Last year, the High Court found the Government claim settlement agency had misled and deceived Karl and Alison Dodds when it kept secret from them a higher estimate to rebuild their quake-damaged home.
It led to the couple unwittingly settling for an option of about $895,000 - a lot less than the true estimate - and they bought elsewhere.
The Dodds were awarded costs by the High Court of nearly $179,000.
However, the government ordered an appeal, despite the couple pleading for the saga to be put to bed, because there could be up to 3000 homeowners in the same situation.
At the Court of Appeal today, both sides were asked to provide written submissions on a question of duty of good faith.
"It does rather depend on that [good faith] becoming significant ... if we take a view that we need to look more closely at the question of what loss flowed and what remedy might be appropriate," Justice Miller said.
He said the court would issue a minute outlining what was required for the submissions.
Justice Miller said they would then assess whether another court hearing was needed.
Karl Dodds sat patiently at the back of the court hearing - a briefcase and documents in hand.
