EQ insurers upped offer after appeal dropped

22:11, Apr 08 2013

A recent legal win, trumpeted by Crown-owned insurer Southern Response as evidence of its "no concessions" policy, was influenced by a "substantially increased" cash payout.

Turvey Trustee, the trustee-owner of a century-old Hillsborough villa, had planned to appeal a High Court ruling made in December that would mean a reduced settlement payout from Southern Response.

However, it recently abandoned the Court of Appeal action and settled, leading Southern Response chief executive Peter Rose to claim the insurer's "firm but fair" line had prevailed.

"The customer withdrew all aspects of their appeal of the High Court judgment," he said.

"There were no concessions from Southern Response following the High Court judgment."

That has been rejected by Turvey Trustee, the family trust of Christchurch lawyer Kerry Ayers, of Helmore Ayers.


In a statement, Ayers said the trust had settled with Southern Response after it had offered a much larger settlement conditional on Turvey Trustee quitting the appeal. "Following the filing of the appeal to the Court of Appeal, further negotiations occurred. As a result of those Southern Response settled at a substantially increased figure, and did so by immediate payment."

Rose said yesterday there had been no compromise and the difference in settlement was due to Turvey Trustee providing more information about the additional costs of building a replacement home.

"These costs were quantified and paid to the customer," he said.

"This represented the provision of more information by the customer to enable Southern Response to finalise its liability.

"The case was settled in full in line with Southern Response's interpretation of the policy, and substantially below what the customer was seeking."

Ayers said the insurer's offer was more than $3000 a square metre including consent costs and professional fees, which "more fairly" reflected the costs of rebuilding the villa, Ayers said.

According to property records, the home was 190sqm, putting the settlement at roughly half a million dollars.

The home has since been demolished and it is understood work has started on a different-style replacement at another site, with the construction to be funded from the agreed liability from the villa.

The High Court had ruled Southern Response must pay for the cost of building the same style house with the same quality of materials, although it could use common contemporary methods and elements. For example, exposed native timber should be replaced, but if it was painted, pine would suffice.

Ayers' statement said the canned appeal did not mean Turvey Trustee now agreed with the High Court decision. "It is implicit in the filing of an appeal that a decision is thought to be erroneous."