Chee v Stareast Investment Limited
[2012] NZHC 133
•16 February 2012
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV2010-404-007804 [2012] NZHC 133
UNDER the Weathertight Homes Resolution
Services Act 2006
IN THE MATTER OF an appeal pursuant to Section 93 of the Weathertight Homes Resolution Services Act 2006
BETWEEN JOSEPH CHEE AND MARGARET CHEE Appellants
ANDSTAREAST INVESTMENT LIMITED First Respondent
ANDAUCKLAND COUNCIL Second Respondent
ANDPATRICK HUNG Third Respondent
ANDBRIAN CHARLES TAYLOR Fourth Respondent
Hearing: 8 November 2011
Appearances: J Chee first-named Appellant, in person
D McLellan and F McGregor-Tate for Second Respondent
No appearance for First, Third or Fourth Respondents
Judgment: 16 February 2012
(RESERVED) JUDGMENT OF ANDREWS J
This judgment is delivered by me on 16 February 2012 at 4pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
Solicitors: Heaney & Co, PO Box 105391, Auckland 1143 (Second Respondent)
Party: J and M Chee, 131B Bucklands Beach Road, Bucklands Beach, Auckland 2012
CHEE & CHEE V STAREAST INVESTMENT LTD HC AK CIV 2010-404-007804 [16 February 2012]
Introduction
[1] The appellants, Mr and Mrs Chee, have appealed against a determination of a
member of the Weathertight Homes Tribunal (“the adjudicator”) issued on 1
November 2010, in respect of water damage to their house at Bucklands Beach, Auckland (“the determination”).1 The appellants had claimed the cost of a full re- clad of their house from the local authority (at the relevant time, the Manukau City Council) (“the Council”) and companies and individuals who were involved in the construction of the house. The appellants did not succeed in their claim for the cost of a full re-clad, but were awarded a total of $99,704, comprising $73,910 (being the
cost of targeted repairs to the house), $794 for consequential costs, and $25,000 as general damages.
[2] The appellants contend that the adjudicator was wrong to decline their claim for the cost of a full re-clad.
Background
[3] The appellants bought the house in November 2001 from the developer, Stareast Investment Limited (“Stareast”). Stareast entered into contracts for construction of the house. The Council issued the building consent, inspected the building work during construction, and issued a Code Compliance Certificate on 26
June 2001.
[4] The house is a two-storeyed detached building with a pitched concrete tile roof. The external walls comprise light timber framing with a direct-fixed monolithic external cladding, to which a textured coating system has been applied.
[5] In August 2003, there were leaks into a downstairs living room from a deck above it. Despite attempts to remedy, the leaks continued to occur from time to time. In November 2007, the appellants applied for an assessor’s report, under s 32 of the Weathertight Homes Resolution Services Act 2006 (“the Act”). The report
concluded that the appellants met the criteria to be eligible for a claim under the
1 Chee v Stareast Investment Ltd [2010] NZWHT Auckland 33.
Act.2 After the initial assessor’s report, further leaks occurred in the bedrooms and the garage, and cracks became apparent in the cladding.
[6] The appellants’ claim was first heard by a different adjudicator in June 2009. That adjudicator concluded on the evidence before him that targeted repairs were appropriate. That finding was conditional upon the Council issuing the appropriate building consent. The appellants were awarded $115,000 for repairs, $10,000 for general damages, and $16,768 for “other losses”.3
[7] The appellants appealed to the High Court. The appeal was allowed and the appellants’ claim was remitted back to the Tribunal for re-hearing.4 The claim was re-heard in September 2010.
The determination
[8] The adjudicator posed the issues for determination as being:5
(a) What are the defects that have caused damage?
(b) What is the remedial work required to address the defects?
(c) What is the responsibility, if any, of the Council and various companies (and their directors) involved in the construction of the house?
(d) What is the appropriate level of damages to be awarded?
(e) What contribution should each of the liable parties pay?
2 See s 14.
3 Chee v Stareast Investment Ltd WHT TRI 2008-100-91, 21 July 2009.
4 Chee v Stareast Investment Ltd HC Auckland CIV 2009-404-5255, 1 April 2010.
5 Determination at [6].
What defects caused damage?
[9] The adjudicator’s findings regarding the defects claimed to have caused
damage may be summarised as set out below.
[10] Failure to install cavity battens: Mr Chee submitted that the design of the house specified that cavity battens were to be used to ensure that the monolithic cladding was spaced away from the timber frame. The adjudicator found that the battens as drawn were not intended as cavity battens; they were considered to be aesthetic rather than functional, and were not required for the purposes of a building consent. The adjudicator also concluded that there was no evidence that the lack of
the battens had caused damage.6
[11] Vertical control joints: Mr Chee submitted that the cladding was not installed in accordance with the manufacturer’s technical specifications, in that properly functioning vertical control joints were not installed. The adjudicator was not satisfied that there were departures from the technical specifications for the layout of cladding sheets that had been causative of leaks or cracking. The adjudicator was satisfied that there were issues with the way in which some of the vertical control joints had been formed by the plasterer, but it was not established that this had caused leaks or resulted in any significant cracking. The adjudicator allowed $4,416
for repairs relating to the vertical control joints.7
[12] Deck: The adjudicator accepted the expert witnesses’ evidence that the manner in which handrails had been installed had caused damage to the balustrade and the deck, and that there was leaking from the deck outlet. The adjudicator accepted the estimated repair costs of $45,315.8
[13] Windows: The adjudicator noted that all expert witnesses agreed that there was evidence of damage caused by deficiencies in installing a curved window on the east elevation of the house. The adjudicator concluded that there was little evidence
of leaks, and no evidence of damage, as a result of any deficiencies in installing any
