Shanks Katrina: Weathertight Homes Resolution Services(Remedies) Amendment Bill — First Reading 
Shanks Katrina: Weathertight Homes Resolution Services(Remedies) Amendment Bill — First Reading 
[Volume:639;Page:9715] 
KATRINA SHANKS (National) 
: 
 I rise to speak to the Weathertight Homes Resolution Services (Remedies) Amendment Bill. The legislation surrounding the leaky homes from which this bill originated was a knee-jerk poorly thought-out poorly written and rushed piece of legislation. This may be reflective of the fact that there have been eight Ministers responsible for the leaky homes issue in the term of this Government. 
In 2002 the original legislation the Weathertight Homes Resolution Services Act entered the House at the beginning of November and became law on 26 November that year—just a matter of 3 weeks. The Minister later accepted responsibility for the fact that this legislation had been a failure. In 2006 the Weathertight Homes Resolution Services Amendment Bill was once again a rushed job. Obviously the Government had learnt absolutely nothing in terms of how to construct good legislation. Now 6 months later we are looking at another piece of legislation to amend this Act. 
Reading the  
Hansard 
 of 2006 I see that Nick Smith stated that the legislation had failed once again and that it would fail again—and he was right. In the same  
Hansard 
 Judy Turner stated that the legislation would have to be reviewed—and she was also right unfortunately. The explanatory note of the bill begins with a very bold statement: “This Bill amends the Weathertight Homes Resolution Services Act 2006 … to make clear the remedies that may be—claimed under the Act; and ordered by the Weathertight Homes Tribunal … in determining a claim adjudicated by it under the Act. In particular the amendments make it clear that those remedies include general damages for mental distress and anxiety.” 
This amendment has been introduced due to a recent decision in the High Court. These amendments in fact reverse the effects of the decision made on 29 March 2007 in  
Hartley v Balemi and Ors 
. This decision relates to the Weathertight Homes Resolution Services Act 2002. The High Court case highlighted that general damages could not be awarded as compensation for any mental anxiety or stress under the Weathertight Homes Resolution Services Act 2002. This judgment was made only 2 months ago. 
The story goes like this. The appellants David and Fleur Hartley were awarded $90000 in damages by the Weathertight Homes Tribunal in 2005. They had faced a repair bill of $284000 for their Manukau home. The High Court in Auckland doubled the amount of compensation on appeal but also ruled that no basis existed under leaky home law to award general damages as compensation for mental anxiety or stress. Justice Stevens went on to say: “In my judgment general damages claims for mental stress do not fit comfortably within the overall scheme of the legislation and its underlying policy considerations.” This judgment sets a precedent that impacts on existing adjudications under the Weathertight Homes Resolution Services Act 2002 and the administration of the Weathertight Homes Resolution Services Act 2006. 
Following the High Court decision the Hon Clayton Cosgrove said that the ability to award a range of general damages was simply carried over from the old Weathertight Homes Resolution Services Act and that that had been working fine in this regard until the recent High Court decision. In other words the Minister was saying that the problem with this legislation was caused by the High Court. In reality the problem was the lax wording of the previous legislation. And 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 in accordance with the principles of law.” and the order may include an award of general damages including those for mental anxiety or distress. The previous amendment was incorrectly thought to do this. In fact the Minister said during the first reading of the Weathertight Homes Resolution Services Amendment Bill in 2006 that the amendments allow homeowners to claim for a range of damages similar to those they would be able to claim in a court process. 
So now there are some questions that need to be asked. Firstly was the question of general damages considered during deliberations on the Weathertight Homes Resolution Services Amendment Bill in 2006? The answer is yes. But no change was considered necessary for several reasons. The Weathertight Homes Resolution Services Act 2002 did not expressly exclude the power to award general damages for anxiety and stress. Two District Court appeal decisions made in 2005 had interpreted the Weathertight Homes Resolution Services Act 2002 as including such powers. Adjudicators had been making modest awards in some determinations and their ability to do so had been upheld in the District Court appeals. 
The second question is what the difference is between provisions in the Weathertight Homes Resolutions Services Act 2002 and the Weathertight Homes Resolutions Services Act 2006 regarding general damages. The answer is none. Both Acts claim the same provision—that an adjudicator may make an order that a court of competent jurisdiction could make in relation to a claim in accordance with principles of law. The new bill clarifies that the adjudicator’s order may include an award of general damages for mental anxiety or stress. 
The third question is how claimants have reacted to the Hartley judgment. Individual claimants have expressed their concern to the Minister and the Department of Building and Housing about the impact of the judgment on their claims. Some people suggested that an amendment be made to the Weathertight Homes Resolution Services Act. Informal feedback from the Leaky Homes Action Group indicates that it supports the proposed change in legislation to clarify the situation regarding awarding of general damages. However it should not have to do that. We should have got it right the first time. The legislation should have been right the first time. 
The fourth question is what the implications are and for whom. There are 15000 leaky home owners identified. After 4 years only 10 percent of claims have been resolved. Things are so bad for the service that over the last year the number of claims it received was over three times the number it settled; over the last year it settled over 200 claims yet picked up 584 others. In fact here I could talk about Mrs Dicks and why she went through the courts to get resolution and closure. 
Finally should the homeowners have confidence in this legislation? When the original Weathertight Homes Resolution Service was set up the Government said that the problem would be resolved within 2 years. Four years later only 7 percent of claims have been resolved. If I were a leaky home owner I would want to see better statistics than that—in fact not just statistics; I would like to see action. The Weathertight Homes Resolution Services Act has been a failure and this bill like the last one highlights Labour’s incompetence. Far from sorting through its backlog of cases the service’s active claims have increased by 330 over the last year. The average number of assessments completed each fortnight has dropped by 33 percent to 27 percent. The average number of resolved claims each fortnight has dropped by nearly half over the time to fewer than five per fortnight. 
It is no wonder the level of frustration amongst homeowners is extreme. As with the 2006 amendment the changes in this legislation are tinkering and will not solve the problem. But the legislation represents an opportunity to debate the issue—a debate we would like to enter. The Government is being incredibly optimistic that the Weathertight Homes Resolution Service should substantively cease around 2021. At this rate it will take 7 years to clear just existing claims. A recent Cabinet paper quoted 15000 affected homes which would take 32 years at least to clear. The Weathertight Homes Tribunal will not be able to recapture claimants’ trust given this latest failure and given previous embarrassing remarks like “the seriousness of the situation appears to be a fraction of what the beat-up in the  
New Zealand Herald  
implies.” 
In that same month Jim Anderton said: “I am aware that while ‘leaky building syndrome’ or ‘weathertightness’ is a serious issue for those affected the numbers involved are not great.” The numbers may not be great but it is an important issue to those 15000 homeowners who deserve better.