Hermann v Martin
[2020] NZHC 688
•3 April 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-000896
[2020] NZHC 688
UNDER the Weathertight Homes Resolution Services Act 2006 IN THE MATTER
of an appeal from a decision of the Weathertight Homes Tribunal
BETWEEN
DAVID THOMAS HERMANN
First Appellant
HERMANN ENTERPRISES LIMITED
Second AppellantAND
JULIE MARTIN, BELINDA MARTIN and NOEL CAVE
First Respondents
GRAEME JOHN EVANS
Second RespondentRespondents continued over
Hearing: 18 March 2020 Appearances:
C E Lane and N W H Hawtin for First and Second Appellants D J Barr and M G Bolwell for Seventh Respondents
No other appearance for or by other Respondents
Judgment:
3 April 2020
JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie
On 3 April 2020 at 3.30pm Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:…………………………
HERMANN v MARTIN [2020] NZHC 688 [3 April 2020]
BRUCE POVELL
Third Respondent
RICHARD PALMER
Fourth Respondent
MARK WILLIAM TERRILL
Fifth Respondent
MWT MASONRY LIMITED
Sixth Respondent
FLETCHER CONCRETE AND INFRASTRUCTURE LIMITED
Seventh Respondent
NAGEL CONSULTANTS LIMITED
Eighth Respondent
Solicitors/counsel: Grimshaw & Co, Auckland
Simpson Grierson, Wellington
Introduction
[1] The appellants, David Hermann and his company, Hermann Enterprises Ltd (jointly Hermanns), appeal a decision of the Weathertight Homes Tribunal (the Tribunal) made in procedural order 12 delivered on 12 April 2019.1
[2] Hermanns are defendants in a claim bought under the Weathertight Homes Resolution Services Act 2006 (the Act). They sought to join additional parties - including the seventh respondent, Fletcher Concrete and Infrastructure Ltd (Firth) and the eighth respondent, Nagel Consultants Ltd (Nagel) - to the claim. The Tribunal joined some parties to the claim but declined to join others, including Firth and Nagel.
[3] Hermanns appeal the Tribunal’s refusal to join Firth and Nagel to the claim. They do not appeal the other orders made by the Tribunal. Firth opposes the appeal. Nagel has been served but has taken no steps.
Background facts
[4] The appeal arises out of a building defects claim brought by the first respondents, Ms Julie and Ms Belinda Martin and Mr Noel Cave (jointly the claimants), against various persons and entities they say were involved in the construction of their new home in New Plymouth between 2004 and 2005. They say that the house was constructed with defects, that it leaked, that damage resulted and that the house required remedial work to put it right, including recladding. In particular they say that there was:
(a)inadequate detailing to the joinery/cladding junctions;
(b)inadequate detailing to the exterior concrete block and plaster paint systems;
(c)inadequate installation of structural elements including inadequate grout filling of exterior block walls;
1 Martin v Hermann (Procedural Order 12) [2019] NZWHT Auckland.
(d)poor installation of exterior plaster and paint systems; and
(e)a lack of detailing in line with the approved building consent documentation.
[5] The claimants applied to the Ministry of Business Innovation and Employment (MBIE) in January 2013 and an initial Assessment Eligibility Report was completed in February 2013. A follow up full report was completed in June 2013. Their claim was accepted into the financial assistance package program by MBIE in March 2013.
[6] The remedial works have been completed. The full cost was $421,887.52. The claimants have received $157,958.09 from MBIE under the financial assistance package. They seek the shortfall from the various people they think were responsible for the construction defects. They have claimed against four parties – Mr Herman, Mr Evans, Hermann Enterprises Ltd and Mr Povey - alleging that:
(a)Mr Hermann had control over the design and construction of the house;
(b)Mr Evans built the house;
(c)Hermann Enterprises Ltd provided the required architectural services; and
(d)Mr Povey was the plasterer.
In addition to the shortfall the claimants also seek special damages ($7764.06), reimbursement of wasted expenditure ($19,065.25), damages for an assumed diminution in the value of the house, general damages ($25,000) and interest.
[7] On 1 March 2019 Hermanns applied under s 111 of the Act to join nine additional parties to the claim. The application was opposed by the claimants.
