Wigglesworth v Auckland Council
[2012] NZHC 1194
•21 May 2012
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2011-404-5043 [2012] NZHC 1194
BETWEEN LUKE CHARLES WIGGLESWORTH AND SUZIE KIRSTEN WIGGLESWORTH
Plaintiffs
ANDAUCKLAND COUNCIL Defendant
ANDNEIL RAYNER CAMERON Third Party
Hearing: 21 May 2012 at 2:15pm
Appearances: R J Thompson for Third Party as Applicant C R Goode for Defendant as Respondent No appearance for Plaintiffs
Judgment: 21 May 2012
ORAL JUDGMENT OF ASSOCIATE JUDGE BELL
Solicitors:
Grimshaw (Gareth Lewis), DX CX10174 Auckland, for Plaintiffs
Email: [email protected] / [email protected]
Heaney & Co (Catherine Goode), DX CP18503 Auckland, for Defendant
Email: [email protected]
Lovegroves (K Harbourne), P O Box 25-066 St Heliers, Auckland 1740, for Third Party/Applicant
Email: [email protected]
Copy for:
Richard J Thompson, P O Box 3320 Auckland 1140, for Third Party/Applicant
Email: [email protected] / [email protected]
Case Officer:
WIGGLESWORTH AND WIGGLESWORTH V AUCKLAND COUNCIL HC AK CIV-2011-404-5043 [21 May
2012]
[1] This is an interlocutory application in leaky building litigation. The third party, Neil Cameron, has applied for orders striking out the defendant’s cause of action against him, for summary judgment against the defendant and, in the alternative, directing a separate preliminary hearing to determine whether the defendant’s causes of action against him are time-barred. In essence, Mr Cameron’s application is based on the claim that the third party proceeding is time-barred by s 393(2) of the Building Act 2004.
[2] The property in question in this case is a house at 7 Melanesia Road, Kohimarama, Auckland. The plaintiffs are the current owners of the house. They have sued the Auckland Council as the successor to the Auckland City Council. They have not sued anybody else. Their claim is for the costs of remedial works and associated consequential costs for carrying out those remedial works, a claim for residual loss of value because of stigma factors, and general damages.
[3] Paragraph 8 of the plaintiffs’ statement of claim lists 19 alleged defects, but
that list is not exhaustive:
[a] Insufficient clearance between the window head flashings and moulding.
[b] Window head flashings buried into moulding and plaster cladding.
[c] The moulding above the windows and doors was formed flat with no scope to shed moisture.
[d] Sill flashings buried into plaster cladding. No stop ends visible.
[e] Vertical control joints were not formed above and below windows and at the sides of opening and/or at 4 metre intervals.
[f] Horizontal control joints were poorly formed and in some locations not installed at all;
[g] Balustrade handrails fixed through the flat horizontal plaster surface. [h] Lack of fall to top of plastered balustrades.
[i] Lack of clearance between cladding to paved and unpaved ground. [j] Overflow outlets to balconies poorly formed.
[k] Lack of internal floor to external balcony level clearance.
[l] Lack of clearance between plaster cladding and apron flashings. [m] No stop ends formed at ends of apron flashings.
[n] Lack of clearance between plaster cladding and tiled balcony.
[o] No turn-down installed at end of trapezoidal profile roof sheet at gutter termination.
[p] Parapet capping not formed to 15 degree slope or 30 degrees if heavily textured.
[q] Bottom edge of plaster cladding under bay windows and enclosed beams has no means to allow moisture to drain away.
[r] Timber fascias and metal cap flashing buried into plaster cladding. [s] Membrane gutter formed with lack of falls.
[4] The defects are all alleged to relate to the original construction of the house. A building consent was issued in 1999. A code compliance certificate was issued on
25 September 2001. The statement of claim alleges that the council was negligent in its inspection of the property by failing to identify defects, failing to see that defects were remedied, and in finding that the property complied with the building code. There was also alleged negligence in the issue of a code compliance certificate.
[5] The plaintiffs issued their proceeding on 18 August 2011. The Auckland
Council very promptly issued a third party proceeding against Mr Cameron on
26 August 2011. As this case concerns s 393(2) of the Building Act 2004, the enquiry is whether there were any relevant acts or omissions on the part of Mr Cameron within the 10 years before 26 August 2011.
[6] Mr Cameron, the third party, is the builder who erected the house at
7 Melanesia Road. He says that he and his wife bought the property in 1994 and later demolished the original house. He is a builder by occupation. He undertook the construction of the house, engaging sub-contractors and supervising their performance. In this case he has a double role, both as owner and builder.
