Stott v Uplifting Homes Limited
[2023] NZHC 1514
•19 June 2023
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2021-470-101
[2023] NZHC 1514
BETWEEN GAVIN JOHN STOTT and MEGAN JANAE SAVAGEAU
Plaintiffs
AND
UPLIFTING HOMES LIMITED
Defendant
Hearing: 27-28 February 2023, 1-2 March and 6-7 March 2023 Appearances:
G R Grant and B M Foster for plaintiffs K M Quinn and R Pope for defendant
Date of judgment:
19 June 2023
Reissued:
28 June 2023
JUDGMENT OF JAGOSE J
This judgment was delivered by me on 19 June 2023 at 12.30pm.
Pursuant to Rule 11.5 of the High Court Rules.
………………………… Registrar/Deputy Registrar
Counsel/Solicitors:
K M Quinn, Barrister, Auckland Grant & Co, Auckland
Beattie Rickman Legal, Hamilton
STOTT v UPLIFTING HOMES LTD [2023] NZHC 1514 [19 June 2023]
Contents
Background [7]
Statutory context
—Building Act 2004 [46]
—Consumer Guarantees Act 1993 [50]
—Contract and Commercial Law Act 2017 [53]
Discussion
—did Uplifting perform the contract? [54]
—were the Savageau/Stotts entitled to cancel the contract? [65]
—compensation on cancellation [69]
—contractual damages [74]
—conclusion on relief [85]
Result [90]
Costs [91]
[1] In July 2019, the plaintiffs, Megan Savageau and Gavin Stott (the Savageau/ Stotts), acquired from the Hamilton-based defendant (Uplifting) an early-20th century wooden house for relocation from Auckland’s Remuera to Bay of Plenty’s Katikati at a price of $158,000.
[2] The house was transported in October 2019, but its resiting became complicated by its move from Remuera’s lower to Katikati’s higher wind zone. The Western Bay of Plenty District Council’s (the Council) building consent requirements accordingly imposed particular requirements for the relocated house’s foundations, internal bracing and roof structure. Pending issue of building consent, the relocated house was placed on temporary foundations at the Katikati site. After building consent was obtained, Uplifting re-established the house on permanent foundations in July 2020 and relined and reroofed the house, albeit incompletely.
[3] The Savageau/Stotts claim Uplifting’s relocation and building work was so substandard the house required “extensive remedial work in order to render it fit for occupation” and compliant with building standards, and cancelled their contract with Uplifting. By this proceeding, they sought to recover some $800,000 in contended losses, constituted by some $240,000 in their “wasted costs” to acquire and relocate the house (and identify its defects), some $520,000 as the estimated cost of remedying the defects and some $30,000 in lost rental income from other accommodation on the new site (in which the Savageau/Stott family continued to reside, pending their
occupation of the house). Unquantified general damages also were claimed for emotional loss.
[4] However, the Savageau/Stotts subsequently relocated to Marlborough’s Nelson and sold their Katikati property. Its purchaser required as a condition of sale the house’s removal. After unsuccessful attempts to re-sell the house for removal or return it to Uplifting, the house was demolished. In the event, for trial, the Savageau/Stotts seek now to recover some $330,000 in “wasted costs” (less insurance receipts) and lost rental income, plus $35,000 in general damages. The claim alleges breach of contract entitling cancellation, and prays in aid requirements imposed by the Building, Consumer Guarantees and Contract and Commercial Law Acts.
[5] Uplifting responds it was not required to make the relocated house ‘fit for occupation’, but only to re-erect the house as structurally sound on permanent foundations in Katikati. It says its relining and reroofing work was “gratuitous”, rather than being any part of the relocation contract. Uplifting also raises as affirmative defences, if it is in breach of contract, the Savageau/Stotts contributed to any water damage by failing to protect the house from the weather while it rested on temporary foundations in Katikati, and failed to mitigate any loss by taking reasonable steps to progress the house’s completion.
[6] Ms Savageau and Mr Stott both gave evidence at trial and called evidence also from a residential property manager, Shonagh Harris, and building experts, Graeme Blissett and Roger Charnock. By consent, the intended brief of real estate agent Bradley Barbour on the property’s 2022 sale was handed up in evidence. Uplifting gave evidence through its managing director, Abby Daly, and her father, Mick Daly, who was one of the truck drivers transporting the house to site. It also called evidence from a building expert, Noel Jellyman, and a quantity surveying expert, Paul Ranum.
Background
[7] Ms Savageau and Mr Stott lived with their two young children (the second child born 24 December 2019) in a garage and sleepout on their rural Katikati property. In mid-2019, they saw Uplifting’s advertisement online for a “beautifully presented
150sqm 1920’s Remuera bungalow” for “relocation onto a flat site with easy access” at a price including standard pile foundations and building consent plans.
[8] The wooden house previously was used as commercial premises in Remuera. It plainly had been the subject of some renovation, as it then formed the upper storey of a two-storey building, the lower storey being of more modern masonry construction. Some of its original internal walls had been removed to create a more open-plan commercial building, and some of its internal lining with timber sarking (wide planks fixed across the internal framing) had been replaced with gib board. In some rooms, a false ceiling had been suspended from the original board and batten ceilings.
[9] After Mr Stott, working as a shift firefighter in Auckland, visited the building, he and Ms Savageau entered into a written contract dated 22 July 2019 with Uplifting for the house’s “uplifting, transporting and re-siting” from Remuera to Katikati for
$158,000 (GST inclusive). The price expressly included “building consent plans drawn and submitted to the local council on your behalf, with no changes to the original floor plan”, and “engage[d] both parties” in the house’s relocation.
[10] Uplifting was “responsible for ensuring that the relocation of the building is carried out in a professional, workman-like manner for the duration of this contract, in accordance with the Conditions of Trade”, and “[a]ll work carried out by Uplifting
… will comply with NZ Building Code 3604”. The ‘Conditions of Trade’ were set out on a second page of the two-page contract; by “NZ Building Code 3604” was meant both the New Zealand Building Code as appears at Schedule 1 of the Building Regulations 1992 and NZS 3604:2011, the New Zealand standard means of compliance with the Building Code for the structure of timber-framed buildings.
[11]Under the ‘Conditions of Trade’, titled “Terms and Conditions”:
3. THE purchaser upon signing this contract shall forthwith make application to the relevant authority to have an inspection carried out on the building as described in the schedule. If, upon inspection, the building and or materials are found not to be structurally sound and the contractor cannot remedy same to the satisfaction of the council, then all monies paid will be refunded.
4. THE purchaser will forthwith at his cost obtain plans and seek and obtain a building consent for the erection of the building on his site.
…
6. THAT the contractor shall be responsible for the disconnection of existing services from the building, and also the dismantling of chimneys, the lowering of the roof, if required, and the removal of all base boards.
7. THAT the purchaser shall clearly peg and identify the site for the building on his property with pegs as approved by the Building Inspector for the said local authority which shall demonstrate the position on the new site on which the building is to be re-erected and will pay upon demand all or any extra charges for time lost through failure to mark the said site. Prior to delivery of the said building the purchaser is responsible for locating the survey pegs and string lining all boundaries to the satisfaction of the local authority. Boundary pegs and house pegs are to be clearly marked.
8. THAT the contractor undertakes to re-erect the building in a workmanlike manner, it being acknowledged by the purchaser that incidental damage may result from the transportation of the building. The contractor shall have the right to cut the building into sections for the purposes of transportation, but in this event shall rejoin the same by cleating, and furthermore shall re-erect the roof if lowered in a workman-like manner with the existing roofing materials. Any defects found in the roof at the time of removal will be the responsibility of the purchaser to remedy.
9. THE contractor shall be responsible for the transportation and removal of the building only, but this shall not include any obligation to remove, transport or reinstate any porch, landing, decks, balcony, steps, baseboards, chimneys or other appurtenant to the building.
10. THAT it is acknowledged and agreed that the following provisions shall apply to all foundations:
…
Foundations: Foundations to be combination of Anchor piles and ordinary piles. There is an allowance for a slightly sloping section, 300mm to the underside of the bearers to the lowest point to 600mm at the highest point. There is no allowance for any braced piles, nailing, wiring, bolting or bracing whatsoever. Should increased ground slope be encountered and the contractor elects to carry out this extra work, he then reserves the right to charge for extra labour and materials used; the extra charge to be paid with the delivery payment or by arrangement prior to the delivery of the said building to the new site.
11. THAT where the building has been resting on the foundation out of level and is reinstated on a foundation true and level by the contractor, no warranty will be expressed or implied as to the final resting position.
12. All insurance shall be the purchaser’s responsibility. All costs to be met by the purchaser.
13. THAT this contract is subject to the contractor carrying out a site inspection and his approval of same.
14. THAT for the avoidance of doubt and not intended as an exhaustive list of the work which the purchaser shall be responsible for, the purchaser shall be solely responsible for the following:
(a) Any winching, tractor, digger work or craning required to access and/or position the house on the new site
(b) Rebuilding of chimneys (if any)
(c) Removal of and transportation of any chattels, including carpets and stove
(d) Reconnection of all services
(e) Replacement of baseboards and steps if necessary
(f) Repairs to wallpaper, plastering, painting, electrical, plumbing, hot water cylinders and toilet pans which may have been damaged by any cause whatsoever, including weather.
15. THAT the purchaser will provide full and proper access to his site and will remove any obstacles, including fences, hedges and trees, to allow the transportation of the building, and will obtain all necessary consents for access through adjoining properties, and indemnifies the contractor and its agents against any claim whatever arising through the transportation of the building through the property of others.
16. THAT if for any reason beyond the contractor’s control it is not possible to place the building on to its new foundation and it has to be placed on temporary packing or left sitting on the transportation unit, the contractor is not responsible for any damages that may occur to the building.
17. THAT any new work and any work not specifically expressed herein is the responsibility of the purchaser.
18. THAT no liability shall attach to the contractor for any loss or damage occasioned to the building, goods or materials supplied through water or storm damage or any cause whatsoever.
19. THAT the purchaser acknowledges that he has purchased the building in its existing condition and after inspection and without reliance upon any representation by the contractor as to the condition or fitness of any purpose of the said building.
20. THAT this contract shall deem to be completed when the contractor has fulfilled his obligation as set out herein including any special conditions to be satisfied by the contractor, provided that if the contractor is prevented by the purchaser from fulfilling any obligation or satisfying any condition then the contract shall be deemed to be completed for all purposes hereunder.
21. THAT the parties may import into this agreement such other conditions and terms as may be necessary to fully and properly record the agreement of the parties, in which event such special conditions shall be separately endorsed hereon.
[12]The contract’s ‘special conditions’ provided:
Price includes building consent plans drawn and submitted to the local council on your behalf, with no changes to the original floor plan. Contract is subject to a Site Inspection. House is to be removed by 30/09/2019. No allowance has been made for storage. Extra travel charges to be charged separately upon completion of a Site Inspection. $5,000 holding deposit to be paid before close of business on 22/07/2019. Remainder of Initial 50% deposit to be paid before close of business on Thursday 25th July 2019.
and a “Payment Schedule” added the 50 per cent balance was to be paid 40 per cent “on beginning of works” and the final 10 per cent “before lowering of building”. Ms Savageau and Mr Stott paid Uplifting accordingly, except for the final 10 per cent which they withheld (and Uplifting has not demanded be paid).
