Owners of Christchurch earthquake-damaged commercial buildings in dispute with Vero Insurance are left with a Court of Appeal ruling having the effect of requiring them to deconstruct part of each building in order to prove Vero should pay for a rebuild.
Moorhouse Commercial Park Ltd, controlled by engineer Peter Dennis, owns several adjoining commercial buildings in central Christchurch. It cannot agree with Vero Insurance over the scope and extent of repairs needed following earthquakes in 2010 and 2011.
Moorhouse Commercial says the buildings need to be demolished and rebuilt. Vero says epoxy resin injected into cracks within the buildings is sufficient.
The buildings are currently tenanted by commercial clients; two gyms, offices and retail outlets.
Moorhouse Commercial says epoxy repair is insufficient; the buildings are at risk of collapsing in another major earthquake.
In engineering terms, the dispute is over the buildings’ post-earthquake ‘stiffness;’ the ‘bonding’ between concrete and reinforcing steel rods.
The buildings were constructed between 1954 and 1997, using smooth sided steel rods. Structural engineers have since learnt that the bond between smooth reinforcing steel rods and concrete poured around them could lessen or slip following earthquakes. Industry preference now is for ribbed reinforcing steel, providing better bonding; more grip, and a more robust structure.
Moorhouse Commercial says extensive exterior cracking post-earthquake is clear evidence of potential structural failure, requiring Vero to pay for a rebuild.
Vero’s engineering experts said epoxy resin repairs already undertaken are sufficient and that Moorhouse Commercial is overstating the seismic risk.
The Court of Appeal ruled it is for Moorhouse Commercial to prove Vero is in breach of its insurance contract. To force a rebuild, Moorhouse has to prove the earthquakes caused damage to the buildings’ structural integrity.
It is possible that bond loss occurred, the Court said. But Moorhouse Commercial has to prove it.
Moorhouse Commercial Park Ltd v. Vero Insurance – Court of Appeal (3.09.24)
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