IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2021-409-428
[2023] NZHC 3662
BETWEEN
ANDREW ROBERT FREER and LUCINDA RAE McEVEDY Plaintiff
AND
EARTHQUAKE COMMISSION
Defendant
Hearing:
12 September 2023
Appearances:
A R B Barker KC and G D R Shand for Plaintiffs N L Walker and C J Curran for Defendant
Judgment:
14 December 2023
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 14 December 2023 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
FREER v EARTHQUAKE COMMISSION [2023] NZHC 3662 [14 December 2023]
Introduction [1]
The proposed common issues and class definition [15]
Legal principles [18]
Issue one — The proposed common issues [22]
The first proposed common issue [23]
The second proposed common issue [24]
Issue two — Are the plaintiffs adequate representatives to advance the common issues on behalf of the class? [42]
Do the plaintiffs lack the ability to undertake repairs to their land? [45]
Are there fresh causes of action that are time barred? [47] The application issue [48]
The strategy [66]
Can the plaintiffs represent claims for IFV land damage? [77]
Issue three — Is Mr Wootton a suitable representative in respect to IFV land damage? [82]
Issue four — Is the proposed class correctly defined? [93]
Persons who could not have suffered any loss because their entitlement could never be greater than DOV [94]
Former owners [95]
Subsequent owners [99]
Persons for whom repair was not feasible or not wanted [105]
Claims that are statute barred [107]
Issue five — Should the class be constituted on an opt in or an opt out basis?
[113]
Prospect of disadvantage to class members [116]
Objectives of r 4.24 [129]
Individual autonomy [132]
Summary [133]
Result [134]
Introduction
[1] The plaintiffs are the owners of 51 Quinns Road, Shirley. The property suffered increased liquefaction vulnerability (ILV) land damage in the Canterbury earthquakes. The plaintiffs made a claim to the Earthquake Commission (EQC) under the Earthquake Commission Act 1993 (the Act) in respect to the land damage.1
[2] EQC developed policies for the assessment and settlement of land claims in respect to ILV and increased flooding vulnerability (IFV) land damage which were considered by the High Court in 2014,2 and were subject to several iterations.
[3] In April 2017, EQC settled the plaintiffs’ claim by payment of its assessment of the diminution of value (DOV) of the plaintiffs’ land by reason of the ILV land damage. The plaintiffs were not unique in this regard. EQC settled over 99.5 per cent of all ILV claims, and 100 per cent of all IFV claims, on a DOV basis.3
[4] The plaintiffs consider it was wrong for EQC to settle claims in respect of ILV and IFV land damage otherwise than for the cost of repair. They objected to EQC and advised that the payment of DOV was received as part payment and, once they had settled their claim with…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Freer v Earthquake Commission [2023] NZHC 3662
Case
[2023] NZHC 3662
Decision Date
CaseChat Overview and Summary
The case of Freer v Earthquake Commission involved the plaintiffs, owners of residential land that suffered damage due to the Canterbury earthquakes, challenging the Earthquake Commission's (EQC) practice of settling claims for increased liquefaction vulnerability (ILV) land damage based on the diminution of value (DOV) rather than the cost of repair. The plaintiffs sought to represent a class of similar property owners in a representative proceeding, arguing that EQC's policy and strategy were unlawful. The court had to determine whether the plaintiffs could bring a representative action, if they were suitable representatives, if the proposed class was correctly defined, and whether the proceeding should proceed on an opt-in or opt-out basis. The court found that the plaintiffs could bring the proceeding, were suitable representatives, the class was not correctly defined, and the proceeding should proceed on an opt-out basis. The court held that EQC's use of the DOV approach and its strategy to settle claims on a DOV basis, regardless of individual circumstances, were suitable common issues for the proceeding. The court also found that the plaintiffs were adequate representatives, despite not having undertaken repairs to their land, and that the proposed class was not correctly defined as it included persons who could not have suffered any loss and those for whom repair was not feasible or wanted. Finally, the court ruled that the proceeding should proceed on an opt-out basis as the opt-in approach did not sufficiently address the potential disadvantages to class members and the objectives of access to justice and efficient use of judicial resources.