Prattley loses Supreme Court Appeal


The Supreme Court on 6 December 2016 in Prattley Enterprises Ltd v Vero [2016] NZSC 158 dismissed an appeal by Prattley against the refusal of the Court of Appeal to set aside an insurance  settlement agreement and order Vero to pay it a further $2.7M for damage to Worcester Towers in the Canterbury earthquakes.  Vero insured the building on an indemnity, and not reinstatement basis for $1,605,000.  The property was damaged in September, December and February earthquakes.  It was demolished in September 2011.  Prattley and Vero entered into a claim settlement agreement on 23 August 2011 where Vero agreed to pay Prattley $1.481M in full and final settlment.  In the Court proceedings Prattley asked the Court to set aside the settlement agreement under the Contractual Mistakes Act.  The Supreme Court dismissed the Prattley argument.  Prattley knew what it was doing when it entered into the settlement agreement and that it had actually got more under the settlement agreement than what it was probably entitled to being the market value of the building of $520,000.  Prattley took out indemnity insurance cover and not replacement insurance cover so could not recover more than its loss which was the market value before the quakes.