The District Court has a very efficient system for dealing with earthquake insurance and EQC cases where the claim is less than $200,000.    As with the High Court most claims are against insurance companies and EQC.  The goal of the court process is to get the claim at a resolution stage within 50 working days.

A message from CERA: Settlement data update
As practitioners will be aware, the Crown offer to purchase properties in the flat land red zones (except Southshore and South New Brighton) expired on 31 March 2013.  The offer was accepted by just over 98% of all those owners entitled to receive the offer.  Of the owners who accepted the Crown offer:

  • 1,504 chose Option 1
  • 5,162 chose Option 2
  • 5,636 have settled to date

We would like to acknowledge the efforts of all practitioners who have acted for red zone owners throughout the conveyancing process, without whom this would not have been possible.

Final settlement date
Please note that the final date for settlement of all flat land transactions is 31 July 2013.

Due to the expected increase in numbers of settlements as the 31 July deadline approaches, we ask that practitioners do everything reasonably possible to ensure that settlement is able to take place early in the day, including sending settlement statements and undertakings as soon as possible.

Vacant possession
Again, we wish to remind practitioners that the Crown offer requires vacant possession and this is not negotiable.  Settlement will be delayed if, prior to settlement, CERA becomes aware that vacant possession is unable to be provided by the vendor on the settlement date.  In addition, the vendor has no further right of access following settlement.

Practitioners should ensure that their clients are aware of the importance of vacant possession for tenanted properties. It is the vendor’s responsibility to ensure that any tenancy has been validly terminated and any tenant has actually vacated the property prior to settlement.

These issues are particularly important given the upcoming settlement deadline to ensure that transactions settle smoothly come July.

Rates following settlement
Please ensure that rates are paid promptly when practitioners have given an undertaking to do so following settlement.  Please be aware that solicitors’ undertakings will be enforced by CERA and ensure that such undertakings are complied with when given.

Option 2 Agreements
We are aware of an element of confusion surrounding the ownership of improvements where owners have accepted and settled under Option 2 of the Crown offer.  For the avoidance of doubt, please note that under both Option 1 and Option 2 the Crown is purchasing the land as well as any improvements located on the land, irrespective of any applicable salvage rights that an insurer may have.  Please ensure that your clients understand that they are no longer own the dwelling after settlement under either Option 1 or Option 2.

We continue to face difficulties in relation to the return of keys by vendors on settlement.  Accordingly, we wish to remind you that on settlement practitioners must ensure that all of their client’s keys and garage door openers etc are forwarded to CERA.

For further information, please contact or 0800 7464 2372.

Andrew Logan
Interim Chair

19th April 2013

A confidential settlement has been reached between a retired Christchurch couple and their insurance company.

Matt and Valerie O’Loughlin took Tower Insurance to court after it agreed to only pay repair costs for their red zoned Dallington home.

The house is in the red zone and cannot be lived in beyond July. The O’Loughlins believed their insurers were bound to pay the amount of a replacement house rather than the cost of repairs.


Valerie and Matthew O’Loughlin outside the High Court in Christchurch

In reaching an interim decision earlier this month, Justice Raynor Asher ruled Tower was bound to make a payment for the full replacement value of the O’Loughlins’ house on another site.

Asher wanted to hear more argument about what the cost could be.

However, it was announced today that a confidential settlement had been reached between the O’Loughlins and Tower.

Tower’s group managing director Rob Flannagan said today the company was pleased the matter has been settled.

“We welcomed the clarity that the decision provided,” Flannagan said.

In a statement today the O’Loughlins said they never dreamed they would end up in the High Court setting a precedent before an agreement could be reached.

“This time has been very emotional, stressful and expensive for us,” they said.

The O’Loughlins said they hoped their case would give other people the confidence to fight for their rights.

(Read full article here)

19th April 2013

Tower Insurance has reached a settlement with the O’Loughlins over their earthquake damaged Christchurch house.

The Dallington couple won the right to get their payout recalculated after a landmark court case earlier this month.

The terms are confidential.

Matt and Valerie O’Loughlin took their insurers to court after rejecting offers to repair their cracked and broken house.

In what was seen as a potentially landmark legal case, the retired couple told how their two-storey Gayhurst Rd property in the badly-hit suburb of Dallington was so damaged it couldn’t be fixed.

They said Tower was “obligated” to pay for a new home outside the red zone.

