Derwin v Wellington City Council

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2012-485-553 [2014] NZHC 341

BETWEEN  PATRICK DEAN DERWIN & RAMA DIAR

Plaintiffs

ANDWELLINGTON CITY COUNCIL Defendant

ANDCOLIN JAMES DALLAS First Third Party

ALCHEMY ENGINEERING AND DESIGN LIMITED

Second Third Party

BUILDERS PLASTICS LIMITED Third Third Party

Hearing:                   14-16 and 23 October 2013

Counsel:                  A K Hough and K M Mortimer for the Defendant

J D Haig for the First Third Party
No appearance for the Plaintiffs, Second Third Party and Third
Third Party

Judgment:                28 February 2014

JUDGMENT OF MALLON J

Table of Contents

Introduction ....................................................................................................................................... [1] The facts ............................................................................................................................................. [7] A leaky home .................................................................................................................................. [7] Kingdom ....................................................................................................................................... [10] The Craig home ............................................................................................................................ [13] Sale to Derwin and Diar............................................................................................................... [35] Subsequent events ......................................................................................................................... [37] The Building Act and Code ............................................................................................................ [38] Claim as concurrent tortfeasor ...................................................................................................... [40] Outline of claim ............................................................................................................................ [40] WCC’s liability ............................................................................................................................. [41]

Mr Dallas’ liability ....................................................................................................................... [44]

Same damage................................................................................................................................ [56]

DERWIN v WELLINGTON CITY COUNCIL [2014] NZHC 341 [28 February 2014]

Just and equitable......................................................................................................................... [57] Negligent misstatement ................................................................................................................... [58] WCC’s claim ................................................................................................................................. [58] Representation that the building was weathertight ...................................................................... [60] Representation as to kick outs ...................................................................................................... [64] Representation concerning window(s) ......................................................................................... [74] Representation as to parapets ...................................................................................................... [96] Conclusion.................................................................................................................................... [97] Fair Trading Act ............................................................................................................................ [100] Conclusion...................................................................................................................................... [106]

Introduction

[1]      This claim concerns a leaky home built in late 2001/2002 and given a Code

Compliance Certificate (“CCC”) by the Wellington City Council (“WCC”) in March

2005.  The home was built for Mr and Mrs Craig.  It was purchased by Mr Derwin and Ms Diar (the plaintiffs) in 2005 shortly after the CCC was given.1   By February

2012 at the latest the problems with the house became evident to the plaintiffs.2

Work to rectify the home is quantified at $774,000.

[2]      The plaintiffs brought a claim in negligence against WCC to recover special damages of $809,968.25 and consequential losses, general damages of $30,000 per plaintiff, interest  and  costs.   The claim  alleged  that WCC  breached  its  duty to exercise reasonable skill and care by failing to carry out proper inspections and issuing a CCC when there were no reasonable grounds for believing that the building work complied with the Building Code.

[3]      WCC in turn claimed against:

(a)       Mr Dallas, the managing director of Kingdom Residential Housing

Limited   (“Kingdom”),   which   was   the   building   company   that contracted with Mr and Mrs Craig to build the house;

1      A building report from Mr Redican of Capital House Inspections to the plaintiffs indicates that the plaintiffs were investigating purchasing the property in early 2005.   The title was not transferred until 19 July 2005.

2      Mr Derwin and Ms Diar lodged their claim with the Weathertight Homes Resolution Service (“WHRS”) on 21 February 2012.   The WHRS Assessor’s eligibility report at 6.3 notes that Ms Diar and Mr Derwin experienced a leak in 2007 in their bedroom, and that leaking again became a problem in January 2012.

(b)      Alchemy  Engineering  and  Design  Limited  (“Alchemy”),  which

installed balustrading to the house; and

(c)      Builders…