Weathertight Homes Resolution Services Amendment Bill — In CommitteeText is incorporated into the Bound VolumeWeathertight Homes Resolution Services Amendment Bill — In Committee[Sitting date: 21 October 2015. Volume:709;Page:7419. Text is incorporated into the Bound Volume.]Weathertight Homes Resolution Services Amendment BillIn CommitteePart 1 Amendments to Part 1AHon CLAYTON COSGROVE (Labour): I can say from the outset that the Labour Party will be supporting this bill. As a former Minister for Building and Construction I am one who I think has been followed by a litany of them—from both sides of the House to be fair. There is a political graveyard of building and construction Ministers from both sides of the House who to be fair to them all in their various ways have attempted to try to address this absolutely tragic issue that has been around—Chris Bishop: Oh that’s very kind.Hon CLAYTON COSGROVE: Pardon? Sorry? It has been around since 1994 and I think that to all of us who were members of Parliament through that period—Mr Bishop in his few months in the House may have dealt with the odd constituent who has had pretty tragic circumstances around this—this was a systemic failure right across the board.In dealing with Part 1 particularly new section 125BB “Eligibility for financial assistance measures” in clause 5 I want to just ask the Minister in the chair Michael Woodhouse a number of questions. The first is that the then Minister Maurice Williamson when this package was first announced trumpeted it as a billion-dollar package—a billion-dollar package—on the back of I remember the taunts from the then Opposition spokesperson Nick Smith who when I was Minister was famous for every time I would get up to answer questions on the issue interjecting “Just write them a cheque.” That was his solution: “Just write them a cheque.” Then again as Nick Smith is wont to do when he comes into Government suddenly the scales fall from the eyes and his position changes like changing socks. So I could say to Dr Smith in Government why do you not just write them a cheque as you said you would? However the Government determined under Maurice Williamson that in terms of the package it would be a billion-dollar package.I am advised Minister Woodhouse that over the past 4 years the projections were that 16000 victims of this would take up this package; I am advised that 86 have. My question is although this package is well intentioned—and we all want a solution to this problem and we all want these issues resolved for folk and we have all had a crack over the years at trying to do it—the issue still remains as to why the uptake of this has been so low. Is it because as I think is generally the case people believe that they have a better chance of a swifter and more equitable resolution via the court system where yes they would have to put up their own money but they may well get a better deal than a 50 percent impost on themselves—matched of course by a 25 percent contribution from the local authority and a 25 percent contribution from Government.But it was trumpeted as a billion-dollar package. It was estimated there would be 16000 I believe out of the estimate of around 42000 cases at a cost of anywhere between—the estimates were in 2009 $11.3 billion. Other estimates more than double the number of claimants from 42000 to 89000 and estimate the costs could be around $23 billion. Again I recall in Government the taunts from Dr Smith as he demanded quantification of the figures and the truth is that none of us knew. And as he has subsequently I think admitted in Government none of us know. This is sort of an open-ended envelope. We do not know how far these difficulties go. The only thing we do know for certain is that there was a systemic failure right through the value chain from the trades to designers to the local authorities the drive-by inspections etc. and this problem exists.So I would like to know firstly does he have any updated projections on numbers of potential claims and also what the latest costings would be? And if he could give us—you know given new section 125BB in clause 5 and the previous provision with the eligibility criteria in it—some explanation as to why only 86 claimants have taken up the package as opposed to the estimated 16000 and if there are any newer projections or more updated projections what they are likely to be?As I say we do support this. We genuinely hope it will work—we genuinely do. But the figures of those who are opting for it the proof of the pudding is if it is working—I had a go with the Weathertight Homes Resolution Service; some people opted for that. Others in truth again saw the courts as a better remedy. This Government has had a crack at it but again the figures tend to bear out that people are opting for the court system which begs the question: is there a better way in terms of perhaps facilitating or assisting with court action? A 50 percent impost on people depending on the size of their building is a massive impost in many cases. It is a huge amount. And I note from some of the reports that are appended to this bill that the Government has said that it will assist in assisting weathertight homes folk in their liaison with banks in terms of trying to get financial assistance of their own accord.I would ask the Minister—that is all well and good and I think very well-intentioned but it would be helpful to know what that means in practical terms. I would doubt given the language that there is much the Government could do unless it has struck a deal with the banks—and if it has that would be great—in terms of encouraging the banks to lend to many of these folk. For many of these folk of course their capital investment has been gutted and destroyed. Their land is still there but the value in their home has deteriorated because of the position it is in and I know of many people whom banks simply will not look at to provide