EQC welcomes recent High Court decision in the He case
14 September 2017
EQC welcomes recent High Court
decision in the He case
The Earthquake Commission has welcomed the recent decision by the Christchurch High Court which found that EQC had correctly assessed the damage that Xaioming He’s dwelling incurred in the Canterbury earthquakes.
General Manager Internal Partners, Gillian Dudgeon, says that the Court found that Mr He’s claim that his property needed to be rebuilt was not credible and his case was dismissed.
“EQC inspected Mr He’s dwelling following the September 2010 earthquake and paid him approximately $16,000 for emergency repair work to his chimneys and for repairs for some minor cosmetic damage to the dwelling.
“However Mr He alleged there was extensive earthquake damage, including to the foundations, and the rebuild cost was around $1 million.”
EQC and Mr He’s private insurer disputed Mr He’s claims for further payments. EQC’s technical evidence stated that the foundation damage claimed by Mr He was pre-existing and was not materially altered by the earthquakes. The building was in the same condition, albeit a poor one, as it was before the earthquakes happened.
“The Court determined that there has to be a material physical change to a building as the direct result of an earthquake, which also impairs its value and usefulness, to constitute damage from a natural disaster.
“Therefore if a building already has extensive defects, and any minor further damage may make no material difference to its function or value, then is unlikely to be deemed ‘damage’ covered by EQC,” says Ms Dudgeon.
“The Court also deemed EQC’s settlement for the earthquake damage sustained to Mr He’s chimneys to be acceptable. In respect of one of the chimneys, Mr He signed a consent form to have a heat pump installed in place of a replacement fireplace and rebuilt chimney as part of the Chimney Replacement Programme.”
Ms Dudgeon says that this decision, along with other recent High Court decisions in the Kelly and Sadat cases, supports EQC’s approach to assessing and settling claims for earthquake damage to residential buildings.
“This case also shows that homeowners have to provide credible evidence to support a claim that their property has sustained earthquake damage and demonstrate the loss they believe has been incurred.
“Mr He claimed there was much more damage to his building than had been assessed, but his evidence was inconsistent with that provided by EQC and could not be substantiated. Therefore having reviewed all aspects of this case, the Court found that Mr He’s evidence did not support his claim, and as a result, it was subsequently dismissed.”
More information on the High Court decision is available on EQC’s website at https://www.eqc.govt.nz/about-eqc/our-publications/legal-decisions