McFall v Bayley Developments Limited t/a Fabricators Builders Renovators
[2023] NZHC 1040
•3 May 2023
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV 2021-419-000035
[2023] NZHC 1040
UNDER the District Court Act 2016 IN THE MATTER
of an appeal against a decision of the District Court at Hamilton
BETWEEN
REGAN JAMES MCFALL AND EMMA MCFALL
Appellants
AND
BAYLEY DEVELOPMENTS LIMITED
trading as FABRICATORS BUILDERS RENOVATORS
Respondent
Hearing: 28 & 29 November 2022 Appearances:
V A Whitfield for the Appellants
P J Morgan KC for the Respondent
Judgment:
3 May 2023
JUDGMENT OF TAHANA J
This judgment was delivered by me on 3 May 2023 at 4.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
Beattie Rickman Legal, Hamilton Thackeray Chambers, Hamilton
Victoria Whitfield, Barrister, Cambridge O’Sheas Barrister & Solicitors, Hamilton
MCFALL v BAYLEY DEVELOPMENTS LIMITED (trading as FABRICATORS BUILDERS RENOVATORS) [2023] NZHC 1040 [3 May 2023]
Introduction
[1] Mr and Mrs McFall (the McFalls) engaged Bayley Developments Ltd (BDL) to build a new home. There was no written contract. The District Court held that the McFalls owed BDL $78,501.58 (including GST) for unpaid building works, and BDL owed the McFalls $69,407.00 for costs to repair building defects.1 Applying a set-off, the District Court awarded judgment for BDL of $9,094.58 (including GST). The McFalls appeal that decision.
[2]The McFalls say the Judge erred:
(a)By finding that BDL had charged a reasonable amount for labour costs.
(b)In relation to certain defects:
(i)by awarding the wrong amount to repair the defect; or
(ii)by finding that BDL was not responsible for the defect or unfinished work.
(c)By not awarding general damages for stress and anxiety.
[3]After set-off, the McFalls are seeking judgment in their favour of $152,708.61.
Approach on appeal
[4] A general appeal requires the Court to come to its own view on the merits. The McFalls, however, bear the onus of satisfying the Court that it should differ from the decision under appeal.2 It is only if the appellate court considers that the appealed decision is wrong that it is justified in interfering with it.3
1 Bayley Developments Limited v McFall [2020] NZDC 23168 at [71].
2 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103.
3 At [4].
[5] Mr Morgan KC submitted that this was a factual case, evidence was heard and a large volume of documents were considered over 13 hearing days, so that any factual issues were appropriately considered by the District Court Judge.
[6] I accept that this is a general appeal which allows this Court to consider any errors of fact with due allowance for the advantage the trial judge had of hearing the witnesses over the course of the trial.
Appeal ground 1 – reasonable costs
District Court finding
[7] The Judge found that BDL’s labour costs of $93,800.00 (plus GST) were reasonable. In reaching this decision, the Judge considered:
(a)the estimates provided by each of the quantity surveyors (Mr Brock for BDL and Mr White for the McFalls); and
(b)the time sheets for actual labour costs.
[8] The Judge determined that Mr Brock’s estimate of labour costs should be reduced to $87,174.00. Considering this against the labour charge of $93,800.00, the Judge did not consider it unreasonable.
[9]The Judge referred to the estimates from the quantity surveyors and noted:4
Importantly, the estimates from the Quantity Surveyors were retrospective assessments of labour costs for the build. However, all the labour hours claimed are supported by timesheets filled out by the respective workers for BDL. While Mr White’s evidence was that an analysis of those timesheets pointed to some anomalies in terms of the time spent on various tasks, those alleged anomalies were not explored in sufficient detail to support a finding that the time spent on any particular task was unreasonable. …
(emphasis added)
4 Bayley Developments Limited v McFall [2020] NZDC 23168 at [22].
Mr Brock’s estimate of labour costs
[10] The McFalls submit the Judge erred in calculating the reduction to Mr Brock’s estimate for labour costs.
