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Southern Response- Buy another house policy


In Southern Response Earthquake Services Ltd v Shirley Investments Ltd [2017] NZHC 3190 the High Court (Thomas J) decided that the costs of enhanced foundations and demolition were not to be included in the calculation of an insured’s entitlement under the insurance policy as these were additional costs that were only payable when incurred.  These costs would not be incurred on the “buy another house” option.  The Court also confirmed that the amount payable under the “buy another house” option can be no greater than the actual cost of the bought replacement house, excluding the land cost.  Thomas J gets a bit creative with her interpretation of Avonside in reaching her conclusions.  Highly likely that the decision is appealed.