Auckland Council v Chief Executive of the Ministry of Business, Innovation and Employment
[2013] NZHC 912
•30 April 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2012-404-5559 [2013] NZHC 912
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
CIV 2012-404-6095
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
Hearing: 26 February 2013
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: 30 April 2013
JUDGMENT OF HEATH J
This judgment was delivered by me on 30 April 2013 at 4.00pm pursuant to Rule 11.5 of the High
Court Rules
Registrar/Deputy Registrar
AUCKLAND COUNCIL V THE CHIEF EXECUTIVE OF THE MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT HC AK CIV 2012-404-5559 [30 April 2013]
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 Apers [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 Housing3 that Ms Bamford’s claim was “eligible”, for the purposes of the Act and
(b) appeals against
1 See para [16] below.
2 See para [18] below.
3 Now the Ministry of Business, Innovation and Employment.
(i) the entry of judgment by the Tribunal in favour of Ms
Bamford on her claim against the Council4 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
claim6 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
4 Coleman and Bamford v Auckland Council [2012] NZWHT Auckland 41 at paras [12] (limitation) and [24] (liability) (Ms S Pezaro).
5 Ibid, at paras [25]–[31].
6 The term “eligible claim” is defined by s 8 of the Act.
7 Weathertight Homes Resolution Services Act 2006, s 37, and Building Act 2004, s 393. Both provisions are set out at para [37] below.
8 The term “stand-alone complex” is defined in s 8 of the Act: see para [23](e) below.
9 Those sections are set out at para [37] below.
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
10 The term “stand-alone complex” is defined by s 8 of the Weathertight Homes Resolution
Services Act 2006; set out at para [23](e) below.
11 Set out at para [24] below.
12 Weathertight Homes Resolution Services Act 2006, s 18. The terms of s 18 are set out in full at para [24] below. The definition of “stand-alone complex” is set out at para [23](e) below.
13 The term “eligibility criteria” is defined in s 8 of the Act.
14 That decision was made under s 48(1) of the Weathertight Homes Resolution Services Act 2006 and was not challenged.
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
15 Coleman and Bamford v Auckland Council (Weathertight Homes Tribunal, 28 March 2011
Procedural Order 2 at para [14].
16 Auckland Council v Coleman [2012] NZHC 175, at para [30]–[34] (Lang J).
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.
17 Coleman and Bamford v Auckland Council [2012] NZWHT Auckland 32 at para [2].
18 Set out at para [25] below.
19 For the purposes of the Weathertight Homes Resolution Services Act 2006, a claim is brought by
applying for an assessor’s report in respect of it: s 9.
20 Coleman and Bamford v Auckland Council [2012] NZWHT Auckland 41 at paras [12] (limitation) and [24] (liability).
21 Ibid, at para [31].
22 The background to the Building Act 1991 is discussed extensively in Body Corporate 188529 v
North Shore City Council [2008] 3 NZLR 479 (HC) at paras [151]–[164].
[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 procedures for
assessment and resolution of claims relating to those buildings”.23
[21] After the 2002 Act had been operating for some time, Parliament considered whether any changes were required for it to meet the stated objectives. Some were to be made by way of amendment to the 2002 Act. However, they were regarded by a Select Committee as “so substantial” that “it would be better to replace the principal Act entirely” to avoid “loss of coherence”.24 Parliament had been reconsidering questions relating to limitation periods, notification of leaky home issues on Land Information Memoranda, the introduction of class actions for multi- unit claims and legal costs.25
[22] The Act repealed the 2002 Act.26 In its original form, the Act articulated the same purposes as the 2002 Act.27 The Act offered more flexibility in relation to the way in which claims could be commenced. That degree of flexibility reflected views expressed by the Social Services Committee that considered submissions on the Bill. The Select Committee said:28
Multi-unit claims
Although we are not making substantial recommendations for amendments to the bill as introduced, we believe that the provisions in respect of multi- unit claims are significant. Under the existing Act there are barriers to owners of units within multi-unit apartment complexes registering claims and resolving their disputes. As a result, at present the [Weathertight Homes Resolution Services] does not offer these homeowners a more accessible, faster, and less costly way to resolve disputes than is available to them through the court system. This is a serious concern because around 70
23 Weathertight Homes Resolution Services Act 2002, s 3. Some aspects of the 2002 Act are discussed in Body Corporate 188529 v North Shore City Council [2008] 3 NZLR 479 at paras [194]–[197].