[11] In considering whether Mr Brock’s estimate was reasonable, the Judge noted that the foundation perimeter beams were built by a third party who had invoiced
$4,274.00. In fact, the third party had charged $6,300.00. This was an error.
[12] Then, instead of simply deducting Mr Brock’s estimate of $10,900.00 for the perimeter beams, the Judge deducted $6,626.00 (being $10,900.00 less $4,274.00). The amount of Mr Brock’s estimate was therefore reduced to $87,174.00.
[13] The McFalls submit that the Judge should have deducted $16,344.00, because Mr Brock’s estimate for the foundations was $22,644.00 in total and not $10,900.00 (which estimate was for the perimeter beams only). $22,644.00 less the actual amount charged of $6,300.00 is $16,344.00. This leaves a reduced estimate of $77,456.00 against the Judge’s revised estimate of $87,174.00. The difference between the Judge’s approach and the McFall’s submission is $16,344.00.
[14] Before accepting the McFalls’ argument, I must be satisfied that Mr Brock’s estimate of $11,744.00 should also be deducted as advanced by the McFalls. Mr Brock’s evidence was that this amount comprised:
Defendants’ estimate PHC Assessment of Defendants’ estimate Item Description Qty Unit Rate TOTAL Qty Unit Rate TOTAL Comments 1.00 SUBSTRUCTURE 1.01 Construct the form work in preparation of the 100mm concrete slab, include for bracing, laying of the damp- proof membrane, installation of mesh reinforcing and the removal of form
work
156 m2 39.30 6,130.80 156 m2 39.30 6,131.00 Hour constants from PHC database or QV cost builder 1.02 Construct the slab thickening 300 x 200mm deep, including excavation, installation of form work and
reinforcing
5.00 M 86.70 433.50 5 m2 101.00 505.00 Assessed 1.03 Construct 600 x 600 x 600mm deep 4.00 No 178.60 714.40 4 No 200.00 800 Assume dig
– reo place
footings under portal frame legs Garage 1.04 Construct the form work in preparation of the 100mm concrete slab, include for bracing, laying of the damp- proof membrane, installation of mesh reinforcing and the removal of form
work
74 m2 39.30 2,908.20 74 m2 39.30 2,908.29 Ok 1.05 Construct 600 x 600 x 600mm deep footings under
portal frame legs
6 No 178.60 1,071.60 6 No 200.00 1,200.00 Assessed 1.06 Construct 400mm x 600mm deep
concrete footing to entry canopy
2.00 No 79.40 158.80 2 No 100.00 200.00 Assessed Total of SUBSTRUCTURE to summary: 11,417.30 11,744.29
[15] Mr Letford gave evidence for the McFalls and confirmed that his company had undertaken all the works referred to at 1.01 to 1.06. Given Mr Letford’s evidence, if the works covered by 1.01 to 1.06 were not undertaken by BDL, then it is appropriate that it be deducted.
[16] That then leaves a reduced estimate for Mr Brock of $77,456.00 against an actual cost of $93,800.00. The Judge did not compare these two figures. However, the issue is whether the quantity surveyor’s estimates should be preferred to the actual costs in circumstances where the Court held that Mr White’s evidence did not support a finding that the actual costs were unreasonable.
Were the actual labour costs unreasonable?
[17] The Judge was not satisfied that Mr White had been able to establish that the actual labour costs for the tasks performed were unreasonable. It was open to the Judge to consider that scrutiny of the actual labour charge was a more accurate way of determining whether the charge was reasonable than relying on retrospective estimates from quantity surveyors. I accept that the Judge was in a better position to assess the credibility of Mr White’s evidence as to the reasonableness of actual timesheets. While the estimates may be helpful, in the absence of evidence proving that the actual time was unreasonable, I accept the Court was entitled to find that the actual costs were reasonable.
