Urlich v Far North District Council - [2018] NZHC 3170

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2017-488-62

[2018] NZHC 3170

BETWEEN
KAREN URLICH, RANDOLPH IVAN FRANCIS URLICH and BOI TAXATION TRUSTEE COMPANY LIMITED

Plaintiffs

AND

FAR NORTH DISTRICT COUNCIL

First Defendant

GLOBAL FIBRE8 LIMITED
Second Defendant

STEPHEN MICHAEL BARCLAY

Third Defendant

Hearing: 29 November 2018

Appearances:

J E G San Diego and L A J Gould for the Plaintiffs No appearance by or for the Defendants

Judgment:

4 December 2018

JUDGMENT OF PALMER J

This judgment was delivered by me on 4 December 2018 at 3.00p.m. pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:
Doug Cowan Barristers & Solicitor, Auckland

URLICH v FAR NORTH DISTRICT COUNCIL [2018] NZHC 3170 [4 December 2018]

Summary

[1] Ms Karen Urlich and Mr Randolph Urlich wanted to build their dream home on the Karikari Peninsula in Northland in 2015. Global Fibre8 Ltd (GF8) sold them a new wall panel system, K3T, and designed plans and specifications for its installation. The product, the plans and the specifications were defective. The Urliches brought proceedings against a number of parties. All defendants settled except GF8, which had taken no steps in the proceeding since their lawyers withdrew in March 2017.

[2] On the basis of the evidence offered by the Urliches in a formal proof hearing, I conclude GF8 was negligent and engaged in misleading and deceptive conduct in supplying the K3T to the Urliches and designing the plans and specifications for its installation in their house. GF8 is liable for $64,464.04 in special damages for the outstanding amount of the Urliches’ loss and $20,000 in general damages for their distress and inconvenience plus interest and costs.

What happened?

Building a dream home

[3] In 2015, the Urliches started to plan a new home at 245 Tokerau Beach Road on the Karikari Peninsula. Mr Tangi Tuake, the sole director and shareholder of GF8, took them on a factory tour, promoting GF8’s pre-fabricated wall panel system, K3T, which was launched in August 2015. He was a compelling host.

[4] Mr Tuake told the Urliches K3T had a Codemark Certificate of Conformity from the Joint Accredited System of Australia and New Zealand. It did. He also told them that meant K3T was a tested and approved building material in New Zealand.1 It did not. But his advice was consistent with the explanation on GF8’s website that the CodeMark Certificate was “a guaranteed acceptance by the regulatory bodies that “demonstrates alignment with mandatory compliance requirements”.2 It was not. In fact, the Codemark Certificate only purported to establish compliance with the

1 Affidavit of Karen Urlich of 23 November 2018 at [17].
2 At [20] and Exhibit H.

Australian Building Code, and even then required installation subject to a particular installation guide.

[5] Mr Tuake told the Urliches K3T did not burn, did not absorb water and could hold a screw with a 50-kilogram weight.3 The website stated K3T’s “key features” are that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NZHC 3170
Decision Date: 4 December 2018

CaseChat Overview and Summary

The case of Urlich v Far North District Council involved Karen and Randolph Urlich who sought to build their dream home on the Karikari Peninsula in Northland. They purchased a wall panel system, K3T, and designed plans and specifications for its installation from Global Fibre8 Ltd (GF8), but the product, plans, and specifications were defective. The Urliches brought proceedings against several parties, including GF8, but all defendants settled except for GF8, which had not taken any steps in the proceeding since their lawyers withdrew in March 2017. The court was required to decide whether GF8 was negligent and engaged in misleading and deceptive conduct in supplying the K3T to the Urliches and designing the plans and specifications for its installation in their house.

The court found that GF8 was negligent and engaged in misleading and deceptive conduct. The court held that GF8 breached its duty of care in supplying K3T to the Urliches and in designing the plans and specifications for the Urliches' house. The expert evidence showed that K3T was a defective product and did not comply with the New Zealand Building Code, and GF8's design of the Urliches' house was defective. The court also found that GF8 engaged in misleading and deceptive conduct in its characterisation of the qualities of K3T and the status of the Codemark Certificate in complying with New Zealand regulatory requirements. The reasonable customer would have been likely to have been misled and deceived, and the Urliches were actually misled and deceived. This was clearly an effective cause of their loss.

The court ordered GF8 to pay the Urliches $64,464.04 in special damages for the outstanding amount of their loss, $20,000 in general damages for their distress and inconvenience, interest on the total amount of damages from 2 June 2016 to the date of judgment, and costs on a 2B basis and reasonable disbursements.

Orders