Bonney v Cottle [2012] NZHC 909 (4 May 2012)

Last Updated: 29 May 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-427 [2012] NZHC 909

BETWEEN CALVEN DENNIS BONNEY, PATRICIA ANN BONNEY, CST TRUSTEES LIMITED AND MURDOCH HALL TRUSTEE COMPANY LIMITED Plaintiffs

AND VALERIE JOY COTTLE First Defendant

AND JOHN GILMOUR MCLINTOCK TRADING AS J. G. MCLINTOCK & ASSOCIATES

Second Defendant

AND ROBERT GERARDS MEDEMBLIK Third Defendant

AND LORETTA MARY BOLER AND ROBERT NEIL BOLER

Fourth Defendants

AND AUCKLAND CITY COUNCIL Fifth Defendant

AND TONY HERON Sixth Defendant

AND JOE STANTON Seventh Defendant

AND BRENT COTTLE Eighth Defendant

AND JOHN BERNARD TUCKER AND HEATHER MAUREEN TUCKER Ninth Defendants

AND ROGER WILLIAM CARTWRIGHT AND DAVID STEPHEN HUGHES

_{Tenth Defendants}

BONNEY V COTTLE & ORS HC AK CIV 2010-404-427 [4 May 2012]

AND BUILDING CODE CONSULTANTS LIMITED

Eleventh Defendant

AND MURDOCH PRICE BARRISTERS & SOLICITORS

Twelfth Defendant

Hearing: 5 March, 18 April and 4 May 2012

Appearances: J P J Mackie for plaintiffs

No appearance for third and seven defendants

Judgment: 4 May 2012

_{JUDGMENT OF GILBERT J}

This judgment was delivered by me on 4 May 2012 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ......................

Solicitors: Fortune Manning, Auckland: [e-mail]

[1] The plaintiffs seek judgment by default pursuant to r 15.10 of the High Court Rules against the third and seventh defendants, who have taken no steps in this proceeding.

Background

[2] The plaintiffs are the trustees of the Calann Trust. As trustees, they are the owners of a property in Ronaki Road, Mission Bay, which they purchased in June

2004 for $1,420,000. The first- and second-named plaintiffs live at the property.

[3] In the second half of 2005, the plaintiffs discovered a number of weathertightness defects and consequent damage to various parts of the building including the cladding and the timber framing.

[4] The plaintiffs rectified these defects and repaired the damage at a cost of

$762,148.40. The repairs, which were carried out between August 2007 and September 2008, included a complete reclad of the house and replacement of much of the timber framing.

[5] The plaintiffs commenced the present proceeding on 27 January 2010. The third and seventh defendants were served but took no formal steps and did not file a statement of defence. The third defendant wrote to the Court stating that his involvement was limited to designing and preparing drawings for the building consent. He says that he was not engaged to supervise the construction and his involvement with the project ceased when the building consent issued on 11 May

1999, more than 10 years prior to the commencement of the proceeding.

[6] The plaintiffs initially applied for judgment by default against the third and seventh defendants on 8 September 2011. The matter came before Keane J, who directed that the defendants be served with the amended statement of claim, upon which their application for judgment was based.

[7] Affidavits of service have now been filed showing that the amended statement of claim and a copy of the minute of Keane J dated 8 September 2011 was

served on the third and seventh defendants on 13 September 2011. No steps have been taken by either defendant following service.

Claim against third defendant

[8] The third defendant prepared the plans and specifications for the house in April 1999. The affidavit of John McLintock, a consulting engineer who specified the structural elements of the building at the third defendant’s request, confirms this.

[9] The plaintiffs claim that the plans and specifications were deficient, resulting in defects in the building and consequent damage. They have filed an affidavit from Simon Paykel, a registered building surveyor, who has particular expertise in investigating and advising on remedial works required to leaky buildings. Mr Paykel inspected the property during September and October 2007, after the remedial works had commenced. Mr Paykel considers that the moisture damage was caused by the following defects: inadequate parapet flashings, defects in the master bedroom balcony balustrade, inadequate joinery flashings, inadequate cladding control joints, insufficient cladding clearances, defects in the butyl membranes and penetrations through the cladding with inadequate flashings or other design details to ensure weathertightness.

[10] In Mr Paykel’s opinion, the third defendant must take responsibility for the master bedroom balcony balustrade defects and for the moisture problems associated with the penetrations through the cladding system including in the location of an electrical meter box.[1]

Claim against the seventh defendant

[11] The seventh defendant was a certified building inspector who carried out the gib-nail and external linings inspections on 16 September 1999.[2] These inspections are relied on by the plaintiffs in their claim against him.