The Tribunal’s Procedural Order 12
[8] The Tribunal briefly summarised aspects of the factual background and then set out what it considered to be the test for joinder. After referring to relevant case law, it held that two things are generally required: tenable evidence of a proposed party’s breach of duty and a causative link to the construction of a claimant’s house.2
[9] The Tribunal then considered the factual foundation for the claims which Hermanns wished to make against each proposed party. It ordered the joinder of some additional parties. It declined to order the joinder of other proposed parties – Mrs Martin (the claimants’ mother), Firth, E & J Saunders trading as Rylock New Plymouth, Nagel, Mr O’Brien (the foreman employed by the builder) and Valspar Paint (NZ) Ltd (the paint manufacturer).
[10] The cladding on the claimants’ house is a masonry block product supplied by Firth. It is known as the “Firth Hotbloc”. Relevantly, Hermanns were alleging that Firth was responsible either in whole or in part for:
(a)defects with the installation of the windows;
(b)inadequate ground clearances; and
(c)defects with the fixing of gib board to the block work.
[11] Hermanns asserted that the work in relation to each of these items was carried out in accordance with a trade manual put out by Firth - the 2001 Firth Masonry Villa Manual (the Manual) - and that the defects and resulting damage arose as a consequence of following the Manual.
[12]In relation to:
(a)the windows, the Tribunal outlined the evidence before it from Mr Thomas Wutzler, a building surveyor and remediation specialist
2 At [9]-[14].
retained by the claimants, to the effect that the windows were not installed in accordance with the Manual and/or Mr Hermann’s details and/or good trade practice and/or the consented plans. It held that because of these departures, there was no causative link between the Manual and the defects and damage that arose;3
(b)the ground clearance issue, the Tribunal noted that the consented plans required the builder to comply with the manufacturer’s specification, the BRANZ Ltd Good Stucco Practice (February 1996) and good trade practice. The BRANZ guide and good trade practice required that the stucco not be taken below ground. The Manual showed the cladding being taken to the ground. The Tribunal noted that it was not possible to tell whether the cladding was to ground level or below and observed that the surrounding ground level would most likely have been completed following construction. It considered that it was not possible to tell if the cladding was formed above or below ground in the absence of evidence about the relative ground levels at the conclusion of the cladding installer’s work;4 and
(c)the gib board installation, the Tribunal accepted that the evidence was that it was installed in accordance with the Manual, but that there was no causative link between this and any damage arising. It considered that the fixing of the gib linings was not a defect in itself.5
In summary, the Tribunal held that the various allegations against Firth did not raise tenable arguments such that it should be joined to the claim.
[13] Hermanns alleged that Nagel prepared the structural engineering design, including a design for control joints in the blockwork. Hermanns asserted that the plans prepared by Nagel were unclear. The Tribunal did not agree. It considered the plans and found that they made clear reference to the grout filling of cells and to
3 At [44]-[45].
4 At [46]-[49].
5 At [50]-[51].
control joints, and that it was obvious to anyone constructing the house that control joints were required at the locations indicated. It observed that there was no evidence before it, other than Mr Hermann’s uncorroborated assertion that it was the practice of the New Plymouth District Council to require structural engineers to attend onsite during construction, suggesting that Nagel made site observations or undertook a supervisory role.6 It declined the application to join Nagel as a party to the claim.
The Appeal
[14] The appeal was filed on 10 May 2019. Unfortunately, Hermanns neglected to serve it on either Firth or Nagel. As a result, a fixture for the hearing of the appeal on 30 October 2019 had to be vacated. Firth and Nagel were served on 31 October 2019, both at their respective registered offices.
[15] The appeal is brought pursuant to s 93 of the Act. It provides that any party to a claim that has been determined by the Tribunal can appeal to this Court (if the amount at issue exceeds $350,000) on a question of fact or law that arises from the determination. The right of appeal extends to procedural orders given at the interlocutory stage where the orders finally determine a claim (or in this case an intended claim) against a party or proposed party.7 The appeal proceeds by way of rehearing.8 The observations of the Supreme Court in Austin Nichols & Co Inc v Stichting Lodestar are apposite. The Chief Justice there held as follows:9
Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence rather than forming its own opinion.
