Saffioti v Auckland Council [2012] NZHC 2394 (14 September 2012)

Last Updated: 9 October 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-002091 [2012] NZHC 2394

IN THE MATTER OF an appeal against the decision of the

Weathertight Homes Tribunal at Auckland

BETWEEN CARL SANTO SAFFIOTI AND EIJA MARITA LINDEN SAFFIOTI Applicants

AND AUCKLAND COUNCIL Respondent

Hearing: 30 August 2012

Counsel: R J Hooker for the Applicants

D J Barr for the Respondent

Judgment: 14 September 2012

_{JUDGMENT OF WOODHOUSE J}

This judgment was delivered by me on 14 September 2012 at 4:45 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

..........................................

Solicitors / Counsel:

Mr R J Hooker, Vallant Hooker & Partners, Solicitors, Auckland

Mr G J Christie / Mr D J Barr, Simpson Grierson, Solicitors, Auckland

SAFFIOTI V AUCKLAND COUNCIL HC AK CIV-2012-404-002091 [14 September 2012]

[1] The applicants commenced a claim in the Weathertight Homes Tribunal against 10 defendants, including the respondent Council. The Council applied for an order that it be removed as a party pursuant to s 112 of the Weathertight Homes Resolution Services Act 2006 (the Weathertight Act). An order to that effect was made by the Tribunal on 21 December 2011.

[2] The applicants now seek leave to appeal out of time against that decision.

The appeal provisions under s 94(2) of the Weathertight Act and leave to appeal principles

[3] Under s 94(2) a notice of appeal must be filed within 20 working days after the date of the Tribunal’s decision or “within any further time that the ... court may allow”. The notice of appeal should have been filed by 10 February 2012. The application for leave was filed on 18 April 2012.

[4] The over-riding consideration on an application of this nature is where the interests of justice lie.1 Factors that bear on this include: (1) the length of the delay; (2) the reasons for the delay; (3) the merits of the appeal, which in this case requires consideration of the merit of the substantive claim against the Council; (4) the party’s conduct; (5) the extent of prejudice; and (6) whether the appeal raises any issue of public importance.2

[5] These factors are not exhaustive. And particular matters are not to be given priority as a matter of course. For example, a persuasive explanation for the delay may not warrant leave being granted if the applicant has little prospect of success. The reverse could apply – the reasons for delay may not be persuasive, but the case may be strong. Prejudice is to be assessed in the overall context, not only in relation

_{to the parties. Others may be affected.}

1 See Stedmances v Stedmances [1987] 2 NZLR 336 (CA) at 340; Robertson v Gilbert [2010] NZCA

429 at [24]; My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 224, (2009) 19

_{PRNZ 518 at [19]; Barber v Cottle [2010] NZCA 31 at [6].}

2 See the discussion in McGechan on Procedure (looseleaf ed, Brookers) at CR29A.02 in respect of r 29A in the Court of Appeal (Civil) Rules 2005 – extension of time for appealing.

The applicants’ claim against the Council

[6] The Council’s application to be removed as a party was directed to the applicants’ original statement of claim. Following this a detailed, fully pleaded amended statement of claim was filed in November 2011. The submissions to the Tribunal, and therefore the Tribunal’s decision, were made after the amended statement of claim was filed. The Council, for the purposes of the hearing in the Tribunal, and also for the purposes of the hearing in this Court, accepted that the pleaded facts are correct.

[7] The claim arises out of an agreement for sale and purchase of a residential property entered into by the applicants, as purchasers, on 26 September 2004. The applicants obtained a LIM from the Council.3 The request for the LIM was on 8

October 2004. It was supplied to the applicants’ solicitors on 11 October 2004. The content of the LIM, and information not recorded in it, is at the heart of the applicants’ claim against the Council.

[8] The LIM recorded that a code compliance certificate for the building had been issued on 16 April 2002. It is not in issue that that statement in the LIM is factually correct. A code compliance certificate had been issued on that date by Approved Building Certifiers Ltd (ABC Ltd), a building certifier under the Building Act 1991. The Building Act made provision for building certifiers to provide inspection and certification services. Building certifiers had to be approved by the industry regulator, the Building Industry Authority. The legislation in this regard, and its implications in respect of claims relating to leaky homes, was discussed by

the Supreme Court in McNamara v Auckland City Council.4

[9] The essence of the applicants’ claim against the Council is, firstly, that the

LIM does not state whether the code compliance certificate was issued by the

_{Council or a building certifier. The applicants contend that the Council should have}

3 That is to say, a Land Information Memorandum compiled in accordance with s 44A of the Local Government Official Information and Meetings Act 1987. Relevant parts of s 44A are recorded below at [11].