6 At [19] – [23].
7 At [23] – [28] and [44] (all figures are GST inclusive).
8 At [27] – [31].
other windows in the house. The adjudicator concluded that the repair costs for the curved window would be approximately $10,000.9
[14] Horizontal control joint: The adjudicator noted that the expert witnesses agreed that there was an issue with the horizontal control joint at the junction of the polystyrene band, fascias and lower roof areas. The adjudicator assessed the costs of remedying this at $2,944.10
[15] Roof: The adjudicator noted issues in relation to the roof, being a split in the lead flashing in two locations, defects in the valley trays, and issues with the junction between the roof and the cladding. The adjudicator concluded that there was no evidence on which the roofing contractor, or any other person or contractor, could be found responsible for the splits in the lead flashing. The adjudicator also found that there were no elevated moisture readings at the junction between the roof and the cladding and the contribution of this alleged defect to damage or future likely damage was minor. The adjudicator accepted that the valley gutters had been nailed down almost flat, resulting in water overflowing onto ceiling space and inside internal walls, which may have caused staining to the floor and carpet in two
bedrooms. The adjudicator assessed the cost of repairing the valley trays at $5,000.11
[16] Ground levels: The adjudicator accepted that in one area, minor but localised damage had been caused by a lack of clearance between the cladding and ground levels, and that damage was likely to occur in another area. The adjudicator assessed the cost of repair to address ground clearance at $6,235.12
[17] Lack of inseal: Mr Chee submitted that there was a failure to seal the cladding boards at ground level. The adjudicator accepted that while the technical literature at the time specified such an inseal, there was no damage caused as a result
of the absence of an inseal.13
9 At [32] – [40].
10 At [41] – [44].
11 At [45] – [55].
12 At [56] – [57].
13 At [58].
[18] Cracking: The adjudicator accepted that there was a increasing number of cracks appearing in the cladding, but that there was no evidence that the cracks had caused damage to other building elements. The adjudicator noted that this was, in part, due to the care taken by Mr Chee to carry out maintenance and seal cracks as they appeared. The adjudicator said that the “most plausible” explanation for the cracking was the fixing of a low quality cladding material directly to the bracket (untreated) timber framing, but noted that that was an approved method of construction at the time the house was built. The adjudicator concluded, therefore, that none of the parties to the claim could be found liable for damage resulting from
using the construction method.14
[19] In summary, the adjudicator concluded that deficiencies in the construction of the deck, installation of a curved window, addressing ground clearance, splits in the lead flashing, squashed valley trays, and some vertical and horizontal joints, had caused damage and required repairs.
Remedial work required
[20] The adjudicator then considered whether a complete re-clad was appropriate (as the appellants contended) or whether the defects could be remedied by targeted repairs. The adjudicator noted that at the time of the second Tribunal hearing only two of the five experts giving evidence were of the opinion that the appellants’ house required a complete re-clad. One of those (the Tribunal’s assessor) was only marginally in favour of a re-clad. The other (the appellants’ expert witness) considered that a re-clad was necessary because the cladding system (monolithic
cladding affixed to untreated timber) would not perform for its life expectancy.15
[21] The adjudicator observed that the appellants’ wish to re-clad the house was “a reasonable one given the increased cracking to the cladding”, but went on to say that while a re-clad may be reasonable, that did not necessarily mean that the
respondents, either individually or in combination, were responsible or liable for the
14 At [59] – [62].
15 At [64] – [65].
cost. It was necessary to determine whether the respondents had caused there to be a need for a total re-clad.16
[22] The adjudicator concluded that the appellants had not established that any negligence by any of the respondents had caused there to be a need for a full re-clad. The adjudicator said:17
Mr and Mrs Chee have pointed to a number of defects for which they believe the respondents are responsible. Apart from the ground levels, the junctions, the deck, the curved window and the valley trays however there is no evidence that any of these have caused damage, or resulted in the need for a re-clad, or are the responsibility of any of the parties named in this claim. The evidence of damage caused by water ingress to this dwelling is in some isolated areas only. The deck is the area where the most damage has been detected but all the experts agree this does not necessitate a re-clad. There is also damage as a result of the splits in the apron flashing but there is no evidence on which I could conclude any of the respondents have any liability for this damage.
Other than those areas the only other evidence of moisture ingress causing damage are three elevated moisture readings associated with the garage clearances, curved window and one horizontal control joint junction. I am accordingly satisfied on the evidence presented that the defects for which the respondents are liable can be appropriately remedied by targeted repairs. They have not, either on their own, or in combination resulted in the need for a re-clad.
[23] The adjudicator went on to say:18
The various experts agree that the defects, for which it has been established any of the parties to this claim are liable, could be remediated through targeted repairs. The claim for the full amount of the remedial costs accordingly fails. This is not because the proposed scope is unreasonable but because Mr and Mrs Chee have been unable to establish a causative link between the need for a re-clad and the negligent acts of the respondents. The two experts who supported the re-clad did so primarily because of the cracking in the cladding. In their opinion the system had either failed or was unlikely to last for the length of its expected life.
[24] The adjudicator apportioned liability between the developer, the Council, the builder, and the contractors who supplied and installed fascias, the textured external
coating, and roofing and associated flashings.19
16 At [66] – [68].
17 At [137] – [138].
18 At [142].
19 At [157]. An appeal by the builder was subsequently allowed: Chee v Stareast Investment Ltd
HC Auckland CIV 2010-404-7804; CIV 2010-092-5026, 2 June 2011. An appeal by the roofing
Principles as to appeals from determinations of the Tribunal
[25] Pursuant to s 93 of the Act, a party to a claim that has been determined by the Tribunal may appeal to the High Court (if the amount at issue exceeds $200,000) on a question of law or fact that arises from the determination. Part 20 of the High Court Rules applies to the appeal, and the appeal is by way of re-hearing. Such an appeal is determined by the appeal court considering the issues that had to be determined at the original hearing, and the effect of the evidence heard at that
hearing, applying the law as it is when the appeal is heard.20
[26] The correct approach to an appeal from a specialist tribunal such as the Weathertight Homes Tribunal was set out in the judgment of the Supreme Court in Austin Nichols & Co Inc v Stichting Lodestar.21 The principles may be expressed as follows:
(a) The appellant bears the onus of satisfying the appeal court that it should differ from the decision of the tribunal appealed from.
(b) The appeal court should carry out its own assessment of the facts.
The appeal court may or may not find the reasoning of the tribunal persuasive.
(c) The tribunal may have had a particular advantage (such as technical expertise, or the opportunity to assess the credibility of witnesses), and in such cases the appeal court may rightly hesitate to conclude that the tribunal’s findings of fact or fact and degree are wrong.
(d)The appeal court has the responsibility of arriving at its own assessment of the merits of the case. If the appeal court’s opinion is different from the conclusion of the tribunal appealed from, then the
tribunal’s decision is wrong. In such cases, it is an error for the
contractor against the adjudicator’s finding of liability in relation to the valley trays was
abandoned.
20 See Pratt v Wanganui Education Board [1977] 1 NZLR 476 (SC) at 490.
21 Austin Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [5] and
[16].
appellate court to defer to the tribunal’s assessment rather than
forming its own opinion.
