A win for Tasman Council at the Court of Appeal against a $271,000 negligence verdict highlights the value that builders and landscapers can provide for homeowners in meeting compliance requirements
Tasman Council was sued after it negligently issued a building consent for a house and swimming pool in 2004 and a CCC in 2006. It also carried out what were deemed to be negligent inspections in 2009 and 2012.
The homeowners, Ms Buchanan and Mr Marshall, bought the award-winning property in 2008, which features a swimming pool in the centre of a courtyard.
The Court of Appeal acknowledged that: “[Ms Buchanan and Mr Marshall] specifically checked that the house had a CCC [and] purchased the house in reliance on the assurance provided by the CCC that the house complied with relevant building laws.”
Pushing the boundaries
Until 2019, the pool barrier was made up of:
To the north, one of the main dwelling walls and a small section of fencing.
To the south, the walls of a studio and garage connected by another small section of fencing with an entrance gate.
To the east and west, boundary fences with a gate in the east fence.
Following the purchase, inspections by Tasman Council in 2009 and 2012 deemed it compliant with the Fencing of Swimming Pools Act 1987 (FOSPA).
When the owners put the house up for sale in 2019, the pool was re-inspected and found to be non-compliant with FOSPA because the “doors were not self-closing or alarmed, and the east gate in the side fence did not self-close”. As a result, the owners took it off the market.
Remedial requirements
In December 2021, the owners applied for a building consent for remediation, which took part in 2022. A CCC was issued in June 2022.
“The owners say the required remediation has destroyed the central design feature of the house by interposing a reflective box-like structure into the central courtyard, ruining the character of the property [and reducing its value],” stated the Court.
The owners initially sued Tasman Council in the High Court, which found that the Council acted negligently in issuing a building consent, carrying out the inspections and issuing the CCC, and made negligent misstatements about the property’s compliance in its inspections.
Subsequently, the Council was ordered to pay damages totalling $246,000 to compensate the owners for loss of value to the property, plus remedial costs and other associated costs.
Council appeal
Following the High Court verdict, Tasman Council appealed to the Court of Appeal.
“The primary basis of the Council’s appeal is that the purpose of the 2009 and 2012 inspections was to protect the safety of young children, not to protect the economic interests of property owners,” stated the Court.
The Council argued that any duty of care it might owe in connection with the negligent inspections was not owed to the property owners and didn’t extend to the economic loss they suffered.
The Appeal Court agreed with Tasman Council’s argument, saying that the 2009 and 2012 inspections didn’t contribute to the existence of any defects in the property, which already existed. It therefore determined that Council did not owe a duty of care to the owners to protect them from the loss of litigation rights.
No duty of care to owners
“The 2009 and 2012 inspections, and the statements about FOSPA compliance made following those inspections, were not in any meaningful sense a cause of the owners’ loss. Rather, their loss was caused by the negligent acts of the Council in 2004 and 2006,” stated the Court.
“The Council did not, when it carried out those inspections and advised the owners of their outcome, owe the owners any duty to take care to protect them from loss of rights of action against the Council and others.”
While the Court acknowledged the Council had acted negligently in 2004 and 2006, the claim was struck down because it was time-barred by the 10-year longstop.
“If a failure to identify defects in that work during a subsequent inspection, when those defects should have been apparent to the Council, is sufficient to start time running afresh, then time could in some cases run indefinitely in respect of Council decisions to grant building consents and CCCs. That would be inconsistent with the purpose of the 10-year longstop.
“We have considerable sympathy for Ms Buchanan and Mr Marshall, who have suffered loss through no fault of their own and are unable to recover that loss from the negligent Council because of a time bar,” stated the Court.
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