Judgment summary - Quake Outcasts & Fowler Developments Ltd v Canterbury Earthquake Recovery Authority

[2015] NZSC 27

This is an appeal from the decisions of the High Court and the Court of Appeal.

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

In the High Court

Fowler Developments and the Quake Outcasts sought declarations from the High Court that the red zoning of land was unlawful, and that the decision to offer to purchase either vacant land or uninsured residential properties for 50% of the 2007 rating value of the land was improperly made.

Justice Panckhurst decided that any red zoning decision should have been made using the mechanisms set out in the Canterbury Earthquake Recovery Act 2011 (CER Act) rather than using the Government's prerogative powers, and that the red zoning of the land was therefore done improperly. However, he noted that the vast majority of the offers have been accepted, and that many people have now moved on. He said that "regardless of the decision-making process and my conclusion that the decision was not made according to law, the fact remains that the present situation is essentially a fait accompli".

He did, however, make:

"A declaration that the decision to create the red zone announced on 23 June 2011 did not lawfully affect the property rights of [the Quake Outcasts]." By the same reasoning, he found that the September 2012 decision to make 50 percent offers was also "made outside of, and without regard for, the statutory regime and was not made according to law." These offers were therefore set aside.

The Minister for Canterbury Earthquake Recovery and the Chief Executive of the Canterbury Earthquake Recovery Authority appealed the High Court's decision, arguing that both decisions were lawful and effective.

In the Court of Appeal

The Court of Appeal, in deciding whether the decision to create the red zone should have been made under the CER Act, considered various sections of the CER Act. They decided that the information about the red zone could have been released by the Chief Executive of CERA under section 30 of the CER Act, but that there was nothing that indicated an intention to restrict Ministers from also communicating...