[27] In this case, the Court may confirm, modify, or reverse the determination, or any part of it, and may exercise any of the powers that could have been exercised by the adjudicator in relation to the appellants’ claim.
[28] With the principles set out above in mind, I turn to consider the issues raised by the appellants.
Issues for determination
[29] In their amended notice of appeal dated 8 February 2011, the appellants contended that the adjudicator erred in law in applying the principles of causation when determining the quantum of damages that each respondent was required to pay. They asserted that, having found that a full re-clad of the house was reasonable, the adjudicator should have allowed damages on the basis of the indivisible measure of loss – the full re-clad. They asserted that the adjudicator wrongly treated each defect in isolation, by allowing damages on the basis of the cost of targeted repairs.
[30] The appellants asked that this Court set aside the adjudicator’s findings on causation and quantum, and make in their stead an order holding the respondents jointly and severally liable for the cost of a full re-clad of the house, together with consequential losses, general damages, and costs.
[31] This Court is required to determine whether the adjudicator correctly directed herself on the applicable principles of causation. The Court is also required to determine whether, on the evidence, the adjudicator was correct to reach her conclusions as to liability, and that the appellants had not established that negligence on the part of the respondents, either individually or in combination, caused it to be necessary for there to be a full re-clad.
[32] As a subsidiary issue, the appellants seek an order that Stareast also be held liable. It will be recalled that the first respondent, Mr Hung, is the director of
Stareast. Stareast was struck off the Companies Register on 15 June 2010, some months before the second Tribunal hearing. On 22 October 2010 (shortly before the determination was released) Stareast was restored to the register. That fact was apparently not made known to the adjudicator. An issue for determination is, therefore, whether Stareast should be held liable as well as Mr Hung.
Were the adjudicator’s conclusions as to liability for defects correct?
[33] The appellants’ submissions require, first, a brief discussion of the adjudicator’s findings regarding the alleged defects in construction, supervision of construction, and inspection, then a discussion of her findings as to the scope of, and liability for, the remedial work required.
Cavity battens
[34] Mr Chee claimed that the plans for the house, on which the Council issued a building consent, specified that “cavity battens” were required.22 He also claimed that cavity battens were not employed in the construction of the house.
[35] However, the evidence given at the second Tribunal hearing by Council officers and the various experts was that battens shown on the plans were not cavity battens, and would not have functioned as such. Rather, they appeared to be intended to pack out the exterior cladding of the upper storey of the house, for aesthetic reasons.23 Furthermore, it was not a requirement of the relevant building
code at the time the house was built that cavity battens be employed.24 Accordingly,
even if the consented plans had provided for cavity battens, the Council could not have insisted on them.
[36] The adjudicator found that the battens as drawn on the plans were not intended to be cavity battens. She also found that there was no evidence that the lack
22 Cavity battens are employed to create a ventilated cavity, to assist in dealing with moisture entering the cladding.
23 Notes of evidence of second Tribunal hearing, at 33-35, 60-61, and 264-270.
24 At 264.
of battens, as drawn, had resulted in any damage. Accordingly, no negligence was found.25 The adjudicator’s conclusion was clearly correct.
[37] Mr Chee did not challenge the adjudicator’s finding at the appeal hearing, but he submitted that a ventilated cavity will be required to be incorporated in any remedial work on the house (as a condition of a building consent for remedial work), thus making a full re-clad necessary.
Vertical control joints and standard sheet joints
[38] Mr Chee submitted that the HardiTex cladding had not been installed in accordance with the manufacturer’s specifications, in that properly functioning vertical control joints had not been incorporated.
[39] Following inspection at a site visit, the expert witnesses agreed that vertical control joints had been properly constructed by the builder, in that they were correctly aligned onto the framing. However, there were issues as to the plasterer’s work, in that the joints were not filled with silicone, but with a “stopping paste” (as described by Mr Smith, the appellants’ expert) or “flexible paste” (as described by Mr Bayley, the Council’s expert). Mr Bayley also said, after researching the matter, that the flexible paste was approved by the manufacturer, but that the joints had not been treated correctly by the plasterer because of the absence of sealant underneath
the flexible paste.26 The experts also noted that a butynol strip had been placed
behind the joints.27
[40] All of the expert witnesses agreed that there was some cracking of the external textured coating at the area of the vertical control joints, but there was no evidence of moisture ingress or damage in those areas. The experts considered that the butynol strip provided protection and that maintenance by Mr Chee (by sealing
cracks) would also have assisted.28
25 Determination, at [19] – [22].
26 Notes of evidence of second Tribunal hearing, at 224 – 225.
27 At 196–200.
28 Ibid.
[41] The expert witnesses also discussed cracks at “standard” sheet joints (that is, where a vertical control joint was not required). Increased cracking was observed over the period of inspections by the WHRS assessor, Mr Browne.
[42] Mr Chee questioned Mr Browne regarding the location of the standard sheet joints, and their preparation for plastering (whether the edges were bevelled before filling). Mr Browne and the other experts agreed that the edges were bevelled. The expert witnesses also pointed to conflicting information in the manufacturer’s specifications. Neither Mr Bayley nor Mr Smith was able to identify the specific causes of increased cracking. None of the experts said that there was increased
moisture ingress through these cracks.29
[43] The adjudicator summarised the evidence concerning both the vertical control joints and the standard sheet joints, regarding the expert witnesses’ agreement that the vertical control joints had been correctly constructed by the builder, that there was some concern as to the filling and plastering of the joints, that there was no evidence of moisture ingress through the cracking around the joints, and no current damage resulting from deficiencies in the joints. The adjudicator recorded the experts’ agreement that there was “an issue of future likely damage on the rear [west]
elevation only”.30
[44] The adjudicator concluded that there were issues as to the way the vertical control joints had been treated by the plasterer, but it was not established that this had caused leaks or resulted in any significant cracking.31
[45] The adjudicator also set out the evidence as to the standard sheet joints, and the experts’ inability to explain why there was increased cracking. The adjudicator was not satisfied that there were departures from the technical specifications as to
layout of sheets that were causative of leaks or cracking.32 She found that there was
29 At 197 – 215.
30 Determination, at [24].
31 At [28].
32 Ibid.
no evidence on which she could conclude that the increased cracking was caused by defects in the design or construction of the house.33
[46] Mr Chee submitted that the adjudicator’s conclusions that deficiencies in the plasterer’s treatment of the vertical control joints had not caused significant cracking, and that there was no evidence on which she could conclude that the increased cracking was caused by defects in the design or construction of the house were wrong. He submitted that the adjudicator had misunderstood the evidence, in particular that of Mr Smith (the appellants’ expert) and Mr Bayley (the Council’s expert), both of whom, he submitted, had given clear evidence that “deficiencies in the vertical control joints caused the uncontrolled cracking”.
