Caselaw Update
Caselaw Update
Friday 9 March, 2018
Southland Indoor Leisure Centre Charitable Trust v Invercargill City Council [2017] NZSC 190
- In our Legal Brief of 17 May 2017 we provided a summary of the Court of Appeal decision in relation to the collapse of the Southland Indoor Leisure Centre stadium roof in Invercargill. The Court of Appeal overturned the decision of the High Court and leave was subsequently granted to appeal to the Supreme Court. The Supreme Court decision was released on 14 December 2017. The following provides a summary of the outcome of that decision.
Background
- In 1999–2000 the Southland Indoor Leisure Centre Charitable Trust (“the Trust”) had a stadium built in Invercargill to provide sporting and recreational facilities. During construction from June 1999 to March 2000, Council issued building consents for various phases of the work. There were a number of inspections by Council and a number of code compliance certificates issued. As part of that process, Council relied on producer statements provided by the engineer who was engaged by the Trust.[1]
- Problems with the roof trusses over the community courts were identified during construction. The Trust engaged an independent structural engineer, Mr Harris, to review the design. He provided advice as to how the problems with the trusses should be remedied. The Trust applied for a building consent for the remedial work. A letter from Mr Harris setting out how the work was to be done was attached to the application.
- The Invercargill City Council (the Council) granted the building consent for the remedial work on the trusses. There would be no inspections of the remedial work by the Council. Instead, the building consent was issued subject to various conditions that the Trust’s engineer was to meet. The conditions included written confirmation that the work was completed consistently with the key specifications set out in Mr Harris’ letter and that individual truss measurements would be provided to the Council.
- The remedial work was undertaken in early 2000. The Council followed up on compliance with the conditions of the consent without success. An interim code compliance certificate for the building was nonetheless issued and the stadium opened in March 2000. The Council followed up again on the conditions so that a final code compliance certificate could be issued. However, before receiving this material, the Council issued a code compliance certificate for the remedial work. It was not disputed that this was negligent.
- In January 2001 the Trust’s engineer provided further information to the Council in relation to the conditions of the building consent. The information provided did not comply with the conditions of the building consent for the remedial work. Notwithstanding, the Council issued a final code compliance certificate for the last stage of the construction in April 2003.
- The remedial work on the trusses was not in fact completed consistently with Mr Harris’ specifications and was defective. (This fact was critical in respect of the Supreme Court’s findings.)
- The Trust sought further advice from Mr Harris in 2006 in relation to leaks in the roof over the community courts. The Trust was also prompted to seek further advice by reports of a collapse of a stadium in Poland under snowfall. Mr Harris confirmed that the strength of the trusses over the community courts, as designed, was adequate but set out a number of recommendations including that the truss welds and support fixings should be visually inspected and the precamber of the trusses measured. However, no inspection or measurements were carried out.
- As a result of the defective remedial work, the roof collapsed under snowfall in September 2010. The Trust subsequently brought proceedings against the Council in negligence and negligent misstatement in relation to the remedial work. The Trust was successful in the High Court. The Council appealed successfully to the Court of Appeal.
- Leave to appeal to the Supreme Court was granted on the question of whether the Court of Appeal was correct to reverse the High Court judgment. The principal issue for the Supreme Court was whether the Court of Appeal was correct to distinguish the case from the decision in Body Corporate No 207624 v North Shore City Council (Spencer on Byron)[2] on the question of whether the Council owed the Trust a duty of care. That question also required consideration of whether the Court of Appeal was right to characterise the claim based on the code compliance certificate as a claim of negligent misstatement. The other principal issue arising on the appeal was whether the Trust’s actions amounted to contributory negligence.
Reasons
- The Supreme Court allowed the appeal in part. It found unanimously that the Court of Appeal erred in distinguishing Spencer on Byron from the present case. The critical finding of the Supreme Court was that the duty of care on councils under the Building Act 1991 (and, it follows, the Building Act 2004), springs from councils’ regulatory role under that Act. The distinction which the Council sought to draw on the basis that the Trust was a commissioning owner of the building in this case was not consistent with the legislative scheme. Nor was the attempt to draw a distinction between the issuing of a code compliance certificate and councils’ other functions such as granting building consents or carrying out inspections. These functions are all directed at ensuring that buildings comply with the relevant building code. As such, the Council owed the Trust a duty of care. In addition, the claim based on the code compliance certificate should have been characterised as one in negligence, not negligent misstatement.
- The Supreme Court found by majority (Elias CJ, O’Regan and Ellen France JJ) that the Trust was contributorily negligent with the result that the damages award was reduced by 50 per cent.
- The majority of the Supreme Court also held that the Trust’s failure to have the trusses and welds inspected and the precamber measured, as recommended by Mr Harris, amounted to contributory negligence.
Conclusion
- The decision in this case turned on the particular facts. The decision serves as a timely reminder for Councils to consider their processes under the Building Act, particularly that it is satisfied that that the relevant engineering advice has been followed and/or any conditions of a building consent has been complied with prior to issuing a certificate of code compliance.
If you would like to discuss the implications of this decision or require any advice on Building Act decisions and processes, please contact James MacGillivray, Megan Crocket or Marianne Mackintosh.
[1] Under the Building Act 1991, a producer statement was a statement provided by an applicant for a building consent, or by a person who had been granted a building consent, that certain work had been or would be done in accordance with particular technical specifications (section 2).
[2] Body Corporate No 207624 v North Shore City Council [2012] NZSC 83, [2013] 2 NZLR 297 (Spencer on Byron).