New earthquake judgment - Vero Insurance New Zealand Ltd v Anthony Brendon Morrison and Gail Cross

Vero Insurance New Zealand Ltd v Anthony Brendon Morrison and Gail Cross [2015] NZCA 246

This is an appeal from the High Court's judgment in Morrison v Vero Insurance New Zealand Ltd [2014] NZHC 2344. The respondents are the trustees of the Tony Morrison Trust (TMT), which owns a commercial building in Woolston, Christchurch.

The High Court case considered computer modelling of the Canterbury earthquakes, and the extent to which that modelling was helpful for quantifying the extent of the damage to the building caused by each of the earthquakes. It also looked at when a building will be considered to be destroyed, under the policy.

Modelling of the damage

Vero challenged both the admissibility of the modelling evidence, and the weight given to that evidence.

The Court of Appeal considered whether the modelling evidence was admissible in terms of section 25 of the Evidence Act 2006. President Ellen France, giving the judgment of the Court, said:

"In the present case, we do not doubt that the evidence was admissible. It was plainly relevant. We also consider it met the reliability threshold and had some probative value. As we shall discuss, we accept Vero's submissions that there were flaws in the model that limited its probative value. However, we have not seen that conclusion as requiring us to revisit the threshold question of admissibility. Instead, we focus on the weight given to the model by the Judge because that analysis appears to us to better capture what is truly in issue in the present case." The Court of Appeal reviewed the evidence of the experts, and noted that there were some difficulties with the model. These included, notably, the fact that the model did not take liquefaction into account, although this was a significant cause of the damage in the February earthquake. It was also not clear from the model how the extent of damage translated to produce the list of repairs required. President Ellen France therefore said "we consider the model was given considerably more weight than it should have been".

She went on to consider the reports of the experts who had viewed the building, which indicated that there was additional damage from the June earthquake, but that this damage was for the most part to items which were already listed as requiring replacement. President Ellen France decided that:

"our view is that TMT has shown the June event required some additions to the scope of repairs. However, given the limitations of the...