[47] In his brief of evidence dated 2 April 2009, at paras [119] – [127], Mr Smith discussed the vertical control joints. His opinion was that incorrect construction of the joints had led to premature failing of sheet joints in the cladding, which had allowed moisture to penetrate and affect the underlying framing. He then said that a “standard stopping compound” had been used to fill the control joints, and that “[t]he lack of a flexible sealant in [the control joints] has allowed stresses to occur at adjacent junctions and form uncontrolled cracking”. The “uncontrolled cracking” had allowed moisture to enter the timber framing.
[48] Mr Bayley discussed the vertical control joints at paras [122] – [125] of his brief of evidence dated 1 May 2009. He referred to the use of “Fosroc Flexipaste” as filler. He agreed with Mr Smith’s comment that the filling used in the control joints had caused “uncontrolled cracking”.
[49] In his reply brief of evidence dated 21 May 2009, Mr Smith said at para [60]:
It is noted that joints away from the control joint were the first to show signs of cracking as evidenced in the November 2007 Assessor’s [Mr Browne] report where only two cracks were identified. Since that date numerous other cracks have occurred and I have included as part of this Brief of Evidence a current crack location map as Addendum 1. From this it becomes apparent that there are a number of areas associated with under the windows that are now showing signs of cracking. This, I believe, is because of the incorrect location of the sheet joints with reference to the James
33 At [63].
Hardie Manual of July 1998 where it states “joints should be located 200mm
away from corners of windows”.
[50] At the first Tribunal hearing, Mr Chee put to Mr Smith that the uncontrolled cracking had been caused by incorrect placement of sheets (less than 200mm away from corners) and “incorrect construction of weathertight control joints”, to which Mr Smith replied that that was his belief.34
[51] The difficulty with relying on the statements just referred to (as Mr Chee does) is that at the second Tribunal hearing, two things were clear on the evidence given. These were, first, that a “Flexipaste” compound, approved by the manufacturer, had been used to fill the control joints. Secondly (as Mr Smith and Mr Bayley both accepted), there was no evidence of any moisture ingress behind the control joints, or damage to the framing. Further, Mr Smith said, regarding the cause
of the cracks:35
Mr Smith: When I first went to the property I think that there was only maybe four or five cracks in the property and over the time the amount of cracking has increased and there doesn’t seem to be any pattern to it. I can’t agree that the amount of cracking is minimal. There’s a crack map that I’ve put in with my reply brief of evidence which was done in May last year and I don’t think that those cracks are – or could [be] aligned to just control joint cracks, because there’s too many of them. So there seems to be ongoing issues in respect of the cladding with further cracking that’s occurring.
Adjudicator: And do you have an opinion on what that is caused by?
Mr Smith: It’s hard to say although from what I can understand from Mr [Browne’s] report is that it appears that the control joint or the area where the control joints may have been, might have been the first areas that had gone, but since then it seems to have got worse for some reason or another.
[52] Mr Smith has not given “clear evidence” that deficiencies in the construction of the vertical control joints has caused uncontrolled cracking. When he gave evidence at the second Tribunal hearing, Mr Smith was not able to say what had caused cracking.
[53] Mr Bayley’s evidence at the second Tribunal hearing was no less equivocal.
He first said:36
34 Notes of evidence of first Tribunal hearing, at 121.
35 Notes of evidence of second Tribunal hearing, at 197 – 198.
36 At 200.
I covered [the extent of the cracking] in my brief, the original brief, 122 to
125[.] I indicate that there appear to be no indication of damage or excess moisture to the framing directly beneath the vertical cracked cladding joints
as evidenced by the WHRS assessor’s report in three particular instances and
in my capacitance readings on site and also refer to the joint in paragraph
124 relating to the use of [Flexipaste] joint material, compound, in lieu of
6mm control gap or a flexible sealant referred to by Mr Smith. So in that respect I agree with Mr Smith that possibly the use of the actual jointing
compound in the vertical joints probably contributed somewhat to the cracks
that we were seeing on site. But certainly the paste system is approved by HardiTex and no damage appear[s] to have occurred to the underlying framing as a result.
[54] Later in the hearing he said:37
Yes, I think that whole issue about trying to find out why the cladding was actually cracking was at the heart of me trying to determine what the problem was with the cracking joints and the whole issue about using Flexipaste really put my mind at rest that the correct jointing material had been used, albeit that on the construction joints they hadn’t applied flexible silicone sealant underneath that area, so it was along the same lines to try and determine what was the cause of the cracking on the cladding.
...
I don’t believe it is a system failure, I think some of the cracks that we saw I believe were as a result of not filling the control joints with sealant as required by the HardiTex manual, but filling it with Flexiform compound. I think that that was the reason why at least the control joints cracked, so I don’t believe it was a systemic failure in that the cladding was bound to fail, if that’s what systemic failure is meant to mean.
...
The way that the compound has been applied to the control joints has not been done correctly in accordance with the HardiTex Manual, so it hasn’t been done correctly because of the sealant underneath the paste. It should have been applied but they used compound there. But yes, because of that we are seeing cracks and it is the – in that respect that it affects the system, because it is particular issues in relation to the joints that then affect the system.
[55] The WHRS assessor, Mr Browne, was also equivocal. He said (at the second Tribunal hearing) that there did not appear to be any damage directly related to the control joints and that some of the cracking seen on subsequent visits “could well be
related to maintenance”.38
37 At 224 – 225.
38 At 200.
[56] He later said, after being referred by Mr Chee to his evidence at the first Tribunal hearing, that defects (cladding joints being in the wrong location) could contribute to cracking,39 and that he was “not 100 per cent sure of whether the cracks [were] caused by defects or whether it’s typical of [a] not very high quality cladding system”, adding that cracking did generally happen on a lot of HardiTex systems.40
[57] Having reviewed and considered the evidence before the adjudicator, I am not satisfied that she was wrong to conclude that there were issues as to the way the vertical control joints had been treated by the plasterer, but that it was not established that this had caused leaks or resulted in any significant cracking, and that there was no evidence on which she could find that the increased cracking was caused by defects in the design or construction of the appellants’ house. It follows that I do not accept Mr Chee’s submission that the HardiTex building system failed or cracked because of deficiencies in the construction of the vertical control joints to the extent that they were not working because of those deficiencies.
