Grey District Council v Blain - [2013] NZHC 522

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

CIV-2011-418-000060

CIV-2011-418-000123 [2013] NZHC 522

BETWEEN GREY DISTRICT COUNCIL Plaintiff

ANDANDREW SCOTT BLAIN First Defendant

ANDKEVIN O'CONNOR & ASSOCIATES LIMITED
Second Defendant

ANDASC ARCHITECTS LIMITED [DISCONTINUED]
Third Defendant

ANDCARTER HOLT HARVEY LIMITED Fourth Defendant

ANDLHT DESIGN LIMITED Fifth Defendant

ANDEVAN JONES CONSTRUCTION LIMITED
Third Party

Hearing: 27 February 2013

Appearances: No appearance for Plaintiff
S Lester for First & Second Defendants
D Valente for Fourth Defendant D J MacRae for Fifth Defendant G M Brodie for Third Party

Judgment: 19 March 2013

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

GREY DISTRICT COUNCIL V ANDREW SCOTT BLAIN HC GRY CIV-2011-418-000060 [19 March 2013]

[1] In 2006 the Grey District Council decided to construct an aquatic centre in Greymouth. Each of the defendants and the third party played a part in the process which resulted in the centre being built. Evan Jones Construction Limited (EJCL) entered a construction contract with the Grey District Council. A product called laminated veneer lumber (LVL) was used for the beams supporting the roof of the main building. The fourth defendant, Carter Holt Harvey Limited (CHH) supplied the LVL to EJCL.

[2] The Council says that the LVL rafters have a deflection which is outside the recommended deflection levels in the building code, that the design of the roof structure allowed for the use of untreated LVL rafters and purlins which has had negative consequences for their structural integrity, and that at a point where aluminium-coated steel fixings have been installed with the use of galvanised steel nails, the nails have started to oxidise and corrode. The Council says it has suffered loss and damage yet to be quantified, for remedial work replacing the LVL rafters and purlins, and the galvanised nails. The damages will include professional fees and the cost of consequential repairs to the building.

The Council claims

[3] As a result the Council sues the following parties, on the following bases: (a) The First and Second Defendants:
1.Mr Blain and Kevin O’Connor and Associates (KOA), by whom he is employed, are engineers. The Council says that it engaged the fifth defendant, LHT Design Limited, which trades as LHT Engineering Solutions (LHT) for the design and administration of the construction of the aquatic centre, and to deal with regulatory compliance. This contract is known as the Design and Construction Administration Contract. It says that LHT engaged Mr Blain and KOA to provide an independent review of part of the design work for the aquatic centre. It says that Mr Blain produced a producer statement and signed it on behalf of KOA, which then supplied it to the Council.

2.The Council sues Mr Blain and KOA in tort alleging they owed the Council a duty of care, and were negligent and breached that duty of care by issuing the producer statement because the documents in the schedule to that statement were not wholly compliant with the relevant provisions of the building code.

3.In the alternative the Council sues…

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: [2013] NZHC 522
Decision Date: 19 March 2013

CaseChat Overview and Summary

The Grey District Council brought an action against several parties involved in the construction of an aquatic centre in Greymouth, claiming that the design and construction process resulted in structural defects in the building. The defendants and third parties were EJCL, the construction contractor; LHT, the designer and administrator of the construction; ASC, the project architect; CHH, the supplier of the laminated veneer lumber used in the building; and Mr Blain, an engineer engaged by LHT to review the design work. The Council sued the defendants on the basis of breach of contract, negligence and misleading or deceptive conduct under the Fair Trading Act. The Council also sought contribution or indemnity from EJCL under s 17(1)(c) of the Law Reform Act 1936. EJCL applied for the third party claims against it to be set aside, and for summary judgment in its favour. The issue was whether the claims against EJCL should be set aside because EJCL did not owe a tortious duty of care to the Council to exercise reasonable skill, care and diligence in carrying out the construction. The Court concluded that EJCL did not owe a duty of care to the Council in tort, and set aside the third party notices against it. The Court noted that the contract between the Council and EJCL provided a detailed regime for the allocation of risk and responsibility, including an indemnity by EJCL for all loss suffered by the Council arising out of or in consequence of the construction or the remedying of defects in the contract works, limited by three specific exceptions. The Court held that the approach to the allocation of risk and responsibility was inconsistent with a general duty of care in tort to act with reasonable skill and care. The Court also held that the lack of a provision in the contract excluding liability in tort was not conclusive given the present state of the law. The Court held that the third party notices should be set aside because the claims against EJCL were so clearly untenable that they could not possibly succeed.

Orders