The High Court has ruled the Government's offer to buy out uninsured red zone land in Christchurch for 50% of 2007 values was "not made in accordance with the law."
The Government said it was considering its options after the court ruling, which could include an appeal. A spokesman for Earthquake Recovery Minister Gerry Brownlee said on Tuesday the ruling would be applealed.
The ruling throws into doubt the current time lines for the NZ$40 billion rebuild of Christchurch's CBD and residential areas, given many of the ininsured sections being compulsorily acquired are integrated into the 'anchor projects' seen as the focus of the rebuild. Corrected in next paragraph.
Justice Panckhurst ordered in his decision the offers to Fowler Developments, which owned 11 sections on north-eastern outskirts of Christchurch worth NZ$1.95 million, and those to 46 property owners in the 'Quake Outcasts' group, to be set aside. A spokesman for the minister said the ruling only applied to residential sections in the red zone, which would not be rebuilt on. The ruling did not apply to any of the anchor project land, he said.
The government is spending NZ$1.7 billion buying red zone properties, although not all of them were uninsured. Insured properties are being bought at 100% of the 2007 Registered Value. The properties referred to in the judgement represented less than 1% of the properties being bought.
Justice Panckhurst said the Outcasts group had argued the 50% offers were not made under the Earthquake Recovery Act and were therefore not lawful.
"They further allege that the offer is oppressive, disproportionate, contrary to their human rights and an abuse of power," he said.
The Government's decision to offer those with insured land 100% while those without insured land were offered 50% was a blunt instrument, given that many were uninsured through no fault of their own, he said.
"The lack of even-handedness argument however, has I think considerable merit. Clearly, the main impetus for the June 2011 decision to make 100 percent offers to insured property owners was the need to provide certainty and create the confidence necessary to enable people to move on with their lives, given that “many people have their life savings tied up in their homes”, to borrow the Prime Minister’s phrase. Importantly, these considerations apply equally to many of the applicants, particularly those who are the owners of uninsured house properties."
The 50% offers would not allow land owners to make a fresh start, he added.
"Many owners are people of modest means, some are elderly and it is commonplace that their land and home is their one substantial asset. I am satisfied that the plight of this relatively small group has not been adequately considered in light of the purposes of the Act," Justice Panckhurst said.
He directed Brownlee and Canterbury Earthquake Recovery Authority CEO Roger Sutton to reconsider and reach a new decision.
(Updated to correct reference to slowing the rebuild or that the ruling would affect anchor projects).
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