Lee v Whangarei District Council - [2015] NZHC 2777

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2014-488-94 [2015] NZHC 2777

BETWEEN
OLIVIA WAI YEE LEE

Plaintiff

AND

WHANGAREI DISTRICT COUNCIL Defendant

ROBIN FREDERICK LITTLEJOHN Third Party

Hearing: 8 June 2015

Appearances:

Plaintiff in person with Therese Connor (McKenzie friend) F Divich and H Waldron for Defendant

A G Jackson for Third Party

Judgment:

10 November 2015

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 10 November 2015 at 3:30pm
pursuant to Rule 11.5 of the High Court Rules

……………………………………………………
Registrar/Deputy Registrar

Solicitors:
Heaney & Partners (Frana Divich/HollyWaldron), Auckland, for Defendant
Perkinson Law (S W Perkinson), Whangarei, for Third Party

Counsel:
Anthony G Jackson, Whangarei, for Third Party

LEE v WHANGAREI DISTRICT COUNCIL [2015] NZHC 2777 [10 November 2015]

TABLE OF CONTENTS

Paragraph

The legal test for accrual of a cause of action in negligence
in a leaky building case [8]

Admissibility of reports and notices [14] Events up to 22 May 2008 [15] Events after 22 May 2008 [37] The adjudication under Construction Contracts Act 2002 [38]
Application for assessor’s report under the

Weathertight Homes Resolution Service Act [41]

The proceeding in the Weathertight Homes Tribunal [42]

Proceeding by Composite Cladding and Signage Manufacture

and Installations Ltd [43]

Arbitration by Rob Littlejohn Builders Ltd [45]

The Gill Report [46]

Ms Lee’s response to the Council’s summary judgment application [48] Beattie reports [49] The application for an assessor’s report [50] Fresh defects identified by Mr Gill [56]

Result [70]

[1] The defendant, the Whangarei District Council, applies for summary judgment against the plaintiff, Ms Lee, on the ground that her proceeding is statute- barred under s 4(1)(a) of the Limitation Act 1950. Ms Lee started this proceeding on
21 May 2014.1 Accordingly the District Council needs to show that Ms Lee’s cause

of action against it accrued earlier than 22 May 2008. Opposing, Ms Lee says that the proceeding is within time.

[2] This is a leaky building case. Ms Lee sues the District Council for alleged negligence in inspection while her house at 183 Sandford Road, Ruakaka, was under construction between 2006 and 2008. Ms Lee moved into the house in late 2007. She accepts that by early 2008 she was aware that there were defects in the workmanship but says that that knowledge was not enough for the cause of action against the Whangarei District Council to have accrued.

[3] On a defendant’s application for summary judgment under r 12.2 of the High Court Rules, the court applies the principles in Westpac Banking Corporation v M M Kembla New Zealand Ltd:2

The applications for summary judgment were made under R 136(2) of the High Court Rules which permits the Court to give judgment against the plaintiff “if the defendant satisfies the Court that none of the causes of action in the plaintiff's statement of claim can succeed”.

Since R 136(2) permits summary judgment only where a defendant satisfies the Court that the plaintiff cannot succeed on any of…

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: [2015] NZHC 2777
Decision Date: 10 November 2015

CaseChat Overview and Summary

This case involves a proceeding by Olivia Wai Yee Lee against the Whangarei District Council for alleged negligence in the inspection of her house during its construction between 2006 and 2008. Ms Lee moved into the house in late 2007 and is aware of defects in the workmanship by early 2008. The District Council applies for summary judgment under Rule 12.2 of the High Court Rules, arguing that Ms Lee's cause of action accrued earlier than 22 May 2008, and thus her proceeding is statute-barred under section 4(1)(a) of the Limitation Act 1950. The key legal issues in this case include the legal test for the accrual of a cause of action in negligence in a leaky building case and the admissibility of reports and notices.

The court finds that for Ms Lee's claim to be time-barred under section 4 of the Limitation Act 1950, the council must show that before 22 May 2008, Ms Lee knew or could with reasonable diligence have discovered that the house had construction defects that resulted in water ingress. The court further establishes that the discoverability test applies in a claim for building defects, where time does not run against the owner of a defective building until the defects are discovered or could have been discovered with reasonable diligence. The court holds that the later discovery of additional defects by Mr Gill does not put back the point when time starts running under section 4(1)(a).

Ultimately, the court grants summary judgment to the Whangarei District Council and awards costs to the council against Ms Lee. If the parties cannot agree on costs, memoranda may be filed.

Orders