EQC—what role it did (or didn't) play in Christchurch’s rebuilding process
The Earthquake Commission (EQC) is a Crown entity, established under the Earthquake Commission Act 1993, which has three objectives—efficient management and settlement of claims, efficient pricing and financing of risks, and improving the current state of knowledge about New Zealand's natural hazards. With this being the mandate, ideally EQC's role after Christchurch's 2010–11 earthquakes should had been to help the city stand on its feet again.
Instead, the entity is facing the possibility of a class action suit, and allegations of oversight on shabby repair works, nepotism and favouritism.
Shabby repairs
First came a report into the Building Code compliance of earthquake repairs to Christchurch homes by the Ministry of Business, Innovation and Employment (MBIE) in August. It found that out of 90 randomly selected homes, 32 had non-compliant structural repair works, with 30 of those involving floor re-levelling using the “jack and pack” repair method. Astonishingly, out of these 32 homes, at least nine were supervised by a licensed building practitioner.
This prompted the EQC to initiate “rechecking the files of 3,600 homes—around five per cent of the 69,000 houses in the EQC Canterbury Home Repair Programme—to make sure there is complete evidence that all repairs are code compliant”.
EQC Chief Executive Ian Simpson went on damage control mode saying, “We accept that looking at some work again is not ideal for customers and we apologise for any inconvenience this may cause.”
“Any work that doesn’t meet the Building Code will be made compliant at no expense to customers. Based on the MBIE survey findings, of the 3,600 homes being rechecked we can probably expect to remediate around 1,200 homes, which is around 1.7 per cent of the repair programme,” he added.
Class action
In early September, more than 100 Christchurch home-owners declared their intention of approaching the High Court in a class action suit against the EQC seeking three sets of declarations in respect of EQC’s repair obligations under the Earthquake Commission Act 1993.
“The declarations cover the extent of EQC’s liability when EQC elects to settle by payment, replacement or reinstatement. In addition, home-owners argue that EQC’s liabilities are not met merely by compliance with MBIE guidance,” informed Anthony Harper, a commercial law firm, which is fighting the case for the home-owners.
“This is not a class action for damages. The group action is seeking declaratory judgements on how EQC interprets the EQC Act, which will have far-reaching implications for all New Zealanders,” noted Peter Woods, who is heading the group action on behalf of the home-owners.
And with EQC responding unfavourably to the class action threat, the class action seems imminent now.
“EQC does not believe it is appropriate to try to agree to detailed abstract declarations as currently proposed by Anthony Harper. We consider that the most practical way to resolve the issues of the customers who have joined the proposed group action, is to work with them directly,” argued the Commission.
Nepotism/favouritism
As if all the above was not enough, EQC has faced negative media coverage all through this year for allegations of nepotism and favouritism. Especially against one of its young claims assessor Nikki Kettle who was employed in 2011 by the Commission on a six-figure salary and whose mother Gail Kettle is the general manager of customers and claims at EQC.
As revealed by TV3's investigative programme 3D and stuff.co.nz, Nikki Kettle had faced scrutiny and internal investigations for her general conduct, technical decisions and conflict of interest. So much so that she resigned last week. Although as was expected, EQC issued a statement claiming that it was for “personal reasons”.
To be sure, Nikki Kettle's was not a one-off or the only such case. Christchurch's provincial newspaper The Press had earlier revealed [as early as 2011] that of the about 100 field staff appointed that year as assessors or estimators, many were “not only the children of EQC senior staff but also bankrupts, failed property developers and builders with questionable professional backgrounds”.
Even though the Commission announced then that it would review its recruitment policy, not much has changed since, if the recent Nikki Kettle controversy is an indication.
The Earthquake Commission (EQC) is a Crown entity, established under the Earthquake Commission Act 1993, which has three objectives—efficient management and settlement of claims, efficient pricing and financing of risks, and improving the current state of knowledge about New Zealand's natural...
The Earthquake Commission (EQC) is a Crown entity, established under the Earthquake Commission Act 1993, which has three objectives—efficient management and settlement of claims, efficient pricing and financing of risks, and improving the current state of knowledge about New Zealand's natural hazards. With this being the mandate, ideally EQC's role after Christchurch's 2010–11 earthquakes should had been to help the city stand on its feet again.
Instead, the entity is facing the possibility of a class action suit, and allegations of oversight on shabby repair works, nepotism and favouritism.
Shabby repairs
First came a report into the Building Code compliance of earthquake repairs to Christchurch homes by the Ministry of Business, Innovation and Employment (MBIE) in August. It found that out of 90 randomly selected homes, 32 had non-compliant structural repair works, with 30 of those involving floor re-levelling using the “jack and pack” repair method. Astonishingly, out of these 32 homes, at least nine were supervised by a licensed building practitioner.
This prompted the EQC to initiate “rechecking the files of 3,600 homes—around five per cent of the 69,000 houses in the EQC Canterbury Home Repair Programme—to make sure there is complete evidence that all repairs are code compliant”.
EQC Chief Executive Ian Simpson went on damage control mode saying, “We accept that looking at some work again is not ideal for customers and we apologise for any inconvenience this may cause.”
“Any work that doesn’t meet the Building Code will be made compliant at no expense to customers. Based on the MBIE survey findings, of the 3,600 homes being rechecked we can probably expect to remediate around 1,200 homes, which is around 1.7 per cent of the repair programme,” he added.
Class action
In early September, more than 100 Christchurch home-owners declared their intention of approaching the High Court in a class action suit against the EQC seeking three sets of declarations in respect of EQC’s repair obligations under the Earthquake Commission Act 1993.
“The declarations cover the extent of EQC’s liability when EQC elects to settle by payment, replacement or reinstatement. In addition, home-owners argue that EQC’s liabilities are not met merely by compliance with MBIE guidance,” informed Anthony Harper, a commercial law firm, which is fighting the case for the home-owners.
“This is not a class action for damages. The group action is seeking declaratory judgements on how EQC interprets the EQC Act, which will have far-reaching implications for all New Zealanders,” noted Peter Woods, who is heading the group action on behalf of the home-owners.
And with EQC responding unfavourably to the class action threat, the class action seems imminent now.
“EQC does not believe it is appropriate to try to agree to detailed abstract declarations as currently proposed by Anthony Harper. We consider that the most practical way to resolve the issues of the customers who have joined the proposed group action, is to work with them directly,” argued the Commission.
Nepotism/favouritism
As if all the above was not enough, EQC has faced negative media coverage all through this year for allegations of nepotism and favouritism. Especially against one of its young claims assessor Nikki Kettle who was employed in 2011 by the Commission on a six-figure salary and whose mother Gail Kettle is the general manager of customers and claims at EQC.
As revealed by TV3's investigative programme 3D and stuff.co.nz, Nikki Kettle had faced scrutiny and internal investigations for her general conduct, technical decisions and conflict of interest. So much so that she resigned last week. Although as was expected, EQC issued a statement claiming that it was for “personal reasons”.
To be sure, Nikki Kettle's was not a one-off or the only such case. Christchurch's provincial newspaper The Press had earlier revealed [as early as 2011] that of the about 100 field staff appointed that year as assessors or estimators, many were “not only the children of EQC senior staff but also bankrupts, failed property developers and builders with questionable professional backgrounds”.
Even though the Commission announced then that it would review its recruitment policy, not much has changed since, if the recent Nikki Kettle controversy is an indication.
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