any finance at all and then they are in a cleft stick. If they cannot come up with their share they do not get the local authority’s share they do not get the Government’s share and they are back to square one. Many of those folk also cannot afford to get to court. I do not believe they get legal aid because it is a civil matter to take these measures to court.So there are some of the questions I think it would be helpful not just for Opposition members and our learning as we go through this but also to get on the record of the House—because these debates of course are cited in courts—to give people some certainty. I am glad the Government has moved on from the simplistic sloganeering of “Just write a cheque.” because it was a pretty macabre response then and it remains a pretty macabre response now to people who are in grave difficulty around the country. At its simplest people’s biggest asset generally other than their family of course—their biggest monetary asset is their home. They plough over 20 or 30 years all their resources into it—Phil Twyford: 50 now.Hon CLAYTON COSGROVE: —or 50 years in many cases and many of these folk were let down.I say this to the Government—and I said this when I was in Government to be fair—the key responsibility lies in my view in the tradespeople designers or whoever. The building inspectors who—many of them specialised in what they call drive-by inspections because a former building inspector told me that when I was Minister. The actual responsibility lies ultimately and realistically with those folk many of whom have gone broke and done a runner. Equally I have got to say though the National Government should remind itself of its conduct in the 1990s when of course Dr Lockwood Smith then led the charge—in I think 1995—in deregulating the whole building industry. I said a couple of nights ago that God help me I could have strapped on a tool belt and called myself a builder and I could not build a doghouse let alone any other dwelling. People were just entering the trade without any quality control not standing by their work and doing extremely shonky work and many of those people could not be pursued because they went broke.So I say as we address Part 1 that those are the questions we would like the Minister to address if he can and I think it would be helpful across the board as we progress through this.PHIL TWYFORD (Labour—Te Atatū): You know you cannot walk around or drive around any of the newer suburbs in Auckland these days without coming across a house that is surrounded by scaffolding and wrapped in white plastic. It is just a sign of the times really—these houses that are wrapped up in white plastic. It looks bizarre but it has become an emblem of the kind of legacy of what PricewaterhouseCoopers calculated was a $22 billion calamity that afflicted New Zealand really over two decades.Hon Clayton Cosgrove: 23.PHIL TWYFORD: $23 billion Clayton Cosgrove says.I was baffled just by way of a preamble to Part 1 by Paula Bennett’s recent comments that New Zealand has moved on and that it is over the leaky homes crisis because this bill and particularly Part 1 as we will see makes changes to the qualifying criteria for the Financial Assistance Package. I thought it was baffling that she would say that and in the same breath would release her loopy rules task force report which proposes that builders are able to self-certify—to sign off their own work. In the years since the early 1990s—1994 I think it was—when we saw the deregulation of the building sector and all of the other factors that flowed through into the systemic breakdown that led to the leaky homes crisis if there was anything that we should have learnt it was that clear accountability and a strong commitment to quality assurance and quality control is what is needed.As my colleague Clayton Cosgrove pointed out this Financial Assistance Package was trumpeted by Maurice Williamson at the top of the news bulletins and in the front pages of the newspapers as a billion-dollar rescue package—a billion-dollar rescue package—but it did not really turn out that way. What we actually have seen is that although the Government announced that the scheme was going to fix 16450 homes as of about a year ago only 87 leaky homes had been fixed and the ministry said at the time that it had approved repair plans for another 364 and a further 3000 had qualified for assistance. But one commentator after another—including people like Paul Grimshaw and Tim Rainey two prominent lawyers representing the owners of leaky homes—made it clear that the Financial Assistance Package might have added another option for people who did not want to go through the courts and who felt that mediation or adjudication would not serve them very well. It gave them another option based on this concept of 25:25:50 with 25 percent of the cost to be picked up by the local authority 25 percent to be picked up by the Government and 50 percent to be picked up by the owner or the claimant.So what this bill does fundamentally is it sets out to provide a bit of clarity. It responds to a Supreme Court decision that we will talk about in a bit more detail and in doing so it slightly extends the eligibility criteria and the number of potential claimants.But I want to comment particularly about Part 1 of the bill. It basically deals with a lack of clarity that the courts have commented on in relation to the eligibility criteria. The criteria basically require that they exclude any claimant from eligibility where the claimant has initiated civil proceedings against a council in respect of a leaky home or has entered into adjudication. So you cannot have it both ways: if you have initiated civil proceedings and you are in court court action is under way or there is mediation or adjudication going on then you cannot also proceed under the Financial Assistance Package.So the main change in Part 1—[Bell rung]—is