Deck
[58] The adjudicator found that a deck off the master bedroom, on the upper storey of the house (south elevation), had defects in construction which caused water ingress and consequent damage to the ceiling and walls of the room below. The adjudicator also recorded the expert witnesses’ agreement that there was damage to the balustrades and deck, caused primarily by the manner in which the hand rails had been installed. There was leaking from the deck outlet. Advanced decay to the
balustrade and associated cladding was noted.41
[59] The adjudicator recorded the expert witnesses as agreeing that if the defect with the deck were the only issues with the house, they could appropriately be remedied by targeted repairs rather than a complete re-clad. The adjudicator adopted Mr Browne’s assessment of $45,315 (GST inclusive) for the costs of targeted repairs.
In so doing, she accepted that it was “most likely” that the Council would require the
39 At 203.
40 At 204.
41 Determination, at [29] – [30].
deck joists (which did not show signs of damage) to be replaced in order to obtain a building permit for the repair work.42
[60] The adjudicator held the developer, Mr Hung, the Council and the builder (Mr Taylor) liable in respect of the defective deck. As noted earlier, Mr Taylor’s appeal against that finding was allowed.43
[61] Mr Chee did not challenge the adjudicator’s findings, except to the extent that she later held that damages should be awarded for the cost of targeted repairs, only. It is not therefore necessary to consider the evidence relating to these defects further, at this stage. I am satisfied that the adjudicator correctly summarised the evidence as to the defective deck, and the repair work required to remedy it (considered in isolation from the question of whether in fact a full re-clad was appropriate).
Windows
[62] The adjudicator recorded that the expert witnesses agreed that there was evidence of damage caused by deficiencies in the installation of a curved window on the east (front) elevation of the house, indicated by a slightly elevated moisture reading.44 The adjudicator also referred to evidence that other windows had not been installed strictly in accordance with the manufacturer’s instructions. However, the adjudicator found that there was little evidence of leaks and no evidence of damage as a result of departures in installing any windows other than the curved window.45
[63] The adjudicator recorded that Mr Smith (the appellants’ expert) had seen a puddle of water on the floor beside the garage window, and a wet carpet beside the living room window,46 but was not able to ascertain the cause of the water ingress.
Mr Browne (the WHRS assessor) found water ingress resulting from defects in
42 At [31].
43 See fn 19.
44 At [32]. A reading of 21% was obtained from a sample from the left stud. Moisture readings of up to 18% were said to be acceptable.
45 At [33] – [34].
46 Mr Smith in fact referred to a window in the dining room. See Mr Smith’s reply evidence, 21
May 2009 at [97].
window installation, only around the curved window. Moisture readings were not high around other windows, and there was no other evidence of decay.47
[64] Further, regarding Mr Chee’s submission that the puddle on the garage floor and the wet carpet was evidence of water ingress caused by defective installation of windows (other than the curved window) the adjudicator recorded that the majority of the expert witnesses considered such water ingress would be very unusual from a window leak. The adjudicator further said that although Mr Chee had been aware since May 2009 (the experts’ site visit) that there was no evidence of damage caused by alleged defects in any windows other than the curved window, he had not carried
out any further testing, or documented further water ingress.48
[65] The adjudicator held that, with the exception of the curved window, there was no evidence of moisture ingress as a result of deficiencies in the window installation, and that the only evidence of water ingress that had been established to be due to window installation was related to the curved window.49 The adjudicator held the Council and Mr Hung liable.
[66] Again, Mr Chee did not challenge the adjudicator’s finding, except in relation to the subsequent finding as to targeted repairs, so it is not necessary to discuss the evidence further at this stage. I record that I am satisfied that the adjudicator correctly summarised the evidence, and reached the correct conclusion as to the alleged defect.
Horizontal control joint
[67] In his assessor’s report dated 29 November 2007, Mr Browne recorded at [12.1.4.10] that the technical literature required that horizontal control joints were provided at the inter-storey floor joist level. He also recorded that “decorative polystyrene reveals” (referred to at the second Tribunal hearing as “polystyrene
bands”) had been fitted over the horizontal control joints on the appellants’ house.
47 Determination, at [34].
48 At [36].
49 At [38] – [39].
[68] The adjudicator recorded that the expert witnesses agreed that the horizontal control joints between the lower and upper storeys of the house had been installed correctly, but that there was an issue with the junction between the polystyrene band, control joints, and the fascias and lower roof areas, where the work of several contractors had come together at one intersection. There was no evidence of damage or water ingress from the horizontal control joints, but there were fungal hyphae present in a sample from the junction between the polystyrene band and gutter and
fascias, although no evidence of decay.50
[69] The adjudicator concluded that the only issue was with the intersection of the polystyrene band and the gutter and fascias, which she held was primarily a sequencing issue, the responsibility of the developer.
[70] As was the case for the deck and the windows, Mr Chee did not challenge the adjudicator’s findings, except as to the finding regarding targeted repairs as opposed to a full re-clad. I am satisfied that the adjudicator correctly summarised the evidence relating to the horizontal control joints and this polystyrene band, and that her factual findings were correct.
Ground clearances
[71] In his initial investigation the assessor, Mr Browne, found that the cladding had been finished very close to the concrete paving on the east (front) elevation of the house, close to the garage door. A shavings sample (which had a low moisture reading) was found on analysis to have low numbers of fungal hyphae, but no
established or incipient decay.51 In a supplementary report dated 24 June 2008, Mr
Browne reported that no clearance was provided between the cladding and the concrete slab, allowing water to be drawn up by capillary action. Mould resembling stachybotrys toxic mould was found on the rear face of the cladding at a cutout on the right-hand side of the large garage door. At that point the building paper was
