Christchurch homeowners launch group action against EQC

by Miklos Bolza16 Sep 2015
A group of 100 homeowners from Christchurch have taken class action against the Earthquake Commission (EQC) saying they have failed to meet their legal obligations.

Peter Woods, partner of legal firm, Anthony Harper, has been working on these proceedings for over 18 months and says the group action is around the Commission’s interpretation of the EQC Act.

“EQC’s interpretation has left many outstanding claims in dispute, and potentially many settled claims now in doubt,” Woods said.

“This is not a class action for damages. The group action is seeking declaratory judgements on how EQC interprets the EQC Act. These judgements cover serious issues and will have far-reaching implications for all New Zealanders.”

These declarations affect the Commission’s liability when it elects to settle by payment, replacement or reinstatement. Woods also contends that these liabilities are not met by merely complying with guidance from the Ministry of Business, Innovation and Employment (MBIE).

“Where the EQC Act states the definition of ‘replacement value’ is ‘when new’ and compliant with the building code, EQC has chosen to consider only the pre-earthquake condition of a building,” Woods said.

Last Wednesday (9 Sept), Anthony Harper delivered a letter to the EQC outlining the details of the group action. The Commission responded on Friday (11 Sept).

“EQC wants to resolve the repair issues associated with all of the customers who have joined the proposed Anthony Harper group action,” they wrote on the EQC website.

“In this regard, EQC has been trying to engage with Anthony Harper for the last 18 months, but Anthony Harper has yet to provide EQC with the concerns of each individual claim.”

“EQC considers that the most practical way to resolve the issues of the customers who have joined the proposed group action is to work with them directly.”

Woods sees the EQC as “reluctant” to accept liability for its standards of repair as well as what it says it is obligated to repair. While the Commission maintains it is only liable to cover earthquake damage and not the cost of related work, Woods says this simply isn’t the case.

“If the only way of replacing or reinstating earthquake-damaged parts of a building is to do work on other parts of the building that are undamaged, the cost of working on those other parts is simply part of the cost of replacing or reinstating the earthquake-damaged parts,” he said. “Accordingly [it] is a cost for which EQC is liable.”