This recent earthquake judgment considers three important
issues:
- what are the implications of a policy including the requirement
to use construction methods commonly used at the time of the loss
or damage;
- whether exemplary damages could be claimed; and
- is there an implied duty of good faith in insurance
contracts.
Background
The plaintiffs' own a home on Christchurch's Port Hills,
which was significantly damaged in the Christchurch earthquakes.
For a long time there was disagreement about the extent of the
damage to the property, however by the time of the hearing there
was substantial agreement between the parties. Justice Gendall
noted that:
"It is agreed that the foundations have settled, most
significantly in the south-eastern part of the house, and generally
walls are leaning down the slope in a manner consistent with the
dis-levelment of the floor levels. There is close agreement between
the parties and their surveyors now on the