that it takes those eligibility criteria that have—The CHAIRPERSON (Hon Trevor Mallard): Would the member like a call?PHIL TWYFORD: Thank you Mr Chairman. The eligibility criteria were contained in the Gazette notice and what this provision does is it moves them into the legislation proper “in order to avoid any doubt as to the intended effect of the criteria” and “so that there is no question of inconsistency with the Act.”I would actually be interested to hear from the Minister or even if there is a member who was on the Local Government and Environment Committee who heard the submissions. It is not entirely clear to me based on the written material available why there was any lack of clarity in the criteria those key criteria in the Gazette notice. So I would be interested to hear that because there is not a heck of a lot in this bill—only a couple of parts—but this is one of them. It seems pretty minor and technical to me but I would be interested in hearing an explanation about why it was worth addressing in Part 1.POTO WILLIAMS (Labour—Christchurch East): I am going to make a small but hopefully useful contribution to this Committee stage. As I understand it the need for the bill is really to tidy up some definitions and to allow for claimants to qualify where they may not have qualified previously. There are three main components that are contained within Part 1. The first really is around the criteria with which claimants may access the Financial Assistance Package. It is very clear from the work that has been done through the Local Government and Environment Committee that the definitions around the criteria are very much aligned with what stage the claimant is at in the process. So it makes it very clear that if you are engaged in any type of proceedings or legal process you exempt yourself from the ability to then be part of the Financial Assistance Package.Also part of Part 1 is around identifying what the actual built date is. The definition is not within the primary legislation and I just want to say that it is really important to ensure that we get the definition right because the definition of the built date which we have here as running for 10 years from the date on which the code compliance certificate for the building work for the affected structure was issued has actually provided an opportunity for a larger number of claimants to now be part of a claim where they would previously have been excluded. So it is very important that the built date is secured and defined within the Act. Just going back to the criteria for the Financial Assistance Package it is important to have this defined to avoid any doubt of who is actually intended to be part of that.But the main part of Part 1 is around “qualifying claimant”. I do have a couple of questions to ask about this. The qualifying claimant definition as I see from one of the submissions that was made by the Law Society does include a greater set of claimants now potentially being able to access the Financial Assistance Package but there also may be a subset of owners who were previously ineligible who may become eligible under the Act. I would like to know who they might be because potentially some of them might not qualify for the Financial Assistance Package.The other question I would like to ask is this. According to the Law Society in the bill’s current form some of those who are affected claimants specifically those who repaired their homes after their claim was deemed ineligible will still not be able to obtain financial assistance under the Financial Assistance Package provisions. So I would like to ask the Minister whether there has been any work to ensure that those claimants who are currently going to be ineligible will become eligible—whether he has made any recommendations or has written any Supplementary Order Papers that would include that subset of claimants within the bill.The other part of Part 1 is about the contribution criteria and that really just sets out the relationship between the Government and the participating territorial authorities as to who has what role in ensuring that they contribute to that criteria.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): It is a pleasure to take a call on the Weathertight Homes Resolution Services Amendment Bill. I was not on the Local Government and Environment Committee which considered this bill but I am very interested in the whole process of it. In particular I want to acknowledge the Osborne family for their part in bringing this legislation into the House by their pure perseverance with this issue. I was reading the regulatory impact statement also absolutely staggered at the numbers in here—you know “42000 homes … likely to be leaky and the total economic cost (including repairs and transaction costs) to remediate them could be $11.3 billion.” which is an enormous amount of money in anyone’s language.Speaking in particular to the parts that through this bill widen the definition for qualifying as a claimant I think it is really important that those claimants who are affected by this unfortunate incident of having a leaky home through no fault of their own will be comforted that they are now included in this and come under this bill. So the meaning of a “qualifying claimant” in clause 5 is the particular part that I wanted to look at. Also we have the bill and I also have a copy of Supplementary Order Paper 125 which wholly replaces section 125BA and—sorry—Hon Clayton Cosgrove: Section 125BB.ADRIAN RURAWHE: —section 125BB thank you. I think it is important that—and the part that I was looking at in particular was the situation where a claimant has already applied for adjudication. So taking this which is new section 125BA(2)(ii) inserted by clause 5 it makes it quite clear that “the claimant must withdraw from the adjudication in accordance with section 67” so that “if the claimant has applied for adjudication under this