Property insurance: successive losses

Crystal Imports Ltd v Certain Underwriters at Lloyd’s of London [2013] NZHC 3513 is the most recent New Zealand authority to consider the question of successive losses within the same policy period. The marine position is settled in favour of the doctrine of merger, whereby unrepaired partial losses merge into a subsequent total loss, but there is no English authority on the application of that doctrine to non-marine policies.

The point arose in Ridgecrest New Zealand Ltd v IAG New Zealand Ltd [2013] NZCA 291, but the Court of Appeal sidestepped the issue and chose not to comment on the trial judge’s ruling that merger did not apply. The matter is going to the Supreme Court of New Zealand in 2014, but in the meantime Crystal Imports has come down in favour of merger and has rejected the alternative possibility of estoppel.