Leaky building law: Council responsiblity for third party certifiers welcomed

Marcus Beveridge

Lawyer Marcus Beveridge is welcoming a recent court decision allowing apartment owners to sue their local body for actions of third party certifiers.

Mr Beveridge says the law on third parties who signed off on buildings had been “bizarre” up until now.

Earlier this week, NBR ONLINE reported that owners in Auckland’s “The Landings” apartment block, could sue the Auckland Council in its $10 million negligence claim for building defects. 

The council had argued it should not be liable because no other territorial authority in its position had been, and that this was supported by an earlier case, known as the McNamara case.

However Associate Judge Jeremy Doogue distinguished that case as it dealt with a code compliance certificate, not a building certificate.

Mr Beveridge says it was crazy that councils had been able “wriggle out of liability when they themselves had engaged the certifiers." His firm, Queen City Law is currently working on more than $60 million of leaky building claims.

The lawyer described the leaky building situation – and the fact that lawyers were “feeding off it” – as a disgrace.

He says the owners in this case were a well-organised body corporate but, unfortunately, not all apartment owners had savvy body corporates, and claims completely depend upon the caliber of the owners.

Full $10 million unlikely

Queen City law consultant Ross Dillon says while the council baring the costs for a $10 million leaky repair sounds tough; it is unlikely to pay the full amount.

He says the case over “The Landings” is yet to go to trial and even if there council has a duty of care, causation will be an issue. While the council may have failed  to keep tabs on the private certifier properly, it was probably the certifier which caused most the damage.

Mr Dillion says the court will attribute damages relative to the proportion of harm that the council really caused.

“If the council failed to pick up on the certifier, then that’s negligence but it would be a long bow to draw that was responsible for $10 million worth of damage.”
“As a ratepayer I hope the payment is proportionate.”

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