Linehan v Thames Coromandel District Council - [2021] NZHC 3234

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2017-419-000141

[2021] NZHC 3234

BETWEEN
BRIAN JOSEPH LINEHAN, SHANNON JAMES WALSH and

ROSS DOUGLAS BLAIR as trustees of the Eliza Trust

Plaintiffs

AND

THAMES COROMANDEL DISTRICT COUNCIL

First Defendant

BERNARD BARBER LIMITED
Second Defendant

BERNARD BARBER
Third Defendant

MARK TARRANT HOSKINS
Fourth Defendant

.../intituling cont over

Hearing:
13–24 July 2020, 1 December 2020, 9 February 2021.

Further submissions filed 18 October and 1 November 2021.

Counsel:

VA Whitfield, KI Bond and LHH Hunt for Plaintiffs DJ Neutze and C Robertson for Defendant

Judgment:

29 November 2021

JUDGMENT OF HINTON J

This judgment was delivered by me on Monday, 29 November 2021 at 4 pm
pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Brookfields Lawyers, Auckland.
Braun Bond & Lomas Ltd, Hamilton. VA Whitfield, Cambridge.

LINEHAN v THAMES COROMANDEL DISTRICT COUNCIL [2021] NZHC 3234 [29 November 2021]

CITY CERTIFYING CONSULTANTS LIMITED
Fifth Defendant

MURRAY SIEVERS
Sixth Defendant

MARK GORTON
Seventh Defendant

STRAIGHT EDGE EXTERIOR PLASTERING LIMITED
Eighth Defendant

PENINSULA ROOFING LIMITED
Ninth Defendant

PAULA MAREE HARVEY
Tenth Defendant

[1] This proceeding concerns a dwelling on the beachfront at 15 Wharekaho Crescent, Simpsons Beach, which has many features typical of a leaky building. The property was purchased by trustees of the Hilldon Trust, a trust settled by Dr Brian Linehan in March 2003, with the knowledge it was a leaky building. The property was sold in 2013 to the plaintiffs who are trustees of the Eliza Trust, also settled by Dr Linehan (the Trustees).1

[2] Dr Linehan carried out extensive remedial work on the house in 2011 and on the upstairs balconies (only) in 2016, in an effort to address the leaks. Some of the 2011 works and all of the 2016 works were themselves inadequate or defective. Weathertightness problems and risks remain. Dr Linehan also carried out more minor unconsented work on the upstairs balconies in 2014/2015.

[3] This proceeding is not about the original construction of the building. It relates solely to the 2011 and 2016 remedial works. The Trustees say that the first defendant, the Thames Coromandel District Council (the Council) was negligent in issuing building consents, inspecting, and issuing code compliance certificates in respect of both the 2011 and 2016 works. They note many defects, including defects in cladding, roofing, parapets and balconies, and seek compensation for all or substantially all such defects. Importantly, the Trustees claim that the Council is liable for the full cost of repairs even if its only breach was in respect of the balconies.

[4] The Trustees claim the cost of repairs, stigma, and associated damages in a total sum of $1,559,369. As the 2016 repairs failed completely, they also claim damages of $197,528 for the wasted cost of those repairs. Interest is claimed on all sums.

[5] The Council acknowledges it was negligent in 2011 in certifying balcony tiling that had been, contrary to the building consent and the Building Code, affixed directly…

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: [2021] NZHC 3234
Decision Date: 29 November 2021

CaseChat Overview and Summary

The case of Linehan v Thames Coromandel District Council involved a dispute over a dwelling on the beachfront at 15 Wharekaho Crescent, Simpsons Beach. The property was purchased by trustees of the Hilldon Trust in March 2003 and later transferred to the trustees of the Eliza Trust in March 2013. The property had many features typical of a leaky building. Dr Brian Linehan, a trustee of both the Hilldon Trust and the Eliza Trust, carried out extensive remedial work on the house in 2011 and on the upstairs balconies in 2016. The trustees claimed that the Thames Coromandel District Council (the Council) was negligent in issuing building consents, inspecting, and issuing code compliance certificates in respect of both the 2011 and 2016 works, and sought compensation for all or substantially all such defects.

The Council acknowledged it was negligent in 2011 in certifying balcony tiling that had been, contrary to the building consent and the Building Code, affixed directly to the membrane below. It also accepted it was negligent again in 2016 in issuing a building consent for direct-fixed tiling. The Council denied any other breaches and denied that it had any liability other than accepting liability for the cost of targeted repairs for the 2016 balcony breach. The trustees also claimed in negligence against their builder, Bernard Barber, and a number of others who had been involved in relation to the works on the property. However, the claims against all defendants other than the Council had been discontinued.

The legal issues in this case were whether the Council was negligent in issuing building consents, inspecting, and issuing code compliance certificates in respect of both the 2011 and 2016 works, and if so, what the appropriate measure of damages would be. The court found that the Council was negligent in certifying the deck tiling in 2011 and in issuing a building consent for direct-fixed tiling in 2016. The court also found that the Council was not liable for other breaches. The court held that the appropriate measure of damages for the 2011 certification breach was the wasted costs in 2016 of $197,528, and for the 2016 consenting breach, the court held that the Council was liable for the cost of targeted repairs based on the Paykel scope of repair, subject to contributory negligence.

The court found that the Council was liable for 50 per cent of the cost of increased targeted repairs of $598,610, being $299,305, 50 per cent of wasted costs of $197,528, being $98,764, 50 per cent of general damages of $15,000 being $7,500, and interest assessed under the Judicature Act at five per cent per annum from the date of Mr White's assessment in the case of the targeted repairs and from the date the costs were incurred in the case of the wasted costs, down to the date of judgment. The court also found that the trustees had contributed to their own loss and reduced the damages by 50 per cent under s 3 of the Contributory Negligence Act.

Orders