Leaky building issue: Why should Wanganui pay for Auckland's stuff-ups? - 14/02/2007Mayor Michael Laws today queried statements made by the Local Government Association and the mayors of Auckland that the government must get involved with assisting councils in paying for leaky homes settlements.
Pressure has gone on Building Minister Clayton Cosgrove to reverse his stance after the successful case brought against the Waitakere City Council by superannuitant Colleen Dicks. The council is now appealing that judgment to the Court of Appeal.
The concern is that Riskpool – the insurance company created by local government to cover any potential public liabilities – will not have sufficient income nor reinsurance to handle leaky homes claims in the wake of the Colleen Dicks decision.
"I am at a loss to know why Wanganui ratepayers – either through their rates or their taxes – should be responsible for the shoddy building practises of Auckland and metropolitan councils. Justice Baragwanath made it plain in the Dicks case that Waitakere’s building inspectors had not done their jobs properly. Neither, it appears, have other metropolitan councils' building compliance teams.
"Wanganui has. So have numerous other district and city councils. But now we are looking at increased Riskpool premiums or direct pay-outs because larger councils were negligent. That is manifestly unfair."
Mr Laws said that when Riskpool was established "it was never envisaged it handle institutional ineptitude".
Councils tend to pay an excess of around $35,000 per case but after that Riskpool covers any subsequent liabilities.
"The system can handle the occasional stuff-up. But not these sorts of figures. Where is the political or fiscal accountability? Why were building standards so lax? Why should my ratepayers be responsible for such appalling deficiencies as outlined in Justice Baragwanath's decision?"