Recent Building Case Law

Amor v New Plymouth District Council 25/9/02, Priestley J, HC New Plymouth, AP34/02
This case concerned an appeal against an Order pursuant to s 55 (4) of the Building Act requiring the Appellant to demolish within 28 days, a structure on his land on the grounds it was visually offensive.

The appeal was on the basis that the enforcement officer who made the decision that the house was deemed to be unsanitary had not had that power delegated to him appropriately.

In the District Court it had been held that the enforcement officer’s appointment under part 9 of the Act carried with it a delegation of the Council’s powers under s 65 (2).

The High Court held that this was incorrect. The High Court said

“no where in part IX is there a provision which expressly or impliedly suggests that a territorial authority’s authorisation of an enforcement officer under s 77 (1) ipso facto carries with it a delegation of the s 65 (2) power. S 78 undisputedly permits a delegation of the Acts statutory powers which would obviously include the s 65 (2) powers. The appointment and authorisation of an enforcement officer under s 77 without more, does not result in a valid delegation in the s 65 (2) power.”

In essence, the High Court held that the enforcement officer had the power to enter into the premises in order to carry out inspection, but did not have the power to adjudicate on behalf of the territorial authority as to whether the building is deemed to be unsanitary.

Abatal Limited v Waitakere City Council 5/07/02, Chambers J, HC Auckland, AP24/02
This case was about the construction of green houses without a Building Consent. The Appellant was found guilty in the District Court and was fined $25,000. The appeal was against the level of the fine imposed. The Appellant argued that the fine was excessive, however the High Court held that the level of the fine was appropriate, particularly taking into account the commercial advantage gained by the Appellant by making a decision to erect the green houses without obtaining the appropriate Building Consents.

Klinac v Lehman 6/12/02, Glazebrook J, HC Whangarei, AP15/01
This case is of particular note as it includes an extensive review of the legislative history of Section 91(2) of the Building Act 1991. This section states:

“91. Limitation defences
...

(2) Civil proceedings [relating to any building work] may not be brought against any person 10 years or more after the date of the act or omission on which the proceedings are based.”

The case helpfully sets out in simple terms, calculation of claim limitation periods for civil claims for breach of contract and negligence relating to building work.

Under the Limitation Act 1950, the limitation period for claims in contract is six years and runs from the date of the breach of contract. The cause of action is complete at that point and does not rely on the breach having caused actual loss. By contrast, in negligence the cause of action is not complete until damage results from the breach of the duties. The six year limitation period under the Limitation Act therefore starts at the time of damage or discoverability of damage.

Section 91 of the Building Act was introduced to modify the position where claims of negligence were involved. It was designed to provide a balance between the interests of consumers and the interests of those involved in the construction industry and in particular local government. It did not, and was not intended to, change the law in respect of the limitation period relating to contractual claims.

The effect of Section 91 in terms in limitation periods can be summarised as follows:

1. If the claim relates to building work, the 10 year provision for claims for breach of contract will run from the date of the act or omission on which the proceedings are based, i.e. the breach of a contractual provision.
2. For all negligence claims relating to building work, the relevant act or omission on which the proceedings will be based will be the actual breach of the duty rather than the date of damage or its discoverability. The effect of this is that where physical damage, e.g. cracks to foundations, are not discovered until 11 years after the building was completed, any negligence claim by the owner say against the builder for building works, will be statute barred under Section 91(2) as 10 years would have passed from the construction of the building (being the negligent act).