Ministry of Education v Mike Barns & Associates Ltd and others

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267

The Crown is the owner of Ruatoki Area School. In the latter part of 1994, the Ministry entered into a contract with the first defendant (being the architect) for the design of a new library and administration building for the school.

On August 21, 1995, the Ministry entered into a contract with Mr and Mrs Pullar for the construction of the new building. Mr Pullar subcontracted out different parts of the work to the subcontractors.

The building work was completed in August 1996. Subsequently the school experienced problems with the new building.

The Ministry commissioned an investigation into the problems. A further report was commissioned which was, in turn, sent to Mr Pullar. It identified four different faults:

Poor ventilation

Leaks

Condensation

Glare

Between December 1999 and November 2000 the Ministry engaged alternative contractors to rectify the defects in the building that had been identified in the earlier reports. J W Pullar received no formal notice of this.

The next contact the Ministry had was on May 17, 2005, when the Ministry issued this proceeding to recover the cost of the repair work.

The causes of action against the defendants were that they were in breach of their respective contracts and a duty of care owed to the Ministry.

Onus
The onus was upon them to establish to the balance of probabilities that the Ministry could not succeed. It was submitted on their behalf that they could do so on two grounds:
a) There is no duty of care owed to industrial or commercial property owners and no factors present to warrant extending the duty of care in this case.
b) The claim was brought outside the limitation period of six years from the date the cause of action accrued, being the date when the Ministry received the report from BRANZ.

Dealing first with a) above, while considering a number of cases dealing with whether, in fact, a duty of care is owed by a builder to a commercial property owner, such as the owner of a school, Associate Judge Abott was unwilling to come to a summary decision.

However, he commented that there was precedent to the effect that no duty of care will be owed, but also suggested that every decision has to be considered in isolation to its own factual matrix.

Statement of principle
Of particular interest is his strong statement of principle to the effect that “there is, of course, no duty in tort to take reasonable care to perform a contact.”

In response to the argument about the application of s4 of the Limitation Act 1950, again Associate Judge Abbott was unwilling to decide on a summary basis whether, in fact, as at the date of the Ministry receiving its first report, all of the damage was reasonably discoverable at that point and, therefore, the limitation period ran from then.

In short, he concluded that “he was not satisfied that the Ministry will be unable to prove at trial that this cause of action arose later than the time of receipt of the December 1998 report”.

He concluded that there was not sufficient certainty on the facts for this issue to be properly decided by summary judgment.

Accordingly the application for summary judgment failed. However, costs were reserved.