Rubble Foundations; Epoxy, Jack/pack and Insurance Policies

In Fitzgerald & ors v IAG New Zealand Ltd [2018] NZHC 3447 the High Court (Gendall J) considered whether IAG’s proposal to epoxy rubble foundation cracks and jack/pack piles/perimeter to relevel a floor with a differential of 58mm complied with its insurance policy obligation to reinstate the earthquake damaged house to a condition as similar as possible to when it was new.  The Fitzgeralds own 111 Innes Road, St Albans.  It is TC3.  The house built in the 1920’s is 2 storey with timber frame, weatherboard cladding and metal roof built on an unreinforced rubble perimeter foundation with internal piles.  After the earthquakes the floor level differential is 58mm in the house.  The earthquakes also caused some cracks to the perimeter foundation.  The Court decided that the policy standard of”when new” involved a comparison to the state of the house when it was built.  So any foundations must provide that level of support.  Gendall J decided that repairing the foundation cracks with epoxy met the policy standard and so did the proposed jacking and packing of piles and perimeter.  This would not meet the standards for a newly built home, but met the insurance policy standard that required the comparison to as built in the 1920’s.  The conclusions were premised on IAG being able to obtain building consents (or exemptions) and code compliance certificates for the work.  If it could not do so, then IAG would be required to replace the entire foundation.