Christchurch’s unique situation has brought a number of challenges to our Christchurch Body Corporates. The impact of Mother Nature has been both random and at times unjust. Equally the insurance industry and its associated broking fraternity have responded in a variety of different fashions. The catastrophic events suffered in Christchurch illustrate so clearly that the laissez faire attitude to insurance that many encompassed was shared not only by owners but also by many in the related industries.
One of BBCL’s Body Corporates has suffered huge challenges as a result of impreciseness in documentation relied on by the Body Corporate. This documentation was supplied by its broker and the insurer. This sadly has resulted in two lawsuits against both the insurer and the broker which have only caused further heart-ache to owners.
February 22 2011 saw the total complex declared an economic loss. To this day the Insurer still will not accept that (despite 50% being demolished under an order from CERA) and the remainder requiring temporary strengthening to leave it habitable pending a controlled deomolition.
The BC relying on a replacement valuation looked to design a replacement complex for its central Christchurch site only to be advised that the replacement cost is nearly double the replacement valuation it received. The extent of cover under the policy was disputed and an issue has also arisen as to whether or not EQC payments acted as an excess under the policy or not. A simple reading of the policy document would suggest it does however when confronted with the claim the insurer alleged it did not.
The issue of whether EQC’s payments acts as an excess has now been resolved by a full bench of the High Court in Auckland and the Body Corporate is delighted to have received the judgment issued by Justice Courtney which has affirmed that a clear reading of the policy does in fact apply.
The end result is that instead of being limited in recovery to the valuation estimate the Body Corporate is able to recover both that plus the EQC pay-out of $6.8 million plus GST. The total sum will certainly go a long way towards the cost of rebuild, if not completely, and will come as a huge relief to the 68 owners affected.
Managing claims of such scale and then preparing for rebuilding as required by the 2010 Unit Titles Act required a significant vote of faith by owners and their hardworking Committee in BBCL and the supporting professionals. BBCL share’s the owners delight at the successful High Court award and looks forward to progressing with the Body Corporate a complete rebuild over the coming years.