Mark Gilmour and Althea Kallas are accusing government-owned insurer Southern Response of cashing out their earthquake-damaged Lyttelton home without disclosing all the information.
They were teetering on the edge when the cash offer came.
Their hillside wedge of paradise, overlooking the caldera of Lyttelton Harbour and the busy port below, was cracked and twisted.
The February 2011 earthquake wrenched the 1930s wooden cottage on its foundations. Walls were cracked, ceilings sagged. Even the birds seemed to have abandoned the manicured, sloping gardens.
And when the 100-year rains came, and a landslide sent the home further towards the sea, Mark Gilmour and Althea Kallas felt everything slipping away from them.
So, when the retired couple's insurance company Southern Response came along - more than three years after New Zealand's worst modern natural disaster - and offered them $354,000 to cash out, they took it. They had no reason to believe they were being short-changed.
"We were in a terrible state," Kallas said. "We were vulnerable, urgent and so very stressed."
They sold their broken Lyttelton property "as is, where is" and later settled in the small rural town of Darfield 60km west. Life was very different away from the sea. And it didn't have to be that way.
Former customers of failed AMI Insurance started to request full disclosure from Southern Response, the Government-owned company settling AMI's earthquake claims, more than a year ago. They wanted to know what might have been kept from them.
The Court of Appeal and the Supreme Court - the highest court in New Zealand - agreed with Avonside Holdings in mid-2015 that Southern Response was required to pay out demolition costs, contingencies and professional fees in their settlement offers. It's believed it cost the insurer more than $25 million.
Word soon started circulating that it was worth red-zoned customers filing requests to Southern Response under the Official Information Act (OIA).
It appeared that before July 2015, when the insurance firm lost the landmark court case, that it had maintained two Detailed Repair/Rebuild Analysis (DRA) on its files.
Lawyer Grant Shand, along with other customers and lawyers, alleges a second DRA never shown to the policy holder before their case was settled or discharged, often showed higher overall costs to repair or rebuild their home.
"They only changed what they did after they lost in the Supreme Court in the case of Avonside Holdings," Shand says. "Anyone who settled after that got the full DRA and the full amount, but the people who didn't, they didn't know about it, and they got the lesser amount, which is completely unfair."
In the case of Gilmour and Kallas, who are now seeking legal advice, they contest that another DRA on their file says repairs would have cost $540,000. With contingencies included, the figure soars to $701,000. They settled for $354,000 and feel ripped off.
"They [Southern Response] took advantage of our situation to suddenly reduce the payout figure to a level that would probably have been acceptable to us without discharging the full costs to us," says Gilmour, a 74-year-old former police officer.
"It is inconceivable, virtually impossible, having considered all repair options - considerations which were still ongoing - that Southern Response could within five working days produce a figure $186,000 lower than [their original DRA] without peer review."
It's a similar story for the Groens.
They built their ideal family home close to relatives, the river and ocean in the suburb of Bexley in 2008.
But as for thousands of others in Christchurch, that all changed at 12.51pm on February 22, 2011, when the vicious magnitude-6.3 tremor struck.
A few months later, their property - like hundreds of others - was red zoned, the Government had "determined it is not feasible to rebuild on this land at the present time".
In November 2011, Southern Response sent a DRA to the Groens that showed a $337,716.83 (GST inclusive) cost to rebuild their home. "It never occurred to us that we weren't getting the full amount or that there were any hidden extras we didn't know about," said 43-year-old auditor Anna Groen.
"We just accepted we had bought a place where there was a low GV (government value) and we would have to do the best with the money we got."
Four months later, the Groens accepted the settlement to rebuild on another site. They built a house 40km west on the solid ground of West Melton. But once their special, low "red zone" mortgage interest rates expired, they found themselves over-extended. They sold up last year, downsized, and moved to Rolleston.
Around March last year, they heard about people using the OIA to request Southern Response provide a full copy of the DRA used to calculate their payout.
Within weeks, Southern Response sent them "the most up to date, latest version of the DRA", dated October 25, 2011, which specified the rebuild cost of $442,577,50 (GST inclusive).
