Owners of rockfall property fight back
A Christchurch couple who failed to convince a judge their rockfall-threatened home was an insurance writeoff are heading back to court in a bid to help save others from the same fate.
Sumner homeowner Helen Kraal and her partner Craig Prior sought a declaratory judgment in the High Court as to whether the Earthquake Commission and insurance company Allianz should pay full replacement value for their house, which cannot be occupied because of rockfall threat.
The Wakefield Ave property was red-zoned by the Government and the house was made subject to a council-issued Section 124 notice, which restricts entry.
Justice Jillian Mallon this month dismissed the claim, saying being deprived of the use of the house because of rockfall threat was not "physical loss . . . to the property" under the EQC Act or "damage" under the natural disaster cover in the insurance policy.
Prior told The Press that despite the case being costly, stressful and time-consuming, he and Kraal were prepared to continue the legal battle if other affected homeowners joined a class action.
"It's about letting [other homeowners] realise the consequences of this [High Court] decision and where we can go forward from here," he said.
"We can't really proceed down that path without the help of others."
Insurance lawyer Duncan Webb said the decision had "changed the landscape significantly" for those still to receive a settlement offer, and insurers who had been paying full replacement settlements in S124 cases confirmed they were now reconsidering their positions.
Prior was convinced the policy wording never intended to leave those with S124s "out on a limb any worse than anybody else".
Although the couple still had the option of accepting a government buyout offer, he said a settlement based on their 2007 rateable value was less than full replacement. There was also the question of fairness.
"Through no fault of our own, we haven't been able to live in our house for over three years. While we still own that house and the Government are prepared to pay for it, it's no different from somebody who's house has fallen over.
"The fact our house is still standing is irrelevant. We should be entitled to the same benefits as our policy and the EQC Act allow."
The difference in settlements could total hundreds of thousands of dollars in some cases.
The Press was told of one case where the full replacement value was $800,000 more than the homeowner would have received had the insurer not accepted the rockfall threat made the house a writeoff.
"It's not just the amount of money that's on the line - people's futures are on the line," Prior said.
"Generally speaking, people around the Port Hills are not young 20-something-year-olds. They're people in their late 40s, 50s or 60s who may have to start all over again."
Prior said he and Kraal had not wanted to publicise their plight, but now needed both moral and financial support to battle on.
The class action is being handled by their lawyer, Richard Johnstone, of Wynn Williams.