Tougher earthquake strengthening overruled
Insurance companies and building owners could save hundreds of millions of dollars after a High Court decision overturned tougher rules for strengthening earthquake-prone buildings.
The judgment means property owners faced with quake repairs will not have to pay more to meet the Christchurch City Council's proposed stricter building standards.
The insurance sector vehemently opposed the policy, arguing that it was unlawful and holding up the Christchurch rebuild.
After the September 2010 quake the council (CCC) changed its policy on quake-prone buildings, lifting the minimum seismic strength from 33 per cent of the Building Act's new building standard (NBS) to a target of 67 per cent.
The Insurance Council (ICNZ) sought to overturn the policy via a judicial review, and this week got its wish.
Justice Panckhurst found: "Territorial authorities may not use section 124 notices [of the Building Act, which prohibits entry to dangerous buildings unless made safe] to advance a policy of increasing building capacity to a level above 34 per cent of the NBS.
"The primary focus in requiring work on earthquake-prone buildings is upon managing the likely risk of collapse causing injury or death."
ICNZ insurance manager John Lucas said the council policy would have had nationwide ramifications.
"Insurance premiums would have increased significantly and also the cost of doing business for all New Zealanders would have increased because . . . other councils . . . would end up having to adopt similar policies.
"Quite a lot of our communities around the country simply couldn't afford that. They would end up losing buildings."
The 67 per cent target was not consistently applied, he said, and ICNZ was aware of many cases in which building owners had consent applications denied.
"These were repairs to buildings which were certainly above 34 per cent [NBS] anyway so it was holding up the recovery.
"It can be a bit of a lottery."
Council lawyers had argued that 34 per cent NBS should not be treated as a precise safety threshold, and it was at the council's discretion how to ensure buildings were made safe.
The University of Canterbury and the body corporate of a central city apartment building backed the council in court.
The university declined yesterday to comment on the judgment.
CCC general manager regulation and democracy services, Peter Mitchell said yesterday the council "appreciated the clarification" of the ruling.
Christchurch developer Ernest Duval said that building owners could gain a lot by extra strengthening.
"It would be an imprudent building owner who would only go to 34 per cent [NBS] when for another 10 or 15 per cent of cost he could get to 67 per cent.
"It makes their building easier to insure, their building would become more attractive to tenants . . . and the value of their investment will be enhanced."
The Canterbury Earthquakes Royal Commission and the Government agreed last year that the earthquake-prone threshold should stay at 34 per cent NBS.
Increasing the standard to 67 per cent of code was estimated to cost $12 billion nationally over 15 years.