Palmer v Hewitt Building Ltd

[2021] NZHC 1460

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2019-435-005

[2021] NZHC 1460

BETWEEN

BARBARA LYNN PALMER

Plaintiff

AND

HEWITT BUILDING LIMITED

First Defendant

AND

MARK WILSON HEWITT

Second Defendant

Hearing:

22 – 24 March 2021 and 8 June 2021

Appearances:

P W Michalik for the Plaintiff

R P Conner and S J Martin for the Defendants

Judgment:

18 June 2021

JUDGMENT OF COOKE J

Table of Contents

What happened?[5]

Second cause of action: Breach of statutory duties[22]

Statutory warranties[25]

Breach of statutory duty[32]

Third cause of action: negligence[39]

Evidential issues[41]

Recoverable loss[42]

Expert evidence[44]

Measurement of damages[48]

Evidence on claim against first defendant[51]

The builder’s duty of care[53]

Trevor Ivory — assumption of responsibility[57]

Obligation to comply with the Consent not the Code — the Building Act 2004[66]

Individual elements of disallowed claims[81]

Water tank[83]

PALMER v HEWITT BUILDING LIMITED [2021] NZHC 1460 [18 June 2021]

South elevation cladding — Coloursteel not Abodo[86]

Omitted roof[91]

Roof eaves and fascia boards[96]

Masport fireplace[99]

Regency gas fireplace[104]

Garage size[108]

Concrete steps and base for gas cylinders[110]

HySpan beams/girder truss[113]

Unstable walls[115]

Ceiling batts[120]

Other omissions[125]

Provisional sums and diminution of value[128]

Conclusion on claims against first defendant[133]

Individual elements where claims potentially upheld[137]

Abodo cladding[138]

Roof[153]

Flashings to Coloursteel cladding[161]

Roof support posts[167]

Summary[172]

Conclusion[173]

[1]                 In June 2016 Ms Barbara Palmer signed a fixed price building contract with Hewitt Building Ltd to extend and renovate a house that she had purchased on the outskirts of Masterton. She remained living onsite whilst the building works were undertaken. The building work was largely completed by December 2016 but a series of problems and disputes had emerged and continued to emerge through 2017 and 2018. The Masterton District Council issued a Notice to Fix deficiencies with the building on 19 October 2018, and at the date of trial no Code of Compliance Certificate has yet been issued.

[2]                 Ms Palmer commenced these proceedings in 2019. They involve claims in contract against the contracted building company, Hewitt Building Ltd as first defendant, and additional personal claims against Mr Hewitt as the second defendant. Mr Hewitt is the owner and sole director of the first defendant. Shortly before trial the first defendant advised it was not defending the claims brought against it, such that those claims would proceed at the trial by way of formal proof. At trial Mr Hewitt confirmed it would not have the assets to meet the judgment sought against it. The trial has focused, therefore, on Mr Hewitt’s personal liability to Ms Palmer.

[3]Ms Palmer pursues two causes of actions against Mr Hewitt, namely:

(a)A claim for breach of statutory warranties arising under the Building Act 2004, or for breach of statutory duty (the second cause of action); and

(b)A claim in negligence (the third cause of action).

[4]                 As against the first defendant the formal proof relates to its claims under the first and second causes of action.

What happened?

[5]                 I will first briefly address the factual background to the claims, making factual findings where appropriate. I will not do so in detail as many of the background facts are not ultimately material to determining the plaintiff’s claims. This is a domestic building project that has gone seriously wrong. By the time of the trial, at which both Ms Palmer and Mr Hewitt gave evidence, Ms Palmer regarded Mr Hewitt as incompetent, unreliable and dishonest, and Mr Hewitt regarded Ms Palmer as obdurate, unreasonable and vindictive. It is not the Court’s function to adjudicate on these views. Some of the criticisms will be relevant to the findings that the Court needs to make, but the Court’s ultimate function is to determine the disputes in accordance with law.

[6]                 Ms Palmer was first introduced to Mr Hewitt in April 2015, and subsequently purchased the property she wished to renovate in June. She moved into the property in August. Concept designs were prepared in November. By this stage Ms Palmer began paying the first defendant for design work. Demolition work for the parts of the building that were to be removed began in about April 2016 although no contract had yet been signed at this stage. A fixed price building contract was prepared and presented to Ms Palmer in or around April 2016, although it was not signed by her until 1 June. The fixed price was $526,317.05 (GST included).

[7]                 The contract was between Ms Palmer and the first defendant. Ms Palmer’s earlier engagement with Mr Hewitt involved the suggestion that Design Builders

(Wairarapa) Ltd would be the contracted building company. The first defendant was fully owned and controlled by Mr Hewitt, whereas Design Builders (Wairarapa) Ltd was a branch of a New Zealand group of which it was the Wairarapa representative. Mr Hewitt had been a 60 per cent shareholder in that company, with the balance owned by the group. I accept Ms Palmer’s evidence that when the change in the contracting entity was raised by her, Mr Hewitt said that the change did not make a difference as he would still be the builder responsible for doing the works.

[8]                 A building consent was issued by the Masterton District Council on 28 April 2016, and the work progressed following that time. I accept Ms Palmer’s evidence that Mr Hewitt did not give her a copy of the consented plans. All that he provided her was six pages of earlier design plans which were conceptual in nature. I also accept her evidence that the consented plans were not retained on site in a manner that she could inspect them.

[9]                 The plans pursuant to which the consent was granted were not of good quality. Mr Hewitt’s own expert witness, Mr Sean Batchelor described them as “pretty poor”. In effect Mr Hewitt treated them as outlining the essence of what Ms Palmer wanted, but he would depart from them not only to deal with variations agreed with Ms Palmer, but also where he could save costs on the fixed price contract.   This was part of    Mr Hewitt’s modus operandi through his company. If Mr Hewitt could achieve the building work in the consented plan in a different way from that in the plan that he thought that Ms Palmer would be happy with, and which the Masterton District Council would accept, he would seek to do so if it involved cost saving. In terms of variations from the building consent, and therefore the building contract, when he could personally do the variation work he would not arrange a contractual variation. He would also complete some works that should properly have been undertaken by one of the other trades. He would only arrange a formal variation if sub-contractors work was required which needed to be paid for. Otherwise he would treat it as part of the swings and roundabouts he was seeking to manage for the overall project through which he hoped to make a profit. As part of this process he would also seek to persuade the Masterton District Council that any departures from the consented plan should be able to be dealt with by a variation to the consent, or if he believed he could get away with the change without informing the Council he would keep the change to himself.

[10]              The disagreements between the parties began almost from the beginning. There was a disagreement about the signing of the contract, and there were other disputes about the standard of workmanship. For example, Ms Palmer did not like one of the tradespeople on site, and asked he not be involved in the project.  After  Mr Hewitt removed him there was an unfortunate incident where Ms Palmer’s dog was taken, although it was later returned. I accept that Ms Palmer had reasonable grounds to suspect that the removed tradesman was to blame. By this stage the personal relationship between Ms Palmer and Mr Hewitt was strained.

[11]              By December 2016 much of the building work had been done, and Ms Palmer had by that point paid $542,988 — more than the fixed price because of variations and other elements. Mr Hewitt took the view that he had achieved practical completion, but Ms Palmer raised a series of concerns she had with the building work. There was agreement that some items needed to be fixed, and disagreement with others. Lawyers were first engaged from about this time.

[12]              On 8 May 2017 the Council undertook an inspection, and a number of items did not pass. A series of further problems then developed. In July 2017 the septic tank system flooded, and in August there was a problem with water in the pipes freezing. Both the gas fire and open fire had problems arising from faulty installation. In August the parties attempted mediation, but this failed. Later in October the property flooded because the stormwater disposal system did not appear adequate, and it was also identified that the toilets were incorrectly vented into the ceiling space.

[13]              A series of lists were  exchanged  of  remedial  works  without  agreement. Mr Hewitt attended to some of the works, but not all those that Ms Palmer raised. The relationship between the parties had completely broken down by this time.

[14]              An amended application for a building consent was filed at Mr Hewitt’s instigation, but limited to the relocation of a bedroom wall. A related inspection took place by the Council on 24 April 2018. A number of issues were again raised in the Council’s site notice, including the need for an amended consented plan given items that were identified as not matching the consent that had been issued.

[15]              In a subsequent letter dated 30 April 2018, the Council wrote to Mr Hewitt stating, amongst other things:

I may be missing something, but it appears from existing and proposed plans provided …, that significant changes are happening i.e. between garage and dwelling, interior and exterior door changes, footprint changes etc. Please clarify.

[16]Mr Hewitt responded the following day and he stated amongst other things:

The only change from the original consent is the wall change to the corner bedroom which is the subject of the Amendment.

[17]              This was not true. Mr Hewitt had made a number of changes as he went which had not been drawn to Ms Palmer’s, or the Council’s attention. Mr Hewitt had made the changes when he believed he could broadly achieve the same standard of building work in a manner that met what Ms Palmer had wanted, and which allowed him to save money on the fixed price contract.

[18]              The parties then continued to have disputes on what was required to complete the building work in the appropriate manner, and obtain the Code of Compliance Certificate. By this stage Ms Palmer had retained Mr Craig Ticehurst as a new builder to help her remedy the deficiencies with the building, and he had provided her with reports.

