The Canterbury Earthquake Response and Recovery Act (the Act), passed by Parliament this week, provides special powers to facilitate the post-quake reconstruction.
This Brief Counsel examines the Act and provides some comments.
The Act delivers three key mechanisms:
the establishment of an Canterbury Earthquake Recovery Commission
the ability to pass Orders in Council amending or granting exemptions from normal statutory requirements (22 Acts are specified but the Act is not limited to them), and
protections from liability for certain acts or omissions.
The Recovery Commission
The Recovery Commission has the role of providing advice to the relevant Ministers on Orders in Council and how resources may be prioritised and funding allocated. It is also to provide a key contact point between central and local government.
The Commission consists of the three local mayors, and four government appointees, one of whom must be an Environment Canterbury Commissioner or the Chair of the regional council (if it is revived in time).
Orders in Council
Orders in Council can be used to relax or suspend statutory requirements that restrict the ability efficiently to respond to the damage caused by the earthquake or to minimise further damage, or which may not be capable of being complied with as a result of circumstances arising from the earthquake.
An Order in Council may also facilitate the gathering of information about any structure or infrastructure affected by the earthquake which might assist in understanding how to minimise the damage cause by further earthquakes.
Orders are made on the recommendation of the relevant Minister who must consult the Recovery Commission (if practicable).
Ministerial recommendations cannot be challenged through judicial review. Presumably this is to prevent the Orders, and the actions taken under them, from being declared invalid.
Orders can be retrospective, back to 4 September. Where an Order provides an exemption from or modification of or extension to any provision in any other statute, any act or omission in good faith by any person in relation to that Order will be protected from liability.
The Earthquake Act together with any Orders in Council will expire no later than 1 April 2012.
The Government says the quality of the reconstruction work will not be sacrificed and that the Act is needed because current laws covering building, transport and other key infrastructure do not allow for emergency situations.
As noted by the newly appointed Earthquake Recovery Minister Gerry Brownlee;
“business as usual won't work ... This Earthquake Act will be the House's expression of a strong desire to remove bureaucracy that could slow down the very necessary work we now have to do”.
However, it also needs to be recognised that the Act provides extensive powers through the Order in Council process, so the Recovery Commission, officials and Ministers will need to be extremely careful as to how this power is exercised.
Chapman Tripp comment
In our view it would have been better from a constitutional perspective to have allowed Orders to be challenged in the Court provided that, should the Court strike down an Order as invalidly made or no longer required, this would not invalidate actions already taken under that Order. That is what would happen if Parliament struck down an Order using the Regulations (Disallowance) Act which is available here.
The Earthquake Act provides significant and unusual powers so it is important that its implementation is monitored. We would hope that the retrospective facility will be used only to grant waivers, extensions and validations; not to impose retrospective restrictions.
In particular, Orders should not be left in place longer than necessary.
What we expect to see is changes to laws in the areas of Resource Management, Local Government, Earthquake Commission, Building and Rating, and local authority bylaws.
In some cases, such as Road User Charges, amendments to allow for deferred payments but exemptions from the charges themselves might be hard to justify (see box for tax relief already granted).
What we would not want to see are material changes to the Local Government Official Information and Meetings Act 1987 (despite it being named in the Earthquake Act as a candidate), the Official Information Act, the Human Rights Act, or Privacy Act and others that exist to promote good governance such as the Public Audit Act and Local Authorities (Members’ Interests) Act.
We note that the Social Security Act is named as one for possible amendment by Order in Council and wonder if there will also be calls for the accident compensation legislation to be extended to cover the emotional stress caused by the disaster.
Perhaps the Earthquake Act may also be used to extend the Tax Act provision to allow remission of tax penalties for payments missed due to lack of funds caused by financial stress related to the earthquake?
Tax relief already
Separately from the Act, an Order in Council was made on Monday under the Tax Administration Act 1994 declaring the Canterbury earthquake to be an emergency event. This allows the IRD to remit penalty interest that would otherwise be payable on unpaid tax payments (such as PAYE deductions).
It is a discretion, not automatic - and the taxpayer must ask for relief as soon as practicable and pay the due tax as soon as practicable. The IRD must be satisfied that remission is equitable.
Importantly, the inability to pay on time must have a physical basis (not just lack of funds), but will be appropriate where files have been destroyed or access to them is not possible.
The Earthquake Act deals only with statute law and the relationships between residents and central and local government. After the 1931 Napier earthquake, Parliament created the Hawke’s Bay Adjustment Court (presided over by the Chief Justice or a Supreme (now High) Court Judge) to determine personal rights and liabilities and to grant relief from liabilities such as mortgages.
The 1931 Act had a long list of matters for which regulations could be made, including replacing lost documents and regulating rents. Will something similar be needed for Canterbury also?
Chapman Tripp is pleased to have joined many of our clients in supporting the Canterbury Earthquake Appeal Mayoral Relief Fund. If you'd like to support this cause, donations can be made via the Red Cross website www.redcross.org.nz.
Our thanks to David Cochrane, Partner and Aleisha Waller, Law Clerk for writing this Brief Counsel.