[13] When the contract was entered, Uplifting engaged its architects, Hugis Partnership (Hugis), “to begin your Building Consent Application Process with you”. On 24 September 2019, Hugis reported to Uplifting on the condition of the house to be relocated. The report expressly was “a visual report only of the building elements which could be easily seen”. Thus, because “the underside of the floor framing was completely lined as a ceiling for the ground floor”, “[w]e cannot report on the size, spacing or condition of the floor framing”. Hugis advised the external and internal walls all were “constructed using native timber framing, 100 x 50 studs @ 450 centres”. The exterior cladding was “ex. 150 x 25 native timber bevel back weatherboard, directly fixed to the framing”, and the house internally was lined with “10mm gib board, stopped flush and painted”. Exterior paint work was “in excellent condition”; internal paintwork in “poor excellent condition”. The “longrun coloursteel” roof, constructed to a “25° gable style”, “appear[ed] to be in a good sound condition, with no sign of leaks”. External joinery of “timber doors and sashes hung in timber frames” were said to be “in excellent good working condition”, and ceilings all “in excellent condition with no signs of mould or decay”.
[14] Hugis confirmed “the roof, cladding, joinery, joinery flashing and installation, would have met all requirements for weather tightness at the time of construction and are in good condition”, and “the building appears structurally sound, and is suitable for re-sitting and re-use [as] a dwelling” on condition:
1 The building must be re-sited on foundations which comply with NZS3604 or are specially designed.
2 Any damage to the building caused through the relocation process must be made good.
3 All work described in 1 and 2 above must be carried out, or supervised by a Licensed Building Practitioner.
[15] Also on 24 September 2019, Uplifting forwarded to the Savageau/Stotts “a full set of floor plans, elevations and site plans” prepared by Hugis for the house to be relocated on the Katikati property. The site plan included extension of the existing driveway terminating at the existing garage with a “proposed metalled driveway” to the house’s intended position at the rear of the property and a septic tank and field to the side of the house. The next day, the Savageau/Stotts agreed the documents could be submitted to the Council in support of their building consent application. They accepted, if the plans required to be changed, “a full resubmission of the Building Consent Application will be required and … the additional time and costs incurred will be at [their] own expense”. The resource consent application was submitted that day.
[16] On 30 September 2019, the Council sought further information about the application, including:
As this building appears to be moving from a low wind zone to a very high wind zone, please demonstrate how it will meet structural and weathertightness requirements. Sec 112 of the Building Act requires that it must comply at least to the same extent as it did prior and moving to an increased wind zone means that it will not.
The Council required the application be resubmitted with the additional information, and accepted the resubmitted application on 21 October 2019.
[17] Meanwhile, in early October 2019, Uplifting prepared the house for transportation. It was separated from its lower floor, had its roof structure removed and windows secured against transportation damage and was cut in half along one edge of a central corridor (the cut line). On 14 October 2019, the house’s sections were loaded onto Uplifting’s trailers for relocation, which occurred over the subsequent two nights, arriving in Katikati on 17 October 2019 and rejoined before being established on temporary foundations, pending building consent. Reinstatement of the roof also awaited building consent, the original roofing iron being stored in the roof cavity.
[18] Throughout the process including after the house’s relocation, prompted by weather reports, Ms Savageau repeatedly expressed to Uplifting her anxiety about the house’s protection from the elements. Ms Daly confirmed the house would be protected by tarpaulins, and enquired if insurance was in place and the Katikati site was set up. Ms Savageau replied insurance was ready to be activated and “[w]e’ve marked out the house site ourselves, and Mick has [sighted] it”. The latter referred to Mr Daly’s pre-transportation site inspection, on which he observed some trees would need to be cleared and Ms Savageau left a chainsaw for his use on arrival.
[19] The Savageau/Stotts were “distressed” and “devastated” by the state of the house on its receipt and establishment, and the prospect it would continue to suffer damage while, on temporary foundations at their Katikati property. They perceived the house had suffered substantial damage during transit, which they attributed to water damage sustained during a 14 October 2019 Auckland storm and subsequent transportation, causing ceilings in the house’s living area to collapse. Abby and Mick Daly both sought to reassure them whatever damage had occurred was a normal incident of relocation, not affecting the house’s resiting on its permanent foundations. They disputed any storm damage. Ms Savageau requested Ms Daly re-establish the house’s tarpaulins when they repeatedly were dislodged by weather. On one of Uplifting’s attendances, a worker inadvertently took the Savageau/Stotts’ ladder.
[20] Ms Savageau continued to pursue Uplifting from November 2019 to February 2020 on both continued restoration of the tarpaulins and return of the ladder. In February 2020, in response to Ms Savageau’s continued pursuit, Uplifting advised Ms Savageau by successive text and email it had arranged for Prestige Building Removals Limited (Prestige) “to complete the job” under Ms Daly’s oversight, and subsequently to “organis[e] the piling of your house for you” with Prestige’s Maria Loomans “your main point of contact from here on out”. Prestige was operated by Ms Daly’s partner, Jason Barnes.
[21] At some point, the Council appears to have sought still further wind zone information for the resource consent application. Being dissatisfied by its original engineer’s response, in February 2020, Hugis approached a second engineer, Redco, which considered “the majority of the structural components and fixings could be
verified, or upgraded, by following the requirements of NZS3604”. Noting the design wind pressure at Katikati to be “almost double” that at Remuera, Redco observed “it’s not unreasonable that the Council are asking for verification in our experience”.
[22] On 5 March 2020, Mr Barnes and Ms Loomans met with the Savageau/Stotts on the Katikati site. Ms Savageau recorded part of the meeting. Ms Loomans’ comments suggested she was shocked by the state of the house compared to its original presentation in Remuera. Mr Barnes considered the house had sustained more damage in relocation than was ‘normal’, and was unsure if it properly had been cleated back together, but was confident it would successfully be re-established on its permanent piles. He said:
[W]e just need to get it piled, that’s, cause you don’t want them staying up like this. At the end, um, all this pile of stuff here when we get it down, we’ll put new stuff in. So, we’ll clean it all out, straighten it up.
After inspecting the house’s interior, in the course of which Mr Barnes identified various works Prestige would conduct, he said “I’ll give you an undertaking and make sure the house is right for you. Okay? I promise you that.”
[23]The works Mr Barnes identified were:
[T]o get it piled … get it all back to where it gotta go … get all this bracing out … get someone to fix that window … get [replacement laminate flooring]
… where the cut line is here … the whole hallway just needs replacing. So we’ll have to pull all the bracing down, re-gib the ceiling for you and, um, yeah, just put that right … to claim [from insurance] on a new floor and some of this gib.
After a discussion about the feasibility of reroofing the house using the original materials, including replacement of cut roofing iron sheets with new sheets, in which Ms Savageau asked “[i]f we bought the supplies, would you guys roof it? Do you know what I mean?”, Mr Barnes said:
I can get you what it costs us from the factory, so what I’ll do, when it’s down, I’ll get someone to come out and measure up and get it put on. We’ll sort it out. If you get it there you’ll save yourselves heaps of money. Um, but I think the first thing is to get it down and clean all this stuff out, and rip out all the stuff that needs to be replaced and then reinsulate, line it … . … I’ll get a quote from Metalcraft to come and put a new roof on for you, and get it at cost straight from the factory. Cause I believe that you should put a new roof on anyway, regardless of what’s happened, because if you’re here for a long time then you’ll get the spouting done and things will look clean … .
Ms Savageau asked about the outside of the house and Mr Barnes explained:
[The weatherboards] all get done anyway when it gets cleated. … Yeah, they’ve all gotta be redone, so that’s normal anyway. You’ll get that, and around the side of the house, and the baseboards get done, so.
[24]Of the insurance claim, Mr Barnes said:
I’m gonna lodge a claim and say while it’s been here the waters come in dropped the ceilings and stuff, and has just gone through the floor, and um, probably what we wanna do is when they come out is I wanna get it down first and then clean the house out, so when they come in, yeah. And my biggest thing is if we can get all the flooring through the insurance and some gib, then I’ll be happy with that. Because the flooring is the most expensive part. And I reckon, pull it all out and put brand new shit down.
He added:
[I]f I could get the flooring out of it that would be cool. The rest of it is just gib. Gibs not a lot, like it looks worse than what it is, once you clean all the rubbish out and you get it down and start replacing gib it starts looking like the house that you probably saw. … And you just gotta go and repaint it, I don’t know if you were gonna do that anyway? The only thing we don’t do is gibstop, but we can put you on to a gibstopper, and then that’s the only thing you’ll have to pay for is the gibstopping, but at least you’ll have most of the gib replaced in your house.
and repeated:
Just look at the iron, it doesn’t matter what’s gone on on the transit, it is due for new iron. But getting new iron, flashings and spouting will seriously finish your house off, it’ll look awesome. So, once it’s down I’ll get that quote done for you and um, yeah. The outside’s not too bad, it’s actually pretty normal.
[25] After explaining how the works would be conducted, including removal of a meatsafe and its replacement with weatherboards and re-establishment of an oval vent into the roof space, Mr Barnes concluded:
[O]nce we get it down and we put a roof on, instead of gibbing what we do, we get it down, clear it out, get the roof back, clear the whole house out, get all the old gib off, and then we’ll get the roof sorted. Get that on, and then start finishing off.
Finally, he said:
I’ll get you another ladder, just let me know what it is, or just go and get what you had and give me the receipt, and I’ll reimburse you for it.
[26] In mid-March 2020, on behalf of each the Savageau/Stotts and Uplifting,1 Ms Loomans notified a joint insurance claim for:
Rain and high winds while the house was up in the air on temporary foundations blew tarps off the house and water got inside the house through the cut lines causing damage to the ceiling and floors.
The claim explained, to reduce the damage, the claimants had “[r]eplaced the old tarps with new ones, and removed any wet gib from the house to reduce further water damage”, and described the damage as to “Flooring/Floor Boards” and “Gib/Ceilings”, their replacement “[to be confirmed] once house is piled”. Ms Loomans advised the insurer:
It is best to wait until [the building consent] is accepted to prevent further damage while house is in the air. We will be able to get quotes for repairs once the house has been piled.
[27] On 25 March 2020, New Zealand moved to a national state of emergency and Alert Level 4 lockdown, heavily restricting personal contact and movement to contain COVID-19 community transmission. The lockdown was reduced to Level 3 on 27 April 2020, enabling contactless work, until 13 May 2020 when the national state of emergency was lifted.
[28] Also on 13 May 2020, the Council issued building consent for the house’s relocation. The consent required “[a]ll work to be carried out in strict accordance with NZS 3604 2011 NZBC or acceptable solutions. All restricted building work to be carried out or supervised by a Licensed Building Practitioner”. It specified:
Where the building has been cut for transportation, the following remedial work must be carried out:
Sub Floor:
Butt 150x50 floor joists together – provide and fix a further 150x50 joist to one side of each cut joist extending from bearer to bearer each side of cut and well nail joists to the new joists.
Floor:
Provide 70x45 nogs and nail up to under the flooring where it has been cut. Nogs to be provided for the full length of the cut. Nail flooring on both sides of cut back down to nogs.
1 Given the contract’s cl 12, which makes insurance the Savageau/Stotts’ sole responsibility, it is unclear why the insurance was ‘joint’, but ‘joint’ it was.