[19]              In July 2018 an independent advisor retained by the Council engaged in another site visit. He provided an eight page report raising a number of issues. By way of summary that report stated:

There are a range of matters here which appear to have been further complicated by plans that had inconsistencies between drawings. In addition, there are changes that have been made during the project that do not appear to have both owner and MDC approval. Many of these changes are noted in failed inspection records. I note that some of these changes do not necessarily equate to non-compliance with the Building Code (as opposed to Ms Palmer’s expectations not being met and any subsequent breach of contract between Ms Palmer and her contractors).

[20] By notice dated 19 October 2018 the Masterton District Council then issued a Notice to Fix under ss 164 and 165 of the Building Act 2004. It identified a number of matters that needed to be remedied before a Code of Compliance Certificate could

be issued, including issues related to the requirements for durability under B2 of the Code, and external moisture under E2 of the Code.

[21]              There were further interactions between the parties following this, and some further work was undertaken. But the parties remained in dispute and at the time of the trial no Code of Compliance Certificate has been issued for the property.

Second cause of action: Breach of statutory duties

[22]              The plaintiff’s first cause of action is against the company, and proceeds by way of formal proof. I will uphold that cause of action, and will address the individual elements of the claims against the first defendant when I address them for the purposes of considering the claim in negligence.

[23] The plaintiff’s second cause of action is a claim that the second defendant is liable to the plaintiff for breach of statutory duties/warranties. It is based on the duties said to be owed by the second defendant to the plaintiff under the Building Act 2004 (the Act). This cause of action is also pleaded against the first defendant, but the present focus is on the alleged personal liability of Mr Hewitt.

[24]              There was some uncertainty as to the exact basis upon which this claim was advanced. Following the plaintiff’s opening I was unsure whether it involved the tort of breach of statutory duty, or whether it involved a claim for breach of warranties imposed by the Act. In closing, however, Mr Michalik focussed on the warranties arising under residential building work established under Part 4A of the Act, although he also addressed other duties that appear to involve the tort of breach of statutory duty. I accordingly will address both potential causes of action.

Statutory warranties

[25]              Part 4A of the Act involves a series of provisions under which warranties are imposed into contracts involving residential building work. This Part is described in the Act itself in the following way:

362A   Outline of this Part

This Part protects consumers (referred to in this Part as clients) in relation to residential building work by—

(a)requiring certain information to be provided before a residential building contract is entered into; and

(b)prescribing minimum requirements for residential building contracts over a certain value; and

(c)implying warranties into residential building contracts; and

(d)providing remedies for breach of the implied warranties; and

(e)requiring defective building work under a residential building contract to be remedied if notified within 1 year of completion; and

(f)requiring certain information and documentation to be provided on completion of building work under a residential building contract.

[26]              There is an immediate issue about the plaintiff’s claim against the second defendant under this Part. Section 362A explains that the statutory warranties are imposed into a relevant contract (see s 362A(c) in particular). Mr Hewitt is not a party to a relevant contract. Only his company was. Ms Conner submitted that the statutory warranties are not intended to impose personal liability on a builder who is not a contracting party. As she submitted, the definitions provided for Part 4A also make it clear that the party that provides the statutory warranties is the building contractor, and not the individual builder. Section 362B provides:

362B    Meaning of building work and residential building contract

(1)In this Part, unless the context otherwise requires,—

…

residential building contract—

(a)means a contract under which one person (the building contractor) agrees with another person (the client) to do building work for the client in relation to a household unit; but

…

[27]              Section 362B(1) identifies the entity which enters the contract as the entity providing the warranty. The fact that the Act elsewhere imposes direct statutory duties on individual builders irrespective of the contractual arrangements shows that

Parliament is being precise when deciding who would have the statutory obligations in question. It is apparent that Part 4A is not intended to impose warranties that are deemed to be given by individual builders. Rather it is imposing warranties into the existing contracts between the relevant parties.

[28]              Mr Michalik sought to address that point by arguing that the implied warranties imposed under Part 4A, and particularly the implied warranty under s 362L, were not specifically imposed on the building contract party.   In particular he argued that       s 362L(3) provided that the person who was liable was only “called” the building contractor for the purpose of the statutory warranties. Although he did not then develop the argument I take it that the allegation is that Mr Hewitt is liable as the person “called” the building contractor under s 362L.

[29]              I do not accept this argument. The statutory warranties are implied into certain contracts. The contracts they are implied into are residential building contracts,1 or a contract to on-sell household units.2 The warranties so implied are set out in s 362I. Here there is no on-sale contract, and the only relevant contract is between the plaintiff and the first defendant.

[30]              Section 362J provides that the owner of the building can proceed in an action for breach of the warranties notwithstanding they are not a party to the relevant contract. Section 362L then provides that the person who can sue under those warranties is called “the client”, and the person who is liable is called the “building contractor”. But nothing in these provisions creates a liability on a person who is not a party to the relevant contract. The plaintiff need not be a party to a relevant contract

—  that is what s 362J provides — but there is no equivalent provision for the defendant to such an action. The sole point of s 362L(3) is to explain that the defendant is “called” the “building contractor” for the purposes of the provisions. That is so whether they were a party to the residential building contract or an on-sale contract. The section does no more than explain the terminology used in the provisions.

1 Building Act 2004, s 362H(1)(a)(i).

2      Section 362H(1)(a)(ii).

[31]              For these reasons the plaintiff’s claims based on the warranties established by the Act cannot succeed. Mr Hewitt was not himself a party to the contract into which the statutory warranties are implied.

Breach of statutory duty

[32]              Notwithstanding that it was not clearly articulated in this way, the plaintiff’s claim can also be treated as a claim for the tort of breach of statutory duty. To succeed with this tort the following elements need to be satisfied:3

(a)A statute must create a duty.

(b)The duty it creates must be owed by the defendant to the plaintiff.

(c)As a matter of statutory interpretation the plaintiff must establish that it is the intention of Parliament that a civil remedy for damages should exist for a loss arising from the failure to comply with the duty.

[33]              The key requirement to establish Parliament’s intention to create a civil remedy in damages involves a statutory interpretation exercise, adopting the normal purposive approach.4 Discerning that intention with modern statutes may be more difficult as a legislative intention to confer a right of recovery in damages might be expected to have been expressly spelled out. But it may still be possible to identify that intention as a matter of implication.

[34]              Here Mr Michalik referred to the statutory duties imposed on individual builders like Mr Hewitt. He referred particularly to the obligation spelled out in s 14E in the following terms:

14E     Responsibilities of builder

(1)In subsection (2), builder means any person who carries out building work, whether in trade or not.

(2)A builder is responsible for—

3      Select 2000 Ltd v ENZA Ltd [2002] 2 NZLR 367 at [26].

4      Thompson v Hopkins [2018] NZCA 197, [2019] 3 NZLR 299 at [14]–[16]; Wool Board Disestablishment Co Ltd v Saxmere Co Ltd [2010] NZCA 513, [2011] 2 NZLR 442 at [186]–[193].

(a)ensuring that the building work complies with the building consent and the plans and specifications to which the building consent relates:

(b)ensuring that building work not covered by a building consent complies with the building code.

(3)A licensed building practitioner who carries out or supervises restricted building work is responsible for—

(a)ensuring that the restricted building work is carried out or supervised in accordance with the requirements of this Act; and

(b)ensuring that he or she is licensed in a class for carrying out or supervising that restricted building work.

[35]              But as Ms Conner emphasised, when identifying Parliament’s intent, s 14A is important. It provides:

14A     Outline of responsibilities under this Act

Sections 14B to 14G—

(a)are not a definitive and exhaustive statement of the responsibilities of the parties but are an outline only:

(b)are for guidance only, and in the event of any conflict between any of those sections and any other provision of this Act, the latter prevails:

(c)do not reflect the responsibilities of the parties under any other law or enactment or any contract that may be entered into between them and are not intended to add to the existing responsibilities of the parties.

[36] Within the Act, Parliament has set out the statutory duties, and what the consequences are for failure to comply with them. For example, in Part 4A it has established a system of civil liability for residential building works. Penalties are also provided for other breaches — under s 40(3) a person can be liable for an offence for carrying out building work except in accordance with a building consent. And under Part 4 licenced building practitioners such as Mr Hewitt can be subject to complaint to the Building Practitioners Board.5 So a licensed building practitioner who fails to comply with the duty imposed under s 89, or the duties referred to in s 14E, can be subject to the complaints procedure.

5      See Building Act 2004, s 315.

[37]              Against that background there is no room to imply a legislative intent to create a cause of action in damages for breaching duties set out in the Act. Parliament has addressed the consequences of failure to comply with the duties it has created in the statutory regime. This is an illustration of a modern statute where there is little or no scope for implied statutory remedies in damages.

[38]              For this reason the plaintiff’s second cause of action against Mr Hewitt stands or falls on the express provisions. I have already held the express provisions do not establish personal liability of Mr Hewitt. The plaintiff’s second cause of action against the second defendant is accordingly not established. This cause of action is dismissed.

Third cause of action: negligence

[39]              The plaintiff’s main cause of action is a claim in negligence. It is advanced solely against Mr Hewitt as the second defendant.

[40]A number of issues need to be addressed to properly assess this claim.

Evidential issues

[41]              First, there are a series of evidential issues that it is appropriate to address in a preliminary way.

