Charles Richard Fussell and Christine Heather Fussell v Wellington City Council

JurisdictionNew Zealand
CourtHigh Court
JudgeDobson J
Judgment Date13 February 2013
Neutral Citation[2013] NZHC 179
Docket NumberCIV-2012-485-643

[2013] NZHC 179

IN THE COURT OF APPEAL OF NEW ZEALAND

Court:

Dobson J

CIV-2012-485-643

Between
Charles Richard Fussell and Christine Heather Fussell
Plaintiffs
and
Wellington City Council
Defendant

And

Bellevue Lands Limited
First third party

And

John Everiss
Second third party
Martin John Tedder
Third third party
Stephen Dean
Fourth third party
John Everiss Contractors Limited
Fifth third party
James Hardie New Zealand Limited
Sixth third party
Branz Limited
Seventh third party

And

David Lawrence Davies and Michael Joseph Thompson
Fourth parties
Counsel:

J D Haig for fourth parties/applicant

M Freeman and S J Parry for third third party/respondent

Application for strike-out by fourth parties on the grounds the claim was time barred under the Building Act 1991 or Building Act 2004 or that the Court did not have jurisdiction because it related to an employment relationship and was within exclusive jurisdiction of Employment Court — plaintiff purchased house which developed watertight issues — claimed against respondent which joined the third third party on the basis he was responsible for the application of the exterior coating — third third party applied to join the fourth parties on the basis he was employed by them and they had a duty at common law and as an implied term of their employment agreement, to indemnify him — whether claim against fourth parties was time barred — whether High Court had jurisdiction.

The issues were: whether claim against the fourth parties was time barred and whether the HC had jurisdiction because the claim related to an employment relationship.

Held: T's claim did not depend on an act or omission relating to the building work. Therefore it was more appropriately likened with the nature of alleged contractual liabilities in Klinac and Gedye than it was with the allegations of involvement in the work complained of in Dustin and Johnson. The grounds for the Council's claim against third parties involved allegations of defective building work by each of the parties, and would be governed by the long stop provision.

Maintaining that distinction between the categories of claims brought against defendants accorded with the legislative purpose behind the introduction of the specific long stop provision for the building industry. The case against the fourth parties did not depend on their having to reconstruct the circumstances of their own involvement in the physical works, which the long stop provision was designed to address.

The issues were: whether any contract of employment between them and T extended to the provision of an indemnity that covered T's liability for alleged defects in work he carried out at the time; whether the scope of any such indemnity covered the alleged defects; and whether the indemnity endured after termination of the contractual relationship between T and the fourth parties. Although the issues related to types of work within the definition of building work, they did not require the fourth parties to reconstruct their own physical work, therefore requiring the protection of the long stop limitation provision in recognition of the difficulty of that process. The long stop provision contained in s393(2) BA 2004 did not apply to the claim as brought by T against the fourth parties.

Section 161 Employment Relations Act 2000 (“ERA”) (jurisdiction) provided that the Employment Relations Authority had exclusive jurisdiction to make determinations about employment relationship problems generally. Section 5 ERA (interpretation) defined an employment relationship problem as including a personal grievance, a dispute, and any other problem relating to or arising out of an employment relationship. The issue of whether a former employer had an on-going obligation to indemnify the former employee in respect of claims made against the employee for defects alleged in the course of work done as an aspect of the employment was not an employment relationship problem intended by s161 ERA. The issues that were likely to be contested between T and the fourth parties were clearly distanced from the types of employment relationship problem that were addressed by s161 ERA. Accordingly, the fourth parties were not entitled to have T's claim against them struck out. Nor was T's claim of a type that s161 ERA reserved for the exclusive jurisdiction of the Employment Court.

RESERVED JUDGMENT OF Dobson J

1

In these proceedings, the plaintiffs are homeowners in residential Wellington. They purchased their home in March 2010 and discovered it was not sufficiently watertight in early 2012.

2

The house had been constructed from about February 2001 and the defendant (WCC), in its capacity as territorial authority under the Local Government Act 2002, issued a post completion code compliance certificate dated 20 June 2002.

3

The plaintiffs have sued only WCC, alleging negligence in numerous aspects of its involvement from the issue of the building consent to the issue of the code compliance certificate.