[7] The council’s statement of claim against Mr Cameron pleads two causes of action. The first is that he is a tortfeasor who owed a non-delegable duty of care. Under this cause of action the council alleges that Mr Cameron is responsible for
building defects as a developer. He owed a non-delegable duty of care – meaning that he is liable for defects even if they have been created by sub-contractors. The second cause of action is for breach of a duty of care. That cause of action is more directed at Mr Cameron’s own actions in building the house, including engaging and supervising sub-contractors. In both causes of action the council seeks contribution from Mr Cameron to the extent of a full indemnity.
[8] In his application, Mr Cameron says that any relevant acts or omissions on his part that might expose him to liability had already occurred more than 10 years before the third party proceeding started against him. As the case developed, there was a concession that there was some relevant work carried out immediately before the council issued its code compliance certificate in September 2001.
Leave under r 12.4
[9] As for the summary judgment application, there is a preliminary procedural matter. Under r 12.4 of the High Court Rules, a defendant is required to file an application for summary judgment at the same time as a statement of defence is filed. In this case the summary judgment application was filed after the statement of defence was filed and leave is required. Mr Cameron’s application did not expressly seek leave but he applied orally for leave at the hearing. The council did not strenuously object.
[10] I grant leave:
(a) Both parties have put in significant effort, time and research to prepare for the hearing. It would be wasteful to refuse leave for the summary judgment application.
(b)The summary judgment application is coupled with a strike-out application. The two applications overlap.
(c) The application was filed only after discovery had been completed.
This has been one of those cases where it has been helpful that the
parties have exchanged discovery and each side has been able to have a look at the documents held by the other.
Limitation defences in strike-out and summary judgment applications
[11] The general principles for strike-out applications and summary judgment applications are well-known. There is no dispute between the parties as to the principles that apply. Mr Thompson relevantly referred to the leading cases: Attorney-General v Prince and Gardner[1] for strike-out applications, and Westpac Banking Corporation v M M Kembla[2] for summary judgment applications. There is
no need for me to repeat what has been stated in those cases.
[1] Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA).
[2] Westpac Banking Corp v M M Kembla [2001] 2 NZLR 298 (CA).
[12] A limitation defence can be the basis for a strike-out application or a summary judgment application. The decision that is most on point is that of Tipping J in Matai Industries Ltd v Jensen.[3] I emphasise in particular this part of Tipping J’s
decision:[4]
To hold the interests of plaintiffs and defendants in fair balance in this context the Court should in my view be slow to strike out a claim or cause of action altogether in limine but against that, if the position is quite clear, then a defendant should not be vexed by having to go to full trial when the answer is obvious and inevitable.
[3] Matai Industries Ltd v Jensen [1989] 1 NZLZR 525 (HC) at 531-532.
[4] Ibid, at 532.
[13] There are a number of cases under the Building Act legislation where courts have considered strike-out and summary judgment applications, relying on s 91 of the Building Act 1991 and s 393 of the Building Act 2004.[5]
Building work by Mr Cameron
[5] Johnson v Watson [2003] 1 NZLR 626 (CA), Lee v North Shore City Council HC Auckland
CIV-2009-404-2091, 12 April 2010.
[14] To consider Mr Cameron’s application, it is necessary to set out what
building work was carried out and when it was carried out. Some of that is common ground. Some of it is contentious.
[15] Mr Cameron applied for a resource consent which was granted in February
1999. He applied for a building consent on 15 March 1999. The council granted the consent on 6 April 1999. There was then building work on the house during 1999. There is evidence which satisfies me that the house had reached the stage of practical completion or was substantially completed by the end of 1999. That evidence is found in a report by a valuer who inspected the property for mortgage purposes in August 1999. The valuer said that the property was 97.25 per cent complete. He identified work that needed to be completed. That work went to the internal fit-out of the property and the laying of a driveway. Certainly the more structural work appeared to have been completed.
[16] Next, there are the records of the council’s inspections under the Building Act. The main inspections run up until August 1999. There were no further inspections until the final inspection before the issue of a code compliance certificate in August 2001. Then Mr Cameron has put in evidence of invoices and quotes from sub-contractors and materials suppliers pointing to work being carried out during
1999.
[17] An enforcement officer for the council inspected the property in September
1999 for compliance with a resource consent. His report says:
New dwelling completed as per proposed development submitted by the applicant. Minor landscaping work required.