Recoverable loss

[42]              A claim in negligence is a claim directed to loss that has been caused by a failure by the defendant to exercise reasonable care. With building negligence cases there has been debate about the need for the breach to have caused physical damage. In the present case Ms Palmer does not sue to recover compensation for damage that has been occasioned to her property as a consequence of negligent building works. For example, there is no damage caused by it being a leaky building or having subsiding foundations. But as Tipping J emphasised in Spencer on Byron the law in

New Zealand has not maintained a requirement for physical injury or damage before recovery in tort is permitted.6 Tipping J held:

[44]      The purpose of the Act and the building code is to maintain minimum standards of construction. Those standards are designed to protect the interest society has in having buildings constructed properly. The minimum standards avoid the waste, inefficiency, economic losses and health and safety issues that might well be encountered if the only potential control was contractual. The Act and code are also based on the premise that non-compliance with the code necessarily has a health or safety connotation; so that does not have to be established in addition to non-compliance.

[45]   In cases where negligent inspection has given rise to the potential for physical damage but no such damage has yet occurred, it cannot be the law that you have to wait for physical damage to occur before you are regarded as having suffered loss or harm. It is not determinative whether the loss suffered at the outset is characterised as financial or physical. It is measured by the cost of bringing the building up to the standard required by the code and thereby removing the potential for physical damage and the associated health and safety concerns. A duty of care should be recognised in respect of preemptive expenditure as well as expenditure necessary to reinstate or repair physical damage which has actually occurred. In the present situation the line between economic loss and physical damage is far from bright. Even if one were to analyse cases such as the present as resulting solely in economic loss, there is no good reason for denying a duty of care. There is no risk of indeterminate liability; only a current owner can sue. And, in this context, there cannot be any logical distinction between residential premises and premises of other kinds.

[43]              This approach applies to negligent building as well as negligent building inspection, and I accordingly apply it.

Expert evidence

[44]              The second evidential point is that in seeking to prove the plaintiff’s claim the plaintiff called a single expert witness, Mr Ticehurst. He is a licenced building practitioner, and is currently retained by Ms Palmer to work on her property. The second defendant objected to the admissibility of his evidence on the basis that he was not properly qualified to give his opinions, and that he was not sufficiently independent given the current role for Ms Palmer and likely to be retained to do the alleged repair works.

6      Body Corporate No 207624 v North Shore City Council [Spencer on Byron] [2012] NZSC 83, [2013] 2 NZLR 297.

[45]              In elaborating on the objection Ms Conner argued that in a case of this nature it was necessary for the plaintiff to call a properly qualified building surveyor to give evidence on the defects of the building work and the scope of work necessary to remedy them, a suitably qualified quantity surveyor in the cost involved in completing this remedial work, and a witness with suitable qualifications and experience in matters concerning the grant of building consents. Those experts should also be independent.

[46]              There is a difference between independence, which is not a requirement of the Code of Conduct for expert witnesses, and impartiality which is. An expert may not be completely independent, but can give expert evidence if they do so impartially. But there is a point where an expert witness’s involvement in the subject matter of the litigation means that their evidence is not substantially helpful.7 But here I do not accept either the admissibility objection, or the thrust of the point made by the second defendant. The fact that Mr Ticehurst is now retained by Ms Palmer to undertake the remedial work required does not mean he is unable to give impartial expert evidence on the problems with the existing building.

[47]              It is true that relevant experts with the different areas of expertise identified by Ms Conner would be appropriate if the claim was of greater financial significance. But this case is a domestic building contract that has gone wrong, and it is already unlikely to have been economic litigation as it presently stands. If all these different experts needed to be retained to give expert evidence it would be impossible for a claim of this kind to be advanced. The second defendant himself only called a single expert, Mr Sean Batchelor, who is a duly qualified building surveyor. The Court needs to approach litigation of this kind with a pragmatic eye. It may be that a licenced builder is not as well placed to scope the full extent of remedial works, or the cost that would be required to undertake them as a building surveyor and quantity surveyor would be. Equally the builder may not be best qualified to know what the consenting authority might ultimately decide. But the plaintiff must still be able to advance this case and rely on the degree of experience that the builder may have on these issues. For that reason Mr Ticehurst’s evidence remains substantially helpful, and accordingly

7      See Pratley Enterprises v Vero Insurance NZ [2016] NZCA 67, [2016] 2 NZLR 750 at [93]–[102].

admissible. There are areas where his opinion is less helpful, but such limitations are a consequence of the economies that must apply in bringing litigation of this kind.

Measurement of damages

[48]              The third preliminary point relating to the evidence arises from the fact that the plaintiff has advanced her case on the basis that Mr Hewitt is liable to her for damages calculated on the basis of the cost to her of restoring her house to a condition conforming with the original building consent. As I will address in detail below, this is advanced on the basis that Mr Hewitt’s duty in tort is a duty to comply with the building consent. Thus the loss arising from a breach of that duty is the cost of remedying the elements of the building that do not comply with the original consent. Mr Hewitt’s defence is that to the extent there are differences from the original building consent they can be addressed by way of an amended consent. He then says that any remaining deficiencies in the building work can be remedied by work that is far less extensive than what would be required to bring the building back to the state of the original consent. In most cases, however, he has not quantified the cost of this more limited work.

[49]              As I will address in more detail below when dealing with particular items of the claim this potentially causes a difficulty. If I reject the plaintiff’s formulation of the duty of care, but nevertheless accept that some of Mr Hewitt’s work was negligent because it failed to comply with the Building Code, a breach might be established, but the evidence of what it may cost to bring the building to the standard of the Code is not directly addressed in either the plaintiff’s or the second defendant’s evidence. When I raised this concern with Mr Michalik and Ms Conner, both acknowledged that one possibility was for the Court to order an inquiry into damages in those circumstances, although neither was enthusiastic about that possibility. Both accepted that provided that the Court was able to make a proper assessment of what the measure of the loss might be it would be appropriate for the Court to proceed to make an award.

[50]              With respect, I think it important that the Court do so if it can. Litigation of this type would be hopelessly uneconomic if the Court adopted an overly exacting approach to the award of damages.  There is already inherent uncertainty about the

award as it cannot be known for certain what the Masterton District Council will require to obtain a Code of Compliance Certificate. The state of the evidence is otherwise imperfect in terms of identifying the costs of the remedial work required. It seems to me that provided the award has a foundation in the evidence, that it is rational and reasonable, then the Court should proceed to make an award. Provided the amount awarded is not arbitrary it will achieve justice between the parties.

Evidence on claim against first defendant

[51]              There is a final evidential point to record before addressing the claims. As indicated the claims against the first defendant proceeds by way of formal proof, and they are undefended. But there is evidence led by the second defendant, and challenges to the plaintiff’s evidence in cross-examination that might have been relevant to the claims against the first defendant. Both counsel confirmed that the evidence led by the second defendant, and the cross-examination of the plaintiff’s witnesses by counsel for the second defendant, was not relevant to the plaintiff’s claims against the first defendant. I record that agreement and proceed on that basis.

[52]I turn to the merits of the claim against that background.

The builder’s duty of care

[53]              Although many factual and legal issues have been raised in this case, the key issue is to determine whether the second defendant owed the plaintiff a duty of care in tort, and what the content of that duty is. Once that key question is decided, the individual elements of the claim can be assessed.

[54]              The extent of a builder’s tortious duty to the building owner has been the subject of analysis in a number of decisions by which New Zealand has cut its own track, beginning with the decision of the Court of Appeal in Bowen v Paramount Builders (Hamilton) Ltd,8 moving through to more recent decisions of the Supreme Court, including Spencer on Byron.9 The question of the tortious duty owed by the

8      Bowen v Paramount Builders (Hamilton) Ltd [1977] 1 NZLR 394.

9      Body Corporate No 207624, above n 6. See the summary of this line of authority in Minister of Education v H Construction North Island Ltd [2018] NZHC 871 at [26]–[36].

owner/director of a company who is the contractual party also has its own line of New Zealand authority beginning with the decision of the Court of Appeal in Trevor Ivory v Anderson.10 There are potential complications arising from both matters. But notwithstanding these complications the outcome of both lines of authority is now reasonably well settled.

[55]              A builder has a personal duty of care to a building owner to meet the standards of a reasonable builder when engaging in building work. That is so whether they are an employee, a director of a company or are self-employed. That duty is different from the contractual obligation of the entity obliged to undertake the building work. An action in contract against the entity promising to perform the building work is concerned with a failure to perform contractual promises. An action in negligence against the individual builder is directed to compensation for the loss caused by the builder’s failure to build with reasonable care. Conceptually they address different issues. In the present case this line of analysis would mean that Mr Hewitt cannot be sued for the failure of Hewitt Building Ltd to build in accordance with the contract with the plaintiff, but he can be sued for any loss caused by his failure to conduct the building work he personally undertook with reasonable care.

[56]              Mr Michalik advanced two related arguments for why Mr Hewitt is nevertheless effectively liable for the company’s failures, however. I will address each of those in turn.

Trevor Ivory — assumption of responsibility

[57]              Mr Michalik referred to the decision of the Court of Appeal in Trevor Ivory v Anderson, and advanced the argument that Mr Hewitt had assumed responsibility in the way referred to in that decision.11 In doing so Mr Michalik relies on the first instance decision of Venning J in the Byron Avenue litigation.12 Mr Michalik argued that paragraphs [189]–[201] of Venning J’s judgment correctly analysed how an owner-operator of a company can assume responsibility for the company’s obligations,

10     Trevor Ivory v Anderson CA157/90, [1992] 2 NZLR 517, (1992) 6 NZCLC 67,611, [1992] MCLR

122.

11     Trevor Ivory v Anderson, above n 10.

12     Body Corporate 189855 v North Shore City Council [Byron Avenue] CIV-2005-404-005661 25 July 2008, HC Auckland.

and thereby become liable for the failure to perform them. In that decision Venning J upheld a personal claim against an architect. That finding was not addressed further on appeal in that case.