Act … whether the claimant has commenced mediation or adjudication) and the relevant participating territorial authority is named as a party in the application or later joined to the application then—(i) the participating territorial authority must agree to the claimant receiving a financial contribution …”. I think that is the main part that I wanted to acknowledge within this particular clause here.I think overall Part 1 in addressing these three main areas is important to acknowledge. That is all I have to contribute to this bill. Kia ora.Hon CLAYTON COSGROVE (Labour): To be fair to the Minister in the chair the Hon Michael Woodhouse he is not the portfolio Minister but I just wonder whether the portfolio Minister Dr Nick Smith—who is I am sure here although I cannot quite see all avenues of the Chamber—given that this is such an important issue might be prepared to—The CHAIRPERSON (Hon Trevor Mallard): I think the member is aware that drawing attention to the absence of—Hon Clayton Cosgrove: I did not say that.The CHAIRPERSON (Hon Trevor Mallard): Well I think the member did indicate he is not in the Chamber which is an indication that he is absent. So I will just ask the member to address the questions.Hon CLAYTON COSGROVE: Well I would hope to put it this way that the Minister in the chair who eminent Minister though he is this is not his portfolio can make a valiant attempt to answer some of these technical questions which ordinarily given the gravity of this piece of legislation and the tragedy that we are dealing with—42000-plus claims—I would have thought this was such an issue of moment that the portfolio Minister would at least take a call wherever he may be.I want to refer to the regulatory impact statement. I would like to ask the Minister a question on paragraph 4—and this covers the entire legislation; it is an interesting piece of prose—which says “Due to the sensitivity of the weathertightness issue and the negative impact speculation can have on leaky home owners to make informed decisions and the impact [it] can have on ongoing discussion with territorial authorities and banks consultation has been targeted.” I can understand that to some extent. Then it goes on “Limited consultation means that the present analysis has to rely on limited evidence.”—well that is self-evident—“Therefore there is uncertainty about the costs and benefits of the option(s).”That is quite an interesting statement from officials. I will not name the official. I know the official. The official used to work in my office as my adviser—a very eminent official actually. It worries me that an official of that stature would write this down on a piece of paper and I take that official absolutely at their word. But it creates a whole series of questions around the cost and benefits when you have an official document—a regulatory impact statement—saying “Therefore there is uncertainty about the costs and benefits of the option(s).” I am sure others for the avoidance of doubt for those who are following this debate who are subject to the difficulties that we are trying to address would like an explanation from the Government in some way shape or form as to what that means.I would have thought that this is an issue of such moment that the Government would have despite the sensitivities to quote this report done extensive consultation would have gathered extensive evidence and would be able to put quite definitively estimates of costs and say with some authority based on evidence that it was certain about the costs and benefits of the options. This raises a whole can of worms because it is a document produced by the Government that says in essence if we take it literally “We don’t quite know whether this is going to you know have any effect at all whether it’s going to be beneficial whether it’s going to achieve what the Government policy wants.” If you actually look at the point I made before about the estimates of 16000 claimants—and we have got 87 actually in the system; I think I said 86 but it is 87—then that evidence would bear out the uncertainty contained within this regulatory impact statement.So I say with all seriousness this is a serious issue that is raised in the regulatory impact statement one that on the one hand we are clarifying through taking out the criteria from the Gazette notice and placing it within the legislation for the avoidance of doubt to ensure there is total clarity which we all agree with and on the other hand we have a regulatory impact statement that basically says: “We don’t know which way’s up. We’re uncertain about the costs and benefits of the options.”I have been in the odd select committee and when officials come in to see you—I think there was some Inland Revenue Department bill we dealt with earlier in the year—you ask officials: “Will this work?”. When I have been a Minister the first question I have asked officials is “Will this work?”. If they look at you strangely and they cannot quite answer you then you realise pretty quickly if the old grey matter is working that there is something wrong inherently. Now we are at this stage of this bill—we have been through the select committee and are into the Committee stage and it went right through the Cabinet process prior to that—and we have got a regulatory impact statement that says the Government is uncertain about the costs and benefits.So I do not know whether the Minister could indicate—and again in fairness he is not the portfolio Minister and these are quite technical issues specific to the portfolio and he has obviously sort of been dropped in it tonight so I do have a bit of sympathy for him. But perhaps he could gain from his officials some answer. You know he is the sort of guy with his shovel behind the elephant. Perhaps he could ask his officials who are learned whether they could pass him some notes and give us some explanations to put some certainty and dissolve some of the uncertainty that has been raised by the regulatory impact statements. It is on page one it is in paragraph 4 it is sitting there it is glaringly obvious and when you read it you think: “Well you know why are we here? Why weren’t these issues resolved well before this legislation was put to the Parliament and put through the select committee?”