EQC defends Christchurch repairs as Labour candidate calls for royal commission

Sir Maarten Wevers

Earthquake Commission chairman Sir Maarten Wevers has defended building repairs in Christchurch following the 2010 and 2011 quakes in response to a petition for a royal commission of inquiry into defective work.

With aftershocks continuing across the country following Monday morning's 7.5 magnitude earthquake near Kaikoura, Duncan Webb, a partner at Christchurch law firm Lane Neave and the Christchurch Central candidate for the Labour Party, gave a presentation to the finance and expenditure select committee about his petition, which has 3054 signatures calling for a royal commission of inquiry into EQC's repairs in Christchurch.

The problems with defective repairs done through EQC were "on par with leaky homes," Mr Webb said. Some 167,000 homes were damaged by the earthquakes which struck Canterbury in 2010 and 2011, and about 70,000 houses were repaired without a building consent as they did not require consent under the Building Act.

Speaking to Mr Webb's presentation, Sir Maarten told the committee there were a number of assertions in the petition he "would certainly not concur with" and the hurdle for calling a royal commission was quite high.

"We do not contest for a moment that there have been shortcomings in some repair work, and there is a range of reasons for that," Wevers said.

A survey of 2174 properties where unconsented underfloor repairs had been done found that 476 repairs met the building code, while 839 required remedial repairs, of which 200 have been completed. Another 844 inspection reports are still under way, he said.

EQC is dealing with 12,000 remedial repair requests, with the total bill estimated to about $70 million, or 2.3% of EQC's total bill.

The act allows replacement without the need for a consent provided the replacement is not substantial, and Mr  Webb said some builders had been "pretty enthusiastic" with their interpretation of substantial.

"There was no third party scrutiny of the repairs, and a lot of those were very significant repairs," Mr Webb said. "There's continuing research being done and an alarming proportion simply didn't comply with the Building Code."

Sir Maarten said consenting would have created unnecessary delays: "If we had gone through and consented all the matters we followed regulation not to consent, we would have a much longer tail now of homeowners."

Mr Webb said the issue is not confined to repairs that didn't require and gain a building consent, with some cases of consented work also defective. A shortage of qualified people who can properly identify damage done to houses by the quakes meant some "hopelessly unqualified" people had assessed damage, meaning inadequate repairs have been done.

"The problem is massive and not going away," Mr Webb said. "This will have a long tail. It will take a long time for defects to become apparent."

Sir Maarten said EQC had taken the view that it didn't want to do invasive investigations such as ripping jib off walls, and the need for further work had often become apparent after the initial repair had started.

"In many cases where repairs have been undertaken, the initial scope has been amended – that is exactly what you'd expect us to do," Sir Maarten said.

Sir Maarten denied EQC has a brief to minimise costs, saying the government agency could neither overcompensate nor undercompensate homeowners under the statute that governs it.

(BusinessDesk)


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Sir Maarten is right that tying things up in consents would have been less than helpful.

I don't know whether a Royal Commission is the best way to do things, but it would be worth clearing up whether dodgy repairs were the random draw things you have in any huge building programme, or whether there was more to it than that.

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The most concerning thing is that nothing has changed in regard to the remedial assessments. These are being undertaken by unqualified, inexperienced people.

Of greater concern is the apparent relationship between the contractors appointed to do the remedial work and Fletcher EQR. I would wager that they are in bed together in some way as many of the so called "remedial" repairs are a sham and a rort - and the contractors are deriving huge financial gain from the situation. There are no checks and balances. Fletcher EQR reigns supreme!

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I totally agree with you Debra as my sister's house had two botched repairs done on it. she is now waiting for Lumley to see if they agree her home is overcap because of earthquake damage or because of the botched up repairs. Graeme robinson, EQCs chief engineer said her house was twisted from the windows up but they took no notice and tried to repair it. These are people's homes that those ratbags are playing with. Your home is your biggest investment and should be treated a damn site better. Unless you have been there yoursseelf you have no idea what hell it is to deal with these awful people.

