In the case of Earthquake Commission v Insurance Council of New Zealand Inc (delivered in December 2014), the High Court considered the question of how EQC’s obligations under the EQC Act may be enforced against it.
EQC argued that a claimant could only file judicial review proceedings (essentially a review by the High Court as to whether a decision made by a public body has been made lawfully) against EQC. The Insurance Council of New Zealand argued that this was incorrect and that such proceedings would be inadequate and insufficient (as there are limitations on the types of issues which can be covered and the relief/compensation which can be awarded).
The High Court agreed with the Insurance Council holding that claimants were not limited to filing judicial review proceedings against EQC. Instead, claimants may also file ordinary legal proceedings against EQC, whether in the District Court or the High Court (depending on quantum).
This was on the basis that:
- EQC’s obligations under the EQC Act provide claimants with definite entitlements and rights (and, conversely, place definite obligations on EQC).
- Based on modern civil procedure, an ordinary action for payment is and should be available where the factual basis for payment is in dispute.
- The Act does not exclude claimants filing ordinary proceedings against EQC/require proceedings to only be commenced by judicial review. If that was intended, Parliament would need to have expressly said so.
- New Zealand civil procedure has historically resisted limiting judicial review proceedings, as some other jurisdictions have done.
- Judicial review is not generally an appropriate way to determine entitlement to payment under a statute where the obligation is definite in nature (as EQC’s obligations are).
- The remedies available for breach should be direct and definite, and not discretionary (as is the case with judicial review).
This is a positive development, clarifying uncertainty as to how to enforce EQC’s obligations against it.