4 McNamara v Auckland City Council [2012] NZSC 34. The decision was delivered on 9 May 2012;

that is to say, after the decision by the Tribunal in this case. The decision is discussed below.

stated in the LIM that the code compliance certificate had been issued by a building certifier and named the certifier.

[10] It is further contended that the Council should have included in the LIM, in connection with the code compliance certificate, information it had received from the Building Industry Authority that ABC Ltd had been deregistered as a certifier by the Building Industry Authority, and the reasons why ABC Ltd had been deregistered. The pleading about the information received is as follows:

76. That on 7 September 2004 the Building Industry Authority pursuant to its statutory powers:

a. deregistered ABC as a certifier on the grounds that ABC had in the performance of its duties been negligent and incompetent;

b. informed the Council of the deregistration of ABC and the grounds of deregistration.

c. informed the Council that the Authority found ABC to have been negligent and incompetent in the following respects:

 Issuing code compliance certificates and interim code compliance certificates for buildings outside the scope of its approval

 Inadequate record keeping and irregularities relating to the signature of inspection-related documents

 Faulty inspections on which code compliance certificates were issued

 Inspecting work that had not received a consent.

[11] The applicants contend that the Council was statutorily bound to supply this information in the LIM and was negligent in not recording it in the LIM. The statutory foundation for the claims is s 44A of the Local Government Official Information and Meetings Act 1987. This provision, with some omissions, is as follows:

44A Land information memorandum

(1) A person may apply to a territorial authority for the issue, within 10 working days, of a land information memorandum in relation to matters affecting any land in the district of the authority.

(2) The matters which shall be included in that memorandum are—

(a) Information identifying each (if any) special feature or characteristic of the land concerned, including but not limited to potential erosion, avulsion, falling debris, subsidence, slippage, alluvion, or inundation, or likely presence of hazardous contaminants, being a feature or characteristic that—

(i) Is known to the territorial authority; but

(ii) Is not apparent from the district scheme under the Town and Country Planning Act 1977 or a district plan under the Resource Management Act 1991:

(b) Information on private and public stormwater and sewerage drains as shown in the territorial authority's records:

(ba) any information that has been notified to the territorial authority by a drinking-water supplier under section 69ZH of the Health Act 1956:

(bb) information on—

(i) whether the land is supplied with drinking water and if so, whether the supplier is the owner of the land or a networked supplier:

(ii) if the land is supplied with drinking water by a networked supplier, any conditions that are applicable to that supply:

(iii) if the land is supplied with water by the owner of the land, any information the territorial authority has about the supply:

(c) Information relating to any rates owing in relation to the land:

(d) Information concerning any consent, certificate, notice, order, or requisition affecting the land or any building on the land previously issued by the territorial authority (whether under the Building Act 1991, the Building Act 2004, or any other Act):

(e) Information concerning any certificate issued by a building certifier pursuant to the Building Act 1991 or the Building Act 2004:

(ea) information notified to the territorial authority under section

124 of the Weathertight Homes Resolution Services Act

2006:

(f) Information relating to the use to which that land may be put and conditions attached to that use:

(g) Information which, in terms of any other Act, has been notified to the territorial authority by any statutory organisation having the power to classify land or buildings for any purpose:

(h) Any information which has been notified to the territorial authority by any network utility operator pursuant to the Building Act 1991or the Building Act 2004.

(3) In addition to the information provided for under subsection (2) of this section, a territorial authority may provide in the memorandum such other information concerning the land as the authority considers, at its discretion, to be relevant.

...

The applicants rely, in particular, on s 44A(2)(e) and (3).

[12] The applicants plead two causes of action. The first rolls together claims of breach of statutory duty and negligence, as follows:

79. That in breach of its statutory duty and/or negligently the Council in the [LIM] failed and/or omitted to state as required by section

44A(2)(3):

a. that the code compliance had been issued by a building certifier, namely ABC; and

b. exercise its discretion and state that the certifier ABC had been deregistered by the Building Industry Authority on the grounds that ABC had been negligent and incompetent [in] its operation as a building certifier.

[13] There is a further pleading alleging negligence, and seemingly pleaded as a cause of action distinct from the cause of action just dealt with. However, the contentions, in their essence, mirror the contentions in paragraph 79. The pleading is as follows:

81. That the Council was negligent in the issue of the LIM report by:

a. failing to state as required by section 44A that the certificate had been issued by the building certifier under the Building Act 1991;

b. failing to state that the Building Certifier had been removed from the register on the grounds as pleaded herein.

