EQC's 'unaccountable actions' see Christchurch woman 'wrongly' accused of fraud and left uninsurable, says Andrew Hooker

EQC's 'unaccountable actions' see Christchurch woman 'wrongly' accused of fraud and left uninsurable, says Andrew Hooker

By Andrew Hooker*

I have a story that needs to be told. The woman involved is one of a stream of disenfranchised and frustrated people that have come into our Christchurch office. While her experience is unique, the theme of what she has undergone is not. 

Shortly after the 2010/2011 earthquakes, and as winter approached, EQC advertised on the radio in Christchurch the availability of heat pumps. It invited people to call an 0800 number to apply for one.

An elderly woman living on her own (we will keep her anonymous and call her “Mrs Jones”) thought she would call the number to see if she qualified for the heat pump. When she rang the number provided by EQC, she was simply told to call another number. She rang that other number. The person who took the call took her cell phone number and address and said that someone would be in touch. 

Very soon after that, someone got in touch via text message and advised that they were coming around to install the heat pump. Mrs Jones, who at that stage was working, arranged for a friend to be at home at the stipulated time. Someone turned up, installed a heat pump and left. 

It was as simple as that. Mrs Jones heard no more, and the heat pump worked well. Most importantly she was never interviewed or asked any questions to see if she qualified for the offer.

A few months later, she was contacted by EQC advising that EQC was undertaking a “heat pump audit”. What followed was two interviews in which she was asked about whether she qualified for a heat pump. She told the people at both interviews that she was never asked any qualifying questions. At the second interview, the person from EQC acknowledged that EQC’s processes were lacking. Mrs Jones said that if she was not entitled to the pump, she would pay the money back. She was told that would not be necessary.

Mrs Jones heard nothing for a while. Then she received the bombshell. EQC was accusing her of deliberate fraud. EQC said that she had lied to EQC about her claim. The consequence was catastrophic:

  • EQC would be demanding a refund of the amount paid for the heat pump. 
  • As if that was not enough, EQC was declining her entire claim for earthquake damage caused to her house in that earthquake. 

But what was the lie? She had never said anything to anyone. No one had asked her if she qualified or even told her, when she called, what was needed to qualify. She rang to enquire about whether she was entitled to one, and next thing, one was installed.

Months, years of trying to get EQC to see her version led to nothing. So she asked us for help. We wrote to EQC. The letter was written to Ian Simpson in the hope that he may take an interest in this gross miscarriage of justice. Sadly, no, he fobbed it off to an underling who said that an investigation would be undertaken. 

At last, someone was looking at her situation, Mrs Jones thought. She waited eagerly for the investigation, hopeful that a new fresh set of eyes would uncover the truth – that she had never lied about anything. Sadly, no one even contacted Mrs Jones for her version of events.

Despite the very serious situation, EQC’s investigation was wholly internal, apparently, and did not even include an interview with the person against whom the allegation had been made. EQC’s “investigation” resulted in a short letter confirming the previous decision and alleging that Mrs Jones had deliberately lied. 

When asked to identify when and by what means Mrs Jones told the lie, EQC stated that the lie was essentially that Mrs Jones should have known that she did not qualify. And that EQC “assumed” that she had made the statements. 

Proof of fraud by assumption? That would be a novel proposition indeed! I thought that proof of a criminal act required a bit more than an assumption.

The absurdity of EQC’s position would be humorous if the consequences were not so serious for Mrs Jones. Mrs Jones never claimed that she qualified for a heat pump! And she was never asked any questions as to whether she qualified. Now she has had to pay for her own repairs and is uninsurable.

EQC suggested she make a complaint to the Ombudsman as a last resort. But Mrs Jones has lost all faith in the system. 

How many people have been wrongfully accused of serious criminal offending by a Government organisation that is supposed to step up and help people in a time of need? It seems that EQC’s own system has let it down. There must have been some process for ascertaining entitlement to a heat pump. But whatever that system was, no one at EQC followed it. Mrs Jones simply rang a number to make an enquiry, and a heat pump was installed. 

