Christchurch High Court Earthquake Litigation List

Christchurch High Court Earthquake Litigation List 
As of 30 September 2016

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Figure 1: Breakdown of insurers, claims amounts and areas
 (Interactive version can be viewed by clicking on the image above)

Here is a graphical analysis of the Christchurch High Court earthquake list as at 30 September 2016. Mouse over the insurers in the left-hand section to see how many High Court cases each one is involved in. Clicking on each rectangle activates the pie chart and map information for one insurer.

If you move the mouse over the pie chart in the centre, you can see the total dollar values for residential and commercial claims against the particular insurer. The “highlighted” figure shown is for the area of the chart the mouse is currently in.

In the block diagram showing active and inactive cases at the bottom right, you can grey out either category by clicking on the circle beside the other category (e.g. click on “active” to highlight these cases only, or click on “inactive” to highlight inactive cases). You can see that almost no cases are inactive for the months of 2016.

The map shows the number of High Court cases by location by insurer. So you can immediately see where the main geographic concentrations for the respective insurers are. For example, claimants against Lloyd’s of London (which will be predominantly commercial claims) are almost exclusively in the city centre. For the large rectangles like EQC and IAG, with heavy concentrations throughout the city, if you mouse slowly over each suburb, you can see the number of people in each who have sued the insurer in question in the High Court.

Figure 2: Dollar value of High Court earthquake claims

This graph shows the gradual accumulation of High Court earthquake insurance claims expressed in dollars, starting from the first earthquake in September 2010. The blue columns represent High Court cases that are inactive (i.e. have been discontinued, cash settled, withdrawn, etc., or where a decision has been delivered by the court). The green columns represent active cases that are still to be heard. The red line shows the accumulation of costs for active cases, while the black line shows the accumulation of active and completed cases combined. Note the spikes in the number in July and December 2013, and in August/September 2016 (end of the period of limitation). 25% of claims do not specify a dollar value for the claim. This means that the combined total of $752,685,873 is well short of the full amount that is being claimed. In all probability, the complete figure is over $1,000,000,000. It should also be remembered that these are only claimants who have decided to sue their insurer or EQC. We should not forget low-income and vulnerable claimants, people with mental and physical health problems, the elderly, and those who accepted cash settlements. These are the real victims of the recovery.
While every care has been taken in compiling the statistics, Empowered Christchurch assumes no responsibility for the accuracy of the information.


The EQC leads the field with a total of 107 cases, while 79 of the Southern Response cases have been concluded. This means that government-controlled entities make up 186 (55%) of the total. Almost all of these will be under cap and “repair” cases – an unknown number of land cases are still to come.
Lumley is an IAG subsidiary, which means that the IAG Group accounts for close to one third (105) of the 336 concluded cases. Concluded cases do not actually go to court for one reason or another. They are frequently (cash) settled shortly before High Court proceedings commence, which is when serious legal costs accrue for the insurance companies.

Figure 3: Concluded cases by insurance company and solicitor/barrister – 30 September 2016

Here are the figures for the most proactive solicitors and barristers in High Court litigation. Grant Shand has the lion’s share in both categories, with no competitor in sight for concluded cases. In the active cases category, Jai Moss has a respectable 90, and Andrew Hooker, of Shine Lawyers, 38 cases. The former appears to be the only Christchurch lawyer* with any substantial number of cases, the other two being Auckland-based. It has been suggested that this is because local law firms rely heavily on banks and insurance companies for their bread-and-butter work. [*One Christchurch omission is S P Rennie, of Rhodes & Co., with 26 cases, but we will be updating the statistics as we receive more information.]


Figure 4:  Active cases by insurance company and solicitor/barrister – 30 September 2016

This figure shows the current High Court list of active cases.
Since our focus is on residential claims, companies writing mainly commercial business, such as QBE Insurance (13 cases), have been excluded. As with the statistics for concluded cases, the EQC is the clear leader, with 37% of the total of 402 active cases. The IAG Group (IAG + Lumley) account for 28%. IAG has still to settle approximately 60% of its total court cases (concluded and active), as does its subsidiary, Lumley. Vero, the number 2 in the private insurance market in New Zealand, has slightly more than 60% of its defence cases still to be heard (or cash settled). The EQC’s combined total of 310 High Court cases (to date) leaves it with roughly two thirds of the way to go. Most of the future claims for EQC land damage may be handled by the District Court (<$250,000) rather than the High Court. The smaller players (Tower and AA) have still to defend between 50% and 60% of their respective cases. Overall, therefore, the spread of remaining cases from best to worst is quite narrow, between 53% (Tower) and 66% (EQC).

Are you paying too much for your insurance premiums? This could be one reason.

The New Zealand insurance industry is dominated by two Australian groups, Sydney-based IAG (Insurance Australia Group) and Suncorp Group Limited, a Brisbane-based finance, banking and insurance corporation. IAG bought the AMI business in 2011 after the latter became insolvent, leaving the outstanding earthquake claims to be handled by the government through the new entity, Southern Response.

In December 2013, the IAG Group announced a A$1.845 billion deal to buy the underwriting businesses of Australia’s Wesfarmers, which included Lumley in New Zealand. At this point, IAG already owned NZI (its broker arm), State and AMI (non-quake related business), and was also behind cover provided by ASB, BNZ, and Cooperative Bank, and Warehouse Travel. The Lumley deal increased the group’s share of the overall New Zealand insurance market from 41.5% to around 50.5% and the new acquisition reportedly increased its share of the New Zealand home and motor insurance market from 60% to as much as 66%. In Germany and the USA, the market leader controls only around 10% of the overall market. In addition, since it owned three of the main four banking relationships, IAG was now in a position to ensure that price increases could occur across the majority of the bank channels.

market-sharesFigure 5: Market shares of IAG plus Suncorp

This section looks at the market share of the second-biggest player.