[18] While quoting that report, I bear in mind that the enforcement officer was inspecting the property for compliance with a resource consent and would not have turned his mind to the Building Act and building code compliance issues. But it is some evidence pointing towards the property having been completed. The council’s building surveyor, Mr Jones, accepted that the building would have been completed during 1999.
[19] Mr Cameron identified certain outstanding work. He says that there was a banister on an internal staircase that had not been fitted. He says that the construction of the house had cost more than he and his wife had anticipated and they had deferred installing the banister until they had funds. He also addresses the
question of landscaping work and says that he carried out landscaping work after the family went into occupation in August 1999. In a reply affidavit, he has attached photographs showing the state of the property when the family first started living in the property and a later photograph showing the landscaping work he carried out during his ownership. I accept that any such landscaping work was completed at least 10 years before this proceeding was commenced.
[20] The fitting of the banister to the internal staircase is not relevant to this proceeding. Whether the house was a leaky building or not does not turn on the fitting of an internal banister.
[21] In August 2001 Mr Cameron applied to the council for a code compliance certificate. A council officer inspected the property on 27 August 2001. That date was inside the 10-year period under s 393(2) of the Building Act 2004. The inspector recorded details of items requiring attention. These are set out in the submissions for the council at paragraph 21 under the heading “28 August 2001”:
Cracking stucco appearing top and bottom of north-east and facing wall
(garage);
Gas certificate required;
Certificate for glass toughening required; Water ponding on master bedroom balcony; Seal vanity to wall in bathroom;
Outside James room.
[22] Mr Cameron says that he attended to those items. The council carried out another inspection on 6 September 2001 and approved the house for the issue of a code compliance certificate.
[23] There are items within the inspection made on 28 August 2001 that have potential relevance to defects in the plaintiffs’ statement of claim. Those items are relevant to the defects in paragraph 8[n] and 8[q] of the plaintiffs’ statement of claim:
Cracking stucco appearing top and bottom of north-east and facing wall
(garage);
Water ponding on master bedroom balcony and outside James’ room.
Mr Cameron acknowledges that he carried out work to attend to these items. That much is common ground.
Section 393(2) Building Act 2004
[24] The work that Mr Cameron carried out after the inspection on 28 August
2001 is within the 10-year limitation period under s 393(2). There is also the question whether Mr Cameron carried out any further work on the house after the Council issued its code compliance certificate in September 2001. On that point the evidence is sparse. Mr Cameron has sworn in general terms that he did not carry out any further construction work on the property after September 2001. He and his wife sold the property in July 2002. The question whether he carried out any further work on the property between September 2001 and July 2002 is, in my judgment, a triable issue. For the purpose of a summary judgment or a strike-out application the evidence does not reach the standard stated by Tipping J in the Matai Industries case. It may be that at a final hearing Mr Cameron’s evidence will be accepted on the point, but for summary judgment purposes it remains a triable issue.
[25] My findings are that there was relevant construction work following the inspection on 28 August 2001. Mr Cameron has not persuaded me that he did not do any further construction work after the council issued its code compliance certificate in September 2001 up until the sale of the property in July 2002.
[26] Those findings are enough to dispose of the application for summary judgment. On a summary judgment application the defendant has to show that no cause of action can succeed. Mr Cameron has not succeeded on that, because I am satisfied that there was some relevant building work within the 10-year period before the issue of the third party proceeding against him.
[27] However, the real dispute in this case is whether Mr Cameron can be held potentially liable for work carried out before 26 August 2001. Mr Cameron’s
argument is that that is work that is outside the 10-year period. It was complete before 26 August 2001 and is therefore beyond the 10-year limit. The council, on the other hand, contends that in this proceeding he can be held liable for construction work carried out before that date on the basis that there was still relevant building work within the 10-year period.
[28] The council relies, in part, on a decision of Lang J in Auckland City Council
& Ors v Attorney-General and Garlick.[6] That proceeding was an application for judicial review of a decision of the Weathertight Homes Tribunal. The issue in that case related to whether a dwelling-house had been built under s 7(2) of the Weathertight Homes Resolution Services Act 2006. The question of eligibility for claims under that Act is different from the test under s 393(2) of the Building Act
2004. The question under the Weathertight Homes legislation is whether the dwelling-house as a whole is complete. Lang J had to consider what “completion” of a dwelling-house meant. It is clear that s 7 of that Act is a filter, to keep out all claims for which a 10-year limitation defence would be available. It is only a preliminary filter because claims might still not succeed under that Act. In particular the parties to the construction of a house might be able to rely on the 10-year limitation defence. The test under s 393 is different from the test under s 7 of the Weathertight Homes legislation. The test under s 393 goes to particular acts or omissions of the person who is sued, rather than the completion of a dwelling-house as a whole.
