KEY POINTS:
Council insurer RiskPool says it has already nailed many builders who tried to escape paying for the rotting homes scandal by pleading poverty.
And RiskPool is having builders who can't pay declared bankrupt.
Michael Ross, RiskPool's chairman, said the insurer which backs 82 councils nationally had a formidable
record in recovering money from builders for councils.
RiskPool sent out a strong "pay up or else" message to the building sector this week in deciding to chase builder Robert McDonald for putting up Colleen Dicks' rotten Hobsonville house.
RiskPool said builders rather than ratepayers should bear the brunt of the leaky homes scandal.
Mr Ross said builders often tried to escape liability by winding up their companies and claiming they had no assets. But RiskPool often found this was not the case because the assets were not being openly declared.
"We've had a lot of builders who had told us they have had no assets in the past. But we've found that to be quite incorrect," he said.
RiskPool had several builders declared bankrupt when they declared they could not pay, he said.
After RiskPool ditched its appeal against Mrs Dicks and declared it would chase builder Robert McDonald, Mr Ross was surprised when Mr McDonald contacted him directly.
"You could have knocked me over with a feather," Mr Ross said. He passed contact details on to a team at the insurer who is demanding he pay much of the $250,900 awarded to Mrs Dicks by the High Court at Auckland.
Mr McDonald said he only owned a car worth about $500, had no assets and could not pay.
John Gray, head of the Leaky Homes Action Group, said it was time builders fronted up for their role in the crisis and stopped trying to shield themselves. Too often victims found builders had used phoenix companies, structured to intentionally fold immediately after a job was finished to avoid carrying any liability for their poor work, he said.
They also used trusts to disguise their assets, leaving victims without anyone to sue except councils.
Pieter Burghout, chief executive of the Registered Master Builders Federation, said most of the country's rotting homes were not put up by his 1700 members who employ 15,000 people in the construction industry. Mr McDonald was not a master builder, he said, and he encouraged those builders who had problems to quickly sort out the mess.
An increasing number of people are pointing the finger at the Government, saying it has got off almost scot-free in a crisis which could cost from $5 billion to $10 billion.
Mr Ross criticised Building Issues Minister Clayton Cosgrove for saying the Government would not back up insurance companies in the rotting homes crisis.
"Local authorities have insurance to cover their public liability, and it is not the role of the taxpayer to indemnify the insurance industry," Mr Cosgrove said on February 12.
But Mr Ross said Mr Cosgrove had misunderstood some facts of the situation and he was seeking a meeting to discuss this. Auckland mayors also want to meet Mr Cosgrove to push for more Government help in resolving the crisis.
Mr Cosgrove is bringing in a new builder licensing system which he promises will eradicate cowboys.
THE CASE
* 69-year-old widow Colleen Dicks sued the builder of her leaky home and the Waitakere City Council for approving the builder's faulty work.
* The High Court ruled in December that the builder, Robert McDonald, was responsible for 80 per cent of the costs and the council for 20 per cent.
* The council's insurer, RiskPool, initially planned to appeal against the ruling on the grounds that councils would be left paying the entire bill.
* On Wednesday, it changed its mind, saying it would chase up Mr McDonald for his full share.
* The ruling could be applied to many other builders who have personally built leaky homes.