[16] The onus is on an appellant to satisfy the appellate court that it should differ from the decision under appeal. The extent of the consideration the appellate court
6 At [78]-[86].
7 Thomson v Christchurch City Council HC Christchurch CIV 2010-409-2298, 28 March 2011 at [19]; Kells v Auckland City Council HC Auckland CIV 2008-404-1812, 30 May 2008.
8 High Court Rules 2016, r 20.18.
9 Austin Nichols & Co Inc v Stitching Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16].
should give to the decision under appeal is a matter for its judgment; no deference is required beyond the customary caution appropriate when the tribunal had a particular advantage, such as technical expertise or the opportunity to assess the credibility of witnesses.10
Submissions
[17] Mr Lane for Hermanns discussed the law applicable to joinder under the Act. He submitted that the Tribunal in this case applied too high a standard, requiring Hermanns to point to “sufficiently compelling evidence” that the claim against the proposed parties was capable of succeeding. He further argued that the Tribunal either did not consider, or did not give sufficient weight to relevant circumstances – in particular that Hermanns no longer have contemporaneous documents and that they were deprived of the opportunity to collect evidence when the remediation works were being undertaken.
[18] Mr Lane then turned to address the legal basis for Hermanns’ claim seeking contribution from Firth as a manufacturer and supplier of a building product used in the construction of the house. He went through each of the defects raised by the claimants which Hermanns seek to attribute in whole or in part to Firth He went through the evidence available to date in relation to each relevant alleged defect and submitted that there was tenable evidence that aspects of this defective work were carried out in accordance with the Firth Manual. He put it to me that as a result Firth should be joined to the proceedings. He then went through the same exercise with Nagel.
[19] Mr Barr for Firth assumed, for the purposes of this appeal, that Hermanns will be found liable to the claimants and that Firth owed a duty of care to the claimants. He argued that there is insufficient evidence to establish a tenable claim against Firth and that the available evidence does not establish that the relevant building elements were constructed in accordance with the Manual. Even if they were, he argued that this does not mean that Firth is liable. He argued that there is no explanation in the evidence of why the construction methods specified in the Manual were defective,
10 At [3]-[5], [13] and [21].
how construction in accordance with the Manual caused leaking or damage, what standard Firth should have met, or if it breached whatever that standard was.
Further Evidence
[20] Before analysing the submissions and considering the appeal, I deal with a minor subsidiary issue.
[21] On 4 March 2020, Firth filed a memorandum seeking leave to adduce further evidence at the appeal hearing. The proposed additional evidence comprised extracts from building practice guides put out by BRANZ Ltd, by the Department of Building and Housing and by the Cement and Concrete Association of New Zealand. Hermanns filed a memorandum opposing the application.
[22] The memorandum filed by Firth referred to r 20.06 of the High Court Rules 2016. Inter alia it provides that, without leave, a party to an appeal can adduce further evidence on a question of fact, if the evidence is necessary to determine an interlocutory application that relates to the appeal. In all other cases leave is required. Here leave was sought and it was accepted that it was required. There was however no application before the Court seeking leave. There were only memoranda. The Court does not normally respond to memoranda where, as here, application should have been made. When I raised this issue with Mr Barr he accepted that much of the further evidence he was seeking to adduce was not strictly necessary for the determination of the appeal but that it would be advantageous if counsel were able to refer to the BRANZ Ltd Weathertight Solutions Masonry Guide dated January 2007. I doubted the relevance of the guide given that the house the subject of the claim was built in 2004 to 2005. Nevertheless, Mr Lane consented to this guide coming in and, on this basis, I was prepared to accept this guide but not the other materials sought to be adduced.
Analysis
(a)The Test for Joinder applied by the Tribunal
[23] Section 111 of the Act provides for the joinder of additional parties after a claim has been filed. Relevantly it provides as follows:
(1)The tribunal may order that a person be joined as a respondent in adjudication proceedings if it considers that –
(a)the person ought to be bound by, or have the benefit of, an order of the tribunal; or
(b)the person’s interests are affected by the proceedings; or
(c)for any other reason it is desirable that the person should be joined as a respondent.
(2)The tribunal may make an order under subsection (1) on the application of any party or on its own initiative.