[12] Mr Paykel considers that the seventh defendant should have detected the same defects for which the third defendant was responsible, namely the defects in the master bedroom balcony balustrade and the inadequate waterproofing around the penetrations through the cladding. Mr Paykel considers that the seventh defendant should also have detected the lack of control joints in the cladding system.

[13] Mr Paykel considers that the defects for which the seventh defendant is responsible required the same remedial works and therefore gave rise to the same costs as are claimed against the third defendant.[3]

Special damages

[14] Mrs Bonney states in her affidavit that the plaintiffs engaged Sansom Contract Services Limited to undertake the remedial works.[4] The original contract sum was $289,120, but numerous variations were required as the work progressed. These variations totalled $511,817.47. The final payment to Sansom was therefore

$800,937.47. The plaintiffs have deducted from this the sum of $75,317.79 for various amenities on the property unrelated to the repair of the house. This reduces the total sum claimed to $725,619.68. In addition to this sum, the plaintiffs claim

$36,528.72 for architectural and engineering fees, investigation costs and other sundry costs including “cat boarding” costs while the works were carried out. When the matter was first called on 5 March 2012, the total sum claimed against the third and seventh defendants was therefore $762,148.40, not the amount shown in the amended statement of claim of $799,686.45.

[15] I was not satisfied that the plaintiffs had demonstrated to the requisite standard that the third and seventh defendants were responsible for this sum. It was not clear to me that the whole of these costs were caused by the defects for which they were responsible. Mr Mackie, for the plaintiffs, sought the opportunity to provide further submissions and information. Further conferences were held on

18 April and 4 May 2012 for this purpose.

[16] Mr Mackie advises that the plaintiffs now seek judgment against the third and seventh defendants for special damages totalling $24,502.44. Mr Mackie has provided me with a spreadsheet prepared by the plaintiffs’ quantity surveyor showing the composition of this sum. I have compared that spreadsheet with the evidence in the affidavits of Mrs Bonney and Mr Paykel and I am satisfied that the costs identified are directly linked to the particular defects for which the third and seventh defendants are liable.

General damages

[17] The plaintiffs also claimed general damages of $50,000 in compensation for stress and inconvenience as a result of discovering the defects and the scale of the repair costs, concern about the diminished value of the property, anxiety arising from the uncertainty of owning and living in a property affected by moisture, rot and decay and the inconvenience of having to relocate to a boat while repairs were undertaken.

[18] Mr Mackie accepted that general damages at that level could not be justified against the third and seventh defendants. He seeks a revised award of $2,000 under this heading against both defendants. I accept that this is appropriate.

Limitation

[19] I have considered whether judgment should be declined on limitation grounds. Prior to being amended by the Limitation Act 2010, which came into force on 1 January 2011, s 393 of the Building Act 2004 provided:

393 Limitation defences

(1) The provisions of the Limitation Act 1950 apply to civil proceedings against any person if those proceedings arise from—

(a) building work associated with the design, construction, alteration, demolition, or removal of any building; or

(b) the performance of a function under this Act or a previous enactment relating to the construction, alteration, demolition, or removal of the building.

(2) However, civil proceedings relating to building work may not be brought against a person after 10 years or more from the date of the act or omission on which the proceedings are based.

(3) For the purposes of subsection (2), the date of the act or omission is,—

(a) in the case of civil proceedings that are brought against a territorial authority, a building consent authority, a regional authority, or the chief executive in relation to the issue of a building consent or a code compliance certificate under Part

2 or a determination under Part 3, the date of issue of the consent, certificate, or determination, as the case may be; and

(b) in the case of civil proceedings that are brought against a person in relation to the issue of an energy work certificate, the date of the issue of the certificate.

[20] Work in connection with the construction of a building, including design

work, is “building work” as defined in s 7 of the Act.

[21] The claim against the third defendant arises from building work, being building design. The claim against the seventh defendant also arises from building work, being work in connection with the construction of the building. Section 393 of the Building Act 2004 therefore applies to the claims.

[22] The claim against the third defendant is based on acts or omissions in the preparation of the plans and specifications in April 1999.[5] The proceeding was not commenced until 27 January 2010. It follows that the third defendant has an absolute limitation defence to the claim against him.