4

In its turn, WCC issued third party proceedings against the developer and various parties it alleges were involved in construction of the house. Among those, Mr Tedder, the third third party, was joined on the basis of allegations that he traded as M & D Textures, and was responsible for the application of the exterior texture coating and substrate to the property.

5

The WCC's third party proceedings appear to have been commenced barely within 10 years from the date on which work on the house was completed. After the expiry of more than 10 years since completion of the physical works, Mr Tedder commenced a claim of his own by way of a fourth party notice against the fourth parties, Dave Davies and Mick Thompson, whom he sued as a partnership trading as M & D Decorators and M & D Textures. In a cause of action labelled as “common law duty to indemnify/implied term of employment agreement”, Mr Tedder alleges as follows:

9
    At all relevant times, the Third Third Party was an employee of the Fourth Parties. 10. At all time the Third Third party's involvement in the work at the property was in the course of his employment with, and/or as an agent of, the Fourth Parties. 11. The Fourth Parties have a duty, both at common law, and as an implied term of their employment agreement with the Third Third Party, to indemnify him in respect of any liability or costs incurred in, or as a result of, the reasonable performance of his employment. 12. The Third Third Party at all time acted reasonably, in accordance with the directions of the Fourth Parties, and in accordance with his duties as an employee, in carrying out work at the property. 13. If the Third Third Party is found to have any liability in respect of the claim or the defendant's claim against third parties (any liability is denied) it says that: a. Any liability was the result of the reasonable performance of his employment with the Fourth Parties b. The Fourth Third Parties [sic] have a duty to indemnify him in respect of any such liability. 14. In any case the Third Third Party says that the cost to him of defending the claims against him in this proceeding are a cost incurred as a result of the reasonable performance of his employment and the Fourth Third Parties [sic] have a duty to indemnify him in respect of his actual and reasonable legal costs in defending these claims.
6

This judgment determines the fourth parties' application to strike out Mr Tedder's statement of claim against them. The fourth parties argue that the claim against them is time barred by the provisions in the Building Act 1991 or 2004, or alternatively that if it is not time barred, then the High Court does not have jurisdiction because it is a claim that relates to, or arises from, an alleged employment relationship, thereby coming within the exclusive jurisdiction of the Employment Relations Authority and the Employment Court.

7

In the alternative, the fourth parties seek summary judgment determining that they have no liability of the type alleged against them. That alternative relies on the same grounds as the strike out.

8

An applicant seeking to strike out a cause of action must establish that it is clearly untenable. It is a jurisdiction to be exercised sparingly, and only in clear cases, but the Court should not decline the strike out merely because it involves decisions on difficult questions of law. 1

9

To succeed in a defendant's application for summary judgment, the defendant must similarly establish that the claimant's cause of action could not possibly succeed, or that there is a clear answer to the claim which cannot be contradicted. 2

10

It appeared to be common ground that in terms of the more generally applicable limitation provisions in the Limitation Acts 1950 and 2010, time would run for a claim in breach of contract from the date of the alleged breach of duty. That could only arise when the fourth parties were requested to acknowledge liability to indemnify Mr Tedder, and they refused to do so. Accordingly, no issue of the claim being out of time on that basis arose.

11

The time bar issue instead focused on the specific “long stop” limitation provision in relation to building works, which appeared in substantially similar terms in both the Building Act 1991 and the Building Act 2004. The provision in the latter act is in the following terms:

393 Limitation defences

  • (1) The Limitation Act 2010 applies to civil proceedings against any person if those proceedings arise from–

    • (a) building work associated with the design, construction, alteration, demolition, or removal of any building; or

    • (b) the performance of a function under this Act or a previous enactment relating to the construction, alteration, demolition, or removal of the building.

  • (2) However, no relief may be granted in respect of civil proceedings relating to building work if those...

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1 cases
  • Fussell v Wellington City Council HC Wn
    • New Zealand
    • High Court
    • 13 February 2013
    ...HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-2012-485-643 [2013] NZHC 179 BETWEEN CHARLES RICHARD FUSSELL AND CHRISTINE HEATHER FUSSELL Plaintiffs AND WELLINGTON CITY COUNCIL Defendant AND BELLEVUE LANDS LIMITED First third party JOHN EVERISS Second third party MARTIN JOHN TEDDER Third......

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