[18]I dismiss this ground of appeal.
Appeal ground 2 – defect 15: WANZ bars
[19] WANZ bars are support bars that sit underneath window joinery to take the weight of the joinery. The parties agree that WANZ bars were required. At trial, the McFalls relied on Mr Jellyman’s evidence as to the scope of work required to install the WANZ bars. Based on that evidence, Mr White, the quantity surveyor who gave evidence for the McFalls, assessed the cost of repairs at $40,573.81.
[20] In contrast, Mr Brock, the quantity surveyor who gave evidence for BDL, assessed the costs of repairs at $3,953.86. Mr Brock noted:
No WANZ support bars. G Bayley advised use of standard WANZ bars possible without need to remove any of the joinery units. Also removal and reinstatement of patio channel drains is by others (owner). We have been advised access to fit and drill support bars is adequate and working space available afforded by removed patio drains. Assumed removal and replacement of metal cladding is straight forward and possible by building crew. For example there may be warrantee issues? To be checked/verified.
[21] The McFalls challenge the Judge’s finding that $5,000.00 was sufficient to remedy this defect. The Judge accepted that Mr Jellyman “had no time to independently research this possible alternative solution,” but that Mr Jellyman had conceded that it was “possible.” The Judge accepted that it was a “realistic solution.”
[22] BDL challenged Mr Jellyman’s evidence that the joinery needed to be removed to insert WANZ bars. During cross-examination Mr Jellyman was asked about an alternative solution which involved removal of a strip drain in front of the concrete patio, which was said to be at the McFalls’ cost. The removal of the strip drain would then provide a space of 200 mm. BDL relied on a photo of a type of drill that occupied a space of 150 mm.
[23] While BDL did not provide evidence as to the space available, Mr Jellyman gave evidence that the channel drain was 115 mm and Mr Jellyman had measured the room under the joinery back to the concrete at 35 mm (150 mm in total). During re- examination Mr Jellyman acknowledge it was “doable” and then went on to say that he was sceptical until he saw the drill and could put it in his hand and see how it works.
[24] The McFalls rely on Body Corporate 326421 v Auckland Council where the Court held:5
[39] ... The plaintiffs should not have to accept makeshift repairs and be left with the risk that this will not be effective or durable. This is particularly so in this case where the remedial works promoted by the Underwriters have not been designed or costed and no guarantee or assurance is offered that they will be effective.
[40] Baragwanath J made a similar point in Dicks v Hobson Swan Construction Limited (In Liquidation):
I am satisfied that Mrs Dicks should not have to bear the worry and risk that the council’s estimate should be inadequate; indeed general damages would have to make allowance for the resulting anxiety. It was open to the council to offer a guarantee that its estimate would be correct but it did not accept that option. Mrs Dicks is entitled to the peace of mind that results from a firm price ...
(footnotes omitted)
[25] In Body Corporate 326421 v Auckland Council the plaintiffs’ expert challenged the repair solution suggested by the defendant’s expert, considering that there were many practical problems associated with it. The plaintiffs’ expert also provided alternative costings for the solution advocated by the defendant and maintained that the solution proposed by the plaintiffs carried less risk.6 The Court accepted this evidence and considered that an enduring solution was required.
[26] In contrast to Body Corporate 326421 v Auckland Council, here Mr Jellyman did not reject the solution proposed in cross-examination and acknowledged it was “doable.” The alternative solution was not complex and turned on the existence of a type of power drill that could access the 200 mm space. A picture of the drill was in evidence.
[27] In these circumstances, I accept that it was open to the Judge to find that the McFalls had not proven on the balance of probabilities that the repair solution was unrealistic and to find that the alternative solution was a realistic alternative.
[28]I dismiss this ground of appeal.
5 Body Corporate 326421 v Auckland Council [2015] NZHC 862.
6 At [38].
Appeal ground 3 – defect 1: floor rebates incorrectly boxed
[29] Ms Whitfield submits that the Judge erred in calculating the remedial costs after finding that BDL was responsible for defect 1.