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Many letters containing personal experiences were added to the submission and the petition. In there I recounted the journey of three family properties that were "assessed" as lying with EQC/EQR for repair. Our family in the first case relied on EQR's stated "expertise" and let them do what they determined was needed (with some heated disagreement from our end, but with no discernible movement from EQC's end). This involved proceeding with a consentable foundation repair, but without seeking geotechnical or structural engineering oversight. This was because Fletchers EQR were going around giving themselves something called "exemptions" at the time: nothing like a council exemption procedure which would require geotechnical and structural engineering oversight. EQC turned up when the floors were opened up. Conversations were had (not with us, the homeowners). The underfloor sub-contractor said it will be a bit harder and more complex to repair the way he felt the "correct" way was to repair it. A letter was sent by him to EQC suggesting the hard bit was "historic" and suddenly it didn't need to be done....The property was repaired, badly, and still exhibited problems relating to the non-repair of that part of the house. Four years later and geotechnical and structural site specific engineering was done, accepted by EQC and the property placed over cap with the insurer, for another round of assessments. Eventually, it could be a write off. It is years of stress post-disaster for homeowners dealing with EQC who will not listen, and has surrounded itself in in-expert unqualified yes-men at the grass roots level. This, Sir Maarten, is not the way of relieving distress on a population. Consenting this process would at least have ensured that Fletchers EQR and EQC had to obtain support for its opinion from expert quarters. If this had been understood by me at the time, I would have happily delayed the work to accommodate this happening. The Council is not overburdened now and is operating quite well. The house was live-able in the interim....And that is one property....Just reply if you want to hear the story of the two others!!!

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One other comment: the house when "re-assessed" by people with proper and full expert qualifications, properly instructed to the repair standard in the EQC Act, managed somehow to undertake their assessment and reporting without doing any "invasive inspections." I think Sir Maarten should get out of his office and come and speak to some of the people directly about the EQC assessment of properties. It is consistently poor and has resulted in poor quality repairs that do not meet the EQC Act standard, and will likely result in very poor quality housing stock in Christchurch, much of which will likely suffer from problems when seeking insurance coverage in future events as a result....and after Kaikoura we know future events are not going to be some time in the future so that we can ignore this possibility. EQC needs to establish some proper and transparent guidelines around assessment of properties, starting with the assessment of the land. Many properties here in Christchurch have been left under a new flood line, where they were sitting above it previous to the quakes.

How many people in NZ know that this is not something that is considered repairable? EQC think the solution is to throw sufficient money to some of those people to allow them to take a nice holiday. It doesn't matter that their houses are now flooding regularly and will be uninsurable (or subject to massive excesses) in the future? EQC blames the Council in some places...the Council says it isn't their fault and insurers state people must go to EQC for land damage payments....

There is no joined up response here and meanwhile Fletchers EQR have gone in and done "cosmetic" paint jobs on these houses....telling people they are "fixed." It is a mess, clean up your act EQC.

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It was apparent very early on that EQC were not interested in looking for all quake damage to our home. For us, it was all about the levels...a simple task in reality. The first time the height of conrete blocks were compared, and I was told there was a minimal difference, no need for concern. The difference EQC told us was different from what they wrote down. The next time EQC took the levels, the numbers were reversed and the tilt was in the opposite direction. The next time EQC took levels we were denied a copy, we were told a copy simply did not exist. Strangely a copy appeared later, but they were so badly written it was impossible to decipher. Then we got a lawyer,and engineer and help from an MP. The levels were taken....and the house was on a tilt (quake tilt). The house became a rebuild. In my experience there was a systematic failure to assess houses correctly. At some point neglience, when continually ignored surely becomes an accepted mandate.

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We have three properties in litigation that received substandard repairs through EQC. The initial scopes appear to have been incompetent and this issue has been compounded by incompetent and incorrect repair strategies. Given the number of homeowners in a similar situation to us it is hard to believe that it is not a huge systematic failure on EQC's part. This is indeed a sorry saga in New Zealand's history and promptly needs investigating to ensure that it will not happen again!

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My first inspection in 2011 by an EQR team was very thorough and inspections in the ceiling and underfloor cavities were performed. My report obtained under the Official Information Act recommended 42 new piles and classes the damage as severe. My "repairs" were not done till mid 2014. In the interim I had many invasive and trivial (merely looking around) visits to my property. When it came to "repair" they jack and packed ONE pile and did some cosmetic work inside. Structurally, my foundations continue to fail and cracking, tilting and curving is evident in the floors and exterior.

