Hon CLAYTON COSGROVE (Minister for Building and Construction) Link to this
I move, That the Weathertight Homes Resolution Services (Remedies) Amendment Bill be now read a second time. I thank the Social Services Committee for the efficiency and focus with which it has dealt with this bill within a very short time frame. I agree with and wholeheartedly support the committee’s amendments. The changes, I believe, improve the bill.
I also thank the New Zealand Law Society for its accurate and expert guidance, which has been of great value. All members will be aware of the valuable public service the Law Society provides in reviewing and commenting on bills of general public interest. This occasion is no exception. The thrust of the Law Society submission is that the amendment proposed by the bill is needed. The High Court’s decision in Hartley v Balemi and Ors is, as the Law Society states: “at odds with what practitioners working in this area thought the legislation did and should provide for.”
I take this opportunity to remind the House briefly of how this bill came about and of what it contains, and to summarise the select committee’s recommended amendments. The bill confirms and clarifies Parliament’s intention that general damages for mental anxiety or distress can be awarded under the current Weathertight Homes Resolution Services Act 2006 and the repealed Weathertight Homes Resolution Services Act 2002. The decision in Hartley v Balemi held that such damages could not be awarded under the 2002 Act. The judgment also has implications for the 2006 Act. The effect of the judgment, if allowed to stand, is that claimants might secure general damages for mental anxiety and distress from the courts but not from the Weathertight Homes Tribunal. This consequence could not have been foreseen when Parliament enacted the 2006 Act, as two appeal decisions of the District Court made in 2005, in examining the same matters in contention, had held that general damages could be awarded.
An added complication is that the 2006 Act enables the transfer of a claim from the courts to the tribunal, and vice versa. Already, since the tribunal commenced operations on 1 April 2007, it has received claims transferred from the courts: one from the High Court and seven from the District Court. Clearly, the effect of the High Court decision in the Hartley case was contrary to Parliament’s intention of having a specialist one-stop shop for dealing with leaky home claims. Urgent action was needed. The response had to be swift, but it had to be well crafted and lasting. It also had to be widely considered to be the right thing to do, and not only by owners of leaky homes. Therefore, it is pleasing that the New Zealand Law Society, drawing on the insights of lawyers operating in this field, has agreed that this is a necessary amendment.
The bill makes it clear that general damages for mental anxiety or distress can be awarded. I emphasise that this bill does not require that such damages must be awarded. Indeed, prior to the High Court judgment, such damages have been awarded in only a minority of determinations—that is, 21 percent. Moreover, when there has been an award the amounts have been modest, averaging just $9,450. This is consistent with the longstanding judicial precedent that when the courts award such general damages, the awards are modest.
There will be those who comment that the possibility of general damages for mental anxiety and distress will not add an extra dollar to the compensation received, and is therefore of no relevance. I do not agree. Claimants value these awards as an acknowledgment of the stress they have suffered. The committee wanted the bill to be as simple as possible, so that lay people could understand it. I strongly endorse this aim, and I accept the committee’s amendments. Subclauses (4) and (5) of clause 5 have been deleted; the reference to the Hartley decision was not legally essential.
In passing, I note that this bill, if enacted, will not apply to the parties to the Hartley decision. New subclauses (4) and (5) have been inserted in clause 5. These clarify how the bill’s amendment applies to appeals. Subclause (4) clarifies that even if a claim that has been determined is under appeal or review, it will still be deemed “disposed of through resolution” for the purposes of working out whether the proposed Act applies to that claim. New subclause (5) provides that if the amendment applies in a claim, the amendment remedies may be included both when the claim is adjudicated and when there is any appeal, rehearing, or review.
The converse is also true. If the amendment did not apply to a claim when adjudicated, it also cannot apply when there is an appeal, even if the appeal is made after the amendment has come into force. Clauses 6 to 8 have been deleted. They stated that the affected claims could be amended to include the remedies in question. Certain transition provisions in the principal Act would be unaffected by the proposed Act, and determinations made before the proposed Act commenced would not be affected by it. The technical amendment in clause 9, repeated in the schedule, clarifies that the relevant mental stress relates to the claim, not the claimants.
To conclude, the bill as reported back achieves what is needed. It clarifies and confirms Parliament’s original intent. It restores to the adjudicators and the tribunal deciding these claims the ability to award general damages for mental anxiety or distress in the same way as the courts. I thank John Gray and the Leaky Homes Action Group members for their strong support for this amendment. I acknowledge the Law Society for its authoritative and helpful contribution. I again thank the Social Services Committee for its thorough and quick examination and sound recommendations, which improve the bill. It is my hope that the House will see it as in no one’s interest to delay this bill. I commend it to the House.
