Leaky building decision — Builder 40% liable, Council 60% liable

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A new District Court decision of Judge Hubble — namely Standen & Standen v Waitakere City Council & Others — has found that the council ought to bear a 60% apportionment of liability for the repairs to a leaky building.

In February 2001 the Standens purchased from the Third Defendants (Mr and Mrs Ashwell) a 1950s brick and tile home in Green Bay, Auckland.
Mr and Mrs Ashwell had owned the property since 1992, but in 1998 they carried out extensive alterations in accordance with plans and specifications drawn up by the Fourth Defendant (architect Mr Little).

There were a lot of issues with settlement of the property as it did not have a code compliance certificate (CCC).
Correspondence passed between the respective solicitors acting on the sale of the property. Eventually, the purchaser agreed to settle without a CCC having been issued on the property. Settlement and possession took place in April 2001.

Towards the end of 2001, the Standens noticed some cracking in the plaster, particularly at the junction of the new work with the old brick and tile building. Mr Alexander, a building consultant, was employed to look at the problem.

They received his report on March 25, 2002, and, at this point, they knew for the first time that this was a leaky building.
By July 2002, the Standens had completed the four items that had been holding back the issue of a CCC, and asked the council to carry out its final inspection.

A visual inspection was completed by the council in August 2002, and it was then obvious to them that the stucco finish had many faults as previously identified by Mr Alexander.
The principle failures which allowed water ingress into the walls of the house were the method of construction adopted for the roof apron flashings, head flashings and balustrade flashings. Plaster was also taken down to ground level without clearance.

The Standens then carried out $115,000 worth of remedial works as recommended by Mr Alexander, and a CCC was eventually issued. These proceedings were then brought and Judge 

Hubble found in favour of the Standens as follows:
• The cleaning of the spouting or the failure to clean the spouting did not cause the water ingress issues at the house.
• The architect Mr Little was engaged merely to supply sufficient plans for the grant of resource and building consents. He was neither asked, nor required, to produce detailed drawings.

His fee ($4000) was a fraction of what it would be if he was a supervising architect called upon to provide full working drawings. It was possible for the house he designed to have been built waterproof.
• The Standens must accept some responsibility for entering into the contract when a CCC had not actually been issued. Judge Hubble assessed this as 10% contributory negligence.
• The defendants were unable to prove to the requisite burden that any delay in repairs caused additional damage.

• The council was negligent in issuing the original building consents. If the consent plans had included properly detailed cross sections of decks and deck barriers, they would have showed a sloped top (not a flat top), a break between the balustrade walls and the deck membrane, and the east deck subfloor ventilation.

• The council accepted that the architect was not asked for detailing in crucial areas, and subsequent inspections failed to ensure that the deck balustrades were probably waterproofed.
• There was no break at the base of the walls to the decks, there was insufficient height differential between the internal and external decks, and the ground, and there were no head flashings on the joinery in some areas.

Council and builder found negligent

Judge Hubble therefore concluded that the council had been negligent in missing these defects in construction in its 12 inspections.
It was concluded that Mr Ashwell had been negligent as the builder in failing to ensure that the house alteration had been done in accordance with the building code, and that the council and the builder ought to share the apportionment of liability as regards every construction defect bar the front entrance
up-stand and the foundation.

In respect of these two defects, the council was totally in control, and so was found solely responsible for them.
In conclusion, the council was found 60% liable for the cost of the remedial works, whereas the builder was found 40% liable.

This now stands as the highest apportionment yet to be found against a council on a direct basis. Prior to this it was 33% in the decision of Chase v De Groot.
Previously, a council may have paid out as much, but only because other liable parties were unable to meet their share of liability due to impecuniosity.
It remains to be seen whether this finding will be appealed by the council.