[24] The wording of the section differs from the equivalent provision in the High Court Rules.11 That provision provides for the joinder of any person who ought to have been joined or whose presence may be necessary to adjudicate on and settle all questions involved in the proceeding. Section 111 is arguably more liberal – it refers to desirability and not necessity. Both however have the same essential purpose. They provide the mechanism to ensure that all necessary (under the High Court Rules) or desirable (under the Act) parties are before the Court or the Tribunal, as the case may be, so that all issues can be resolved in the one hearing, thus preventing multiple hearings and the risk of inconsistent findings. The approach to joinder under the High Court Rules, notwithstanding the higher threshold of necessity, is liberal.12
[25] Here the Tribunal observed that whether a claim is capable of succeeding, based on information available to the Tribunal at the time, is one of the critical factors in determining, in the circumstances of each case, whether it is fair and appropriate to
11 High Court Rules 2016, r 4.56.
12 Chan v Seyip Association of New Zealand Inc [2008] NZAR 37 (HC) at [12]; McKendrick Glass Manufacturing Co Ltd v Wilkinson [1965] NZLR 717 (SC) at 723 - 725; And AC Beck and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR4.56.04].
join the proposed party. It went on to refer to three decisions of this Court.13 After referring to the first decision, it stated that:14
[A]ccordingly where a party is applying to join a party, they have to point to sufficiently compelling evidence to establish that the claim against that party is capable of succeeding.
[26]After referring to the other two decisions the Tribunal stated that:15
[A]ccordingly, in order to meet the criteria set down in s 111, tenable evidence of the proposed party’s breach of duty and a causative link to the construction of the claimant’s property is generally required.
[27] The Tribunal drew two conclusions from the case law. It does not seem to have appreciated that they are different. A test requiring sufficiently compelling evidence is more stringent than a test requiring only tenable evidence.
[28] The Tribunal relied on the decision of Harrison J in Auckland City Council v Weathertight Homes Resolution Services for the proposition that there has to be “sufficiently compelling” evidence before joinder will be ordered.16 With respect, that is reading too much into the decision. Harrison J held that the Council, as the party seeking to add architects to a claim, had to point to “tenable evidence” both of breach and of a causative link.17 He did go on to say, obiter, that where the Council was alleging breach of a duty of care by architects, a brief from an appropriately qualified and independent member of that profession would have been essential. He opined that the assessor’s opinion could never have sufficed.18
[29]In Thomson v Christchurch City Council Gendall J observed as follows:19
Clearly if there is no tenable evidence of factual foundation put before the Adjudicator to provide some support for a cause of action against an intended party then joinder would be inappropriate. It would all depend upon the circumstances and material before the Adjudicator, whether emerging from the assessor’s report or other evidence tendered at that stage.
13 Auckland City Council v Weathertight Homes Resolution Service HC Auckland CIV 2004-404- 4407, 28 September 2004; Yun and Phon v Waitakere City Council HC Auckland CIV 2010-404- 5944, 15 February 2011; Auckland Council v Gormly [2013] NZHC 721.
14 Martin v Hermann, above n 1, at [11].
15 At [14].
16 Auckland City Council v Weathertight Homes Resolution Service, above n 13.17 At [28].
18 At [31].
19 Thomson v Christchurch City Council, above n 7, at [33].
[30] This signals a more lenient approach than that which found favour with Harrison J.
[31] In Auckland Council v Gormly, Woolford J summarised arguments put to him by counsel for the appellant in that case:20
(a)Unless a proposition is clearly wrong or unsustainable it is premature to decline a joinder application;
(b)An applicant seeking joinder must be able to point to evidence of a factual foundation;
(c)If the party seeking joinder can point to tenable evidence, the Tribunal should grant joinder and not consider the relative strengths and weaknesses of the evidence; and
(d)The Tribunal should err on the side of granting joinder, recognising that
(i)parties that are joined can subsequently apply to be removed form the claim; and
(ii)if a party is joined on the basis of an allegation that lacks substantial merit this can sound in costs.
[32] Woolford J recorded that he saw merit in these (and additional) arguments. Some caution has to be accorded to this observation because there was no appearance for any other party and it is obiter. The Judge did however note that the Tribunal was overstating the position when it had commented that a party seeking joinder has to produce “sufficiently compelling evidence” before it can be granted.
