Section 40 Buildings not to be constructed, altered, demolished, or removed without consent

(1)A person must not carry out any building work except in accordance with a building consent.

Breach of this provision comes with a maximum fine of $200,000.

Facts.

Mr Tan was employed by Alpha Laboratories (NZ) Ltd to manage the expansion of a block of units in East Tamaki for use in a food processing business.  On 7 July 2014, an officer from the Auckland Council building compliance team visited the property and observed that substantial building works had been completed.  However the Council had not received any application for building consent in respect of these works. 

Mr Tan did not do any of the building work.  His work was limited to instructing and supervising the actual builders.  He admitted that he knew the building works completed required a consent, however he instructed the building works to advance, so as to avoid delay.  He was prosecuted pursuant to section 40 of the Act for carrying out building works without a consent, and was found by the District Court to be in breach of this section. 

The critical issue – What is the meaning of the words “carry out”?

The central issue on appeal was the meaning of “carry out” which is an undefined term in the Building Act 2004.  In the District Court it was held that the words must be interpreted to include any person who is engaged in building work and development at a level or in a role that provides a meaningful contribution to making the building work happen.  This means that a building supervisor would clearly be one who was carrying out the work. 

Mr Tan through Counsel argued for a much narrower interpretation of the words “carry out” such that they did not include the concept of supervision.  In support of this narrow interpretation a series of arguments were presented by his Counsel. 

Fairness is irrelevant to the interpretation of a statute, the focus must be on clear words. 

The Court held that the ordinary meaning of the words was broader enough to encompass the concept of supervision, and such an interpretation was also more consistent with the purpose behind the Act which was to strengthen the regulation of building.

Wider Interpretation is inconsistent with other provisions of the Building Act 2004.

Mr Tan argued that a wider interpretation of these words would render section 386 of the Act redundant.  Section 386 was a deeming provision that specifically imposes liability upon a principal where representatives, agents and contractors carry out the actual works.  He also argued that the definition of “building work” did not include supervisory work and thus this showed that building work is the doing of physical work itself and not anything broader.  Furthermore he argued the Licensed Building Practitioner regime imposed liability in a supervisory capacity. The lack of express reference to supervision suggested that Parliament intended to exclude supervision from the scope of section 40. 

The High Court disagreed with this argument and instead concluded that the wider interpretation of these words to include supervision, was consistent with these specific provisions found elsewhere within the Act. 

The High Court also found that the wider meaning had support in the legislative history of this section and the subsequent amendments of the Building Act 2004.  Finally it was held that a wider interpretation of the words “carry out” in preference to the narrow meaning argued for by Mr Tan avoided absurdity and injustice. 

At paragraph 68 Justice Brewer states:-

“It would indeed be nonsensical and “savagely unfair” on those “wielding the hammers and shovels to expose them, and not those who supervise or instruct them, to prosecution.”

It follows that his Honour reached the conclusion that the term “carry out any building work” in section 40 was not limited to the physical carrying out of the building work but includes the supervision or instruction of those who physically carry out the building work.  The Appeal was dismissed.  The District Court decision remains in place, although a fine is yet to be issued. 

This decision shows the perils of carrying out building works without a building consent.

NOTE: This article is not intended to be legal advice (nor a substitute for legal advice).  No responsibility or liability is accepted by Legal Vision to anyone who relies on the information contained in this article.

Overview

This claim before the High Court was an appeal of a decision in the District Court.  The Appellant, being GPE Holdings Limited (“GPE”) was a property developer.  The units in the Greta Point complex to which the appeal relates were completed between 31 January 2001 and 29 June 2001. The proceedings in relation to this appeal commenced on 21 April 2011. BASF New Zealand Limited (“BASF”), being the Third Respondent in this subject proceeding, imported and distributed building products.  In or around 2000, GPE was approached by BASF for the purposes of convincing GPE to use its product (namely HLM 5000) instead of Butynol (which had been specified in the plans for the complex at the time BASF approached GPE) on the decks and roofs of the complex. BASF represented (among the other representations) that its product could be used as a waterproof sealant on decks that were to be constructed on the outside of each apartment unit of the complex, which were found to be misrepresentations. The act in this case (being the misrepresentations made by BASF) occurred in 2000. Accordingly, if those misrepresentations by BASF were considered to be in connection to “building work”, then section 393(2) of the Building Act 2004 would apply, which meant that any civil proceedings relating to those representations would be barred, since it would have been more than 10 years from when the representations were made to when the proceedings were commenced on April 2011. In the alternative, if those representations were not considered to be in connection to “building work”, then the 10 year time limit in section 393(2) of the Act would not apply.

Issue:

The issue of appeal was whether the representations made by BASF fall within the definition of “building work” in section 7 of the Building Act 2004 (“the Act”). If the representations made by BASF were “building work”, then GPE’s proceedings against BASF would be barred by the 10 year time limit set out in section 393(2) of the Act.

What is “building work”?

(i)         Section 7 of the Act

In deciding if BASF’s representations fell within the definition of “building work”, Justice Collins first referred to section 7 of the Act which provides that “building work” means “work for, or in connection with, the construction, alteration, demolition, or removal of a building.” The term “in connection with” in this definition is pivotal in this case.

It was held that the words “in connection with” have a wide meaning requiring merely a link or relationship between one thing (A) and another (B).  Applying that concept to the current case, in order for the work (A) to be connected with the construction, alteration, demolition or removal of a building (B), BASF performing (A) must have had (B) in mind.  This means that at the very least that plans and designs for the construction of (B) have to be in existence.

(ii)        Policies underpinning and the purpose of the definition

Justice Collins noted that Parliament intended that the acts or omissions of those involved in all phases of the construction of buildings would be protected from civil liability if proceedings were commenced 10 years after the act or omission in question. That objective was achieved by ensuring the definition of building work was broad and covered all work in connection with the construction, alterations, demolition or removal of a building.

(iii)       Context in which BSAF made the representations

It should be noted that the question as to what is “building work” within the meaning of section 7 of the Act is dependent on the facts. In this case, the context in which BASF made its representations involved buildings which had been planned or designed. At least one unit had been completed and a deck constructed which was used to “flood test” BASF’s product. As a result, Justice Collins held that BASF’s representations were work in connection with the construction of a building and thus fell within the definition of “building work”. This meant that the 10 year limitation period applied. Accordingly, the claim as against BASF could not be pursued because it was out of time.

Conclusion

This decision illustrates the point that representations made in connection with the construction, alteration, demolition or removal of a building which had been planned or designed is likely to fall within the definition of “building work” under section 7 of the Act which would trigger the 10 year time limit in section 393(2) of the Act.

NOTE: This article is not intended to be legal advice (nor a substitute for legal advice).  No responsibility or liability is accepted by Legal Vision to anyone who relies on the information contained in this article.