Weathertight Homes Resolution Services (Remedies) Amendment Bill — Second Reading 
Weathertight Homes Resolution Services (Remedies) Amendment Bill — Second Reading 
[Volume:640;Page:10582] 
Weathertight Homes Resolution Services (Remedies) Amendment Bill 
Second Reading 
Debate resumed from 21 June. 
PITA PARAONE (NZ First) 
: 
 Tena koe Madam Assistant Speaker. I recall quite clearly the last time the Weathertight Homes Resolution Services (Remedies) Amendment Bill came before the House. Although there were a number of members in the House members from particularly the major parties were reluctant to take a call because it was too close to 6 o’clock. I suspect that the people I addressed that particular afternoon are the same people who are still locked in the gridlock of Auckland roads while making their way home at this time. I say to them that they can always rely on New Zealand First to ensure that the business of Parliament carries on particularly in this case. 
I come back to the bill. I want to again make the point that this amendment is required because a couple of court cases have shown that the intent of the parent Act has been lost. The Minister for Building and Construction on advice from his officials and I suspect from a number of people within the industry has introduced this amendment. It is a remedies bill not a repairs bill. I think it should be incumbent on members in this House to lend support for it. Those people who have been affected by this terrible problem in terms of the weathertightness of their homes ought to be considered. 
The fact that the Minister has taken the time to introduce this bill ought to have the support of all sides of the House. I know that people in the industry are appreciative of the fact that this Government has introduced this bill in order to ensure that the intent of the Act is met. A couple of court decisions quite clearly have flown in the face of the intent of the Act. I know that some members in this House have been critical of the Minister suggesting that the original Act was introduced and passed in haste and now we are seeing the consequences of that haste. Be that as it may I think it is important that this House recognises that if this amendment does correct the consequences of haste then we should lend support to it. 
On behalf of New Zealand First I say we are delighted to be able to stand in this House to lend our support to this bill. Kia ora. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Deputy Speaker. Tena tatou katoa e te Whare. I will start with a quote which will come up a bit later in my speech: “If this was a White middle-class community there would be hell to pay.” 
The Maori Party welcomes this move to change the law so that the Weathertight Homes Tribunal can make awards to those families who have suffered mental distress as a result of the leaky homes saga of the past few years. It is appropriate that this bill is coming up now because of the trauma and distress that are being suffered by the victims of the recent storms and floods that have hit Te Tai Tokerau Whitianga Kahungunu and Taranaki over the past few weeks. It is really sad that this bill ain’t going to help any of them at all. This current proposal came out of a court decision that noted that the Weathertight Homes Resolution Services Act did not allow for awards to be made for mental distress and anxiety. This bill will allow such awards to be made which will be a big relief for those with claims relating to weathertight deficiencies. Mind you it would be better if people could get decent affordable good-quality housing first rather than have to try to claw back compensation for shoddy construction later. 
Although the Maori Party acknowledges the genuine distress caused by the deficiencies damage destruction and loss of value that this bill deals with we also want to widen the debate to deal with housing stress more broadly. Of course we support any move that acknowledges the stress of having a home and then losing it. Like the Law Society we see this bill as being forward-looking and in the best interests of those who have suffered mental distress and anxiety caused by damage and loss of value. But we are also aware that since 2002 the Government has spent nearly $76 million on the Weathertight Homes Resolution Service and then the Weathertight Homes Tribunal. We wonder when the Government will get around to funding a “Substandard Homes Resolution Service” to respond to the desperate needs of those people who live in homes where there is no bathroom where the long drop toilet is hidden behind a shabby wooden door where the wind whistles through paper-thin walls and ill-fitting doors and windows where there is no heating or protection from the cold and damp where there is no hot-water cylinder and where the only tap that works is the cold one. 
If members think I have made that up they should just ask John Carter Parekura Horomia or Pita Paraone himself. They will tell them that what I have said is true. There are way too many of those instances for the Government to continue to ignore the situation. Indeed all members will be aware of quotes such as this one from a regional health strategy recently: “Hospitalisation for preventable diseases among Maori is high along with health issues associated with poverty and poor housing.” That confirms an ongoing reality of housing stress for Maori a reality that includes overcrowding substandard housing and poor heating further impacting on Maori health. 
So it is hard to think about this weathertight homes bill separately from the impact of wider housing policy on Maori. The facts are that up until World War II Maori were specifically excluded from mainstream State housing and that in a study completed just last year by the Family Centre social policy research unit and by the Massey University research centre for Maori health and development we find that the same problems are still there: It states: “Local councils and government departments are reported to have struggled to meet changing housing demands for Maori.” This was just last year. It seems to me that if legislation can be fast-tracked through to allow for awards for mental distress for leaky home victims then there is no reason why legislation cannot be fast-tracked to cater for Maori housing needs. The research has already been done into housing discrimination and there is a whole host of recommendations for affordable homeownership communal housing designs and innovative rental deals. 
