Brebner v Collie Hc Ak

• Jurisdiction: New Zealand
• Judge: Peters J
• Judgment Date: 08 March 2013
• Neutral Citation: [2013] NZHC 63
• Docket Number: CIV-2012-404-1447
• Court: High Court
• Date: 08 March 2013

Between

Michelle Anne Brebner And Darcy Raymond Wentzel

Appellants

and

Luonie Beth Collie

Respondent

[2013] NZHC 63

CIV-2012-404-1447

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Catchline:Appeal from a Weathertight Homes Tribunal decision which determined respondent vendor was not liable in tort or in contract — appellants purchasers commenced proceedings in Tribunal in respect of leaks in residential property purchased from vendor — purchaser claimed in tort on the basis that the vendor was liable for breach of a duty of care and in contract — purchaser also claimed a breach of warranty in agreement for sale and purchase between the parties — whether vendor had breached warranty in agreement — whether agreement required all work to be completed in conformity with BRANZ's good practice guidelines — whether vendor was liable as a developer.

Appearances:

G D R Shand and N J van der Wal for Appellants Respondent in person

JUDGMENT OF Peters J

Peters J

This judgment was delivered by Justice Peters on 8 March 2013 at 3 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: ……………………………..

Introduction

1 The Appellants (“purchasers”) appeal from a decision of the Weathertight Homes Tribunal (“Tribunal”), sitting at Auckland. 1

2 The purchasers commenced proceedings in the Tribunal in respect of leaks in a residential property they purchased from the Respondent (“vendor”) in 2007. They sought relief in tort on the basis that the vendor was liable to them for breach of a duty of care and in contract for breach of warranty in the agreement for sale and purchase between the parties (“agreement”). The claim in contract was based on clause 6.2(5)(b) of the agreement, being clause 6.2(5)(b) of the eighth edition of the Auckland District Law Society form of agreement for sale and purchase.

3 The Tribunal determined:

• (a) that the house was subject to moisture ingress due to deficiencies in the installation of joinery; a flat topped chimney; and insufficient ground clearances on some elevations; 2

• (b) that further damage was likely as a result of other defects; 3

• (c) that remediation of the house would cost $350,384 (including GST) and that the vendors had suffered consequential losses of $37,593.48;

• (d) that the vendor was not liable in tort as she did not owe a duty of care to the purchasers; and

• (e) that the vendor was not liable in contract as she had not breached clause 6.2(5)(b) of the agreement.

4 On appeal the purchasers contended that moisture ingress has been caused by a greater number of defects than the Tribunal determined, and that the Tribunal erred in the determinations referred to in (d) and (e). The purchasers sought an award of the sums referred to in (c) and an award of $50,000 general damages, being $25,000 for each of them. Before me the vendor took issue with the cost of repairs but she did not file a notice of cross appeal, and for that reason I do not propose to consider that issue.

Jurisdiction/approach on appeal

5 The purchasers have a general right of appeal from the determination, as follows: 4

93 Right of appeal

A party to a claim that has been determined by the tribunal may appeal on a question of law or fact that arises from the determination.

6 The approach of the Court on appeal is that set out in Austin Nicholls & Co Inc v Stichting Lodestar. 5

7 The Court's powers on appeal are as follows: 6

95 Determination of appeal

• (1) In its determination of any appeal, the court may do any 1 or more of the following things:

  • (a) confirm, modify, or reverse the determination or any part of it:

  • (b) exercise any of the powers that could have been exercised by the tribunal in relation to the claim to which the appeal relates.

…

8 There is also power to refer the matter back to the Tribunal for further consideration. 7

9 No appeal lies from a decision of the High Court on appeal from the Tribunal. 8

Facts

10 I have taken the facts from the determination. Those which are relevant to the issues that arise on appeal are as follows.

11 In 1999 the vendor bought a section in Orakei, Auckland. The vendor subdivided the section into two lots, selling one and retaining the other.

12 In 2002 the vendor entered a “turn key construction” contract with a builder trading as “Euro Vision Homes”, Mr Marston (now deceased), to build a house on the site that she had retained. The essence of a turn key construction contract is that the contractor will carry out works for a fixed price, the intention being that the other party will be required to do little more than “turn a key” to the completed building.