[58]              I do not accept Mr Michalik’s argument. The first point is I do not read Venning J’s judgment in this way. After referring to Trevor Ivory, and other authorities and articles that have addressed that decision, Venning J held:13

An employee of a company, if negligent in the course of his employment can be liable to the company’s client, and the company will be vicariously liable for the employee’s actions. Often a director of a small company will also act as an employee of the company. If a director is also acting as an employee of the company carrying out a task that would have to be undertaken by another person employed for the tasks, if not by the director, then there is no reason at law why that director should not be personally liable if he or she is negligent in carrying out that task.

[59]              That seems to me to be consistent with the proposition that someone in the position of Mr Hewitt can become liable in negligence. I do not read that decision as concluding that someone like Mr Hewitt can become liable to perform the contractual obligations of the company.

[60]              In any event, if there is doubt about it, there have been a number of decisions since Venning J’s judgment which in my view clarify the scope of a builder’s individual responsibility, and liability. In Body Corporate 202254 v Taylor the Court of Appeal reinstated claims in negligence against an individual director of companies that had allegedly built leaky buildings. The case was complicated by the fact that it concerned Fair Trading Act claims as well as claims in negligence. But the underlying complications arising from Trevor Ivory were addressed and it was held that this decision did not prevent a claim in negligence succeeding against an individual builder who was also a director or employee of the contracted building company. The judgment of Williams Young P and Arnold J observed that Trevor Ivory did not necessarily represent “the last word on this topic in New Zealand”.14 I respectfully agree with the approach in the separate judgment of Chambers J. He concluded that the complications of Trevor Ivory did not truly arise. He said:15

13 At [198].

14     Body Corporate 202254 v Taylor [2008] NZCA 317, [2009] 2 NZLR 17 at [44].

15 At [125].

The law in New Zealand is clear that if a builder carelessly constructs a residential building and thereby causes damage, the owners of the residential building can sue the builder in negligence. … That is really the long and the short of it. If Mr Taylor were self-employed, no one would have a moment’s doubt about the propriety of the appellants making the above allegations against him. It should make no difference whether or not he was employed at the time he allegedly did these careless things. The only relevance of his being employed is that his employer or employees may be vicariously liable for his tort committed in the course of employment: Isac and Todd “Directors’ Torts” in Rowe and Hawes (eds) Commercial Law Essays: A New Zealand Collection (2003) 39 at 50 and the cases there cited. He and the employer would be joint tortfeasors.

[61]              I note that the authors of Todd on Torts also indicate that the approach adopted by Chambers J should be preferred.16 The position was subsequently addressed in Stephens v Barron.17 The Court of Appeal there reiterated that the liability arises from the personal actions of the individual, not from their position as directors or employees of the company entering the contract.18

[62]              The nature of Mr Hewitt’s relationship with the first defendant — the party which had the building contract with the plaintiff — is essentially immaterial. What matters is Mr Hewitt’s own obligation to undertake the tasks he undertook with reasonable care in order to avoid the plaintiff suffering loss from a failure to exercise that care. Given that Mr Hewitt was the builder that undertook the building work, and supervised all the sub-contracting work, he plainly had an obligation to take reasonable care when performing the tasks. I did not understand Ms Conner to suggest otherwise.

[63]              Mr Michalik relied on a number of factors to support his submission that    Mr Hewitt did nevertheless assume personal responsibility for the performance of the contractual duties of his company. The evidence demonstrates that it was originally contemplated that the plaintiff would enter a contract with Design Builders (Wairarapa) Ltd, but that this was changed by Mr Hewitt who informed her that it did not matter that it was changed to Hewitt Building Ltd because he was still the person who would do the work. Mr Michalik also referred to Mr Hewitt’s personal

16     Stephen Todd (General ed) Todd on Torts (8th ed, Thompson Reuters, Wellington, 2019) at [6.8.03].

17     Stephens v Barron [2014] NZCA 82, (2014) 21 PRNZ 34.

18     At [30]–[31].

responsibility for the overall supervision of the works, including control of all the decisions to be made. He also signed the memorandum of works as the licensed building practitioner and supervised the work under that regulatory framework.

[64]              I do not accept there is any personal liability for the contractual obligations arising from such factors. Indeed, if anything, the evidence about the change of the contracting party made it clear to the plaintiff that she was entering the contract with a limited liability company, and not with Mr Hewitt personally. The fact that he explained that he would nevertheless still be responsible for the works was correct — he was the builder who would still be doing the work under that contract. The remaining factors relied on by Mr Michalik do not establish a responsibility for performance of the contractual promises. It simply establishes that he was the licensed building practitioner involved in the work.

[65]              For these reasons I do not accept Mr Michalik’s first argument for contending that Mr Hewitt is liable for the company’s failure to perform its contract.

Obligation to comply with the Consent not the Code — the Building Act 2004

[66]              The more significant contest between the parties arises from a difference on the scope of the duty arising from Mr Michalik’s second argument. Mr Michalik contends that Mr Hewitt had a duty to conduct the building works in conformity with the building consent that had been issued. By contrast Ms Conner argued that the scope of the duty is a duty to comply with the Building Code.

[67]              The difference is important. In the present case many of the criticisms advanced by the plaintiff are that Mr Hewitt did not build in accordance with the building consent, with loss calculated on the basis of the costs of the steps now required to remedy that. To take an example from the items claimed which I address in greater detail below, the water tank actually provided at the property has a 15,000 litre capacity rather than the 25,000 litre capacity identified in the consented plans. There appears to be little doubt that Mr Hewitt was responsible for conducting the building work which involved installing a tank with the lower capacity. There is an argument between them as to whether the plaintiff agreed to this. The plaintiff sues for the cost of now installing the higher capacity tank. It is not suggested that that is

a requirement of the Building Code, but the plaintiff says it is a requirement of the consent.

[68]              Mr Michalik’s argument is that the cases to date, including Downs J’s judgment in Minister of Education v H Construction North Island Ltd all addressed the nature of a builder’s duty of care in the context of the Building Act 1991, and that there was a substantial change introduced by the Building Act 2004.19 The 2004 Act now imposes clear statutory duties on the builder to build in conformity with a consent, rather than to build in conformity to the Code. This is reflected in the provision that regulates the Code of Compliance Certificate — s 43 of the 1991 Act referred to the work complying with the Code, whereas s 94 of the 2004 Act refers to the work complying with the consent.

[69]              Mr Michalik referred to the decision of Andrew AJ in The Sunshine Smile Co Ltd v Bayleys Real Estate which addressed the changes made by the 2004 Act, albeit in the different context of a misrepresentation claim against a real estate agent. Andrews AJ was dealing with claims relating to the statements made in the Code Compliance Certificate (CCC). He referred to cases which referred to these certificates being directed to ensuring the buildings comply with the relevant Building Code. Andrews AJ held:20

[78]      However, I note that the above jurisprudence relates only to CCCs issued under the Building Act 1991, not the current 2004 Act. The latter applies here. Under s 43(3) of the Building Act 1991, the test was one of reasonable grounds of compliance with the building code (emphasis added).

[79]      It is clear that ss 94 and 95 of the 2004 Act and the express change in wording to compliance “with the building consent” (not the code) was a deliberate and significant change intended to place greater emphasis on the building consent stage of the process. The Ministry of Business, Innovation and Employment’s Building Performance website describes the change in the following way:

Under BA04, a building consent authority must issue a Code Compliance Certificate if it is satisfied on reasonable grounds that the completed building work complies with the building consent, s 94(1)(a). That is a significant change from the situation under BA91, when a territorial authority or building certifier had to be satisfied that the completed building work complied with the Building Code.

19     Minister of Education v H Construction North Island Ltd, above n 9.

20     The Sunshine Smile Co Ltd v Bayleys Real Estate [2020] NZHC 931 (footnotes omitted).

The change is in line with the “do it once and do it right” approach and can be seen as encouraging building consent authorities to be more demanding at building consent stage, and in particular to insist on “approved for construction” plans and specifications instead of the much less detailed information that some territorial authorities accepted under BA91.

[70] I accept there is a different focus in the 2004 Act, including statutory duties on builders to build in accordance with the consent. For example s 89 of the Building Act 2004 provides:

89 Licensed building practitioner must notify building  consent authority of breaches of building consent

(1)A licensed building practitioner must, if he or she is of the view that any building work carried out under a building consent does not comply with that consent, notify—

(a)      the territorial authority in whose district the building is situated; and

(b)      the owner.

(2)The notification must—

(a)      state that the licensed building practitioner is of the view that building work carried out under the building consent does not comply with that consent; and

(b)      state how the building work does not so comply; and

(c)      be given as soon as practicable after the licensed building practitioner forms that view.

[71]              But the Act nevertheless contemplates that the work undertaken in accordance with a building consent can change. Under s 45A a building consent authority can grant consent for minor variations to a building consent, and under s 45(4) there can be an application to amend a building consent which will follow the same process for initially obtaining a consent. It may be that the Act contemplates that such consents will be obtained for variations before the work is undertaken, but variations can still occur. When a building is not built in accordance with a consent, an amended consent will be required before a Code of Compliance Certificate is issued. Whether the variation has been agreed to by the property owner may be a question to address as a matter of contract law, but in terms of tort law the question will be whether what has been built is sound (ie, whether it is ultimately consentable).

