Interlocutory Application to Set Aside a Third Party Notice
Soulis v Wellington City Council & Ors
Interlocutory Application to Set Aside a Third Party Notice
Background
The plaintiffs claim against WCC and Mr Blades who was the structural engineer for negligence and misreperesentation in the construction, inspection and certification of an allegedly defective residential dwelling now owned by the plaintiffs. WCC joined the former owners of the property, the Gambitisis, who on the outset seems to have applied for a building consent for the dwelling as a residence for themselves and their family on 5 August 1993. In the application, the section marked “Builder” seems to have been completed with the words “refer to owner”.
The Gambitisis seems lived in the generally completed dwelling until 1999. WCC wrote to the Gambitisis informing that WCC was unable to issue a Code Compliance Certificate for the dwelling until a number of listed items were completed or remedied. The next day Gambitisis had entered into an agreement to sell the property and the dwelling at a price of $730,000. On 5 August 1999 WCC wrote to the Gabitsis’ solicitors to confirm that if the outstanding matters noted in the interim CCC were addressed, the dwelling would be code compliant and this was forwarded to the Plaintiff’s solicitor. The sale of property to the plaintiffs was settled with a retention pending completion of the remedial works and the issue by WCC of the final CCC. The CCC was issued on 6 September 1999.
Decision
It was decided that whether or not an owner can be liable to subsequent purchasers for defective construction work is always an intensely factual question. On the evidence of the other defendants, it is contended that there was no head contractor engaged by the Gambitsis and there were as many as four builders employed by them direct during the course of the construction work. They also attended the site meetings and they chose not to engage an independent head contractor or project manager but effectively took those roles themselves. It was satisfied that the argument that the Gambitisis did owe a duty of care here which has been breached is not so clearly untenable that the third party notice against them should be set aside.
It was alternatively argued that even if they did owe a duty of care, the plaintiffs waived any claim against them with respect to the identified defects before they proceeded with settlement as they Plaintiffs proceeded to settle notwithstanding these defects in reliance on the representations of the WCC and Mr Blades. Alternatively they argued that the Plaintiff’s suffered no loss as a result because they proceeded with the purchase in reliance on the representations and certifications made by WVV and Mr Blades. These issues were not matters to be determined summarily.