Walls:
Behind the external cladding, where the wall have been cut vertically, provide a double 45mm x same wide as wall thickness, and nail cladding to this double stud on both sides of the cut. Before installing new studs at joints provide and fix a splice nog to the top of the bottom plate and the underside of the top plate, extending from stud to stud either side of the cut, and well nail to both plates.
Rafters and Ceiling Joists:
Provide and fix hitch plates to each side of the ceiling joists and rafters, in accordance with the attached detail.
Purlins:
Butt 75x50 purlins together, provide a further 75x50 purlin to each side of each cut purlin extending from rafter to rafter each side of cut, and well nail cut purlins to the new purlins.
Lintels:
In the unlikely event that a cut in building needs to pass through a lintel, then the lintel shall be completely replaced with a new lintel of like dimensions to the one which is cut.
In anticipation of the consent’s issue, to “get the ball rolling for piles, roofing, repair, etc, etc, etc”, Ms Savageau earlier had enquired of Uplifting to “know what dates and time frames are looking like”. No particular response was forthcoming.
[29] Piling work commenced in early June 2020. The Council inspected the works on 9 June 2020, observed there would need to be changes to the consent application’s drawn bearer layout to match their as-built layout in the original house and required the “as-built plan to be provided as minor variation” for approval. The house was located onto its permanent piles in mid-June 2020. No ‘as-built plan’ was provided to the Council.
[30] Uplifting’s attendances on site thereafter were sporadic, complicated by unsuitable weather and worker illnesses and injuries. Some of Uplifting’s work was certified by Mr Daly as a licenced building practitioner.
[31] On 8 July 2020, Ms Loomans advised Ms Savageau she had spoken to Mr Barnes about the roof quote, which she had asked the supplier to “re-do … showing for [s]upply of the iron only, and we will have our team install it for free” (excluding fascia and spouting, remaining for the Savageau/Stotts’ installation). The Savageau/
Stotts accepted the updated quote, based on Uplifting’s further measurements, on 23 July 2020. Work on the roof was to commence in late August 2020.
[32] On 2 September 2020, Ms Savageau sought to revisit the 22 May 2020 proposed insurance settlement, addressing remedial work in the building’s hallway and back room, to cover also additional damage to its lounge and flooring. After an intermediate offer on 21 October 2020 to cover lounge damage, the insurer’s revised settlement including floor damage ultimately was offered on 17 December 2020, and promptly accepted by Ms Savageau.
[33] On 2 October 2020, Mr Barnes and Ms Loomans met with the Savageau/Stotts on site, to discuss what remained to be done “[to get] the house finished”. Mr Barnes explained, pending the insurer’s acceptance of the further cover, “we’ve come to a little bit of a stop”. Mr Barnes observed “the majority of the roof is on” and identified the outstanding work to be to “get all that flooring back down … put all the gib back on the walls … insulation to go back up in the roof”. Later he added “[g]et that roof finished … get those windows done … get the bases done”. He recommended the Savageau/Stotts have their electrical and plumbing reticulation “down before we put the gib on”. In answer to Ms Savageau’s request for “assurance that once the insurance payment comes through, that you’ll stay on site until it’s done”, Mr Barnes said “we’re not even waiting for payment, we’ll carry on”; he was “picking to be out of here by the end of this month. Completely”. Ms Loomans reinforced “you guys are our main priority”.
[34] On 6 November 2020, Ms Loomans forwarded the suppliers’ invoices for roofing materials, observing “[a]s per our agreement, you and Gavin were to pay for the materials and we would do the labour for free for the iron laying”, and asking the Savageau/Stotts to pay the supplier directly. Ms Savageau responded on 12 November 2020, raising queries about the further invoices (including if they were being asked to pay for materials damaged by Uplifting’s workers), noting they had paid earlier invoices, and advising they were “not comfortable about paying what [the supplier] quoted us for the iron until the room is completed as agreed between us and Prestige” and “[t]here is still a good bit of work for [Prestige] to do on the main portion of the roof”. On 13 November 2020, Ms Loomans replied “there is not much to do on
the roof, this should not stop you from paying for your product”. She observed the gib stopper had “at least another week there” and she would “be sending the builders back there towards the end of next week which the little bit that is needed for roof will be finished”. Ms Loomans said “also I will be there next week to have another look at where we are at going forward”. Mr Barnes advised the same day “the main roof is all competed” but for work on the gables. Ms Savageau’s subsequent requests for Uplifting’s attendance on site went unmet.
[35] In January 2021, the Savageau/Stotts’ builder expressed concerns about the quality of work done on the house. The Savageau/Stotts instructed expert inspections of the house by registered building inspector Graeme Blissett and registered building surveyor Roger Charnock. Mr Blissett’s February 2021 report concluded:
It is my opinion that the re-siting of this dwelling has numerous short-comings and has not been completed in a workmanlike manner.
The installation of the interior linings and the stopping of these linings is not in line with standard practice or the Gib Installation Site Guide.
The roof has been poorly installed with several fixings missing, is leaking into the roof cavity and has dis-coloured in numerous areas.
The foundation piles have not been set out as per the consented plans, the bearers and floor joists are poorly secured and movement was evident and there is no bracing installed as detailed on the consented plans.
The consented plans show a detailed interior wall bracing schedule that does not appear to have been followed.
The re-joining of the dwelling and replacement of sections of the cladding is poor and not completed as per the detail provided on the consented plans.
The re-joining of the roofing rafters has also not been completed as per the detail provided on the consented plans.
Some of the floors and the hallway walls are out of level and not plumb and not within acceptable tolerances as described within the ‘Guide to tolerances, materials and workmanship in new residential construction 2015’.
We believe that considerable work will be required to all areas of this dwelling to bring the dwelling back to an acceptable level of construction and finish that is acceptable. Considerable work will be required to the interior, exterior, roof, sub-floor and roof cavity. All new wall linings will most likely have to be removed and re-instated and the new roof re-placed. This may also involve the re-positioning of the dwelling on new foundation piles due to the deviation from the consented plans.
and Mr Charnock’s March 2021 report concluded:
This building has numerous issues which if left, will result in premature failure of materials and future likely damage of the structure, and these are identified in the list of concerns above.
The building appears incomplete, the timber weatherboard joints along the cut line have not been formed as designed. The bottom section of timber weatherboards has not been installed. The facing boards around openings have not been reinstated. The timber joinery is decaying, has gaps at junctions allowing water entry and the beadings are either decayed or new beading poorly installed. The door surrounds have gaps present which are allowing water entry resulting in deterioration of internal materials. The building wrap where new cladding has been installed has not been dressed into openings as required, the joinery opening do not have flashing tape in the corner or along the sill. There are no air seals formed between the joinery and timber framing to prevent moisture entry via vapour diffusion. All these issues regarding the timber weatherboard will allow water ingress to the framing timbers and will result in decay of the framing timbers.
The roof structure has been installed not level in parts, there are timber outriggers which are missing, split, or decayed. The roofer did not check the levels of the framing prior to installing the roof sheets and flashings which has led to ad hoc installation measures being carried out onsite which has led to poorly fitting ridge flashing, unprotected cut edges of roof sheet and undulations in the roof sheets etc. The roofing underlay has not been installed to all areas of the roof as required. The eaves flashing, fascia, spring clip, gutters and over straps have not been installed, possibly due to the uneven finish of the timber outriggers which the fascia would have been fixed to which would be clearly visible when the fascia is installed.
The roof framing has not been installed as per Hugis Partnership design, as highlighted above, with valley and ridges timber which were cut during the relocation process have not been replaced, but instead have flitch plates installed. The roof flashings are leaking and there is a bucket in the roof space to collect the rainwater and prevent further damage to the property. Lintels shown in the design documentation above the roof space vents have not been installed, the collar ties have not been installed as per the design, the ridges do not fully support the rafter’s edges.
The subfloor timbers have no connections installed, currently the building is reliant on its self-weight, but in the likely event of an Earthquake has no means of preventing lateral movement of the building, which would collapse off the piles. The piles have not been installed as per the design and the bearers have not been install continuously from one side of the property to the other but have been staggered. There is a design within the Hugis Partnership documentation that shows staggered bearers but there is no indication as to whether this has been approved by council. The Anchor piles have not been fixed as required. The Bracing Pile Systems have not been installed.
There appears to be an asbestos containing material in this subfloor area which requires testing to confirm basis of material. The damaged vinyl flooring within the dining room has been confirmed as asbestos and requires removal in an approved manner to prevent the risk of fibres entering the living space.
The building has not been installed level or plumb. This has resulted in gaps opening at junctions and around openings such as windows and doors which are allowing water entry to the framing timbers and interior of the building leading to deterioration of flooring.
There are areas of severe timber decay around the property particularly to the door and window surrounds which requires removal.
Western Bay of Plenty council were called to carry out a Pile/ Pole foundation inspection 9 June 2020 which [“]Pass - Not complete” requested an as-built plan be provided as a minor amendment, to include for the “staggered to match location of originals” referring to the bearer layout slightly changed from the approved plan. Western Bay of Plenty council have not been invited to inspect any of the other works, such as the siting underfloor Plumbing and Drainage, R2 Framing (fixing of framing to the floor), R2 Pre-clad (flashing tape, and sill tape, flashings etc), Pre line (airseals, moisture content levels, framing etc), Post-Line (bracing fixings before stopping) and Drainage. All these inspections will require opening of enclosed areas to allow the building inspector to check the adequacy of the works.
The building in its current state is not compliant with the New Zealand Building Code in the areas of durability and external moisture.
[36]Mr Charnock also recommended:
A land surveyor should be tasked to accurately measure the levels of all elements to determine the best way in which to ensure the building is level. This is likely to involve packing areas of the existing timber piles. Once the building is level then the bracing pile system, anchor pile connections and all connections and fixings.
The material under the Living room floor, which is an Artex ceiling plaster, should be tested for asbestos containing material.
All construction debris should be removed from the sub floor area, to prevent deterioration of the materials and the possible proliferation of mould growth on the cellulose materials.
Consideration should be given to installing 250 micro damp proof membrane over the exposed earth within the subfloor space, all fully lapped and taped around the piles.
The H3.2 base boards shown on the design require installation once all subfloor works are complete.
The bottom timber weatherboards require installation.
The installed building wrap must be wrapped into the opening in the framing and flashing tape installed at the corners and across the sills. New air seals will be required with PEF backing rods.
All timber joinery is to be inspected thoroughly for any decay and any decayed timbers removed and replaced.
Any missing, split, cupped, decayed, or damaged timber weatherboards, corner boards, facings, trims, soffits and outriggers are to be replaced with new.
The weatherboards along the cut line are to have vertical joints formed with H3.2 Facings with weathergrooves and scribers both sides as per the design.
Any gaps in the external claddings are to be fixed tight and sealed.
Any cracks or gaps in the internal lining which may occur during the relevelling works are to be re-stopped prior to painting.
The internal trims are to be inspected so that all the trims match.
Any remove wall linings are to be replaced and re-stopped. The wall linings are to be taken down to finished floor level. All wall linings are to be checked to ensure the fixings are in accordance with the manufacturer’s recommendations. The gaps between the floorboards and wall framing are to be sealed to prevent vermin entry.