The Suncorp Group owns Vero Insurance, (known until 2003 as Royal & SunAlliance), which is New Zealand’s second-largest insurer, as well as SIS Insurance, AMP General Insurance, Axiom Insurance and Asteron Life. Vero operates through a large stable of different companies, covering most classes of insurance (commercial, marine, liability, travel and motor, as well as specialist risks) and sells exclusively to the broker market. Vero also holds a 68% share in AA Insurance. After IAG’s purchase of Lumley, however, Suncorp’s total market share of 23.5% of the general insurance market paled into insignificance in comparison with its rival. When taken together, these two groups control just under 75% of the general insurance market in New Zealand. As pointed out earlier, this contrasts dramatically with other insurance markets such as Germany and the USA, where the market leader controls only around 10% of the overall market.

In a submission to the New Zealand Commerce Commission in 2014, Suncorp objected to IAG’s acquisition of Lumley on the grounds that it would seriously decrease competition, particularly in the home and contents market, and also in the motor insurance segment. It pointed out that, at the end of 2013, IAG had settled 51% of its earthquake claims, compared to Lumley’s 70%. Purchasing a better performing rival, it argued, would “decrease the competitive tension on IAG to improve its claims handling record”.

However, despite the virtual cartel situation that resulted, the Commerce Commission gave the OK for the Lumley purchase by IAG without demur. A press article on the subject led with a picture of a small dog representing the Commerce Commission, the presumed metaphor being the Commission as poodle, with the government’s firm hand on the leash.


Figure 6: IAG share of total

The EQC is, of course, the elephant in the room. With 203 cases before the High Court, and 10,492 remedial claims as at the end of June 2016, the Earthquake Commission, whose stated function when set up in 1993 was “to reduce distress, both in those immediately affected by the disaster, and in the New Zealand economy and society”, appears determined to reduce the distress to the New Zealand economy only. Adopting a similar strategy to IAG, the EQC has given homeowners until the end of October 2016 to decide to either take a cash settlement, or to remain in the organisation’s managed repair queue. The Commission’s series of 6 community information meetings on DoV (diminution of value) payments for “increased liquefaction vulnerability” was abruptly terminated without explanation in mid-October. There are indications that many homeowners will also be suing EQC for its volte face on land remediation, since it paid the full pre-earthquake land value to homeowners affected by the September 2010 earthquake and many homeowners now face much more serious land damage, for which they are scarcely being compensated.

Southern Response’s efforts to reduce its claims payments also seem likely to be the subject of litigation for quite some time. Southern Response is the defendant in roughly 88 active High Court cases, half of which are with EQC as its co-defendant. So far, it has received two Crown pledges of $500 million, with an additional $250 million dollars approved. Its figure for payouts and operating costs is $2.28bn, with the gross cost of claims estimated at $2.904bn. This contrasts sharply with the forecast Crown support figure of $1.132bn.

Of the smaller insurance companies involved in the High Court litigation, the most noteworthy is Tower, a New Zealand insurer that claimed to have 10.5% of the house insurance market at the end of 2013. However, the company had a disproportionately large share of over cap claims transferred to it by the EQC (11,070 claims or approx. 35%). And with 45 or so active High Court cases, it accounts for roughly 11% of the total. Tower’s share price has been falling for much of this year and according to press reports, it is expected to face a $75m bill, as its reinsurance cover for the February 2011 event has already run out.


Source and more information:

Disclaimer: This information here has been compiled to the best of our knowledge for informational purposes only from publicly available sources, including the lists published by the Courts. Empowered Christchurch assumes no responsibility for the use of, or the accuracy of, the information.





Existing Use Rights – Sustainability or a hazardous future


Guests: Helen Beaumont, Head of Strategic Planning, Christchurch City Council

Councillor David East, Chair of the Regulation and Consents Committee, Christchurch City Council

Audience: 23 residents


Part A: Council has been applying Existing Use Right inappropriately, without following the process set out in the Resource Management Act, ignoring its own recommended procedure, ignoring MBIE guidelines on floor levels with EURs, and ignoring legal advice about development in high hazard areas.

Summary Part B

Council has been working against ratepayers in the interests of insurance companies and very few houses have been rebuilt to the correct height or repaired to the correct standard. However, Council’s role is irrelevant in terms of the relationship between claimants and insurer and claimants and EQC. Homeowners should get expert advice and insist on their entitlement under their insurance policy and/or the EQC Act.

Summary Part C (includes presentation)

CERA promised that houses would be rebuilt to the correct, safe heights.

900 properties in Christchurch are at high risk of flooding. The tidally influenced area extends much further than Council has admitted and rising groundwater and constant erosion poses a huge problem that has not been addressed.

Part A

Séamus welcomed everyone, introduced the speakers, and began with the background to the meeting. A meeting had been held with the Mayor on Council premises on 6 April 2016 to discuss various issues, including existing use rights, stop banks, and the old and vulnerable in the community. On that occasion, the Mayor had argued that Council had no legal basis for blocking the use of existing use rights. Another meeting with a Council team followed on 26 April, following the discovery of the discrepancy in flood modelling for the area north of Bridge Street in South Brighton. The explanation given at that time was that the 50 cm difference in floor levels between the two areas was a “revised assumption”, rather than a colossal mistake. Council originally estimated that only seven or eight houses were affected, and has subsequently revised the number downwards to five. As an outcome from the meeting, Council undertook to contact the people involved, to revise the incorrect PIMs, and to notify the insurance companies.

