Editor: I. Mallikarjuna Sharma Volume 11: 15-31 March 2015 No. 5-6

(2015) 1 LAW Quake Outcasts v. Minister for Canterbury Earthquake Recovery [NZ-SC: Court Opinion] F-165
[90] In his submission, any residual “third source”
authority 139 that the Crown has could never authorise
the kind of measures introduced in this case. Even
assuming the existence of “third source”
authority, this only provides authority for
ancillary or incidental administrative actions
necessary for the day to day business of
government. In Mr Cooke’s submission, it is also
clear that such authority does not arise where legislation
“occupies the field” or when there is existing positive law.
Further, it cannot authorise governmental action that
affects rights and liberties. It is submitted that the
Crown’s actions in this case had significant
practical effects which directly resulted in truncated
rights.
[91] In this context, it is submitted that the unequal
treatment of the uninsured (and the delays in
making decisions about their position) is unlawful,
an abuse of power and inconsistent with the earthquake
recovery purposes of the Canterbury Earthquake
Recovery Act. Even if the lack of insurance is a
relevant point of differentiation for some of the
Quake Outcasts group, the dramatic nature and
effect of the different treatment is oppressive,
disproportionate and unreasonable, especially as
there has been no consideration of the individual
circumstances of the affected persons. It is also
contrary to the purpose of earthquake recovery, in
terms of the Canterbury Earthquake Recovery
Act.
[92] It is now more than three years since 100 per
cent offers were made to the other insured
residents and over a year since the High Court
ordered that new offers consistent with the Act be
139 We were referred to numerous articles that discussed the
existence and scope of the “third source”, including BV
Harris “The ‘Third Source’ of Authority for Government
Action” (1992) 108 LQR 626; BV Harris “The ‘Third
Source’ of Authority for Government Action Revisited”
(2007) 123 LQR 225; BV Harris “Government ‘Third
Source’ Action and Common Law Constitutionalism
(2010) 126 LQR 373; and J Simpson “The Third Source
of Authority for Government Action Misconceived”
(2012) 18 AULR 86. See also Philip A Joseph
Constitutional and Administrative Law in New Zealand
(4th ed, Brookers Ltd, Wellington, 2014) at 652–658.
made. Mr Cooke submits that, even if unequal
treatment was a legitimate option open to the
Government in June 2011, the exceptional
circumstances now facing the Quake Outcasts
group require that they now be treated equally
with insured property owners. In his submission,
any other relief has been, and would continue to
be, ineffectual.
Fowler Developments’ submissions
[93] Mr Rennie, for Fowler Developments,
submits that there is no rational basis to
discriminate between Fowler Developments and
insured residential property owners. He says that
Fowler Developments had uninsurable assets
rather than uninsured assets and cannot rationally
be penalised for having no insurance. He also
points out that the offer of 100 per cent of 2007
rateable values was intended to be an area-wide
or blanket solution to compensate for the effects
of the red zoning decision and with the objectives
of securing relocation of all within the red zones.
This was unachievable without a similar offer to
vacant land owners.
[94] Mr Rennie points out that insured residential
owners received the offer for 100 per cent of
2007 rateable value for their land regardless of
whether the land was damaged, whether they had
an EQC claim or whether such a claim would be
of any value and notwithstanding that any land
more than 8 metres from their dwelling was
uninsured in any event. 140
[95] In addition, Mr Rennie points out that the
decision to create the red zones would have impacted on
the value of the land. The earthquake damage had
also seriously impacted the value of land. This
meant that the offer to purchase the underlying
land of insured residential owners for 100 per
cent of rateable value cannot therefore have been
based upon a post-earthquake market value.
Instead, it was an offer of compensation for the
140 Mr Rennie’s reference to the 8 metre limit is from the
Earthquake Commission Act which defines “residential
land”, among other things, as “all the land within 8
metres in a horizontal line of the building”.
107
Law Animated World, 15-31 March 2015