"Highlighting the inadequacies of the way in which the earthquakes of 2010-2012 were handled by the insurance industry! "

Time to eradicate the fruit fly in the legislation – Guest post by Sleazkey


Today I want to cover some of the interesting new developments in earthquake recovery technology and a bit of the politics and law involved in this developing science.???????????????????????

You will all remember that although New Zealand has a perfectly satisfactory Building Act which covers how our homes must (not should) be built to meet current minimum standards, government decided that it would be even better if ‘guidelines’ could be issued so that EQC could exploit sections 2, 18, 22, 27, 30 and Schedule 3 of the EQC Act 1993, which attempts to give EQC absolute discretion as to how earthquake repairs under its $100,000 cap will be carried out.  These ‘MBIE guidelines’ bear no relationship in law to the Building Act 2004 or private insurance contracts and are the product of a bunch of ‘good old boys’ who got slipped the word to do it by our transparently opaque government.   No one in the industry actually knows what they are for, although a High Court Judge in East v Medical Assurance Society New Zealand Limited [2014] NZHC 3399 recently took them into account, nevertheless the home was deemed to require a considerably more substantial repair solution than the insurer had intended carrying out. Both experts agreed that any re-levelling and repair must comply with the New Zealand Building Code.

Well, it gets better.  My inside sources in the Insurance Industry (no, wrong, stop guessing – not Mr Grafton – he’s straight-up) tell me that EQC and the industry (which is the same thing really) are becoming increasingly concerned at the escalating costs of ‘repairs’.  Fair enough, they’re haemorrhaging profits, as all we Tui drinkers know.  But the word on the street is that the industry has dumped the obviously honest and effective, if a little occluded, Institution of Engineers, (who are known to have little or no connection to government) and that major industry players are looking elsewhere for the next iteration of the MBIE guidelines.  And to a rival institution, no less.  Those earthquake shakers and movers who are privileged to write C.Eng. after their names will be livid when this one comes out – particularly those who are members of the little-known Institute of Insurance Engineers who were hopeful of getting the commission to write the ‘guidelines’.  After all – anyone can write ‘guidelines’ – it’s a free country. My take is that their version was a little too stringent on quality – but who knows?

The word is that the insurers (on behalf of Government of course – nothing underhand here), are negotiating with the Institution of Lego Engineers, – who’s application for Royal Charter has been successful – and it looks like those practitioners now able to use the coveted C.Leng. after their names will be taking over.  Their claim that no building they have designed and built has ever been destroyed by earthquake with loss of life, was obviously compelling, but there’s more…….

A draft copy of the forthcoming new iteration of the MBILE ‘guidelines’ was slipped to me (as I am one of the bigger shareholders in GAI Insurance Ltd.) and I am privileged to be able to share some of the points with you, hot off the press.   Here are a few of those points:


Notes concerning the use of these guidelines:

  • Use of the technologies specified in these guidelines need not take into account any existing agreement or contract.
  • Whereas every good intention has been employed in the production of these guidelines, neither the government nor the parties employing these guidelines may be held accountable for any adverse outcome, whatever, retrospectively, or otherwise.

6.   Cracking.

Cracking is usually cosmetic and whilst owners are typically concerned about its manifestation, particularly in foundation slabs, it will usually be found to be pre-existing or merely cosmetic.

Remedy.    Porridge (hot poured) will usually give a good textured repair, when cold and provide a good colour match.  Excess sugar is advised with cracks exceeding 10mm.  Avoid the use of excessive water until the area is re-carpeted. Follow the packet instructions carefully.

  1. Assessment of floor levels.

Generally, there is over-concern regarding out-of-level floors, which is largely irrelevant to the use of a dwelling, unless excessive.

Assessment.   Use of the Lego 30mm levelling cube is recommended – place one face of the cube flat on the floor and observe movement.  If the cube fails to roll or slide, there is probably no need to take further action.  If the Cube slides, adequate use of floor levelling compound should be sufficient to bring to level.  If the Cube rolls, then a C.Leng engineer should be consulted about towing the house to a flatter portion of the site. Lego research indicates that this approach is always effective.

