River Oaks Farm Limited v Olsson HC Tauranga CIV 2009-470-775

[2010] NZHC 2066

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2009-470-0775

BETWEEN  RIVER OAKS FARM LIMITED, C & A THURNELL AND L HORNE AS TRUSTEES OF INGODWE TRUST Appellants

ANDTIMOTHY OLSSON, CHARLOTTE OLSSON & JOHN CRONIN AS TRUSTEES OF PICCOLO TRUST First Respondents

ANDTIMOTHY OLSSON Second Respondent

ANDKENT JARMAN Third Respondent

ANDWARWICK SWEETMAN Fourth Respondent

ANDSIMON NOEL MORAN Fifth Respondent

Hearing:         18 October 2010

Appearances: G Brittain for first and second respondents

Judgment:      18 October 2010

ORAL JUDGMENT OF PRIESTLEY J

Counsel:

G Brittain, P O Box 13473, Tauranga Cental 3141. DX HP40039. Fax: [phone]

Email: [email protected]

RIVER OAKS FARM LTD & ORS V OLSSON & ORS HC TAU CIV-2009-470-0775  18 October 2010

[1]      This hearing deals with the last remaining appeal issue arising out of an appeal from a decision of the Weathertight Homes Tribunal delivered in August

2009.

[2]      Mr Brittain appears for the first and second respondents.   He was facing a challenge, by the appellants, to the quantum award made by the adjudicator of

$311,747.  That quantum appeal, however, along with other outstanding issues has now been resolved.

[3]      At the centre of this outstanding appeal issue is the respondents’ contention that they are entitled to some contribution from the fourth respondent, Mr Sweetman.

[4]      Mr Sweetman, and out of an abundance of caution his former solicitor, have been informed of today’s hearing.   There is no appearance.   Mr Sweetman was originally joined as a party before the Tribunal by the respondents.  The claim was essentially a leaky building claim arising out of a home that had been constructed by the respondents at 37 Riveroaks Drive.

[5]      The  relevant  determinations  of  the  adjudicator,  Mr  C  B  Ruthe  were  as follows.

•    In general terms, liability against the respondents was established.

•    The proved claim was to the extent of the $311,477 figure.

•    There were five significant and causative leaks.

•    Relevant to Mr Sweetman was the second leak located in internal gutters.

There  were  two  deficiencies  with  these  gutters.     The  first  was  poor application of a membrane.  The second was fixing the fibre cement cladding (the notorious Harditex) too low into the gutter.

•The assessment, based on the joint and agreed calculations of the parties’ experts,  was  that  the  internal  gutter  leaking  contributed  to  25%  of  the damage.

•The finding by the adjudicator that Mr Sweetman was not liable.   In para [35] of his decision the adjudicator described Mr Sweetman’s role as limited. It was suggested he applied only two membrane coats to the gutters.   The adjudicator  held  that  Mr  Sweetman  was  not  negligent  and  thus  had  no liability to the claimants.

•Mr Sweetman was, however, liable for $1,600, being the cost of subsequent efforts to reseal the deficient parts of the building.

Mr Brittain’s submissions

[6]      In general terms Mr Brittain submits that the adjudicator erred in his finding so far as Mr Sweetman was concerned; that Mr Sweetman was liable to the respondents in negligence; and that the respondents should be entitled to recover a contribution from him.

[7]      I concur with Mr Brittain’s submission that, on the uncontested evidence before the adjudicator, it was clear that Mr Sweetman was engaged much more extensively than being a mere membrane applicator.  He was certainly engaged on a labour only basis as a carpenter and in conjunction with the third respondent, Mr Jarman.

[8]      I have been referred to evidence given to the adjudicator by Mr T Olsson which refers to Mr Olsson agreeing to start construction on the site in conjunction with Mr Sweetman; that Mr Sweetman was involved in the preparation of the foundations; that he liaised with plumbers and installed the pre-nailed frame; that he organised other subcontractors; and was even at one stage involved in a design amendment.

[9]      There is also evidence from Mr Olsson that Mr Sweetman constructed the plywood gutters over a two week period and also discussed changing the liquid membrane waterproofing system.  Critically there is evidence from Mr Olsson that it was Mr Sweetman who put the cladding on to the inside face of the parapets and

determined  clearances  between  the  Harditex  cladding  sheets  and  the  gutter membrane.

[10]     None of this evidence, involving Mr Sweetman’s critical involvement, was challenged or contested.  There is no evidence to the contrary.

[11]     On  the  basis  that  there  was  no  challenge  to  the  clearances  between  the cladding and the gutters as being causative in part of the leaks, I cannot see the basis on which the adjudicator found in Mr Sweetman’s favour on this issue.

[12]     In fairness to the adjudicator, and I am obliged to Mr Brittain for pointing this out, the major focus of the Tribunal hearing was on issues of quantum, and in particular the extent to which the remedial works would have to be carried out.

[13]     I note that the adjudicator also found that the other builder, Mr Jarman (with whom  Mr  Sweetman  was  working),  was  not liable.    The  appeal  contested  that finding as well.  I understand that issue has been resolved.

[14]     Mr Brittain’s second submission, closely linked to the first, was the type of contribution Mr Sweetman should be directed to make.

[15]     Initially Mr Brittain was attracted to push the point that Mr Sweetman could well be liable for a substantial part, if not the whole, of the ordered sum given that the cladding all had to be removed and replaced.   The reason for its removal was undoubtedly a Local Body requirement to check that rot had not set in undetected in parts of the frame of the building.

[16]     In that regard, however, I am not prepared to go beyond para [13] of the adjudicator’s decision and the finding which he made to the effect that the leaking attributable to internal gutters represented 25% of the damage.  In my judgment, and on the basis of the joint approach and agreed figures put before the adjudicator by the parties’ experts, I consider the 25% figure to be appropriate.

[17]     Mr Sweetman, so I am told, was unrepresented at the Tribunal hearing and although present throughout did not give evidence.  Whether or not that stance has

led to any distortion, so far as Mr Sweetman’s actual involvement and liability are concerned, I do not know.

[18]     Accordingly, pursuant to my powers under s 95 of the Weathertight Homes

Resolutions Services Act 2006 I make the following orders and directions.

a)        The finding of the adjudicator, that Mr Sweetman had no liability, is set aside.

b)I hold that Mr Sweetman has legal liability in respect of all damage caused by the second leak site identified by the adjudicator.

c)        An  appropriate  contribution  to  be  made  by Mr  Sweetman,  to  the quantum sum awarded by the Tribunal, is 25%.

[19]     Mr Brittain informs me from the Bar that the claimant before the Tribunal has been  paid  the  awarded  sum  in  full.    In  that  situation  it  is  appropriate  for  Mr Sweetman to pay the sum for which he is liable to the first and second respondents.

Costs

[20]     Should it become an issue costs are to be awarded in favour of the first and second respondent (one sum for both) on the 2A scale.

.......................................… Priestley J