Owner of wrecked mansion still fighting for $5m payout

The owner of a Christchurch riverside mansion lost in the earthquakes is fighting his insurer's demand that he buy a $5 million to $6m house before it settles his claim.

Riverlaw owner Paul Myall is challenging insurance company Tower in the High Court over the settlement, and is fighting its attempts to charge him more than $400,000 interest on interim payments made.

Myall owned and extensively restored the three-storey 19th century Riverlaw homestead, at the foot of Murray Aynsley hill in Christchurch. It was badly damaged in the earthquakes and demolished in 2012.  

He now wants the court to order Tower to pay him the agreed final settlement on his Super Maxi Protection policy.

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As with some of its other large Christchurch settlements, Tower will pay for a home of similar value exclusive of land cost, but will not cash settle. The house settlement is worth $5.273m which, on top of land cost, would mean a property worth about $6m. 

Tower also wants to deduct almost $420,000 interest on the $3m it paid Mayall in 2012 and 2013 before court rulings boosted the settlement. Another hearing in 2017 saw the settlement reduced by $1m due to an underestimated floor size in the insurance policy, a ruling Myall unsuccessfully tried to appeal. 

In one earlier ruling, the judge said houses "do not come much grander than Riverlaw". Built by Member of Parliament Hugh Percy Murray-Aynsley, the mansion was once considered one of the city's finest homes.

Myall now lives in Australia, where he has bought a replacement home with the earlier payments, and has been battling cancer. He put the Riverlaw land up for sale after deciding not to rebuild on the site.

In a hearing in Christchurch this month before Justice Rachel Dunningham, Myall's lawyer, Kevin Sullivan, said his client wanted the court to order a final settlement so he could "move on with his life".

Having to buy a $5m to $6m home would mean Myall having to sell his existing home, Sullivan said. It would also be "a herculean task" to find a suitable qualifying property in New Zealand to "unlock" the balance of the settlement.

"We want the issue put to bed or it is never going to end and we will just face another hearing next year," he said.

Regarding the interest claim, Sullivan said Tower's previous payments had been made unconditionally as full payouts at the time.

During the long court battle Myall had been paying a mortgage for a house he had lost, while having to find another home.

There was no precedent for an insurer demanding interest in such a case, he said.

"There are no requirements on how it should be used. I say that is absolute rubbish – there is no basis on which Tower can claim interest".

On behalf of Tower, Matthew Harris said Myall was entitled to a replacement house, not cash. 

It would be unjust to allow Myall to enjoy the "huge benefit of funds paid out to him" when he wasn't planning to rebuild, and there was money he was not entitled to keep, Harris said.

Claimants applying money for other purposes other than rebuilding could "enjoy windfall profits", which created an incentive to delay, he said. 

"The insured should account for the benefit of those funds.

"We've run into problems in other cases where people have run off and done other things with the money and then run out of money for replacement costs."

Harris said Myall had "played his cards every step of the way in order to maximise his recovery".

Justice Dunningham indicated she would make her judgment next year.