Mr DEPUTY SPEAKER Link to this
The next call will be shared, 5 minutes each, by Judith Collins and Bob Clarkson.
JUDITH COLLINS (National—Clevedon) Link to this
It is a pleasure to be able to speak on the Weathertight Homes Resolution Services (Remedies) Amendment Bill, although it is never a pleasure to follow Mr Cosgrove. What Mr Cosgrove could have mentioned is that if only he had listened to the National Party last year, this bill would not have been necessary. I say to him: “Frankly, we told you so.” We told him back then that the legislation needed to be fixed, but he did not bother to do anything about it. Instead, what we had to do was to deal with the situation as it was pointed out by Justice Lynton Stevens, whom, as I noted the other day, Mr Cosgrove knew so well that he referred to him in the feminine sense, whereas Mr Stevens is actually a male judge. Mr Cosgrove might like to get these things right.
One of the issues with the bill is that it is trying to remedy an error in the law, and the National Party was very pleased to assist in doing that. What we were not pleased to do was to just rush the bill through without there being any consultation with anybody at all outside of Parliament and the Minister’s own department. So on the Social Services Committee we made it very plain that we wanted to get the New Zealand Law Society in to submit on this. I was very pleased that the committee agreed with that.
It is a good thing that we insisted on that, because, at the end of the day, the Law Society, which obviously has a lot of people who are very, very experienced in this area, came along with some sensible suggestions. The Law Society said that despite the very good drafting by the Parliamentary Counsel Office, the fact that it was without practical experience in this area meant that it had perhaps missed the point that in trying to make the bill more user-friendly for the public, it was, unfortunately, creating more opportunities for there to be disagreements in court over what the meaning was. So that is one of the issues that the New Zealand Law Society was able to point out. Those on the select committee were particularly grateful for that. Again, if we had not insisted on it, it would not have happened.
The Social Services Committee met at various times outside normal hours to assist the Government, but did we get a word of thanks? No, there was not a word of thanks. But we would not be thanked by the Government, because we did not do this for the Government; we did it for the people of New Zealand. We did it because we cared more about them than we cared about making politics out of this issue, and that is what the Government did not do.
When I look at the Minister Clayton Cosgrove, who consistently indulges in personal abuse, except when he wants us to do something for him—then suddenly—
Well, of course, my abuse was all correct. When the Minister does not want us to do something for him, he suddenly does not want to have a bar of it and simply refers to the work of the select committee as though it was a Labour select committee. But what about the members on it? What about all the parties? Let us look at them. The Greens, the ACT party, the National Party, and the Labour Party all agreed to meet outside the normal hours. Also, United Future should not be forgotten. It would be nice for the Minister to say to those other parties, particularly to United Future and to the Greens, that the Government actually appreciated the effort that they put into the bill.
Hon CLAYTON COSGROVE (Minister for Building and Construction) Link to this
I know I have just made a speech, and in that speech I think I said four times that I thanked the Social Services Committee. I seek leave to table my speech, so that the member can see that I did thank the select committee members on at least three occasions.
Mr DEPUTY SPEAKER Link to this
Leave has been sought for that course to be followed. Is there any objection? There is.
BOB CLARKSON (National—Tauranga) Link to this
Thank you, Mr Deputy Speaker, for this chance to speak on the subject of leaky homes. It is quite interesting that it says at the top of the bill “(Remedies)”. That is a bit of a joke. I really want to go through the whole thing about the leaky homes issue, but let us go through some of these—
Yeah, that will do; good. If I solved some of my business problems the way the Government does, I would be broke in a very short time. One cannot wake up in the morning and change the rules just because one has a good feeling in the middle of the night. It is as simple as that.
Hon Clayton Cosgrove Link to this
Define that, Bob! How many good feelings have you had in the middle of the night?
Darren HughesWould members please keep quiet, eh—I am trying. The Government is a bit lucky. It just keeps spending more taxpayers’ dollars and hoping that the problem will go away. I have news for the Minister, Clayton Cosgrove: this bill will not make the problem of leaky homes disappear. Labour’s policy is quite simple. If dollars do not fix a problem, then Labour changes the Minister in charge of it. There have been seven Ministers so far since this problem started. Six have failed to solve the problem, and the seventh is about to fail.
