Judge orders insurer to replicate villa features

Last updated 09:58 16/12/2012
The Aynsley Tce villa built in 1911, before it was irreparably damaged in the earthquakes. It was the subject of a High Court ruling on the liability of the insurer, Southern Response.

NO SUM INSURED: Changes to the way insurers will value and pay out on damage to homes are coming.

Damage to an Aynsley Tce villa built in 1911. The house was the subject of a High Court ruling on the liability of the insurer, Southern Response.
Damage to an Aynsley Tce villa built in 1911. The house was the subject of a High Court ruling on the liability of the insurer, Southern Response.

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Government-owned Southern Response must pay to rebuild a Christchurch claimant's century- old Edwardian villa with materials of the same quality, the High Court has ruled, as long as the parts and techniques are still commonly used.

In a summary judgment issued this week, Justice Dobson determined Southern Response should have to pay to reinstate the features and style of the irreparably damaged Hillsborough house, but it could use cheaper methods or materials if the look or use of the new building would be unaffected.

The Aynsley Tce villa, owned by company Turvey Trustee, had been insured for many years by AMI on the most comprehensive of the insurer's three plans.

Originally, the plan was for "full replacement cover", but at the time of the claim the policy had been restyled as "premier house cover".

The property was damaged in the September 2010 tremor and further damaged beyond repair by the subsequent aftershocks and February 22 quake.

The building has since been demolished.

Turvey believed Southern Response's liability was to pay the cost of replicating the Edwardian bay villa, with all its distinctive features, while the insurer thought its liability did not extend that far.

The property had a 2007 rateable value of $711,000 and was on TC3 land. The new home was being built on a different site.

The Press understands the new home will not be built in the style of the original and the agreed liability will be used to fund the new build, which has already started.

Justice Dobson said Southern Response's liability should be calculated taking into account methods that were common in the building of an Edwardian-style villa in 2012.

He said, for example, there would be no need to require native timber for doors or skirting boards if they had originally been exposed timbers but had been painted over by the time the house was damaged. Double-brick framework should be replaced with something more structurally sound with a brick veneer to give the same look.

Embossed plaster ceilings should be priced for polystyrene moulds and plaster coat, which would be much cheaper than the methods of 1911, when the original villa was built, Justice Dobson said.

"Such features might today be replicated by use of a polystyrene mould and plaster covering, at a lower cost but with no material difference in appearance."

Southern Response is the Government-owned claims manager of failed insurer AMI after the sale of its continuing business to IAG in April.

Chief executive Peter Rose said he would not comment until the 20-working-day appeal window had closed.

A representative of Turvey Trustee said it may be in a position to comment next week.

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- Fairfax Media

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