[30] The Judge awarded damages of $2,400.00 based on Mr White’s estimate of costs and the Judge referred to “Appendix A, items 18 and 19”, which stated:
Item Description Quantity Unit Rate Total 18 Allow to remove existing metal cover
plates to external doors and dispose off site
Item 200.00 19 Allow to neatly grind down existing joinery threshold and install new metal cover plates extended to outside edge of architraves throughout including
suitable levelling compound
Item 2,200.00
[31] Mr Jellyman gave evidence that the costs of repairing defect 1 were broken down into different components that included items 18 and 19 but also included other items. When the plaintiffs’ evidence was first presented it was not broken down by defect so it was difficult to determine which costs were shared across which defects. The Judge issued a minute requesting the McFalls provide information:
Clearly some of the estimates apply to more than one defect. Where there is an overlap the extent of it will need to be identified to avoid double counting.
[32] In response to the minute, the McFalls filed a memorandum dated 16 November 2020 which attached a “Defect Summary” and a document entitled “Amended Remedial Cost Estimate.” The Defect Summary sets out the value of the repairs for defect 1 at $20,990.42. That summary indicates that almost all of the costs are also relevant to other defects. It is not a straightforward calculation to determine the costs of repairing this defect alone. It requires an analysis of whether the costs claimed also relate to other defects and if so, whether they should be removed.
[33] BDL filed a response to the 16 November 2020 memorandum, noting that the documents demonstrate the defendants’ claim for damages was untenable. The project summary document totals remediation costs at $343,853.00. That sum is greater than the total claimed, being $191,203.13.
[34] I accept that the manner in which the evidence of remediation costs was presented by the McFalls was confusing and could easily result in the same costs being recovered twice. The cost estimate for defect 1 includes items that relate to a number of other defects including defects 2, 3, 8, 12, 15, 20, 21, 22 and 23. The Judge awarded damages in relation to all of those defects except 8, 20 and 21. Damages for defect 3 were included within the remedial costs for defect 1.7 The remedial costs awarded were for defect 2 ($850.00), defect 12 ($2,000.00), defect 15 ($5,000.00) and defects 22 and 23 ($5,000.00 in total).
[35] I consider that the McFalls are entitled to recover the remedial costs for items that were not also relevant to other defects for which damages were awarded. That is, items 40 to 44, being an additional $2,978.70 in relation to the patio, and costs for preliminary contractor’s overhead and margin and contingency (items 80 to 82), being
$5,300.00.
[36]The appellant is therefore entitled to an additional award of damages of
$8,278.70 (items 40 to 44 and 80 to 82 for defect 1), or $10,678.70 in total (including the $2,400.00 awarded in the District Court).
Appeal ground 4 – defect 2: patchy floor from masking materials
Judge’s finding
[37] The floor was left looking patchy from sealer that had lifted when masking materials were removed. Mr Jellyman’s evidence was that all of the polished concrete needed to be ground and resealed and if only the patchy floor was fixed, there would be a clouding effect. Mr White’s repair cost estimate was $15,352.45, and Mr Brock estimated $850.00.
[38] The Judge accepted that BDL was responsible for the defect and noted Mr Jellyman’s evidence that a spot repair would leave a small cloudy strip where the concrete meets the metal plates. The Judge considered this suggests Mr Jellyman’s remediation was disproportionate to the nature of the defect.
7 Bayley Developments Limited v McFall [2020] NZDC 23168 at [68].
Did the Judge err in the calculation of the cost of repair?
[39] During cross-examination Mr Gardiner suggested that a spot repair could be undertaken:
ACorrect and that’s where there is this spot repair stuff I vaguely recall reading about where you can restore it to the same visual appearance.
