Canterbury Earthquake Class Action Proceeds Despite Appeal Dismissal

A New Zealand court has dismissed an appeal in a class action lawsuit against the Natural Hazards Commission (NHC) on behalf of 228 Canterbury homeowners seeking $80 million in damages.

The case, led by Carol Mathias, alleges that the NHC owed claimants a duty of reasonable skill and care in repairing earthquake damage to their properties. The court has confirmed a 34-day trial will begin on April 12, 2027.

The issue at hand is pre-existing earthquake damage that exceeds the public cover cap, which sits outside most private policies, creating unresolved risk for homeowners who purchased properties after the earthquakes and discovered missed or sub-standard repairs. The NHC's residential building cover cap is $300,000 plus GST per dwelling, but when a previous EQC repair is later found to be inadequate, the resulting over-cap amount may not be recoverable under the current owner's private insurance policy.

The Mathias proceeding highlights a structural gap in New Zealand's natural hazards coverage framework, which has been identified as a problem not only for Canterbury homeowners but also for those in other regions, including Wellington. The Reserve Bank of New Zealand (RBNZ) has noted that risk-based pricing for seismic exposure has increased insurance costs in Wellington, and the NHC scheme is under structural pressure due to underfunding.