Vero settlement agreement valid

On March 2016 the Court of Appeal in Prattley Enterprises Ltd v Vero Insurance New Zealand Ltd [2016] NZCA 67 dismissed an appeal by an insured against the High Court’s refusal to set aside a settlement agreement on the grounds of mistake.  It also comments on the inappropriateness of a Risk Worldwide person (George Keys) purporting to give “expert’ evidence when that person had a financial interest in the outcome of the claim.  Prattley claimed that it was mistaken in relation to a settlement agreement it entered into with Vero about damage to Worcester Towers at Cathedral Junction.  In August 2011 Prattley settled all claims with Vero for $1,050,000.  That was Prattley’s estimate of the building’s pre-earthquake market value.  Prattley insured the building for indemnity value with a sum insured of $1,605,000.  In July 2012 Risk Worldwide became involved and claimed $8.8M gross from Vero.  The Court decided that there was no mistake claim and the settlement agreement was enforceable.  It also decided that the indemnity value of the building was its replacement cost less depreciation.