Prime Minister John Key this morning said the Government would take a good look at Justice Graham Panckhurst's judgment, which was delivered yesterday following a judicial review.
"My understanding is that we are going to go away and have a look a bit at whether we might appeal that decision," he told TV3's Firstline.
But Earthquake Recovery Minister Gerry Brownlee has this morning confirmed the appeal.
The decision concerns uninsured, vacant plots of red-zoned land. Only land with structures on it can be insured, which excluded vacant property owners from any quake payouts.
The Government stepped in to offer quake-hit owners 50 per cent of the value of their land - a decision a small group of about 40 residents calling themselves 'Quake Outcasts', as well as Fowler Developments Ltd, challenged in court.
In his judgment, Justice Panckhurst ordered Mr Brownlee and Canterbury Earthquake Recovery Authority chief executive Roger Sutton to reconsider their buy-out offers.
He ruled the 50 per cent offer was "not made according to law" and "will not enable many property owners to make a fresh start".
Mr Key said the Government was being generous in paying out 50 per cent.
"The Government will have to go away, have a good look at the judgment, make a decision about what it does next. But there are a lot of precedent risks here and issues, because if we pay out more than that, even paying out 50 per cent sets a precedent.
"What do we do when there's an uninsured land slip later in the year because of a flood somewhere? Those homeowners will say, 'But you paid out in Christchurch and you paid out more than 50 per cent.' It's not easy for the Government."
Labour's earthquake recovery spokeswoman Ruth Dyson said red-zone property owners had been been vindicated by the court decision.
"This is a victory for residents and for fairness," she said.
"John Key said no one would be worse off as a result of his Government's offer, and today's verdict proves that many, many people were."