24 Weathertight Homes Resolution Services Amendment Bill, as reported from the Social Services
Committee, at p 1.
25 Ibid, at p 2.
26 Weathertight Homes Resolution Services Act 2006, s 126.
27 Ibid, s 3(a).
28 Ibid, at p 4.
percent of all claims that have been registered to date are from owners of such units.
The bill allows a class action to be taken for multi-unit buildings and makes the [Weathertight Homes Resolution Services] more accessible to this type of claim. The main purposes of the multi-unit amendments are to ensure that as far as possible a “whole of complex” approach can be taken to these leaky buildings, and to enable bodies corporate and other groups to bring claims to the [Weathertight Homes Resolution Services]. With a few exceptions, single residential unit owners will not be able to bring separate claims. Instead, a representative will bring a claim for all weathertightness damage to common areas and residential units in a multi-unit complex.
The representative will be able to bring a claim only where the owners in the complex agree to it. For those decisions, if a representative’s body corporate rules, constitution, or lease require more than 80 percent of owners to agree, the bill allows that no more than 80 percent of owners entitled to vote will need to agree. In bringing a claim, the representative will need to provide a statutory declaration that at least 75 percent of residential unit owners in the complex have authorised the representative to bring and resolve claims in respect of their dwellinghouses. Both provisions are a balance between a “whole of complex” approach and allowing some leeway for the possibility that some owners may “hold out”, and not agree to a claim being brought.
(emphasis added)
[23] The five circumstances in which claims may now be made are:
(a) Section 14 deals with claims made in respect of a single dwellinghouse which is situated on land comprised and described in an individual title.
(b)Section 15 permits a claim in respect of a dwellinghouse in a “multi- unit complex” that is not a “stand-alone complex”.29 While the drafting is inelegant, it is clear that a “stand-alone complex” is intended to be a sub-set of a “multi-unit complex”. Section 8 states:
multi-unit complex means a complex (which may, but need not, be a stand-alone complex) that—
(a) contains 2 or more dwellinghouses; and
(b) contains 1 or more, or no, common areas; and
(c) is a company-share complex, cross-lease complex, or unit title complex
29 A “stand-alone complex” is defined by s 8 of the Weathertight Homes Resolution Services Act
2006 and is set out at para [23](e) below.
(c) Section 16 deals with representative claims made on behalf of owners of dwellinghouses in a multi-unit complex.
(d)Section 17 authorises representative claims in respect of common areas.
(e) Section 18 permits claims in respect of one or more dwellinghouses in a “stand-alone complex”. The term “stand-alone complex” is defined by s 8:
stand-alone complex means a multi-unit complex—
(a) each, or 1 or more, of the dwellinghouses contained in which is either—
(i) a building containing no common areas; or
(ii) part of a building consisting entirely of dwellinghouses and containing no common areas; and therefore
(b) which may, but need not, contain, in addition to the
1 or more dwellinghouses to which paragraph (a)
applies, either or both of the following:
(i) 1 or more buildings consisting entirely of common areas:
(ii) 1 or more buildings consisting of 1 or more dwellinghouses and 1 or more common areas
[24] Ms Coleman’s application of 25 August 2008 specifically stated that it was brought in respect of a “stand-alone” complex. That brought ss 18 and 21 of the Act into play. They provide:
18 Claim in respect of 1 or more dwellinghouses in stand-alone complex
The criteria are that the claimant is the representative of the owner or owners of the dwellinghouse or dwellinghouses (being a dwellinghouse or dwellinghouses in a stand-alone complex) to which the claim relates; and—
(a) the dwellinghouse, or each of the dwellinghouses, is either—
(i) a building containing no common areas; or
(ii) part of a building consisting entirely of dwellinghouses and containing no common areas; and
(b) the dwellinghouse, or each of the dwellinghouses, is either—
(i) a dwellinghouse that is a separate building; or
(ii) a dwellinghouse that is part of a building consisting entirely of dwellinghouses all of whose owners are, or are some of, the owners bringing the claim; and
(c) the dwellinghouse or dwellinghouses were built (or alterations giving rise to the claim were made to it or them) before 1 January 2012 and within the period of 10 years immediately before the day on which the claim is brought; and
(d) water has penetrated the complex because of some aspect of its design, construction, or alteration, or of materials used in its construction or alteration; and
(e) the penetration of water—
(i) has caused damage to the dwellinghouse or dwellinghouses; but
(ii) has not caused damage to any common area in the complex.