Empowered Christchurch established that it did not contact one of the people involved for almost a week, and none of three insurance companies that were contacted a week later had heard anything on the subject, either from Council or from ICNZ (the Insurance Council New Zealand). Following the meeting, Council then reneged on its commitment to a follow-up meeting, and instead told Empowered Christchurch to direct any future enquiries to an e-mail address that was not active (and is still not active). They also said that any further enquiries would be treated as local government official information act (LGOIMA) enquiries, exhibiting signs of a cover-up in progress. (The council web page on floor levels was hurriedly edited in the same week, and now advises homeowners to build at higher levels. A video with a similar message was posted featuring Mr Peter Sparrow, Council’s GM Consenting and Compliance.)


The two pieces of legislation that are important in the context of EURs were explained:

The Resource Management Act and the Building Act. The minimum floor level under the latter is 11.8 m, and 12.3 m under the former. [1]

Existing use rights is only defined under the Resource Management Act (RMA). An application procedure is set out that leads to the issue of an existing use rights certificate. Certain criteria must also be met for a property to qualify for existing use rights. Over the last five years, council has unilaterally declared EUR to apply to properties, with no reference to the RMA, and with no evidence requested or provided. In all of the cases that Empowered Christchurch is aware of, no existing use rights certificate has been issued.


Séamus then quoted from five examples that specified the process and requirements for EUR and advised against development in high hazard areas, some of which dated from as far back as 2010:


1) A Council senior planner (Kent Wilson) had detailed the 2 options for re-establishing a building in February 2012 (“either by demonstrating that existing use rights apply, or obtaining a resource consent”)


2) Legal advice[2] advising that development in hazardous areas should be prevented or restricted


3) A Council newsletter advising that the higher floor level (12.3 m) be applied for filling in flood management areas (FMAs)[3]


4) A Council newsletter acknowledging that the higher floor level was needed in more flood prone areas and that the one-in-50 year floor height under the Building Act was “not adequate”[4]


5) MBIE Guidance stating that, if existing use rights were applied, levels had to be at or above the Building Act 2004 level (11.8 m).[5]


In the vast majority of EUR cases, Council has wilfully ignored these guidelines and advice, and allowed building at substantially lower levels that benefit insurance companies and leave homeowners with a high risk of flooding.


Séamus concluded with a quote from Lianne Dalziel MP, writing to Tony Marriot in 2011, and detailing the risk of leaving residents with homes that were uninsurable against flooding. This underlines the fact that all these risks were already known and were being discussed in 2011, yet the decision was then made to transfer both risks and liability to residents.


Part B

Adrian Cowie then discussed the relationship between policyholders and their insurer, and between policyholders and the EQC. He pointed out the difference between a homeowner voluntarily requesting the application of existing use rights, where there is personal, individual control, and the way it has been used under insurance policy relationships. He emphasised that Christchurch City Council had no role to play in these relationships, which were governed by the specific insurance policy on the one hand, and by the EQC Act on the other. Under the Building Act, no action is required for a building damaged by an earthquake. However, this is not the case pursuant to the Earthquake Commission Act. When introduced, MBIE guidelines proposed repair standards that were well below what was required under the EQC Act and most insurance contracts.

He argued that Council has nothing to do with whether a building needs to be lifted because of settlement from the earthquakes. Adrian had requested Peter Sparrow to withdraw the video mentioned above, where the Council’s General Manager, Consenting and Compliance, had claimed that only five houses were affected. This is because floor levels and building height are crucial factors in every insurance policy claim (as new/as when new). Despite multiple requests for Council to issue a statement that they have no role in setting the standard for insurance policies, it has consistently refused to do so. This, he felt, was quite a shocking approach from an elected City Council. MBIE agreed to publish a statement of this kind on its website, explaining that its guidance does not apply for insurance policies.

As regards existing use rights, insurers have been saying “we don’t need to lift your house because we have existing use rights”. They have also used MBIE guidelines as an excuse not to lift, but only to repair foundations. This is incorrect. If a building was not flood-prone when new, and has settled in height and been damaged, it must be restored to a non-flood prone status after the damage has occurred. So Adrian’s advice was to ignore anything from Council and focus on the claimant’s individual entitlement under the insurance policy or pursuant to the EQC Act. The respective standards in each are what is definitive, not what the Council says.


At a recent surveyors’ conference here in Christchurch, UN Margareta Wahlström, the head of the United Nations Office for Disaster Risk reduction (UNISDR) singled out urban flooding as the greatest global risk to communities over coming years. This is very relevant to the Christchurch situation, where there has been significant land settlement and areas are now exposed to extreme flood risk. Despite this, CCC, EQC and Council are claiming that everything is fine and that buildings do not need to be lifted. Adrian reminded listeners that many New Zealand insurance policies (before the earthquakes) had no limit to the cost of reinstating buildings (no limit to the sum insured). Yet in the South Brighton area, almost no buildings have been raised to the 11.8 m, never mind the 12.3 m floor level. Of the properties in the South Brighton area that have been recently surveyed, and presumably rebuilt, almost every single one now has a hazard notice. This transfers the risk of flooding and erosion from insurers and Council to the homeowner. This is happening in Christchurch, which is ironically a member of the so-called “100 resilient cities” group.


Council has also been holding what appear to be secret meetings with insurers and PMOs since the earthquakes. There has been absolutely no evidence of Council actively trying to help ratepayers.


Land claims and diminution of value:

From the declaratory judgement, it appears the High Court allowed EQC to use the Diminution of Value in the absence of any evidence to the contrary provided by the owner.

