EQC Act and repairs done by EQR by John

Posted 01 Oct 2013 by John
The "as new" standard is set out in the Act (in paragraph (a)(ii) of the definition of "replacement value" in section 2 of the Act, which must be read in conjunction with section 18 of the Act). The part of the Act that Duncan refers to (taken from Clause 9 of Schedule 3 to the Act) appears to be relied on by EQC to the exclusion of sections 2 and 18, and as a general description of their obligations (which should only be applied if circumstances do not permit exact or complete reinstatement).

It is a fundamental principle of statutory interpretation that an Act must be read as a whole, and when the Act is read as a whole (rather than the words in Clause 9 of Schedule 3 being taken in isolation) our view is that:

1. The standard of repair provided for in the Act requires EQC to replace or reinstate the building to a condition substantially the same as when it was new, modified as necessary to comply with any applicable laws. The costs in doing so must be reasonably incurred.

2. The Act also contemplates circumstances that do not permit exact or complete reinstatement. This might arise, for example, where building materials or methods have evolved, or where products are no longer available, or no longer comply with current building standards. In such circumstances the Act states that EQC is only bound to replace or reinstate as circumstances permit and in a reasonably sufficient manner.

This is untested in the courts, and is therefore one of the issues that we are looking to resolve in bringing a group action against EQC.