Christchurch Earthquake 2011
Do you have a legal question arising from how the earthquakes have affected you? Lane Neave partner Dr DUNCAN WEBB has agreed to be an "agony uncle" on how the law applies to certain situations.
We live on the hill. Our house has a fairly long drive, some of which is on council land and some on our section. It is supported by a long retaining wall. The wall partially collapsed in the February 2011 earthquake and was further damaged in June 2011. Our insurer is refusing to pay.
EQC has paid us some money, but not nearly enough to fix the wall, which needs to be replaced, and the council is not interested either. What is our position?
Retaining walls can cause real problems. There are very few policies out there which cover retaining walls whatever the cost (and those that used to have had their terms changed since the earthquakes).
Some policies cap the amount they will pay (often at $10,000), but most often retaining walls are excluded entirely.
You should check your own policy. If there is cover raise it with your insurer - and if it is capped, point out that the cap applies separately to each event which caused damage.
It will be important to understand who is responsible for the retaining wall on council land.
In some cases the nature of your right to have your drive over council land will be lost in the mists of time. However in other cases there will be details on your certificate of title, or there will be documents held by council which will outline the nature of the right and the responsibilities which go with it.
If any arrangement exists it is likely that the council granted you (or a prior owner) the right to drive over the land provided you maintained the access way at your own cost. If this is the case then the council is entitled to leave it to you to fix.
Of course, if the land is in fact designated as road by the council then there is a good argument that the council should fix the wall which supports it.
Most complex of all is the EQC position. The first issue is whether or not the land is covered by EQC at all. A retaining wall is covered by EQC if it is within 8 metres of a building, or if it supports an access way (such as a drive) provided that it is also "situated within the land holding on which the residential building is lawfully situated".
At first blush, it would seem the land you own is covered, but the council land is not. However, it may be that cover also extends to any land over which the homeowner exercises control and for which they have responsibility - this equates to "holding" land and there is a good argument that the council land is in fact part of your "land holding". If there was a lease in place this would almost certainly be the case. If you "hold" the council land, EQC would cover all of the wall.
However, EQC will not pay the replacement cost of a retaining wall (unless it was new at the time of the loss). EQC's responsibility for retaining walls is limited to the "indemnity value" of the walls. To "indemnify" means to put back in the equivalent position - not better and not worse.
Clearly the indemnity value for an old wall is less than the replacement cost, as to replace old for new would result in betterment.
"Indemnity value" is not defined in the EQC Act. EQC seem to have taken the view that it means the same as "depreciated value" - that is the amount that it would be valued at for tax or accounting purposes given its cost to build and its expected life when it was built.
However a more appropriate approach is to ask what value the wall in its pre-earthquake state added to the land - that is to say what would you pay to have the wall. This much more effectively restores the owner to the position they were in prior to the loss.
The issue of indemnity value is a large one which needs resolution - and EQC is unlikely to change its position without encouragement from the courts.
Duncan Webb is a partner at Lane Neave lawyers. Email questions for him to legal.questions@ laneneave.co.nz
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