So if your land has sunk and you can prove the fact, Adrian argued that EQC was obliged to lift it to at least its pre-earthquake height. In almost every case, the cost of this would be significantly more than the DoV payment. A further complication is that, in the future, if we have another earthquake, EQC cover could be refused because you did not spend an earlier DoV settlement to remediate your land.


In conclusion, Adrian recommended obtaining expert advice on land settlement to oblige EQC to restore it to the original height.

Similarly with house claims, he advised getting expert advice, expensive though it may be EQC is reimbursing owners their expert fees where these have shown EQC’s assessments to be in error. Under the EQC Act, the standard of repair is extremely high, and in most cases, it has not been met or assessed to the correct standard.

Likewise, many private insurance assessments have assessed to the wrong standard, so it generally pays to obtain your own, expert advice.

In summary, existing use rights in relation to floor levels and minimum flood heights are irrelevant in terms of an insurance policy. You cannot have existing use rights to rebuild a house lower and in a flood-prone or more flood-prone condition than it was when new, since this contradicts the “as new/as when new” definition in the insurance policy. Council’s rules or exemptions have no role to play in this.


Part C

June Presentation EUR_Land_Page_01

In the third presentation, Hugo displayed a series of documents and maps, contrasting the original intentions with the “recovery” and what was actually implemented in practice.

June Presentation EUR_Land_Page_02

In the first brochure, CERA stated that 11.8 m as a minimum floor height was insufficient in the flood-prone areas in Christchurch and that 12.3 was more appropriate. CERA also stated that it was working with the insurance companies to ensure houses would be raised to the correct level. June Presentation EUR_Land_Page_03
A CCC newsletter stated that existing use rights might apply for a rebuild on exactly the same footprint “so long as this was at or above the Building Act height” (1-in 50-year flood event = 11.8 m).

In a tidally influenced area, the higher RMA floor height should apply (12.3 m).

June Presentation EUR_Land_Page_04
A CCC document from October 2012 showed houses before and after the earthquakes, with the new houses having been raised to a safe level. This comforting scenario did not eventuate. He reminded the audience that the current minimum floor heights are 11.8 m under the Building Act, and 12.3 m under the Resource Management Act.


On the subject of land:

June Presentation EUR_Land_Page_05
Maps were presented showing the area of land with groundwater at less than a metre below the surface. This covered a substantial area (including both red and green zones to the east and west of the lower Avon. Under these conditions, land has started to erode from underneath.

June Presentation EUR_Land_Page_06
An EQC map highlighted the houses that were below the high tide mark. Hugo had questioned Gerry Brownlee on this subject at the Earthquake Forum back in 2013, but the Minister had then denied that any houses were below the high tide mark and repeated this assertion later on RNZ. The map shown was published with the IFV documentation from EQC and can be found on the EQC website. 11.2 m is the elevation given for the high tide (10.8 m plus 40 cm freeboard).

June Presentation EUR_Land_Page_07
A further LiDAR map showed much the same area for houses situated below the high tide mark. The original map colours had been adjusted to show differences in elevation more clearly.


A member of the audience asked for an explanation of the high tide mark. Hugo explained that the term generally used was “mean high water spring”, which is the average level for successive spring tides[6]. A follow-up question asked if the property would flood if it was below that mark. Hugo explained that several different factors came into play, such as groundwater and tidal influence. While some risks were gradual and could be lived with, others were more problematical.


June Presentation EUR_Land_Page_08
The next map was published by Dr Jan Wright, Parliamentary Commissioner for the Environment. This identified properties at high risk of flooding, the most immediate risk that New Zealand will have to face from climate change. Once again, the same contours in the lower Avon were visible as on the previous maps. The Commissioner estimated that there were 900 properties in Christchurch at the 11.2 m level or lower, and which were therefore at risk of flooding. Such houses, especially those close to the river, will have a very short lifetime in the face of rising sea levels.


June Presentation EUR_Land_Page_09
A recent Council map identified the red zone area, and also the low-lying green zones, some of which have also extremely high groundwater. This map also defined the tidally influenced area, yet the City Council has asserted that only an area as far as Admiral’s Way in New Brighton, but not beyond, is tidally influenced. This is patently incorrect, since a lake appears much further into the City on Avonside Drive at high tide and disappears at low tide. This demonstrates that the tidally influenced area extends much further upriver. Even six years after the earthquakes, Council has made no plans for this fact. The latest information suggests that this situation may drag on until 2021. Most of Christchurch is tidally influenced, and not only the coastal area. Given that a large part of the city has sunk, the incoming and outgoing tide is also removing a large quantity of land each day.


June Presentation EUR_Land_Page_10
The next maps, a set of three, showed groundwater boreholes at 20 m, 70 m and 100+ m from the river. The closer to the river, the greater the fluctuation in groundwater between low and high tide. In the light of rising sea levels, groundwater will eventually come to the surface, and sooner rather than later in the areas closer to the river. One way to address this problem, as recommended in the coastal policy statement, is to build relocatable houses, plan to remain for a short period, and then move elsewhere.


June Presentation EUR_Land_Page_11
The next slide was a statement from Martin Manning, an expert on groundwater and climate change. Studies show that coastal groundwater is directly connected with sea level rise. In Florida, groundwater has now reached the surface in some low-lying areas. A rise in the water table, which we have had here because of the loss of land height, automatically increases the flood risk. According to Civil Defence, the risk of flooding is currently much higher than the risk of earthquakes. With such high groundwater, there is no additional storage available in an extreme weather event.
June Presentation EUR_Land_Page_12
A further point was that, bizarrely, EQC’s flood modelling for increased flooding vulnerability (IFV) uses a bathtub model, which makes no allowance for storm surge (freeboard) and has no margin for error. Hugo reminded listeners of the massive erosion that followed last week’s storm in Australia as an illustration of how foolish such an approach is.