[23] The claim against the seventh defendant is based on acts or omissions in the course of carrying out the gib-nail and external linings inspections on 16 September

1999,[6] more than 10 years prior to the commencement of this proceeding. The

seventh defendant also has an absolute limitation defence to the claim against him.

[24] The plaintiffs sought to overcome the limitation obstacle by submitting that the third defendant’s work in preparing the plans and specifications was not building work. Alternatively, counsel submitted that such work was not complete until the

code compliance certificate was issued on 28 January 2010, just within the 10 year period prior to issue of the proceeding. The plaintiffs submitted that the same limitation considerations applied to the seventh defendant “because he is being sued in relation to his negligence as a building inspector”.

[25] I reject these submissions. The work carried out by the third and seventh defendants is building work for the purposes of s 393 of the Building Act 2004. The third defendant is sued solely for acts and omissions relating to the preparation of the plans and specifications in April 1999. The issue of the code compliance certificate is irrelevant to the claim against the third defendant. The fact that both defendants are sued in negligence does not mean that the long stop limitation period does not

apply in addition to the separate limitation period in the Limitation Act 1950.[7]

[26] Although not relied on by the plaintiffs in their submissions, I have considered the well-known judgment of Tipping J in Humphrey v Fairweather,[8] which clarified that a limitation defence under the Limitation Act 1950 had to be pleaded and proved by a defendant. The limitation does not bar the bringing of an action and does not extinguish the right of action; it merely provides a defence. The Court will not take a time point under the Limitation Act if the defendant does not wish to raise it. It is an affirmative defence which must be pleaded and proved by the defendant.

[27] The language of s 4 of the Limitation Act 1950 considered by Tipping J in Humphrey is in materially the same terms as the language employed by the legislature when enacting s 393 of the Building Act 2004.[9] Both sections restrict the bringing of proceedings after the stipulated period. By employing the same language when enacting s 393, the legislature can be taken to have intended that the longstanding and well-known interpretation of that same language in Humphrey

_{would apply.}

[28] Accordingly, I have reached the conclusion that although both defendants would have had an absolute limitation defence to the claims had they pleaded it, the limitation defence does not extinguish the plaintiffs’ claims and it is not for the Court to take the time point when the defendants have not done so. No statement of defence having been filed, the plaintiffs do not need to prove liability. The scope of the trial is limited to the assessment of damages in terms of r 15.10 of the High Court Rules.

Conclusion on claims against third and seventh defendants

[29] I am satisfied, on the basis of the affidavits of Mrs Bonney, Mr McLintock and Mr Paykel, that the plaintiffs have shown that the third and seventh defendants were both negligent and responsible for the repairs referred to by Mr Paykel in his affidavit and for which Mr Mackie now seeks judgment. Mr and Mrs Bonney have suffered the inconvenience of having to relocate to a boat while repairs were carried out. They have also suffered the inconvenience and distress of living in a property with weathertightness defects. They are entitled to the general damages sought by Mr Mackie to compensate for this.

Result

[30] Judgment is entered in favour of the plaintiffs against the third and seventh defendants in the sum of $24,502.44.

[31] Judgment is entered in favour of each of the first- and second-named plaintiffs against the third and seventh defendants for the sum of $2,000 for general damages.

[32] The plaintiffs are entitled to interest on the judgment sum pursuant to s 87 of the Judicature Act 1908 from the date of commencement of the proceeding to the date of judgment.

[33] The plaintiffs are entitled to costs on a category 2B basis against both

_defendants.

M A Gilbert J

---

[1] _{Affidavit of Simon Paykel sworn on 21 July 2011 at paras 48, 117 and 126.}
[2] Job Card, Exhibit D to Mr Paykel’s affidavit.

[3] _{Paras 47, 74 and 116 of Mr Paykel’s affidavit.}
[4] Affidavit of Patricia Ann Bonney sworn 22 June 2011 at para 14.
[5] _{Amended Statement of Claim, paras 50 and 53.}
[6] Plaintiffs’ submissions (30 March 2012), paras 4.1 and 4.2.
[7] _{The Limitation Act 1950 applies in this case, not the Limitation Act 2010.}
[8] _{Humphrey v Fairweather [1993] 3 NZLR 91 (HC).}

[9] The wording was changed when the Act was amended by the Limitation Act 2010 and now provides that “no relief may be granted” in place of the earlier wording which provided that no proceedings may be brought. The amended provision came into effect on 1 January 2011 and does not apply in this case.