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Body Corporate 406198 v Argon Construction Ltd

Body Corporate 406198 v Argon Construction Ltd

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Case Copied 30 October 2023 69 min read

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-001772

[2023] NZHC 3034

IN THE MATTER OF The Bianco Apartments

BETWEEN

BODY CORPORATE 406198

Plaintiff

AND

ARGON CONSTRUCTION LIMITED

First Defendant

AUCKLAND COUNCIL

Second Defendant

Hearing:
1-5, 8, 10-11, 15-19, 22-26, 29-31 May and 1, 6-7, 19-20 and

22 June 2023

Appearances:

D R Bigio KC, R D Butler, S C I Jeffs, I J Stephenson, R J H Scott, H Chung and J C Wedlake for Plaintiffs

W A McCartney and D A Cowan for First Defendant
S C Price, M J Ferrier, C M Fairnie and S H Ji for Second Defendant

Judgment:

30 October 2023

JUDGMENT OF ANDREW J

This judgment was delivered by Justice Andrew on 30 October 2023 at 3.00 pm
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar
Date …………………………….

BODY CORPORATE 406198 v ARGON CONSTRUCTION LTD & OR [2023] NZHC 3034 [30 October 2023]

TABLE OF CONTENTS

Introduction [1]

The parties [6]

Factual background [10]

Building consents [14]

Construction [17]

Auckland Council inspections [37]

Discovery of the defects by the plaintiffs [39]

Agreed defects [40]

The history of the claims and pleadings [41]

The pleadings [46]

The issues [47]

Defects and liability framework [50]

Scope and quantum [51]

Expert evidence [54]

The defects at issue [55]

Defect 1 – Cantilevered balconies [57]
Defect 2 – Podium [72]

The damage caused by the defects
Is the damage in respect of defect 1 of such a nature that the requirements of the Building Code are not met – is it actionable damage?  [76]
Is the damage in respect of defect 2 actionable damage?  [93]
Liability of Argon
Did Argon owe a non-delegable duty of care?  [102]
Argon’s responsibilities  [115]
Conclusion – Argon’s liability  [120]
Liability of the Auckland Council
Standard of care  [123]
Defect 1  [129]
Causation  [163]

Defect 2 [166]

Conclusion on liability [169]

Reasonable remedial scope
Legal principles  [170]
The plaintiffs’ proposed scope of remedial works  [180]
Interpretation of ss 17 and 112 of the Building Act 2004 [186]
Is the plaintiffs’ scope reasonable?  [203]
Evidence of the façade engineers – cladding  [213]
Mr Earley’s evidence – Auckland Council  [237]
Mr Alexander’s scope of repair  [241]
The acoustic matting  [254]
What will it cost to repair the defects?
The parties’ positions  [261]
Preferred approach  [272]
Betterment  [281]
Consultants’ costs  [283]
Consequential losses  [287]
General damages  [288]
Standing  [296]
Contributory negligence  [322]

GST [334]

Affirmative limitation defences [337]
Apportionment between defendants [340]
Other issues

The non-legally represented plaintiffs [343]

Former owners/assignees [345]

Result [351]

Introduction

[1] This is defective building litigation. It involves the 157-unit residential unit title development (comprised of two towers) known as the Bianco Off Queen Apartments (Bianco Off Queen).1

[2] The Body Corporate and individual unit owners sue in negligence. The defendants are the building contractor, Argon Construction Ltd (Argon), and the Auckland Council (i.e. the territorial authority).

[3] The remaining defects at issue are…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 3034
Decision Date: 30 October 2023

CaseChat Overview and Summary

The case of Body Corporate 406198 v Argon Construction Ltd and Auckland Council involves defective building litigation concerning the Bianco Off Queen Apartments in Auckland. The plaintiffs, including the Body Corporate and individual unit owners, sued in negligence against the building contractor, Argon Construction Ltd, and the Auckland Council, alleging defects related to the building's waterproofing system. The primary defects in question were the cantilevered balconies and the ground level waterproofing. The plaintiffs sought total damages of approximately $40.7 million, primarily for the cost of repairing the identified defects. The defendants denied liability, contesting the nature and extent of the defects and the reasonableness of the proposed scope of repairs. The court had to determine whether the identified defects were actionable, the extent of the damage caused, and the liability of the defendants. The court found that the plaintiffs had established actionable defects related to the balconies and the podium, but the damage caused was limited. The court held that Argon owed non-delegable duties of care and was liable for the defects, while the Auckland Council was also found liable, albeit to a lesser extent. The court apportioned liability at 85% to Argon and 15% to the Auckland Council. The court also addressed issues of standing, contributory negligence, and the calculation of damages, reserving the final determination of costs for further submissions by the parties.

Orders