Canterbury man fails to prove earthquake damage in long-running insurance claim, High Court rules

Damage to power lines and a road near Darfield after the 7.1 magnitude earthquake struck on September 4, 2010. Photo / NZ Herald

A Canterbury man has failed to prove his historical home was damaged in the region's first major earthquake, meaning his insurance company does not have to pay.

Derek Ricky Bligh said his two storey Georgian-style house was badly damaged in the 7.1 magnitude Canterbury earthquake on September 4, 2010.

He had bought the 1860s building, on Waddington Rd in Waddington, in April 1985.

Bligh made alterations to the home but because of illness and a series of unanticipated life events, there was little progress with the planned improvements after the early 1990s.

After the earthquake struck at 4.35am, Bligh claimed the first floor's concrete walls and other parts of the house, including a timber-framed structure at the back of the property and the garage, suffered major structural damage.

He said the cost of repair would be in excess of $950,000.

Bligh's property insurance was with State, now IAG, and because of the policy his home was covered by the Earthquake Commission (EQC).

EQC sent several people to inspect Bligh's home and initially assessors thought there was earthquake damage.

However, three people, including an experienced builder employed by EQC and two engineers, inspected the property in December 2010 and January 2011.

They said Bligh's home suffered no material earthquake damage.

Under the insurance policy, IAG would only be liable to repair Bligh's home if it suffered material damage as a result of the earthquake and the cost of repairing it was more than the EQC cap of $115,000.

But Bligh, a retiree with heart disease, Parkinson's disease and terminal cancer according to an earlier report in The Press, was adamant the trio of experts was wrong.

He said evidence from a structural engineer and the opinions of other witnesses showed there was earthquake damage.

The dispute went to a hearing in the High Court at Christchurch in late February and early March.

A view of the property taken in July 2012, after the earthquake. Photo / Supplied

However, in Justice Gerald Nation's judgment, released publicly today, the judge said he had difficulties with Bligh's credibility.

"On all the evidence that has been presented, Mr Bligh has been unable to prove there was earthquake damage to his property for which either EQC or IAG could be liable," Justice Nation said.

Bligh also made a claim against EQC and IAG for general damages in the sum of $25,000 because of the way their conduct had caused him substantial distress, inconvenience and mental anguish.

"There is no doubt that Mr Bligh has been intensely aggrieved at EQC's refusal to accept his claim and this has caused him considerable distress," the judge said.

Both EQC and IAG disputed Bligh's claims.

Justice Nation said the evidence before him did not establish either EQC or IAG had acted unreasonably or in breach of their contractual obligations.

"There were times when, in response to communications from either Mr Bligh or his son, Hayden, who was acting as his advocate, certain EQC employees responded as if EQC were, at that time, still considering his claim when in fact it had already been declined," he said.

"The miscommunication could not be attributed solely to inefficiencies on the part of EQC staff. There would have been significantly less potential for such confusion if, at the time such inquiries were made, the EQC staff were told that Mr Bligh's claim had been declined and the communication was in relation to that."

EQC had also suggested Bligh could take advantage of their mediation services, but he declined and said he had heard from others it would be a waste of time.

However, Justice Nation said EQC made an offer before an October 2016 hearing to bring the dispute to an end, which "would have been significantly to [Bligh's] benefit".

Bligh's first statement of claim in July 2012 sought $963,000 from EQC and IAG and $25,000 from each for general damages. The claim was amended in December 2014 to a claim for remediation costs of $596,249 and general damages of $25,000 against EQC and IAG.

Bligh's claim for general damages and also an order for IAG to pay the fees he incurred with engineers, surveyors, building consultants and legal advisers also failed.