This is a story repeated everywhere in Christchurch. The latest EQC engineer fobbed off the initial report by saying "Oh that was just a builder, not an engineer". Time and again I have had repair strategies diminished in scale or dropped by EQR in what appears to be a cost cutting exercise. And if you think EQR have learned their lesson in employing amateurs - wrong. Because my house has been deemed a rerepair, more teams of people have been swarming through my house. One contractor performing a geotech assessment a few weeks ago was new to the job entirely and freely admitted to me he didn't know the difference between sand and gravel when making his report. The taxpayer is paying for these amateur contractors! And the case of the latest EQC "engineer" whom I cannot find listed as a member of any professional group such as IPENZ, standing having a chat to me and laying on bland conversation and denying things EQC have said about my property. I simply referred him to the OIA report and he had to admit it all. I DO think there has been a deliberate attempt to obfuscate the truth and to cost cut. Well, that was a wasted $50 k on my property alone, because there is now substantially more damage than there was pre-repair. It is NOT good business sense and the taxpayers need to know how millions of dollars have been squandered and lives and peoples assets wrecked by EQC's incompetence and swindling. Yes - swindling - The Great Christchurch Rock and Roll Swindle. 6 years of stress on families. Ordinary citizens having to litigate to get their policy met. A Royal Commission Inquiry is completely necessary.

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As a Jaffa one feels for the CCH and now Kaikoura and Wgtn people. The past experience has shown how a toxic trio of insurance companies EQC and the Gumint has royally screwed over the people. We have seen a deliberate and knowing stream of delays and refusals to honour both legal and moral social contracts.

For me the message is if I am subject to such a disaster I am on my own . The toxic trio have their own agendas and these have nothing whatever to do with my interests or welfare.

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I would also like to add to my previous comment that the decision to litigate was not made lightly. This is a last resort after years of EQC having ample opportunity to rectify our properties and having been part of the Anthony Harper Class Action Group. EQC refused to acknowledge our experts independent reports and recommendations and have not repaired according to the Earthquake Act or to a good tradesperson standard. EQC kept us undercap for five years, proposing a Fletchers repair; this property is now a rebuild and currently with our insurer, but only after we got a lawyer involved! It should not take legal action for EQC to fulfill their legal obligations to a homeowner who finds themselves in this most unfortunate situation :-(

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To say getting consents for many of the repairs would only have delayed things is a crock. The reason for building consents is precisely to prevent what has happened. Unqualified people doing shoddy building repairs. The number of re-repairs is only so small because the majority of home owners who have had their repairs undertaken by EQC/EQR Fletchers, have no knowledge of the building industry and requirements entailed. And why should they, they are not builders. Many home owners will never know there is a problem till they go to sell their homes and a builders report is done for the new prospective owners. I have 1 case on my books where a young couple went to sell their home, only to find NONE of the repairs had been done and the photos shown of the supposed repairs were in fact of another property. At the moment my heat goes out to those suffering damage from the latest quakes. Their suffering has only just begun.

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It is hard to sound reasonable and measured when the situation is unbelievable. It is also hard to see constant commentary from officials and elected members that minimise or dismiss the situation, and imply that we are exaggerating or lying. Or comments from people that have not been to Christchurch to gain a better understanding of the situation across the city. It *is* hard to understand, and it is complex. It is also very real for those of us that live here.

We have a beautiful 1910 villa on TC3 land. We had 40 tonnes of liquefaction pumped out from under our home by vacuum truck a year after the February quake, and countless more tonnes scraped off our property in the intervening months.

Our property / neighbourhood has dropped by 1.5m. We experienced flooding post-quake - thigh deep. Our drainage is blocked with liquefaction, our sewerage pipes are cracked.

EQC maintained for five years that we were under-cap. They said it would cost $90k to fix our home.

We sought the advice of a structural engineer, who said our foundation needed to be rebuilt.

Eventually EQC came back for a fourth assessment and decided our repairs would cost $270k. Nothing had changed - except the way EQC assessed our damage / repairs.

After five years of fighting and living in a damaged home - and to put that in perspective, I was pregnant for the Feb 2011 quakes, and our daughter just started school. It is a very long time to fight, and to live in a compromised home. And it should not be a fight - that is why we have legislation and insurance.