21 Representative claims in respect of dwellinghouses in stand-alone complexes
(1) The representative of some or all of the owners of 1 or more dwellinghouses in a stand-alone complex may bring a claim under this Act in respect of those dwellinghouses if—
(a) each of those dwellinghouses is either—
(i) a building containing no common areas; or
(ii) part of a building consisting entirely of dwellinghouses and containing no common areas; and
(b) each of those dwellinghouses is either—
(i) a dwellinghouse that is a separate building; or
(ii) a dwellinghouse that is part of a building consisting entirely of dwellinghouses all of whose owners are, or are some of, the owners bringing the claim; and
(c) each owner has given the representative a written notice—
(i) authorising the representative to bring and resolve a claim (unless the person concerned is taken to be the representative under subsection (2), in which case that kind of authorisation is not required); and
(ii) authorising invasive testing by an assessor relating to the owner's dwellinghouse.
(2) A person is taken to be the representative of the owner of 1 or more dwellinghouses in a stand-alone complex for the purpose of a claim under this section (without any written authorisation under subsection (1)(c)(i) or section 27(1)(b)(i) or (2)(b)(i)) if—
(a) each dwellinghouse in respect of which the claim is made is owned by that owner; and
(b) the person is that owner or, if that owner is a body corporate, a member or officer of that body corporate.
(3) This Act, with all necessary modifications, applies to a claim under subsection (1) in respect of 2 or more dwellinghouses as if those dwellinghouses were a single dwellinghouse owned by the owner or owners concerned.
[25] Section 21 of the Act did not operate to bring Ms Bamford’s claim automatically within the scope of the single “stand-alone complex” claim made by Ms Coleman. Before Ms Bamford’s claim could be considered as part of the one brought by Ms Coleman, it was necessary to comply with the procedural mechanisms set out in ss 26 and 27 of the Act:
26 Adding further owners to representative claims in respect of multi- unit complexes or stand-alone complexes
(1) Before adjudication of a claim under section 19 or 21 has been initiated, the representative can, in the way stated in section 27(1), add the owner of a dwellinghouse in the multi-unit complex or stand-alone complex concerned to the claim.
(2) After adjudication of a claim under section 19 or 21 has been initiated, a further owner of a dwellinghouse in the multi-unit complex or stand-alone complex concerned can, in the way stated in section 27(2), be added to the claim by the representative, but only with the tribunal's consent.
(3) The owner of a dwellinghouse in the stand-alone complex concerned must not be added under subsection (1) or (2) to a claim under section 21 unless section 21(1)(b)(i) or (ii) applies to the dwellinghouse.
(4) If an assessor's report relating to the multi-unit complex or stand- alone complex concerned has already been completed when the owner is added then, having regard to the claim concerned and any evidence already obtained, the chief executive may do, or the tribunal may request the chief executive to do, 1 of the following:
(a) have a further assessment done, and provide an addendum to the original assessor's report; or
(b) proceed without having a further assessment done.