The newly installed roof sheets and roof flashings are to be removed. The roofing underlay is to be removed and the roof framing straightened. The roofing underlay is then to be installed so that all areas of the roof framing are covered and there are sufficient laps. The prefinished eave flashings are to be installed to the perimeter edge. The fascia bracket, Metalline fascia, spring clip, Metalline quad gutter and over straps are to be installed. The roof sheets and new flashing are to be installed as per the manufacturer’s recommendations.
When reinstalling the cladding, it will be necessary to ensure the building wrap is correctly taped to any wall penetrations and that the cladding is adequately sealed to the penetration with a correct width of sealant incorporating a bond breaker mechanism of PEF Rod to the back of the joint.
New head flashings must be fully integrated with jamb and sill flashings to all windows and doors. All head flashings must have stop ends formed.
Replace all decayed timber framed joinery with new.
Structural engineer to check the adequacy of the roof framing structure, the subfloor structure particularly the staggered bearers and the wall bracing elements.
The internal lining fixings are to be checked as meeting the manufacturers recommendations and the stopping works are to be complete prior to painting. All skirtings are to be installed plumb which may require packers.
The Kitchen, bathroom, Laundry and WC fixtures and fittings are still to be installed.
Covers will be required to provide weather protection to the dwelling during repairs. These covers are required to protect the property from water damage when the claddings and linings are removed and to allow repair work to continue during rainy weather, the covers will be provided supported by scaffolding which is required to access the areas being reclad.
The extent of any remedial work would warrant tendering to achieve competitive pricing. The preliminary recommendations are not sufficient to instruct a contractor in the process of repair work. Specific detailing and direction are required to be provided before and during the repair process.
[37] Quantity surveyors engaged by the Savageau/Stotts assessed the cost of these works to exceed $520,000 (including GST); alternatively, demolition and make good costs of $24,000–$33,000 (including GST).
[38] By letter of 9 April 2021, the Savageau/Stotts’ solicitors wrote to Uplifting, alleging its poor work quality and contractual breaches and seeking reimbursement of the Savageau/Stott’s $248,000 expenses on the house and its relocation, together with
the house’s removal from and making good its Katikati site. By email of 6 May 2021, Uplifting’s solicitors responded, asserting its “right to remedy pursuant to s 19 of the Consumer Guarantees Act 1993”, and proposing an on-site meeting to determine outstanding issues and possibly agree remedial work. By email of 11 May 2021, the Savageau/Stotts’ solicitors replied, rejecting any opportunity for remedial work as spent and reserving their rights to cancel the contract while contending for “a strong claim against Uplifting for breach” of Building Act warranties, Consumer Guarantees Act guarantees and contract.
[39] Nonetheless, on 4 June 2021, the Savageau/Stotts met with Uplifting on site and Uplifting advised it would make a proposal to them. The Savageau/Stotts rejected the consequent proposal as “vague, [lacking] any detail about costings, and [not addressing] key issues, costs and defects” raised in the correspondence and expert reports. Ms Savageau explained they lacked confidence in Uplifting’s ability “to remediate the house to a code-compliant standard”, and the proposal also had not addressed their additional costs incurred by Uplifting’s failures. The Savageau/Stotts therefore would be “moving forwards with our legal action” while remaining open to “any reasonable settlement offer”. On 19 July 2021, the Savageau/Stotts’ solicitors gave Uplifting’s solicitors notice they cancelled the 22 July 2019 contract on grounds:
1. Uplifting has substantially breached its guarantees under sections 28 (reasonable care and skill), 29 (fitness for purpose) and 30 (time for completion) of the Consumer Guarantees Act 1993, entitling our clients to cancel the contract pursuant to section 36 of that Act; and/or
2. Uplifting has repudiated the contract by its failure to complete the building work required under the contract within a reasonable time, such that our clients are entitled to cancel the contract pursuant to section 36 of the Contract and Commercial Law Act 2017 (CCLA); and/or
3. Uplifting has breached essential terms of the contract, including (without limitation) its contractual obligation to ensure that all work on our clients’ house be completed in a professional and workmanlike manner and in compliance with the New Zealand Building Code (NZBC), such that our clients are entitled to cancel the contract pursuant to section 37 of the CCLA; and/or
4. Uplifting has breached implied warranties under section 362I of the Building Act 2004, including (without limitation) warranties that the building work on our clients’ house would be:
(a)carried out in a proper and competent manner;
(b)carried out with reasonable care and skill;
(c)carried out in accordance with the relevant building consent;
(d)carried out in compliance with all applicable laws and legal requirement (including the NZBC); and
(e)completed within a reasonable time;
Such that our clients are entitled to cancel the contract pursuant to section 362N of the Building Act 2004.
[40] The present proceeding issued on 27 August 2021. By letter of 4 March 2022, the Savageau/Stotts’ solicitors advised Uplifting’s solicitors their clients “now plan to move on from the property and the best way for them to realise value from it is to remove the house”. Before incurring such costs, Uplifting was invited to retake possession of the house. No response appears to have been made. On 24 May 2022, the Savageau/Stotts entered into an agreement for the Katikati property’s sale for
$1.25 million, on conditions including the house’s removal, which was demolished accordingly.
[41] For trial, Uplifting instructed another expert, registered building surveyor Noel Jellyman, to identify “the reasonable and necessary works required to remediate defects that Uplifting Homes are responsible for” under the 22 July 2019 contract “and subsequent works”. In his assessment, elaborated in a schedule to his report, such works were:
Roof cladding works
• Loosen sheets via the bottom rows of fixings and slide in roof underlay, refix the roof sheets in the isolated areas where the underlay is missing.
• Lift ridge and loosen the tops of the sheets to allow a strip of roof underlay to be installed.
• Go over the roof and add missing fixings. Allow 1 box of roof tech screws and 4 hours labour.
• Repairs to the ridge hip junctions flashing. Sum for sundry materials and 4 hours labour.
• Remove the bottom row of fixings around the periphery of the roof and install the eave flashing.
• Replace colour faded sheets of roofing, allow 6 sheets 1t 4.0m and 6 sheets at 20.m plus 5.0m of ridging.
• Retrim the existing roof sheets lapping into a valley. Roofer 1 hour’s work.
Roof structural works
• Flitch plated rafters require that the engineer inspect and approve alternative fixing type and/or add the additional nailing to comply with the engineer’s design pattern and numbers (see Redco page 29). 5Kg box of nails and 2-hour labour.
• Flitch plates on ridges and hips are okay as constructed, however an additional prop under each hip (x4) would be prudent.
• Allow for adjusting some roof props and structure within the roof space.
I.e. remove props and trim then reinstall, add a few more props. Say 30m 90 x 45 and 2 men for a day.
• Allow to add 8 Collar ties 150x25 say 4.0m long – estimate 2 men for 4 hours.
• As for Z Nails, check on site – appropriate screws may already be installed. If lacking add Lumber Lock CT160 from within the roof space and/ or blue screw 10g self drilling screw to each purlin crossing a rafter.
• 90 x 90 Lintel installed within the roof space. 90 x 5 timber at 3.0m, sundry nails and 1 hour labour.
• Allow to add wrap behind the top of the sheets and apron flashing across a Dutch Gable.
• Add two full height studs at the gable end alongside existing cut studs, or flitch plates. 90 x 45 4.8m and 1 hour labour.
Note: While the two [categories] of roof works are split under the two headings, roof cladding works [versus] roof structural works, in practice these works will need to be done at the same time and will require a Carpenter and Roofer working together as a team to sequence and execute the works at the same time.
Carpentry and flashings around bottom of apron flashings.
• Apron flashings need to be removed, discarded and then reinstated with a higher degree of skill. This will also include removing, then reinstating, corner boxes. The apron flashing extending past the corner box. Allow 2 Apron flashings 3.0m and estimate labour 4 hours on two corners.
Note: Again, executing Apron flashing work will require sequencing and coordination between roofer and carpenter. Both are required to execute the remediation of this defect.
Sundry Carpentry
• Fitting of remaining Weatherboards soakers, window facings and scribers limited to those areas affected by the cut line repairs.
• Allow a sum to remove debris left in the roof space and subfloor– a bin and say 4 hours labour. This includes the Artex ceiling under part of the floor.
• Replace an area of particle board floor 5.0m x 1.5m (Laundry area – cut line went through here)
Wall Bracing
• Engineer review required and likely an amendment to the Building Consent which would be treated as a variation under the Contract. In my opinion, Uplifting may have a responsibility to arrange for this, however it is a variation to the work for which ordinarily the owners would be charged as a variation.
• An allowance to add some hold down fixings where shown required on the Brace plan and Redco calculation.
• Allow for some additional nailing or screws into gib and subsequent touch up stopping.
Subfloor
• Nog out along the sub floor each side of the cut line – 15 LM x 2
• Two new joists 4.8m and two hours labour.
[42] Mr Jellyman’s report also listed works, similarly elaborated at its schedule, excluded from Uplifting’s responsibility as “betterment” or falling within the Savageau/Stotts’ responsibility, being:
• Building paper behind the gables weatherboards. No action
• Reconstruction of the Valleys and ridges. No action
• Straightening of old timber walls, floors or parts of roof structure that was not previously plumb, level and true.
• Outriggers that are deteriorated is repair work that the owners need to undertake (or not, as they choose)
• Reconstruction of the soffit’s facia and a gutter to a new modified detail on the building consent plans.
• No action required in terms of rafter to ridge connections.
• Pile, joist bearer connections. (Clause 10 of the Contract).
• Insulation is excluded.
• Removing patched-in weather boards to add building wraps. (Note wraps are optional and not required where minor repairs are undertaken).
• Owner’s carpenter is required to fit the bracing to the subfloor and connection of the piles to bearer and joist.
• Amendment to the building Consent – a cost that the owner would incur as it would, in a normal building contract be treated as a variation.
• Replace particle board flooring (except in the laundry).
• Reconstruction of porch landings and steps.
• Internal finishing works including, but not limited to, Gib, Gib stopping, internal painting and decorating, fit-out of bathroom and kitchen, doors, skirting, scotia, architrave and trim, cupboard fit outs, hardware and floor coverings.
• Replacement or upgrade of windows, and external doors (unless the same are shown to have been damaged by Uplifting, as opposed to simply having decayed over time).
• Completion of exterior weatherboard trim such as soakers, facings and scribers in areas away from the cut line.
• Refit weatherboards around the base of the wall and add baseboards.
• Borer treatment
• Painting of the exterior.
• Scaffold as may be required to construct soffits and carry out works on higher parts of the walls.
[43] Also for trial, expert registered quantity surveyor Paul Ranum assessed those ‘reasonable and necessary works’ as costing some $66,000 in December 2022. Excluding the wall bracing variation identified by Mr Jellyman and associated expenses as at the Savageau/Stotts’ cost, he reduced that sum to some $29,000 (including GST).
[44] In advance of trial, on 16 February 2023, the building experts Blissett, Charnock and Jellyman met. Mr Jellyman minuted their meeting as follows:
NJs Removal of houses
• The cutting of the house in half and transporting them tends to make a (big) mess of what previously have looked very tidy.
• Builder (owners) would not carry out any works to the shifting and reconnection building works whilst the works were not complete.
• Amended foundation plan not provided by Uplift Homes and no bracing plan provided to owners
• Section 42A (2)(b) (ii) - if it did not comply with the building code immediately before the building work began, continues to comply at least to the same extent as it did then comply.