And after that fight, we had to start from scratch with our insurer. We are now almost a year into the negotiations.

We are still living in a damaged home, despite having a full replacement comprehensive home insurance policy. We, like many others, want a realistic and fair settlement.

None of this is simple. It is complex, confusing and takes a lot of energy.

Our insurer has accepted that our foundation needs to be rebuilt. The damage and repairs to our home are around ten times what EQC claimed they were for five years. The scale of the discrepancy is huge. Ten times.

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Well, I am afraid Sir Maarten Weever has it wrong. From my personal experience the EQC by their inaction and inappropriate actions have cost me a lot of money. I sent him an open letter in March 2016 to highlight the systemic issues leading to damage in my house being misidentified meaning the repair value was assessed as $35,000, (it has recently, over 4 years later, been assessed by the EQC at over $300,000). In addition, the number of re-repairs and properties going over cap in the 5th and 6th years is a sign of impact of those systemic issues. The EQC has now 12,000 remedial repairs on their books and another 5,000 odd that were supposed to be repairs and are now over cap and with insurers. This is a fail on a massive scale, 17,000 faulty assessments or repair strategies, compared to a total of 67,000 houses repaired under the CHRP. That is a 25% failure rate and climbing... something must be wrong, something must be done so the same failings are not repeated.

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I cannot believe that you would even consider that EQC has done their job in a professional Manner !

I have just working in Christhchurch, going door to door for a registered research company and was conducting a survey for and on behalf of a large international rescue and welfare agency that operated in Christchurch just after the 2011 earthquake.

While I was conducting the survey I did not come across one householder, one house or anyone for that matter that had a good word to say about the EQC. i was appalled at the treatment of various householders who have tried to get their prime Investment refurbished back to where it was prior to 2011.

The millions of dollars that has been placed by the everyday Kiwis into the EQC has just dissappeared, or has been fritterted away by successive governments over the years because they never considered that there would be a need such as we have.

Now we have the Kaikoura Quake in 2016 and this will certainly sort the chaff from the wheat and show the people of New Zealand the quality and competancy of their current chosen leadership. God forbid that I find in another six years that there are still people living in a homeless situation because of the lack competancy of the EQC, Government and the Insurers of New Zealand .

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No shortage of drongos at EQC

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The latest EQC inspection (before it was thankfully handed over to my insurer in late 2015) stated repairs to my house would be $50000 or so.

The latest estimate is over $600000 and climbing with every new scope.

Adequate assessment by EQC? Yeah right...

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The first thing you should do in a disaster is get your insurance company to do an assessment then let them decide if it is undercap and therefore EQC's responsibility. They are the professionals and did a better job in our experience. It is also useful to make a list of your own detailing the damage and compare notes with the assessor at the time.

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In my opinion;
Reversing the standard and historic position of assisting the claimant prove their loss, to one where 'insurers' attempt to manage a process that a) they don't normally and b) with staff who understand neither insurance nor construction was only ever going to have a single outcome. That of only a few customers miraculously having a painless and undelayed journey from claim notification to claim resolution .

There may be some that think all is well until they come to sell their homes and find out that maybe not all is as it should be.

The opinion of a number of building professionals early on was that the 'process' would end up with failure on site or litigation. And this is what we now have in abundance. Unacceptable EQR repairs and poorly executed insurer led repairs and rebuilds. Fat cats, fat pockets, liquidated building businesses and struck off directors and perhaps, a sprinkling of nepotism and behind closed door deals.

What a success story, it hasn't been.

Deficient assessments, because they were not carried out by a suitably skilled Engineer or Surveyor (and I use the capital letters with deliberate intent). What about a builder ? Well, I'm lucky enough to have worked with some outstanding builders in my career but even so, only a tiny percentage would put themselves forward to diagnose defects. After all, they love and are skilled in putting stuff together, not tearing it apart and working out what's wrong.

Deficient scopes of work based on the deficient assessments, not helped by further inappropriately engaged staff.

Deficient costings based on the deficient scopes, not helped by further inappropriately engaged staff.

Deficient work. EQR contractors pushed down on price for bulk work, cutting corners to make ends meet ? Incomplete contract documentation ? expert reports obtained at the wrong time against a restricted scope ?
No quality management and no-one holding the cowboy builder to account.