[33] I agree with Woolford J’s view - but only in regard to the observations I have set out in the preceding paragraph. I do not express a view on the other propositions recorded in Thomson. They were not raised in argument before me. There is no basis in case law for the further propositions in so far as I am aware and I am not prepared to endorse them without hearing full argument on the issue.
[34] In my view the Tribunal in this case would have erred if it had applied a test requiring Hermanns to adduce sufficiently compelling evidence before ordering joinder. I am not however persuaded that it did apply that test. It recognised the
20 Auckland Council v Gormly, above n 13, at [13] - [14].
tenable evidence test and it seems that it was this test which it applied when it declined to join Firth and others to the claim. It expressly recorded that “[t]he various allegations against Firth do not raise tenable arguments that it should be joined to this claim”.21 It adopted the same approach when refusing to join other proposed parties. The Tribunal was not so clear when dealing with the application to join Nagel but it seems unlikely that it would have flip-flopped from one test to the other in the course of its decision. I would not allow the appeal on this basis alone.
[35] I now turn to consider whether the tenable evidence test was properly applied by the Tribunal to the application to join Firth and Nagel to the claim.
(b)The particular circumstances in which the application was made
[36] Mr Lane argued for Hermanns that the Tribunal either failed to take into account relevant circumstances or failed to give them sufficient weight. He referred to the observations made by Gendall J and noted above at [27]. He said that it is relevant that Hermanns no longer have their contemporaneous documentation and that they did not have the opportunity to collect evidence before the remedial works were undertaken or while those works were underway.
[37] I am not persuaded that there was any error by the Tribunal in this regard. That Hermanns did not retain its records is a matter for it and it should not fall in favour of joinder. Nor should the fact that Hermanns say they did not have the opportunity to attend while the remedial works were being undertaken. Both Julie and Belinda Martin have deposed that they made numerous attempts to contact Mr Hermann from 2007 onwards once problems with the house started to arise. They say that they did not receive any substantive response or advice. They have referred to numerous calls which they say Mr Hermann declined to answer or to return. Assuming this evidence is correct, Hermanns’ refusal to engage should not be visited on Firth.
21 Martin v Hermann, above n 1, at [52], and see [30] in relation to Mrs Martin, [61] in relation to E & J Saunders, [75] in relation to Mark Terrill and MWT Masonry Ltd, [101] in relation to Mr O’Obrien, and [110] in relation to Valspar Paint (NZ) Ltd.
[38] The only circumstance of relevance is that the claimants opposed the joinder of any additional parties. That is a factor to be considered but it is not a bar to joinder.22 The Tribunal noted the opposition in its decision and considered it. It did not treat it as a bar.23 There was no error in this regard.
(c) The Nature of the Proposed Claims against Firth and Nagel
[39] The law is clear that those involved in the construction of a house - contractors, architects, and engineers - owe a duty of care to use reasonable skill and care to prevent damage to those whom they should reasonably expect to be affected by their work.24
[40] Hermanns, as the designer/architect, are the subject of a claim by the claimants as owners of the house. They say that if they are liable so also are Firth and Nagel. Hermanns’ proposed claim against Firth and Nagel seeks contribution pursuant to s 17 of the Law Reform Act 1936. To succeed, Hermanns will have to establish that Firth and/or Nagel were also liable to the claimants and in respect of the same damage.
[41] Firth was a product supplier. That does not preclude its potential liability. In recent years, the Courts have been prepared to accept that liability can extend to the manufacturers of products used in the building industry.25 The assertion that there is a duty to exercise reasonable care and skill in relation to the design, development, manufacture, testing and supply of building products, approved systems and technical information documents, does not raise a novel duty of care.26
[42]Nagel was a designer of part of the building works.
(d)Firth
[43] As noted Mr Barr was, for the purposes of this appeal, prepared to accept that Firth owed a duty of care to the claimants. Nevertheless, he argued that, to join Firth,
22 Mainzeal Corp Ltd v Contractors Bonding Ltd (1989) 2 PRNZ 47.
23 Martin v Hermann, above n 1, at [2] to [4].
24 Bowen v Paramount Builders (Hamilton) Ltd [1972] 1 NZLR 394 (CA).
25 Carter Holt Harvey v Minister of Education [2016] NZSC 95, [2017] 1 NZLR 78; Cridge v Studorp Ltd [2017] NZCA 376.
26 Cridge v Studorp Ltd, above n 23, at [26] to [27].
Hermanns had to assert a reasonable cause of action against Firth and point to tenable evidence that Firth breached its duties to the claimants and that that breach resulted in whole or in part to the claimants’ loss.