27 How addition under section 26(1) or (2) effected
(1) To add the owner of a dwellinghouse in a multi-unit complex or stand-alone complex to a claim in respect of the complex under section
26(1), the representative must give the chief executive—
(a) a written notice that the owner wishes the claim to extend to his or her dwellinghouse; and
(b) a copy of a written notice from the owner—
(i) authorising the representative to take action (unless the person concerned is taken to be the representative under section 21(2), in which case that kind of authorisation is not required); and
(ii) authorising invasive testing by an assessor relating to the owner's dwellinghouse.
(2) To add the owner of a dwellinghouse in a multi-unit complex or stand-alone complex to a claim in respect of the complex under section
26(2), the representative must—
(a) apply to the tribunal, in writing, and in a form (if any) approved for the purpose by the chair, for its consent under section 26(2); and
(b) give the tribunal a copy of a written notice from the owner—
(i) authorising the representative to take action (unless the person concerned is taken to be the representative under section 21(2), in which case that kind of authorisation is not required); and
(ii) authorising invasive testing by an assessor relating to the owner's dwellinghouse; and
(c) obtain the tribunal's consent under section 26(2). (emphasis added)
[26] Section 27(1) makes it clear that the same representative who commenced the original claim must make the secondary claim on behalf of the new owner. That ensures that one person has control over the single “stand-alone complex” claim. On
31 March 2009, Ms Coleman’s representative made an application on behalf of Ms Bamford to have her unit brought under the umbrella of Ms Coleman’s s 18 claim. Written notice from Ms Bamford authorising him to take that action was attached.
Subsequently, officials processed that application and the two claims were joined together through operation of ss 26(1) and 27(1) of the Act.
Analysis
(a) The Council’s judicial review application
[27] Mr Rainey, for Ms Bamford, submitted that no decision of the Chief Executive was required. He based that submission on the ability of an owner of a unit in a “stand-alone complex” to join in a claim made by another owner in the same complex. He submitted that once Ms Coleman’s claim had been determined as “eligible” under s 48 of the Act, no further action was required from the Chief Executive.
[28] Mr Barr, for the Council, contended that a fresh decision from the Chief Executive was necessary. Otherwise, he argued, claims that were barred through the operation of s 37 of the Act could be brought to hearing, notwithstanding the limitation provision. That, he submitted, would be contrary to the policy underpinning the statutory scheme and, in particular, the insertion of a long-stop
limitation period of 10 years from the date on which work was done.30
[29] Ms Chan, for the Chief Executive, supported the position taken by Mr Rainey. She submitted that Ms Bamford’s ability to join the eligible “stand-alone complex” claim brought by Ms Coleman was permitted by ss 26 and 27 of the Act.31
Therefore, there was no statutory power of decision exercised by the Chief
Executive. Ms Bamford was entitled to bring her claim, by operation of law.
[30] The Council’s claim for judicial review turns (in part) on whether the Chief Executive made any reviewable decision before Ms Bamford’s joined claim proceeded to hearing, in conjunction with Ms Coleman’s. No decision was, in fact,
made by the Chief Executive. The joinder of Ms Bamford’s claim to Ms Coleman’s
30 See ss 37(1) of the Act and 393(1) of the Building Act 2004.
31 Set out at para [25] above.
was effected administratively, under the process envisaged by ss 26(1) and 27(1). In those circumstances, I hold that no statutory power of decision was exercised.
[31] In my view, the approach taken by both Mr Rainey and Ms Chan prevails because:
(a) The clear words of s 18 allow the owner of a dwellinghouse in a stand-alone complex to bring a claim in the circumstances set out in that section. That is precisely what Ms Coleman did. In law, Ms Coleman commenced a claim that related to the whole complex in which her dwelling was situated.
(b)Section 21 permits a representative of one or more such owners to bring a claim in respect of other dwellinghouses within that type of complex.32 While Ms Coleman did not refer to any other units in her application form, her reliance on s 18 of the Act preserved the right of other owners of units within the “stand-alone complex” to join later, if they wished to do so. Joinder was effected through Ms Coleman’s
authorised representative, who was acting also on Ms Bamford’s behalf.