[14] The written submissions for the applicants in this Court also record that the claim against the Council “could be” for breach of the Fair Trading Act 1986. The amended statement of claim does not have a pleading under the Fair Trading Act and no draft pleading was presented on this appeal. The foundation for the claim under the Fair Trading Act was not articulated in the submissions on appeal in any material way.

[15] Loss is said to flow, under each of these causes of action, because of steps the applicants claim they took under the agreement for sale and purchase in reliance on the LIM. There is a provision in the agreement for sale and purchase which made the agreement conditional upon the purchasers approving the LIM. The applicants approved the LIM and were then bound to complete the purchase. There is a general pleading (at para 22(a) of the amended statement of claim), that in purchasing the property the applicants “relied upon the statements and representations contained in” the LIM.

[16] The applicants plead that they would not have approved the LIM if the LIM had recorded that the code compliance certificate had been issued by ABC Ltd as a building certifier, or if it had recorded that “ABC had been found to be negligent in its operation as a building certifier”. They claim that notice to the vendors that the LIM was not approved would have given rise to further rights and obligations specified in the agreement for sale and purchase. It is contended that the applicants would have “notified [the vendors] to provide a full invasive assessor’s report” of the house. The pleading that immediately follows this is:

That as a result of the negligently issued LIM Report the Claimants were denied the opportunity to not approve the LIM Report and to cancel the contract.

[17] The pleading at this point relies, in part, on clause 8.2 of the agreement for sale and purchase. This provision bears on a question as to whether, if there was breach of an obligation owed by the Council to the applicants, the breach was

causative of the claimed loss. The loss is the cost of repairing the house to make it weathertight. The clause is as follows: 5

8.2 (1) If the purchaser has indicated on the front page of this agreement that a LIM is required:

(a) that LIM is to be obtained by the purchaser at the

purchaser’s cost; and

(b) the purchaser is to request the LIM on or before the fifth working day after the date of this agreement; and

(c) this agreement is conditional upon the purchaser approving that LIM.

(2) If the purchaser does not approve the LIM, the purchaser shall give notice to the vendor (“the purchaser’s notice”) on or before the fifteenth working day after the date of this agreement stating the particular matters in respect of which approval is withheld and, if those matters are capable of remedy, what the purchaser requires to be done to remedy those matters. If the purchaser does not give a purchaser’s notice the purchaser shall be deemed to have approved the LIM. If through no fault of the purchaser the LIM is not available on or before the fifteenth working day after the date of this agreement and the vendor does not give an extension when requested, this condition shall not have been fulfilled and the provisions of subclause 8.7(5) shall apply.

(3) The vendor shall give notice to the purchaser (“the vendor’s notice”) on or before the fifth working day after receipt of the purchaser’s notice advising whether or not the vendor is able and willing to comply with the purchaser’s notice by the settlement date.

(4) If the vendor does not give a vendor’s notice, or if the vendor’s notice advises that the vendor is unable or unwilling to comply with the purchaser’s notice, and if the purchaser does not, on or before the tenth working day after the date on which the purchaser’s notice is given, give notice to the vendor that the purchaser waives the objection to the LIM, this condition shall not have been fulfilled and the provisions of subclause 8.7(5) shall apply.

(5) If the vendor gives a vendor’s notice advising that the vendor is able and willing to comply with the purchaser’s notice, this condition is deemed to have been fulfilled and it shall be a requirement of settlement that the purchaser’s notice shall be complied with, and also, if the vendor must carry out work on the property, that the vendor shall obtain

5 Clause 8.2 of the REINZ/ADLS Standard Form Agreement for Sale and Purchase of Real Estate, 7th

ed, (2) July 1999.

the approval of the local authority to the work done, both before settlement.

[18] Some of the provisions in clause 8.7 of the agreement for sale and purchase are also relevant. These are as follows:

8.7 If this agreement is expressed to be subject either to the above [including clause 8.2] or to any other condition(s), then in relation to each such condition the following shall apply unless otherwise expressly provided:

(1) The condition shall be a condition subsequent.

(2) The party or parties for whose benefit the condition has been inserted must do all things which may reasonably be necessary to enable the condition to be fulfilled by the date for fulfilment.

(3) Time for fulfilment of any condition and any extended time for fulfilment to a fixed date shall be of the essence.

...

