SOUTHERN RESPONSE EARTHQUAKE SERVICES LTD V DODDS

[2020] NZCA 395, New Zealand Court of Appeal, Justice Miller, Justice Clifford and Justice Goddard, 7 September 2020

Insurance (property) – Measure of indemnity – Full and final settlement agreement – Change in the law after settlement reached – Misrepresentation – Whether settlement could be set aside

The claimants’ house was damaged beyond economic repair in the Canterbury earthquakes in 2010 and 2011. The claimants’ policy gave them a number of options in that event, including building on another site with full replacement cost but capped at the cost of rebuilding the original house on the existing site. A claim was made under the policy. The insurers referred this to surveyors, Arrow, who produced a detailed costed report (the Complete DRA) for the insurers in November 2011. The document put forward a rebuild figure of $895,937.78, but also detailed a number of other costs, including demolition, professional fees and a builder’s margin, totalling $253,028.80. The grand total, with tax, was $1,186,920.75.