.So this is not just an issue of politics; there are people there are lawyers dealing with the victims of leaky homes and there are victims of leaky homes sitting out there hoping that this will provide them some assistance. They will be looking at this going “Well what does that mean if the Government’s own officials themselves aren’t convinced of the validity of this policy?”—[Interruption] Well you may want to wind it up Mr—I cannot remember his name the one who stood for Wellington Central.The CHAIRPERSON (Hon Trevor Mallard): “You” is not winding anything. Well you might wind something up pretty soon actually.Hon CLAYTON COSGROVE: Not you Mr Chairperson the gentleman beside the junior whip. I cannot actually recall his name. But you know he may want to wind up this issue. He may want to go around perhaps Wellington Central and other places and visit some of those folk who are in desperate need of assistance. We are trying to act with some goodwill over here. That is why we would like—you know I know the member is new—some answers to pretty serious questions. The member has been in Government. Maybe if he gets a report like this that says “We don’t know the costs and benefits of a particular policy—we’re uncertain about it.” you know in his little world maybe that does not mean much but to other people it is sort of “Hang on. Is this going to work?”. He may be happy to push through legislation whether it works or not. It may be a political stunt.I actually have some goodwill for the Government; I think it is trying to make a genuine effort. So that member may want to go around and you know tap on a few doors and ask a few people how they are doing in respect of their leaky home issues and then wind up. So I would appreciate some of those questions being answered and getting some of this stuff on the record so that we can do away with the uncertainty that this particular document now puts before us.Part 1 agreed to.Part 2 Consequential amendments validations and transitional amendmentsPHIL TWYFORD (Labour—Te Atatū): One of the first cases of leaky homes that I had contact with after becoming an MP was a very very unfortunate development called Pepperwood Mews. The building is still standing actually. It is on Great North Road in Kelston now in Carmel Sepuloni’s electorate. It had been a development that Housing New Zealand undertook in the mid-2000s and Waitakere City Council was the local authority that signed off the work. Basically what Housing New Zealand did was it did a deal with a developer and said: “We’ll sell you this land and if you develop it we guarantee that we will lease all of the dwellings from you.” It is basically a block of apartments. The developer built the building and sold off the individual units to a whole lot of mum and dad investors who ploughed their retirement savings into this development. It was the most shonky most dodgy rotten development that you could imagine and within about 3 or 4 years of being completed and signed off by the local council Waitakere City Council at the time the place was basically condemned. It was uninhabitable; it was leaky in the extreme and since about 2010 that building has stood as sort of a rotting hulk on Great North Road.The CHAIRPERSON (Hon Trevor Mallard): Order! I regret interrupting the member. I am sure there is a way of tying his story into this part of the bill but since it has been going for nearly 2 minutes I would appreciate him doing that just to show that he is being relevant.PHIL TWYFORD: It is very important to provide some colour for the discussion of Part 2 because—The CHAIRPERSON (Hon Trevor Mallard): That would be nice too.PHIL TWYFORD: Part 2 is the other part of the Weathertight Homes Resolution Services Amendment Bill that deserves some specific comment in this debate and what it does is—again it is a pretty technical minor tweak—it basically responds to a decision by the Supreme Court that is all around the definition of the word “built”. So let me explain that if I may. To have a claim declared eligible under the Act claimants must meet a series of statutory criteria and we have discussed that in relation to Part 1. Those criteria include that the claim must be made within 10 years of the date on which the affected structure was built. What is the meaning of “built”? It is very vague if you think about it. Until the case in question at the Supreme Court Osborne v Auckland Council 2014 was decided the interpretation of the word “built” was essentially the finalising of the building. What the Supreme Court held was that the meaning of the word “built” in this case would be the issuing of the code compliance certificate. The Osbornes of Auckland—not the Osbournes from television fame—took this case through to the Supreme Court. John and Helen Osbornehad been arguing that the 10-year limitation on leaky buildings basically should start when the code compliance was issued; not when the physical building had been completed. They took it all the way through to the Supreme Court. The commentary at the time said that the effect of the ruling could mean that another 300 leaky homeowners could benefit from the funding assistance package.I do not know what has happened. This was a year ago now when the Supreme Court handed down that judgment. I do not know what has happened since. I do not know what has happened to the Osbornes. It would be interesting to know whether John and Helen Osborne have in fact sought to be registered under the funding assistance package and to get the benefit of this scheme. So that is basically what the