[72]              Whether variations will be approved will ultimately come back to whether what is sought complies with the necessary standards, and accordingly the Building Code. The consent remains a means to an end. The end that is sought to be achieved is that buildings be soundly built. If they are not soundly built by a builder, that builder may become liable in negligence. It is true that the Code of Compliance Certificate now refers to compliance with a consent and not the Code, but that is because the consent is the means to achieve the standards set by the Code.21 Moreover it would appear that this change to the legislation was primarily directed to addressing the situation where the Code is changed after a consent is issued which was seen to be unfair to property owners who had complied with the consent.22

[73]              For that reason I largely agree with the view taken on the nature of the duty as described by Downs J in Minister of Education v H Construction North Island Ltd.23 He reviewed the approach of the Supreme Court in Spencer on Byron24 and Hotchin v New Zealand Guardian Trust Co Ltd25 to the effect that the duty is to conduct building works that comply with the standards set by the Building Code. Downs J held that the content of the duty was clear and readily articulable. He saw no reason to depart from the recent and authoritative trend.26 Significantly when he did so he analysed the provisions of the 2004 Act, and considered these consistent with the duty as he had identified it. Mr Michalik argued that the building work in issue in that case was undertaken under the 1991 Act. That may be so, but the analysis by Downs J was nevertheless by reference to the provisions in the 2004 Act.

[74]              Acceptance of Mr Michalik’s argument would also involve a departure from the very rationale for imposing a personal duty of care on a builder. The reason for the duty is that building owners should have a remedy when a building is badly built causing prospective or actual damage, and accordingly loss. Mr Michalik’s argument would suggest that such owners have a remedy in tort even when there is no such loss

21 Compare s 43 of the Building Act 1991 with s 94 of the Building Act 2004.

22 See Michael Weatherall Laws of New Zealand, Building and Construction at [102]. That also appears to have been the intention as revealed by the Parliamentary Debates, see (3 August – 2 September 2004) 619 NZPD 14532 at 14533.

23     Minister of Education v H Construction North Island Ltd, above n 9.

24     Body Corporate No 207624, above n 6.

25     Hotchin v New Zealand Guardian Trust Co Ltd [2016] NZSC 24, [2016] 1 NZLR 906.

26 At [54].

caused by substandard building work. It would also involve a confusion between the role of contract law, and the role of tort law. As Chambers J said in Body Corporate 202254, contract and tort involve conceptually different claims.27 The Court of Appeal explained in Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd that “there is no duty in tort to take reasonable care to perform a contract”.28 Focusing on the conceptual foundation of the claim in tort provides the necessary clarity in a case such as the present. The plaintiff can sue a builder in negligence if the builder fails to take reasonable care in conducting the building work so that loss arising from actual or prospective damage arises. That duty is owed to subsequent owners as well. The builder must build in accordance with recognised standards. Those standards are largely to be found in the Building Code.

[75]              Departure from the contract, or departure from the consent, might still be relevant to an allegation that the builder failed to build in accordance with the standards of a reasonable builder. That is because the consent is a means to an end, and the end is compliance with the sound building standards set by the Code. But a departure from the contract or the consent neither defines the duty, nor establishes a breach of it. It is common for the building works to depart from a consent, including in contemplation of an amendment to that consent. People make changes as they go. If a departure from the consent is without the agreement of the building owner, but that departure remains consistent with the Building Code there may well be a claim in contract, but there is no claim in tort. So a builder who fails to install gold taps in the bathroom in accordance with the consent obtained under the contract is not liable in negligence. The entity that promised to build in accordance with the consent may be liable in contract, however.

[76]              Compliance with the Building Code may not represent the entire analysis required to consider a claim in negligence against a builder, however. The obligation of the builder who conducts the work is to meet the standards of a reasonable builder. Those standards are generally to be found in the Building Code. For that reason the duty of care is often described as a duty to comply with the Code. But that is just a shorthand way of capturing the essence of the obligation, rather than it being the

27     Body Corporate 202254, above n 14.

28     Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd [2005] 1 NZLR 324 at [66].

precise identification of its scope as a matter of law. The legal obligation is to take reasonable care to avoid causing loss to the building owner arising from actual or prospective damage to the property. This requires the builder to meet the standards of a reasonable builder. Whilst those standards would usually be taken to be those set out in the Code it may be a little more complicated than that, especially as the current Building Code now is focused on outcomes rather than particular building requirements. It is possible to imagine a situation where a builder builds to the Code, but where a duty of care is breached because the building is nevertheless not sound and this can be attributed to a failure to take reasonable care. Equally it is possible to imagine a scenario where a builder departs from the Code but nevertheless constructs a sound building such that no duty is breached. Defining of the duty of care as one that precisely matches a statutory requirement may not always be entirely appropriate.

[77]              The point can be illustrated by one of the items that I address below. The plaintiff alleges Mr Hewitt’s duty was breached because he re-used ceiling batts from the existing building rather than installing new ceiling batts as allegedly required by the Code. If I were to accept that allegation, and conclude that the building work did not comply with the Code as a consequence, that would not amount to a breach of the builder’s duty of care in my view. The building might be a little less well insulated but this is a quality issue and not a negligent building issue. The builder’s duty is to take reasonable care to avoid loss being caused to the building owner, and that does not arise in this scenario. So whilst I accept that a duty to comply with the Code is a convenient shorthand expression for the builder’s duty, it is not necessarily legally precise in all cases.

[78]              Departure from a consent may also be relevant to an allegation that the builder has failed to meet the standards of a reasonable builder. A builder who departs from a consent will need to demonstrate to the consenting authority that the departure is compliant. If the builder fails to arrange appropriate inspections, or keep appropriate records of the work such that the consent authority will not issue a Code of Compliance Certificate, the owner may suffer loss as a consequence represented by the cost of remedying that situation. A determination that the scope of the builder’s duty of care extends to taking care to conduct the work so that the work may be approved by the consenting authority is consistent with the statutory duties placed on individual

builders, and the associated idea to “do it once and do it right”.29 I accept that this is part of a builder’s duty to take reasonable care. Negligent building includes undertaking building work that is not consentable.

[79] There is an argument that this kind of failure is contractual rather than tortious in nature — that is that a failure to keep proper records of consent departures is a project management failure of the contracted entity. But there is authority for the proposition that negligent project management will involve liability in both contract and tort.30 And, in any event, the Building Act 2004 places this responsibility on the individual builder. The industry standards are found not just in the Code, but also in the Act. Ms Conner accepted that the builder’s duty was not just to build to the Code, but to be able to demonstrate to the consenting authority that the building work was to Code. I agree that this should be accepted as part of the builder’s duty of care.

[80]              These elaborations should not obscure the essential clarity that now exists in this area, however. A builder’s tortious responsibility, and potential liability, arises by a failure to meet the standards of the reasonable builder, which are likely in the majority of cases to involve taking reasonable care to meet the standards set by the Building Code.

Individual elements of disallowed claims

[81]              I address the individual elements of the plaintiff’s claim against the above background dealing first with the claims which I do not accept are recoverable in negligence against Mr Hewitt. I will also address the claims against the first defendant for those elements.

[82]              The elements of the claim that I address are those itemised in the plaintiff’s closing submissions. That involves some departure from the pleaded claim. All amounts exclude GST.

29     See The Sunshine Smile Co Ltd v Bayleys Real Estate, above n 20, at [79].

30     See Rowlands v Collow [1992] 1 NZLR 178 (HC) where an engineer’s negligence in contract and tort extended to his project management functions.

Water tank

[83]              The plaintiff claims the cost of remedying the requirement for the property to have a 25,000 litre water tank rather than the 15,000 litre tank installed. The originally consented plans had a 25,000 litre water tank. It is not suggested that the higher tank capacity is a requirement of the Code. There is a disagreement as to whether this was an agreed variation. The plaintiff claims $3,686.93.

[84]              I accept the second defendant’s argument that this is not a claim for a breach of a duty of care owed by the second defendant. It is not defective building work. It is a contractual issue focused on whether the parties had agreed to this variation. I accordingly reject this claim against the second defendant.

[85]I uphold these claims as against the first defendant for $3,686.93.

South elevation cladding — Coloursteel not Abodo

[86]              The consented building plans involved a specialised vertical timber weatherboard cladding known as Abodo Vulcan AW52. This was specified in a section of the south elevation. What was installed on that section was vertical Coloursteel. On the other sides of the building the Abodo was installed as specified.

[87]              There is a dispute whether this variation from the consented plans was agreed to. The plaintiff claims $12,932, being the estimated cost of restoring Abodo cladding to this section as estimated in Mr Ticehurst’s evidence.

[88]              Again I accept the second defendant’s argument that this is a contract issue, and not a negligence issue. It is classically an allegation Ms Palmer did not get what she bargained for.

[89]              There are separate allegations concerning the workmanship undertaken on both the Abodo and Coloursteel cladding which I address separately below, but I dismiss the plaintiff’s claim against the second defendant in negligence on this element.

[90]              I uphold the plaintiff’s claims against the first defendant on this element, however, in the amount of $12,932.

Omitted roof

[91]              The building as constructed is inconsistent with the consented plans in that a lower roof extension section was omitted, a roof porch was constructed smaller than specified, and two downpipes were also omitted. There is a dispute on whether this was agreed to. As part of the dispute, reference is made to the changes to the drainage of roof water into the stormwater drainage system that was involved with eliminating roof sections and downpipes. The plaintiff claims the following amounts as estimated by Mr Ticehurst — $8,650 for reinstating the omitted lower roof extension, $4,120 for extending the roof porch, and $3,900 for installing the two missing downpipes and connecting them to the drains to the water tank.

