Supreme Court affirms trustee's contributory negligence in construction dispute

The court found that the appeal did not raise issues of general or public importance

Supreme Court affirms trustee's contributory negligence in construction dispute

The Supreme Court has affirmed the finding of contributory negligence on the part of the trustees of a property subjected to remediation work.

In Linehan v Thames-Coromandel District Council [2023] NZSC 149, the trustees of a trust settled by the late Dr. Brian Linehan have applied for leave to appeal the High Court's decision finding the Thames-Coromandel District Council negligent in issuing building consents and code compliance certificates for remediation work on a house in Whitianga.

The case involved the council's actions concerning remedial works from 2010 to 2011 and 2016. The High Court awarded damages totalling $796,138 and an additional $15,000 for stress and anxiety. However, these figures were reduced by 50% to reflect the trustees' contributory negligence.

The background of the case revealed that after a significant water leak in 2010, the trustees initially engaged a builder for remedial work without building consent. After the council issued a stop work notice, the trustees obtained building consent based on design plans that included specific requirements for placing deck tiles. However, the approved design was not followed during the remediation work, leading to further weather tightness issues.

The council's building inspector investigated the issue and advised on the necessary remedial work. That investigation and advice failed to identify and fix the source of the problem, which is the direct fixing of the tiles to the deck membrane. In mid-May 2016, the council issued a building consent for further remediation work. The application was for the balconies to be repaired on a like‑for‑like basis, which meant the tiles were again directly attached to the deck membrane, leading to further water leakage. The council issued a code compliance certificate in September 2016.

The High Court found the council was negligent in issuing the certificate even though the deck tiling was directly fixed to the deck membrane contrary to the approved design, building consent and Building Code. Similarly, the council was negligent in issuing the 2016 building consent because that application was again for directly fixed tiles.

However, the court reduced damages by 50% due to the trustees' contributory negligence. The trustees applied for leave to appeal to the Supreme Court on the issue of negligence, arguing that the appeal raises matters of general or public importance, including the standard of care applicable to homeowners in leaky home cases. They also question the extent to which a party's case is constrained by its pleadings and the approach to drawing adverse inferences of fact in civil cases.

The trustees also argued that an appeal is necessary in the interests of justice to avoid a substantial miscarriage of justice. The level of contributory negligence imposed in this case was high, and the trustees contended that the evidence established that they did meet the standard of a reasonably prudent homeowner.

However, the Supreme Court ultimately rejected the trustee's position that the case was of general or public importance. The court found that the proposed appeal on contributory negligence would merely reprise the arguments in the Court of Appeal.

Furthermore, the Supreme Court said that the issues related to the pleadings, the drawing of inferences, and the burden of proof did not raise issues of general or public importance. The court also refused to consider that the approach taken by the Court of Appeal gave rise to the appearance of a miscarriage of justice in the civil context. Ultimately, the Supreme Court dismissed the appeal.

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