disintegrating.52
50 At [41] – [42].
51 Mr Browne’s report 29 November 2007, at [12.1.4.12] and [12.2.4.10].
52 Mr Browne’s supplementary report 24 June 2008, at [12.1.4.13] and [12.2.3.4].
[72] This issue was discussed by the expert witnesses at the first Tribunal hearing. All of the expert witnesses agreed that there was a lack of clearance between the cladding and the concrete paving on the east elevation of the house in front of the garage. All but one (the expert witness called by the builder) agreed that there was damage on the right side of the door. Some (Mr Browne, Mr Smith, and Mr Bayley) considered that the lack of ground clearance on the left side of the door would cause damage in the future. In his evidence as to repairs, Mr Smith said that the entire cladding around the garage up to the horizontal band and a small return wall to the left of the garage should be replaced. Other expert witnesses said that a lesser extent of repair would be sufficient, for example, replacing a smaller area of cladding,
installing a concrete nib wall, or removing some of the concrete paving.53
[73] The adjudicator summarised the evidence and found it established that there was minor but localised damage in one area (the right side of the garage) and another (the left side) where damage was likely to occur. She concluded that, had this been the only defect, it could be remedied by a targeted repair. She held Mr Hung and the
Council responsible.54
[74] Again, Mr Chee did not challenge the adjudicator’s findings, except as to the question of targeted repairs or a full re-clad. I am satisfied that the adjudicator correctly summarised the evidence on the issue, and that her factual findings were correct.
Cracking
[75] Before turning to the adjudicator’s conclusions concerning the scope of remedial work required, I refer to her discussion of the issue of an increasing number of cracks occurring in the cladding. It is appropriate to do so because, as the adjudicator recorded, the increased cracking was, for Mr Browne and Mr Smith, the
most significant issue in support of their opinion that a full re-clad is required.55 Mr
Chee submitted at the appeal hearing that failure to construct the vertical control
53 Notes of evidence of first Tribunal hearing, at 50-58.
54 Determination, at [56] – [57], [85] and [119]. The evidence was that the concreting had been
carried out after the building work was completed, but before the Council’s final inspection.
55 At [61].
joints properly, and to inspect the joints, had resulted in widespread cracking which, in turn, caused or contributed to the need for a full re-clad.
[76] I have set out and discussed Mr Chee’s submissions regarding the vertical control joints, and the standard sheet joints at [46] to [57] above. His submission that the joints caused the cracking is not supported by the evidence. I am not satisfied that the adjudicator was wrong to hold that there was no evidence upon which she could conclude that the cracking was caused by defects in the design or construction of the appellants’ house.
[77] In this respect, it must be remembered that the Tribunal deals with claims of
“leaky buildings” under the Act. A “leaky building” is defined in s 8 as:
... a dwellinghouse into which water has penetrated as a result of any aspect of the design, construction, or alteration of the dwellinghouse, or materials used in its construction or alteration
Under s 14 of the Act, a claimant may claim in respect of a dwellinghouse if (among other things) water has penetrated (as set out in the definition of “leaky building”) and the penetration has caused damage to the dwellinghouse.
[78] Mr Chee bears the onus of proof in respect of his claim, and it must be proved on the normal civil standard of the balance of probabilities.56 The most that the appellants’ expert, Mr Smith, the Council’s expert, Mr Bayley, and the assessor, Mr Browne, could say was that it was possible that the filling compound used had caused cracking, or that it could do so. That does not reach the balance of probabilities standard.
[79] Further, there was no evidence of water ingress (penetration) through the cracks, and no evidence of resulting damage to the framing.57 The adjudicator said58 that “the most plausible explanation” for the cracks was given by Mr Browne, when
he referred to a “not very high quality cladding system” and said that cracking “does
56 See Hartley v Balemi HC Auckland CIV-2006-404-2589, 29 March 2007 at [72], in relation to a claim under the 2002 Act.
57 See [51] above.
58 Determination, at [62].
generally happen on a lot of HardiTex systems”.59 The adjudicator did not find that this was the cause of the cracking, and she was not required to do so. She was required to determine whether the cracks were caused, as claimed by the appellants, by defects in construction or Council inspections. She found that they had not established that the cracks were caused in that manner, albeit found some liability in respect of the filling compound, and did not err in doing so.
Causation
[80] At [66] – [68] of the determination, the adjudicator posed the issue as to causation as follows:
Mr and Mrs Chee’s decision to reclad the dwelling is a reasonable one given the increased cracking to the cladding. This claim is however somewhat unusual as although a re-clad may be reasonable this does not necessarily mean that the respondents, either individually or in combination, are responsible or liable for the cost of a total re-clad. In deciding whether or not any of the respondents are liable for the costs of the re-clad it will be necessary to look at the reasons why the dwelling needs to be re-clad and also whether there is a causative link between any negligence on behalf of any of the respondents.
The claim against all remaining respondents is in tort. Therefore in order to find any liability on the part of any of the respondents three things need to be established. Firstly the party must be found to owe the claimants a duty of care. Secondly that party needs to have breached that duty of care, and thirdly the claimants need to establish they have suffered loss as a consequence [of] the breach. All of the remaining respondents submit that even if they do owe a duty of care, and it is concluded that they have breached that duty of care, any breach has not been causative of the need for a re-clad of this dwelling.
The issue therefore is not so much whether the property needs to be re-clad but whether the necessity for the re-clad has been caused by the negligence of any or all of the respondents. In other words is there a causative link between breaches of duty on the part of any of the respondents and the full amount of the remedial work claimed by Mr and Mrs Chee.
[81] In his written submissions dated 4 May 2011, Mr Chee submitted that the adjudicator’s analysis of causation was wrong. He submitted that the first stage of the causation test requires proof that the negligence (breach of duty) was a cause in fact of the loss suffered and that the adjudicator had confused circumstances which
occasioned the loss with “cause”.
59 Notes of evidence of second Tribunal hearing, at 204.
[82] Mr Chee then submitted that the second stage of the causation test is to ask whether the negligence is a cause of the loss, in law. He submitted that the adjudicator appears to have concluded that the extent of the appellants’ loss was made greater because of the cladding system used, and that this meant that the appellants could only recover from the respondents the loss that they would have suffered in the absence of that “cause”. However, he submitted, it is well established that if a victim’s loss is increased because of the intrinsically vulnerable state of the property, the full amount of loss can nevertheless be recoverable. Thus in the present case, he submitted, any intrinsic vulnerability of the house resulting from the cladding system used could not reduce the respondents’ liability for the cost of a full re-clad.
[83] On behalf of the Council, Mr McLellan submitted that the adjudicator had sufficiently set out the process of legal reasoning to be followed. He submitted that the adjudicator had asked herself the correct questions.
