Tauranga Hosts Presentation by Trish McConnell on Leaky Buildings

November 5, 2014

Recognising that there is often a lack of up to date knowledge about leaky home issues Prendos hosted a “Leaky Home Pot Pourri” for 30 lawyers and experts in the new Tauranga office located at 93 First Avenue on Thursday 23 October 2014. Trish McConnell, Chair of the Weathertight Homes Tribunal, presented on two major issues related to leaky building litigation:

  • Current issues – covering liability of employees, contractual claims against vendors, and proving loss; and
  • Experts in Courts and Tribunals – covering what expert evidence is required to support claims and responses? Potential conflict and independence issues for experts, and caucusing and hot tubs.

For those that were unable to attend the event we have highlighted the key points from Trish’s presentation below.

Employee Liability
The traditional view of employee liability stems largely from motor vehicle claims were the employee driving a vehicle has been found liable. Until recently the discussion in building cases has largely been in the context of directors or independent contractors rather than employees.

  • Hardie Boys J in Morten v Douglas Homes “It is not a fact that he is a director that creates the control but rather the fact of control, however derived, may create the duty. There is therefore no essential difference in this respect between a director and a general manager indeed a more humble employee of the company. Each is under a duty of care, both to those he deals with on the companies’ behalf and to those with whom the companies deals insofar as the dealing is under his control.

The Court of Appeal says that caution is required before concluding that an employee has assumed personal responsibility. Elements of tort approach requires a degree of personal negligence or assumption of personal responsibility. There is a presumption against such an assumption where the employee is simply acting on behalf of the company. At Paragraph 27(d). Body Corporate 202254 v Taylor [2008] NZCA 317.

The recent case law focuses on the control/assumption of responsibility test and the proximity to the claimants. Issues courts & tribunals note are training and experience, remuneration, work actually done, degree of control over work, assumption of responsibility & proximity between claimants and employee/contractor. The trend is against finding a duty in cases where the employee was not a director or senior manager.

Vendor Warranties
Saffioti v Ward 29 October 2013 CIV-2013-404-3390
Caveat emptor applies. No warranty homes have fitness for any particular purpose. Should not transform a principle of compliance with the Building Act re s 7 Building Act into a specific duty on an owner to ensure compliance with its requirements. Warranty in clause 6.5(b) & (d) of Agreement for S & P is not a warranty by non builder vendor that the building work complies with the Code. Including “all works to comply with the NZ Building Code” on plans is not an endorsement or condition – it is no more than an observation as to the standard to be observed by the builder.

Extent of warranty is that all consents and approvals required by the Building Act were obtained and that there were no (known?) departures from plans and specifications.

Proving Loss
In Ford v Ryan although vendor found to have breached the warranties no damages were awarded as claimants were unable to quantify loss. In the context of leaky homes claims respondents are not necessarily liable for full amount of the remedial costs even if it breach or negligence is established. Need to show what loss flowed from the breach.

Chee – although it was accepted house needed a reclad none of respondents were found liable for cost of reclad. Claims of inadequate remedial work or advice. Claims against pre-purchase inspectors or breach of vendor warranty eg Brebner v Collie.

Experts in the Tribunal
The Tribunal is evidence based rather than pleadings based. The Tribunal is not bound by the Evidence Act – definition of court and proceedings does not include tribunals (Chee v Stareast Investment Ltd HC AK CIV-2009-404-5255, 1 April 2010.)

Rules of evidence have been established for good reasons so Tribunal does follow them where appropriate. Ellis J however questioned whether privilege of expert reports applied to WHT (Yun v Waitakere City Council HC Ak, CIV-2010-404-5944).

Respondents often attempt rely on s57 as basis for circulated reports on a “without prejudice basis”. Responses are not primarily communications made in connection with an attempt to settle or mediate a dispute. Most parties find it cheaper to waive any privilege on reports and produce them rather than providing the relevant information in a brief, we will statement or other format.

Duty to the tribunal / court is very similar to an expert’s duty to a client – to give honest, independent, unbiased & informed advice and opinion on matters within their expertise upon which they are instructed. Duty to the tribunal applies through all phases of the tribunal process including giving evidence to support removals & joiners, mediation, expert conference and hearing.

Tribunal has a tribunal specific code of conduct:

  • Must be independent and free from compromising influences or loyalties when providing services.
  • Must not act or continue to act if there is a conflict or a risk of a conflict between the interest of the (expert) and the interest of the client.
  • Must exercise independent professional judgement on a client’s behalf.

The overriding duty when acting in litigation is to the court or tribunal concerned. Subject to this there is a duty to act in the best interests of his or her client without regard to personal interests. An expert’s duty to the tribunal / court overrides any contractual duty to their client.

Excerpts from Lawyers: Conduct Client Care Rules 2008
A conflict can arise when:

  • There are issues that raise justifiable doubts concerning the impartiality of the expert.
  • A clients instructions are contrary to an expert’s duty to the tribunal or their client.
  • An expert has potentially conflicting roles.
  • An expert has previously been instructed by another party in a related matter.

Conflict related issues arising in Tribunal Claims:

  • Giving evidence outside of the expert’s area of expertise.
  • Giving “expert” evidence about a party’s role in construction based largely on contested hearsay information or information provided by the client.
  • Where evidence is based on purposefully incomplete or minimal investigation.
  • Where the person purporting to give independent expert evidence also advised the claimants on remedial scope and was contracted to complete the remedial work.
  • Where an expert personally attacks another expert or witness.
  • Where evidence is biased towards the party that instructed or paid the expert.
  • Where a client instructs you to act contrary to code of conduct or Tribunal directions.
  • Where an expert is primarily retained by one party in all cases.
  • Where the evidence obscures or ignores alternative views or binding precedent.
  • Where evidence strays into making submissions on behalf of client or putting forward legal arguments.

The issue can be more about the weight or credibility of the evidence. Where there is a conflict, or perception of a conflict, the expert’s evidence may be given less weight and the expert could lose credibility.

How Prendos Can Help
Expert Witness – we have a thorough knowledge and extensive experience in the preparation and presentation of independent expert evidence for clients who anticipate legal action (either as a plaintiff or as a defendant) in the District Court, High Court and Weathertight Homes Tribunal. We also provide dispute resolution services of mediation, adjudication, and arbitration.

Prendos has an expert witness panel that spans key construction industry disciplines. The panel consists of Building Surveyors, Quantity Surveyors, Structural Engineers, Fire Engineers, Architects, Valuers, Adjudicators, Arbitrators and Mediators. The panel has extensive experience across the residential, multi-unit, commercial and public property sectors. Find out more information on our expert witnesses here.

For owners grappling with problems associated with a leaky home or those unsure about the status of their home the Prendos residential surveying team has experience in providing building surveying services to owners of both standalone homes and low-rise and high-rise multi-unit developments. Back in the early 1990s Prendos was the first property consultancy to alert the building industry and general public to the destructive nature and extent of the problem of leaky buildings. In the intervening years we have developed considerable investigative and remedial expertise; and many Prendos remedial design solutions are now recognised as construction industry benchmarks.

Having already helped thousands of homeowners and bodies corporate to achieve successful remediation and redress, we continue to help property owners re-establish the integrity of their dwellings – many with enhanced design features – and regain a return to full amenity and value. To find out more about how weathertightness or leaky problems affect residential properties visit our Leaky Building Resource Centre.

Please feel free to contact us if you require any further information or advice or fill in the form below to let us know about your building needs:

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