[92]              There is a further claim for the installation of a new “soak pit” which is said to be necessary by the omission of the lower roof extension. It is alleged that Mr Hewitt agreed to do this, but that he did not do so. The amount claimed for this is $2,470.

[93]              Again I do not accept these items involve negligent building by the second defendant. It is a dispute as to what was agreed by the contracting parties. There were potential implications of any agreed change on compliance with the Code in relation to stormwater drainage, but it is not suggested that what is now in place is not compliant with the Code. For example it is not referred to in the Notice to Fix.

[94]              I accordingly dismiss this head of claim in negligence as against the second defendant.

[95]I uphold the claims against the first defendant in the amount of $19,140.

Roof eaves and fascia boards

[96]              The roof eaves are smaller than specified in the consented plans. They have been shortened from 1100 mm to approximately 800 mm. This appears to have arisen as a consequence of the roof trusses Mr Hewitt ordered. The timber fascia boards have

also been replaced with a Hardy’s fibre cement product rather than a timber product. Mr Ticehurst’s estimate is $28,232 as a best case scenario to remedy these issues on the assumption that the cladding does not need to be removed and refitted to accommodate a soffit extension.

[97]              Once again this is a contract issue and not a negligent building issue. The difference may be the consequence of a mistake by Mr Hewitt, although it is also possible as a consequence of him cost cutting. In any event, even if it is a mistake it is not one that has led to a negligently constructed building. It is simply a building that is not what was contracted for.

[98]              Accordingly I dismiss this head of claim as against the second defendant, but allow the claim against the first defendant in the amount of $28,230.

Masport fireplace

[99]              The Council’s Notice to Fix also indicated that the inbuilt wood burning appliance did not comply with installation requirements and it was not compliant with C2.1 of the Code.

[100]          There were continuous problems with this fireplace, including that the fire did not draw properly. This was ultimately identified to be a consequence of the flue being positioned off-centre. But there are other issues. Mr Ticehurst engaged in an invasive investigation and found that the framing had been installed into a non-framing zone and the installation was very poorly built. Mr Ticehurst also gave unchallenged evidence that the Council’s inspector had seen the opened-up fireplace and viewed the non-compliance. He said the solution was to take the fireplace out and install a new freestanding fireplace. He said that a new freestanding fire was cheaper than reframing the wall to allow for reinstallation of the existing in-built fire that was compliant and had a straight flue. The amount claimed for doing this is $13,276.61.

[101]          This is again a borderline issue because the failure of the fire to operate efficiently through its failure to draw properly, which is potentially a quality issue, and the poor installation work which can be a negligence issue. On that basis some of the amount claimed by the plaintiff could involve a claim in negligence.

[102]          But Mr Hewitt gave evidence that some of the work that was subject to the plaintiff’s claims was not work that he was personally involved in completing, or which he had the relevant skills or qualifications necessary to carry out. This included the installation of the Masport fireplace. In those circumstances I am not satisfied that the plaintiff has proved that the component of this claim that involves negligent work was conducted personally by Mr Hewitt, or that any supervision of the sub- contractor’s work involved his negligence. His evidence was he did not know a great deal about wood fires and that he relied on the recommendations of others. For that reason this element of the claim against the second defendant is dismissed.

[103]I uphold the claim against the first defendant in the amount of $13,271.61.

Regency gas fireplace

[104]          There have also been significant problems with the Regency gas fireplace. Part of the problems arose from it not being properly installed by the gasfitter who was sub-contracted to do the work. The Council’s Notice to Fix includes a finding that the inbuilt gas fireplace may not have been compliant, being a potential breach of C2 of the Code.

[105]          As a consequence of the Notice to Fix Ms Palmer arranged for invasive testing which was undertaken by Mr Ticehurst. This exercise confirmed that the installation was compliant, although Mr Ticehurst gave evidence there was a missing nailing strip that should have been used to support the edges of the installation. Ms Palmer claims

$920 as the cost of this work.

[106]          Again I regard this claim has being a borderline situation between contract and tort. However Mr Hewitt gave evidence that he was not personally involved in completing the installation of the gas fireplace and that he did not have the skills and qualifications necessary to carry out this work. He explained he was not personally involved in the installation of the gas fire. He also referred in his evidence to a complaint Ms Palmer had made against the certified gasfitter to the Plumbers, Gasfitters and Drainlayers Board. In those circumstances I accept that Mr Hewett did not personally engage in the defective work or engage in negligent supervision, and that the claim in negligence against him should be dismissed.

[107]I uphold the claim in contract against the first defendant in the amount of $920.

Garage size

[108]          The garage as built involves reduced dimensions from that in the consented plans. There is an argument whether this was in order to preserve certain trees behind the garage, and whether it was by agreement. Mr Ticehurst gave evidence that to restore the garage to the consented size the back wall needs to be moved back, the roof needs to be replaced, the floor slab extended and all associated works at a cost of

$23,000.

[109]          Again this is a contractual issue, and not a building negligence issue. I accordingly dismiss the claim in negligence against the second defendant. But I uphold the claim against the first defendant in the amount of $23,000.

Concrete steps and base for gas cylinders

[110]          The consented plans included concrete steps for outside doors and a concrete base for the gas cylinders. Ms Palmer claims $3,300 for the cost of building the concrete steps, and $500 for the base for the LPG cylinders.

[111]          The concrete steps are simply a contract issue. The concrete pad for the gas cylinders could potentially be a Code of Compliance issue, and could theoretically form the basis for a claim in negligence. But it is not an issue of negligent building work. Rather it is something that has not been provided in accordance with the contract. So I see it as a contract claim.

[112]          Accordingly the claim against the second defendant in negligence is dismissed, and I uphold the claim against the first defendant in the amount of $3,800.

HySpan beams/girder truss

[113]          The plaintiff claims $2,742 as the consented plan involved HySpan laminated veneer timber structural beams, but what was installed was a redesigned truss layout in place of the HySpan beam. Mr Hewitt said that this was a more efficient way of achieving the same result.

[114]          There is no Building Code issue in relation to this change. There has been no building negligence. It is accordingly a contract issue and not a tort issue. I accordingly dismiss the claim against the second defendant but uphold the claim against the first defendant in the amount of $2,742.

Unstable walls

[115]          The plaintiff alleges that there are two internal walls that have insufficient rigidity and which shake and shudder unacceptably.

[116]          The ceiling height is 3.21 metres in the consented plans, but Mr Hewitt only built to 3 metres, and it is suggested that this is the cause of the problem. By itself this is a contractual issue, not a negligence issue. But there is a question whether these walls comply with the Code, and whether it complies with timber-framed buildings’ standards (NZS3604). It is suggested that the fact that the walls shudder or shake, particularly when doors are opened and closed — described by Ms Palmer as “jelly walls” — illustrates that they are not Code compliant. Mr Ticehurst gave evidence that the walls had not been built to the required standards estimating the cost of repair of the two walls in question at a total of $18,600.

[117]          This item is not in the Council’s Notice to Fix, and I accept that Mr Ticehurst is not fully  expert  on  whether  what  has  been  built  complies  with  the  Code.  Mr Batchelor said that in his view the walls fell within the scope of NZS3604. Under cross-examination Mr Ticehurst accepted that the walls had passed Council inspection, and that the matter was not holding up a Code of Compliance Certificate.

[118]          These are internal walls. It is not suggested that they are failing in a way that could cause any future damage to the property. The essential complaint is that the walls shudder and shake in an unpleasant way, particularly when the doors are closed. It seems to me that this is a building quality issue, and not a negligent building issue where there is a defect that could cause loss that requires remediation. For that reason I do not accept this element of the claim as giving rise to a claim in negligence as opposed to a claim has been proved in contract.

[119]But I accept the claim for $18,600 as against the first defendant.

Ceiling batts

[120]          The plaintiff claims $2,100 as the cost of installing new ceiling batts in an area where Mr Hewitt reused existing ceiling batts. The claim is advanced on the basis that it was a requirement of the contract to install new ceiling batts, and that it was a requirement of the original consent, though the latter is less clear.

[121]          Mr Michalik relied on the implied warranty in s 362I(b)(ii) of the Building Act that all materials in a building work would be new unless otherwise stated in the contract. But this is an obligation imposed into the contract, not an obligation arising from a duty of care.

[122]          Mr Batchelor’s evidence was that there was no requirement for the Code to use new insulation unless there was an area of entirely new building work, and that it was permissible to reuse material already in place in an existing property provided it did not result in any greater non-compliance than occurred previously.

[123]          There is no basis for a claim of negligence against Mr Hewitt in relation to these matters. I am also not satisfied there has been any inconsistency with the Code

—   the area of ceiling over which the existing batts would be used will not have been any greater — and in any event any such inconsistency does not show a failure of the builder to take reasonable care resulting in any loss arising from actual or prospective damage to the property. Accordingly the claim in negligence is dismissed.

[124]I nevertheless uphold the claim against the first defendant in the amount of

$2,100.

Other omissions

[125]          There are a series of other features that have not been constructed consistently with the consented plans. There are disputes on whether they were agreed:

(a)One of two hallway cupboards on the west side of a hallway were omitted during construction. Mr Ticehurst estimates that it will cost

$4,667 to remedy.

(b)The plaintiff also says that six of seven sliding doors in the original consented plans have not  been  constructed.  The  plaintiff  claims  Mr Ticehurst estimates $2,144 per door, or a total of $12,864 for this head of claim.

(c)The plaintiff also claims that an office cupboard is much smaller than the consented plan such that it is impractical to use. The plaintiff claims Mr Ticehurst’s evidence that to remedy this issue will cost $1,385.