There needs to be an independent enquiry into the way EQC has handled itself throughout the earthquake, but in the meantime Mrs Jones remains uninsurable because of the unaccountable actions of a Crown organisation, and a flawed internal investigation process. 

Lawyers representing individuals against EQC and insurance companies have been accused of “claims farming”. And recently, at the same time as it had been found to have breached its good faith obligations by withholding reports, Tower Insurance’s board chairman referred to a “litigation industry”.

Perhaps in light of the recent Court judgment against Tower, its board may appreciate why this “industry” is necessary. Maybe Tower could get its own house in order before criticising those who are tasked with making sure it honours its policies. 

Concealment of reports. Breaches of good faith obligations. Allegations of fraud based on “assumed” statements that were never made. How many more of these stories will need to come to the surface before the powers that be take notice and step up? 

*Andrew Hooker is the Managing Director of Shine Lawyers NZ Limited practices as a specialist insurance lawyer in Albany on Auckland's North Shore. He also runs an insurance information website - www.claimshelp.co.nz

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Sounds like this was when EQC had employed that former cop who went around threatening pensioners. Not the first time I've heard a similar story. From what I've heard nothing was substantiated and I'm not aware on any charges being laid because there wasn't any evidence. EQC did this when people were suffering from a lot of stress post-earthquake.


What were once vices soon become habits. This has been and still is a rotten episode in NZ's political and commercial history. The government elected to protect its people has flouted the very laws intended for that purpose and allowed a government department to persecute instead. The more they got away with the more they grew the culture. What is even more appalling is the so the called parliamentary opposition that we all depend to call the government to account. Those who have suffered most are in traditional Labour electorates, may as well be on the moon. Little has been done by Little or any of the others save Ruth Dyson who has been magnificent, but on her own and demoted. Peters claims he is for the people. There are thousands more affected here by this scandal than the wine box, but Winston is never heard.

What a sad story Andrew. It takes huge amounts of time to change the minds of people who think they are right. Hope you can get some justice for your client.


Gerry Brownlee would have been very pleased with this outcome. I bet if the story was placed in front of him he would do absolutely nothing, as he did with all the other disgraceful EQC situations.

This is why we need robots to perform clerical tasks.

Lets start with replacing Estate Agents, it is doable you know.

Have a look at the Centrelink debacle in Australia before you get too carried away, Zachary old chap.

Robots aren't good at context. What we need is more expertise and judgement.

If this is the whole account of what happened, this is truly bizarre and EQC should be called to account. We have only a lawyers perspective on what occurred though. Be interesting to hear EQCs side.
Making a complaint to the ombudsman is not all that hard and one would have thought a friendly lawyer somewhere might be willing to handle the process for an aged lady.

Gerry Brownlee should be called into account. The so called Christchurch Rebuild has left the city centre a wasteland. There are only a few new buildings appearing recently but there are problems in relation to ownship of land and its use. The Government fucked up badly.

Believe the point of the article is that while the circumstances here would seem to be repugnant.in terms of natural justice this is not an isolated case. It has been relatively easy for EQC & the insurers to attack claimants on a case by case, claim by claim basis. One on one it makes sense, they have the experience, power and funding. However leaving aside the dreadful circumstances as explained here, the point Mr Hooker is making is that collectively all the myriad of miscreant activity by EQC and the insurers that has been inflicted on the insured adds up to a very sorry situation in terms of accountability,sincerity and fair trading. And as he says, they have, despite the legislation in place to prevent this, been able to range virtually unrestricted, so that the only hope the claimant has is the high court.,And as, let's say, these cynical insurers only too well know, how many claimants can actually afford that. So to sum up. Where exactly does our friend Jones go to seek justice. In reality how can you possibly sue the government over this when such as Mr Brownlie it would appear, based on past utterances, would see such malpractice as a job well done! When a government breaks its own laws, such as EQC as one example, the as new repair standard they eventually lost by the means of court class action then all of us are living on very dangerous ground. Big business first it clearly seems to be and people second. Thanks National!

Is the EQC case in line with new imported business ethics?
Standover tactics?

