Bertelle Smyth, 91, has been financially stripped by rates and penalties for the land on which her demolished unit once sat.

An ailing, elderly woman has been financially stripped by mounting council rates and penalties for land she cannot live on.

Ninety-one-year-old Bertelle​ Smyth is party to a multimillion-dollar spat over the demolished Cave Rock Apartments block in Sumner, Christchurch.

Her son says the Christchurch City Council has shown a lack of compassion for her situation.

JOSEPH JOHNSON/FAIRFAX NZ Seven of the 11 elderly people who once called Sumner's Cave Rock apartments home have died waiting for insurance money.

At 91, Smyth is the oldest unit owner from the complex who is still alive.

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Seven of her former neighbours have died since the February 2011 earthquake. They died before receiving compensation from IAG for their homes, which were destroyed in the disaster.

DAVID WALKER/FAIRFAX NZ Most of the units, including Bertelle Smyth's, were demolished in 2012.

Four years after her home was demolished, the added pressure caused by the city council's pursuit of rates and penalties has left Smyth "living on the breadline", according to her son, Kieran Smyth.

Her unit, along with most of the complex, was demolished in 2012. Since then she has incurred at least $8000 in bare land rates and penalties.

"On numerous occasions, members of her family have approached the council to see if there could be a significant reduction in the penalties charged or, given her specific circumstances, have them remitted altogether," Kieran Smyth said.

His mother, who has moved to Timaru to live with family, remained traumatised by the earthquake and her health was "rapidly fading".

The council showed a "lack of compassion", Smyth said.

"I'm just appalled at the intransigence [from council]. She's had to borrow the money to pay the rates and that in turn impacts on her quality of living.

"Little things like that break the back."

He questioned whether the council should make allowances for extreme cases, such as his mother's.

Council head of financial management Diane Brandish said all owners of demolished Cave Rock units were required to pay rates on the rateable value of their land only.

In Bertelle Smyth's case, rates levied for the five years to June 30, 2017, totalled $6970.18.

The council would not disclose how much it had levied in penalties since Smyth's unit was demolished, saying it required a privacy waiver signed by all four trustees, which could not be obtained before deadline.

The Smyths believed over $1000 had been incurred in penalties.

Asked what rebates, if any, Bertelle Smyth was eligible for, Brandish said they were only available if a property was occupied on July 1 each year.

She said Smyth had received applicable earthquake remissions.

The council was unable to say how much of a discount Smyth had received on her rates bill before Stuff's deadline.

Meanwhile, the Cave Rock body corporate remains locked in a multimillion-dollar insurance dispute with IAG, meaning former residents have not been paid out for their destroyed homes.

The body corporate claims the complex will cost $23 million to rebuild, but IAG has paid out only $10m.

The body corporate rejected the insurer's final offer of the difference between indemnity value, $10m, and the sum insured, $16m.

There were 11 residents at the Sumner complex aged in their late-60s, or older, who had to find new homes after the February 2011 earthquake.

Along with the seven deceased, two were in permanent care and the rest required ongoing support.

Body corporate chairman Mike White believed the owners' position was "strong" and said a trial date was set down for May next year.

Despite the owners' rejection of the final offer, IAG was not budging from its position.

The company said the parties held "divergent views of key facts", therefore an agreement could not be reached.