The Government was recently defeated in the High Court – a group called the Quake-Outcasts sought a judicial review of the Government’s compensation policy for red-zoned land. They called the offer an “abuse of power”. They alleged that the offer was “oppressive, disproportionate, contrary to their human rights and an abuse of power”. This abuse of power relates to contentious offers to buy red-zoned land from homeowners who were either uninsured or the owners of bare land (which is not covered by insurance). It was stated that ”there are strong reasons for not extending an offer to these property categories on the same terms as for insured properties. It would compensate for uninsured damage, be unfair to other red zone property owners who have been paying insurance premiums, and it creates a moral hazard in that the incentives to insure in the future (where insurance is available) are potentially eroded.”
The group consisted of 46 land and home owners. The group has felt bullied by the government and were fighting for their right to self-determination of their own land, and full and fair compensation for appropriation of that land by the Government in the event that they were forced to give up their properties. At the time of the hearing 6,607 insured residential property owners received Crown offers, 72.79% accepted vacant land offers and 62.64% accepted uninsured residential property offers. The Judge, Graham Panckhurst considers these to be ‘a fait accompli’, stating that this would indicate that the Crown offers were sufficient to allow those residents to recover from the earthquakes satisfactorily.
The Quake Outcasts asked the High Court to declare:
a) that the minister’s red zoning decision was unlawful;
b) declare that the 50% land – only Rateable Value buyout offer to only some red zoned property owners was unlawful;
c) make a declaration that those people who wish to remain should be able to and this should include being supported by essential facilities as permitted by law.
The History: On June 13 2011, there had been another major earthquake. A week later Cabinet authorised eight Ministers (including the Prime Minister, the Minister of Finance and the Honourable Gerry Brownlee) to take decisions relating to land and remediation issues.
On 22 June 2011 they reached an agreement on the zoning of Christchurch and split the city into four zones, these decisions were jointly announced by the Prime Minster and Brownlee on the 23 June 2011.
The Government argued that the decisions taken by Brownlee and Sutton were lawful policy decisions made by Cabinet or by ministers acting under delegated Cabinet authority and therefore the statutory powers provided under the Canterbury Earthquake Recovery Act 2011 did not need to be exercised, despite the fact that this piece of legislation binds the Crown and sets out a process of decision making which is to take place. Instead, the chief executive, Roger Sutton, developed a Recovery Strategy and a Recovery Plan and used these as the legitimization for their decision making.
The Human Rights Commission also made submissions on the basis of the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic Social and Cultural Rights (ICESCR). The use and enjoyment of one’s home is a fundamental human right – his Honour considered that the creation of the red zone interfered with that right.
The Issue: Red-zoned residential land is subject to a Crown offer to buy it at the 2007 rating valuation (RV) but uninsured or bare land owners are only being offered only 50% of that amount. Red zoning takes away from homeowners their right to live where they want without being interfered with; red zoning reduces their property values; red zoning takes away the open market for their properties (so they are unable to sell for market value if they wanted to). They experienced the National Government as forcing its low price offer on them taking away any right to full compensation for that land and property. In addition, the Government threatened to cut off all essential services (water, power, sewer, and roading) to their homes in the event that they did not accept the government offer.
His Honour, Judge Pankhurst considered three points:
“a) Does the creation of the red zone and the making of buy-out offers to property owners within the zone, affect property rights of the applicants?
b) Should decision(s) which resulted in the chief executive making 50 per cent offers to property owners in the red zone be set aside?
c) If so what form of relief is appropriate, if any.”
The Decision: The High Court decision from Justice Graham Panckhurst criticised both Earthquake Recovery Minister Gerry Brownlee and Canterbury Earthquake Recovery Authority (CERA) chief executive Roger Sutton for their part in the issue. Justice Panckhurst said that the decision by Hon. Brownlee to make the Government offer was “not made according to law and is set aside as are the offers subsequently made to the applicants by [Sutton]”. He also directed Brownlee and Sutton to reconsider and “reach a new decision” to buy the properties.
He went on to say that financial considerations did not enable the Canterbury Earthquake Recovery Act to be brushed aside in favour of ‘decision-making by a group of Ministers on behalf of Cabinet.”
He declared “that the decision to create the red zone announced on 23 June 2011 did not lawfully affect the property rights of the property owner applicants in the proceeding…” but that the declaration is “limited to those who have successfully challenged the decision-making process”.
The Importance of This Case: At the heart of the case is the issue of private property ownership which is the legal foundation of society and our economy. Home ownership is one of the cornerstones which many New Zealanders have worked hard to achieve. There are genuinely times when government must take property in the conduct of managing services to citizens, but it must do so only when there is no other just alternative, and done to give everyone a fair deal.
It is very important that the taking of property by government should be open to public scrutiny and be subject to oversight. A chat between two members of Parliament and an unelected official cannot be allowed as the basis for such important decision-making. Nor should a natural disaster be used as an excuse to discard the democratic process. Government and public officials must be held accountable by citizens from whom they derive their power, (and their pay!)..
So this success in the High Court should have far reaching and long lasting implications It means that politicians will not be able to infringe on individual property rights so easily and the National Government will not be able to ‘get away with’ failure to pay full compensation when they ‘appropriate’ private property.
All New Zealanders should concern themselves with this case – Don’t you find it rather telling that this National Government, which has a tendency to increasingly override our rights and opinions when it chooses – is considering an appeal of this judgement? (See http://www.stuff.co.nz/national/politics/9094429/Walk-away-threat-offends-Outcasts).
If you want to check the condition of the democracy, watch the Courts, watch the Courts, watch the Courts……..