Parker David: Residential Tenancies (Damage Insurance) Amendment Bill — First Reading 
Parker David: Residential Tenancies (Damage Insurance) Amendment Bill — First Reading 
[Volume:630;Page:2745] 
Hon DAVID PARKER (Minister of Energy) 
: 
 I thank the members for their prior contributions. I think they have all been valuable. I acknowledge Maryan Street for bringing this bill forward. I also thank a constituent of mine when I was the MP for Otago Warwick Goldsmith who is a lawyer in Queenstown and who is the source of this bill originally. He wrote to me as a constituent and as a lawyer reporting a commentary on the  
Harrison 
 v  
Shields and others and Medical Assurance Society New Zealand Ltd 
 decision whereby as a prior speaker mentioned the judge concluded in his comments that: “The outcome of this proceeding though in accordance with the law is unjust.” I think that is the essence of the issue we are dealing with today. 
Is it just when there is a joint tenancy between tenants to enforce liability on the part of one of the tenants if the place burns down? The present position is that the landlord can and generally does insure the property but when the property burns down the landlord’s insurerFR can exercise a right of subrogation and stand in the shoes of the insured and do what the landlord could do if the landlord was not insured. So the insurance company can effectively force the landlord—who might not want to do anything against the tenant and might think it is quite an unjust outcome—to sue the tenant to recover the losses that may not have been caused by that tenant. 
I think that is unfair and I contrast the position with a family that occupies their own home. The family might occupy their own home and insure it. Their mother might be living with them and it might be the mother’s negligence in leaving the towel next to the heater that causes the fire but one does not hear in that situation of the insurer exercising rights of subrogation to sue the mother or the child or the wife or the husband who caused the fire. 
 The insurance premium of course is not much different in either situation yet in the situation of the non - owner-occupied property the insurer has the opportunity to have and does exercise rights of subrogation that would not occur in an owner-occupied situation. Having said that I do acknowledge that there is something in some of the statements made by Tariana Turia and by the National Party. They suggest we need to take care that we do not cause unnecessary problems in respect of minor damage to premises where perhaps it is appropriate that all tenants share the obligation to make good damage caused by a co-tenant because they may be able to influence that damage not happening if they have some level of responsibility. I am not sure where the line should be drawn there and I think it is something that the select committee should look at. 
What I am clear on is that it is not right in the case of fire that the major risk being insured against by the landlord does not also cover the interests of the tenant. That could be achieved for so small an extra cost and the full amount of that extra cost could be passed on to the tenant. So I think this is a good bill. 
Finally I will respond to one thing Sue Bradford said. She gave the example of someone falling asleep in bed while smoking and thus causing a fire. She thought that person should perhaps be made liable but I do not think that person should be. I think the same situation should apply to that person as a tenant as would apply if that person was an owner-occupier or the mother or child of the owner-occupier if they were to do the same thing. 
I think this is a good bill and that there is a need to look at the issue of minor damage. I suggest that this bill should be limited to matters of damage caused by fire so as to avoid the large risk that could cause perhaps a $100000 liability but those are matters of detail that the select committee can report to the House. I support the bill.