Q. That’s just a vague recollection that you have?
A.I remember at the time wondering about whether you could spot repair it or not so I did a bit of research and I was found somewhere where I thought that, yes, you could do a spot repair. I just haven’t taken a note of that.
[40] The appellants submit that given the tentative nature of Mr Gardiner’s evidence it should not have been accepted. No information was given as to the means of the “spot repair” solution and no quotation was produced.
[41] Counsel for the McFalls submits that the cost of repair is the appropriate measure of damage and rely on Johnson v Auckland Council.8 In that case, the Court considered that cost of repairs will be the appropriate measure of loss “if it is reasonable to repair.”9 The Court emphasised that the enquiry is a factual one and “it is necessary to do fairness between the parties.”10
[42] The appellants also rely on Marlborough District Council v Altimarloch Joint Venture Ltd and submit that it is only where the cost of cure is not practical or reasonable that damages may measure loss of expected amenity.11
[43] In Marlborough District Council v Altimarloch Joint Venture Ltd the Supreme Court noted that cost of cure must not only be appropriate but also reasonable and referred to the decision of the High Court of Australia in Bellgrove v Eldridge:12
Many examples may, of course, be given of remedial work, which though necessary to produce conformity would not constitute a reasonable method of dealing with the situation and in such cases the true measure of the building
8 Johnson v Auckland Council [2013] NZCA 662 at [110].
9 At [110].
10 At [110].
11 Marlborough District Council v Altimarloch Joint Venture Ltd [2012] NZSC 11 at [26].
12 Marlborough District Council v Altimarloch Joint Venture Ltd [2012] NZSC 11 at [39] citing
Bellgrove v Eldridge [1954] HCA 36, (1954) 90 CLR 613 at 619.
owner’s loss will be the diminution in value, if any, produced by the departure from the plans and specifications or by the defective workmanship or materials.
[44] The Supreme Court also referred to Ruxley Electronics and Construction Ltd v Forsyth where the cost of cure measurement was held not to be appropriate because the cost of cure was disproportionate to the benefit to be obtained.13
[45] The caselaw above indicates that while the cost of repair is the usual measure of damages, it may not be appropriate if the cost of repair is disproportionate to the benefit to be obtained.
[46] The Judge had the benefit of hearing the evidence of Mr Gardiner and considering whether it was sufficiently certain to rely on. He considered that it was and rejected Mr Jellyman’s evidence that the whole of the floor was required to be polished. The Judge was satisfied that a spot repair would address the defect and Mr Jellyman’s proposed repair was not proportionate to the nature of the defect.
[47] I consider that it was open to the Judge to accept Mr Gardiner’s evidence that the defect could be spot repaired and that this was a reasonable and practical method of repair. It was a reasonable alternative to Mr Jellyman’s proposal to repair the whole of the floor.
[48] BDL also refer to the evidence of Mr Fenton that it was well known that the floor was scratched and was going to be redone anyway because of scratches. This suggests that the McFalls would achieve a windfall gain if BDL was required to pay for polishing the whole of the floor and not just the defect caused by its negligence.
[49] It was open to the Judge to consider that repairing the whole of the floor was unreasonable and not a practical method of repair when an alternative was available. The Judge also heard evidence that the floor could be repaired for $850.00, which was proportionate to the damage.
[50]This ground of appeal fails.
13 Ruxley Electronics and Construction Ltd v Forsyth [1996] 1 AC 344 (HL).
Appeal ground 5 – defect 8: foam backing rod for doors and windows
Judge’s finding
[51] This defect concerned the failure to install a foam backing rod (or bond breaker) behind the windows and doors. BDL acknowledged the work was unfinished, so the issue was the amount BDL is required to pay to compensate for the unfinished work.
[52] The Judge did not make a finding as to whether BDL was required to install a backing rod (or bond breaker). The Judge found that given the conflicting evidence as to the solution to be adopted, the claim was not made out.
[53] The appellants challenge the Judge’s finding that the absence of a foam backing rod (or bond breaker) did not constitute a breach of contract.
