Judgment summary - earthquake damage - University of Canterbury v The Insurance Council of New Zealand Incorporated and others

[2014] NZSC 193

This appeal concerned the extent to which the Christchurch City Council was entitled, under the Building Act 2004, to require the strengthening of earthquake-prone buildings (being a building under 34% of code, or new building standard).

The case began in the High Court with a judicial review of the Christchurch City Council's Earthquake-Prone, Dangerous and Insanitary Buildings Policy 2010, which required earthquake-prone buildings to be strengthened to 67% of code, rather than the alternative 34% of code argued by insurers.

High Court decision

In the High Court, Justice Panckhurst found that the Council cannot issue a policy which requires buildings to be brought up to 67% of code. However, they can require buildings to be brought up to 34% of code, and require any other specific work to reduce or remove specific vulnerabilities of a building.

The declarations made were:

"The Court grants a declaration that in issuing a notice in respect of an earthquake prone building under s 124 of the Building Act 2004 the Christchurch City Council cannot require a building owner to take steps to increase the seismic strength of the building to a greater extent than is necessary to ensure that the building will not have its ultimate capacity exceeded in a moderate earthquake as defined in clause 7 of the Building (Specified Systems Change the Use, and Earthquake-prone Buildings) Regulations 2005." and "The Christchurch City Council in issuing a notice in respect of an earthquake-prone building under section 124 of the Building Act 2004 can require a building owner to carry out work on a building to reduce or remove specific vulnerabilities capable of causing injury, death or property damage that arises in or from the building." The University of Canterbury appealed that decision, and the Insurance Council cross-appealed in relation to the second declaration.

Court of Appeal decision

The Court of Appeal described the issue to be considered as follows:

"The question is whether the Act conferred on councils such as the City Council the power to require strengthening work beyond one-third and up to 67 per cent of the NBS. If it did the policy was lawful. If not it was unlawful. Panckhurst J approached the application, rightly in our view, as raising an issue of statutory interpretation. What power was conferred by the Act to require works to a particular standard? Panckhurst J concluded that the City Council in enacting a policy whereby it...