June Presentation EUR_Land_Page_13
A conference of New Zealand planners earlier this year asked the following questions:

  • Can we plan for a change?
  • Protect, accommodate or retreat?
  • Will the poor inherit the shore?


Closed groups of authorities have been planning for our future, without any involvement of the communities and without any dialogue process.


Further manoeuvring on the part of the authorities:

The natural hazards chapter in the Replacement District Plan was removed in September 2015. According to the latest information, Hugo believed that some of the authority of the Independent Hearings Panel for the Replacement District Plan would be transferred to Christchurch City Council to pass using the Resource Management Act. There has been no information about what changes are planned or when they will take place. Six years after the natural disaster, there is absolutely no excuse for further delay.


The next slide was from a senior council planner, who stated the following:

“There will be a level of trust between us, as a public body, and the community that we serve that says they are trying to do the right thing. We’ve got a point where there is a problem. We haven’t nailed the social impact of what it means to take away what, at the moment, is 17,000 households’ biggest asset. And the societal impacts are pretty huge.”

So the new hazard notices on properties basically constitute a removal of assets. Hugo called on the audience to make a careful and educated decision when deciding on their future.


The planner concluded by saying: “So it’s easier to put a rule in the plan that says you can’t live here any more. That might help someone, if they’ve got somewhere else to live. But I don’t believe that any rule is going to take away someone’s home unless we can provide them with viable alternative options to live somewhere.”


June Presentation EUR_Land_Page_14
The final slide was sent to CCC by Hugo in 2012. It pointed out that inaccurate flood modelling and EUR have created this situation where housing is being made uninsurable.


A Q&A session then followed. A question was asked about the Empowered Christchurch template letter to Council, stating that the homeowner would not accept existing use rights requested by a third party. Hugo said that while this had been effective, promotion of the declaration on the part of Council would have been more welcome. The representatives from Council were asked if this could be done. Councillor David East stated that he was Chair of the Regulation and Consents Committee at Council, but that “we don’t get involved in the day-to-day work of building consents”. He also said that he was not aware of any houses that had been built below the 11.8 Building Act level. He added shortly afterwards that, according to the information he had been given, not more than 5 houses had been built below the correct level.


Helen Beaumont “freely admitted” that Council had “got it wrong” in its flood modelling for the South Brighton area. [Despite this, the 79-year-old lady in Bridge Street interviewed last month by RNZ’s Checkpoint programme has recently been told by Council that it considers her floor level of 11.27 m above the Christchurch City Datum is adequate to protect her against flooding. This follows the Mayor stating at a press conference that no compensation would be paid to the affected homeowners, followed by the Deputy Mayor claiming in an interview on Newstalk ZB that this report of what the Mayor had said was not, in fact, correct.]


The discussion continued for some time, but with little new information coming from the Council representatives.

Two additional slides were added to the presentation following the event, before the presentation was forwarded to elected members of Council.

June Presentation EUR_Land_Page_15
June Presentation EUR_Land_Page_16


[1] (Séamus incorrectly stated that the 11.8 m under the Building Act applied for all of New Zealand, but of course, different areas will have different elevation and different tidal influences, so there are variations. 11.8 m is the minimum floor level in Christchurch pursuant to the Building Act. This inaccuracy was later corrected by Helen Beaumont.)

[2] Simpson Grierson legal advice to Local Government New Zealand in June 2010 (“The RMA provides councils with a comprehensive mandate to prevent or restrict both new developments and the extension of existing development in hazardous areas.”)

[4] “In most, but not all cases, it will be obvious which of these two levels [EC: 11.8 or 12.3] is the higher level, and therefore the dominant criteria (sic). These are not rules but effectively default positions.”


[5] “If a house is to be rebuilt on exactly the same footprint as before, existing use rights under the Resource Management Act to rebuild at the original floor level are likely to apply, so long as this is at or above the Building Act 2004 – one in 50 year flood level plus freeboard.”


[6] Popularly known as “king” tides, which occur every 14 days or so

Empowered Christchurch Inc.



Empowered Christchurch has been extremely active since the protest rally on 21 February 2016. Following on from the submission made to the Local Government and Environment Committee on the Regenerate Christchurch Bill back in December 2015, further submissions were made on the Replacement Christchurch District Plan at the end of February this year. A hearing panel of judges listened to submissions from community groups and individuals. One of the chapters covered was on coastal environment and the other on natural hazards. On 3 March, based on the evidence provided, the independent hearings panel asked the council to provide supplementary information on 1) sea level rise, 2) flood ponding management areas, and 3) permitted activities in rural areas. Most of this was duly submitted on 21 March 2016. However, on 20 April 2016, Council requested an extension for providing evidence on further high flood hazard modeling to Friday, 20 May 2016. The extension was granted the next day.

At the Seismics in the City meeting on 18 March 2016, we asked the Mayor, Lianne Dalziel, why she had not followed up on her offer to meet with us after the protest rally. A meeting was subsequently arranged for the morning of 6 April 2016. Here, the discussions centred on existing use rights (EURs), flood protection, ground water and building in high risk flood management areas (HRFMAs). The Mayor stated that Council lacked a statutory legal basis to prevent EUR rebuilds at the low floor levels we described (and illustrated with pictures). On existing use rights (EURs), Council agreed to seek a legal opinion from its solicitor, Brent Pizzey, as to whether EURs ceased to exist after a building platform has settled or removed laterally following an earthquake (a query made by Adrian Cowie). Council also undertook to follow the example of the MBIE and post a statement on its website reminding residents that Council regulations were not necessarily the same as insurance policy entitlements. We were told a working group would be set up to define the problems and determine the areas where Council could do something. A written response was promised by 20 April 2016, while the public would be kept informed on the Council website. No update has been forthcoming, but we did have a further meeting with Council on 26 April and will report on that in the near future..

