This case involved a Christchurch house registered as a historic place, which was damaged in the earthquakes of late 2010 and early 2011. The house was unsafe to enter or repair and had demolished. Tower Insurance proposed to employ modern and cost-effective methods to rebuild the house, rather than using all of the original materials and specifications, as the owner would have wanted. The High Court examined the effect of the insurance policy’s requirement to rebuild the house “to the same condition and extent as when new”.
The High Court held that the requirement was not to rebuild an identical house, or to the exact specifications as it had when new. The wording “to the same extent or condition” modified “as when new”, so that Tower’s obligation was to provide something equal in size, facilities and quality to the house when it was new, but not exactly the same. Accordingly, Tower could use modern methods and materials where reasonable.
In the result, some of the more expensive but unique aspects of the house still had to be replaced as they had been. However, where aspects could be substituted with modern, cheaper approaches of the same quality, those methods could be followed. For example, in light of the prohibition on open fires, Tower could provide a cheaper replica chimney rather than an expensive and redundant one.