Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Chch property investor wins policy appeal in Supreme Court

Christchurch property investor Ridgecrest wins IAG policy appeal in Supreme Court

By Jonathan Underhill

Aug. 27 (BusinessDesk) - Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes.

The closely held Ridgecrest had originally taken its case to the High Court after a dispute with the local unit of Insurance Australia Group about the nature of its policy. Ridgecrest had contended it was entitled to the maximum cover of $1.98 million for the final quake on June 13, 2011, that damaged the building beyond repair, and also for losses caused by the three preceding quakes.

IAG, which hadn't been able to complete repair work from the earlier quakes by the time each new one hit, maintained it was only liable to pay the maximum cover for the final 'happening' and only for cost of repairs actually undertaken in the three previous quakes. The High Court found in IAG's favour and the Court of Appeal came to the same conclusion, albeit on different grounds.

The Supreme Court pondered three issues: whether IAG was required to make payments in relation to the earlier quakes; whether losses from the earlier quakes should be treated as merged or subsumed into the loss from the final quake; and whether Ridgecrest's claim was precluded by the "indemnity principle" under which insurance policies "are construed to avoid an insured recovering more than the amount of the loss."

In the Supreme Court judgment released today, justices John McGrath, William Young, Susan Glazebrook, Peter Blanchard and Andrew Tipping unanimously allowed the appeal. They found that Ridgecrest was entitled to be paid out to the policy limit of $1.98 million in each of the earlier quakes and that the merger principle did not apply. They also concluded that the indemnity principle didn't apply because the policy limit was below the replacement value of the building.

However they did find that Ridgecrest wasn't entitled to recover more than replacement value of the building or to double-count its losses.

Ridgecrest was awarded costs of $25,000 and orders for costs in the High Court and Court of Appeal were set aside. Instead, IAG would meet Ridgecrest's costs in those courts.

IAG New Zealand is the nation's biggest general insurer, with local brands State, NZI and AMI. In the 12 months ended June 30, it posted a 56 percent gain in profit to A$183 million after lifting household premiums and making more online sales.

IAG said this month it had settled about 58 percent of its Canterbury earthquake claims as at June 30, amounting to more than $3.3 billion in claim settlements. Projects were taking longer than expected and the company expected the rebuild completion date to extend out to mid-2016, it said, later than the previous target.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

The Nation: Call For Cross-Party Auckland Housing Plan

Penny Hulse calls for cross-party accord on Auckland housing because “it’s too important to score political points on”. More>>

ALSO:

Flu Season: Overcoming Vaccination Reluctance

While research shows that 40% of New Zealand businesses offer free or subsidised flu vaccinations to employees this time of year, HR professionals say persuading staff to participate is the biggest challenge. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news