Roger and Graeme agree whilst that the works had a building consent in place the works were required to comply with the building consent and building code. Noel considers that the scope of works comes under Section 42A (2) (b)
(ii) and didn’t need to comply.
Condition of this house prior to removal
House is roughly 100yrs old, no insulation, or building wrap consistent with properties of this age.
The Hugis report says the property was in good condition, whilst none of the experts visited the property prior to relocation and cannot comment.
Use of tarpaulin to cover the roof
All agree normal practice and for the tarpaulin to come loose in high winds.
Foundations
All agree that the inspection of the foundation pile’s location was approved, and an amendment was required. The details of the amendment were not provided.
Roger and Graeme consider the floor to be out of level in isolated areas such as hallway and dining room and all experts agree that the floor levels could’ve been releveled and repacking to suit.
Plumbness
All experts agree the walls are out plumb and that the true cause of this out of plumbness could not be agreed or determined. The windows and doors are now no longer able to be open, whilst the Hugis report says that the windows were generally in good condition. It is not unusual for there to be some movement and racking in windows and doors while being in transportation.
Wall Bracing elements
We agree that an amendment for the bracing elements was required, and that the bracing plan requires review and additional works. That there are lots of different ways to include the bracing elements to achieve the required bracing elements.
Post meeting note – the internal wall linings were discussed under this heading with works agreed as required to the linings to make good.
Roof
Roger and Graeme agree that the roof would be better to remove the roof sheets to allow the structure to be realigned (made straight), whilst Noel considers that works can be done without removal of the roof sheets. And considers the roof misalignment to be consistent with age.
Roger and Graeme consider the Uplifting works to roof have not followed the building consent or building code whilst Noel considers the works incomplete.
Only one bucket present which was full of water at the time each expert inspected.
Joining the two portions and reinstating the cut line.
All agree that the incorrect sized weatherboard cladding required replacement. Soakers are required and were not installed yet.
The boards don’t match in width and thickness, replacement required. Scribers, facing not installed.
Noel considers the works incomplete, whilst Roger and Graeme consider this work to be defective.
Remedial works
All agree that remedial works are required, and that works carried out by Uplifting Homes Ltd require remedial works.
Clarification note – the proposed scope of remedial works recommended by each expert have not changed.
I understand the comments at the bullets under the first heading “NJs Removal of houses” to be attributable to Mr Jellyman alone. Mr Blissett and Mr Charnock lacked experience of relocating houses in New Zealand.
[45] The experts subsequently submitted a supplementary joint statement dated 24 February 2023 as follows:
A. Removal of houses – General
· Do we all agree that cutting houses in half, and transporting them, tends to make a (big) mess of what might previously have looked very tidy? Effects of racking etc.
Agreed that it is inevitable there will be some damage.
Cutting a house in half and transporting it tends to cause some damage. NJ considers that what was seen in the photos was in line with what he would expect. RC and GB thought it was more extensive than what they would expect.
· Do we all agree that almost invariably the purchaser will have his/her own builder to carry out work on site once the house removers have placed the building on its new piles?
Generally Agree.
RC and GB state the owner had a builder lined up but he would not take on the work because he felt that Uplifting had not completed their work first
· Do we agree that it is not always practicable to see in advance what the condition or layout of relevant parts of the house might be (e.g. underfloor) ?
Agreed
· Is it common with removal jobs, as with renovations generally, that amendments will be required to the building consent plans. Do we agree?
Agreed
· Approach to the work needed for reinstatement purposes – i.e. the difference between the new foundations (which are entirely new and thus required to comply with current Code) and patching work on other existing elements of the house are (which NJ considers are simply required to be like for like).
RC and GB position remains that due to the consent being in place, all works undertaken by UHL were required to meet the building consent and comply with the Building Code.
NJ considers Building Act section 42A(2)(b)(ii) can be applied to renovation works on an old building at least to the extent like for like repairs not detailed in the consent are carried out.
B. Condition of this house prior to removal
· Do we agree the house was roughly 100 years old, or older (i.e. not as stated in the Hugis report) ?
Agreed. The House is roughly 100 years old.
· Do we agree it is likely that the house would originally have had no insulation or building wrap?
Agreed.
· Do we agree with NJ’s observations based on the photos, that some of the joinery and the rafters (and roofing iron) etc was far from in an “excellent” condition?
None of us had the opportunity to visit the house and subsequently cannot confirm the condition, other than what we can see in the photos. GB &
RC say the Hugis report can be relied on to confirm good condition. NJ’s view is the Hugis report is not sufficiently comprehensive to be relied upon. There was agreement that the three of us could not comment in any detail as we had not seen the building prior to it being shifted.
C. Use of tarpaulins to cover the roof
· Do we agree the use of tarpaulins to cover the open portions of the roof, while awaiting the BC, was an appropriate (and indeed typical) measure to take ?
Agreed.
· Do we agree also that despite best intentions/efforts, tarpaulins are never perfect?
Agreed.
· Do we agree also that water commonly gets into buildings while under construction? If it gets in while there are linings up (whether old or new) the water will tend to damage those linings and create a mess, but rectification is pretty simple (just remove water damaged linings and instal new gib).
Not specifically discussed.
D. Foundations
· Do we agree that the consented piling plan appears not to have been drawn to match actual floor joist configuration (and therefore it was appropriate to depart from the consented plans) ?
All agreed. All that was required was that the Building Consent be updated with an amendment.
· Do we agree that BC foundation plans can be amended to reflect as built foundations, and that the Council inspector appeared to be okay with this? I.e., it is reasonably common for a BCA Inspector to instruct that an amendment is required.
Agreed as noted above.
· Regarding levelness measurements, NJ done with laser and a 3m straightedge, and RC & GB used small digital levels. Do we agree it is more likely that the laser and straightedge is an accurate assessment?
NJ confirmed he measured room by room, as did RC and GB. RC & GB confirmed floor areas they identified as being out of level were in isolated places and could be corrected with jacking up and packing a pile or two.
· Is it agreed that any areas of floors being out of level are likely only to be localised, and that such irregularities are not in themselves evidence of the foundations being out of level? Do we agree any minor discrepancies could be packed out without having to re-pile again?
Agreed, as noted above.
Also discussed plumbness (ie vertical planes). There was general agreement that the cause of some of the walls being out of plumb was not able to be agreed or in fact determined. RC and GB pointed out that the Hugis report did not note any issues with levelness or plumbness. NJ pointed out that there is nothing in the Hugis report to suggest that such
matters were even investigated. While some doors and windows may have worked better prior to moving the building, some racking and movement is inevitable during a house relocation, but RC and GB thought not to this degree. NJ considers that the amount of racking etc which occurs during a removal will depend on the structural strength of the house. NJ pointed out that adjustments to doors and windows etc can be made once on site.
E. Bracing elements
· Is it agreed that the bracing plan prepared by Hugis required amendment, because it did not accurately reflect certain features/dimensions of the house ?
Agreed a review and BC amendment was required once it was apparent the bracing did not all work.
· Do we agree that there might be other ways (short of a steel portal frame) of completing the required bracing for M3, to the satisfaction of the Council ?
Agreed there are other bracing solutions. These could include engineer- designed steel portals, or stronger Brace systems in the smaller panels (eg using Braceline gib), etc.
· Do we think the consented bracing plan took into account that quite a bit of the interior of the house was lined with native timber match lining (photos show that very clearly) ? Does this make a difference to what should actually have been required in terms of bracing elements to be achieved with gib (bearing in mind BRANZ testing of old wall systems)?
Not discussed.
F. Roof
· Z nails versus self-drilling screws specified by Redco – do we agree that there did not have to be Z nails (para 126 of NJ’s brief). Are there alternative that achieve the same KN hold down strength. i.e., Mitek alternative solutions.
Agreed that the KN hold down is the important criteria and subsequently, alternative solutions can be used, albeit may need an amendment to the BC (because ‘Z’ nails were specified). Agreed that fixings had not been fully installed as required.
· Only one location where a bucket was needed (under a poorly formed ridge capping or flashing)? Was this what we all saw?
Yes, agreed.
· Consider NJ’s plan to lift sagging rafters (or lower rafters that are propped too high)? Do we agree this is feasible, and not onerous?
GB and RC don’t believe the roof can be straightened without removal and reconstruction. NJ’s experience and belief is that it can – we are well apart on this issue.
G. Joining the two portions, and reinstating the cut line
· Use of soakers where weatherboards are butt joined. Do we agree it is an acceptable solution under E2/SA1?
Agree. Also agree that new weatherboards need to be fitted flush first (in any places where they are not flush).
· Soakers are a variation from what is shown on the BC plans (box joint with scribers) but not an unreasonable one, and still compliant with Code, so could easily be subject of an amendment to the BC or could simply be that a BCA inspector could accept this?
Agreed soakers could be accepted as they are an Acceptable Solution.
H. Remedial Work
· Have RC and GB reviewed Appendix A to NJ’s brief? What do they say about the proposed remedial works? Do they agree all those works are required?
All agree that remedial works are required.
· What further works do the experts think are required, and why?
As above. RC and GB stand by their original assessments, and NJ stands by his.
I. Any other matters?
Nothing further discussed.2
Statutory context
—Building Act 2004
[46] The Building Act 2004 makes anyone “who carries out building work, whether in trade or not,” covered by a building consent “responsible for ensuring that … the building work complies with the building consent and the plans and specifications to which the building consent relates”,3 or if not covered by a building consent “responsible for ensuring that … the building work complies with the building code”.4 ‘Building work’ relevantly means work “for, or in connection with, the construction, alteration, demolition, or removal of a building”,5 and ‘construct’ means “in relation to a building, includes to design, build, erect, prefabricate, and relocate the building”.6
[47] Building consents are ‘means to the end’ established by the building code.7 The ‘building code’ is set out at sch 1 to the Building Regulations 1992,8 by which “each
2
3 Building Act 2004, s 14E(2)(a).
4 Section 14E(2A)(a).
5 Section 7(1), definition of ‘building work’.
6 Section 7(1), definition of ‘construct’.
7 See, for example, Palmer v Hewitt Building Ltd [2021] NZHC 1460 at [72].
8 Section 7(1), definition of ‘building code’.
building shall achieve the performance criteria specified in the building code for the classified use of that building”.9 The building code relevantly requires buildings’ structure, to “withstand the combination of loads that they are likely to experience during construction or alteration and throughout their lives”; durability, to “be sufficiently durable to ensure that the building, without reconstruction or major renovation, satisfies the other functional requirements of this code throughout the life of the building”; and resistance to penetration by and accumulation of external moisture.10
[48] Where, as here, the building work is conducted under a residential building contract,11 without derogation from the provisions of the Consumer Guarantees Act 1993,12 pt 4A of the Building Act implies warranties into the contract and provides remedies for their breach.13 Section 362I(1) provides:
In every contract to which this section applies, the following warranties about building work to be carried out under the contract are implied and are taken to form part of the contract:
(a)that the building work will be carried out—
in a proper and competent manner; and
(ii)in accordance with the plans and specifications set out in the contract; and
(iii)in accordance with the relevant building consent (if any):
(b) that all building products to be supplied for use in the building work—
(i)will be suitable for the purpose for which they will be used; and
(ii)unless otherwise stated in the contract, will be new:
(c) that the building work will be carried out in accordance with, and will comply with, all laws and legal requirements, including, without limitation, this Act and the regulations:
(d) that the building work will—
(i)be carried out with reasonable care and skill; and
(ii)be completed by the date (or within the period) specified in the contract or, if no date or period is specified, within a reasonable time:
(e) that the household unit, if it is to be occupied on completion of building work, will be suitable for occupation on completion of that building work:
9 Building Regulations 1992, r 3(2).
10 Schedule 1, cls B1.2, B2.2 and E2.2.
11 Building Act, s 362B(1)(a), definition of ‘residential building contract’.
12 Section 362C.
13 Section 362A.
(f) if the contract states the particular purpose for which the building work is required, or the result that the owner wishes the building work to achieve, so as to show that the owner relies on the skill and judgement of the other party to the contract, that the building work and any building products used in carrying out the building work will—
(i)be reasonably fit for that purpose; or
(ii)be of such a nature and quality that they might reasonably be expected to achieve that result.
