EQC's Repair Standards - Not Compliant or Up to Code?


We have all got used to a bit of spin.  Much of what we read in the media is done these days with the head cocked to one side and one eye squinting.  We know what looks like reporting is actually carefully crafted by a PR magician working hard for their client.  But how far is too far?  When does a bit of image “spit and polish” become an outright and unjust deception? Actually, that line is still very clear.  A lie is still a lie. 

It is now understood that EQC have been repairing earthquake damaged homes to a lower standard than required under the EQC Act and, during the critical period when most of the Canterbury repairs were carried out or cash settled, EQC lied about claimant’s entitlements and EQC’s legal obligations.  The public have been fooled by EQC into believing they were entitled to less than the full replacement cover stated in their policies.    

In November 2015 a group of Canterbury home owners known as the EQC Action Group filed an application in the High Court seeking Declaratory Judgments on a range of issues where EQC was misusing and incorrectly interpreting the provisions in the EQC Act.

Prior to filing the claim the group sought EQC’s agreement to statements clarifying EQC’s liabilities.  EQC refused to meet with the group and negotiations between solicitors failed, after many months of trying.  The Action Group had no choice but to file their claim in the High Court.  Only then did EQC take proactive steps to resolve the dispute and on 28 April 2016 a Settlement Agreement was reached by the parties.  Despite their initial resistance EQC capitulated on every major point sought by the Action Group. 

EQC has now accepted that it must repair homes to an “as when new and Code compliant” standard, as required under the EQC Act, however it has not always done so.  Until recently EQC maintained that it only had to repair homes to their “pre earthquake” standard.  The difference between these two standards can be significant and can mean the difference between a minor repair, over cap claim or full rebuild.

In another concession EQC also accepted that it cannot use the MBIE Guidance on relevelling floors to limit its liability and must relevel to an “as when new and Code compliant” standard.  This also, in many cases, makes the difference between no (or minor) repair, an over cap claim or full rebuild. 

EQC also refused to complete upgrade work to components such as non-compliant wiring or cladding, instead forcing homeowners to do this work at the homeowner’s cost despite this work being necessary before the earthquake repair work could be completed.  Many homeowners have been forced to pay these costs which EQC now accept are their responsibility.

Not only did EQC have it wrong but, once forced to concede this, they sought to deceive the public into believing that this was their position all along and that nothing has changed.  It was not their position all along.  The evidence is overwhelming in this regard.  Publications and statements by EQC repeatedly record EQC telling homeowners and the public that EQC only need to get the home back to “pre earthquake” condition and that the repair will be “like for like”. An example of this historic misinterpretation had them declaring in 1998 "Repairs or replacement do not have to be exact or complete, but after discussions with you they must be fair and good enough".  That’s very different to “as when new and Code compliant”.

EQC’s public statements since this Action Group Settlement in April this year have sought to mislead claimants and the public into believing that nothing has changed and that “as when new and Code compliant” was their repair standard all along.  This is a deliberate deception clearly intended to discourage claimants from questioning the standard of their repair or settlement. 

For a Government Department to take such extraordinary action in perpetuating an obvious falsehood is alarming and should be to every New Zealander. 

EQC’s motivation for doing so is as obvious as it is inexcusable.  If every claimant were to know that it is likely they have been short changed and that their repair has been carried out (or cash settled) to a lower standard than the homeowner was legally entitled, then the cost implications of the subsequent remedial repairs (or rebuilds) would be enormous for EQC. 

No other explanation is plausible for why such steps were taken by EQC to deceive the public about their true entitlements under the EQC Act and the wide ranging implications of the Action Group Settlement.

The EQC spin on this goes far beyond a bit of image and brand protection.  Rather it is a deliberate deception seeking to mislead the public and deprive EQC claimants of a full and proper reinstatement.  Such conduct shakes to the very core the writer's confidence not just in our public institutions but in our democracy itself.


Craig Edwards was Deputy Chair EQC Action Group Steering Committee, and is currently on the EQCFix.nz Steering Committee


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Cam Preston