bill does and the effect of Part 2 will be to slightly increase the pool of eligible homeowners.POTO WILLIAMS (Labour—Christchurch East): I just have a couple of things that I would like some clarity on but first I do want to reiterate as I said in my earlier contribution on Part 1 that this bill will seek to define what the built date is which is not actually defined in the primary legislation. As I understand it the built date is 10 years after the code compliance certificate is issued. But what I do want to ask—and it is unfortunate that we do not have the responsible Minister Nick Smith here because there is an issue around the weathertightness of homes that has a direct relationship to what is happening within the Canterbury rebuild. That for many of the constituents who come through the doors of my office and the Hon Clayton Cosgrove’s office and the other Christchurch MPs’ offices is around the repair strategy that is stymied because of the implication that there might be weathertightness issues with the home. So a lot of Earthquake Commission issues are held up because of this type of issue.What I would like to ask the Minister is: if that becomes part of the Earthquake Commission’s scope of works the weathertightness issue where do those residents in Canterbury fit into the Weathertight Homes Resolution Services Amendment Bill? Is there going to be an opportunity for their concerns to be addressed within this bill? I know it is potentially slightly out of the scope but it has a big impact on the people who are part of the Canterbury rebuild and I would ask the Minister whether he has got an answer to that question. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn): It is a pleasure to take a short call on Part 2 in this Committee stage of the Weathertight Homes Resolution Services Amendment Bill. This bill is yet another remedial action that has occurred because of the very serious situation around lack of weathertightness and the difficulty that claimants have had. As has been said by several colleagues the purpose of this bill is to remove doubt around the eligibility of certain claims in the period in which they are claimed. The bill has traversed clauses 1B and 1C of the 2011 Gazette notice and has inserted them into the bill. As my colleague Phil Twyford has said the bill aims to deem eligible certain claims that were not eligible as a result of the term “built” in sections 14 to 18 of the Act arising from the Supreme Court case of Osborne v Auckland Council. That ruling has potentially allowed a number of additional claims to be eligible under the Act.There are a number of Supplementary Order Papers on the bill but before we get to that I would like to turn the attention of the Committee again to some of the clauses in Part 2 and particularly the drafting amendments to section 164 in clause 7 which are the provisions that amend the 2011 Gazette notice and to ask the Minister whether he would clarify why in subsection (2) it says: “In clause 1 delete ‘To qualify for a contribution from the Crown all of the criteria in this clause 1 must be met:’.” I assume although it is not entirely clear from the revision-tracked version of the bill that that clause 1 is subsection (1) of section 164 which is the section in which it appears. I may have misinterpreted that. It may be the original clause 1 but I would like the Minister if he could to clarify that because it does have an important implication. If it is section 164(1) then we are dealing with quite a wide set of qualifications of Crown contributions and that presumably has fiscal implications and I would be very interested to know how they have been quantified.The original estimates of leaky building syndrome were a Crown cost if I recall of about a billion and a half dollars. Recently I have seen estimates as high as $25 billion. In the context of this clause which raises the question of Crown indemnity I think it is worth our while reflecting on the genesis of the issue both design problems and importantly the use of untreated kiln-dried timber at the request of the industry and in the absence of effective regulation from the Building Industry Authority. That is vested here in the increased exposure of the Crown to claims and the need to make remedial amendments that clarify the importance of removing the ambiguity that has crept up. I guess that is typical—when you rely upon the common law processes even when set up under an Act like this and you have thousands of cases going through there is going to be a whole lot of variation a whole lot of special cases that the law did not foresee. There is an old saying in jurisprudence which is that hard cases make bad law. As it evolves the law stretches to accommodate them and every now and again Parliament has to re-intervene and tidy up the mess as it is doing today.The Labour Opposition supports this bill. We support Part 2. We think the amendments are necessary and that is regrettable. But as with other pieces of legislation where we think it makes a positive difference for our community we are not a party that would hesitate to say we support the Government—that is we are not standing on ceremony we are not standing on party tribalism; we are trying to do what is best for the country. We have no hesitation in saying that it is sad it has got to this point that yet another set of remedial amendments such as section 164(1) are required. But it has got to that point.The Minister may also wish to take a call and clarify section 165 in Subpart 9 “Meaning of affected claimant”. Here we are at the heart of the matter because so many thousands of New Zealanders have been affected by it and there has been so much ambiguity about who can claim and who cannot. Just imagine that we did not have the residual liability of the consenting authorities—[Bell rung]The CHAIRPERSON (Hon Trevor Mallard): The Hon David Cunliffe but with a bit of a caveat. He has