  1. Voids.

The determination of voids beneath foundation slabs is important and a registered professional (Insurer’s lawyer or an engineer who is a member of the Institute of Insurance Engineers) should be present when checking. If in doubt, the lawyer will instruct the engineer as to the findings.

Assessment.   Ensure that the noise-level in the property is less than 45 db.A.  A builder’s standard steel plumb-bob should then be dropped from 1.5 M height on to the floor slab.  If no echo, or hollow sound is heard, the floor can be assumed to be void-free. Ear-muffs should not be worn and persons using hearing-aid devices should not participate in the assessment.  The technique is not valid for floors of less than 100 mm thickness.

  1. Step-Cracking – concrete block.

Concrete block structures can have embedded reinforcement bar within them, but it is not necessary to know whether this is the case to effect repairs. Nor should it ever be necessary to dismantle the wall simply because the cement bond between blocks has failed.  As with Lego, the blocks shouild remain in place up to an inclination of 25 Degrees.

Repair. Using a diamond saw, chase-out crack-lines to 25 mm depth on the exterior of the wall only.  Do not cut deeper or there is risk of cutting through the re-bar.  When the repair is complete, this rebar will be the only element which is holding the wall together.  Repoint the excavated crack-line with a 50:50 mix of super-glue and sand. A small portion of cement will help to match unpainted walls. This repair strategy is preferential as it maintains good flexibility of the wall in further aftershocks.  

  1. The Use of Structural Paint. (SP)

Often overlooked, SP is a useful and flexible tool in cosmetic repair situations – which will be most situations.  Structural paint can be used in situations such as cracks in 90 Degree corners in block walls, where it is not feasible to chase-out the crack line .It has also found many uses where cracks do not exceed 1.5 mm. and has numerous other applications associated with Gib. board.  Contactors are advised to obtain the fact sheet and disclaimer from the manufacturers.

 Well that’s just a few of the new points, but you can see that these people have not been asleep at the wheel and the industry is buzzing with the excitement that the prospect of increased profits brings.  And the good thing is that anyone can write guidelines as they have no relationship to law.  It’s like almost anyone can have C.Leng. after their name as long as you pay the annual fee…. No moral obligations at all.  I just know that EQC will love the new guidelines.

However, there may still be one stumbling block as the confused Courts are being faced with an increasing number of indignant owners who thought that there was only one law which defined the standard of construction when you build (or repair) dwellings in New Zealand .   It’s called the Building Act 2004.  It’s about law and good building – not saving the insurers money, including EQC and Southern Response.   So let’s watch closely what happens.  Will the Leg. Eng.’s win the day or will the High Court judges practice law?  Mind you, it’s difficult for the poor souls because sections 2, 18, 22, 27, 30 and Schedule 3  of the EQC Act 1993 are at odds with the provisions of the Building Act 2004 and no one is prepared to admit that when a foundation is broken, it needs to be REPLACED so that it can meet the code.

In lay terms the question could be put as can the EQC Act ‘contract out’ of the Building Act? If it can, then the next set of ‘improved guidelines’ will likely come from the Kennel Society…….




Author: Sarah-Alice Miles

Love to write, create and watch the clouds move across the sky - these days in the Netherlands. 'Art allows us to find ourselves and lose ourselves at the same time'.

2 thoughts on “Time to eradicate the fruit fly in the legislation – Guest post by Sleazkey

  1. This would be hilarious except that the use of structural paint (I think the EQC guy called it a paint membrane) to repair my step cracked concrete block garage is the actual honest to god repair strategy offered by EQC on my most recent scope of works. (no pesky mortar removal for us!)

    On second thoughts …. this IS hilarious ….

    (PS: Love reading your work Sarah)


    • Thank you – though the praise goes to another in this case. Fabulous to have contributions. And by the way just tell the EQC guy to add an extra large spoonful of sugar and she’ll be right.


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