(Read full article here)

6th April 2013

A Christchurch couple appear to have won the battle to have their insurer rebuild their house but lost the war to give all red-zoners a similar deal.

The High Court has ruled Tower Insurance should pay Matt and Valerie O’Loughlin a yet-to-be determined full replacement value of their Dallington home, after the pair disputed their provider’s initial claim it only needed to pay $138,000 for repairs.

However, Justice Asher stopped short of a landmark decision that could have led to all red-zoners successfully arguing for the full insured value of their properties.

He ruled that “Tower is bound to make a payment for the full replacement value of the O’Loughlins’ house on another site, calculated at its option on a rebuild or replacement basis”.

Tower’s proposed repair method of injecting a grout into the damaged concrete base of the house did not meet its policy obligations, he found.

“[It] may well encounter serious problems and not secure a building consent.”

Counsel for the O’Loughlins had argued because the house had been red-zoned it was, by definition, not repairable.

However, the judge found that “the creation of the red zone did not constitute or cause physical loss or damage . . . to the O’Loughlins’ house”.

If Justice Asher had ruled the zoning itself caused loss, it could have triggered a flood of red-zoners arguing repair settlements from their insurers were invalid, and policies should be paid out in full.

The O’Loughlins had sought $620,000 in relief but the figure was based on rebuilding on their red-zoned Dallington section and should have been calculated for a “sound site” elsewhere at a maximum of $540,000, the judge ruled.

He asked for submissions on the issue from both sides, who planned to meet to discuss a settlement amount.

Valerie O’Loughlin last night said she was “pretty chuffed” with the decision.

“We’ve definitely been vindicated. We’ve always maintained that the house couldn’t be repaired, especially not at the hypothetical price Tower gave us,” she said.

The couple had been flooded with phone calls from their supporters yesterday.

Lawyer Grant Shand said the ruling was “very positive” for his clients.

“They’re going to get a replacement house, not a lesser amount of money based on an unproven repair.

“It essentially said the replacement policy means replacement and if an insurer wants to try to settle for less it’s going to have to stack it up.”

Tower group managing director Rob Flannagan welcomed the decision.

“We’re not uncomfortable with [full replacement settlement] at all,” he said. We would hope we could reach an agreement much more quickly than that [the six-week time frame].”

Lane Neave insurance partner Duncan Webb said the decision was a win for Tower.

“Tower will just pay it.

“They’ll think, ‘so the court said we can’t do grout injection on this property. . . that has no precedent value, it relates only to this property . . . [if] we have to pay another $120,000 or whatever it is, we’ll pay it’.”

The two sides have six weeks to provide submissions.

(Read full article here)

5th April 2013

Insurance giant Tower must pay out a Christchurch couple for a like-for-like replacement on another site, after their home was damaged in the earthquakes, a judge has ruled.


Matt and Valerie O’Loughlin arrive at the Christchurch High Court.

In an interim judgment, released today, High Court judge Raynor Asher now wants to hear more submissions from both parties on what a proper pay-out should be.

Matt and Valerie O’Loughlin took their insurers Tower Insurance Ltd to court after rejecting offers to repair their cracked and broken house.

In what was seen as a potentially landmark legal case, the retired couple told how their two-storey Gayhurst Rd property in the badly-hit suburb of Dallington was so damaged it couldn’t be fixed.

They said Tower was “obligated” to pay for a new home outside the red zone.

Tower said the damaged home could be repaired for $337,000 – but the O’Loughlins felt short-changed.

Now, after the two-week High Court hearing, Justice Asher has released an interim judgment which says the insurers are obligated to make a payment based on a rebuild or replacement for a comparable house to the O’Loughlins’ home.

He said it must be at a site outside the red zone, and it should be left to Tower to decide whether to pay out on the basis of a rebuild or replacement.

If it was a payment based on the costs of rebuilding the O’Loughlins’ home, that payment must be on the basis of the costs of rebuilding on a good site ($540,000), not on the present weakened and vulnerable section ($620,000).

“This is because the O’Loughlins have chosen not to rebuild on the existing damaged site, and both parties have proceeded on the basis of a cash payment which will enable them to purchase elsewhere in Christchurch out of the red zone,” Justice Asher said.

“They are not entitled to a payment in excess of the cost of replacing the house.”

Justice Asher said both parties needed to provide further submissions before he could make a final ruling on what the pay-out should be.

He also needed more submissions before he could decide what, if any, general damages should be awarded.

(Read full article here)