"I was shocked and gutted," Groen says. "I understood the concept that we had taken full and final settlement and couldn't go back on it, but I still felt there was an ethical or moral duty on the insurers to have given us full disclosure of the information they had at hand at the time they settled to us, then we could have made a fully informed decision into what we were doing, and not feel cheated."
Southern response says developing DRAs is an "iterative process", with each version becoming more complete as more detailed information and quotes become available.
There may be circumstances, a spokeswoman says, where initial cost estimates might well be high because of uncertainty over the condition of a house, but may decrease once a detailed assessment is completed and a quote is received from a builder.
"Any settlement offer is made based on the best information available at the time," she says. "Depending on how a claim is settled, certain costs may not form part of a settlement offer. For example, if a customer's house is deemed uneconomic to repair and they choose to buy another existing house, Southern Response will often agree that they can keep their current house.
"Southern Response will not include the cost of demolishing the old house in its settlement offer. This is because the customer gets to keep their house and no demolition costs would be incurred."
An "office-only version" of the DRA served a second purpose of recording estimated costs that Southern Response could be responsible for, the spokeswoman said, if it was to carry out the repair or rebuild work as part of its managed construction programme.
"This version of the DRA was used to assist our actuaries with developing an internal forecast and to estimate our expected overall liability as a result of the Canterbury earthquakes," she adds.
Southern Response's policy for any settlement agreement entered into after the Avonside Holdings decision is that contingencies and professional fees are payable for customers choosing to buy another house or to enter into cash settlements.
However, Southern Response says it is not reopening any settlements made before October 1, 2014.
"Those claims were settled in good faith and on a full and final basis."
Southern Response would not comment on individual cases, citing privacy reasons. It also would not be drawn on cases before the courts.
Mel Bourke, of earthquake claimant advocacy group EQC Fix, is wary of the explanation.
The emergence of a second DRA provides more weight to the argument for a Royal Commission of Inquiry into EQC and insurers post-quake, she says.
"Every single person who has discharged their claim up until mid-2014, particularly with Southern Response, needs to OIA their file and ask for all copies of DRAs and costs of scope of work before going over it with a lawyer and a fine tooth comb. There could be hundreds of cases just like this one," Bourke says.
Former lawyer Duncan Webb, now the new Labour MP for Christchurch Central, is aware of several cases where Southern Response customers have discovered a second, "hidden" DRA on their file.
"There seems to be a DRA for public consumption, and then there's the hidden DRA that is the best estimate of cost of repair," Webb says.
Peter Woods of law firm Anthony Harper is also acting for clients who have instructed proceedings against Southern Response over alleged "hidden" DRAs.
"We anticipate that there will be more proceedings commenced in respect of this issue," he says.
"The DRA that was not disclosed to our clients by Southern Response, estimated that the costs to rebuild were approximately 20 per cent more than those shown in the DRA that was disclosed to our clients. Documents provided under a Privacy Act request, show that Southern Response was aware of the undisclosed DRA. Our clients are seeking damages for the difference between the DRAs."
The Groens feel they've been left with no alternative but to take legal action.
Through lawyer Grant Shand, they lodged a statement of claim against Southern Response at the High Court in Christchurch on September 28 alleging a breach of the Fair Trading Act 1986.
Shand expects a court hearing early-mid next year in what could prove to be a landmark case.
"This will affect a lot of people. There must be hundreds of people in the same circumstances and for some people it could be a lot of money," Shand said.
For the Groens, it's about making Southern Response responsible.
"They have to learn that this isn't the way you deal with your customers in the future. This is not the Kiwi way," Groen says.
"Normally we're pretty good at looking after each other in New Zealand. We're getting natural disasters happening constantly and I want other people who have insurance to know what their rights are and to make sure they're getting all of the information they are entitled to.
"Everyone pretty much has their life savings tied up in their houses. It's a very stressful, challenging time anyway and to have to deal with this negotiation and settlement with insurance companies too, it becomes more of a battle than it should be. It's just not right."
Tere Livingston died in 2023 after receiving two head knocks while playing league.