[19] The claimants had obtained a pre-purchase inspection report of the building; that is to say, a pre-purchase inspection report as to the integrity of the building and not the “invasive assessor’s report” that the applicants claim they would have required the vendor to provide. The applicants’ pre-purchase inspection report did not identify any relevant issues with the building.

The Tribunal decision

[20] The Tribunal received fairly comprehensive written submissions from the parties on the removal application. Mr Hooker, for the applicants, noted that some matters advanced in submissions to the Tribunal were not referred to in the Tribunal’s decision. I am not persuaded that this provides any grounds for granting leave to appeal, because I would not regard it as being grounds for allowing the appeal. Reading the Tribunal’s decision in respect of the Council’s application to be removed, I am satisfied that due regard was had to the primary submissions advanced. The Tribunal’s decision also dealt with applications for removal by six other respondents, issues relating to an application for removal by another respondent, and some procedural matters. Having regard to the number of matters

required to be addressed in the decision it is not surprising that the Tribunal dealt with the central issues without going into detail.

[21] The Tribunal concluded that s 44A of the Local Government Official Information and Meetings Act did not require the Council to record who issued the code compliance certificate. It found that the Building Act did not impose any obligation on the Council to differentiate between the certificates issued by a territorial authority or by a building certifier.

[22] The Tribunal further held that, although the express pleading was in negligence, in substance the claim was for breach of an asserted statutory duty. Although the conclusion flowing from that is not stated, I infer that it was that the particular duties imposed on the Council did not give rise to a right of action as advanced by the present applicants.

[23] The Tribunal also held that s 50(3) of the Building Act 1991 prevented any action against the Council provided the Council acted in good faith. Section 50(3) together with s 50(1) are important. Those provisions, so far as material, are as follows:

50 Establishing compliance with building code

(1) A territorial authority shall accept the following documents as establishing compliance with the provisions of the building code:

(a) A building certificate or code compliance certificate to that effect issued by a building certifier under section 43 or section 56 of this Act:

...

(3) For the avoidance of doubt, no civil proceedings may be brought against a territorial authority or a building certifier for anything done in good faith in reliance on a document set out in subsection (1) or subsection (2) of this section.

[24] The Tribunal concluded that there would also be “significant problems in the claimants establishing a causative link between the alleged failure on the part of the Council and the loss they are claiming”.

Discussion

[25] The applicants, in support of their application for leave, submitted that there was an adequate explanation for the delay and that there is, at the least, merit in the claim. Both propositions were firmly resisted for the Council.

[26] The delay, standing alone, would not in my judgment justify declining leave. Mr Saffioti in his affidavit explained the reason for the delay. This was based on legal advice the applicants received to the essential effect that they should wait until the Supreme Court’s decision had been delivered in the Altimarloch case.6 The underlying legal reasoning is not very persuasive, as Mr Barr submitted. However, it is understandable that the applicants proceeded on the basis of the legal advice they got, and I do not consider that they can be criticised for the delay. Coupled with this, there was no suggestion of material prejudice to the Council.

[27] In considering the merit of the claim I will apply the principles that apply when considering whether an action should be struck out on the grounds that a pleading does not disclose a reasonably arguable cause of action.7 The test applying on a strike out application may not be entirely applicable when considering the merit of a claim on an application for leave to appeal out of time. And the strike out principles for a High Court proceeding may not be entirely applicable to a removal application under s 112(1) of the Weathertight Act.8 However, I received full argument for both parties as to whether there are tenable causes of action. And applying the strike out principles favours the applicants. Applying those principles, I am satisfied that the claim against the Council cannot succeed. My reasons follow.

[28] Section 50(3) of the Building Act provides a complete statutory defence unless the applicants could establish that s 50(3) has no application at all, or that the

_{Council did not act in good faith.}

6 Marlborough District Council v Altimarloch Joint Venture Ltd [2012] NZSC 11, [2012] 2 NZLR 726 (SC), (2010) 10 NZBLC 99-700, delivered 5 March 2012.

7 That is to say, an application under High Court r 15.1. The principles, derived from Attorney- General v Prince [1998] 1 NZLR 262 at 267 and Couch v Attorney-General [2008] 3 NZLR 725 (SC) at [33], are summarised in McGechan on Procedure (looseleaf ed, Brookers) at HR15.1.02.

8 See Yun v Waitakere City Council HC Auckland CIV-2010-404-5944, 15 February 2011 per Ellis J at

[57].

