15th March 2013

An insurance company tried to “steamroll” a red-zoned Christchurch couple into accepting the cheaper repair settlement for their earthquake-damaged home, a court has heard.

Matt and Valerie O’Loughlin are disputing the repair value offered by Tower for their Dallington home and have taken legal action seeking full replacement.

The two-week High Court battle which could change the settlement of insurance claims in the red zone finished yesterday with Justice Raynor Asher reserving his decision. The O’Loughlins’ lawyer, Grant Shand, said in his closing statement the couple’s policy entitled them to full replacement.

“The O’Loughlins had a home and under their policy they ought to receive a home they can live in . . . which is not what they are getting now nor can they get it with what Tower proposes,” he said.

Tower had from the start focused on repair, would not consider alternatives, and tried to “blanketly streamroll through” the cheaper option.

Shand questioned the impartiality of Tower’s expert engineering witnesses, as it was “in their interests to support Tower’s position”.

Geotechnical engineer Nick Harwood’s firm had completed more than 600 Tower assessments. Harwood “stretched and bent” his calculations to ensure re- levelling the house appeared viable , Shand said.

The $390,000 repair option offered by Tower, which included Earthquake Commission payments of $203,000, did not produce a “usable” house.

“It ultimately comes down to the wording in the policy and the wording of this policy says, ‘Same condition as when new’. It’s clear,” Shand said.

Christchurch City Council building operations unit team leader David Hutt was quoted in a witness statement as saying there was no reason consent to repair the O’Loughlins’ house would not be granted if supporting engineering advice was provided.

Shand argued Tower’s repair strategy was far from being a position to apply for consent.

More designs, calculations and investigations were needed, he said. “There is a long way to go before we even get to a consent application here. At any point along that way, the [council] could say ‘no’. That is a possibility, so I don’t think it could be said there would be a building consent,” he said.

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