Earthquake class action goes to High Court

by Samantha Woodhill23 Nov 2015
The EQC Action Group filed a legal proceeding against the Earthquake Commission in the High Court last, backed by Anthony Harper partner Peter Woods.

The group, 150 Canterbury homeowners, is seeking declarations on the interpretation of the EQC Act, arguing that clarification is needed on the Commission’s liability when it elects to settle by payment, replacement or reinstatement.  They also argue that the EQC’s liabilities are not met merely by compliance with MBIE guidance.

“The purpose of the declarations is to obtain that clarification.  Our clients consider that the issues addressed by the declarations are widespread and common to a large number of EQC claimants,” said Woods.   He said his clients have not been able to reach a settlement and will not be able to without clarification of the Commission’s obligations under the act.

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

The proceeding follows the Earthquake Commission’s failure to respond to a letter and an offer to sit down and discuss the issues.

“The Group considers that the declarations will clarify EQC's obligations and assist in resolving the impasse.  The Group offered to meet with EQC but EQC did not accept that offer,” Woods told NZ Lawyer.

“Members of the Group have been trying to resolve their own claims for more than four years and have reached an impasse.”

Among other things, group members are facing major delays, inadequate cash settlements and the refusal to assess and repair foundation and floor dislevelment.

“EQC will need to reassess the EQ damage and prepare new scopes of work in accordance with the statutory standard of repair,” Woods said. 

“Many members’ claims will go ‘over-cap’ as a result.  All should have the EQ damage to their homes paid for or repaired in accordance with EQC statutory obligations.”

The group has asked the court to expedite the claim, hoping a hearing will be held in Court in the first quarter of next year.

EQC told NZ Lawyer that they did not deem the actions appropriate for general resolution by a declaratory judgement process.  EQC said that Anthony Harper had not responded to requests to directly engage with the EQC in order to resolve the concerns of individual clients but that the firm had not yet to provide EQC with the concerns of each individual claim.

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