Auckland Council v The Chief Executive of The Ministry of Business, Innovation and Employment Hc Ak

• Jurisdiction: New Zealand
• Judge: Heath J
• Judgment Date: 30 April 2013
• Neutral Citation: [2013] NZHC 912
• Docket Number: CIV 2012-404-5559
• Court: High Court
• Date: 30 April 2013

UNDER the Judicature Amendment Act 1972

BETWEEN

Auckland Council

Plaintiff

and

The Chief Executive Of The Ministry Of Business, Innovation And Employment

First Defendant

and

Patricia Ann Bamford

Second Defendant

AND UNDER the Weathertight Homes Resolution Services Act 2006

BETWEEN

Auckland Council

Appellant

and

Robyn Coleman and Patricia Bamford

First Respondents

and

Johannes Laurentius Apers

Second Respondent

[2013] NZHC 912

CIV 2012-404-5559

CIV 2012-404-6095

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Application by council for judicial review of a decision of Chief Executive of MBIE that the second defendant's claim was eligible under Weathertight Homes Resolution Service Act 2006 since it was brought within ten years of the home being “built” — appeal by council against Weathertight Homes Tribunal's decision that claim was not statute barred — second defendant had stated her claim was in respect of a “stand-alone” complex under s18 Weathertight Homes Resolution Service Act 2006 (1 or more dwelling house in stand-alone complex) — had joined with neighbour's claim which had been filed within a 10 year period — whether the Chief Executive had made a decision which could be reviewed — whether claim was time barred.

Counsel:

D J Barr and K Lydiard for Auckland Council

T J Rainey and J Wood for Ms Coleman, Ms Bamford and Mr Apers

R B Chan for Chief Executive of the Ministry of Business, Innovation and Employment

JUDGMENT OF Heath J

CONTENTS

The proceedings	[1]
Background	[8]
The Tribunal's decisions	[16]
The statutory scheme	[19]
Analysis
(a) The Council's judicial review application	[30]
(b) The Council's appeal	[36]
(c) The claim against Mr Apersk	[41]
Result	[48]

The proceedings

1 Ms Robyn Coleman and Ms Patricia Bamford each own a dwellinghouse within a unit title development in Remuera Road, Auckland. Each dwelling suffers from lack of weathertightness. In August 2008, Ms Coleman initiated a claim under the Weathertight Homes Resolution Services Act 2006 (the Act).

2 In March 2009, before Ms Coleman's claim had been resolved, Ms Bamford lodged her own claim under the Act. The claims came on for hearing together, in July 2012, before the Weathertight Homes Tribunal (the Tribunal). By consent, judgment was entered against the Auckland Council (the Council), on Ms Coleman's claim. 1 The Tribunal found in favour of Ms Bamford, on her claim against the Council. 2

3 There are two proceedings before this Court. The Council:

• (a) seeks judicial review of a decision said to have been made by the Chief Executive of (what was then known as) the Department of Building and Housing 3 that Ms Bamford's claim was “eligible”, for the purposes of the Act and

• (b) appeals against

  • (i) the entry of judgment by the Tribunal in favour of Ms Bamford on her claim against the Council 4 and

  • (ii) the Tribunal's dismissal of its claim against Mr Johannes Apers, someone whom it was alleged had prepared a pre-purchase building report for Ms Coleman. 5

4 On the judicial review application, the Council argues that the Chief Executive incorrectly determined that Ms Bamford's claim was eligible for mediation and adjudication services under the Act. The Council contends that the Chief Executive was not entitled to add Ms Bamford's unit to an existing eligible claim 6 made by Ms Coleman, the owner of a neighbouring property within the same unit title development. Because Ms Bamford brought her claim more than 10 years after her house was built, the Council says that it was statute barred. 7

5 While the Council asks the Court to grant relief by setting aside the Chief Executive's decision to join Ms Bamford to Ms Coleman's claim, Ms Bamford's and the Chief Executive's position is that no decision was, in fact made; as none was required. They contend that, because Ms Bamford was joining an existing “stand-alone complex” 8 claim, no individual decision on eligibility was required.

6 On its appeal, the Council contends that the Tribunal was wrong to hold that Ms Bamford's claim was not barred, by virtue of s 37 of the Act and s 393 of the Building Act 2004. 9 It also challenges the Tribunal's decision to dismiss its claim, under the Fair Trading Act 1986, against Mr Apers.

