O'Rourke Denis: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeO'Rourke Denis: Questions for Oral Answer — Questions to Ministers[Sitting date: 02 July 2014. Volume:700;Page:19127. Text is incorporated into the Bound Volume.]12.DENIS O’ROURKE (NZ First)to the Minister responsible for the Earthquake Commission: Is he satisfied with the progress of the Earthquake Commission in the settlement or disposition of all claims in respect of multi-unit dwellings arising from the Canterbury earthquake; if so why?Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery):I thank the member for his question and recognise him as one of Parliament’s foremost experts on multi-unit dwellings. The Earthquake Commission has worked through 21000 dwellings in multi-unit buildings. Of these two-thirds have been resolved including 4100 repaired under the Canterbury Home Repair Programme. For almost all of the remaining properties the commission has a detailed clear path to settlement. Seventy-two of the most complex properties are being managed in conjunction with the insurers to determine the best way to repair entire buildings where some claims are with insurers and some with the Earthquake Commission. The problem has largely occurred through neglect of conveyancers over years to recognise the importance of body corporate rules.Denis O’Rourke: Can the Minister tell us what proportion of all of the claims relating to multi-unit dwellings have been settled or completed?Hon GERRY BROWNLEE: Two-thirds.Denis O’Rourke: Where the units of individual owners in multi-unit dwellings are assessed by the Earthquake Commission as being under the $100000 cap but the damage claimed is greater than this and when the cost to repair the building as a whole may exceed the total of the Earthquake Commission’s assessed damage for all individual units together why in so many cases is the commission resisting a realistic total sum for repairs?Hon GERRY BROWNLEE: The Earthquake Commission is an insurer just like any other insurer and when you get situations that would see damage on one side of a party wall under the cap but damage on the other side of the wall over the cap in recognition that in order to repair the under-the-cap property you have to damage further the over-the-cap one naturally there is going to have to be an unders and overs arrangement between the Earthquake Commission and all of the insurers. In many cases inside a single multi-unit block there will be multiple insurers. The member knows this; it has been explained to him many many times.Denis O’Rourke: What does the Minister say to the people who are caught in the trap of an inadequate offer by the Earthquake Commission where it insists that units are under the cap and who are then expected to pay tens of thousands of dollars to engineers and assessors to do the commission’s job for it as well as pay lawyers’ fees and other costs in order to get the Earthquake Commission to acknowledge its real liabilities?Hon GERRY BROWNLEE: That is an interesting proposition to put to us but I want to explain it to the member like this. Where there are a number of units all joined together but with separate letterboxes there may be separate insurance bills going into each of those letterboxes and there will therefore be separate contracts on each of those properties. Where the Earthquake Commission has a liability less than $100000 those properties can go into the repair programme and 4100 of them have done so so far. So what the member is outlining is a situation that should not exist. If he has details of those properties let us know.Denis O’Rourke: What actions has the Minister taken to ensure that a rigorous quality control regime is in place so that the assessments relied upon by the Earthquake Commission are fair and realistic for multi-unit buildings?Hon GERRY BROWNLEE: If they were not fair and realistic then they would be progressively handed back to the commission by the private insurers. What the member is not fairly representing is that if you have for example a building with—as I know of in one case in Christchurch—43 units in that structure with 13 different insurers alongside the Earthquake Commission sometimes it is difficult to sort those things out. But I have to say that there is a cooperative atmosphere and we are getting through them. As I say out of 21000 two-thirds are settled and most of them have a clear path now and there are 72 difficult properties remaining with a lot of work going into them. I need to report to the House too that these dwellings were not even easily recognisable by the policies that they had. That failing goes straight back to the lawyers who conveyed them inappropriately.Denis O’Rourke: I raise a point of order Mr Speaker. That is a very long answer but it does not even get close to answering—Mr SPEAKER: Order! [Interruption] The member can resume his seat. The question was also quite a long question and it has been addressed by the Minister. Does the member have a further supplementary question?Denis O’Rourke: I raise a point of order Mr Speaker. You did not allow me to ask—Mr SPEAKER: Order! [Interruption] Order! The member will be lucky to stay for the balance of the afternoon. The member raised the issue about whether the question had been addressed. I have concluded quite clearly that the question was addressed. I am inviting the member if he has a further supplementary question to ask it now; otherwise we will move on.Denis O’Rourke: Why was the Earthquake Commission not better prepared before the earthquakes so that the complex issues around multi-unit dwellings could be promptly and fairly dealt with when an earthquake such as that which devastated Christchurch occurred?Hon GERRY BROWNLEE: If the Earthquake Commission had had just one cover on a multi-dwelling property that would be a fair proposition. But as the member knows as these properties have been conveyed from one owner to another over a period of years body corporate rules have been ignored by the legal fraternity. Multiple insurers have coverage and therefore there are multiple Earthquake Commission claims on a single property. That is exactly the problem we are trying to work through. It is typical of a lawyer to just tell us what is wrong and forget about the fact that lawyers were largely responsible for the problem.Hon Ruth Dyson: Will he give a guarantee to the people of Canterbury that they will not be forced to accept a disputed cash settlement imposed so that the Earthquake Commission can meet his deadline that all claims will be resolved by the end of this year and does he still stand by that deadline?Hon GERRY BROWNLEE: There is every effort being made to reach settlement on claims. At the moment as the member knows all claims under $15000 are cash-settled. People have an option where their claims are between $15000 and $20000 to go into the Canterbury Home Repair Programme but many people with the encouragement of a lot of other leaders in the community are going to private providers. You see the ads in the paper almost every day. Those people are choosing to cash out but my information is that no one is being forced to accept a cash settlement.