(c) Section 26(1) of the Act refers to claims under ss 19 or 21 of the Act.
Section 21 is directly referable to claims made in respect of dwellinghouses in “stand-alone complexes”.33 Section 27(1) of the Act provides the mechanism by which an owner of a dwellinghouse in either “a multi-unit complex or [a] stand-alone complex” may be added. That is by “written notice” to the Chief Executive being given in accordance with s 27(1).34 Ms Bamford, through Ms Coleman’s authorised representative, followed that procedure.
[32] It is clear from the provisions to which I have referred that the Chief
Executive is not required to make any eligibility decision under s 48 of the Act
32 Sections 18 and 21 are set out in para [24] above.
33 Section 21 is set out at para [24] above.
34 Section 27 is set out at para [25] above.
before a claim can be added. All that was needed was an initial eligibility decision on Ms Coleman’s application. That was made. Compliance having been made with all conditions precedent to addition of Ms Bamford’s claim, she was entitled to proceed with it, subject to any substantive defences being raised.
[33] The answer to Mr Barr’s policy point,35 in relation to the limitation provisions, is that Parliament decided that a claim in respect of a single dwellinghouse within a stand-alone complex would provide the foundation on which other owners of units within the complex could join the claim. The underlying assumption must be that once one dwelling in a complex has been shown to have qualified as a claim, there is reason to believe that other dwellinghouses may be similarly affected by water penetration damage.
[34] That is a logical and practical approach to take in regard to such complexes. The fact that the limitation period begins to run from the time at which the first eligible claim is made is consistent with the policy of the Act: to “provide owners of dwellinghouses that are leaky buildings with access to speedy, flexible, and cost effective procedures for the assessment and resolution of claims relating to those buildings”.36 Nothing in the provisions entitling addition of claims relating to a single stand-alone complex clashes with that overriding objection. It is also consistent with the Select Committee’s report.37
[35] The Council’s application to review a decision of the Chief Executive fails. There is no decision to review and, in any event, no limitation issue arises.
(b) The Council’s appeal
[36] The Council challenges the Tribunal’s decision to allow Ms Bamford’s claim to proceed notwithstanding its limitation argument. That is done by way of appeal against the Tribunal’s decision. In my view, the Tribunal was right to hold that the claim was not statute barred but not, with respect, for the reasons that it gave. The
way in which I intend to deal with this issue avoids the need to consider Ms
35 See para [28] above.
36 Weathertight Homes Resolution Services Act 2006, s 3(a).
37 See also para [22] above, in relation to the Select Committee’s approach to such claims.
Bamford’s cross-appeal, or to determine whether Ms Bamford’s claim based on negligence arising out of the issue of the code compliance certificate was maintainable.
[37] The limitation provisions are contained in s 37 of the Act and s 393 of the
Building Act 2004:38
37 Application of Limitation Act 2010 to applications for assessor's report, etc
(1) For the purposes of the Limitation Act 2010 (and any other enactment that imposes a limitation period), the making of an application under section 32(1) has effect as if it were the filing of proceedings in a court.
(2) This section is subject to sections 54, 133, 141, 146, 152, and 155.
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 proceedings are brought against a person after 10 years or more from the date of the act or omission on which the proceedings are based.
(3) For the purposes of subsection (2), the date of the act or omission is,—
(a) in the case of civil proceedings that are brought against a territorial authority, a building consent authority, a regional authority, or the chief executive in relation to the issue of a building consent or a code compliance certificate under Part
2 or a determination under Part 3, the date of issue of the consent, certificate, or determination, as the case may be; and
38 See also, in the context of the predecessor to s 393, s 91 of the Building Act 1991, Gedye v Smith
[2010] 3 NZLR 271 (CA) at paras [39]–[41]. The reference, in s 37(1) to a claim brought under s 32(1) of the Act is the initial application by a claimant for an assessor’s report.