Did BDL breach the contract?
[54] There is no written contract. The appellants rely on the specifications of Carter Holt Harvey (CHH) which required the installation of a “continuous protective seal with foam bond breaker to form rain screen.” The building consent required compliance with E2/AS1. Section 362I of the Building Act 2004 provides for an implied warranty that the building work will be carried out in a proper and competent manner and in accordance with the building consent.14
[55] The Judge failed to consider whether BDL was required to finish the work. It was accepted that they were. Mr Brock’s evidence was that it would cost $1,020.00 to repair. Mr White’s evidence was that it would cost $15,538.11.
[56] I accept that the Judge erred in failing to find that BDL was required to finish the work. In the absence of any written contract and consistent with the Building Act, I find that BDL was only obliged to ensure the building work complied with E2/AS1. I therefore accept that the cost of repairs to enable compliance is $1,020.00. BDL is therefore liable to the McFalls for $1,020.00.
14 Building Act 2004, s 362I(1)(a)(i) and (iii).
Appeal ground 6 – defect 12: repair costs of garage end walls
Judge’s finding as to repair costs
[57] Both parties accepted that the end walls were defective. The Judge noted Mr Gardiner for BDL accepted that if the end walls were built in accordance with NZS 3604 there would be no issues.
[58] The Judge accepted that the plans provided for steel girts to be used and accepted Mr Bayley’s evidence that the walls were constructed of timber because the steel girts were not supplied.
[59] The Judge considered installation of horizontal beams to be the most practical solution and awarded $2,000.00 for the repair costs. This was on the basis that the engineering and steel work supply costs would be paid by the McFalls.15
Did the judge err?
[60] Counsel for the McFalls submits that the Judge erred in finding that the plans provided for steel girts to be used for the end walls and refers to Mr Gardiner’s acceptance that the engineering drawings did not include steel end walls.
[61]Mr Bayley’s evidence was that:
The plans submitted for the building consent from Alter Architecture show that the garage was to have girts on all sides. That is evident from the approved plan … see the notation in the garage itself and also see the construction notes, “garage walls to be formed using 200/12 DHS girts and refer to engineer’s document for further information.”
[62] The evidence included plans (indicating steel work for the two ends of the garage) and a separate engineer’s drawing (without steel work for the two end walls). Mr Gardiner acknowledged the engineer’s drawing did not include steel work for the end walls. Mr Gardiner went on to criticise the engineer’s drawings for failing to consider the whole of the garage structure and how the end walls would connect to the
15 Bayley Developments Limited v McFall [2020] NZDC 23168 at [44].
side walls. Mr Gardiner also acknowledged that had BDL built timber end walls in accordance with NZS 3604 then there would have been no problems.
[63] While Mr Bayley’s observation about the plans may be correct, the plans needed to be considered together with the engineer’s drawing which clearly did not include steel girts for the end walls. It was open to Mr Bayley to raise this issue and to refuse to build the end walls without the steel work. BDL proceeded to build end walls with timber and those timber end walls were defective. Those defects were not caused by the failure of the McFalls to supply steel girts but because of the failure of the end walls to comply with NZS 3604.
[64] The issue is then whether it was open to the Judge to only award $2,000,00 to repair the defective timber end walls. The Judge referred to Mr Brock’s solution of running a horizontal beam along each wall at a cost of $2,000.00 as a solution.
[65] Counsel for the McFalls submit it was Mr Hursthouse who advanced this solution and it was costed by Mr Brock, (the quantity surveyor) so that it was not open to the Judge to rely on Mr Hursthouse’s proposed solution. The Judge should therefore have accepted Mr Jellyman and Mr White’s evidence.
