WCC can undertake earthquake strengthening to properties at owners’ cost

Late last year in Wellington City Council v Lakhi Maa Limited the High Court granted Wellington City Council (WCC) orders under section 133AS of the Building Act 2004 (the Act) that would allow WCC to undertake seismic work on particular earthquake-prone buildings at the owners of such buildings’ expense (Section 133AS Orders).  WCC’s Section 133AS Orders are the first of their kind.

In this article we consider the context in which the Section 133AS Orders were granted and key insights from the High Court decision.

The District Court applications

Prior to its appeal to the High Court, WCC made an application for the Section 133AS Orders to the District Court.  This came following the service of earthquake-prone building notices to each buildings’ respective owners, and their failures to comply with the conditions of each notice.

The District Court refused WCC’s request on the basis that WCC’s application only requested that ‘seismic work’ be authorised, without specification of the exact nature of work that would be done to make the buildings no longer earthquake prone.  In reaching this decision, the District Court exercised discretion, considering the impact the Orders would have on an owner’s property rights and the imposition of financial liability, and what would be reasonable in the circumstances.

Since the range of what could be done was noted as being from “demolition of the entire building through to retaining and strengthening the whole existing building”, the range of effects this would have on an owner’s property rights were significant and spoke to the reasonableness of granting a Section 133AS Order.

Important considerations from the High Court

The High Court decision quashed the District Court’s earlier refusal to grant the Section 133AS Orders, providing that a Court has limited discretion in considering applications for these.  Instead, if the pre-conditions under the Act are met (being non-compliance with a notice or failure to progress at a reasonable speed), granting an order “is effectively mandatory”.

The High Court noted it was not for a Court to consider the engineering issues, reasonableness or cost-effectiveness of seismic work proposed.  Instead, these are matters dealt with by the territorial authority (TA) that would be undertaking such work under a Section 133AS Order.

In reaching this decision, the High Court emphasised the following:

  • Section 133AS Orders do not involve “taking” a person’s property; they merely transfer control over seismic work that is necessary to ensure the building is legally compliant.
  • Even so, a Section 133AS Order may only be granted following an owner’s non-compliance with legal obligations.
  • There is no requirement for TAs to specify what seismic work will be done prior to being granted a Section 133AS Order; requiring this would limit the ability to recover costs from an owner and may be impractical where it would require entry into the relevant building.
  • Section 133AS Orders reflect a prioritisation of public safety over private property rights and economic considerations.

Conclusion

As deadlines for earthquake strengthening work under the Act continue to fall due (in a high risk area such as Wellington and Christchurch, 7 years and 6 months for a Priority Building and 15 years for another building, from the date of the notice), this case is significant and clearly outlines the circumstances in which a TA might carry out remedial work where owners of earthquake-prone buildings served notices fail to act.

For owners, we anticipate this case will be an important incentive to fulfil the requirements of a notice quickly themselves, or risk footing the bill where a TA is granted that power.

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