(b) in the case of civil proceedings that are brought against a person in relation to the issue of an energy work certificate, the date of the issue of the certificate.
(emphasis added)
[38] In dealing with the limitation point, the Tribunal ruled, in its final determination of 11 September 2012:39
[5] A claim is defined in the Weathertight Homes Resolution Services Act 2006 (the Act) as a claim by the owner of a dwellinghouse that the owner believes suffers damage as a result of water ingress. A
‘dwellinghouse’ is defined as a building, apartment flat, or unit within a
building, that is intended to be used principally as a private dwelling.
[6] The claimants’ units are dwellings in a stand-alone complex. Section 21(1) provides that a representative of owners in a stand-alone complex may bring a claim on behalf of other owners. However Ms Coleman made her claim under s 14 as a single dwellinghouse claim. When Ms Bamford applied to join this claim, [Department of Building and Housing] issued the [Weathertight Homes Resolution Services] report for Ms Bamford’s unit as an addendum report to the report for Ms Coleman’s unit.
[7] Section 37(1) of the Act provides that:
37 Application of Limitation Act 2010 to applications for
assessors’ report etc,
(1) For the purposes of the Limitation Act 2010 (and any other enactment that imposes a limitation period), the making of an application under section 32(1) has effect as if it were the filing of proceedings in a court.
[8] In Kells v Auckland City Council the High Court confirmed that for the purpose of determining the limitation period for claims in the Tribunal, time stops running against all parties when an application for an assessor’s report is filed. The issue that I need to decide is when time stopped running in respect of Ms Bamford’s unit.
[9] Ms Divich [for the Council] submits that at 25 August 2008, only Ms Coleman had authorised her claim to be brought and that this application for an assessor’s report did not stop time running in respect of Ms Bamford’s unit. It is submitted that time did not stop running for Ms Bamford until she gave her authority for the claim to be brought on 26 March 2009 or, at the latest, on 7 April 2009 when she authorised invasive testing.
[10] Mr Rainey submits that, just as s 37 of the Act may allow claims against a respondent who would otherwise have a limitation defence, some unit owners in the position of Ms Bamford will be able to bring claims that may otherwise be out of time because another unit owner in their complex has filed proceedings in this Tribunal.
39 Coleman and Bamford v Auckland Council [2012] NZWHT Auckland 41 at paras [5]–[12].
[11] Mr Rainey may be correct in respect of stand-alone or multi-unit complex claims. Section 26 of the Act provides that further owners may be added to representative claims. However, the claim for Ms Bamford’s unit was accepted by the Department for Building and Housing as an addendum to the single unit dwelling claim brought by Ms Coleman under s 14 of the Act. Ms Coleman’s claim was not a representative claim therefore Ms Bamford cannot rely on it for limitation purposes.
[12] Section 37 of the Act provides that proceedings are filed when an application for an assessor’s report is made under s32(1). The date on which Ms Bamford authorised invasive testing was effectively that date as, until Ms Bamford took this step, the assessor was not authorised to carry out the investigation. Time therefore stopped running in respect of Ms Bamford’s claim on 7 April 2009 and any claim based on acts or omissions that occurred before 7 April 1999 is time barred.
(footnotes omitted)
[39] The Tribunal erred by regarding Ms Coleman’s claim as having been made under s 14 as a single dwellinghouse claim.40 As a matter of fact, her claim was brought under s 18 of the Act, as a stand-alone complex claim. For the reasons I have previously given,41 that enabled Ms Bamford to add her claim to that of Ms Coleman and to rely on the date of her application for limitation purposes.
[40] The Council’s appeal against the Tribunal’s decision, in respect of Ms
Bamford’s claim cannot succeed.
(c) The claim against Mr Apers
[41] The issue of the liability (or otherwise) of Mr Apers, under the Fair Trading Act 1986, was dismissed on the grounds that the “Council has not suffered loss or damage as a result of Mr Apers’ actions; rather, the Council is seeking to reduce its own liability by claiming that Mr Apers is liable to Ms Coleman”.42
[42] I can deal with this aspect of the Council’s appeal briefly. I think it is fair to say that it was pressed only “faintly”, by the end of argument.
