19 Aug 2019

Lawyer surprised Brownlee didn't know about Southern Response 'deception'

From Checkpoint, 6:08 pm on 19 August 2019

There are growing calls for an inquiry into state-owned quake insurer Southern Response.

It follows a High Court judgment which found Southern Response had engaged in misleading and deceptive conduct when it deliberately withheld information from customers Karl and Alison Dodds, shortchanging the couple by more than $200,000.

The organisation was found to be operating a two quote Detailed Repair Analysis and the Dodds's unwittingly settled on an abridged assessment in 2013 after the insurer kept the full assessment from them. Gerry Brownlee was the EQC Minister at the time.

He told Checkpoint he did not know.

The issue of the two different repair assessments is the subject of a class action led by Christchurch lawyer Grant Cameron.

Mr Cameron tells Lisa Owen he is surprised Mr Brownlee did not know of Southern Response's actions before Friday's judgement.

"Nevertheless if Gerry is saying he didn't know, we have to accept that. But the question has to be, how could that possibly be when as Minister in an arrangement where the Crown has entered into a Crown support deed to provide cash to AMI, and very stringent processes for reporting on liabilities were put into place at the beginning, how Ministers couldn't know these things."

He says provisions in the Crown support deed meant that Treasury could have observers at every board meeting and executive management meeting.

"Whether they did or didn't attend, we don't know. But one would expect that they were all over this very closely.

"There was an unknown liability for the taxpayer, and it was extremely important to know as this whole thing unfolded what the ongoing liabilities would be.

"So undoubtedly Treasury received all the information that was supplied to shareholders, rating agencies, bankers, auditors, senior management, and more particularly the board itself.

"So it's very hard to see how this wasn't extensively flagged as things went along."