Auckland Council v Body Corporate 202692
[2019] NZCA 635
•11 December 2019
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA573/2019 [2019] NZCA 635 |
| BETWEEN | AUCKLAND COUNCIL |
| AND | BODY CORPORATE 202692 |
| CA575/2019 | ||
| BETWEEN | OMAHA INVESTMENTS NO. 1 LIMITED | |
| AND | AUCKLAND COUNCIL | |
| Court: | Cooper and Collins JJ |
Counsel: | T C Weston QC and C M Fairnie for Auckland Council |
Judgment: | 11 December 2019 at 11.00 am |
JUDGMENT OF THE COURT
AThe application for leave to appeal is declined.
BAuckland Council, Omaha Investments No. 1 Ltd and Mr Harris are to pay one set of costs to the Body Corporate 202692 and Jamac Holdings Ltd for a standard application on a band A basis with usual disbursements.
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REASONS OF THE COURT
(Given by Collins J)
Introduction
The Auckland Council (the Council), Omaha Investments No. 1 Ltd (Omaha) and Mr Harris, seek leave under s 56(5) of the Senior Courts Act 2016 to pursue an appeal from a decision of Associate Judge Bell delivered in the High Court at Auckland on 27 September 2019.[1] For convenience, and consistent with the approach taken by counsel, we refer to Omaha and Mr Harris as “the engineer”.
[1]Body Corporate 202692 v Auckland Council [2019] NZHC 1976 [High Court judgment].
In his judgment the Associate Judge dismissed applications by the Council and the engineer to strike out certain claims against them in a building defects proceeding brought by the Body Corporate 202692 (Body Corporate) and other plaintiffs.
On 21 October 2019, the Associate Judge dismissed an application for leave to appeal his judgment.[2]
[2]Body Corporate 202692 v Auckland Council [2019] NZHC 2696 [Leave judgment].
The criteria for granting leave under s 56(5) of the Senior Courts Act have previously been addressed by this Court. In Moir v IHC New Zealand Inc it was said that leave should not be granted under the subsection:[3]
unless the proposed appeal raises some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the appeal. Moreover, leave should not be granted unless the proposed appeal has some reasonable prospect of success.
Background
[3]Moir v IHC New Zealand Inc [2018] NZCA 130, (2018) 24 PRNZ 45 at [6] (footnote omitted).
In November 1999, the Council issued a building consent for the development of an apartment complex in Ponsonby (apartment building). In early 2002, the engineer conducted a review to ensure the apartment building had been built in accordance with the building consent. On being so satisfied, the engineer issued a “Producer Statement”. The Council then issued a code compliance certificate on 12 April 2002.
By 2009, defects had been discovered in the apartment building. On 9 June 2011 the Body Corporate applied for a full assessor’s report under s 32 of the Weathertight Homes Resolution Services Act 2006. In a report issued in May 2013, the assessor concluded the Body Corporate had an eligible claim under the Weathertight Homes Resolution Services Act.
In addition to weathertight defects, the Body Corporate found there were structural and fire safety deficiencies in the apartment building. The Council required these defects to be fixed as a condition to issuing a building consent to address the weathertightness defects. Repairs were commenced in November 2016 and have now been completed.
On 11 September 2017, the Body Corporate commenced proceedings seeking the estimated repair costs in the sum of $4,881,538.40 (plus other damages) in relation to the weathertightness issues associated with the apartment building.
On 29 March 2019 the Body Corporate filed an amended statement of claim seeking an increased amount of repair costs, $9,001,111.79 (plus other damages) to reflect the additional cost in respect of the structural and fire safety defects.
The Council and engineer applied to strike out the claims relating to the structural and fire safety defects on the basis that those claims were barred by the 10‑year limitation period prescribed in s 393 of the Building Act 2004. They contend that as the structural and fire safety defects are not weathertightness defects, the Body Corporate cannot benefit from s 37 of the Weathertight Homes Resolution Services Act which effectively suspends the limitation periods in the Building Act.
High Court decision
When dismissing the strike-out application, the Associate Judge recognised that the interrelationship between s 393 of the Building Act and s 37 of the Weathertight Homes Resolution Services Act involves an important question of law.
The Associate Judge reasoned that s 37 of the Weathertight Homes Resolution Services Act applied in the circumstances of this case and that accordingly, the Body Corporate was not prevented from pursuing its claim for damages for the structural and fire safety defects.[4]
Analysis
[4]High Court judgment, above n 1, at [50].
We accept that the proposed appeal raises important issues, which require an analysis of the extent, if any, to which s 37 of the Weathertight Homes Resolution Services Act impacts on the limitation provisions of the Building Act, and the extent to which the Supreme Court’s judgment in Lee v Whangarei District Council applies to the circumstances of this case.[5]
[5]Lee v Whangarei District Council [2016] NZSC 173, [2017] 1 NZLR 401.
We are, however, not satisfied that leave should be granted to appeal the Associate Judge’s judgment before the trial. Our reasons for reaching this conclusion are:
(a)There are important unresolved factual issues about the extent to which the structural and fire safety defects are interconnected to the weathertightness issues. The Body Corporate has submitted before us that the repairs to the structural and fire safety defects were necessary in order to remedy the weathertightness defects in the apartment building. Accordingly, the cost of the structural and fire safety repairs forms part of the cost of repairing the weathertightness defects. This aspect of the Body Corporate’s claim would require careful assessment of the evidence that is adduced at trial.
(b)While the factual and legal issues associated with the structure and fire safety defects will add to the time and cost of the trial, we do not think those concerns outweigh the prejudice that will be suffered by the Body Corporate if the hearing of the trial is delayed by an appeal. The current fixture date for the trial is May 2020 and, if rescheduled, will not be heard until 2022. If leave is granted, this is likely to cause a delay of up to two years to the hearing in the High Court.
(c)Ultimately, the Council and engineer can advance the arguments that they wish to pursue at the trial and in any appeal that may be considered necessary if they are held liable for the structural and fire safety defects.
We are not satisfied that the Council and the engineer have satisfied the criteria for leave to be granted to bring an appeal under s 56(5) of the Senior Courts Act. In particular, we do not believe that the issues raised by the proposed appeal are suitable for determination in a pretrial appeal or justify the cost and inconvenience of a substantial delay to the hearing of the High Court trial.
Result
The application for leave to appeal is declined.
Auckland Council, Omaha Investments No. 1 Ltd and Mr Harris are to pay one set of costs to the Body Corporate 202692 and Jamac Holdings Ltd for a standard application on a band A basis with usual disbursements.
Solicitors:
MinterEllisonRuddWatts, Auckland for Auckland Council
McElroys, Auckland for Omaha Investments No 1. Limited and Maurice John Harris
Rainey Law, Auckland for Body Corporate 202692 and Jamac Holdings Limited and others
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