[84] As Mr Chee submitted, the first step in considering causation is to establish whether there is causation in fact. This is usually established by the “but for” test – by asking whether the damage alleged by the plaintiff would have occurred “but for” an action or inaction by the defendant. If that test is satisfied, then the next question is whether there is causation in law – whether the defendant is seen, in law, as having caused the alleged damage. Generally, this will involve considering whether the remoteness test is satisfied.
[85] In the present case, the adjudicator first addressed causation in fact. She found that Mr and Mrs Chee had not established causation in fact. They had not established, on the balance of probabilities, that negligence by any of the parties claimed against, in fact, caused there to be a need for a full re-clad of the house.60 In the circumstances, it was not necessary for the adjudicator to consider causation in law.
[86] I am not satisfied that the adjudicator misdirected herself as to causation, or erred in applying the principles to the evidence.
60 See [22] and [23], above.
The appropriate remedial work: targeted repairs or a full re-clad?
[87] I turn now to the adjudicator’s conclusions concerning the scope of the remedial work required. I preface this discussion by observing that the scope of remedial work is not to be determined as if it were a “numbers game”. In the course of his submissions, Mr Chee referred to the number of expert witnesses who were “for” a full re-clad and those who were “against” it. He may have been encouraged in that to some extent by the adjudicator’s observation that by the time of the second hearing only two of the five expert witnesses considered the house required a full re-
clad.61
[88] It is inevitable in a proceeding such as the present one, where claimants and respondents each call expert witnesses, that the witnesses will express varying opinions. The nature of the proceedings is such that witnesses called by respondents tend to express opinions that differ from those expressed by the claimants’ witnesses. However, notwithstanding the “numbers” for or against a particular conclusion, the adjudicator’s task is to consider the evidence and to reach his or her own conclusion on that evidence.
[89] The matters which pointed to it being necessary for there to be a full re-clad, as identified by the assessor, Mr Browne, were “the quality of the product on the walls, the untreated framing and the cracking and combination of defects”.62 Mr Browne added that the risk matrix was a further factor.63 Mr Browne said that he was marginally in favour of a full re-clad.
[90] Mr Smith said regarding the targeted repairs/full re-clad issue:64
I don’t believe that the cladding system is going to perform for the life that it’s required to under the building code. So therefore my recommendation to Mr Chee is a full reclad. If targeted repairs are proposed by my colleagues, I don’t believe anyone has actually put in a proposal other than Mr Bayley on how the repairs would be undertaken on a targeted basis and I think the way in which Mr Bayley wanted to carry out targeted repairs is – has got its own
61 Determination, at [64].
62 Notes of evidence of second Tribunal hearing, at 216.
63 Ibid.
64 At 221.
issues in respect of how you match in existing work to the targeted repair work, particularly around window openings and things like that.
[91] The adjudicator found that the appellants’ decision to re-clad their house was “reasonable” only because of the increased cracking to the cladding. As noted above at [78], the appellants could not prove on the balance of probabilities that the increased cracking was due to the negligence of any of the respondents. She did not adopt Mr Browne’s conclusion that the re-clad was reasonable because of the “combination of defects”, among other things, even though she considered it. The adjudicator found that the appellants had not established that the need for a full re- clad was caused by negligence on the part of the respondents.
[92] The adjudicator also recorded that the experts had agreed that the defects, regarding which the appellants had established liability on the part of the respondents, could be remediated through targeted repair work.65 I am not persuaded that the adjudicator was wrong to conclude that the respondents should not be required to meet the costs of a full re-clad; putting aside for now the issue of whether targeted repairs can in fact be carried out, which I will discuss later.
Who is liable to pay for the remedial work?
[93] The next step in the adjudicator’s decision was to determine which of the respondents (if any) were liable to the appellants, and to what extent. As noted above at [80], the adjudicator said that before any respondents were found liable, it had to be established by the claimants (appellants) that the party concerned owed the appellants a duty of care, the party had breached that duty of care, and that the appellants had suffered loss as a consequence of the breach. She recorded that the respondents had submitted that even if they did owe a duty of care, and had breached that duty, the breach was not causative of the need for a full re-clad of the appellants’
house.66
[94] The adjudicator found the third respondent, Mr Hung, was a developer together with the first respondent, Stareast, and that he personally owed the
65 Determination, at [66] and [141] – [142].
66 At [67].
respondents a non-delegable duty of care. She concluded that Mr Hung was jointly and severally liable for the full amount of the claim as established.67 She further concluded that the fourth respondent, Mr Taylor, was liable for the costs of remedial work to the deck only. That finding has, as noted earlier, been overturned on appeal.
[95] Regarding the Council, the adjudicator held that negligence had been established in relation to the curved window, the inadequate ground clearances by the garage, the roof valley trays, horizontal band, and deck. The adjudicator held that the Council was liable for the remedial costs relating to those items. She found that the Council was not negligent in respect of any deficiency in the construction of the vertical control joints. The roofing contractor, CSR Building Products (NZ) Limited, was held liable in relation to the roof valley trays only. As noted earlier, the roofing contractor’s appeal relating to this finding has been abandoned.
[96] The appellants challenge the adjudicator’s finding that the Council was liable in respect of certain defects only. Mr Chee submitted, first, that the adjudicator should have found the Council liable in respect of the vertical control joints. He submitted that the Council did not carry out a proper inspection of the joints and, if it had done so, would have seen the deficiencies. That submission cannot succeed. First, as the adjudicator noted, the only actual deficiency related to the manner in which the joints were filled. After hearing the conflicting evidence, she considered that this was not a defect which a Council officer could reasonably have been
expected to detect.68
[97] Secondly, it was argued in Mr Rainey’s written submissions that the appellants’ loss was indivisible, thus the respondents must be jointly and severally liable for all loss which they caused or contributed to. He argued that if the Council’s negligence contributed to the need for the house to be fully re-clad, then they should be held jointly and severally liable for the cost of the re-clad. Adopting Mr Rainey’s submissions, Mr Chee submitted at the appeal hearing that the Council had to “take the house as they found it”; in other words if, because of an inherent
defect in the “HardiTex direct-fixed to untreated timber” construction of the
67 At [74] – [85].
68 At [121].
appellants’ house, remedial work could only be carried out by way of a full re-clad, then they could not contest being held liable in respect of the costs of a re-clad.