If changing the Minister fails, try changing the law! That is the next move. This law came out of a bad dream, and it will not help. Laws should be made after careful studies are done on how to solve a problem. Debates should be had with people who understand the problem—it is as simple as that—and who can give good advice on how to rectify the problem. One should not make laws on the run, as seems to be happening at the moment.
This will be a total failure, because it was rushed through with very little thought by people who do not fully understand the full problem. The Government protected itself through the courts by letting the Department of Building and Housing off the hook, and this has caused a lot of mental stress for thousands of homeowners. Now we have a Minister bringing a bill into the House to allow people to claim for mental stress. How strange is that? The Government causes a stress by not dealing with the situation and by protecting one of its departments, the Department of Building and Housing, so that it cannot be sued for damages. That in itself causes more mental stress.
This bill is a waste of time. The mental stress will be fixed, by fixing the problem. In this case, the Minister has lost sight of the problem. The problem is that we have leaky homes—leaky homes that are taking too long to fix. We have people who cannot face a hearing in the Weathertight Homes Tribunal, because they do not know anything about building a house. That is what got them into the problem in the first place.
There is a major problem with people getting stressed, in that they cannot afford to pay a lawyer to assist them. They have to take a lawyer along to the hearing at the Weathertight Homes Tribunal—even though the Minister says they do not—because the other side has top lawyers defending it. The Minister has the cheek to say that people do not need lawyers to defend themselves at the Weathertight Homes Tribunal hearings. If there is a lawyer on one side, it is only fair that there is a lawyer on the other side. I say to the Minister that he should wake up and get to the real world. It could be a situation where there are no lawyers allowed, such as in small claims courts. I am not recommending that, but I would like to debate it.
The Minister quoted in a select committee on Wednesday that some person—I think he was a reverend—was sorting out his own house, and had handled the complete Weathertight Homes Tribunal hearing himself, without a lawyer, and won the case. The Minister stuttered a little on the percentage of the claim the man won. Also, he did not say whether the person who won actually got the dollars paid to him. It is a funny thing that he quoted only one case. Was there only one case?
I had better move on fast here. I will just quickly say that the National Party has two top people to deal with the leaky homes situation in the future when we are in Government next time: Nick Smith and myself. I assure members that we will not fluff around the edges with a half-baked policy.
RUSSELL FAIRBROTHER (Labour) Link to this
I do admire that man’s optimism. We thought that he came to the House as a retiree, but he will have to leave it as a centenarian if he wants to get a chance to be around the housing and building ministries. His continued life in Opposition is certainly destined by that speech. We cannot, of course, fix leaky buildings by legislation, but we can provide remedies by legislation. That is what this Weathertight Homes Resolution Services (Remedies) Amendment Bill is all about. It is interesting that the Weathertight Homes Tribunal has now been going for 10 weeks, and already a layperson has obtained a settlement as a result of taking a matter right through the process to a stage where he describes himself as being 100 percent happy. He has obtained a confidential settlement and has emerged from the process saying he is totally happy. So already we are seeing the fruits of an efficient piece of legislation.
Another example of efficiency is the Social Services Committee, which I have the pleasure of chairing and whose membership comprises the most happy and agreeable collection of individuals that is possible. We progressed this bill through the committee with all speed, because we appreciated that it corrected an aberration in a point of law taken in the High Court, and accepted by the judge as perhaps having some validity. The judge, Justice Stevens, was no doubt supported by an opinion of a retired High Court judge, the Hon Sir Robert Smellie, who postulated in the New Zealand Lawyer—not a conservative publication—that perhaps the new law did not allow for general damages. But that was a tentative conclusion, and it was in the face of several District Court decisions that the Act did allow for general damages. In fact, after the article was written Judge McElrea of the District Court very carefully analysed the Act, comparing it with the existing Act, and held that the retired High Court judge was wrong.
All that this bill does is to save litigants further costs. That includes the costs of the applicants and the respondents, because it was always the intention—and that is reflected in the National Party’s minority report in the commentary on the original legislation—that the legislation should include the right to general damages. When the High Court decision came out that argued that general damages were not available, it did not say there could be no general damages; it said that if a litigant wished to claim general damages, then he or she had to follow that issue through the general courts. So we had the farcical situation of a specialist tribunal—the Weathertight Homes Resolution Service—being able to decide everything except the quantum of general damages, which the litigant would then need to follow up on through the general court.
How would that save anybody money? How would that save the country money? How would that go towards the speedy resolution of disputes? Well, it simply would not. So this bill amends the earlier Act, which is a sound Act that has withstood judicial scrutiny on several occasions. But to be cautious, we are meeting the challenge laid down by Justice Stevens and making it crystal clear that general damages are the entitlement.
