The notch in the top of the terrace hill (left) is the scarp of the Hope Fault. K Pedley / UC
The glacial outwash terrace gravels at this location date at around 17,000 years old and include some deposits of glacial till (likely terminal moraine) as well as silt and fan deposits.
The Hope Fault (formed around 1-2 million years ago) is currently one of the most active expressions of the Marlborough Fault System, carrying most of the New Zealand plate boundary movement from the Alpine Fault (along the backbone of the South Island) through to the Hikurangi subduction zone offshore. The fault ruptures approximately every 120 years on average with an estimated Holocene slip-rate of 20–25 mm/yr. It last ruptured in this location in 1888 with approximately 2.4 m horizontal movement, captured by a famous photograph of a distorted fenceline by Alexander McKay, thought to be the world's first photograph to record evidence of horizontal (often known as transcurrent, lateral or strike-slip) movement by an earthquake. The full significance of McKay's observations was not appreciated until many decades later, as it was thought at the time that the only large movements possible at faults were vertical. McKay was probably the first geologist in the world to document this type of sideways moving fault.
The badlands style erosion is formed by wind and water erosion into soft rock (not well held together and usually clay-rich). It requires steep slopes with little or no vegetation or soil and a high density of drainage. It's not certain how long this process takes, and it may vary depending on the properties of the rock layers.