[44]I agree with this analysis.
[45] The assessor in his two reports and Mr Wutzler in his brief of evidence confirmed their view that the claimants’ property suffered from various defects which contributed to widespread water ingress, which in turn resulted in damage to the fabric of the home, requiring substantial remediation. The defects are said to include inadequate detailing to joinery/cladding junctions and inadequate detailing to the exterior concrete block plaster and paint systems. Assuming that the assessor and Mr Wutzler are correct, if Hermanns as the project managers and architectural designers followed the Manual put out by Firth inter alia specifying how joinery and cladding junctions were to be installed and how the exterior concrete blocks were to be plastered and painted, then for present purposes, I am prepared to accept that Firth could be liable to the claimants. The cause of action that Hermanns seek to rely on against Firth does not seem to me to be specious or untenable.
[46] It must be determined whether Firth did breach such duty as was owed by it to the claimants - in other words, is there tenable evidence that the relevant defective construction works were undertaken in accordance with the Manual and that there were leaks notwithstanding compliance with the Manual?
[47] Dealing first with the joinery/ cladding junctions, the manual contained a number of detailed drawings setting out how window jamb/cladding junctions were to be formed and installed. It appears to be common ground that there were a number of defects with the installation of the windows. The available evidence suggested that no drip edges were installed, that sills were encapsulated in plaster, that paint was applied over weep holes and that there was inadequate protection to the porous concrete block sills. Mr Wutzler said that the absence of the drip edge and the encapsulating of the sill in the plaster were both in breach of the requirements set out in the Manual. This is not disputed. Clearly Firth cannot be responsible for these defects.
[48] Only one of the alleged window defects is attributed by Hermanns to Firth - the installation of sealant between the window jambs and the block work supplied by Firth (although Hermanns suggested that this may also be relevant to the allegation that the sills were encapsulated into the plaster).
[49] Drawings 500 and 501 in the Manual both showed how specified parts of the window joinery were to be installed into the block work. Both drawings had a number of attached notes. Amongst other things they required that a designer/builder proposing to install windows into an opening in Firth block work should ensure that a 5mm gap was left between the joinery and the plaster and that a 5mm bead of sealant was applied into that gap.
[50] Hermanns said that the Manual was followed in this regard but that the windows nevertheless leaked.
[51] Mr Wutzler in his brief of evidence said that the openings in the block walls into which the windows were installed were too small, that there was insufficient clearance to install sealant and that the failure to do so significantly reduced the protection offered by the joinery jamb/wall junctions to water penetration. He attributed responsibility for this defect to the builder and Hermanns. He confirmed that this was one of the matters that led to the requirement for the remedial works.
[52] Mr Hermann in his affidavit did not deal with the allegation that the openings in the block work were too small. Rather he said that the window joinery in the claimants’ house was installed in accordance with the Manual and that sealant was applied in the 5mm gap between the plaster and the joinery. The builder, Mr Evans, said in his brief of evidence that he specifically recalls that the openings were sealed, that he sealed some of them himself and that he checked all of them to ensure that they were properly sealed.
[53] The assessor’s initial report appears to give some support to Mr Hermann’s and Mr Evans’ assertions. The assessor said that the windows had been fully sealed into the formed openings in the masonry and that there was nowhere for water to drain to the outside. In his follow up full report, he referred to a later version of the Manual
dated June 2005 and not to the 2001 Manual which was current at the time the house was built. Insofar as am I aware there was no evidence before the Tribunal explaining whether there was a difference between the two Manuals. The assessor did however note that the windows were face sealed with silicon to the head and sills of the windows and that this was in breach of the manufacturer’s specifications. He also observed that no evidence of sealant could be seen on the sides of the windows but that the windows were not removed to verify this. This latter comment seems to conflict with the comment in his first report and is more consistent with Mr Wutzler’s view.
