Sadat v Tower Insurance Ltd

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000207 [2017] NZHC 1550

BETWEEN

SAYAD MOSTAFA SADAT and

MASTOREH SADAT Plaintiffs

AND

TOWER INSURANCE LIMITED First Defendant

AND

EARTHQUAKE COMMISSION Second Defendant

Hearing:	22-29 March 2017 and 6-7 April 2017
Appearances:	K T Dalziel & J R Pullar for the Plaintiffs M C Harris & S F Alawi for the First Defendant N S Wood & J W Upson for the Second Defendant
Judgment:	6 July 2017

JUDGMENT OF NATION J

SADAT v TOWER INSURANCE & EQC [2017] NZHC 1550 [6 July 2017]

Table of Contents

Background............................................................................................................. 2

Summary of defendants’ positions...................................................................... 19

Evidence and the evidential burden ................................................................... 23

The 2008 Hayward report ................................................................................... 25

The August 2010 Tower report............................................................................ 37

Geotechnical evidence .......................................................................................... 44
Introduction ............................................................................................................ 44
The experts’ joint report – areas of agreement....................................................... 46
The joint report – areas of disagreement ............................................................... 47
Council records ...................................................................................................... 51
Mr Thompson’s initial brief of evidence................................................................. 52
Mr Learman’s initial brief of evidence ................................................................... 59
Mr McDowell’s initial brief of evidence................................................................. 63
Mr Thompson’s new evidence ................................................................................ 68
Concluding assessment of geotechnical expert witnesses.................................... 101

Conclusions as to geotechnical evidence ............................................................. 105

The Sadats’ evidence .......................................................................................... 106

The initial post-earthquake assessments .......................................................... 137
The 8 September 2010 Hargreaves inspection for Tower .................................... 137

The Jones’ assessment of 9 December 2010 for EQC .......................................... 146

Structural engineering evidence ....................................................................... 152
Evidence of Samuel Polson, structural engineer for Tower ................................. 152
Evidence of Simon Finn, structural engineer for EQC ........................................ 167
The experts’ joint report ....................................................................................... 194
Evidence of Dr Wu, structural engineer for the Sadats ....................................... 195
Damage to the garage .......................................................................................... 234

Damage to concrete paths and driveway ............................................................. 240

Conclusions as to the damage caused by the September 2010 earthquake .. 247

Payments made and sought ............................................................................... 256

Claim against Tower .......................................................................................... 260

Rebuild costs and under-insurance .................................................................. 292

Claim against EQC ............................................................................................ 299

General damages ................................................................................................ 308

Conclusion........................................................................................................... 313

[1]       The plaintiffs’ (the Sadats) home may have had inadequate foundations for the site it was on from the time it was built.  Subsidence of the foundations may have resulted in damage to those foundations and to the structure of the home before the Canterbury earthquakes.  The Sadats had insured their home with the first defendant (Tower) and had Earthquake Commission (EQC) cover, but only at the time of the September 2010 earthquake.  That earthquake may have resulted in further damage to the foundations and the structure of the home.  The problems with the foundations cannot be fixed through repair.   A rebuild of the home will cost some $762,000 including GST.   The broad issue here is whether EQC and Tower are liable for rebuild costs.

Background

[2]      The Sadats were refugees from Afghanistan.   In 2006 they purchased what they regarded as their dream family home at 3 Victors Road, Hoon Hay, Christchurch for $235,000. They insured it with Tower.

[3]      In  September  2008,  there  was  a  potential  sale  of…