A class action against Toka Tū Ake EQC has been authorised by the Christchurch High Court.
“Leave is granted to the plaintiffs to bring this proceeding against EQC as a representative action on behalf of all persons who meet the class definition,” Associate Judge Paulsen, referring to plaintiffs Lucinda McEvedy and Andrew Freer, said in her judgment on Thursday.
Represented by insurance lawyer Grant Shand and Andrew Barker KC, McEvedy and Freer – whose property in Shirley suffered increased liquefaction vulnerability (ILV) land damage in the 2010/2011 Canterbury earthquakes and whose claim was settled by EQC in 2017 by payment of its assessment of the diminution of value (DOV) of the land – were found suitable to advance the common issues on behalf of the represented class.
The common issues were outlined in the 44-page judgment seen by Insurance Business.
In a release, Shand’s camp said the case “could be one of the largest class actions New Zealand has ever seen,” given that EQC, as indicated in the court document, settled over 99.5% of all ILV claims on a DOV basis.
Following the greenlight, Shand commented: “Our clients believed it was wrong for EQC to settle land claims the way it did and continues to do so. It used, for the first time in EQC history, a process that settles land damaged by crust thinning or increased liquefaction vulnerability by a diminution of value methodology and not what it actually costs to repair the land.
“The judge has found that there are issues common across thousands of EQC land claims and therefore a class action is appropriate.”
He went on to point out: “EQC paid McEvedy and Freer just $22,000 for their land damage and, had the assessment been undertaken correctly, that figure should have been at least $160,000. And of the in excess of 13,000 properties assessed with ILV land damage, only 15 received money based on the actual cost to repair their land.”
It was ruled that the representative action should proceed on an opt-out basis, i.e. anyone who meets the definition is an outright class member unless they opt out.
“As this is an opt-out class action, it’s likely the numbers involved will be significant,” Shand said.
According to the judgment, the plaintiffs are to file and serve any memoranda addressing directions for the future conduct of the proceeding by January 19, 2024. The EQC, which has not issued a statement on the judgment as of this writing, will have until February 2 to file and serve their memoranda in response. The plaintiffs can then reply by February 9.
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