The way may soon be clear for “On-Sold” homeowners to access a cash payment from EQC without the stringent conditions previously in place.

More than 50,000 homeowners bought earthquake damaged homes they believed were properly repaired by EQC following the Canterbury earthquakes. Many of these homeowners subsequently found they were not properly repaired and applied for the Government On-Sold programme which has stringent conditions for the homeowner, including tranche payments and a covenant on the land title until works are completed.

The High Court has ruled that a class action can be taken against EQC to receive a cash payment rather than being forced to repair or rebuild the home as required by the Government On-Sold programme which is administered by EQC.

Leading insurance lawyer, Grant Shand, who took the case that has resulted in the courts opening this pathway for a class action, says a significant number of homeowners will be pleased by this decision.

“Many homeowners do not want to go through the stress and extended time it will take to complete repairs, and these will be extensive repairs given they are over the EQC cap,” he says. “Some may be looking to move to a retirement home, some to relocate to be with family elsewhere; there are many reasons the Government On-sold programme is not appropriate for affected homeowners.”

Mr Shand says he is aware of several cases where people have gone to sell their home that was repaired by EQC, only to find there are serious issues with that repair and the house can’t be sold.

“One of these involved a couple in their late 80’s. No-one but especially older people ready to move to the next stage of their lives, should have to spend their precious time fixing an issue that was created by EQC,” he says.

The class action requires claimants to “opt in” and people can do that in the next couple of months when a judge decides how that process will work. In the meantime Mr Shand is encouraging people to register their interest in the class action, which is being supported by litigation funder, Canterbury Litigation Funding Ltd.

If claimants are due any amount from EQC as a result of this class action, the litigation funder will deduct a fee of up to 15% (including GST) of any settlement monies received or judgment sum awarded. Claimants will not be asked to pay any money up front or pay for a share of any costs – it’s simply a deduction of up to 15% (including GST) from any amount you are entitled to receive once the class action is resolved.

Members of the class action will have no liability for legal or court costs if the class action is unsuccessful.

“With the delays currently being experienced as a result of the building material shortages and other pressures on key people such as engineers and builders, being able to receive a cash payment and move on, I believe is going to be a very attractive option to many,” says Mr Shand.

Interested claimants can go here or paste this in their browser www.eqconsold.co.nz

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For more information please contact Ali Jones on 027 247 3112

Frequently Asked Questions

How much will it cost me to join this EQC On-Sold class action?

Nothing.

If you are due any amount from EQC as a result of this class action, the litigation funder will deduct a maximum fee of 15% (including GST) of any settlement monies received or judgment sum awarded. You will never be asked to pay any money up front or pay for a share of any costs – it’s simply a deduction of up to 15% (including GST) from any amount you are entitled to receive once the class action is resolved. You will not pay any legal fees.

Members of the class action will have no liability for legal or court costs if the class action is unsuccessful.

The class action is funded by Canterbury Litigation Funding Limited, and as well as completing an ‘opt in’ form you will also need to complete a litigation funding agreement at the same time.

When can I opt into this class action?

The High Court needs to approve the format of the opt in form as well as the content of any communications with potentially affected homeowners. It is expected that the High Court will approve these within the next 2 months, however, it could be sooner if EQC agree to the format and content currently proposed.

How much money will I get?

It is not possible at this stage to provide any specific figure on what you could expect to receive. This is due to a variety of factors that are unique to each homeowner’s situation (for example how much EQC has already paid, the extent of the additional damage that is required to be repaired, etc).

What are the chances for success for the EQC On-sold class action?

Our team is reasonably confident that the case has merit, however, litigation is, by its very nature, inherently risky and it is not possible to predict the outcome, or how long the case may take to be finally resolved. The on-sold claims obviously have some merit, otherwise the Government/EQC would not have introduced its policy/scheme to pay money.

What are the benefits of a class action?

Running each individual claim through the courts would be costly and time consuming. Being able to combine class member’s claims that involve common questions of fact and law, reduces the average cost of litigation by only addressing the common issues once at trial, instead of multiple times. There is also no risk to each claimant.

Does it cost anything to register?

No, it costs nothing to register.

Doesn’t the Government On-sold programme resolve these claims? EQC says it does.

No.

The Government On-sold programme has eligibility criteria that must be met and it is also optional. Many homeowners will have reasons for not wanting to be part of the Government On-sold programme. Many homeowners will not want to go through the stress and extended time it will take to complete repairs (and these will be extensive repairs given they are over the EQC cap) - some may be looking to move to a retirement home, some to relocate to be with family elsewhere - there are many reasons the Government On-sold programme would not be appropriate for many affected homeowners.

They should not have to spend their precious time fixing an issue that was created by EQC.

What happens to homeowners in the Government On-sold programme who opt into this class action?

We are talking to EQC about what is to happen. EQC has previously stated that Government On-sold applications may be declined or discounted where applicants pursue litigation against EQC after 15 August 2019.

It is hoped that EQC would not decline or discount any applications from the Government On-sold policy simply because homeowners would prefer to have their claim against EQC resolved one way (by payment) over another (being repaired).

Pending the outcome of the primary claim under this class action it is hoped that EQC would place any application to the Government On-sold programme on hold and not once again disadvantage these On-sold homeowners. Regardless of EQC’s thoughts, it is expected this is a decision for the Government to make given the Government On-sold programme is a Government led initiative and EQC only administer it on their behalf.

Will registering mean I become a client of Grant Shand Barristers & Solicitors?

No, registration will not make you a client of Grant Shand Barristers & Solicitors. It simply provides a way to keep you informed about developments and the progress of the class action

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