The Supreme Court has granted leave to the University of Canterbury to argue in the Supreme Court that the Christchurch City Council has authority to set earthquake strengthening standards that are more onerous than the requirements outlined in the Building Act 2004.
Following the September 2010 earthquake, the Council adopted the Earthquake-Prone, Dangerous and Insanitary Buildings Policy 2010 ("Policy"), in which the strengthening of some buildings was required to be beyond 33% of the new building standard, which was issued in accordance with the current code, the Building Regulations 1992, Schedule 1. In some cases this would mean strengthening up to 67%, consistent with the recommendations of the New Zealand Society of Earthquake Engineers.
The Insurance Council of New Zealand brought a judicial review in the High Court of the Council's Policy, arguing that it was unlawful and invalid, because its terms overreached the Council's powers under the Building Act 2004. The Insurance Council also estimated the increase for insurers' repairs bills could be hundreds of millions of dollars if a 67% strengthening standard was adopted. Justice Pankhurst's decision in the High Court favoured this argument, granting the Insurance Council the appeal, based on an interpretation of the Building Act 2004 which did not require people to achieve compliance beyond the Building Code standards.
The University of Canterbury is a major landowner with about 240 buildings, all of which suffered some earthquake damage. The University Council supports the Policy as it has committed to repairing buildings to a minimum of 67%, if technically and economically feasible, to attract more students back to the University following a significant fall in enrolment numbers, in particular in international students. The University's insurance claims could be as high as $500 million, and it planned to contribute a similar sum from its own funds. However, it estimates the monetary difference in strengthening to 34%, as opposed to 67%, is around $140 million. The University joined the judicial review claim initiated by the Insurance Council as the second respondent and later appealed the decision, but lost the argument in the Court of Appeal to overturn the High Court decision, with the Court of Appeal following a similar line of reasoning as Panckhurst J. Following this, the University has now successfully applied for leave to appeal to the Supreme Court.
A hearing date has not yet been set down