(d)A guest bathroom shower in the original plans has also not been constructed. The plaintiff claims Mr Ticehurst’s estimate of $9,800 to now create it.

(e)On the consented plans there is a timber garage door, and timber garage access door. Metal and aluminium garage and access doors have been installed. The plaintiff claims $7,903.57 to restore the building to that set out in the consent.

(f)There was an ash floor and mantlepiece for the fireplace, and a glass panel for the on-suite bathroom in the consented plans. These were omitted. The plaintiff claims $750 for these items.

(g)The plaintiff alleges that painting was omitted from the kitchen, lounge and the ceiling in the second guest bedroom. She claims $2,130.43.

(h)The plaintiff claims that five outside house taps were removed and not reinstated during the building works. Mr Ticehurst estimated that

$7,200 is required to restore the taps and connection to the bore water supply.

(i)The plaintiff claims a total of $9,046.02 for expenses she incurred during the build for a cooker panel, cleaning, tiling, excavation for a soak pit, excavation of rubbish, removal and disposal of burnt waste, an expert roofing report, and for a building expert’s advice.

[126]          All of these items are complaints that the first defendant failed to provide   Ms Palmer what was contracted for. They are not claims of negligent building. I accordingly dismiss those claims as against the second defendant.

[127]          I uphold those heads of claim in the claim against the first defendant for the total amount of $55,746.02.

Provisional sums and diminution of value

[128]          There are then further claims advanced by the plaintiff that are also contractual in nature.

[129]          First the plaintiff claims against the first defendant only for provisional sums in the contract for floor coverings and carpet and plumbing hardware. Her total amount claimed is $16,671 and I uphold it.

[130]          Secondly the plaintiff claims that there are breaches that have led to a diminution in value for the  building  works.  The  plaintiff  called  evidence  from Mr Bruce Manwaring, a registered valuer to address the valuation impact of the building being built with a smaller overall area, less window area, and a lower ceiling height. His evidence was that there was a variation loss of $65,000. He also assessed what has been described as “compliance loss” arising from the stigma from the delay of issuing a Code of Compliance Certificate. He assessed that at $76,250 if a Certificate was issued, and $152,500 if a Code of Compliance Certificate was never issued.

[131]          To the extent that these are advanced as claims against the second defendant in negligence I do not accept them. I have not accepted any of the heads of claim for negligent building work addressed above, and although I accept other elements of the claim against Mr Hewitt as set out below, the proper approach to the award of damages for those heads is the cost of remedying the defective building work. I accordingly dismiss the claim for diminished value as against the second defendant.

[132]          As against the first defendant I do not accept, even as a matter of formal proof, that a Code of Compliance Certificate will not be issued by the Masterton District

Council. In doing so I take into account the evidence of Steven Williams from the Council, although this was limited in scope. In my view a Compliance Certificate will likely issue for the property. So for the claims in contract against the first defendant I award $65,000 and $76,250 on a formal proof basis.

Conclusion on claims against first defendant

[133]          The items that I have considered above in relation to the plaintiff’s claims against the first defendant total $342,090, of which $141,250 is attributed to claims for diminishment in value.

[134]          In advancing the application for formal proof the plaintiff also sought a number of further uplifts. First it sought additional amounts on its first cause of action for contractual work not undertaken. The analysis I have engaged in above addresses such items, however. The balance of the claims are then sought under the second cause of action and which are itemised in a spreadsheet provided by Mr Michalik. I have not addressed the items in that spreadsheet that were not addressed in counsels’ closing submissions. Some of them may well have been addressed in Ms Palmer’s evidence or Mr Ticehurst’s evidence. In the absence of them being explained to me in submission I am not prepared then to add to the judgment obtained by the first defendant by way of formal proof.

[135]          The plaintiff seeks an uplift on all the items on the basis of Mr Ticehurst’s evidence that the costs will have increased by 10 per cent since the estimate in his reports. I accept that there will have been an increase in costs and in the absence of anything raised about this I agree the 10 per cent increase on the figures other than the diminished value elements, at least on a formal proof basis (and accordingly not in relation to the claims against the second defendant). I also accept the plaintiff’s argument that the plaintiff will incur GST on these costs, with the figures I have addressed being GST exclusive. So I increase the judgment amount by a further 15 per cent for the amounts other than the diminished value.

[136]          This results in an award under the plaintiff’s claims against the first defendant totalling $392,400 (that is calculated as $200,840 + 25% = $251,050, + $141,250 =

$392,300).  In light of the point I have made about what has been established by way

of formal proof and addressed in closing submissions, I grant the plaintiff leave to seek any alterations to the formal judgment sum sought. That leave does not extend to allowing any further evidence to be called. Given that it appears that the first defendant will not be able to meet any judgment sum, I would expect that leave only to be exercised if there would be real practical significance in the formal judgment sum.

Individual elements where claims potentially upheld

[137]          I deal next with elements of claims where I accept the plaintiff may be able to recover against the second defendant in negligence to the extent of allowing the plaintiff to recover at least part of what is claimed for each of those elements.

Abodo cladding

[138]          As indicated the building had the vertical timber Abodo cladding on a series of external surfaces. There are two related problems with that cladding as installed.

[139]          First this cladding is usually provided by the supplier already coated with the relevant oil finish. But it can be supplied without that finish. When that occurs the specification document provides that one coat of protective oil finish must be applied to both sides of the timber with two further coats to exterior surfaces. It is established that Mr Hewitt ordered the cladding in an untreated state.  He says that is because  Ms Palmer couldn’t make up her mind on the colour choice, but I do not accept that. I accept Ms Palmer’s evidence that there was no such issue, and that she is not the sort of person who would have difficulty making up her mind on those sorts of issues. In my view Mr Hewitt ordered the cladding untreated either to save cost, or because he was disorganised.

[140]          Mr Hewitt gave evidence that he coated the cladding before it was installed in accordance with the technical specifications. That would have been logistically difficult — it would have been easier to apply the oil finish once it was up on the framing and it needed to be coated once on both sides.

[141]          A problem with this cladding is recorded in the Council’s Notice to Fix which states:

Evidence could be seen that the vertical shiplap cladding (Abode) was cupping and discolouring in some areas.

[142]          The Council went on to say that the cladding did not comply with the B2 durability requirement of the Code. It’s stated remedy was in the following terms:

Provide confirmation as to the type of treatment applied to the vertical shiplap cladding and confirmation from the supplier of the product that the product has been installed in accordance with their technical information. This should include confirmation from the supplier of the weatherboard that their product will meet the durability requirements of the Code as installed.

[143]          In addition the plaintiff has been able to obtain the invoices showing the quantity of oil finish that Mr Hewitt purchased. That quantity is insufficient to have allowed him to coat the timber cladding as required by the specifications. If he had not done so on the reverse side this might explain why the cladding is cupping, and an inadequate number of coats on the front side might explain why it is discoloured in places. Mr Hewitt gave evidence that he did apply the finish as required. I do not accept that evidence. The condition of the cladding as described in the Notice to Fix, the inadequate quantity said to have been obtained, and Mr Hewitt’s general approach to saving costs, satisfy me that he did not do so. Significantly the supplier will not provide a warranty of a kind that meets the requirements of the Notice to Fix given the uncertainties that now exist which result from a failure to have clear evidence of the steps taken in accordance with the technical specification.

[144]          Ms Conner argued that a simple test could now be undertaken on the cladding to see if it has been properly treated. I accept that that may be the case, but that does not prevent the plaintiff proving its case by other means, including by the evidence I have referred to above. Moreover there are other difficulties with the cladding referred to below so such a test would only take the issue so far.

[145]          Ms Conner also argued that a warranty from the supplier of the cladding was not formally listed as one of the warranties required by the Council. That is true in terms of the warranties it has sought, but the Notice to Fix makes it plain that the

durability requirements of the Code need to be confirmed by the manufacturer, and this has not occurred.

[146]          The second problem with the Abodo cladding was addressed by Mr Hewitt’s expert witness, Mr Batchelor. He confirmed that at least two internal flashings were not installed adjacent to the main entrance, that the plaster to the foundation may have covered up the cavity at the front entrance, that the internal corner Abodo junctions were not correctly installed, and a “foam bond breaker” was not installed such that the construction was not in accordance with the consented plans and specification.

[147]          I am satisfied from the evidence that the Abodo cladding has a number of defects and that it is not compliant with the Building Code, including because of a warranty that will not be now provided by the supplier. The durability requirements of the Code cannot be satisfied, and it may well be that over time the cladding would leak and cause damage to the property. I accept that that remedial work will be necessary to make the cladding Code compliant, and obtain a Code of Compliance Certificate from the Council.

[148]          Mr Ticehurst gave evidence that the Abodo cladding should be removed and replaced at a cost of $19,935. There is no compelling evidence to suggest how these problems can be remedied in an alternative way.

[149]          For these reasons I accept that Mr Hewitt personally engaged in poor building practices, that he applied the cladding in a manner that does not comply with the Code, and that it is necessary for the plaintiff to incur the assessed expenditure in order to make the building sound and Code compliant, and they obtain approval from the Council. I accordingly uphold the plaintiff’s claim in the amount of $19,935.

[150]          There is then a further additional claim advanced by the plaintiff in association with this cladding. This is partly associated with window flashings penetrating the Abodo cladding which Mr Batchelor confirmed did not comply with the Code. But in addition Mr Ticehurst identified that the windows and doors do not match the consented plans as they are of different sizes, and have small pane windows that do not open. The foam bond breaker installed at the rear of the joinery problem identified

by Mr Batchelor is also connected to this. Mr Ticehurst gave evidence that the cost of remedying these issues collectively was a further $19,230. This involves correctly sized windows and doors being obtained and then properly flashed and finished.

