In the decision of Crystal Imports Ltd v Lloyds Underwriters & anor [2013] NZHC 3513 on 19 December 2013 the High Court (Cooper J) considered the ability of an insured to recover under a material damage insurance policy for separate damage to an insured property during a single insurance policy period where the property was rendered a total loss by a later event in the policy period.  The relevant insurance policy period was from 20 March 2010 to 20 March 2011.  Relevant insured properties had specified sums insured in the insurance policy.  The sums insured were significantly less  than reinstatement costs.  The insured properties were damaged in the earthquake on 4 September 2010 and rendered a total loss by the earthquake on 22 February 2011.  The High Court decided that the doctrine of merger applied with the effect that once the buildings were a total loss by the February 2011 event the insurer had no liability for damage in the September 2010 event that was un-repaired and/or for which it had paid nothing.  The outcome would be different if the damage occurred in separate insurance policy periods.

In the judgment released 6 December 2013 in Rout v Southern Response Earthquake Services Ltd [2013] NZHC 3262 Justice Gendall decided that Southern Response was in breach of  its policy obligations by wanting to settle the Routs’ claim, based on a repair cost of $263K.  The Court held that the insurance company was liable for to pay up to $693K for the Routs to rebuild a house.  Importantly he  held that an insurance company is liable to return the house to the “as new” floor level.  This will be particularly beneficial to home owners whose houses have dropped.

Below is the announcement about zoning

Gerry Brownlee

5 DECEMBER, 2013

Port Hills zoning review announced

Results of the Port Hills Zoning Review announced today will give property owners certainty and provide options for people to move on from areas posing a serious risk to life, Canterbury Earthquake Recovery Minister Gerry Brownlee says.

The outcome of the review of all zoned properties in the Port Hills means a change of zoning for 270 properties – with 237 going from green zone to red zone, and 33 going from red to green.

Zoning in the Port Hills is based on life risk from rock roll or cliff collapse. Owners of eligible properties in the Residential Red Zone may decide to accept a Crown offer to purchase the affected properties.

“I’m very conscious it has been a long and frustrating wait for Port Hills property owners to get this news, though some of the delay has been outside our control,” Mr Brownlee says.

“We had to wait for clarification from the courts about our zoning process, and we needed to make absolutely sure the final zoning decisions are correct, not just for those who live in the area now, but to protect people in the future.

“Some of the property owners had indicated they wanted their land zoning to change from its initial status.  But many did not actively seek a review, and it is these people who may be surprised by the outcomes of today’s announcement.

“Since last evening CERA has been endeavouring to call all property owners who asked for a change to their property’s zoning, or whose land zoning has changed, to advise them of the outcome, and to provide them with the best possible support and opportunities to attend face to face meetings for more information on their personal situations,” Mr Brownlee says.

Of the properties that have changed in the review, nine were originally zoned red and the former owners have settled with the Crown.  These former owners will have the option of purchasing back those properties from the Crown.

A further nine properties that will be rezoned green were previously eligible for a Crown offer as red zone properties.  The owners of these properties will be able to continue with that offer process if they choose to, despite their properties changing to be zoned green.

The zoning review was undertaken by a panel led by Dr Keith Turner, who also led the panel that undertook the zoning review for the flat land in Christchurch.

Mr Brownlee says CERA has produced specific information for the 44 different areas in the Port Hills that have zoning implications to make it easier for property owners to understand their own situation.

Each of the 44 areas and their zoning implications are detailed at www.cera.govt.nz/port-hills with videos to explain the outcome in each of these areas.

CERA has been able to proceed with the zoning review announcement after the Court of Appeal judgment released this week in regard to the legal challenge by the Quake Outcasts group.

The Court of Appeal found that CERA’s zoning process was lawful, and that the Crown needs to review any offers made to owners of uninsured properties and vacant land to ensure they are consistent with the purpose of the Canterbury Earthquake Recovery Act – Section 3 – and in accordance with the Act – Section 10.

A process for undertaking this review is being developed and until a position is settled upon the Crown is unable to make offers for these categories of land and property on the flat land and in the Port Hills.

In its decision in Minister for Canterbury Earthquake Recovery & anor v Fowler Developments Ltd & ors [2013] NZCA 588 the Court of Appeal overturned the High Court decision that “red-zoning” was unlawful but agreed with the High Court that the offers made to land owners and uninsured red zone home owners were unlawful.  The Crown is to reconsider its offers