mentioned I think for the second timenow a clause in the bill. It would be really good if he could focus on the bill now.Hon DAVID CUNLIFFE: Thank you Mr Chairperson. That is very generous of you. Section 165(a) brings in a person who has “brought a claim under section 9 in respect of the construction or alteration of a dwellinghouse for which—(i) 1 or more code compliance certificates were issued for the relevant building work;”—and for whom—“(ii) the certificate or certificates were issued before 1 January 2012;”. There are then a number of subsections that follow that impose quite stringent conditions: “(b) the chief executive or the chair decided within the period starting on 1 April 2007 and ending on 10 June 2014 that the claim was not an eligible claim;” and that the sole reason for that decision was that the claim failed to satisfy the criteria in the various sections that are noted—sections 14(a) through to 18(c)—and “(d) in reaching that decision the chief executive or the chair treated the date on which the dwellinghouse was constructed or altered as a date earlier than the date on which the code compliance certificate … was issued”.Anybody listening to that rather long and tangled exposition will note that there were about five “ands”. So although this section broadens the eligibility of claimants by allowing some earlier claims between the period 2007 and 2014 I would say that the number of specific hurdles that such a claim would have to pass amounts to quite an onerous process. Certainly in my own electorate of New Lynn in those bushy but rather damp hills around Titirangi we have had a number of very very sad cases where apparently very good homes have had to be all but completely rebuilt because of the terrible effects of leaky building syndrome or a lack of weathertightness and many of them would fit into the time period that we are talking about here.In section 166of the Act “Affected claimants deemed to have eligible claims” in respect of a dwellinghouse if the Gazette notice as amended applies the claim must be treated as eligible from the date on which it would have been eligible if the chief executive or the chair had originally decided in the claimant’s favour. So the subsection here retrofits the decision. If it passes those five conditions the five gates that we talked about in the previous section then effectively it reconstructs the decision and allows it through as if it had been approvedoriginally. It is messy. It reminds me of the Inland Revue Department of income tax or other tax law because there are always amendments upon amendments upon amendments. We as a Parliament find ourselves once again taking up the time of the House with remedial legislation that is doing its best to put a patch over what is in fact a very serious and difficult situation. Those are the matters that I wish to turn the attention of the Committee to in respect of Part 2 and I thank the Committee for its time.Hon CLAYTON COSGROVE (Labour): In dealing with Part 2 I want to also return to the regulatory impact statement in respect of a number of matters. I just note—and the Committee and those listening at home should note—that the Opposition has raised a series of pretty serious questions in Part 1. There has not been one call from a Government speaker and there has not been one call from the Minister in the chair Michael Woodhouse who is not the portfolio holder but none the less has a plethora of venerable officials behind him. There has been not one call not one question answered and that speaks volumes.Either the Government or the Minister—and he could be because he is not the portfolio Minister—is not confident in answering those questions but you know you do have pieces of paper you do have eminent officials who could provide that. I am sure they are very willing to. In fact I suspect they have written down on pieces of paper what the answers are. But there has been not one response to any of the issues raised so one could be forgiven for thinking as we go through Part 2 and raise further questions that they will not be given houseroom by the Minister or the Government. That is how seriously they take this issue. Maybe they cannot answer the questions. But we will give it a go anyway.In referring to the executive summary in the regulatory impact statement one of the items that is cited is “Government provides assistance to owners to access bank finance for remaining agreed repair costs by way of loan guarantees to banks for loans made to owners eligible for the assistance and who can meet the bank’s lending criteria.” On the face of that—and my question flows from this—that is a good thing to do. I would argue that most of these homeowners could not of their own volition gain assistance from a bank given the equity in their home or the value of their home has been destroyed. The question is they are provided with some sort of loan assistance from the Government if they can meet the bank’s lending criteria.My question to the Minister is that you cannot have one without the other—it is a bit chicken-and-egg—so what sort of lending criteria are there? It says in the regulatory impact statement that the Government has liaised with the banks and has spoken with the financial institutions so what sort of special lending criteria might be put in place? Again banks will be interested in having and securing some sort of value over the asset or the residual asset so what in essence does that mean in practical terms? I commend the Government for promoting the notion that it is somehow going to stand—if we read this—as some guarantor or whatever but I would like some explanation as to how that should work.I also note in the regulatory impact statement that “Councils have identified the risk of being joined into litigation between the homeowner and other parties (e.g: developer builder architect) as a significant barrier to them agreeing to sign up to the