Joong Song Kwak and Hye Sook Kwak v Hyun Su Park (also known as Mario Park and Duk Sun Lim

JurisdictionNew Zealand
CourtHigh Court
JudgeFOGARTY J
Judgment Date25 February 2014
Neutral Citation[2014] NZHC 275
Docket NumberCIV 2013-404-4674

[2014] NZHC 275

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-4674

Between
Joong Song Kwak and Hye Sook Kwak
Appellants
and
Hyun Su Park (also known as Mario Park and Duk Sun Lim
Respondents
Appearances:

A J Steele and J Scott for appellants

J Holland for respondents

Appeal from a Weathertight Homes Tribunal decision removing the first respondents from a proceeding — appellants alleged that respondents built a home as residential home developers — claimed respondents owed a non-delegable duty of care in relation to the alleged negligent inspection and certification done a private certifier, as there was no real distinction between the developer engaging a contractor from engaging a building certifier — issue had not previously been discussed by courts — whether the respondents had a non-delegable duty of care in respect to the work of a private building certifier.

The issue was whether the respondents had a non-delegable duty of care in respect to the work of a private building certifier.

Held: Non-delegable duties of care had a consequence that the normal rule that a duty could be discharged by retaining a competent independent contractor, was not available. While the principle of a property developer owing a non-delegable duty of care was now well settled in New Zealand, the issue raised in this case had not been previously considered by the Courts.

The Court of Appeal (CA) had recently decided that there was no right of appeal from judgments of the High Court (HC) on appeal from the Tribunal. The consequence of that decision was that if the HC decided this point, there would be no right of appeal available to either of the parties in this case. The finding of the HC would then bind the Tribunal.

Another problem was that the identification of a non-delegable duty of care was an exceptional event. It was entirely appropriate that any authoritative delineation of the scope of a non-delegable duty of care should be decided by the CA, if not the Supreme Court. Transferring this matter to the CA would enable that Court to consider the ambit of the decision in Mt Albert Borough Council v Johnson, which established the non-delegable duty of care.

The case would be transferred to the CA under s64(1) Judicature Act 1908 (Transfer of civil proceedings from High Court to Court of Appeal in exceptional circumstances).

In accordance with r 11.5 I direct that the Registrar endorse this judgment with the delivery time of 3.30 pm on Tuesday 25 February 2013

JUDGMENT OF FOGARTY J
1

This is an appeal from the Weathertight Homes Tribunal decision, removing the first respondents, Mr Park and Ms Lim, from proceeding TRI 2013-100-38.

2

The appellants are the owners of a leaky home in Auckland. They contend that the respondents built the home as residential home developers. Ms McLaughlan was engaged under private contract by the respondents to act as a building certifier. She and her agents carried out at least 15 inspections on the home.

3

The respondents sold the home to another person. Ms McLaughlan issued a code of compliance certificate, and the appellants purchased the home from the purchaser who bought from the respondents.

4

The appellants, Mr and Mrs Kwak, continue their claim against the respondents as developers, based on them having a non-delegable duty of care in relation to the alleged negligent inspection and certification done by Ms McLaughlan as a private certifier. It is the alleged non-delegable duty of care in respect to the work of a private building certifier which is at the nub of this appeal.

5

The respondents applied to be removed as respondents to this claim to the Weathertight Homes Tribunal. They denied that they had a non-delegable duty of care. The appellants' claims before the Tribunal in these proceedings, submitted that Mr Park and Ms Lim were liable as developers arising from allegedly defective building inspections carried out by a private certifier, Ms McLaughlan.

6

The Tribunal held that the primary issue in this case is whether there is a tenable claim that the developer's duty of care to future owners encompasses liability for allegedly defective inspection work carried out by a private certifier. It records Mr Steele placing considerable reliance on the fact that the private certifier is a contractor engaged by the developer and arguing there is no distinction in this regard between acts of a builder in construction and acts of a private certifier in inspecting the building and work, and that the developer owes a non-delegable duty of care in respect of both.

7

The Tribunal did not accept that submission. In [11] of its decision it said:

The difficulty with this proposition is that the ambit of the developer's duty is well defined in case law and relates to construction, not inspection and certification, which are regulatory functions.

8

Developing that reasoning, the Tribunal then came to the conclusion at [15]:

Given the absence of case law, establishing that a developer is liable for inspection as opposed to building work, I consider that the claim against the developers is not tenable. There is no logical basis for extending of a developer's duty to include regulatory functions.

9

As a result of that...

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