[49]Sections 362L–362P then provide:
362L Remedies for breach of implied warranty
(1) A person who has the benefit of an implied warranty set out in section 362I has the remedies set out in sections 362M to 362P for breach of that warranty.
(2) In sections 362M to 362P, the person who has the benefit of an implied warranty—
(a)is called the client; and
(b)except for the purposes of section 362M(3)(b) or 362N(2)(b), includes the owner of the building or land in respect of which building work was carried out under a contract to which the implied warranty applies, whether or not that person was a party to the contract.
(3) In sections 362M to 362P, the person who is liable to remedy the breach is called the building contractor.
(4) Nothing in this section limits or derogates from any remedy for defective building work expressly provided for in a residential building contract, and nothing in any residential building contract limits or derogates from any of the remedies set out in sections 362M to 362P.
362M Remedies if breach of warranty can be remedied
(1) This section applies in any case where the breach of warranty can be remedied.
(2) If this section applies, the client may require the building contractor to remedy the breach (including repairing or replacing defective building products supplied by the building contractor or the building contractor’s subcontractor).
(3) If the building contractor, after being required to remedy the breach, refuses or neglects to do so, or does not succeed in doing so within a reasonable time, the client may—
(a)have the breach remedied by someone else and recover from the building contractor all reasonable costs incurred in having the breach remedied; or
(b)cancel the contract in accordance with section 362P.
(4) In addition to the remedies in subsections (2) and (3), the client may obtain from the building contractor damages for any loss or damage to the client resulting from the breach (other than loss or damage through reduction in
the value of the product of the building work) that was reasonably foreseeable as liable to result from the breach.
362N Remedies if breach of warranty cannot be remedied or breach is substantial
(1) This section applies in any case where the breach of warranty cannot be remedied or the breach is substantial.
(2) If this section applies, the client may—
(a)obtain from the building contractor damages in compensation for any reduction in value of the product of the building work below the price paid or payable by the client for that work; or
(b)cancel the contract in accordance with section 362P.
(3) In addition to the remedy in subsection (2), the client may obtain from the building contractor damages for any loss or damage to the client resulting from the breach (other than loss or damage through reduction in the value of the product of the building work) that was reasonably foreseeable as liable to result from the breach.
362O Meaning of substantial breach
For the purposes of section 362N, a breach of warranty is substantial if—
(a) a reasonable client fully acquainted with the nature and extent of the breach would not have entered into the residential building contract; or
(b) in any case to which section 362I(1)(f) applies, the building work—
(i)is unfit for the particular purpose stated in the residential building contract; or
(ii)is of such a nature and quality that it cannot be expected to produce the desired result stated in the residential building contract; or
(c) the building work is unsafe.
362P Rules applying to cancellation
(1) The cancellation of a contract under section 362M(3)(b) or 362N(2)(b) does not take effect—
(a)before the time at which the cancellation is made known to the building contractor; or
(b)where it is not reasonably practicable to communicate with the building contractor, before the time at which the client indicates, by means that are reasonable in the circumstances, the client’s intention to cancel the contract.
(2) Subject to subsection (3), the cancellation may be made known by words, or by conduct indicating an intention to cancel, or both, and it is not necessary to use any particular form of words, so long as the intention to cancel is made known.
(3) Where it is reasonably practicable to communicate with the building contractor, subsection (2) takes effect subject to any provision in the contract requiring notice of cancellation in writing.
(4) Sections 42 to 48 of the Contract and Commercial Law Act 2017 apply, with all necessary modifications, to the cancellation of a contract under section 362M(3)(b) or 362N(2)(b).
—Consumer Guarantees Act 1993
[50] Similarly, in terms of the Consumer Guarantees Act 1993 — which defines ‘consumer’ as “a person who … acquires from a supplier goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption”, and ‘services’ as including “the rights, benefits, privileges, or facilities that are, or are to be, provided, granted, or conferred by a supplier under … a contract for, or in relation to, the performance of work (including work of a professional nature), whether with or without the supply of goods” — the Act provides:
28 Guarantee as to reasonable care and skill
Subject to section 41, where services are supplied to a consumer there is a guarantee that the service will be carried out with reasonable care and skill.
29 Guarantee as to fitness for particular purpose
Subject to section 41, where services are supplied to a consumer there is a guarantee that the service, and any product resulting from the service, will be—
(a) reasonably fit for any particular purpose; and
(b) of such a nature and quality that it can reasonably be expected to achieve any particular result,—
that the consumer makes known to the supplier, before or at the time of the making of the contract for the supply of the service, as the particular purpose for which the service is required or the result that the consumer desires to achieve, as the case may be, except where the circumstances show that—
(c) the consumer does not rely on the supplier’s skill or judgment; or
(d) it is unreasonable for the consumer to rely on the supplier’s skill or judgment.
30 Guarantee as to time of completion
Subject to section 41, where services are supplied to a consumer there is a guarantee that the service will be completed within a reasonable time in any case where the time for the service to be carried out is not—
(a) fixed by the contract; nor
(b) left to be fixed in a manner agreed by the contract; nor
(c) left to be determined by the course of dealing between the parties.
Section 41 relevantly excludes supply of services “otherwise than in trade”.
[51] Where services are not so supplied, and such failure either is not remedied within a reasonable time or “is of a substantial character”, s 32 relevantly entitles the consumer to cancel the contract. Section 36 defines a failure ‘of a substantial character’ as being such “the services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure”; “the product of the service is substantially unfit for a purpose for which services of the type in question are commonly supplied and the product cannot easily and within a reasonable time be remedied to make it fit for the purpose; or:
where section 29 applies, the product of the service is unfit for a particular purpose, or is of such a nature and quality that the product of the service cannot be expected to achieve any particular result, made known to the supplier and the product cannot easily and within a reasonable time be remedied to make it fit for the particular purpose or to achieve the particular result.
[52] Without affecting their right to recover damages for failure to comply with the statutory guarantees, s 38(1) entitles a cancelling consumer:
… to recover from the supplier a refund of any money paid or other consideration provided in respect of the services unless a court … orders that the supplier may retain the whole or part of the money paid or other consideration provided by the consumer.
—Contract and Commercial Law Act 2017
[53]The Contract and Commercial Law Act 2017 provides:
42 Effect of cancellation
(1) When a contract is cancelled, the following provisions apply:
(a)to the extent that the contract remains unperformed at the time of the cancellation, no party is obliged or entitled to perform it further:
(b)to the extent that the contract has been performed at the time of the cancellation, no party is, by reason only of the cancellation, divested of any property transferred or money paid under the contract.
…
43 Power of court to grant relief
(1) When a contract is cancelled by any party, the court may, if it is just and practicable to do so, make an order or orders granting relief under this section.
(2) The relief may be granted in the course of any proceeding or on application made for the purpose.
(3) An order under this section may—
(a)direct a party to pay to any other party the sum that the court thinks just (subject to section 35):
(b)direct a party to do or refrain from doing, in relation to any other party, any act or thing that the court thinks just:
(c)vest the whole or any part of any relevant property in a party:
(d)direct a party to transfer or assign the whole or any part of any relevant property to any other party:
(e)direct a party to deliver the whole or any part of the possession of any relevant property to any other party.
(4) In subsection (3),—
party means a party to the proceeding
relevant property means real or personal property that was the subject of the contract or was the whole or part of the consideration for the contract.
44 Order for relief may be subject to terms and conditions
(1) An order under section 43 may be made on the terms and conditions that the court thinks fit.
(2) However, a term or condition must not have the effect of preventing a claim for damages by any party.
45 Matters court must have regard to
In considering whether to make an order under section 43, and in considering the terms of any order, the court must have regard to—
(a) the terms of the contract; and
(b) the extent to which any party to the contract was or would have been able to perform it in whole or in part; and
(c) any expenditure incurred by a party in, or for the purpose of, performing the contract; and
(d) the value, in the court’s opinion, of any work or services performed by a party in, or for the purpose of, performing the contract; and
(e) any benefit or advantage obtained by a party because of anything done by another party in, or for the purpose of, performing the contract; and
(f) any other matters that the court thinks proper.
…
47 Party who has altered position
(1) No order may be made under section 43 in respect of any property if any party to the contract has so altered the party’s position in relation to the property that, having regard to all relevant circumstances, it would, in the opinion of the court, be inequitable to any party to make the order.
(2) This section applies whether the party altered the party’s position before or after the cancellation of the contract.
…
49 Recovery of damages
(1) A party to a contract is not prevented by the cancellation of the contract, or by the granting of relief under section 43, from recovering damages for a misrepresentation or the repudiation or breach of the contract by another party to the contract.
(2) However, the value of any relief granted under section 43 must be taken into account in assessing those damages.
(3) Subsection (1) is subject to sections 34, 35, and 50 to 53.
(4) Any sum ordered to be paid by a party to the contract to any other party to the contract under section 43(3) may be set off against any damages payable by the party to that other party.
Discussion
—did Uplifting perform the contract?
[54] As a contract for “relocation of the building” for the Savageau/Stotts’ household’s residential purposes,14 for the purposes of the Building Act, the contract plainly is for building work under a residential building contract. As such, by implication of the Building Act, Uplifting was fixed with the obligation to carry out the building work properly and competently in accordance with the building consent, to the extent such building work was required by the contract.
[55] For example, Uplifting’s obligation was to re-establish the building on foundations “true and level”, with “no allowance for any braced piles, nailing, wiring, bolting or bracing whatsoever”. The contract stipulated anchor and ordinary piles only, while the building consent called partially for a braced pile system. I consider that made Uplifting responsible for properly and competently re-establishing the building on its consented foundations, the contract price for adjustment by an allowance for the braced piles. In practice, such adjustments occurred; the Savageau/Stotts’ claim includes for additional sums paid to Uplifting for, for example, “bearer upgrades”. On the other hand, although the building consent called for particular new framed bracing elements, Uplifting’s contractual proper and competent rejoining of the building in accordance with the building consent needed go no further than the work outlined at
[28] above. If that was to engage some of the new bracing elements along the cut line, which the experts agreed required to be redesigned, the balance was not Uplifting’s
14 See [10] above.
responsibility. Uplifting accepts it agreed to complete the roof structure and cladding, which necessarily engages the building consent’s requirements in those respects.
