Spat over flooded home set for court

An $8.5 million insurance spat over a luxury Christchurch mansion is destined for the courtroom.

Golden Homes building firm owner Pavlos van Aalst and GJO Trustees are suing IAG because it is unwilling to pay for the Redcliffs property to be rebuilt.

Van Aalst says the estuary has flooded the lounge and that IAG made ’’factually incorrect’’ statements about the 145 Main Rd property.

IAG says the house is leaking and its offer of about $2 million for a repair is unchanged.

Both parties now accept a High Court determination will likely be needed. Proceedings were filed in November 2015.

There is now a dispute over flooding issues at the mansion, which its owners claim will cost nearly $8.5 million to rebuild – the same it will cost to fix New Brighton’s earthquake-damaged pier.

IAG customer reinstatement general manager Renee Walker said the company had been waiting on engineering and water reports for the property.

‘‘The homeowners believed that there

"It is likely this claim will go to court..." Renee Walker, IAG customer reinstatement general manager

was water from the [Avon Heathcote] estuary beneath the house,’’ she said.

The insurer tested the water and believed it was likely a leak from the home and ‘‘certainly not estuary water’’.

‘‘All engineering reports indicate that the home is repairable, therefore our offer remains unchanged.

‘‘It is likely this claim will go to court as the homeowners expectations are wildly different from our current position,’’ Walker said.

IAG believed the home could be repaired for about $2 million.

In a statement issued by lawyers Anthony Harper, the owners labelled IAG’s comments ‘‘factually incorrect’’.

‘‘As with many Cantabrians, such statements from our insurer fail to add any positivity to our insurance experience or belief that our insurer will meet their contractual obligations.

‘‘We have never received an offer from IAG,’’ they said.

The owners had provided reports supporting their view the house could not be repaired to the policy standard.

‘‘There is significant water within the foundation and flooding of the lounge.

‘‘The water to the house has been turned off for some time, so it is clear that the water is coming from an external source, which we believe to be beneath the foundation, not from the house as suggested by IAG.

‘‘While we would prefer to resolve our claim directly with IAG, it appears that it will be necessary for the Court to determine the matter, given the dispute over whether the house is repairable or a rebuild,’’ the owners said.

The ‘‘luxury highly specified building’’ was built between 2007 and 2010. The property is about 812 square metres and overlooks the estuary.

The home was severely damaged during the Canterbury earthquakes, sustaining ‘‘unacceptable levels’’ of foundation deformation, lateral spreading, cracked floors and leaning and cracked walls.

It was understood the plaintiffs were living there at the time of the earthquakes.