Cosgrove Clayton: Weathertight Homes Resolution Services (Remedies) Amendment Bill — Second Reading 
Cosgrove Clayton: Weathertight Homes Resolution Services (Remedies) Amendment Bill — Second Reading 
[Volume:640;Page:10142] 
Hon CLAYTON COSGROVE (Minister for Building and Construction) 
: 
 I move  
That the Weathertight Homes Resolution Services (Remedies) Amendment Bill be now read a second time 
. I thank the Social Services Committee for the efficiency and focus with which it has dealt with this bill within a very short time frame. I agree with and wholeheartedly support the committee’s amendments. The changes I believe improve the bill. 
I also thank the New Zealand Law Society for its accurate and expert guidance which has been of great value. All members will be aware of the valuable public service the Law Society provides in reviewing and commenting on bills of general public interest. This occasion is no exception. The thrust of the Law Society submission is that the amendment proposed by the bill is needed. The High Court’s decision in  
Hartley v Balemi and Ors 
 is as the Law Society states: “at odds with what practitioners working in this area thought the legislation did and should provide for.” 
I take this opportunity to remind the House briefly of how this bill came about and of what it contains and to summarise the select committee’s recommended amendments. The bill confirms and clarifies Parliament’s intention that general damages for mental anxiety or distress can be awarded under the current Weathertight Homes Resolution Services Act 2006 and the repealed Weathertight Homes Resolution Services Act 2002. The decision in  
Hartley v Balemi 
 held that such damages could not be awarded under the 2002 Act. The judgment also has implications for the 2006 Act. The effect of the judgment if allowed to stand is that claimants might secure general damages for mental anxiety and distress from the courts but not from the Weathertight Homes Tribunal. This consequence could not have been foreseen when Parliament enacted the 2006 Act as two appeal decisions of the District Court made in 2005 in examining the same matters in contention had held that general damages could be awarded. 
An added complication is that the 2006 Act enables the transfer of a claim from the courts to the tribunal and vice versa. Already since the tribunal commenced operations on 1 April 2007 it has received claims transferred from the courts: one from the High Court and seven from the District Court. Clearly the effect of the High Court decision in the Hartley case was contrary to Parliament’s intention of having a specialist one-stop shop for dealing with leaky home claims. Urgent action was needed. The response had to be swift but it had to be well crafted and lasting. It also had to be widely considered to be the right thing to do and not only by owners of leaky homes. Therefore it is pleasing that the New Zealand Law Society drawing on the insights of lawyers operating in this field has agreed that this is a necessary amendment. 
The bill makes it clear that general damages for mental anxiety or distress can be awarded. I emphasise that this bill does not require that such damages must be awarded. Indeed prior to the High Court judgment such damages have been awarded in only a minority of determinations—that is 21 percent. Moreover when there has been an award the amounts have been modest averaging just $9450. This is consistent with the longstanding judicial precedent that when the courts award such general damages the awards are modest. 
There will be those who comment that the possibility of general damages for mental anxiety and distress will not add an extra dollar to the compensation received and is therefore of no relevance. I do not agree. Claimants value these awards as an acknowledgment of the stress they have suffered. The committee wanted the bill to be as simple as possible so that lay people could understand it. I strongly endorse this aim and I accept the committee’s amendments. Subclauses (4) and (5) of clause 5 have been deleted; the reference to the Hartley decision was not legally essential. 
In passing I note that this bill if enacted will not apply to the parties to the Hartley decision. New subclauses (4) and (5) have been inserted in clause 5. These clarify how the bill’s amendment applies to appeals. Subclause (4) clarifies that even if a claim that has been determined is under appeal or review it will still be deemed “disposed of through resolution” for the purposes of working out whether the proposed Act applies to that claim. New subclause (5) provides that if the amendment applies in a claim the amendment remedies may be included both when the claim is adjudicated and when there is any appeal rehearing or review. 
The converse is also true. If the amendment did not apply to a claim when adjudicated it also cannot apply when there is an appeal even if the appeal is made after the amendment has come into force. Clauses 6 to 8 have been deleted. They stated that the affected claims could be amended to include the remedies in question. Certain transition provisions in the principal Act would be unaffected by the proposed Act and determinations made before the proposed Act commenced would not be affected by it. The technical amendment in clause 9 repeated in the schedule clarifies that the relevant mental stress relates to the claim not the claimants. 
To conclude the bill as reported back achieves what is needed. It clarifies and confirms Parliament’s original intent. It restores to the adjudicators and the tribunal deciding these claims the ability to award general damages for mental anxiety or distress in the same way as the courts. I thank John Gray and the Leaky Homes Action Group members for their strong support for this amendment. I acknowledge the Law Society for its authoritative and helpful contribution. I again thank the Social Services Committee for its thorough and quick examination and sound recommendations which improve the bill. It is my hope that the House will see it as in no one’s interest to delay this bill. I commend it to the House. 
Mr DEPUTY SPEAKER 
: The next call will be shared 5 minutes each by Judith Collins and Bob Clarkson.