[56] From at least the experts’ evidence, Uplifting did not to carry out the building work properly and competently in accordance with the building consent. To the point in time piling works physically were completed, I assess Uplifting was performing the contract properly and competently. But the building work was not completed, meaning the building consent’s relevant requirements for the relocated house’s foundations and roof structure (and possibly internal bracing) were not met by Uplifting. At least to those extents, Uplifting did not carry out the building work in a proper and competent manner. While the consent’s foundations requirements may have been met by provision of ‘as-built’ location drawings for variation, even that did not occur.
[57] If Uplifting also did not carry out the building works with reasonable care and skill or complete it within a reasonable time under either the Building or Consumer Guarantee Acts therefore may not be of particular moment. Had I to determine the former, I should have found the experts’ agreement “remedial works are required” to mean any ‘care and skill’ failures not to be substantial,15 but as unremedied after mid-November 2020 then not completed within a reasonable time, as with the building work overall.
[58] So far as the Acts’ respective warranty and guarantee as to time of completion is concerned, there is a minor difference in those Acts’ engagement of ‘a reasonable time’: under the Building Act, it is if no date or period for completion is specified in the contract; under the Consumer Guarantees Act, it also is if not left to be determined by the course of dealing between the parties. While there is some room to conclude the course of dealing between Uplifting and the Savageau/Stotts here was such as left the date for completion to be determined between them, the fact of that matter is nothing was done after mid-November 2020. It was not for another seven months, and then under solicitors’ correspondence, there was even any proposal to complete the works. By that time, in mid-June 2021, I assess reasonable time for completion had expired.
15 Building Act, s 362O.
[59] The experts’ agreement also undermines the Savageau/Stotts’ reliance on Mr Blissett’s and Mr Chanock’s prior assessments as putting Uplifting’s breaches of the care and skill warranty beyond remedy. The Savageau/Stotts did not require Uplifting to remedy the care and skill warranty breaches,16 and asserted their right instead to cancel. But the fact of remedial works remaining required means the building was not re-erected as ‘structurally sound’. Mr Jellyman was explicit in his responses to my questions of the experts (and Mr Blissett agreed), for example, his proposed “flitch plate” roof remedial work was to achieve in part the building’s ‘structural reconnection’. Thus the building work was not proper and competent.
[60] Neither may it be of particular moment if the building was to be fit for any particular purpose under either the Building or Consumer Guarantee Acts. The contract states the particular purpose for which the building work is required: to ‘uplift, transport and resite’ the building from Remuera to Katikati. On that, however, it is relevant the Savageau/Stotts pleaded such purpose to be “of such a nature and quality as to render [the building] suitable for occupation by the plaintiffs as their family home”. That contention cannot be maintained: on any view, after the building was to be re-erected on site, very substantial works remained the Savageau/Stotts’ obligation to render the house suitable for occupation. Much of the shortcomings to that end observed by Mr Blissett and Mr Charnock was for the Savageau/Stotts’ performance. The plaintiffs’ experts acknowledged such in accepting under cross-examination much of their critique was of “observations”, not for Uplifting’s performance. Nor had Uplifting any obligation to protect the building from weather or other damage on its temporary platform on site: clauses 16 and 18 of the contract made it plain such was not Uplifting’s liability.
[61] But there is a significant disconnect between Uplifting’s obligations under the contract in its terms, and if implied by the Building Act to be carried out in compliance with the building consent. Under the contract, Uplifting’s obligations were essentially to re-erect the original building on new foundations, with “no changes to the original floor plan” and using “the existing roofing materials”. So far as the building consent’s requirements for foundations went, the contract specified there was no allowance (at
16 Building Act, s 362M.
least in price) for any bracing “whatsoever”. The building consent’s “detailed interior wall bracing schedule” may be understood a change to the original floor plan, at least in its vertical extrapolation. And re-erection of the roof using the existing roofing materials simply could not meet the building consent’s requirements.
[62] Clause 3 of the contract’s conditions allocated risk of that consequence on Uplifting, after the Savageau/Stotts obtained the Council’s inspection and assessment of the building as “structurally sound”, for Uplifting otherwise then to determine if to continue with the contract or to refund the Savageau/Stotts’ payments. Although the Savageau/Stotts’ obligation in that respect is not expressed in terms of an application for building consent, that is the only obvious inspection and structural assessment to be performed by the Council. There is no evidence Uplifting understood it had a decision to make on issue of the Council’s building consent on 13 May 2020.
[63] Uplifting’s commencement of work thereafter constitutes its affirmation of the contract, by that time incorporating the works to which Mr Barnes committed on Uplifting’s behalf in his and Ms Loomans’ meeting with the Savageau/Stotts on 5 March 2020, including in compliance with the building consent. Such compliance cannot be characterised as ‘gratuitous’, whatever that may mean in the context of the Building Act, which only relevantly excludes building work not done ‘in trade’. Here, Uplifting’s work plainly was to be done ‘in trade’, in terms of the enlarged contract including its implied warranties.
[64] I therefore find Uplifting failed to carry out its building work for the Savageau/Stotts (a) in a proper and competent manner; (b) in accordance with the building consent; and (c) within a reasonable time. These each are Uplifting’s breaches of Building Act warranties implied into its contract with the Savageau/Stotts, and the last also Uplifting’s failure to comply with the Consumer Guarantees Act’s guarantee as to time of completion.
—were the Savageau/Stotts entitled to cancel the contract?
[65] While a close-run thing, it cannot fairly be said Uplifting made it clear it did not intend to complete performance of its obligations under the contract such as may have entitled the Savageau/Stotts’ cancellation on grounds of Uplifting’s repudiation.
Although work was sporadic after mid-June 2020, when the building was relocated to its permanent piles, all indications were Uplifting intended to complete its performance of the contract. Sporadic attendance by building contractors is not unknown. Cessation of works in mid-November 2020 are more explicable by the Savageau/Stotts’ withholding payment of Uplifting’s roofing material suppliers. There is an absence of evidence thereafter, requests for a final inspection to enable handover to the Savageau/Stotts’ own builder going unmet and ultimately being overtaken by the Savageau/Stotts’ concerns about the quality of Uplifting’s work.
[66] The Savageau/Stotts’ entitlement to cancel the contract primarily rests on such breaches of warranty being ‘substantial’,17 because “a reasonable client fully acquainted with the nature and extent of the breach would not have entered into the residential building contract”. The building work cannot be said “unfit for the particular purpose stated in the residential building contract”; while incomplete, completion could have been achieved by remedial work. There is no suggestion the building work was unsafe.
[67] Given my finding of Uplifting’s breach of warranties, the Building Act counterfactual to cancellation was for the Savageau/Stotts to have required Uplifting to remedy the breaches and, if it did not, to “have the breach remedied by someone else and recover from the building contractor all reasonable costs incurred in having the breach remedied”.18 To that end, the cost of remedy can be valued. On Uplifting’s very best case, it is Mr Ranum’s $29,000 or, say, at least roughly 20 per cent of the contract’s value. More likely, given the expanded contract as I have found it, it is his
$66,000 or, say, 40 per cent of the contract’s value. That is not to exclude a higher percentage still.
[68] In my assessment, a reasonable client fully acquainted with breaches of that magnitude would not have entered into the contract. The breaches accordingly being substantial, the Savageau/Stotts were entitled to cancel the contract, as they did.
17 Buliding Act, s 362O.
18 Section 362M(3)(a).
—compensation on cancellation
[69] The relief sought by the Savageau/Stotts is reimbursement of all their ‘wasted costs’ under s 43(3)(a) of the Contract and Commercial Law Act, necessarily as being “just and practicable”.19 Such relief falls to be considered on compensatory, rather than damages, principles: from identification of what the innocent party “actually lost by reason of the breach”, rather than their position if the contract had been performed.20 Assessment from the perspective of the measure of damages for breach of contract is not particularly informative. Questions of loss of rental income and other damages fall separately to be considered.21
[70] In terms of the matters to which I must have regard in considering if to make the order sought:22
(a)I have assessed the terms of the contract to arrive at the conclusion at
[63] above;
(b)there was no evidence Uplifting was not, or would not have been, able to perform the contract in whole, directly or by subcontracting;
(c)the Savageau/Stotts incurred expenditure under the contract in paying 90 per cent of the contract price and in obtaining the building consent. There was no evidence of Uplifting’s expenditure;
(d)given the building’s ultimate destruction, none of the work performed by either party under the contract ultimately had any value;
(e)similarly, neither party obtained any benefit or advantage because of anything done by the other under the contract; and
(f)the considerations I set out at [78]–[83] below are proper for consideration here too.
19 Contract and Commercial Law Act, s 43(1).
20 Forest Holdings Ltd v Mangatu Blocks Incorporation [2017] NZHC 448, [2017] NZAR 671 at [27]–[29], citing Maori Trustee v Clark [1984] 1 NZLR 578 (CA) at 584.
21 Section 49.
22 Section 45.
[71] I assess what the Savageau/Stotts ‘actually lost’ by reason of the breaches was not the relocated building itself, but its relocated completion properly and competently, in accordance with the building consent, in a reasonable time. Material in quantification of that loss is Uplifting’s contractual entitlement to withdraw from the contract on issue of building consent, then “all monies paid [to] be refunded”. I construe that phrase to mean ‘all monies paid to Uplifting (or Prestige on its behalf), to be refunded’: the contract price, plus additional fees for transport, bearer upgrades and contract works insurance and its extension.
[72] In other words — under the contract, beyond monies paid to Uplifting — the Savageau/Stotts’ other expenditure in connection with the contract’s performance prior to 13 May 2020 was at their own risk. But, from the time Uplifting affirmed the contract by commencing piling works in early June 2020, the Savageau/Stotts’ subsequent expenditure under the contract was attributable to their expectation Uplifting would perform its contractual obligations. I include under that head the Savageau/Stotts’ expenditure on building works (plumbing and power) necessarily to be carried out in co-ordination with Uplifting’s works, but exclude expenditure on household items intended for subsequent installation and for the driveway and leadlight repair.
[73] The specific ‘losses’ claimed by the Savageau/Stotts are set out in a schedule to Ms Savageau’s brief of evidence, as follows:
Date Paid To For 22/07/2019 $5,000.00 Uplifting Contract payment 25/07/2019 $74,000.00 Uplifting Contract payment 8/08/2019 $7,475.00 Uplifting Contract payment 11/09/2019 $5,057.42 Uplifting Contract payment 17/09/2019 $63,200.00 Uplifting Contract payment 17/09/2019 $2,415.00 Geo Consult Site investigation 16/10/2019 $805.00 Geo Consult Site investigation 1/12/2019 $2,185.00 Geo Consult Site investigation 15/12/201923 $2,000.00 WBOPDC Resource consent fees 6/03/2020 $2,875.00 Lysaght Resource consent application 10/03/2020 $1,535.60 RedCo Structural engineering design 8/04/2020 $1,495.00 RedCo Structural engineering design 20/04/2020 $877.51 Prestige Insurance extension 5/05/2020 $690.00 RedCo Structural engineering design 5/05/2020 $5,771.80 WBOPDC Building consent fees 17/06/2020 $2,685.25 Prestige Bearer upgrades 29/06/2020 $517.50 GeoConsult Site inspection
23 Misdated “15/12/2020” in Ms Savageau’s Schedule.
Date Paid To For 1/09/2020 $2,295.40 Boyd Plumbing Plumbing services to house 1/09/2020 $776.25 SiteWorx Trenching for plumbing 14/09/2020 $9,716.79 BayBuilt Electricity supply 23/09/2020 $411.63 Prestige Metalcraft invoices 23/09/2020 $45.21 Metalcraft Invoice 23/09/2020 $13,245.70 S White Earthmoving Driveway to house 12/11/2020 $800.00 Leadlight Expressions Window repair 20/11/2020 $16,962.50 Metalcraft Invoice 20/11/2020 $1,158.31 Frank Risk Insurance Insurance extension 24/12/2020 $3,400.00 Kitchen Things Oven /cooktop 5/01/2021 $4,029.68 Misc Bathroom Supplies Shower/bath 13/01/2021 $555.00 Bunnings Bathroom plumbing 29/01/2021 $4,904.97 BayBros Plumbing connections in house 15/03/2021 $936.62 Frank Risk Insurance Insurance policy renewal $237,823.14
—contractual damages
[74] The Savageau/Stotts seek damages for lost rental income contended otherwise obtainable from tenancy of the garage and sleepout in which they lived during the building works. There is no evidence Uplifting was apprised of the Savageau/Stotts’ intention. Ms Harris assessed “the plaintiffs’ property would have been able to be rented, as at mid-2021, for between $420 and $440 per week”. She accepted under cross-examination, as being without resource consent for use as a residential dwelling, the property could not then have been let for residential tenancy. The claim is too speculative to establish such loss as reasonably foreseeable on the plaintiffs’ breaches.