[29] The question whether s 50(3) applies turns on a question as to whether the issuing of the LIM by the Council with the reference to the code compliance certificate, was something done in reliance on the code compliance certificate. This point was not really addressed in the submissions for the applicant. On a literal construction of the relevant statutory provisions, it might be argued that the information about the code compliance certificate in the LIM was not something done in reliance on the code compliance certificate, as contemplated by s 50(3), but something done pursuant to the statutory obligation under s 44A(2) of the Local Government Official Information and Meetings Act. However, statutes are not to be construed in a narrow way. And in relation to the statutory provisions in this case, the obligation under s 44A(2)(e) cannot in my judgment be construed without reference to relevant provisions in one or other of the Acts expressly referred to in

s 44A(2)(e) – that is to say, the Building Act 1991 or the Building Act 2004.9

[30] Construing the statutory provisions in this way leads to consideration of the recent decision of the Supreme Court in McNamara v Auckland City Council.10 That case considered a code compliance certificate issued by ABC Ltd. The facts differ from the present facts. For example, the information available to the Council in the McNamara case, indicative of possible problems with certificates issued by ABC Ltd, was not as comprehensive as the information assumed to be available to the Council in the present case. However, the conclusions of principle in the majority decisions in McNamara in my judgment apply to the facts that in this case are

assumed in favour of the applicants. The following discussion in the majority judgment of Blanchard, McGrath and William Young JJ (delivered by William Young J) is relevant to the issue I have to address:11

[150] In what follows in this section of the judgment we will address these issues. Before we do so, we observe that the details of the construction argument in relation to s 50(1) and 50(3) should not be allowed to obscure the reality that on commonsense reading, the section as a whole strongly supports the Council’s argument. This is because the section rests upon assumptions that territorial authorities were not entitled to go behind

9 It is also of some relevance that what is now s 44A was originally clause 74 of the Building Bill

1991. See the discussion of the history of the provision in Marlborough District Council v

_{Altimarloch Joint Venture Ltd [2012] NZSC 11, [2012] 2 NZLR 726 (SC), at [94].}

10 McNamara v Auckland City Council [2012] NZSC 34. As earlier noted, the decision was delivered

_{on 9 May 2012, after the Tribunal’s decision in this case.}

11 See also the separate judgment of Tipping J.

certifier-issued certificates and could not be sued for acting in reliance on them, provided they did so in good faith.

...

[154] What is important for present purposes is that there was nothing on the face of the certificate to suggest that it was invalid (in the sense of being beyond the competence of ABC). The Council could have ascertained that the house, as designed, was not in conformity with E2/AS1 only by checking the plans and it could only have been satisfied that the constructed house complied with E2/AS1 by inspections for which it would not have been paid. Such checking and/or inspecting lay outside the statutory functions of the Council in relation to the receipt of certifier-issued code compliance certificates. Accordingly, the Council was obliged under s 50(1) to accept the code compliance certificate issued by ABC.

[155] In cases where the territorial authority was doubtful as to the validity of a certificate, there was a power to refer those doubts and any associated dispute to the BIA for resolution. In the meantime, pending a decision of the BIA, the code compliance certificate would stand, although the reference of it to the BIA would no doubt be mentioned on any LIM. We accept that if the Council staff dealing with the code compliance certificate issued by ABC were doubtful as to its validity, they could have referred the issue to the BIA. But we are not prepared to accept an invitation from Mr O’Callahan to treat a duty to assess or investigate whether to refer as being the correlative of that ability to refer. This is because imposing an obligation on the Council to go behind an apparently valid certifier-issued code compliance certificate would be incompatible with the scheme of the legislation.

[156] On our view, s 50(1) applies to certificates which, on their face, are not invalid (or do not raise issues of possible invalidity). Such certificates are also the subject of the s 50(3) qualified immunity. We do not see this as rendering s 50(3) redundant. This because “anything done ... in reliance on” a certificate may well go beyond what is necessarily encompassed by the obligation to “accept” a certificate. To be more specific, we treat the obligation that a territorial authority “shall accept ... [a certificate] as establishing compliance with the ... building code” as intended to exclude challenge, inquiry or – and importantly – any need to take action premised on possible non-compliance, whereas the immunity is in relation to actions done in reliance on certificates, for instance issuing building consents or LIMs containing information about such certificates.

...