[151]          I accept that the cost of remedying the incorrect joinery details is part of the required remedial work to address Mr Hewitt’s failure to install the cladding and joinery in compliance with the Code. The complaint that the windows and doors are of the wrong size with panes that do not open is a contractual issue, however. It is a complaint that these details do not correspond to what Ms Palmer bargained for.

[152]          I accordingly do not accept the amount claimed for this additional element of the claim. What I do accept is that when the Abodo cladding is replaced it will be necessary to remedy the defect with the existing details in relation to the window joinery. There is no express evidence of what this more limited cost might involve. So this is an example of a need to adopt a pragmatic approach of the type referred to in paragraphs [49]–[50] above. As an additional element I assess an amount of $2,000 should be allowed, and add that to the amount of the plaintiff’s claim against the second defendant. This means the total claim for the Abodo cladding is $21,935.

Roof

[153]The plaintiff claims $36,000 to replace the roof.

[154]Again there are a series of issues. First the consented building plans involved

0.55 Trim Line Coloursteel. But instead Mr Hewitt used a thinner material, 0.4 Trim Line Coloursteel. On that basis the plaintiff argues that the cost of replacing the roof to the original standard is required.

[155]          For the reasons I have already outlined in relation to other building elements, I do not accept this. This is a contractual issue rather than something that is a basis for a claim in negligence. It is not suggested that the thinner steel does not comply with the Code, or that it will result in any damage to the property.

[156]          But there are other problems with the roof. These matters are not referred to in the Council’s Notice to Fix, but I accept they are issues. Mr Ticehurst gave evidence

that there are places where the roof leaks and where the ridge flashing has buckled. In doing so he referred to a report obtained by Ms Palmer from a roofer, Mr Gerritsen of

A.T. Roofing. His report is that the roof does not comply with E2 of the Building Code. His report has photographs showing apparent defects with the roof. That report describes solutions to remedy the defects. Importantly that does not involve replacing the entire roof.

[157]          Mr Batchelor also identifies the roof as having additional defects. One of his reports states that the ridge flashings are poorly formed and installed, the downpipe spreaders are poorly formed and located incorrectly, the bottom of roof sheets are not turned down to the gutter, that the roof sheets are dented likely from being walked on, that the roof penetrations are not correctly installed and the ends of the apron flashings are poorly formed. That report stated that these were among “defects” that would “likely be observed and then added to the [Notice to Fix]”. In his evidence Mr Hewitt focussed on the report of Mr Gerritsen indicating that they had suggested, if correct, could be remedied “reasonably quickly for much cheaper than replacing the entire roof”. He estimated that it would cost a maximum of $10,000 to complete, although in cross-examination he seemed to suggest this was not his own estimate.

[158]          I am satisfied that notwithstanding it is not presently in the Council’s Notice to Fix that there are deficiencies with the installation of the roof, and that remedial work is required to make it Code compliant. If remedial work is not undertaken the roof will likely fail the durability and weathertightness requirements of the Code and damage will occur.

[159]          I am not satisfied, however, that the whole roof needs to be replaced. That was only proposed in Mr Ticehurst’s evidence on the assumption the plaintiff could advance its case based on a requirement for the roof to match the original building consent. Again I do not have direct evidence of what the cost of the more limited remedial task will be. But Mr Hewitt’s estimate was $10,000. I have given consideration to whether Mr Hewitt’s estimate is less than what will be required on the basis that I have not found all his evidence reliable. But I have no alternative basis to assess the cost of the remedial works as the plaintiff has presented no alternative estimate.

[160]          In those circumstances I accept the plaintiff’s claim, but the second defendants estimate of the cost to address it. Accordingly I award $10,000 on this item.

Flashings to Coloursteel cladding

[161]          When installing the windows into the Coloursteel cladding Mr Hewitt did not follow the details for the flashings set out in the consented plans. One of the reasons why he says he did not do so is that the Coloursteel was corrugated and the window framing detail consented plans did not work well with the corrugated curves of the Coloursteel. But there is a dispute whether Mr Hewitt’s alternative approach was Code compliant. The plaintiff alleges it is not and seeks the full cost of replacing the Coloursteel cladding.

[162]          This issue is addressed in the Council’s Notice to Fix. The Council says that the requirement of E2 relating to external moisture could not be satisfied as the Council was not able to determine “if all flashing had been installed around doors and windows in external cladding, internal, and external corners”. In its required actions it requires drawn details for the flashing. Mr Ticehurst’s evidence proceeded on the basis that it was necessary for this cladding to be undertaken in the manner identified in the original consent, which would cost $33,000 together with an additional $2,640 because there was a need for a vermin closure at the bottom of the cladding.

[163]          Mr Hewitt provided details of the alternative methodology he said that he had used in evidence, and said that this would be Code compliant. In one of his reports Mr Batchelor identified the alternative technique that Mr Hewitt said that he had followed recommending that the jam and sill flashing be installed as specified and this would “likely require the removal and reinstatement of the joinery and all associated linings and air seals”. In his evidence Mr Batchelor seemed to suggest that this would not be a costly exercise. Under cross-examination he also said that the issues that he had identified were only a potential issue with the Code, and that there had been no established breach.

[164]          This is a difficult evidential issue. It is not possible to verify what Mr Hewitt actually did as it is now hidden behind the completed building work. But the plaintiff has established that the joinery has not been installed in accordance with the building

consent, and that Mr Hewitt has not kept proper records of his alternative methodology to show that what he has done is compliant. Moreover the matter has been identified as a problem in the Council’s Notice to Fix, and even Mr Hewitt’s own expert identifies a potential problem with a recommendation that the joinery be removed.

[165]          I accept the plaintiff has established on the balance of probabilities that there has been defective work by Mr Hewitt. For these reasons I uphold the claim. In part this is because a builder’s duty of care extends to keeping proper records of what is done if consented plans are not followed. It is possible that the Council may accept the work without the Coloursteel being removed and reinstated. But even if that happened it remains possible that there is a latent defect that is not Code compliant that could result in damage.

[166]          In the end I am not prepared to accept Mr Hewitt’s evidence at face value, particularly given the Notice to Fix, and his own expert’s evidence. I accordingly uphold this element of the claim in the full amount claimed of $35,640.

Roof support posts

[167]          There are roof support posts required in an outdoor area comprising a concrete patio. In the consented plan these posts were supported by a steel bracket support at the base. That design system had originally been drawn by an engineer.

[168]          Mr Hewitt did not follow the plans when he did the work. Rather than using the engineered design steel bracket the roof posts penetrate through the concrete patio surrounded by a rubber buffer through to in-ground foundations Mr Hewitt says that he constructed. It is not now possible to see these foundations. The plaintiff’s claim proceeds on the basis that this element does not comply with the originally consented plans, with the cost of restoring the posts as required assessed by Mr Ticehurst as being

$23,000.

[169]          There does not seem to be a dispute that the technique that Mr Hewitt says he followed could be compliant. Although the original design was an engineered design, there is no evidence that it is required to be designed by an engineer under the Code. Mr Batchelor said in his report that such a technique would comply with NZS3604.

He suggested in evidence that Mr Hewitt had approached the alternative in this way simply because it was less costly. Mr Hewitt in his evidence said that he had done this because he thought it looked better.

[170]          This matter is not raised in the Council’s Notice to Fix, and it is a detail that would have been obvious from the inspections that have been undertaken. On that basis the plaintiff’s claim would really be a complaint that she had not been provided what she had bargained for, which is not a basis for a claim in tort. But there is one complication. That is that the invoices that the plaintiff has obtained on discovery suggest that some of the posts that Mr Hewitt ordered were only H3.2 treated, and not H5 treated. When that was put to him in cross-examination he responded that that must have been an error in the invoicing by the supplier and that he had installed the correct posts.

[171]          I see this matter as finely balanced as I did not find all of Mr Hewitt’s evidence reliable. But the reality is that this element of the building has been inspected by the Council, and no issue has been raised. I also accept that a reasonably simple test could have been undertaken by the plaintiff on the posts to see whether they are H5 or H3.2 treated and that this test has not been done. Given that I am not satisfied that the plaintiff has proved on the balance of probabilities that the posts are improperly treated such that the extensive work is required to replace them to make the construction Code compliant. I accordingly dismiss this aspect of the claim.

Summary

[172]          Given the above findings I uphold the plaintiff’s claim in negligence against the second defendant for the following items:

Abodo cladding (including repair	ing flashings)  $21,935
Roof repair	$10,000
Coloursteel cladding	$35,640
Total	$67,575

 

(a)

(b)

(c)

Conclusion

[173]         For the reasons outlined above on the plaintiff’s claims against the first defendant, the plaintiff is entitled to judgment in the amount of $392,400.

[174]         On the plaintiff’s claims in negligence against the second defendant the plaintiff is entitled to judgment in the amount of $67,575.

[175]         I give leave to the parties to apply to address any errors or omissions in the calculation of the awards consequent on my findings. This can be done by the filing of memoranda.

[176]         If the parties are unable to agree on costs, a memorandum seeking costs may be filed and served (no more than five pages plus a schedule) which should be responded to within five working days by filing and serving a memorandum (no more than five pages plus a schedule).

Cooke J

Solicitors:

Taverner Keys & Co, Carterton for the Plaintiff Hazelton Law, Wellington for the Defendants