[75] So far as general damages are concerned, as a matter of “rough justice”, there is a recognised ‘tariff’ for non-economic loss suffered in relation to residential buildings, at $25,000 for occupiers.24 Applying the Reserve Bank of New Zealand consumers price index inflation calculator to that amount to the present would increase it to approximately $34,000.25
[76] The Savageau/Stotts claim $35,000 for “distress, anxiety, inconvenience and loss of enjoyment” attributable to Uplifting’s breaches. They contend for the significant “emotional toll of seeing the [building’s] disastrous condition”, extending to their relocation to Nelson away from family, depression and relationship damage. Ms Savageau says Mr Stott:
24 O’Hagan v Body Corporate 189855 [2010] NZCA 65, [2010] 3 NZLR 445 at [129].
25 Reserve Bank of New Zealand “Inflation calculator” (3 May 2023) < had to pick up as many extra hours as he could to make sure we could make ends meet and cover all our payments. This was due to the delays and problems we had with Uplifting ….
and meant she was left “alone with the kids and dealing with the day-to-day problems and ongoing delays …. It was exhausting”. Mr Stott endorses the stresses she identifies and adds his self-confidence and trust in others has been diminished by what he perceives to being “duped” by Uplifting.
[77] I have no doubt the Savageau/Stotts’ experience of acquiring an old wooden house cut into sections for relocation, in circumstances of unknown conditions for building consent to address its new location’s high wind zone and over periods incorporating COVID-19 lockdowns and aftermaths was significantly stressful. The ‘ups’ and ‘downs’ of such a substantial project are clearly reflected in much of their correspondence with Uplifting until some time in late 2020, recording the Savageau/Stotts’ occasions for each disappointment and optimism.
[78] I find the Savageau/Stotts’ expectations of the process to establish their “dream home on [their] dream property” to be considerably unrealistic in terms of the contract they entered with Uplifting. They appeared to have no prior comprehension of additional requirements for their home’s establishment on the new site beyond Uplifting’s transportation and re-erection of the building there, which the contract firmly made their responsibility as “work not specifically expressed”. Their original claim for the building’s remediation “to render it fit for occupation”, on the basis of Mr Blissett’s and Mr Charnock’s reviews to the same end, illustrates their divergence from the contractual reality.
[79] So too was the Savageau/Stotts’ original claim for $520,000 in contended remedial work on a building acquired for $158,000. There is no quantification of what portion of such work, to achieve fitness for occupation, appropriately remained for the Savageau/Stotts’ payment after proper and competent completion of the building works under the expanded contract. But, by way of illustration, the original claim was to include over $100,000 for “fittings and fixtures”, “sanitary plumbing”, “electrical services” and “drainage” (including overheads, margins and contingencies). Yet the contract limited itself to the building’s re-erection using original materials. Although
not pursued at trial, the claim’s making illustrates the Savageau/Stotts’ lack of realism as to Uplifting’s limited, if fundamental, role in establishing their ‘dream home’.
[80] Notwithstanding the Savageau/Stotts’ distress at the sight of the relocated building on its temporary foundations, the contract recorded “incidental damage may result from the transportation of the building”, and Mr Jellyman’s evidence as the only expert with relevant New Zealand relocation experience was the damage to the relocated house “was in line with what he would expect”. Their persistent requests to Uplifting to maintain the house’s condition while on its temporary foundation pending issue of building consent disregards the contract’s stipulation Uplifting was then “not responsible for any damages that may occur to the building”. It is to Uplifting’s credit it responded at all, particularly given its distance from the Savageau/Stotts’ site. Any material distress suffered by the Savageau/Stotts while the building sat on its temporary foundations is not attributable to Uplifting.
[81] Contrary to the Savageau/Stotts’ view now of Uplifting’s “total lack of care”, the “total opposite” of how Uplifting represented itself in helping and guiding its customers, I find Uplifting considerably exceeded its initial contractual obligations in the period leading up to and at its March 2020 meeting with the Savageau/Stotts, exactly to assist and guide them, and particularly thereafter in facilitating their access to trade prices for new roofing iron for installation at its expense. Those contributions are to be recognised as ameliorating the inherent stresses involved in the project.
[82] Uplifting’s sporadic attendances after relocating the building onto its permanent foundations also may be thought, at least to some degree, part of those inherent stresses. The contract did not require Uplifting’s exclusive or continuous attendance on the Savageau/Stotts’ property. I accept its incentive to continue work through its subcontractors likely was reduced by the Savageau/Stotts’ withholding of payments due to its suppliers.
[83] Uncertainty contributed by the possibility the Savageau/Stotts were required to spend perhaps hundreds of thousands of dollars more, on making the building fit for occupation even after its compliant re-erection, suggests there is at least a prospect the building would not ultimately have been made so fit by them. If in that incomplete
state not adding to the value of their property, the building’s ultimate destruction — as a possible outcome on a counterfactual sale of the Katikati property — is not attributable to Uplifting’s breaches.
[84] Nonetheless, the breaches I have found Uplifting to have committed were an additional and unnecessary source of stress to the Savageau/Stotts. I have some difficulty in distinguishing their impact in the overall context of the building’s relocation. Taking into account the compensatory relief I will direct Uplifting pay to the Savageau/Stotts, in relation to which I also had regard for the considerations outlined under this contractual remedies head, I assess no additional damages are payable under this head.
—conclusion on relief
[85] In all those circumstances, I consider the just and practicable relief to which the Savageau/Stotts are entitled must recognise also Uplifting’s legitimate and compliant expenditure under the contract. There is no evidence of those sums, which fairly may be allowed by a discount on reimbursement of monies paid to Uplifting. Absent any reason to weight the assessment in favour of either party, it will be a 50 per cent discount.
[86] I am not prepared to allow the Savageau/Stotts the expenses of Mr Blissett’s and Mr Charnock’s investigations or of their consequent valuation. Both investigations expressly commence from identification of any defects in the relocated building, without consideration of the more limited scope of Uplifting’s contractual obligations.
[87] Neither am I prepared to allow the Savageau/Stotts the expense of the building’s demolition. That was done as a condition of the property’s sale, and may be thought incorporated in the sale price. Mr Barbour (the agent managing the sale) advised, of eight parties showing “genuine interest” in the property, three were prepared to consider taking it with the building remaining on site.
[88] I deduct from the sum of compensation the $22,400 received under the insurance policy. Had there not been such receipts, I would only have permitted the
Savageau/Stotts a 50 per cent recovery on the joint policy’s premia, consistently with other payments to Uplifting.
[89] With those adjustments, I quantify the Savageau/Stotts’ actual loss by reason of Uplifting’s breaches as follows:
Date Paid For Loss Comments 22/07/2019 $5,000.00 Contract payment $2,500.00 50 per cent recovery 25/07/2019 $74,000.00 Contract payment $37,000.00 50 per cent recovery 8/08/2019 $7,475.00 Contract payment $3,737.50 50 per cent recovery 11/09/2019 $5,057.42 Contract payment $2,528.71 50 per cent recovery 17/09/2019 $63,200.00 Contract payment $31,600.00 50 per cent recovery 17/09/2019 $2,415.00 Site investigation $- Savageau/Stotts' risk 16/10/2019 $805.00 Site investigation $- Savageau/Stotts' risk 1/12/2019 $2,185.00 Site investigation $- Savageau/Stotts' risk 15/12/2019 $2,000.00 Resource consent fees $- Savageau/Stotts' risk 6/03/2020 $2,875.00 Resource consent application $- Savageau/Stotts' risk 10/03/2020 $1,535.60 Structural engineering design $- Savageau/Stotts' risk 8/04/2020 $1,495.00 Structural engineering design $- Savageau/Stotts' risk 20/04/2020 $877.51 Insurance extension $877.51 100 per cent recovery 5/05/2020 $690.00 Structural engineering design $- Savageau/Stotts' risk 5/05/2020 $5,771.80 Building consent fees $- Savageau/Stotts' risk 17/06/2020 $2,685.25 Bearer upgrades $1,342.63 50 per cent recovery 29/06/2020 $517.50 Site inspection $517.50 100 per cent recovery 1/09/2020 $2,295.40 Plumbing services to house $2,295.40 100 per cent recovery 1/09/2020 $776.25 Trenching for plumbing $776.25 100 per cent recovery 14/09/2020 $9,716.79 Electricity supply $9,716.79 100 per cent recovery 23/09/2020 $411.63 Roofing iron invoices $411.63 100 per cent recovery 23/09/2020 $45.21 Roofing iron invoice $45.21 100 per cent recovery 23/09/2020 $13,245.70 Driveway to house $- Excluded 12/11/2020 $800.00 Window repair $- Excluded 20/11/2020 $16,962.50 Roofing iron invoice $16,962.50 100 per cent recovery 20/11/2020 $1,158.31 Insurance extension $1,158.31 100 per cent recovery 24/12/2020 $3,400.00 Oven /cooktop $- Excluded 5/01/2021 $4,029.68 Shower/bath $- Excluded 13/01/2021 $555.00 Bathroom plumbing $- Excluded 29/01/2021 $4,904.97 Plumbing connections in house $4,904.97 100 per cent recovery 15/03/2021 $936.62 Insurance policy renewal $936.62 100 per cent recovery $237,823.14 $22,400.00 Insurance receipts $94,911.53
Result
[90] I direct, under s 43(3)(a) of the Contracts and Commercial Law Act, Uplifting pay $94,911.53 to the Savageau/Stotts together with, under s 9(1) of the Interest on Money Claims Act 2016, interest from the date of that quantification by this judgment and ending on the date the judgment debt (including all interest) is paid in full.
Costs
[91] As requested by the parties, costs are reserved for determination on short memoranda each of no more than five pages — annexing a single-page table setting out any contended allowable steps, time allocation and daily recovery rate — to be filed and served by the Savageau/Stotts within ten working days of the date of this judgment, with any response or reply to be filed within five working day intervals after service.
—Jagose J
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