[160] In contradistinction, in the present case the Council, in accordance with the statutory scheme, was not issuing certificates or in any way accepting responsibility for the certification process. And the sort of diligence which Mr O’Callahan’s argument would have required of the Council would necessarily have required the Council to go behind the certificate, a process which we see as inconsistent with the scheme and purpose of the 1991 Act. Where legislation confers an immunity from suit in respect of actions taken in good faith, it can fairly be taken to have excluded a duty of care. Given this, to treat want of diligence (which is really just

negligence) as amounting to an absence of good faith deprives the immunity of any real meaning.

[31] Mr Hooker referred to the decision of the Supreme Court in Marlborough District Council v Altimarloch Joint Venture Ltd.12 In that case the Supreme Court affirmed the decision of the Court of Appeal that a Council may be liable in negligence in respect of information contained in a LIM. However, the Altimarloch case has no application because the claim against the Council in that case was for inaccurate information contained in the LIM on which the recipient of the LIM

relied. And no question arose as to the application of s 50 of the Building Act. The information in the Altimarloch LIM concerned water rights.

[32] I am satisfied that the principles discussed in McNamara extend to the facts of this case and the applicants’ argument founded on s 44A: the Council in this case acted in reliance on the code compliance certificate issued by ABC Ltd when it provided the LIM to the applicants’ solicitors. As a result, s 50(3) provides a complete defence to all of the claims unless the Council did not act in good faith. There is no pleading of an absence of good faith. As already noted, this central issue in respect of s 50(3) was not really addressed at all in submissions on the application for leave to appeal. As Mr Barr submitted for the Council, this is the situation that has continued notwithstanding the clear arguments before the Tribunal on behalf of the Council as to the applicability of s 50(3), followed by the Tribunal’s conclusion almost nine months ago that it provided a defence. It is the position in respect of a claim against the Council which commenced in a formal way in July 2011, and referral of the weathertightness problems to the Weathertight Homes Resolution Service in November 2009. In response to a question from me, Mr Hooker did not say that the applicants do intend to argue that there was an absence of good faith.

[33] I am satisfied that the Tribunal was correct in its conclusion that s 50(3) provided a complete defence. This is sufficient to dispose of the application for leave to appeal without considering other issues with the causes of action. However, it is appropriate to make some further observations in respect of the claims that are

_{advanced which indicate that they cannot succeed for other reasons.}

12 Marlborough District Council v Altimarloch Joint Venture Ltd [2012] NZSC 11, [2012] 2 NZLR

726 (SC), (2010) 10 NZBLC 99-700, delivered 5 March 2012.

[34] The cause of action asserting an actionable statutory duty cannot succeed. The point was considered by the Court of Appeal in the Altimarloch case.13 The Court of Appeal was addressing the same three causes of action as are argued, or mooted, in this case in respect of obligations under s 44A of the Local Government Official Information and Meetings Act: negligence; breach of statutory duty and the Fair Trading Act. The Court focussed on the negligence claim, which was the first

cause of action mentioned. In respect of the other two causes of action the Court said:

[70] ... The second cause of action (breach of statutory duty) is problematic. There is nothing in the statutory context to suggest an absolute and indefeasible duty to provide information. Such a duty is seldom imposed except where personal safety is involved. Further, if such a duty had been intended, we would have expected its metes and bounds to have been clearly defined along with a detailed specification of the consequences. Indeed at trial, counsel for AJVL maintained that the statutory duty relied on was merely “a statutory duty to take care”.14 On this basis, the second cause of action is simply the first cause of action with its fingers crossed. It does not warrant separate consideration. As well, the Fair Trading Act claim (with its “in trade” requirement)15 is at best an awkward fit for the LGOIMA statutory context.

[35] There is a further barrier to the statutory duty claim. A central part of the applicants’ contention is that, on a plain reading of s 44A(2)(e), there is a statutory duty to record in a LIM the fact that a code compliance certificate has been issued by a certifier, if that is the case, and in such event the name of the certifier should also be included. Mr Hooker submitted that this obligation is clear because there is the distinction in s 44A(2) between certificates issued by a building certifier – paragraph (e) – and certificates issued by the territorial authority – paragraph (d). I do not agree. The interpretation argument is based solely on the fact that there are the separate paragraphs (d) and (e). I agree with Mr Barr that the reason for the separate paragraphs is simply for the purposes of drafting clarity and because territorial authorities have wider powers than private building certifiers. The information referred to in paragraph (e) is confined to one item – any certificate issued by a

_{building certifier. Paragraph (d) refers to certificates. But it also refers to a range of}

13 _{Vining Realty Group v Moorhouse [2010] NZCA 104, (2010) 11 NZCPR 879.}

14 Altimarloch Joint Venture Ltd v Moorhouse HC Blenheim CIV-2005-406-91, 3 July 2008 per

_{Wild J at [148].}

15 Fair Trading Act 1986, s 9.

other types of information and this is information which could not be derived from a building certifier.