Submission on the Draft Transition Recovery Plan: Greater Christchurch Earthquake Recovery: Transition to Regeneration



The earthquakes and their aftermath have hit the eastern suburbs hardest, so we feel that it is essential to have relevant community representatives’ involvement in the transition process to “Regenerate Christchurch”. Many members of our community face serious day-to-day challenges, such as substandard living conditions and uncertainty about the future of their homes. Many of the services and infrastructure in the area have disappeared or been withdrawn, and for “Regenerate Christchurch” to be successful, resident input is vital. We therefore hope that the Empowered Christchurch can look forward to productive cooperation between central and local authority bodies, on the one hand, and tax- and ratepayers on the other, over the coming years.

The Christchurch recovery is now at a crossroads, where we need to look for a way forward and reach some difficult decisions. We also need to look back, since although the past cannot be changed we can all learn from it. In hindsight, it is clear that some decisions taken over the last five years could have been better. We need to make sustainable decisions at this juncture, so that generations to come can learn from our mistakes. Let us remember that our city of the future will be their city of the present.

Context and background
It is important to look in detail at how the recovery has been handled.

We have been dissatisfied with the manner in which communication has been handled by the recovery authorities and also with the provision of and access to information.

We feel that genuine community representation is lacking to a large extent: agencies are dependent for funding on local bodies, territorial authorities and even in some cases insurance companies. As a community group, we have frequently been stonewalled when asking questions or raising concerns.

The missing stakeholder
A series of decisions have been made over the recovery up to now where “all the stakeholders” are consulted but one. The stakeholder excluded from almost every decision has been the homeowner.

If political planning is prepared to sacrifice sustainability in the interest of short-term cost savings, the consequences can be devastating for the people affected. Our main concern is that people who were fully insured may end up homeless, facing a lifetime of poverty after 2-3 political cycles.

CERA made zoning decisions based on the assumption that individual solutions were available. In fact, individual solutions are not available in some coastal areas. The temporary stop banks in along the coastal areas are rapidly eroding. Some properties have been left below high tide mark on land that has a limited future life. The New Zealand Insurance Council has stated that they would like hazard notices attached to all properties with risks, so that people know exactly what they are buying. Certain coastal areas of land have been identified as high hazard and may disappear as the result of erosion within the next 50 years. The likelihood is that properties on such land will quickly become uninsurable in the years to come, and will not be accepted as security for a mortgage.

Unlike insurance companies, banks are not risk takers and will foreclose on any mortgaged property that loses its insurance cover once hazards have been identified.
The potential scenario residents face was highlighted recently on Radio NZ, when Westpac gave farmers in Northland 30 days’ notice to refinance, with the alternative of foreclosure on their farms.

The 6.2 earthquake under the eastern suburbs on 23 December 2011, after which Lianne Dalziel, Bob Parker, John Key and Roger Sutton all indicated that new zoning decisions might be made, now appears to have been a mysterious event, since the ground shaking measurements for this earthquake have disappeared.

This is one example of the lack of open and accurate communication from the authorities referred to above. There is also a reason to point out the New Brighton Earthquake that struck in 1869.

Seismic risk
One thing we can learn from the past is that seismic risk in Canterbury had been underestimated before the earthquakes struck. This is confirmed in a report for EQC in 1991. It is also the conclusion of the Royal Commission in the CTV report. A number of recommendations have been made but not followed. For example, neither the AS/NZS 1170.5 standard nor the New Zealand Geotechnical Society guidelines have been updated. Yet another recovery instrument is the Earthquake Prone Building Act, which is still to be passed by Parliament. As the emergency response part of the recovery is now behind us, we need to ensure sustainability for what lies ahead.

Risk acceptance
It is the role of insurance companies, the EQC included, to accept the risks covered under their terms of reference/policies and compensate policyholders when such risks eventuate. However, many policyholders in Christchurch have not been compensated for the damage to their homes and lives. These responsibilities need to be faced by the entities responsible. An equitable solution needs to be found for properties with hazards such as flooding that are a direct result of the earthquakes. In tandem with this, every effort must be made to protect residents from the risks posed by climate change.

Future insurability
Recommendations to the Department of the Prime Minister and Cabinet (DPMC) from ICNZ include taking a long-view – and requiring local authorities to deny consent applications where a long-term perspective risks from natural hazards will increase. It also recommended the issue of hazard notices for all properties affected.
We welcome the long-view but we are concerned that due to the increased risk caused by the earthquakes, future insurance cover will not be available. When the District Plan is made operative the hazards will finally be mapped. Despite the fact that hazards have still not been mapped, we have examples of insurance cover being withdrawn, offered on a monthly basis, and fire insurance being refused.

In an article in the New Zealand Herald of 5 November 2014, the CEO of IAG refers to cooperation with the NZ Government on a strategic intent in 2011 to avoid depopulation of Christchurch. Now that the ICNZ has signalled its intention to withdraw from high-risk areas and the CCC also plans to redefine the boundaries of the city so as to exclude properties below the Mean High Water Springs. We ask whether a “recovery” involves abandoning people once the insurance and bank sectors have managed a retreat.
The EQC does not cover flooding events, which will represent the largest uninsured risk exposure for those Christchurch residents in the future.

Homeowners have not had a fair representation in this recovery.

