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Management of Liabilities, Claims Against the Crown and Crown Properties

Scope of Appropriation

Management of contractual or Treaty of Waitangi-related claims against the Crown and the management of New Zealand House, London.

Significant Work Completed During 2010/11

Residual liabilities overseen by Financial Operations:

During 2010/11, Financial Operations commenced responsibility for ensuring the ongoing effective and efficient management of the Crown's residual obligations and contingent liabilities relating to:

  • the obligation to complete the statutory vesting of the elecricity generation assets that were originally sold to the Electricty Corporation of New Zealand (ECNZ)
  • the Crown Loan and Grants to Taitokerau Forests Ltd
  • the remaining Crown-owned Geothermal Wells, and
  • certain other obligations arising from statute, contract and historic Treaty of Waitangi settlements that the Crown is still responsible for.

During the period, the following significant pieces of work were undertaken or completed:

  • Four land assets were vested in a former SOE to discharge an outstanding contractual obligation.
  • Agreement was reached in respect of the Mount York repeater station site.
  • Negotiations were advanced for legalisation of the remaining electricity generation assets to be transferred in the Taupo region.
  • Ongoing contractual obligations to Taitokerau Forests Ltd were administered effectively and in accordance with stipulated agreements.
  • The remaining Crown-owned Geothermal Wells were appropriately maintained.

Building Industry Authority

The Building Industry Authority (BIA) remains a joint defendant in claims before the courts and the Weathertight Homes Resolution Service relating to BIA's previous role as regulator of the building industry. BIA has been disestablished and absorbed into DBH. To prevent conflicts of interest, the Treasury was given responsibility for managing weathertight claims against BIA on behalf of the Crown from 1 July 2005. The number of such claims against BIA (and thus the Crown) has reduced over time owing to court decisions for the Crown.

In May 2010, the Crown announced its intention to assist homeowners to get their leaky homes repaired by contributing 25% of agreed repair costs (with affected local authorities also contributing the same amount). That project has been advanced by DBH. This package has implications for weathertightness claims.

New Zealand House

Continued to manage New Zealand House in London in a manner that maximises the ongoing return on the property while managing associated risks.

Statement of Service Performance for Output Class - Management of Liabilities, Claims Against the Crown and Crown Properties
Performance Dimensions for 2010/11 Target Performance in 2010/11
Management and resolution of liabilities and claims within parameters set by Ministers.  Achieved. Achieved.
Cost - Management of Liabilities, Claims Against the Crown and Crown Properties
Management of Liabilities, Claims Against the Crown and Crown Properties 2011
Main Estimates
Supp. Estimates
1,384 Expenses 447 1,922 653

Funded by:

1,363 Revenue Crown 439 1,898 645
21 Other revenue 8 24 8

Expenditure is $206,000 (32%) under Supplementary estimates as a contingency was retained for funding for managing the potential liabilities of the former BIA and $191,000 will be transferred into 2011/12.

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