Two insurance giants who argued that a Christchurch developer’s policy provided ‘old for old’ not ‘new for old’ have had the Court of Appeal rule in their favour on the contentious point.
ACE Insurance and
IAG had said the policy, held by developers Islington Park, provided cover on an old for old basis and that there was not a total loss because the cost of repairs was therefore substantially less.
Their estimate was $1.1 million whereas Islington Park had contended the repairs would cost more than $7.2m or 80% of $9m, the agreed value in the insurance policy,
Fairfax Media reported.
Islington Park said the figure for the repair cost was $11.9m and that the standard was that of a ‘compliant’ repair, meeting current building regulations.
However, a judgment was made by the High Court agreeing with the insurers which Islington Park then took to the Court of Appeal.
Now that court has found favour with the insurers also, meaning that if repairs were required that the insured would have to pay for betterment and additional costs to comply with current building regulations as opposed to those in force when the buildings were erected.
The Court of Appeal said the $7.2m cost of repairs was an estimate on a ‘new for old’ basis.
Islington Park, owned by Auckland developer John Sax and Southlanders Ian Tulloch and Paul Johnstone, was a complex of 31 buildings, seven of which were damaged in the September 2010 and February 2011 earthquakes,
Fairfax reported.
Islington Park has developed the Waterloo Business Park on the old freezing works site.
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Ridgecrest: no game-changer
