Southern Response – Liable for contingency (10%) & professional fees (10%)

In its decision 1 October 2014 in Avonside Holdings Ltd v Southern Response Earthquake Services Ltd [2014] NZCA 483 the Court of Appeal decided that the High Court was wrong not to include a contingency at 10% of build costs and professional fees also at 10% of build costs in the calculation of the rebuild cost of Avonside’s house at 1146 Avonside Drive and the amount due to Avonside for it to buy another house under the insurance policy.  The decision will cost SR up to $400,000 (including costs and interest) on this case.  It is yet another loss for Southern Response in the Courts.  Insureds that deal with Southern Response ought to now revise their costs.