Judgment summary - Tower Insurance Limited v Skyward Aviation 2008 Limited

[2014] NZSC 185

Skyward Aviation 2008 Limited owned a property in Burwood, Christchurch (the property) with a 207m2 early 1900s villa home (the house) and a 64m2 free-standing sleep-out built in 2009 (the sleep-out). Both the house and the sleep-out were damaged in the earthquakes, and the property is within the residential red zone.

Skyward and Tower were unable to reach agreement on how to calculate the amount to be paid to Skyward for the house.

The policy provided for four alternative options for settlement. There are:

1. the full replacement value of the house at the situation; or
2. the full replacement value of the house on another site chosen by Skyward. This cost must not be greater than rebuilding the house at the situation; or