[54] The Tribunal referred only to the evidence of Mr Wutzler. In my view, it erred in failing to consider the assessor’s evidence, Mr Hermann’s evidence and the evidence of Mr Evans. There were clear conflicts in the evidence. The Tribunal was not in a position to resolve those conflicts in the course of considering Hermanns’ application to join Firth to the claim. The conflicts could only be resolved after hearing from the witnesses and after they have been cross examined. In my judgment there was tenable evidence which, if accepted, could establish that the window jambs were sealed in accordance with the Manual, and that there was nevertheless leaking into the fabric of the house from the windows. The possibility that a claim against Firth for contribution could succeed cannot be dismissed.
[55] That is enough to determine the appeal in relation to Firth, to allow the appeal and direct that it be joined. However, for completeness I deal briefly with the ground clearance issue.
[56] This issue is complicated by the fact that the defect alleged by the claimants in their details of claim reads as follows:
Inadequate detailing to the exterior concrete block and plaster and paint system including but not limited to:
a. Extension of exterior plaster and paint below ground level;
…
[57] The assessor did not mention problems with ground clearances in his initial report. In his follow up full report he noted that the plaster had been taken to or below
the finished ground level without providing a capillary break to prevent the wicking of ground water.
[58] Mr Wutzler in his brief of evidence said that the exterior plaster and paint extended below ground level and that this allowed water to wick up through the plaster by capillary action into the concrete block cladding. He said that this was in breach of good practice and contrary to various applicable building guides. He did not refer to the Manual. He did state that this alleged defect caused damage and that it contributed to the need to undertake the remedial works. He referred to photos of the claimants’ house taken by another consultant employed by his firm, Helfen Ltd, prior to the remediation works being undertaken. They appear to show instances where the plaster on the blockwork had been taken either to or perhaps below the finished ground surface without, it seems, a capillary break.
[59] Mr Hermann dealt with the issue only very briefly. He deposed that the Manual showed plaster going to ground level and that the “the ground levels were constructed in accordance with the Firth Manual”. In itself this comment is unhelpful. It is the plaster on the block work that is in issue and the ground levels were not constructed.
[60] The Manual contains a number of drawings showing that plaster should go to but not below ground level.
[61] In a subsequent affidavit Mr Wutzler disagreed with Mr Hermann’s assertion that the ground clearances were constructed in accordance with the drawings in the Manual. He pointed out that the claimants’ allegation was that the plaster was taken below ground level. He nevertheless expressed the view that the details shown in the Manual were not good trade practice because they showed the plaster in contact with the finished ground. He said that good trade practice at the time required an adequate separation between the ground and the base of the plaster.
[62] In my view, Mr Wutzler has rather over-emphasised the below ground level point. The evidence suggests that whether or not the plaster was to or below ground is not really the issue. Either can permit the wicking of water. The claim asserts that there was inadequate detailing of the exterior block and plaster system including but
not limited to the plaster extending below ground level. It is wide enough to permit the consideration of wicking where the plaster extends to but not below ground level. In any event this could readily be made clear by an amendment to the claim.
[63] In my view, the Tribunal erred in refusing to join Firth, given the evidence before it in relation to ground clearances. There is tenable evidence that there were at least some instances of the plaster being taken at least to ground level, that this was in accordance with the Manual and that the detail shown in the Manual did not represent good trade practice at the time the building works were undertaken. In my view the Tribunal erred when it held that it was not possible to tell, from the information before it, whether the cladding was to ground level or below ground level. That is a matter for the hearing and as I have already noted the issue is the wicking of water. On the available evidence, it appears arguable that this can occur whether the plaster went to or below ground level. Further the Tribunal should not have speculated as to what the ground level was at the time of construction. There was at least some evidence of the ground level at the time from the photos taken by Helfen Ltd and referred to by Mr Wutzler. I allow the appeal in relation to the refusal to join Firth on the ground clearance issue as well.
[64] Finally, in relation to Firth I deal with the gib lining issue. The allegation in the claim is that there was a lack of detailing in line with the approved building consent and relevantly that strapping was not installed to the interior faces of block walls as shown in the consented plans.
[65] Mr Wutzler in his brief of evidence noted this alleged defect. He said that any departure from the consented plans required a variation and that no variation was sought. He asserted that the defects and damage cannot be treated in isolation and that the damaged internal plasterboard, architraves and trims affected by water ingress had to be removed and replaced.