40 Ibid, at para [6].
41 See paras [31]–[35] above.
42 Ibid, at para [30].
[43] In short, I accept submissions made by Mr Rainey, on behalf of Mr Apers. In summary:
(a) There was no evidence that Ms Coleman instructed Mr Apers. It appears that he was contacted by an employee of the vendor’s real estate agent. His instructions were to make a visual inspection of the condition of the property and he presented his report on 19 August
2002.
(b)Ms Coleman raised two issues with the vendor before declaring the agreement for sale and purchase unconditional on 21 August 2002. Thereafter, Ms Coleman arranged for her own plasterer to attend to remedying the cracks that Mr Apers had observed in the plaster work.
(c) In his judgment of 17 February 2012, upholding the Council’s ability to join Mr Apers, Lang J found that there was sufficient evidence on which the Council could contend that the report was misleading, that Ms Coleman had been misled by it and that there was a nexus
between his conduct and loss.43 However, the issue before Lang J was
whether a claim could be founded on negligent misrepresentation. The Council subsequently abandoned that aspect and placed reliance solely on alleged breach of ss 9 and 13 of the Fair Trading Act 1986.
(d)There was no evidence that Mr Apers acted in a misleading or deceptive manner vis-a-vis Ms Coleman. Ms Coleman did not give evidence before the Tribunal. The Council admitted her claim and it became unnecessary for her to proceed with it. Nevertheless, it remained open for the Council to issue a subpoena and call her as its own witness. It did not do so. That meant that there was no evidential foundation for a claim against Mr Apers.
[44] The claim was, with respect, optimistic. The Council was advocating use of the remedial provisions of the Fair Trading Act in circumstances where Ms Coleman
43 Auckland Council v Coleman [2012] NZHC 172, at paras [23]–[28].
had positively asserted that she did not wish to join Mr Apers. She could not be forced to sue him.
[45] The appeal against the Tribunal’s decision to dismiss the Council’s claim
against Mr Apers fails.
Result
[46] For those reasons:
(a) The Council’s application for judicial review of the Chief Executive’s
decision is dismissed.
(b)The Council’s appeal against the Tribunal’s decision that the Council was liable in respect of Ms Bamford’s claim is dismissed.
(c) The Council’s appeal against dismissal of the Council’s claim against
Mr Apers is dismissed.
[47] Given my conclusions on the Council’s application for judicial review and appeal, it is unnecessary to make any order on Ms Bamford’s cross appeal. Formally, it is dismissed.
[48] In relation to costs, I have a note that one or more counsel wished costs to be reserved. I do not know whether a Calderbank letter or some other information relevant to increased or reduced costs may be available.
[49] It may help the parties if I were to make a provisional order. In the absence of further information of the type to which I have referred, I would direct:
(a) Costs in favour of the Chief Executive against the Council on a 2B basis, together with reasonable disbursements, both to be fixed by the Registrar.
(b)One set of costs in favour of Ms Coleman, Ms Bamford and Mr Apers against the Council on a 2B basis together with reasonable disbursements, both to be fixed by the Registrar. I would certify for second counsel.
[50] I make those orders on a provisional basis. Unless a memorandum is filed by one or more parties on or before Friday 17 May 2013 indicating that orders for costs are sought on any other basis, the orders may be sealed at any time from 20 May
2013.
[51] If a memorandum were filed, the orders cannot be sealed and questions of costs will await further determination after consideration of memoranda. On receipt of any memorandum, the Registrar shall arrange a telephone conference before me as soon as practicable thereafter, so that directions can be made for the filing and service of submissions.
[52] I thank counsel for their assistance.
P R Heath J
Delivered at 4.00pm on 30 April 2013
Solicitors:
Simpson Grierson, Private Bag 92518, Auckland Rainey Law, PO Box 1648, Shortland Street, Auckland Crown Law, PO Box 2858, Wellington
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