29 Apr 2016

EQC challenged on 'when new' claim

6:28 pm on 29 April 2016

The Earthquake Commission (EQC) is being challenged on its insistence it always repaired earthquake damage to a "when new" standard.

Christchurch Construction.

Photo: RNZ / Alexander Robertson

It yesterday announced a settlement with a group of 98 Canterbury homeowners who had taken legal action.

At issue was a dispute over whether earthquake damage should be repaired to a pre-quake condition or "as when new".

In an interview with Checkpoint's John Campbell yesterday after the settlement, the commission insisted it repaired to the higher standard whenever possible.

Angry homeowners, however, have flooded RNZ News with correspondence stating they were told they were only entitled to the lower, and cheaper, pre-quake standard.

Checkpoint has also obtained documents that show pre-quake, not "as when new", was repeatedly cited.

Documents contradict EQC statement

Acting EQC chief executive Bryan Dunne told Checkpoint yesterday EQC had always been operating under "as when new".

"My view is our staff has always attempted in good faith to ensure that customers get what they're entitled to - no more and no less."

However, in August 2011, six months after the earthquake, an EQC newsletter quoted then-EQC Canterbury event manager Reid Stiven specifically saying repairs would be to a "pre-earthquake condition only".

A quote from Fletcher EQR two months later also explained the standards they believed they were working to.

"To return all the relevant properties to their pre-earthquake condition."

The Customer Guide to the Canterbury Home Repair Programme, which was signed by Mr Stiven and dated November 2014, was among key documents available to homeowners.

On page 10, it said, after their home assessments, owners would be given a final scope of works providing "the best repair strategies to return your home to its pre-earthquake state".

The guide contained no mention of the phrase "as when new".

View the guide dated November 2014 (PDF, 3.3MB)

Acting EQC chief executive Bryan Dunne said in a statement this afternoon that repairing to "as when new" had always been the commission's approach.

He said the wording in the guide was intended to be general advice, not a legal statement about EQC's approach.

"In retrospect the wording we used [in one document] was too general, and in the current context we accept that it may be confusing."

The commission declined to be interviewed this afternoon.

Settlement sets precedent, homeowners say

The EQC Action Group - the 98 Canterbury homeowners that agreed yesterday's settlement with EQC - filed a class-action law suit against the commission last November.

The group argued homeowners had been told their homes would be repaired to a pre-quake condition, when the Earthquake Commission Act required repairs to "as when new".

They had not sought damages at the time, merely clarification on the act.

The settlement clarified the commission's obligations and removed its reliance on government guidelines.

The EQC Action Group said it now had a contractual agreement with EQC, but the deal also set a precedent for other claimants.

EQC received almost 700,000 building claims after earthquakes hit Canterbury in 2010 and 2011.

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