By the judgment in Firm PI 1 Ltd v Zurich Australian Insurance Ltd & anor [2014] NZSC 147 delivered 15 October 2014 the Supreme Court by a 3:2 majority decided that the sum insured of $12.95M for the Salisbury Apartments included any amounts due from EQC which in this case was $6.8M.  The insured and its broker argued that the sum insured was additional to the amount due from EQC.  The actual replacement cost of the complex was apparently about $25M.  The majority placed emphasis on the sum insured being based upon a replacement valuation and that the insurer had calculated the premium based on the net figure which was known by the broker.

The progress of cases through  the High Court Earthquake list is heavily dependent on the conduct  of experts at meetings and in the production of “joint reports”.  A previous post commented on an EQC expert (Dick Beetham from GHD) and his questionable conduct in cutting/pasting another engineer’s signature to a document that was not actually the “joint report” of the engineers.  A recent judgment of Whata J on 25 September 2014 in Morrison & Cross v Vero Insurance Ltd [NZHC] 2344 commented on the conduct of Vero expert(s) and its lawyer’s involvement in the process.  The Court commented adversely on the involvement of the Vero lawyer in the drafting of the “joint expert statement”.  The Court also said that all relevant experts who are going to be called to give evidence should participate in caucusing  and that caucusing should take place well before the hearing.  The judgment also notes that a Vero expert witness said to one of the plaintiff’s witnesses in the men’s toilets at the Court that the witness would be “in jail” by the end of the 1st day of the hearing.

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.

A Christchurch family is attempting to sue the Earthquake Commission, and their insurer, Southern Response, after being told damage to their home may have been caused by wind, and a flax bush, rather than an earthquake.$500k-to-$50k


Insurers whittled down an agreed rebuild of a Burwood house to a $50,000 repair, the High Court was told today.

Cameron and Suzanne Kelly are, through their company, claiming about $590,000 for the rebuild of their house which, they say, is uneconomic to repair.



A Christchurch family is attempting to sue the Earthquake Commission and their insurer after being told damage to their home may have been caused by the wind and a flax bush, rather than a quake.
Cameron and Suzanne Kelly are attempting to sue EQC and Southern Response. It is believed they are the first residents to take the commission to court over its assessment processes.,-flax