The ethics are imported with the imported people

It's their way of doing business

The place time forgot

This saga which has run for nearly 6 years is a stain on New Zealand and its culture and mores

It is "the reason" why a certain person should never ever receive a knighthood

He was happy to walk the cat-walk, wave, smile, look concerned, act the leader, then walk away

I am not a great fan of the level of litigious activity in America. Historically our sense of common decency and fairness has meant that we have been able sort things out without out resorting to this. However this government and it's organs of state are leading us in a direction where this is our only choice. Is this the sort of country that we want? Is this the sort of leadership that we want?
Do we need some sort of charitably funded group that will support lawyers who take these cases on, on a low cost basis and then pursue the crown mercilessly for full compensation of all legal costs and consequential costs to the claimant. If the cases are chosen carefully, most of them should be won and the fund replenished. A little bit of donation money might go a long way.
Thank you Andrew for highlighting these situations and all my best wishes in getting justice for this lady and the many like her.

This is the tip of the iceberg,
A large proportion of 'repairs' as well as installing wood burners under the clean heat program are not valid. These people are now struggling to get insurance cover. Some have had to have the wood burner removed at their own cost, or made compliant at their own cost. Ditto with the repairs.

EQC mentality is that they and only they are RIGHT, EQC never admits to being in the wrong,

Very true. My in laws house needs to go up on stilts for a 3rd time as they have found the foundations are out by over 85mm again, only 12 months after the 2nd 'fix'. Insurance won't cover the cost of rent again so EQC suggest they live with friends (all 5 of them) rather than pay for rent themselves. All because of an EQC cock up.
The way EQC has behaved for 5+ years is an embarrassment to us all.

It goes further than that.
Not admitting you're wrong, or not apologising for that matter, is a Government Department policy. Any admission or apology is an indication of guilt and can be used in Court against you.

Look at the Trump effect

Trump is threatening Ford Motors and General Motors and a bunch of other companies about off-shoring and out-sourcing and the companies are reacting - and Trump isn't even in office yet

That's what our "Glorious Leader" could have and should have done

All he had to do was pick up the phone

Well it was pretty clear that that PM was a hardcore, hard shell true blue corporate man. That was his back ground area of expertise and source of all his wealth and the strength he played to.Nobody should begrudge success but having turned NZ into Corporate NZ his government has shown the same scant regard as any corporate does towards minority shareholders, except we are called tax payers. No previous PM or government would ever have allowed any people of NZ to have been mistreated and defrauded as has happened here in this shameful performance by EQC & insurers.

Though I agree with your comment, this disregard for it's citizens by the NZ government pre-dates Key, look at the way that Clark oversaw as they blamed everyone but themselves and the corporates for the leaky building crisis, disbanded the BIA and spent public money defending itself from the public. Not that greater difference. It's not only corporate greed that has corrupted the public service in NZ but also intellectual arrogance.

Yes cannot argue with that. Trouble is though, that it does not help much by saying that one lot is of politicians are better than the other. Stupidly our media feeds this out. So you could end up saying, more or less, anything above hell is heaven. But you are dead right, for different reasons,purposes and directions, in different styles, overall Key's lot are no different to Clark's lot if you were to ask any of them what exactly they are there for, relative to a democracy that is, there would be no credible answer. And continuing the theme, going back to Clark's lot there was too, too much of the old hat personality politics of the 60's or so, that at least Key rose above. Always thought that Clark was intellectually conceited & her deputy intellectually cynical.

This seems a bit hard to believe. I've had dealings with EQC and Insurers on 17 of our properties. Some have/will be rebuilt and others have had minor repairs. A few have involved lawyers to resolve and 2 are still in dispute. Part of the challenge we have faced is the constant changing of staff at both EQC and the Insurers. This means people having to familiarize themselves with the case and each time this happens part of the knowledge and history is lost as they are working from notes. We haven't had one case of EQC or the Insurer being underhanded. It has merely been a lack of knowledge of the history of the case that has caused incorrect interpretations and subsequent issues with a few of our properties.
Are we really to believe that this lady had a heat-pump installed by simply ringing a number......seems a bit unlikely to me. Get the available phone records from EQC and prove it.