scheme.”Have all local authorities signed up is the question. If they have not how many are exposed to litigation and therefore have been reluctant to sign up? This goes to the heart of Part 2 as we look at the criteria as certain applications continue on the basis of amended law as to whether affected claimants are deemed to be eligible in terms of claims. It goes right to the heart of it because if they cannot get their part of the assistance package up then this is meaningless to them. It does not work.I would be grateful for some sort of explanation as to what paragraph 10 third bullet point of the regulatory impact statement means in practical terms. What actually is the Government going to do? Is it going to stand guarantor for everyone? If it is I would have thought that with the Government being the biggest entity in New Zealand the banks’ lending criteria would be met absolutely. You cannot get any better security than a Government-backed guarantee. If the Government is going to do that then what is the projected cost? Again the regulatory impact statement does not make any reference to that. Is it an open-ended envelope for between 42000 and 89000—as per the advice we have—estimated claimants? What is the quantum? What is the exposure to the Crown? What is the fiscal risk? I think all these are particular issues that have not been addressed in any of the documents that lie on the Table or in the legislation I have seen.Again just to roll the dice and have another go having faith in the Government as sometimes we do I would be grateful for an explanation that pertains to all parts—the whole legislation—as to what paragraph 4 in the regulatory impact statement means: “Therefore there is uncertainty about the costs and benefits of the option(s).” That pertains right across the legislation to every clause and I think that is a key issue. There are specialist lawyers who will be looking at this very carefully and they will want to know what that means.The most cynical amongst us could simply say that the Government members given that they are not interested in taking any calls—no one on the Government side has responded to any of the issues that have been raised—are not confident. Maybe the new backbenchers are not—you cannot blame them too much—but surely the Minister backed by a department is confident. He is duty-bound to put on the record of the House in the Committee stage answers to some of these questions. The portfolio Minister I would have thought would want to take a high degree of interest in this and answer some of those questions. After all we know that Nick Smith is very good at bandying around slogans and slinging the proverbial when it comes to these issues in question time and at other times in this Chamber but when it actually comes to a surgical precise examination of his legislation the silence is deafening from the Government—completely deafening. Nick Smith may pay a price for that as he pushes this legislation through the House.So out of goodwill maybe the Minister might have another crack. I am looking at the officials and they look like they are itching to provide some answers. That would be great. They cannot do that.The CHAIRPERSON (Hon Trevor Mallard): Order! The member cannot refer to them.Hon CLAYTON COSGROVE: Indeed. These answers can come only from the vacuum that is the Government and at the moment the silence is deafening. Every leaky home owner would appreciate some clarity tonight. Every leaky home owner I think would look with goodwill at this legislation—Part 1 Part 2 and the whole shebang—hoping that it will assist them.I just find it astounding that after all Nick Smith’s rhetoric over years when the rubber hits the road in the Committee stage there are no answers. Either that says this is just a lot of political horse puckey or a bit of propaganda and there is not really a commitment to solving it—this is just a bit of a patch-up job—or maybe we have raised some pretty genuine issues that cannot be answered. If officials are saying they are uncertain about the costs and benefits of a proposal that is a pretty heavy-duty statement for officials to make about legislation. Normally a Minister would leap to their feet and deal with that issue and extinguish it. Tonight we have had absolutely none of that—no explanation. Maybe we will get one; there are still 7 or 8 minutes to go before the final bell and I think it would actually pay the Government to stand by its own legislation and if Government members believe in it and believe it would work provide that certainty.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.PHIL TWYFORD (Labour—Te Atatū): So as we have been saying there are three main provisions in the bill. The first deals with basically trying to deliver more clarity by inserting the qualifying criteria out of the Gazette notice and into the legislation itself. The second as we have been saying is a response to Osborne v Auckland Council and the question of definition of “built”. The third which I do not think we have discussed sufficiently yet is really about the issue of the qualifying claimant.The point here is that for a claimant to apply for the funding assistance package under the Act a notice to proceed must be issued. In order to get that notice to proceed the claimant has to be considered a qualifying claimant and there are a number of steps involved—The CHAIRPERSON (Hon Trevor Mallard): I regret that I have to interrupt the member. [Interruption] I am sure he does not regret it. The time has come for me to report progress.Progress to be reported presently.House resumed.The Chairperson reported the Organised Crime and Anti-corruption Legislation Bill with amendment and divided into 15 bills the Waitangi National Trust Board Amendment Bill with amendment progress on the Weathertight Homes Resolution Services Amendment Bill and no progress on the Radio New Zealand Amendment Bill.Report adopted.