7 A cross-appeal by Ms Bamford challenges the reasoning by which the Tribunal dealt with the limitation point. Among other things, she contends that the

Tribunal erred in holding that her claim was brought as a “;single dwellinghouse” claim, under s 14 of the Act

Background

8 Ms Bamford is the registered proprietor of Unit 112B, Remuera Road, Auckland. Ms Coleman is the owner of Unit 112D. The two units are situated within a single unit title complex. Both suffer from weathertightness deficiencies.

9 On 25 August 2008, Mr Ben Coleman, as Ms Coleman's representative, applied for an assessor's report, in respect of her dwelling, for a “stand-alone complex claim”. 10 That was done under ss 18 and 21 of the Act. 11

10 The decision whether Ms Coleman's claim was “eligible” rested with the Chief Executive. In broad terms, the criteria for such a claim are that the claimant is a representative of an owner or owners of a dwellinghouse situated within a stand-alone complex (as defined), water has penetrated the complex (because of some aspect of design or construction (including alterations) or deficiency in materials) and the penetration has caused damage to one or more dwellinghouses (but not common areas) within the complex. 12

11 On 30 January 2009, having considered the assessor's report and decided that the claim met the “eligibility criteria”, 13 the Chief Executive determined that Ms Coleman's claim was eligible for mediation and adjudication services under the Act. 14

12 After receipt of the assessor's report, sometime in November 2008, Ms Coleman informed Ms Bamford of the defects disclosed by it. Ms Bamford engaged a company to install moisture probes in the walls of her house to determine whether

there were any problems with water penetration. Testing took place on 21 November 2008. Ms Bamford received a report in early February 2009 confirming that such problems did exist. That was after the date on which Ms Coleman's claim was found to be eligible

13 Ms Bamford contacted the Department of Building and Housing with the intention of bringing a claim. Because her house had been built more than 10 years beforehand, it appeared that she was not eligible to make an individual claim. However, officials suggested to Ms Bamford that she should try to add her claim to the one brought by Ms Coleman.

14 On or about 31 March 2009, Ms Coleman's representative notified the Chief Executive, under ss 26 and 27 of the Act, that Ms Bamford had authorised him to bring a claim on her behalf and asked that her claim be joined to that of Ms Coleman. That was done administratively. No decision was made by the Chief Executive. Ms Coleman's and Ms Bamford's claims were later heard together. The Council did not question Ms Bamford's standing to be heard.

15 A further issue arose out of Ms Coleman's claim. Mr Apers had prepared a pre-purchase report for Ms Coleman. Notwithstanding the Council's belief that Mr Apers was liable to Ms Coleman for negligence in respect of his report, Ms Coleman declined to sue him. The Council moved to join Mr Apers as a party to the adjudication proceeding. The Tribunal dismissed its application. 15 That decision was reversed, on appeal to this Court. 16 The Council persisted with its claim against Mr Apers at the substantive hearing. The Tribunal found against the Council.

The Tribunal's decisions

16 At the commencement of the substantive hearing on 19 July 2012, the Council admitted that it had been negligent in its inspection of Ms Coleman's

property. On 26 July 2012, judgment was entered by consent, in favour of Ms Coleman, in the sum of $341,739.50. 17

17 While the Council also accepted that it had been negligent in inspecting Ms Bamford's property, it continued to deny liability to her. The Council's position was that Ms Bamford's claim was barred, as a result of the combined effect of s 37 of the Act and s 393 of the Building Act 2004. 18 Those provisions have the effect of preventing any claim from being pursued where the act or omission of which complaint is made occurred more than 10 years before the claim was made. 19

18 The Tribunal found in favour of Ms Bamford. It concluded that the Council issued a code compliance certificate when it had no reasonable grounds for doing so and rejected the Council's contention that Ms Bamford's claim was statute barred. 20 The Council was ordered to pay the sum of $345,912.00 to Ms Bamford. The Tribunal also concluded that there was no legal basis for a claim by the Council against Mr Apers. 21

The statutory scheme

19 Following changes to New Zealand law effected by the Building Act 1991, a prescriptive approach to regulation of the construction industry was abandoned in favour of one that was intended to promote innovation. 22 New methods of construction of dwellings were instituted. Over time, a systemic problem emerged. It involved a failure to render buildings weathertight. Over the past decade, much litigation has resulted from damage caused to buildings as a result of significant water ingress. And it continues, seemingly unabated.

20 In order to quicken the process of resolution of claims arising out of such damage, the Weathertight Homes Resolution Services Act 2002 (the 2002 Act) was enacted. Under that statute, claims had to be brought by individual home owners. The purpose of the 2002 Act was “to provide owners of dwellinghouses that are leaky buildings with access to speedy, flexible, and cost-effective...