The declaratory judgment was a one-sided decision, and in the middle of the proceedings CCC took the side of the EQC. The concerns of the community were not addressed in that judgement. EQC stated that it had not paid for subsidence of land before. In fact, EQC made compensation payments for subsidence after the Waihi ground subsidence in 2001.
EQC and CCC reached an agreement to evaluate area-wide solutions for the Avon Estuary, knowing that the current solutions (temporary stop banks) would not suffice. The solution, which is currently being evaluated, is tidal barriers. This solution was previously rejected by the Ministry of the Environment in 2007, and identified as posing the risk of an ecological disaster. This has been done without consultation with the affected people. Meanwhile insurance companies have been settling insurance claims when it is known that the land has a very limited future. The EQC has still not communicated the known land damage to homeowners.

NZCPS (New Zealand Coastal Policy Statement)
CERA did not consider the NZCPS when they conducted their planning/zoning.
Likewise, the statutory obligations of planning for coastal risk were not considered.

Access to information
Homeowners have been denied access to land information on the basis that the information is commercially sensitive. In fact, they have been presented with out-dated information that excludes over 100 earthquakes. These facts have been brought to the attention of CanCERN, EQC, MBIE and Council. There is still no explanation for why these documents have not been updated and are still being presented as current. The EQC stage 3 land report dates the last earthquake as occurring in June 2011. Yet we experienced over 100 earthquakes of magnitude 4-6.2 after that, most of which struck under the eastern suburbs.


CERA, Briefing to the incoming minister
The CERA Briefing to the incoming Minister, October 2014, states the following:

“As reconstruction continues over the next 10 years, a greater focus on developing and realising the vision for greater Christchurch is needed to ensure that long-term recovery is self-sustaining.”

“The eastern suburbs of Christchurch city, which suffered the greatest housing and land damage in the earthquakes, are now experiencing greater rebuild and insurance complexities. The residents of these areas, many of whom have pre-existing vulnerabilities such as low incomes and/or a disability, are experiencing a more challenging recovery than those in other areas of greater Christchurch.

Other issues may complicate claim resolution, such as where owners have cash settled and will therefore have to manage potentially complex rebuilds or repairs themselves in a period of cost inflation. Under-insurance and/or deferred maintenance may mean some owners face funding shortfalls and need to make additional contributions to complete rebuild or repair. Helping owners understand their insurance policies, rights and obligations relating to property ownership and technical aspects of their repair or rebuild is the preferred approach to resolving claims and reaching flexible solutions that meet the individual needs of the parties. CERA will therefore continue to support owners to facilitate faster resolution of insurance claims through supporting the Residential Advisory Service to provide independent information, technical advice and facilitation.”

The residents in the Eastern suburbs were no less insured than anyone else in the city. In fact it has been identified that there was more underinsurance in the western part of the city.

Indemnity insurance is a priority for the recovery authorities. The only problem is that with full indemnity cover there is no accountability.

Without accountability unsustainable practices can take place.

CERA Community Forum
The CERA community forum is one of the administrative structures whereby the Minister is expected to receive input from the community.
However, our experience is that when serious matters are brought to the table of this organization, they are brushed aside or deferred. The minutes from the forum were not published until an OIA request was lodged six months later. The issues brought up were written off as a misunderstanding. The concerns pointed out to the forum are reflected in the results of a recent MBIE inspection of 14 properties, where 13 of them failed.
The root of this problem was presented to the CERA forum in June 2013.
Large sections of the minutes of the forum have been blanked out, which does not instil confidence. In short, we do not see that the forum is serving its intended purpose.


Written Comments

  1. Do you have any views on the powers and provisions that will be needed in the new legislation to support regeneration?

Future insurance is a crucial element for the residents of Christchurch. As current legislation stands, large parts of the coastal areas in Christchurch face a future without any insurance cover or mortgages. The legislation powers should be used to enforce minimal low-cost insurance availability. If that cannot be achieved, rezoning needs to be considered.
The EQC does not provide cover for flooding unless it is caused by another disaster. It may also decline cover for a hazard that already attaches to a property (Section 72 notification). In turn, insurance companies may reject a claim for hazard damage that has already been rejected by the EQC. This leaves property owners totally exposed to natural hazard risks.
A recovery that leaves fully insured people in this position cannot be considered a successful recovery. Legislative powers need to focus on sustainability and consider that people’s lives are being planned for. Planning and decision-making that only takes the perspective of a political cycle can be very damaging for the city.
The community will always elect representatives for long-term planning. However, politicians focus on 3-year planning cycles, since they cannot be sure they will be in office after the next election, Council, on the other hand, can take both approaches. The more consultation there is between the Council and community leaders the better the balance will be between short- and long-term approaches to issues.
Legislation should not be allowed to delay sustainability simply in order to reduce costs. Christchurch hazards have been mapped by both ECan and CCC. According to the RMA 86(B) (3)(a), any notified hazard relating to water in coastal areas must be implemented upon notification, including the increase in the finished floor level (FFL) to 12.3 m above the Christchurch City datum.
Council has informed homeowners that the hazard maps have not become operative because the district plan was passed by an Order in Council. As a result of this, residents have been denied sustainable planning and left at risk. It appears in this case that the legislation is obstructing sustainability, and any future legislation needs to consider this danger.
We suggest that homeowners be provided with financial subsidies, including legal assistance. We propose the independent election of 5 individuals by the communities who would have the role of assisting with negotiations, submissions on laws, bylaws, plans and other instruments of the recovery.
We agree with the CCC that any powers retained under section 27 should be exercised only at the request, and for the benefit, of affected local authorities, for a purpose that complies with the new Act.

  1. Do you think that the proposed new arrangements for the central city will create the ‘step-change’ needed to drive business confidence and investment in the central city?

