TRUSTEES OF THE BAMBRY FAMILY TRUST V HASTINGS DISTRICT COUNCIL AND ANOR HC NAP CIV-2010-441-000055

TRUSTEES OF THE BAMBRY FAMILY TRUST V HASTINGS DISTRICT COUNCIL AND ANOR HC NAP CIV-2010-441-000055 10 March 2010IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY CIV-2010-441-000055UNDER s 93 Weathertight Homes Resolution Services Act 2006 IN THE MATTER OF an appeal against the decision of the Weathertight Homes Tribunal in proceedings TRI-2009-100-000081 to remove the third respondent as a party BETWEEN DARREN JOHN BAMBRY, VICKI CAROL BAMBRY AND JAMES CHARLES SHORT AS TRUSTEES OF THE BAMBRY FAMILY TRUST Appellants AND HASTINGS DISTRICT COUNCIL First Respondent AND PACIFIC PROJECTS LTD Second Respondent Hearing: 10 March 2010 Appearances: Nathan Gray for Appellants No appearance by or on behalf of Respondents Judgment: 10 March 2010JUDGMENT OF HARRISON J_________________________________________________________________________________ SOLICITORS Sainsbury Logan & Williams (Napier) for AppellantsIntroduction[1] This appeal against an interlocutory decision of the Weathertight Homes Tribunal ordering a party's removal is not opposed and can be disposed of in short order and orally.Background[2] The appellants, the trustees of the Bambry Family Trust, have applied to the Tribunal for adjudication of a dispute under the Weathertight Homes Resolution Services Act 2006. The trust owns a residential property at 17 Collison Terrace, Haumoana, Hastings. The dwelling suffers widespread leakage. The trust alleges that liability for that leakage and the reasonably substantial repair costs lies with Hastings District Council and, significantly, the designer of the dwelling house, Pacific Projects Ltd (PPL). [3] In accordance with its statutory obligation, the Tribunal obtained an independent building report on the state of the premises. The assessor's report, which is comprehensive, was supplied on 26 September 2007. The trust's application for statutory eligibility as a claimant was then evaluated. A favourable decision was made on 13 November 2007. The trust's formal application, filed nearly two years later, cited council and PPL as respondents. [4] Mr Nathan Gray, who appears for the trust on appeal, submits that the assessor's report in summary provides evidence of a tenable claim against PPL as designer as follows: (1) PPL owed a duty of care to the trust; (2) there are identified design defects consistent with a failure by the architect to exercise reasonable skill and care; (3) there is apparently a causative link between the design defects and leakage; and (4) the leaks caused the damage to the building which has in turn resulted in financial loss. [5] PPL's solicitors wrote to the Tribunal on 10 November 2009. Their message was not inspiring. They advised that the designer held a limited number of relevant documents and that it was insolvent, before asserting as follows:It is clear that Pacific Projects was not involved in any supervision of the building project or in any way with the construction of the dwelling. Given that the Council issued a building consent for the work, my client assumes that the plans and specifications were approved by the local authority at the time and therefore they must have been compliant with the Building Code at that time. My client was not involved in that process and I assume the Builder would have arranged for the building inspections. I refer to my previous letter to the Tribunal dated 15 October 2009 and note that neither I, nor my client will be taking any further steps in relation to this proceeding as the company is no longer trading and is insolvent.[6] The Tribunal treated this letter as an application by PPL for removal. Council filed a memorandum in opposition (the trust did not take any formal steps but relied upon council's arguments). In response the Tribunal issued a decision described as "Procedural Order 3" on 9 December 2009. In particular it stated:2. The grounds for removal are that PPL prepared the plans for the dwelling but did not oversee the construction and the company did not have any role in ensuring that the plans and specifications were followed. Further grounds are that the terms of engagement with PPL provide that any liability is limited to five times the fees charged or $100,000 and any claim against PPL must be made within six years of completion of its services. ... 5. [Counsel for Council] says that PPL has not adduced any sworn evidence to support its application however the onus is on the first respondent, as the party opposing the application for removal, to demonstrate that there is an evidential basis for a tenable claim against the party applying for removal. 6. [Counsel] then argues that by denying liability the application for removal usurps the Tribunal's function because, in his submission, it is for the Tribunal to determine liability. If [counsel] was correct, every application for removal and every statement of defence would usurp the Tribunal's function. Clearly, there is no merit to this submission. A denial of liability does not equate to a determination of liability.[7] The Tribunal concluded that there was "no evidence of a tenable claim against PPL" and granted the company's application for removal.Decision[8] There can be no doubt that the Tribunal erred. PPL as designer arguably owed a duty of care in tort to the trust to discharge its professional obligations with reasonable skill and care, as Mr Gray submits. Accordingly, the primary issues for determination by the Tribunal at the conclusion of the hearing will be to determine: (1) the nature and scope of the duty; (2) whether the duty was breached; and (3) if so, what if any loss was suffered as a result. [9] Neither the trust nor council is bound to establish an evidential basis for its claim against PPL at any discrete point along the procedural spectrum before the adjudication hearing is completed. However, even if there was such an obligation, the assessor's report provides a sufficient evidential foundation for the reasons submitted by Mr Gray. The issue of PPL's liability will ultimately be determined by a careful evaluation of and findings upon all the relevant facts based upon the evidence and taking into account submissions made by the parties and their counsel. [10] If authority is needed for these elementary propositions, it is found inAuckland City Council v Unit Owners in Stonemason Apartment & OrsHC Auckland, CIV-2009-404-3118, 11 December 2009 at [32] (allowing an appeal in almost identical circumstances against a decision by an adjudicator to remove a party during a hearing on the basis of the claimant's failure to provide cogent evidence of its position where a factual dispute arose). [11] The appeal is allowed. The Tribunal's order removing PPL as a party is set aside. The trust is entitled to costs and disbursements against PPL (which has taken no steps) according to category 2B. ________________________________ Rhys Harrison J