If I might be so bold I would ask this House to think about the societal status of those New Zealand families who are affected by this bill and to ask whether there are certain suburbs certain income brackets and certain socio-economic categories that mostly benefit from the work of the Weathertight Homes Tribunal. I dare not ask this House to think about the communities in my own electorate for example—the northern territory—where poverty often determines people’s housing choice and where people live in houses built from polyurethaned “Weet-bix” where septic tanks have been put in below the level of the water table where sewage runs over the sections where poor workmanship is grossly evident and where one senior Pakeha policy analyst was so shocked and disgusted at the conditions she saw that she was moved to say: “If this was a White middle-class community there would be hell to pay.” That was not a quote from me but from a senior Pakeha policy analyst who was shocked at the housing conditions she had seen in Te Tai Tokerau. 
Then of course a few years ago the middle class went into shock over the leaky homes saga and to no one’s surprise—bang bang bang—we have this legislation. It is different treatment for two groups of people: one brown rural and on a low income and the other white more affluent and in a higher income bracket. Perhaps the criticism of my comments about John Howard was right: maybe I should have been firing my bullets a lot closer to home than I did. Why indeed has this Government treated those two groups of people so very very differently? 
We know from the leaky homes saga that deregulation of the building industry led to cowboy operators and a lowering of standards but what about those Maori houses that were built before then? They are houses built on swamp land because the whanau had been moved off their original papakainga houses approved by the Housing Corporation over the past 20 years that have already been condemned and houses that whanau cannot sell because they were built of inferior materials. But none of the owners of those houses are eligible for the Weathertight Homes Tribunal compensation that those other folks are to receive. We know too from the  
Social Report 2006 
 that there are parts of this country where household overcrowding is rife: places like Manukau Opotiki Porirua Wairoa Kawerau and places in the far north where 25 percent of all homes need more bedrooms and where to no one’s surprise the populations are primarily Maori and Pasifika. 
This bill to allow for awards for mental distress for those who are suffering the effects of the leaky homes saga is a good idea—there is no question about that. But let us not be so blinded by this saga that we do not see a real crisis that has been rotting in our country for generations: a crisis of shoddy homes a crisis of people in desperate need and a crisis of a Government in denial. Tena koe Mr Deputy Speaker. 
KATRINA SHANKS (National) 
: 
 I rise to speak to the second reading of the Weathertight Homes Resolution Services (Remedies) Amendment Bill. The weathertight homes legislation was initially drafted simply because leaky homes had been built and homeowners needed some sort of protection. My understanding of the situation is that approximately 15000 homes have been identified in effect as having leaky home syndrome. 
I understand that a leaky home is caused by moisture leaking into the home which cannot dry due to a lack of air movement. All homes leak moisture but they leak it to different degrees. While I was looking at this issue I learnt that brick homes leak 18 percent strut-frame homes leak 2 percent and Hardiflex homes leak 7 percent. They all leak moisture. When there is air movement that moisture is dried up. Therefore those houses are not considered to be leaky homes—because they do not leak. The problems arise when there is no air movement and the moisture then rots the timbers and walls. That is when we have leaky homes. 
The change in products that the industry uses has in some instances caused those leaks. For example Hardiflex was being used instead of weatherboards thus stopping any air movement; mitre joints and windows were leaking and had no still trays to capture any leaks; and battens that would have allowed for air circulation were not being used between the outer and inner walls. The list goes on but those are just some of the reasons why homes started to leak. Unfortunately builders built homes with those faults but the Building Industry Authority had told them how to build homes and what cladding materials were suitable. The authority got it wrong. 
The new bill has been introduced to allow awards for mental distress and anxiety in order to remedy some of these claims. So far 4600 homes have been registered as being leaky. This number grows weekly and the scary fact is that leaky homes are still being built today. That has been confirmed by Katrina Bach chief executive of the Department of Building and Housing. This figure will grow each year as the years pass. 
The amendment to the legislation basically makes clear what remedies can be claimed. My colleague Bob Clarkson has made the very valid point that if we could just fix the leaky homes then their owners would not need this legislation to begin with as they would not have stress and anxiety about their leaky homes. Those homes would simply be fixed to begin with. 
The original legislation the Weathertight Homes Resolution Services Act was introduced in 2002 and was passed very quickly. It has subsequently proved to be an extremely flawed Act. In 2006 the Weathertight Homes Resolution Services Amendment Bill was once again a rushed job. Six months later we are again looking to amend this legislation. 
Interestingly enough the section in the Act that is to be amended was also the subject of the National Party minority report. Our minority report reflected why this amendment is now necessary. It stated: “National is appalled at the lack of progress in resolving the plight of thousands of owners of leaky homes and is unconvinced this bill will provide a workable solution. 