[98] I do not accept the appellants’ submissions. As discussed earlier, the adjudicator found that the appellants had not established causation in fact in relation to the appellants’ claim for a full re-clad – that on the balance of probabilities negligence on the part of the respondents had caused or contributed to the need for a full re-clad of the house. Accordingly, she was not required to consider whether they
had established causation in law.69 In the circumstances, the question whether the
appellants’ loss (that is, their claim for a full re-clad) was indivisible does not arise. However, with regard to the costs of targeted repair work, the adjudicator was correct to apportion liability between the respondents. In that respect, the respondents are in the position of concurrent, rather than joint, tortfeasors, as their separate acts together produced the same damage. Accordingly, I do not accept that the adjudicator was wrong not to find all respondents liable jointly and severally for all loss.
Can targeted repairs be carried out?
[99] This issue requires consideration because Mr Browne said in his supplementary Assessor’s report that he believed that the Territorial Authority (in this case, the Council) would require re-cladding of all elevations of the house as a condition of a building consent for remedial work.70 Mr Browne also said in his concluding remarks of this report, that “[t]he final decision regarding the nature and extent of remedial works will be influenced by the Territorial Authority’s approach to the existing construction design”.71
[100] In her judgment in Body Corporate 185960 v North Shore City Council
(“Kilham Mews”),72 Duffy J considered targeted repairs as opposed to re-cladding the buildings fully. In that case, her Honour considered that there were extensive
69 See [37] – [38], above.
70 Mr Browne’s supplementary report, 24 June 2008 at [12.1.4.15] (north elevation), [12.2.4.7] (east elevation), [12.3.4.5] (south elevation), [12.4.4.8] (west elevation).
71 At [15.6.3.2].
72 Body Corporate 185960 v North Shore City Council (“Kilham Mews”) HC Auckland CIV 2006-
004-3535, 22 December 2008 / 21 April 2009 at [28] – [31].
points of moisture entry, and that the damage to the building was too widespread to permit targeted repairs to be carried out. Her Honour further observed:73
... Moreover, it is by no means clear that a building consent for anything other than a full re-clad could be obtainable. Since the amendment to Schedule 1 of the Building Act 2004, any repair or replacement work, which is beyond maintenance and which arises from a failure of a building to satisfy the provisions of the building code for durability (for example a failure to comply with the external moisture requirements of the building code), now requires a building consent. Work which requires a building consent must conform to the current building code. This has requirements which were not in place in 1997 and which the building work at Kilham Mews currently does not satisfy.
It may well be the case that legally a building consent could not be obtained to do targeted repairs and that nothing less than a full re-cladding, which complies with current requirements, would suffice. None of the experts could be sure of this. However, it is unnecessary to resolve this legal question as the evidence of the plaintiffs’ expert witnesses satisfies me that the only sensible way to resolve the leaky building problems at Kilham Mews is for there to be a full external re-cladding of the buildings.
[101] The adjudicator has not considered this issue, but simply concluded that, because she had held that the appellants had not established a causative link between the need for a full re-clad and negligence by the respondents, the only basis on which to determine quantum was the cost of targeted repairs. The adjudicator did not consider the possibility that it may not be possible to carry out targeted repairs, in the event that a building consent was not forthcoming.
[102] When this issue was raised at the appeal hearing Mr McLellan submitted, first, that the Kilham Mews decision was distinguishable on its facts, and secondly that the appellants had had ample time to apply for a building consent and had not done so. In the circumstances, he submitted, there were no grounds on which this Court should interfere with the determination.
[103] I accept that the water ingress and consequent damage in the Kilham Mews circumstances were greater than in this case, and as a result I recognise also that her comments on what might happen if a consent was not issued for targeted repairs were obiter. While Duffy J declined to resolve the legal question of what would
happen in that event, her observations are nevertheless helpful.
73 At [30] – [31].
[104] The appellants were given the opportunity to apply for a building consent. The hearing of their appeal was adjourned for that purpose. In their oral submissions dated 8 November 2011, the appellants set out the main reasons why they did not apply for a building consent. These were a concern that the Council, as a party to the proceeding, may issue a building consent to bring the proceeding to an end, a concern apparently arising from Mr Taylor’s appeal, the disagreement as to whether deficiencies in the vertical control joints had caused or contributed to widespread cracking, and the cost of applying for a building consent.
[105] I do not consider that the appellants’ decision not to apply for a building consent should now be held against them. They considered they had good reasons for their decision. Nevertheless, the result is that this Court is in the same position as was the Tribunal, in that it is not known whether a building consent will be issued for targeted repairs.
[106] I consider that the appropriate course is to direct the appellants to apply for a building consent for targeted repairs. For that reason, this will be an interim judgment only. This is most unfortunate, given the time that this matter has been on foot. However, I can see no alternative. The appellants’ application must be considered by the Council, as the relevant Territorial Authority. The Council is expected to consider the application fairly and in accordance with usual practice, and without any regard for its own position in this proceeding.
[107] It is appropriate that the costs associated with an application for a building consent (which Mr Chee believed to be in excess of $10,000) should be incorporated in the quantum of damages as an item of consequential damage. The cost of applying for a building consent for remedial work is clearly consequential upon the liability findings.
[108] Once the Council’s decision on the application for a building consent is
known the matter is to be placed before the Tribunal for a final determination.
Stareast Investment Limited
[109] I turn, finally, to the position of Stareast. In his written submissions, Mr Rainey argued that, as Stareast was restored to the Companies Register before the adjudicator’s determination was delivered, it was open to the adjudicator to make a separate finding of liability against Stareast. He argued that there were ample grounds for such a finding.
[110] In his submissions on behalf of the Council, Mr McLellan supported Mr Rainey’s submissions, adding that the adjudicator was “plainly wrong” in not making a finding of liability against Stareast, although the error was inadvertent since the adjudicator was not aware that Stareast had been restored to the Register.
[111] Both submissions have merit. However, neither Stareast nor its director, Mr Hung, were represented at the appeal hearing, and neither filed any submissions. They appear to have taken no part in this appeal proceeding, at all. If the Tribunal can be satisfied that they have been served with copies of all relevant documents, or otherwise given adequate notice that Stareast’s liability would be squarely before the Court, then it may be appropriate to deal with the matter as a default judgment.
Result
[112] As indicated earlier, I direct that the appellants are to apply for a building consent for targeted repairs. The application is to be filed as soon as practicable. Once the Council’s decision on the application is known, the matter is to be placed before the Tribunal for a final determination.
[113] It is not, at this stage, appropriate to make any order as to costs.
Andrews J
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