Judgment summary - CERA v Fowler Developments Ltd and Quake Outcasts

[2013] NZHC 2173, [2014] 2 NZLR 54, (2013) 7 NZ ConvC 96-005

This case concerns two applications for judicial review heard together by consent. The first applicant, Fowler Developments Limited, is a property development company that owned eleven sections at Brooklands, all of which were red-zoned after the earthquakes. The second applicant, Quake Outcasts, is a group of 46 individual or joint owners of properties in the red zone. They all own either vacant land or uninsured properties.

The genesis of the proceedings was the making of offers by the chief executive of the Canterbury Earthquake Recovery Authority (CERA) to purchase either vacant land, or uninsured residential properties, for 50% of the 2007 rating value of the land.

During the hearing the declarations sought were reformulated. The relief sought was:

" A declaration that "neither the declaration of the red zone, nor the subsequent offers made by the Crown in those zones affect the existing rights at law of residential occupation of property owners in those zones. The decision(s) of the respondents to offer to purchase the properties of the Quake Outcasts are set aside, and the matter is remitted to the Ministers and chief executive who made the decisions to make new decisions to offer to purchase the properties in accordance with law, requiring them under s 4(5)(b) of the Judicature Amendment Act 1972 to make such decisions in accordance with the following directions. The decisions should: be in accordance with the purposes of the CER Act, particularly the need to ensure that affected communities recover from the impacts of the earthquakes; and have regard to: recognition that a market for the properties as residential properties no longer exists; the previous use of the 2007 RV as a basis for acquisition; the cost of acquiring an equivalent replacement property; the individual circumstances of the property owners; and the reasons for the Court's judgment." Justice Panckhurst considered that there were three main issues to consider:

Does the creation of the red zone and the making of buy-out offers to property owners within the zone affect the property rights of the applicants? Should the decision(s) which resulted in the chief executive making 50% offers to property owners in the red zone be set aside? If so, what form of relief is appropriate, if any? Are the property rights of owners within the red zone adversely affected?

Justice Panckhurst acknowledged the decision of...