[36] Mr Hooker sought to reinforce the argument of statutory interpretation with a submission that, unless the Council records, when it is the case, that a certificate had been issued by a building certifier, the recipient of the LIM will not know whether the duty of care in respect of the issuing of a code compliance certificate rested on the territorial authority or on a private building certifier. That submission does not assist in interpreting the statutory provision. And it is not a persuasive submission. If a person receives a LIM which records that a code compliance certificate has been issued, with nothing more, it is not reasonably open to the recipient of the LIM to conclude that the certificate must have been issued by the territorial authority. Mr Hooker submitted, in effect, that that was the conclusion drawn when the applicants’ LIM was received. If that is the case, even if there was a general statutory duty actionable by the applicants, the action would fail at that point because it would not

be a reasonable conclusion; it would not be reasonable reliance on the LIM.16 There

is also a gap in the argument. The recipient of the LIM is not prevented from discovering the identity of the certificate issuer as a consequence of the absence of that information in the LIM.

[37] There is the applicants’ further contention that there was a breach of statutory duty by failing to include the information the Council received about ABC Ltd from the Building Industry Authority. Section 44A(2) could not be construed as giving rise to any obligation to include this information. The obligation in paragraph (e) is in my judgment confined to a statement in the LIM that a certificate has been issued under the Building Act 1991 or the Building Act 2004. There is no direction to provide additional information. This conclusion, at this point, is based on consideration of the other paragraphs in s 44A(2). These other paragraphs indicate that where other information is required it is expressly recorded, and in some cases

in considerable detail.17 As a result, I am satisfied that the words “information

_{concerning any certificate” in paragraph (e) encompasses only what was done, and}

16 As to reliance in cases of negligent misstatement in a leaky home case see North Shore City Council v Body Corporate 207624 [2011] NZCA 164, [2011] 2 NZLR 744 at [64]- [91].

17 And see the observations of the Court of Appeal in Altimarloch, above n 13, at [70], cited above at

[34].

what the evidence and other cases indicate is customarily done – a statement that a certificate has been issued without additional information, relating to the certificate itself or to the entity that granted the certificate. There is the discretionary power in s 44A(3). I am satisfied, on the authority of the Court of Appeal’s decision in Altimarloch, that the discretion contained in s 44A(3) does not give rise to an actionable duty owed to recipients of LIMs if the claim is that information was omitted from the LIM, as opposed to the inclusion of false or misleading information.

[38] As earlier noted, the claim that is said to be available to the applicants under the Fair Trading Act was not explained. It was simply adverted to. The conclusion of the Court of Appeal in Altimarloch, in the passage cited above, also disposes of this claim. In the High Court decision in Altimarloch Wild J concluded that a territorial authority is not engaged in trade when it issues a LIM.18

[39] The claims in negligence, whether they are expressed as negligent acts in respect of statutory duties, or negligent misstatement because of information not recorded, in my judgment could not succeed because they are founded squarely on the statutory provisions. As earlier discussed, there may be liability in negligence for recording inaccurate information in a LIM: see the Supreme Court’s decision in Altimarloch, earlier noted. The circumstances giving rise to a duty of care in Altimarloch are far removed from the circumstances pleaded in this case. Here, the information in the LIM was in fact accurate. There is, of course, the applicant’s claim founded on the omission of information which is a claim of negligent misstatement. But the difficulty here is the extent of the statutory duty.

[40] In North Shore City Council v Body Corporate 18852919 [Sunset Terraces] the Supreme Court granted leave to appeal to North Shore City Council, but declined leave for a proposed cross-appeal by one party, Blue Sky Holdings Ltd. The Council had issued to Blue Sky LIMs which correctly stated that a code compliance

_{certificate had been issued. Blue Sky’s claim was that the LIMs were issued}

18 Altimarloch Joint Venture Ltd v Moorhouse HC Blenheim CIV-2005-406-91, 3 July 2008 per Wild J

_{at [156].}

19 North Shore City Council v Body Corporate 188529 [2010] NZSC 79.

negligently because the code compliance certificate should never have been issued.20

At first instance Heath J held that the LIMs, being accurate, could not give rise to liability.21 Heath J’s conclusion was unanimously upheld by the Court of Appeal.22

In declining Blue Sky leave to appeal the Supreme Court said:

[1] Although we have granted leave to appeal to the North Shore City Council on the grounds set out above, we decline leave for the proposed cross-appeal by Blue Sky Holdings Ltd. It’s proposed argument that the Council was negligent in issuing a Land Information Memorandum (LIM), notwithstanding concurrent findings below that the LIM was accurate on its face, has no merit. It would be expecting far too much of a territorial authority if on every occasion on which it issued a LIM which referred back to a document which it had issued on a previous occasion, the territorial authority was obliged to consider whether the earlier document had been properly issued. Moreover, if we were to hold to the contrary, a fresh limitation period would begin to run from the date of issue of the LIM, perhaps many years after the right to claim in respect of the original document had become statute barred. That would be quite contrary to the obvious intention behind the inclusion in the building legislation of a limitation period.

[41] I am satisfied that the statutory provisions in question, and the acts and omissions of the Council which are assumed to be capable of being established, do not give rise to obligations actionable by the applicants against the Council.

[42] Even if there are actionable duties and breach by the Council, which could only be breach of a statutory duty or breach of a duty of care, the applicants would face formidable difficulties in establishing the further elements of the causes of action required to be established to recover the claimed loss from the Council. I will note some only of these.

[43] The applicants plead that they relied on the LIM when the LIM was approved under the agreement for sale and purchase. The fact of reliance is also to be assumed for present purposes, although the contention does not appear to sit easily with the fact that the applicants had obtained a satisfactory pre-purchase report on the house. More significantly, the reasonableness of that reliance must be open to question for

_{reasons earlier noted. The fact that the LIM was approved, simply in reliance on the}

20 This summary is taken from the judgment of Baragwanath J in the Court of Appeal’s decision in

North Shore City Council v Body Corporate 188529 [Sunset Terraces] [2010] NZCA 64, [2010] 3

_{NZLR 486 (CA) at [85].}

21 _{Body Corporate 188529 v North Shore City Council [2008] 3 NZLR 479 (HC) at [466]-[472].}

22 Above n 20, at [85]-[86], [179] and [205].

LIM as received, in any event does not take the claim very far. One essential premise of the applicants’ case is that if the LIM had stated that the code compliance certificate had been issued by ABC Ltd, or that ABC Ltd had been deregistered and the reasons, the applicants would not have approved the LIM, and at the end of the necessary procedures under the agreement for sale and purchase, they would have been freed from their obligation to complete the purchase. This is open to serious doubt because of the provisions of clauses 8.2 and 8.7 of the agreement for sale and purchase. The significant doubt is compounded by the applicants’ reliance on the pleaded proposition that the applicants, as purchasers, could have required the vendors to provide “a full invasive assessor’s report” of the house. This is another example of a proposition with an essential underlying premise which can, even at this early stage, be regarded as unlikely. The premise is that the vendors would either have agreed to provide the report or pulled out of the agreement.

[44] In terms of the provisions of the agreement itself, as opposed to hypothetical and speculative propositions as to what the applicants as purchasers might have done, it appears that the vendors would have been entitled to respond by stating that the purchasers were not entitled to reject the LIM because there was nothing inaccurate in it. There also appears to be a further contractual problem for the applicants. This is that the applicants failed to comply with time limits under clause

8.2.

[45] The causal link between the acts and omissions of the Council relied on by the applicants and the loss the applicants claim does not appear capable of being established. The applicants’ claimed loss is the cost of repairing their house. The causes of that loss, again assuming the relevant facts to be established, are the usual causes – faulty construction or faulty design, or both, and presumably associated with negligent oversight of the construction and negligent regulatory certification by

ABC Ltd.23 The Council was not concerned with any of these things in any manner

_{causative of the loss claimed.}

23 For the avoidance of doubt, these statements are made solely for the purposes of the present argument. I mention this in case other parties involved in the proceeding before the Tribunal are concerned that these statements might represent some conclusions of fact by the High Court. They do not.

[46] For these various reasons I am satisfied that the applicants’ claim cannot succeed. This conclusion is in turn sufficient, in my judgment, to decline leave to appeal out of time. Although, in a technical sense, it is a decision to decline leave to appeal out of time, in substance it is a conclusion that the Tribunal’s decision to remove the Council as a party was correct.

Result

[47] The application for leave to appeal is dismissed.

[48] The Council is entitled to costs. If the parties are unable to agree on the quantum of costs, a memorandum should be filed and served for the Council within one month and any response for the applicants should be filed and served within a

_{further month.}

Woodhouse J