Section 331 of the RMA provides for compensation relating to emergency works. This applies both for the local authority undertaking works, and for any person who suffers damage as a result of the works. The availability of compensation depends on the connection between the works and any failure of a person to abide by his or her duties under the RMA. In particular:
If the local authority takes emergency action under s330(2) of the RMA because of the default of any person, the authority may require reimbursement from that person of actual and reasonable costs, as defined in the enforcement order provisions of s314(2). If the costs are not paid within 20 working days, the local authority may seek an enforcement order under s314(1)(d).
Every person suffering any damage as a result of the exercise of any power under s330(2) is entitled to compensation from the authority in respect of any damage, so long as this did not arise from that person's failure to abide by his or her duties under the RMA. The compensation is to be determined in accordance with Part 5 of the Public Works Act 1981.
Compensation is not available in relation to damage arising from emergency works on land under a local authority's own control, that is, works pursuant to s330(1) of the RMA. Other remedies may be available to a person affected by such works.
For example, in Waiheke Island Country Club Ltd v Auckland City Council  W05/98 , a private landowner had sought an interim enforcement order against the (former) Auckland City Council to halt a proposed septic and sewage dump works carried out under the umbrella of s330 adjacent to his land. The applicant had made a substantial financial commitment to the development and conservation of his land, and Council's works may have affected his proposed development. The Court held that compensation was not available under s331(2) because the local authority was relying on s330(1). However, the Court did approve the application for an interim enforcement order, having decided there would be a great risk of injustice if it did not.
Section 331 applies the concept of fault in two ways:
The first relates to situations where the local authority is looking for reimbursement (refer s330(1) of the RMA). The test is whether the authority's emergency action was required because of the "default of any person". The qualifying default is not defined in subsection (1) but should be read together with subsection (2), with which it shares the principle of fault to allocate liability.
The second relates to situations where a person may claim compensation from the local authority. Compensation is available for damage that did not result from failure of the person to abide by his or her duties under the RMA.
In the second instance, a person's breach of duties may directly cause damage and that damage cannot be part of their claim. However, it might be difficult to separate out the causes and determine liability, when the local authority's response also contributes to the damage.
Section 331(2) of the RMA provides the mechanism for deciding how compensation should be divided between the regional council for the cost of mitigating the original flood, and the property owner and others affected by the collapse of the dam. The critical question is, to what extent the Council's response added to damage that the other person’s actions or defaults had already caused.