I want to refer to a letter dated 15 June that I received earlier this week from Wellington City Council, lamenting the passage of this bill. Its understanding of the bill seems to be entirely amiss. I will deal with the points it makes about it. The council claims that this legislation will open a Pandora’s box. It seems to have failed to read the National Party’s minority report in the commentary on the original bill, in which National pointed out that it felt general damages should be included but was concerned that a decision such as the one made by Justice Stevens might become apparent. However, the National Party was too timid to take that matter further by voting against the bill or by putting forward any substantial amendments. It was a “straw in the wind” sort of approach. When this amending bill came back before the select committee, the cooperation in getting it dealt with expeditiously was splendid. In fact, the deliberation took all of 46 seconds. That was possible only with the splendid cooperation of the venerable National Party, which realised that this was a bill of short order that made crystal clear a legal right that does exist, whether it be through the Weathertight Homes Tribunal or through the general courts.
Wellington City Council is wrong when it says this bill opens a Pandora’s box, because general damages is not a goldmine that people are entitled to have access to. General damages is the award of a sum of money intended to put a person back in the position that he or she was in before suffering a harm. That is not a Pandora’s box; that is justice. If that council is not concerned about its citizens achieving justice, then it clearly needs to look carefully at what it is there for and at what its elected representatives are seeking to achieve. So this bill does not deliver a Pandora’s box to be opened by litigants; it is merely a bill to sort out what everyone believed was the law. It is as simple as that. It brings the resolution of weathertight homes issues into a specialist tribunal, which has already proven that it can deal with them expeditiously and efficiently.
The previous speaker, the member for Tauranga, Bob Clarkson, who was a member of the committee, lamented that somehow legislation should be able to solve the problem of leaky buildings. He opined that if ever National got near the Treasury benches, then Dr Nick Smith would become the Minister for Building Issues. That in itself is a strong argument for National members not to be made members of a Government, because the same Dr Nick Smith ushered in the Building Act, which gave rise to this fiasco. Until the Building Act came in, people who bought houses knew that the houses were properly built, because there were sets of specifications and requirements that everybody understood.
RUSSELL FAIRBROTHER Link to this
Oh yes, of course. Abolishing the apprenticeships left us with untrained builders. All that one needed, when Dr Nick Smith had finished, was a ute, a dog, and a radio, and one could call oneself a builder. So if we have Dr Nick Smith back on the Treasury benches, assisted by the octogenarian Bob Clarkson, then we will return to the chaotic days that gave rise to the leaky buildings syndrome.
It is not a good thing to have a leaky building. It is one of the most traumatic things that could happen to any individual. Resolution of such a problem is not to play games within our courts’ processes. All that the owners of leaky buildings want is justice. Every person who buys a house expects to get a valid deal, and if that deal proves to be invalid, then he or she does not have to be driven to the wall financially or mentally in trying to litigate a way through the minefield of court processes that are littered with the antics of high-paid lawyers employed by people such as the protesting Wellington City Council. Instead, through the Weathertight Homes Tribunal and through the work of my good friend the Minister, Clayton Cosgrove, who has steered this legislation through and given real leadership to this whole issue, we have a New Zealand that can handle the leaky buildings crisis and put it behind us. My thoughts are with the owners of leaky buildings. It is to my regret that the neo-liberal policies of the previous National Government brought in a situation of open slather, where people could build anything, put a paint job on it, and sell it at an overpriced value.
This Government does not support ripping off householders. Perhaps National’s lament is that that right has gone. This Government supports people’s major investment in homes as being a long-term, sound investment. This bill puts right what the previous National Government put wrong.
PITA PARAONE (NZ First) Link to this
Tēnā koe, Mr Deputy Speaker. I just want to acknowledge at this time all those people who are on the motorway, listening to this debate, particularly in terms of some of the comments that have been made about the intent of this Weathertight Homes Resolution Services (Remedies) Amendment Bill. Although there have been those who have expressed some disquiet about this bill, we know that they will support it.
This bill is timely. I take this opportunity to acknowledge the Minister responsible for this bill, Clayton Cosgrove, for reacting in a timely manner, because there are a number of families whose homes are affected by the weathertight homes issue. It is only fair that this Government should introduce a bill to provide a remedy for the problems that those families have. I know that in Manukau City, where I live, there are a number of families who are concerned about whether they will get some form of compensation, be it for the distress and anxiety caused by the problem their home has or for other reasons.