[66] The Manual gave various options for the installation of internal linings, including the installation of linings on strapping and the direct gluing of linings to the block wall.
[67] Mr Hermann said that the claimants were advised of the options and that they elected to proceed by gluing the linings direct to the block work. He said that the linings were installed in accordance with the Manual.
[68]Insofar as I am aware the claimants have not responded to this allegation.
[69] The Tribunal found, in effect, that the way in which the internal linings were fixed did not result in water ingress into the house. In this regard it was clearly right. No one says that the way in which the internal linings were fixed was a defect. Rather the allegation is that direct fixing was in breach of the consented plans. That is an issue between Mr Hermann as the architect and the claimants. Firth can be under no liability in respect of it and the Tribunal did not err in refusing to join Firth to the claim in relation to this alleged defect.
(e)Nagel
[70] As noted, Nagel prepared the structural design plans for the house. The designs showed a number of control joints to the block work.
[71] The claimants have alleged that one of the contributing defects was a “lack of vertical control joints installed to exterior walls”.
[72] According to Mr Wutzler, the purpose of control joints is to provide for movement due to the shrinkage of the plaster and thermal expansion/contraction within the wall and plaster. He said that if they are not provided, this contributes to the uncontrolled cracking of the plaster and paint, providing a path for water ingress into the wall. He stated that vertical control joints were omitted on the eastern, southern and western elevations. He referred to the New Zealand Building Standard and to the Manual which required vertical control joints at not less than six metre centres.
[73] Hermanns accept that control joints were shown on Nagel’s plans for the eastern, southern and western elevations. They say however that there were no control joints shown on the northern elevation, notwithstanding that the consented drawings showed that there were two walls on the northern elevation that were longer that six
meters. Mr Hermann does not however refer to the length of the walls on the northern elevation in his affidavit and Mr Wutzler makes no reference to the northern elevation at all.
[74] The Tribunal dealt with the northern elevation issue by relying on its own review of the drawings. It concluded that there were no walls on the northern elevation longer than six meters. It then went on to speculate that because Nagel had been careful to indicate control joints in specific locations around the rest of the house, it was unlikely that it would have omitted them on the northern elevation only.27
[75] It was for Hermanns to put forward tenable evidence supporting the joinder of Nagel to the claim. The evidence is slight, and one has to go looking for it. However, the Tribunal should not have indulged in speculation. Although Mr Hermann did not mention the length of the northern walls in his affidavit, the consented plans prepared by Mr Hermann were available to the Tribunal. They showed two walls on the northern elevation - one 6.2 meters long and the other 11 meters long. The Tribunal also had before it the Nagel plans. The plans had the letters CJ appearing at various places on the eastern, southern and western elevations. There was a note on one of the plans which read as follows:
‘CJ’ denotes block work control joint. Control joints shall be continuous vertical perpends. Reinforcement and filling grout shall be continuous through joints. Rake back the vertical joints and seal.
[76] The letters CJ do not appear on either wall on the northern elevation. The Tribunal was wrong when it found that there were no walls on the northern elevation longer than six meters. Its speculation about what was shown on the northern elevation was also wrong. Nagel was a designer of part of the house. It was subject to a duty of care to use reasonable care to prevent damage to persons whom they should reasonably have expected might be affected by its work. This duty extended to the claimants. There was tenable evidence pointing to Nagel’s potential liability.
27 Martin v Hermann, above n 1, at [81].
(f)The Result
[77] The appeal is allowed. I direct that both Firth and Nagel be joined as defendants to the claim. Hermanns are to ensure that copies of all relevant documents are served on both entities in accordance with [113] of the Tribunal’s decision. Hermanns are also to forthwith provide the Tribunal with addresses for service of both Firth and Nagel.
[78] Hermanns are entitled to their reasonable costs and disbursements in relation to this appeal, at least from Firth. I direct as follows:
(a)Hermanns are to file and serve a memorandum seeking costs and disbursements within ten working days of the date of release of this decision;
(b)Firth is to file and serve a memorandum in response within a further ten working days;
(c)Given the present COVID-19 crisis, memoranda can be filed and served electronically; and
(d)Memoranda are not to exceed five pages in length.
I will then deal with the issue of costs and disbursements on the papers unless I require the assistance of counsel.
Wylie J
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