13 In April 2002 the builder lodged an application for building consent to construct the house. What is now Auckland Council (“Council”) granted building consent on 7 May 2002 (“consent”). Matters relating to the consent are important to the appeal but for now it is enough to say that consent was sought and granted for the construction of a monolithically clad house, without a ventilated cavity between the exterior cladding and internal timber framing.

14 The house was built in 2002, during which time the Council carried out several inspections. The works passed each such inspection.

15 The relationship between the vendor and Mr Marston broke down and Mr Marston ceased work on the site in late 2002 or early 2003.

16 The Council's first “final” inspection took place on 17 January 2003. The Council did not identify any weathertightness issues at this inspection but advised that it required six relatively minor matters to be attended to before it would issue a Code Compliance Certificate (“CCC”). These matters included the installation of a top rail to balustrades on a deck, that rail itself becoming a possible cause of moisture ingress.

17 On 16 January 2004 the Council carried out a second “final” inspection. In a subsequent letter to the vendor, the Council confirmed that the items that it had identified as requiring attention after the first final inspection had been completed. However, the Council said its inspector had noted the lack of a cavity between cladding and framing and it advised that a team of experts would carry out a further inspection of the cladding.

18 Following this inspection, the Council issued a “Notice to Rectify” dated 19 July 2004, 9 requiring the vendor to rectify some of the works.

19 The vendor disputed the notice and applied for determination of the dispute. 10 The Department of Building and Housing (“DBH”) issued its determination in May 2005 which was to the effect that various matters required attention and that the cladding system as installed did not comply with the building code. The DBH stated that these were deficiencies in respect of ground clearances, control joints and flashings, inadequate balcony outlets and overflows and failed balcony deck membranes.

20 The determination said that the rectification of a list of items, to the approval of the Council, would result in the house complying with the building code. The determination stated that a new Notice to Fix should be issued.

21 The vendor engaged another builder, Mr John Andrews, to carry out the required work.

22 On 30 August 2006 the DBH issued a second determination regarding the Council's refusal to issue a CCC. The purpose of this determination was to assess whether, in light of the work that had been carried out since the first determination, the house complied with clauses B2 (durability) and E2 (external moisture) of the building code.

23 The determination stated that the cladding complied with clause E2 but not with B2. In particular the determination held that inter-cladding junctions were adequately waterproofed and that the provision of control joints in the cladding was not necessary. The DBH determined that rectification of three particular items to the satisfaction of the Council would render the building weathertight and in compliance with clause B2.

24 In February 2007 the Council determined that the three items identified in the second determination had been completed to its satisfaction. The Council issued a CCC for the house on 28 February 2007. Amongst other things the CCC said that the Council was satisfied on reasonable grounds that the building work complied with the consent.

25 In or about June 2007 the vendor put the house on the market for sale. That led to the agreement and subsequent settlement of the sale and purchase. The purchasers had at least some knowledge of the DBH determinations referred to above before the agreement was executed.

26 The agreement was conditional on various matters, including (in summary) the purchasers' obtaining and approving a builder's report. The purchasers obtained a builder's report from Inspect First Limited dated 28 July 2007 (“builder's report”), which report identified matters of concern as to weathertightness. That led to correspondence between the parties' solicitors. The purchasers subsequently advised that the agreement was unconditional and settlement took place thereafter. The extent and effect of the purchasers' knowledge, both before and after execution of the agreement, was a significant issue in the Tribunal's determination regarding the vendor's contractual liability.

27 The purchasers took possession on 28 September 2007. Leaks developed and in June 2010 the purchasers applied to the Weathertight Homes Resolution Service for an Assessor's Report. This report concluded that there was widespread damage and systemic deficiencies on all elevations and that a full re-clad of the property was required.

28 The purchasers commenced proceedings against the vendor in December 2010. 11 The Tribunal heard evidence from the parties, the builder that the vendor engaged after the first DBH determination, the real estate agent who acted for the vendor on the sale, the two DBH building inspectors who...