Council loses another fight over leaky homes

WELLINGTON City Council another leaky building claim.

Its claim against a developer for a big slice of the damages and costs it had to pay to the owners of a home at 61 Dress Circle, Newlands, has been dismissed.

The house was built in 2001-02, and the council issued a building code of compliance certificate in 2005 after it received assurances from Kingdom Residential Housing managing director Colin Dallas.

When the home was subsequently found to be leaking, the owners brought a claim for negligence against the council for $840,000 for damages and costs.

The council in turn recovered $124,000 of this from Alchemy Engineering, which installed balustrades, and Builders Plastics, which specialised in waterproof coatings.

It also sued Mr Dallas for a further $464,000, claiming this was a fair and reasonable assessment of his responsibility for its loss.

High Court Justice Jill Mallon said an 80 per cent apportionment of costs was

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lost typically appropriate in negligent building cases. But Mr Dallas was not the builder. His company contracted with the home buyer and in turn employed independent contractors.

He did not do any work on the house, did not co-ordinate construction, and did not conduct moisture tests.

His correspondence with the council, before it issued its code of compliance certificate, was in his capacity as managing director of Kingdom.

The council had not made out its claim for negligent misstatements against Mr Dallas because he did not assume personal responsibility to investigate whether the building was weathertight and he made no assurances that it was.

His statements, made some years later after the building was constructed, were limited, lacked detail and could not be relied on as providing an assurance the building was weathertight.

The council could have noted those limitations and made further inquiries.

Justice Mallon said it may have seemed an odd outcome. In negligent building cases the builder was ‘‘typically primarily liable, with the local authority having lesser responsibility’’.

However, this claim was not about the original construction of the house.

‘‘Had the claim been against Kingdom or the building supervisor Kingdom engaged, the position may have been different.

‘‘WCC’s claim was against Mr Dallas personally for the information he provided when WCC was considering whether to issue a code of compliance certificate.

‘‘The information Mr Dallas provided was intended to be the subject of further discussions and inspection and/or has not been shown to be wrong,’’ Justice Mallon said.

The decision comes just days after Justice Ronald Young ordered the council to pay $1.9 million to residents in a leaky Glenmore St townhouse development where he said the council’s attention to its statutory obligation was ‘‘hopelessly inadequate’’.