National does not agree with the majority decision on homeowners being unable to claim legal costs. It is quite unrealistic to expect the average homeowner when confronted at adjudication by up to a dozen lawyers to represent themselves. The bill should make provision for reasonable legal costs as per any other jurisdiction. 
There is a real dilemma created by the Government’s decision in 2002 not to disclose publicly applications to the WHRS for resolution. Many homeowners made claims on the basis that it would not be disclosed but this bill now retrospectively forces disclosure. This concern must be balanced against the rights of new owners to know whether there has previously been a weathertight homes claim. 
National is further concerned at the juggling of the WHRS between departments. The service started as part of the Department of Internal Affairs was then transferred to the Department of Building and Housing and is now proposed to be transferred to Justice. It appears to be a game of pass-the-parcel with the losers being the owners of leaky homes. 
National views the whole Government response to leaky homes as inadequate and failing homeowners. A more substantive reform that puts the focus on fixing the homes rather than spending tens of millions on reports and process is required. 
 In summary National supports most of the bill as a small improvement but in no way a solution to the billion-dollar problem of leaky homes.” 
Maybe if the last amendment to the Act had not been rushed it might have been drafted correctly and we would not be standing here now debating yet another amendment. 
This amendment makes it clear that remedies that can be claimed under the Act can include general damages for mental stress and anxiety. This amendment was introduced due to a recent decision in the High Court and in fact reverses the effects of the decision made on 29 March 2007 in the case of  
Hartley v Balemi and others 
. The High Court case highlighted the fact that general damages could not be awarded as compensation for any mental stress or anxiety. The judgment sets a precedent that impacts on existing adjudication started under the Weathertight Homes Resolution Services Act 2002 and the administration of the Weathertight Homes Resolution Services Amendment Act 2006. 
So what will the 2007 amendment do? It will clarify that the Weathertight Homes Tribunal can make any order that a court of competent jurisdiction could make in relation to a claim according with principles of law. That order may include an award of general damages including those for mental anxiety or stress. 
What does this amendment impact upon? Firstly it impacts upon the 4600 leaky home owners identified. These people have incurred leaky homes through faulty building or products and in many instances through a combination of both. Secondly after a period of 4 years only 10 percent of claims have been resolved. They have been resolved in the court/tribunal system but not necessarily paid out. Many homeowners are still either out of pocket or living in homes that leak like sieves. 
It is people like the elderly who built their last home for their retirement and have no additional money to pay for repairs for whom I feel the most sorry. In many instances compensation will never be received even though it has been awarded through the courts. In reality the money will never change hands. What will those elderly people do? How will they fix their homes? How will they sell their homes? How will they afford to go into a retirement village if they choose to? 
On 1 June 2007 Local Government New Zealand raised the issue in a letter to the Social Services Committee. It said: “The explanation for the bill states that it will return the law to what was intended by Parliament and the Government. We note that there are several aspects of the current Act that do not seem to consistent with what Parliament and the Government intended. It is unfortunate that the Government has moved first to fix the matter of current profile in respect of claimants and cost awards when there are other fundamental matters where the Act does not perform as intended. For example we have previously submitted to the select committee that the Act needs amending to ensure that homes are actually getting fixed at the conclusion of the resolution process. We would agree that getting homes fixed is the intention of the Act and yet this matter was not addressed in the latest amendments to the Act. We have also previously submitted on cost-sharing and liability issues that we believe the implementation of the Act in practice is not as intended by Parliament.” 
It is no wonder that the level of frustration amongst homeowners is extreme. As with the 2006 amendment these changes are tinkering and will not solve the problem but they represent an opportunity to debate this issue. The Government is being incredibly optimistic that the Weathertight Homes Tribunal should substantially cease around 2021. At this rate it will take 7 years just to clear existing claims. A recent Cabinet paper quoted 15000 affected homes which would take at least 32 years to clear. 
The Weathertight Homes Tribunal will not be able to recapture claimants’ trust given this latest failure given the previous embarrassing gaffe from Helen Clark in 2002 that: “The seriousness of the situation appears to be a fraction of what the beat-up in the  
New Zealand Herald 
 implies.” and given this statement in that same month from Jim Anderton: “I am aware that while leaky building syndrome or weathertightness is a serious issue for those affected the numbers involved are not great.” He should tell that to the 15000 I mentioned. 
I will highlight one more adjustment that has been made to this bill. It is small but I believe that it will impact later. I refer to a change in clause 9 “Interpretation” and it concerns the term “relevant mental distress”. The word “claimant” has now been replaced with the word “claim”. This I believe will mean that a relative or any person who is not the principal claimant could also claim for damages in relation to stress and mental anxiety. The amendment made in this bill will mean that existing claimants can amend their claims so that they can take advantage of the new clauses. Therefore the amendment will cover all active claims and all claims coming after the amendment. However listeners must be aware that anything decided to date cannot be changed. 
Bill read a second time.