The year in summary (2012) – Off the cuff by Timothy Bates
In light of this being the last publication of Building Today for 2012, I thought it useful to summarise in broad terms some of the issues we have reviewed this year. They include:-
- Does the LPB scheme expand the liability of builders and contractors? Our resounding answer was no, although they will become more recognisable.
- It is possible to argue in the context of leaky buildings that a delay by Council in the inspection process is negligent;
- Employees of building certifiers are not entitled to the protection afforded by section 89 of the Building Act 1991;
- Although a discharged bankrupt gets a “fresh start” post his period of bankruptcy, he can still be found liable for historic building work, if the cause of action has not accrued before the expiry of the bankruptcy period;
- The Australian Courts have held there is no duty of care owed by a developer to an owner of residential building, to exercise reasonable skill and care in the construction of residential buildings, in stark contrast to the New Zealand position; and
- Councils owe a duty of care to owners of buildings that are used for non-residential purposes.
This year also marks the second year since the Financial Assistance Package for leaky home owners was introduced. In a recent NZ Herald article it was recorded that only 12 pay outs had been made despite 1232 applications having been lodged via this scheme. In short, the scheme is not achieving the objectives the Government set out to achieve.
As a short history, the first attempt to remedy the leaky building problem was to provide leaky home owners with their own Court, being the Weathertight Homes Resolution Services. That was the 2002 Act. In 2006 the Government provided leaky home owners with a new and revised Court, being the Weathertight Homes Tribunal. In 2011 the Financial Assistance Package was introduced, but this scheme has become nothing more than a costly and time consuming distraction for all but 12 homeowners thus far.
It has always been the author’s view that something akin to the no fault Accident Compensation Scheme which grew out of the Woodhouse Report in 1972, was in fact the proper “big picture” fix to this national problem. New Zealand has a significant interest in retaining good housing stock, and I would suggest that a scheme akin to a no fault compensation scheme, promotes this end.
Some lessons will have been learned via the resolution processes provided by the Government, but there still remain so many leaky homes in existence, where the owners have no prospect of recovery such that they can repair.
As for those involved in the construction industry, many have suffered because of the following:
- First and foremost there has been a significant slow down in terms of construction work in the last few years;
- The Council’s have pushed back hard on compliance requirements (post the leaky building crisis), placing higher expectations upon the builders in terms of meeting the requisite building standards; and
- Builders are still regularly being pulled into leaky building litigation for work that was completed at the end of the 90’s (time limits allowing).
On the positive side, the construction industry may be just starting to turn in Auckland, and most likely will do so as the perceived housing shortage comes to fruition. Further, the Canterbury rebuild should move well into gear in 2013, so there is some good news at the end of a difficult time for builders.
We at Legal Vision take this opportunity to wish you a Merry Christmas and a bright and prosperous 2013.