Guess what... it is true.... It is not hard for me to believe. Come sit in our office for a few days. You wouldn't make that comment.

Only hard to believe if you are far-removed from reality. But congratulations on managing your claims in good order, even though under something of a rider in that you did have to engage a lawyer from time to time it seems. Actually why precisely was that necessary!?It is though fair comment that some have sailed through all this debacle with flying colours. Without being specific that more or less explains an unfortunate and sad aspect that has been exposed in our society. By that I mean if I am alright then how can there otherwise be a problem. So it is obvious that the rest of NZ being unaffected, is actually not all that concerned about the Christchurch EQ saga, but worse than that, the areas of Christchurch that are similarly unaffected don't really give a toss either. Sorry state of affairs, but politically,very convenient.

EQC has particularly targeted elderly and other vulnerable people for harsh treatment. What has happened to them has been unbelievable.. EQC and Fletchers even went as far as setting up a vulnerable persons register.. ostensibly this was to give them priority treatment.. In actual fact it was to identify them so they could be abused and tormented and treated worse than everybody else.. many decent builders etc left EQC at that point. there needs to be an independent enquiry .. but only if some people are held to account and its not a whitewash..

That register seemed to work in reverse in so much you would be better off to have not been on it Trouble is the EQC set up has been impregnable, unimpeachable right from the start and as demonstrated in this article,unaccountable. Hard to explain in a democracy.

I'll second that. How the elderly and vulnerable have been bullied and cheated is a common story with EQC and Fletchers, and Brownlee has been presented with enough examples for even blind Freddie to see the pattern. The man is a disgrace - he should have reigned them in and got rid of Simpson years ago.

Exactly! How times have changed. There used to be an old saying "there will be questions in the house." Just imagine if there was a Holyoake,Kirk,Muldoon or Lange in as leader of the opposition. The Minister in charge would be no more, simple as that.

A rental property owner \ had a house in 3 flats After the chimneys were removed he was entitled to three heatpumps.. when the installer arrived he had 4 with him .. The installer said please take the extra one as it is more hassle for me to have to return it and change all the paperwork.. A few months later that area was red zoned and the house was demolished but the owner got to keep the 4 heat pumps anyway . Many other people had chimneys removed but received no heat pump as they were not aware of their entitlement.. In actual fact we would have been better to take a payout of up to $30,000 for a replacement chimney instead of a $2000 heat pump.. Just another way that Gerry Brownlee has shafted us.

The lack of, or inability of EQC to ensure compliance with, systems and processes is endemic. And it doesn’t just affect homeowners but suppliers as well.
I am aware of builders, contracted to EQC via the Fletcher EQR programme, who have been accused of fraud on the basis of the flimsiest of audits by patently unqualified staff without any apparent oversight before the big guns like the Serious Fraud Office were called in.
You would also expect the SFO to have people that understand construction and that sectors processes but, no, just like EQC, they are equally under-resourced and under-qualified for their role.
The net effect is that the builders are presumed guilty and, because a complainant to the SFO are not required to provide proper validation of their accusations and the SFO must respond to any complaint that exceeds their threshold for investigations, they are hung out to dry while waiting on a process that could take a year or more. In one case that I know of the builder had to push and push to get a clearance from the SFO which belatedly came but it was too late to recover from the significant reduction in work from EQC and other insurance companies while the SFO investigation was underway.
To rub salt into those wounds, the detailed investigation work prompted by SFO’s involvement, which should have been done by EQC before they involved them, apparently proved that the vast majority of the issues arising from the individual repairs supporting the fraud allegation were actually the fault of EQC/Fletcher EQR, e.g. inadequate scopes, non-documentation of scope changes/variations to scope, and other verbal instructions to change or offset scope items/costs in trade-off with other repair items.
Did this builder receive an apology or any compensation? I don’t know. They couldn’t take action against the SFO (they’re protected by legislation) but they would have every right to have a go at EQC. I hope they have.