[66] Mr Gardiner was referred to Mr Hursthouse’s proposed solution for defect 12 and agreed that it was the responsibility of the engineer. It was open to Mr Gardiner, in his expert opinion, to accept the solution proposed by Mr Hursthouse, which is what he did. Mr Hursthouse’s comments record that:
I would suggest there is a simple solution in steel, probably a horizontal beam at the level of the top plate to the lower frame (i.e. at the level of the top of the side walls.) This will need to have sufficient cleats to enable it to be securely fixed, both at either end, and to the top plate / bottom plate all across the wall at around 90mm centres.
[67] The Judge was entitled to rely on the expert opinion of Mr Gardiner, which was that he agreed with the solution proposed by Mr Hursthouse. In those circumstances, the Judge did not err in finding that the installation of the horizonal beams was the most practical solution and awarded $2,000.00.
Appeal ground 7 – defect 12: bow in garage wall
[68] The Judge held that the bow in the wall did not require remediation as it did not compromise the functionality of the wall.16 The Judge made this finding in the context of accepting the installation of horizontal beams as an appropriate solution to defect 12. This was the solution proposed by Mr Hursthouse and accepted by Mr Gardiner.
[69] The appellants challenge the Judge’s finding and say the terms of the contract required BDL to build the garage walls to the standard of a reasonably competent builder and the experts accepted that the bow was outside acceptable tolerances.
[70] I consider that it was open to the Judge to accept the expert opinion of Mr Gardiner (who confirmed Mr Hursthouse’s solution), that the solution would remedy defect 12. This was not an error.
[71]This ground of appeal is dismissed.
Appeal ground 8 – defect 22: misalignment of the passageway wall and ranchslider
[72] The appellant claims that the Judge erred in allowing only $3,000.00 for repair costs.
[73] The Judge accepted Mr Gardiner’s evidence that the wall was within tolerance, except at floor level, and remediation was not required. Mr Jellyman’s evidence was that the wall was outside tolerances because the tolerance only applied in the middle of the wall and not at the floor level, where one of the bows existed. Given the conflict with the expert evidence, the Judge was not satisfied that remediation was necessary.
[74] The appellant submits that Mr Gardiner’s evidence as to what he understood was the agreed position between Mr Hursthouse and Mr Jellyman was inadmissible because it was opinion evidence and hearsay.
16 Bayley Developments Ltd v McFall [2020] NZDC 23168 at [44].
[75] The appellant referred to the evidence of Mr Gardiner. That included Mr Gardiner being asked to comment on Mr Hursthouse’s opinion that “Yes, it does comply with the Building Code. It’s more than a minor variation if it was 14 millimetre outside tolerances.” Mr Gardiner’s evidence was that the visual defect is not apparent. Mr Gardiner then went on to comment that the cause is more likely to be the framing on the windows than the wall itself. Mr Gardiner did not consider remediation was required.
[76] The trial Judge had the benefit of hearing the evidence of the experts. It was open to the Judge to determine that the McFalls had failed to establish, on the balance of probabilities, that remediation was required. I do not consider that the Judge erred in not awarding damages for repair of the wall.
[77] The Judge found that the ranchslider was not fitted straight by BDL and allowed $3,000.00 for repair costs to re-fit the door. The appellants submit that there was no evidential basis for finding the repair costs were $3,000.00.
[78]The appellants submit that Mr Jellyman’s evidence that repair costs of
$41,707.65 should have been accepted.
[79] The Judge rejected Mr Jellyman’s evidence that the wall needed to be deconstructed and repaired. His estimated repair costs were based on a solution that the Judge rejected. The only repair was to re-fit the door and the Judge made an allowance for that repair.
[80]This ground of appeal fails.
Appeal ground 9 – defect 23: costs of door
[81] The Judge awarded $2,000.00 for remedial costs to straighten the door. In reaching this conclusion the Judge accepted Mr Bayley’s evidence that the issue with the door being out of plumb could be rectified by straightening the door.
[82] The appellants say the Judge erred in accepting Mr Bayley’s evidence in favour of Mr Jellyman’s evidence. The appellants submit that there was no evidence to support the Judge’s finding that $2,000.00 was sufficient to straighten the door.