The built environment experts should have been engaged first to direct the show, the region should have been sliced up in contractor size chunks, project data collected in a uniform format and this then fed back to the relevant insurer in turn.

Street by street , building by building. Reduce the staff running around all over the place, control the contact with the claimant, work in a methodical manner and add value. Spread the load and everyone gets work and customers get work done. Add in quality review cycles and the work gets done once and properly.

Just my opinion mind you.

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"Webb was optimistic but Brownlee described a royal commission as "completely unnecessary".

"Warranties apply to earthquake repair work, as they do to all building work in New Zealand, as set out by the terms of the Building Act," he said.

"Brownlee added there were already "numerous robust avenues for review and appeal of the standard and scope of earthquake building repairs".

He also claimed regular customer audits carried out by EQC and other insurers showed generally high levels of satisfaction."

Commission of Enquiry?.....think we know the answer to that

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We can only live in hope Pat. Warranties apply, and EQC are trying to shut up the shop on them. Robust avenues for review - I see people spending many thousands of dollars to qualified experts that are required to dispute unqualified people's assessments for EQC. I then see EQC hire "independent" experts who never go to site and are incorrectly instructed to dispute these expensive reports. This process can take many years and many thousands and thousands of dollars. It would be shortened and more appropriately executed by the correct experts instructed correctly at the correct time, as Paul Finch says above - experts instructed correctly but only in relation to a small part of the damage assessed by non-experts results in a restricted scope, and more room for errors. Do it once, get it right. It shouldn't need a Commission of Enquiry to establish that. It shouldn't have needed a group action to establish the standard of repair EQC should work to. However, it is evident that EQC, its departing CEO and its long serving minister are going to be a law unto themselves until it is called to heel. I wonder whether the current government can afford to permit a Commission of Enquiry in those circumstances, but there is certainly a national need given EQC is applying its lessons elsewhere throughout the country to other events.

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understand all the arguments and agree wholeheartedly with the desire for an enquiry however as Brownlees comments indicate this government has too much to lose to allow one.

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That's somewhat true. However if you get the wrong assessor things will get missed. I'm still fighting a signed off eqc repair and non water tight home. Also has a 4x2 on the bare earth as a floor pile. Eqc signed it off. And now we have to convince eqc that they even did it

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The incredible thing is I have never heard of risk and negligence as a condition in any insurance policies.We all have a legal contract with our insurance companies who under essential principles of law have moral and legal obligation to use due care and attention to protect the insured party against risk and negligence.However neither EQC or IAG when you finally get there meet any standard of principled conduct or due care.

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Our Experience with EQC was initially the assessments were done by the book a document that was written in 2009 as a result of the Edgecumb Quake, it was then deemed that Ipads would be a quicker way however this did not have the detailed information of the previous paper assessments. Originally being assessed as under 40K and finally after 5 years being made overcap at 168K one wonders whether the assessors did their assessments and took them back to the office staff who basically said we are not paying that. We had EQC's Chief Engineering consultant Graeme Robinson who reviewed our file and designed a repair strategy of leveling the floor which if undertaken would have resulted in the house breaking in two and that was the view of 3 CPENG Structural Engineers. Fletcher EQR was designed to eliminate the need for every home owner to go it alone however builders with poor track records were allowed to join the programme thereby employing sub standard contractors along with project managers who were under instructions to get the number of claims down quickly to placate the Government. Their are documents from EQC of how to treat elderly claimants that they will be confused and not know what is going on and would be side tacked easily already people were being pidgeon holed other documents from Australian insurance seminar stating that EQC expected all claims to be 30K hence the birth of under 50K status for the majority of claims. Their were some good people working for EQC but unfortunately those in charge were not, the same with Fletcher EQR that was carefully set up that no staff of Fletcher Building were involved and the project managers were all on contract so their would be no legal liability on Fletcher Building both now and in the future. Many have done well out of others misfortune and I fear for those in the current wave of quakes that nothing has been learnt by EQC.

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Yes, what a completely uninformed comment Mr Weevers. Most damage can be worked out without the need for intrusive inspections, only, you have to look in the roof space and under the floor and perform accurate measurements of the floor levels and wall verticalities. All things that the EQC failed to do properly. If you don't do a proper damage assessment then any repairs or settlement will never be adequate.

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