IAG ordered to pay Christchurch couple more than $700,000
Barbara and Francis Gidden have taken on one of New Zealand's biggest insurance companies – and won.
Insurer IAG New Zealand has been ordered by the High Court to pay the Christchurch couple $707,610.94 and interest of $37,416.14.
It must also pay the Giddens' court costs after they sued the insurer, accusing it of breaking a binding contract.
Associate Judge Rob Osborne ordered a declaration that the typed agreement signed by the Giddens and IAG-owned State was binding and enforceable.
They signed a binding agreement in October 2014 which said their Avondale home would be rebuilt after sustaining severe damage during the Christchurch earthquakes.
Six months later, the couple's insurer rejected the deal, saying it wanted to reassess whether the property could be repaired.
Prior to the agreement, the couple lodged a formal complaint against State and were referred to the Residential Advisory Service.
A meeting with State was arranged in October 2014 and they signed an agreement stating the property was a rebuild.
In April 2015, the couple received a letter confirming the property was uneconomical to repair and saying State was finalising a settlement figure.
But, later that month, State emailed the couple to say the rebuild figure their claims technician arrived at was declined by the company's cash settlement team.
Osborne ordered a declaration that the Giddens had the right to elect to rebuild their home and, subject to the defendant's agreement, rebuild the home at a different site.
Francis Gidden described the saga as "a test of endurance".
"You could call it a rollercoaster due to State. You feel you're getting somewhere and then suddenly in the blink of an eye you're not," he said.
Assuming IAG did not appeal the judgment, the Giddens were keen to approach a builder and finally start work on their new home, five years after the earthquakes.
Francis Gidden did not believe IAG would appeal the judgment, but challenged the insurer to "bring it on" if they decided to.
"I think it's criminal, actually, that a company is allowed to operate like State have.
"They said we had seen it [scope of works], signed it and approved it. At that point we said 'look, give us your complaints procedure'. Even then State reneged on that [contract]," he said.
IAG customer reinstatement general manager Renee Walker said the insurer had acted in good faith during its dealings with the Giddens.
"We are disappointed we have not been able to settle the Giddens' claim directly with them, rather than through the courts, but remain committed to settling it in a fair and reasonable manner.
"We have received a copy of the Summary Judgment. It is very unusual to receive a summary judgment in a case with disputed facts, which there clearly are in this case."
IAG was discussing its options with its legal advisors and would make a decision about whether to appeal the judgment following their review, she said.
Lawyer for the plaintiffs, Peter Woods, considered IAG's conduct "outrageous" and said its refusal to accept it was bound by the agreement, reached at the mediation, was bad faith.