Repair issues going to court
10 Oct 2017
Christchurch residents who bought houses after the earthquakes and since uncovered, and inherited, "botched" repair jobs have today filed High Court proceedings against the Earthquake Commission.
Shine Lawyers filed 13 separate claims against EQC today on behalf of what lawyer Andrew Hooker described as "a new category of claimants". More claims are expected to follow.
Hooker says that after the devastating 2010-2011 earthquake sequence, a substantial number of people bought houses which they thought had been properly repaired by EQC.
"However, after doing all the right things, undertaking their due diligence, purchasing the houses then finding their house repairs were botched by EQC, they also discover that they have no insurance company from which to claim," he said.
It's understood that Shine Lawyers is not proposing to launch a group or class action, but rather is aiming to gather a group with the same issue - EQC repairs that have failed - and take a test case to get a ruling on a point of law related to culpability for fixing the failed repairs while meeting the requirement of the claimants' house policy and building code.
Homeowners are concerned that if defective repairs need fixing, and EQC deems that they exceed the $100,000 cap under the EQC Act and it's passed on to private insurers, that the insurance companies could rely on the Limitation Act. There are different interpretations of how the Act applies, and individual insurers and EQC have taken a range of positions.
Hooker says that a ruling court is required to find out whether EQC has to pay the lot.
Hooker fears those who have come forward are just "the tip of the iceberg" with thousands of people, if not tens of thousands, living in houses with botched repairs.
"People are seeing damage starting to occur to their houses as time passes," he said.
"When they bought the house, they were assured that the assessments and resulting repairs were completed correctly and it is only after they have bought the property, they find that is not the case."
He added that in many cases the cost of the unrepaired damage means that a house is worth less than the money owed on it.
"This is a tragic and distressing situation for people in this situation. Having botched the repairs, EQC must compensate the victims. I believe the cases we have filed so far are the tip of the iceberg."
Lawyers, insurance advocates and homeowners spoken to by the Herald last month expressed concern that they'll face massive repair bills if they don't act before the untested statute of limitations defence could be applied.
Shine Lawyers filed "about 50" proceedings in the days leading up to September 4 - the seventh anniversary of the September 4, 2010 magnitude-7.1 tremor that triggered the region's earthquake sequence.
Law firm Anthony Harper had last month also filed two proceedings where insurance companies had refused to defer reliance on a Limitation Act defence. Both of the claims are with the insurer, not EQC.
EQC say its approach to limitation periods takes into account the circumstances of each individual claim and allows customers six years from the date that a decision was made on the claim being accepted or declined.
"Therefore the limitation period starts from the most recent date that EQC makes payment in settlement of a customer's claim under the EQC Act, or a customer's repairs have been completed, including re-repairs," said an EQC spokesman who added that people should talk to their private insurer regarding their policy or claim.
- NZ Herald