New Zealand’s Supreme Court has dismissed an appeal by a broker who misled clients before they lost their house in the Christchurch earthquakes.

In 2009 John Jackson told Nicola and Jacques Marchand he had covered their home, vehicles and business through IAG-owned NZI. In fact, he arranged insurance for their medical practice only.

The clients discovered the failure when their house was badly damaged by earthquake in September 2010.

The Supreme Court last week ruled the broker’s assurances were false, which made his conduct dishonest. If Mr Jackson had not hidden the truth, the Marchands would have secured cover elsewhere before the quake, the ruling says.

The case concerned a dishonesty exclusion in an IAG professional indemnity policy held by Mr Jackson.

IAG had earlier applied for a summary judgement that it should not have to pay for losses on the couple’s property because of Mr Jackson’s dishonesty.

The application was declined in the High Court, but succeeded in the Court of Appeal, which ruled the policy did not cover dishonest conduct.

The Supreme Court says Mr Jackson has failed to show that his conduct was honest, saying he “mainly relies on his physical and mental infirmities to negate any conception of dishonesty”.

“Although the ailments may have had an effect on Mr Jackson’s intentions and motivations, those… are not relevant to the objective part of the test of dishonesty.”

The Supreme Court ordered Mr Jackson to pay the Marchands $2500 in costs.