Award of $519k falls as trustees fail to prove yard couldn’t take lighter fork hoist
The Court of Appeal has ruled that a builder’s director owed no personal duty in negligence to meet a standard set only by contract.
The court allowed the appeal in DTB Construction Ltd v Dobbe [2026] NZCA 492, released 9 October 2026. It set aside a $519,000 damages award, plus interest, against DTB Construction Ltd (DTB) and one of its directors.
Trustees of a trust hired DTB to build a warehouse and an outdoor yard for storing and stacking containers. The yard failed soon after construction, when the trustees used a 36-tonne fork hoist on it. The trustees sued DTB for breach of contract and the director for negligence.
The High Court rejected the trustees’ main claim that DTB had agreed to build a yard for the 36-tonne machine. It found instead that DTB had failed to deliver a yard fit for a lighter 12.5-tonne fork hoist. It also held the director personally liable for failing to supervise the design and build properly.
The Court of Appeal upheld the rejection of the 36-tonne claim. It found no error in the High Court’s acceptance of the director’s evidence that one of the trustees turned down a design for the heavier machine because of the extra cost and delay.
However, the court found that the trustees had not proved that the yard fell short of the 12.5-tonne standard. The evidence-in-chief of the three independent expert engineers assumed a 36-tonne requirement and did not address whether the yard could take the lighter load. One of the trustees’ experts said that all the designs would have been adequate for a fork hoist under 15 tonnes. The court held that any design failings by the director caused none of the claimed losses.
On the negligence claim, the court said that the duty on those involved in building work was to take care to achieve compliance with the Building Code or, possibly, reasonable building standards. The expert evidence was that the yard was not a building, so the Code did not apply, and the High Court made no finding of a breach of any industry standard. The 12.5-tonne requirement came only from the contract.
“There is no duty in tort to take care to build something to a contract standard,” the court said.
Otherwise, the court added, non-contracting parties would gain a warranty of contractual quality they had not paid for. The court left open whether the director had assumed personal responsibility to the trustees.
The court ordered the trustees to pay the appellants’ costs in the High Court and on the appeal, plus the costs the appellants had been ordered to pay an engineering firm they joined as a third party.
