Govt to appeal High Court red-zone ruling
The Government is appealing against a High Court ruling against the Crown's compensation offer for red-zoned land in Christchurch.
Nearly 50 residents sought a judicial review of the offer to buy uninsured properties and empty sections at 50 per cent of the land valuation.
Yesterday, Justice Panckhurst ruled that the offer was not made according to law and should be set aside.
Canterbury Earthquake Recovery Minister Gerry Brownlee and Canterbury Earthquake Recovery Authority chief executive Roger Sutton were ordered to reconsider their decision.
Brownlee's spokesman said today that the Government would appeal against the decision and would make no further comment until it had received legal advice.
However, Prime Minister John Key warned the Crown could simply walk away.
"The Government would say actually we are being pretty generous on an uninsured piece of land; we are paying you out 50 per cent,'' he said.
"One option is the Government says: 'Thanks very much, it's been a lot of fun. If you don't want to take the offer, that's where it's at'."
The quake-damaged land was unusable, he said.
"That land is marooned, there is no service there, it's not supported ... so look, the Government will have to go away, have a good look at the judgment and make a decision about what it does next."
Revising the offer could set a precedent for other disasters, he said.
"There are a lot of precedent risks here and issues ... even paying out 50 per cent sets a precedent,'' he said.
"What do we do when there is an uninsured landslip later in the year because of a flood somewhere? Those land owners will say, 'But you paid out in Christchurch'.
"It's not easy for the Government."
QUAKE OUTCASTS WIN
The residents, from Brooklands and calling themselves Quake Outcasts, want a 100 per cent payout.
The area was devastated in the February 2011 quake, and the red zone put in place nine months later.
Last month, the 68-strong group challenged the Government in court over its decision in September last year to offer to buy uninsured land at 50 per cent of rateable value. Yesterday, the High Court ruled the offers were unlawful.
Many of those affected had vacant sections that could not be insured.
Justice Panckhurst ruled Cera leaders should reconsider the 50 per cent offers and the new decision be made "in accordance with law".
Quake Outcasts spokesman Ernest Tsao said he felt "quite relieved".
The legal challenge had come at a cost, both "figuratively and literally".
He hoped the Government would now abandon it's "cold-hearted modus operandi".
"They should do it right this time, in accordance with the law, and [make an offer] in the spirit of fairness and kindness, instead of the way they have been behaving over the last two and a half years," he said.
Some of the group had accepted the 50 per cent offer after receiving advice it could still be challenged in court.
In his judgment, Justice Panckhurst said the 100 per cent offers to insured property owners were made to "provide certainty and create the confidence necessary to enable people to move on with their lives" and 50 per cent offers did not allow landowners to make a fresh start.
Those landowners had "little or no option" but to to accept the Crown purchase offer, Justice Panckhurst said.
"Particularly as areas became depopulated, infrastructure fell into disrepair and essential services came under threat, the outlook for property owners was bleak," he said.
In a Cabinet paper in June last year, a Cera official suggested they would "eventually be called to task on it".
Brownlee had argued a 100 per cent offer for uninsured land would create a moral hazard - where landowners would choose not to insure, believing they would be rescued by the Government in a disaster.
Justice Panckhurst said it was a legitimate consideration but was a "blunt instrument" because it drew no distinction between those who chose to be uninsured and those uninsured through no fault of their own.
- © Fairfax NZ News
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