[83] Mr Bayley is a builder. In those circumstances, he was qualified to give evidence as to his opinion on whether the defect could be fixed by straightening the door. The Judge was entitled to prefer Mr Bayley’s evidence to Mr Jellyman’s.
[84]This ground of appeal fails.
Appeal ground 10 – defect 24: humps and hollows in passage
[85] The appellants say the Judge erred in not awarding damages for repair of this defect.
[86] The first issue is whether BDL breached the contract. Mr Jellyman’s evidence was that the humps and hollows were outside MBIE tolerance and resulted from a lack of skill and care.
[87] Mr Bayley’s evidence was that the wall was within tolerances, being 6 mm over 3 m.
[88] The Judge was not satisfied that “BDL is responsible” for the defect. There was conflicting evidence as to the cause of the humps and hollows in the passage. Mr Jellyman considered that the defect was caused by a lack of skill and care and not by humidity as BDL asserted. Mr Gardiner’s evidence was that humidity may have caused the defect.
[89] The trial Judge had the benefit of hearing all of the evidence. Given the conflicting evidence as to the potential cause of the defect, it was not an error for the Judge to find that the cause of the defect had not been proven on the balance of probabilities. It follows that the McFalls were not entitled to damages for this defect. This ground therefore fails.
Appeal ground 11 – defect 28: misalignment of bulkhead
[90] The appellant says the Judge erred in not finding that the defect was caused by BDL.
[91] The Judge considered that given the number of variables in the cause of the defect (floor levels, walls, steel portals and trusses), he could not determine what had caused the bulkhead to be out of alignment.
[92] The Judge was not therefore satisfied that the McFalls had proven that BDL had breached the contract and caused the defect. The claim of $10,000.00 for loss of amenities was denied.
[93] The appellants submit that it was wrong for the Judge to reject Mr Jellyman’s evidence given he was an expert. It was open to the Judge to reject the evidence of Mr Jellyman given the evidence from Mr Gardiner that it was not possible to identify the cause of the defect.
[94]This ground of appeal fails.
Appeal ground 12 – general damages for stress and anxiety
[95] The Judge declined to award general damages and awarded special damages of $3,000.00 for accommodation costs. The appellants submit it was wrong for the Judge to consider that because BDL had a claim against the McFalls, this factored against awarding them the full damages claimed.
[96] The Judge did not consider that the stress and anxiety suffered by the McFalls was because of the defects alone. The Judge referred to the McFalls’ failed claim of a fixed contract and Mr Bayley’s stress in not being paid. He declined to award general damages.
[97] The Judge accepted that the litigation would have been stressful but did not consider that the stress was because of the defects alone.
[98] The award of general damages for stress and anxiety is discretionary and the Judge was entitled to consider all of the circumstances and whether it was appropriate to award any general damages. The Judge had the benefit of hearing all of the evidence and considering whether an award of general damages was appropriate.
[99] I do not consider that the Judge erred in declining to award of general damages to the McFalls. This ground of appeal fails.
Conclusion
[100] Two of the grounds of appeal are allowed. I award damages in favour of the appellant as follows:
(a)Defect 1 – $10,678.70 (this replaces the award of damages for defect 1 and 3 in the District Court judgment at [68] of $2,400.00, a difference of $8,278.70).
(b) Defect 8 – $1,020.00.
[101]This therefore increases the amount of damages awarded to the appellant by
$9,298.70 to $78,705.70. Applying a set-off for the amount awarded to BDL in the District Court results in the net sum of $204.12 (including GST). That amount is payable by BDL to the McFalls.
Costs
[102] If the parties are unable to agree costs, the McFalls are to file a memorandum as to costs within 20 working days of this judgment and BDL is to file a memorandum in response within 10 working days after that. Costs memoranda are to be no more than five pages.
Tahana J
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