[6] Auckland City Council & Ors v Attorney-General and Garlick HC Auckland CIV-2009-404-
1761, 24 November 2009.
[29] The council also put the case that Mr Cameron was under an ongoing duty of care up to the time when the code compliance certificate was issued. For that, it relies on his role as the person who was in control of the building works as a whole. It is necessary to bear in mind that s 393 is directed at relevant “acts and omissions”. It is convenient to consider how s 393 would operate when an independent contractor is engaged to carry out work on a dwelling-house. The relevant acts or omissions of a contractor that might give rise to liability are those which are performed by the contractor in the course of carrying out certain tasks on site. When
the contractor completes the relevant tasks, whether he carries out the work
adequately or not, he has effectively “completed” the particular task and from that time onwards he is then “off duty” or “off task”. It is when a contractor goes “off duty” or “off task” that it is the latest point from which time would begin to run against that particular contractor.
[30] There can be useful signposts when a contractor may go “off task”. For example, if the contractor stops work on the site, leaves the site and does not return, that would be a sign that he was “off task”. Another sign might be when someone in supervision (such as an engineer) provides a producer statement to show that the work has been carried out and completed. That also would be a signal that by then time has started to run as regards the persons actually carrying out the work in the producer statement.
[31] This case is different because Mr Cameron was not just a builder but also the owner. That meant that he did not leave the site and, as well, would not issue producer statements to himself. But the approach of determining when a building contractor is “on duty” or “off duty” points the way to determining whether an owner, who is also a builder, is on or off duty, or on or off task. When Mr Cameron completed a task within the building project and then moved on to another task, or treated the task as completed, then time began to run against him from completion of that task or from when he treated that task as “completed”.
[32] In the course of submissions there was discussion as to the work on earthworks and foundations, preliminary to erection of a structure above them. I take that as a relevant example, because it bears out the point that work can proceed in stages and certain stages can be completed before there is other work. When earthworks and foundations are completed, the contractors who have done that work will go “off task” or “off duty”. It is usually not possible to go back and remedy any work that has been done. Any engineer who signs off that work also goes “off task”, and any head contractor who has engaged those contractors or the engineer is equally “off task” and “off duty”. So Mr Cameron’s actions can be viewed in a similar way.
[33] I am satisfied that during 1999 the construction of the house was, to all intents and purposes, practically completed. Mr Cameron treated it as completed so
that his liability for work carried out during 1999 began running then, and not later. When he contacted the council so that a code compliance certificate was issued, he was required to do further work. But that was new work that he carried out. It was distinct from the work that he had carried out in 1999. It was not a continuation of the earlier work. There had been a significant hiatus. He was attending to defects that had appeared since the family had moved into the house and that had become apparent during their occupation.
[34] As an analogy, when Mr Cameron carried out the work on the defects identified by the council, he was in a similar position to Mr Watson in Johnson v Watson.[7] Mr Watson had completed construction of his house outside the 10-year period. He returned to the Johnsons’ house after the Johnsons had entered into occupation and carried out remedial work. The remedial work he carried out was within the 10-year period, but the fact that he carried out that remedial work within
the 10-year period did not mean that he was under any ongoing duty of care in respect of his original construction work. Time had already started to run for the original construction work.
[7] Johnson v Watson [2003] 1 NZLR 626 (CA).
[35] In my judgment the decision in Johnson v Watson is directly applicable here. My judgment is that time has run out for the construction work in 1999. The only work for which Mr Cameron can be liable is the work carried out after 27 August
2001. Only the work that he actually carried out within 10 years of the issue of the third party proceeding against him can be the subject of this claim against him.
Disposition
[36] Having reached this stage of my decision, there has been some short discussion as to the appropriate form of relief. The first aspect is that the application for summary judgment is dismissed.
[37] That does not dispose of matters entirely. There is also the question as to what pleadings survive in the light of my rulings. The parties have agreed that they
will consider amendments to the pleadings in the light of the decision I have given. I give them time to do that.
[38] I adjourn the strike out application, to be brought on for hearing on the application of either party. In the first instance, the parties may ask for a conference for further directions to be given.
Costs
[39] I have also asked for submissions on costs in the light of my ruling. The parties have agreed to discuss costs. If they are not able to reach agreement, then the party seeking costs should file submissions, and the party opposing any order for costs should file further submissions within a further 5 days after receiving the applicant’s submissions for costs.
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R M Bell
Associate Judge
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