We fully support the idea of a Christchurch City Council-led recovery approach, with the Crown in a role of close cooperation. With the active engagement of community leaders, we believe this is the best solution, and the only way to restore the trust required to re-unite the city and move it forward. We cannot change the past but we can plan for a better future. Community engagement, sustainability and transparency are key components for success. Without these, there is the potential for the city to fragment and for serious conflicts to develop.
The “too-hard basket” is overflowing and needs to be dealt with to avoid public unrest.

We believe many aspects, such as a one-stop shop for resource consents and building consents, would help simplify processes.

The long-running disputes over insurance claims must be resolved, and homeowners’ rights honoured. After nearly five years, a duty of care is owed to those affected and still suffering.

One-sided arguments at the expense of the homeowner must stop.

We are extremely concerned about the potential for “regulatory capture”. This concern also extends to the well-funded central and local government training of selected “leaders in the community”, and to other agencies such as RAS, which are mainly funded by the insurance industry. In far too many cases, there has been an absence of open and transparent communication. Independent and unbiased actions in the interests of the communities affected are required from all such bodies and entities.
Neither South Brighton Residents’ Association nor Empowered Christchurch has a representative in this selected leaders group.

We are in favour of CCC endeavouring to attract private investors with the support of central government. We suggest that successful businesses in Christchurch should also be given an opportunity for input here, or encouraged to open up their networks. Investment by supporting industries could strengthen local successes. The business connections are already in place.


  1. Are there any other changes needed to build confidence and encourage investment in the central city rebuild?

If the intention is to attract foreign investment to the city, added facilities are needed. For example, there is a serious lack of swimming pools and saunas in Christchurch. This is a fundamental facility in most cultures, Christchurch can excel in this field and utilise the unique greenery and natural attraction of the red zones. We fully support tourist and visitor attractions such as the Eden Project. “Christchurch – unique – green and clean”.

  1. What are your views on the proposal for regular monitoring and public reporting on priority areas in order to hold agencies accountable for addressing recovery issues?

Independence on the part of recovery agencies and the honouring of the provisions and specifications in insurance contracts is a vital part of the recovery (cf. regulatory capture risk mentioned above). The briefing to the incoming minister illustrates how these aspects have failed.

In December 2012, CERA published the TC3 Residential Rebuild Booklet.
This is an extract from page17:

Home owners should note the fact that most insurance policies in place at the time of the earthquakes will cover the cost of building consent requirements to raise finished floor levels to meet standards set in the Building Act.

Insurers will continue to work productively with the Council, EQC and other agencies to provide best outcomes for policyholders.

EQC and Insurers are working to prioritise the claims of vulnerable groups in the community.”

Considering the number of properties still sitting below high tide after the earthquakes, this indicates that something has gone wrong in the recovery and that original principles have been abandoned.

Empowered Christchurch has reached an agreement with Council on a letter that protects the rights of vulnerable people. We suggest that issue of this letter is made mandatory for anyone seeking assistance from the RAS service. 

  1. In your opinion, is there a better way to report on these recovery issues?

We believe that, as regards residential recovery, monitoring should extend to code compliance certificates.
According to figures published in 2014, only fractions of repairs/rebuilds are completed with the issue of a code compliance certificate. To conclude the work to the required standard, someone must pay for the code compliance.

Leaving things as they are could have serious negative consequences for the recovery and for the city as a whole. We suggest an investigation of number of outstanding code compliance certificates and that responsible parties are made to address this outstanding work.
We recommend that following this process structural EQC repairs are to be listed on LIM reports and form a final part of the insurance claim settlement with consultation with the homeowner.


Looking at the recovery from the perspective of the eastern suburbs, it is impossible to avoid thinking of a phenomenon referred to as “disaster capitalism” and considering the aspects that have already become evident in the recovery process. Loss of equity and quality of life, risk transfer and other substantial shifts are taking place. We suggest that a regular mini-census should be conducted throughout the remainder of the recovery at intervals of 6-12 months to monitor deprivation, insurance cover (or lack of it), mortgage, home equity, and rental status. If unexpected changes identified, investigation and correction measures should be implemented.


Any other comments: (Also see “context and background”.)
At the beginning of the recovery, the city’s residents trusted blindly in the authorities. People had learned to expect government and the authorities to do the right thing for them and treat them with care and consideration.


Some people of Christchurch have now lost this blind trust, and frustration is building up; it will take significant efforts to reverse this erosion of confidence and stem the build-up of anger. To achieve this, there needs to be access to complete and accurate information, transparency, engagement, sustainability, fairness and care.

Let us remember the much-quoted assurance from the Prime Minister in 2011: “On behalf of the Government, let me be clear that no one will be left to walk this journey alone.
New Zealand will walk this journey with you. We will be there every step of the way.
Christchurch; this is not your test; this is New Zealand’s test.
I promise we will meet this test

Empowered Christchurch calls on the authorities to live up to this promise.

After nearly five years of “Emergency Response”, where sustainability has been sacrificed in the interests of speed, we can assume that this phase is now behind us. We see no reason why this period should be extended until April 2016. Lessons must be learned from the past.

It is time to move into the “Restoration Phase”. Once seismic and building standards are corrected, and risks are notified, mapped and accepted, sustainability will be ensured.

We need a city that is driven by the people that live in it, and enabled by a bureaucracy that accepts and mitigates risks, rather than transferring them to the most vulnerable of its residents.




Empowered Christchurch
Hugo Kristinsson,

+64 (0) 3 3535 640

About Empowered Christchurch.
Empowered Christchurch is an apolitical community group with over 2000 members set up to support victims of the Canterbury earthquakes, to find answers to their questions and to help achieve fair settlements for homeowners.