Most Read Contributor in New Zealand, September 2016
High Court judgment found the Insurance Council of NZ
(ICNZ) should remove this imiment to the Christchurch
Some repairs have been put on hold due to an impasse between
Christchurch City Council and insurers over what level of seismic
strengthening the Council can require – whether the 34% of
New Building Standard (NBS) specified by the building code
or the 67% adopted by the Council as its preferred minimum in
But the High Court has now ruled that the Council cannot
over-reach the code.
The ICNZ sought a judicial review of the Council's
Earthquake-Prone, Dangerous and Insanitary Buildings Policy 2010,
arguing that it was unlawful and invalid because it over-reached
the Council's statutory powers under the Building Act 2004
The policy draws as its "preferred basis for defining
technical requirements and criteria" on the recommendation of
the New Zealand Society of Earthquake Engineers that 67% of NBS is
a "reasonable level of strengthening to reduce the risk posed
by existing buildings".
The Court noted that the 67% standard was applied by the Council
as a "preferred outcome" rather than a minimum
requirement and that – invariably – a process of
negotiation would be held with the property owner to achieve a
compromise between risk reduction and affordability.
It was the content of these negotiations – and the
subsequent dealings between the owners and their insurers
concerning the extent of cover under individual policies –
which led to the legal challenge. No section 124 notices requiring
work to be carried out on an earthquake prone building have yet
been issued by the Council. Part of the reason for this lack of
progress has been the dispute over the scope and reach of the
Insurance cover commonly provides indemnity for the cost of
reinstating a property to its pre-event condition, including the
cost of repairs necessary to comply with any law.
The Court found that the Act applied the building code, the
relevant provision of which was that existing buildings reach 34%
of NBS. Councils can enforce compliance with the code by issuing
section 124 notices but they may not require work to achieve
criteria which are higher than those specified in the code:
"The building code governs building requirements in New
Zealand...Persons may not be required to achieve performance
criteria above those prescribed in the code....It would be
anomalous if territorial authorities could as a matter of policy
utilise s 124 notices to achieve a strengthening performance
criteria higher than that used to define an earthquake-prone
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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As a demonstration of India's combined political will, the much awaited and debated Insolvency and Bankruptcy Code, 2016 was passed by the Upper House of the Parliament on 11 May 2016 (shortly after being passed by the Lower House on 5 May 2016).
The Code envisages that the insolvency resolution processes will be conducted by insolvency professionals.
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