On the 21 June 2013 six concerned residents (all of whom you will be familiar with) and myself went to a meeting with a number of government agencies (MBIE, CERA and the Christchurch City Council). We asked for response to some 33 questions to which we received a typically bureaucratic response.
Why were we there? We were concerned! We were concerned that the majority of homes with under-cap repairs were not being assessed by professionals – not by geotechnical engineers, structural engineers, nor surveyors. The implications of this fact was obvious to us all. We were concerned that the only kind of damage being considered was visible damage. We were concerned that there was little in the way of assessment of land settlement being done, little in the way of structural assessment and even less in the way of land or ground damage assessment. Nor was there any consideration being given to the increased flood-risk in large parts of the City. We were concerned that the true extent of the damage was not being fairly considered. It was a tense exchange.
We expressed these anxieties at that meeting about the level of consumer protection for homeowners affected by shoddy earthquake repairs. In fact, that was our main focus. We discussed the EQC/Fletcher EQR ‘home repair programme’ at that time. It needs to be remembered that this was two years ago. It was obvious to us then, that there were going to be major problems. In the end, I decided to personally withdraw from these encounters as it was clear to me that no matter what evidence was provided there was not going to be a shift in position by the bureaucracy which was supposed to be looking after the well-being of the citizens of Christchurch. They would probably do it all again. At that meeting we talked about the accountability of the Project Management Offices and their contractors undertaking the repair work along with the local and central government agencies responsible for administering legislation or working with the building and construction or insurance sectors during the rebuild. We also raised our concerns about the consumer protections which we saw being downplayed at that time, with particular emphasis on building consenting requirements. We specifically expressed our concerns that the exempting work from the Building Act’s building consenting requirements lowers the standards set out in the Building Act. We were told during the meeting that “while such legislative reforms (and process documents) do seek to streamline regulatory processes and reduce the compliance burden for some lower-risk building work, they are not about cutting corners, avoiding liability, or eroding consumer protection”. They affirmed that these changes were merely a pragmatic way of exempting low-risk building work.
Common examples cited were:
- The installation of thermal insulation in external wall framing cavities(with some limitations)
- Repair and replacement of a number of timber foundation piles
- Re-levelling ‘jacking and packing’ of part of a house’s foundation
- Replacing a section of damaged ring foundation
- Repairing minor cracks in concrete foundations
- Demolishing a damaged building (with some limitations)
We were told that MBIE was conscious of working with the PMOs (including Fletcher EQR) to train their project managers, engineers and builders in the application of their technical guidance for earthquake repairs, exempting building work and other Building Act and Building Code requirements. At this meeting MBIE confirmed that these proposals did not seek to erode any existing consumer protection and that existing implied warranties for contracts for building work on residential units remained.
On the 13 August 2013 after the meeting and in response to our letter to MBIE, we received a response from Malcolm McMillan (Earthquake Recovery Operations Manager) in which he stated clearly that the Ministry did not feel that there was anything in the MBIE Guidelines that breached the Fair Trading Act or the Consumer Guarantees Act because “the Ministry’s guidance information is not mandatory and cannot override the law. If the Ministry’s guidance contains recommended technical building solutions (eg. The types of foundations that should be used in certain situations) then any such design solutions have been designed and reviewed by technical experts according to the current state of knowledge and building science. In many cases, they will have also received international peer review. This however does not make such guidance compulsory to use.”
They forgot to mention though, the law of contract and what about the tort of negligence?
We were told that the technical guidance was developed to “speed up design work and provide consenting authorities (and homeowners) with greater surety that the design solutions are based on best practise knowledge available at the time. In short, it can help avoid having to reinvent the same design solutions over and over. In saying this such solutions are not a universal solution in every case. The unique circumstances of each building project and other factors need to be considered.”
i.e. a smorgasbord of solutions. It was clear we were in for major problems!
Given that the MBIE Guidelines were used almost exclusively by Fletcher and others to ‘effect’ repairs (although they were not mandatory to use them) and now that we have wholesale failure of these repairs around the City it would appear that the luminaries in Government and MBIE got it mightily wrong! They couldn’t have really gone to all that trouble just to save the Government some money, could they? It smacks of political interference and cost saving.
Now that Earthquake Minister Gerry Brownlee has decreed what the ‘truth’ shall be, we can be certain that it is all the fault of the builders involved. Of course it was not just Fletcher – the private sector insurers’ Preferred Contractors (Hawkins, Arrow, Maxim, Mainzeal etc.) also used the Guidelines extensively and you are wondering why there is a rush to cash settle everybody now? Quick, sign this full and final settlement, we have a private jet to catch.
The consumer protection warranties in section 379 of the Building Act 2004 apply to all residential building work, regardless of whether it requires a building consent or not. At the meeting we were told that the type of building work that had been exempted should be lower-risk and any geotechnical investigation to assess the state of the land upon which someone is proposing to build was a separate issue. “If however, the repair is lower-risk, and has an appropriate degree of oversight and management, and meets an exemption requirement then it may not need a building consent, as is the case with much of Fletcher’s EQR’s house repairs.”
So the problem is clearly one of oversight and management and in fact the actual choice of the method used to ‘effect’ repairs. It’s not really hard to see where the liability lies, is it? There is no way that EQC and the insurers’ Preferred Contractors and the insurers themselves can escape full liability for the travesty which is occurring in the City. No one said they had to use this stuff.
Building Act Amendment 2013 (No 4) provides consumer protection provisions that make it clear that the main contractor is liable to the homeowner for any defective building work (including any work done by a subcontractor).
The MBIE report on page 14 states that 3 of the 101 properties surveyed (that’s 3%) had structural repairs that have been documented by the PMO but that the work had not been carried out. Extrapolate that over thousands of repairs – it equates to a significant number.
This is absolutely not a time to cash settle!
Of course we are going to find out more about all these issues including ‘who did what’ and ‘who is going to be accountable’ and ‘what is the remedy’. As this torrid story unravels, perhaps unsurprisingly, information will come to light to show that the guilty parties are not from abroad or from the Emerald Isle but most likely ‘honest’ citizens of Godszone.
Anyone for a representative (class) action? More about that next time.
~Future Proofing for a sustainable, participatory, democratic society.