Supreme Court to hear appeal by Southland stadium trust after claim for roof collapse rejected by Court of Appeal

The law on the duty of care owed by councils in relation to building work appeared to be relatively well settled.  In Sunset Terraces the Supreme Court held the council’s duty of care applied to all residential property including multi-unit apartment buildings.  It then decided in Spencer on Byron that the council’s duty also applied to non-residential property.  Councils owed a common law duty to exercise skill and care in respect of their statutory functions under the Building Act irrespective of the nature of the building.

Then came the Southland stadium case.

In 2015 the High Court considered a claim by the Southland Indoor Leisure Centre Charitable Trust against the Invercargill City Council arising from the collapse of the stadium roof in 2010 after a snowstorm.  The Trust claimed the Council was liable in negligence and negligent mis-statement for issuing a code compliance certificate (CCC) for the building in 2000.  The High Court held the Council owed a duty of care to the Trust, following the principle in Spencer on Byron.  It found the Council breached its duty of care and was negligent in issuing the code compliance certificate in the absence of verification that works undertaken to the roof during construction in 2000 were in accordance with the specifications.

The Council appealed.  Earlier this year the Court of Appeal (Justices Miller, Harrison and Cooper) found in favour of the Council.  The Court distinguished Spencer on Byron on various grounds including the fact the Trust was the owner which commissioned the construction project and the Trust’s claim was (for limitation reasons) based on the CCC only.

The Court decided the claim could only be brought in negligent mis-statement and not negligence.  Different considerations apply to the two causes of action including the need to establish specific reliance in a negligent mis-statement claim.   The decision of the Court to categorise the claim as one brought in negligent mis-statement claim was therefore significant.

The Court of Appeal considered whether the Council owed a duty of care in negligent mis-statement.  Justice Miller found the Council owed a duty to check an appropriately qualified person had supplied evidence the consent conditions were met and this duty was breached.  Justices Harrison and Cooper found the Council owed no duty at all.  The Court found that the Trust was unable to prove any specific reliance on the CCC.

An interesting aspect of the decision was the distinction Justice Miller drew between a claim brought in respect of the issue of the CCC alone and a claim for the negligent issue of the CCC based on earlier acts or omissions.  He stated the High Court treated the Trust’s claim as being in the former category.  This led him to conclude the claim must be brought in negligent mis-statement.

The Court’s finding that a claim based on the CCC alone must be in negligent mis-statement is open to question.  The finding was not well reasoned and the Court did not address Justice Heath’s dicta to the contrary in Sunset Terraces.  The Court’s claim that its position is supported by the Supreme Court decision in Spencer on Byron is doubtful.  In Spencer on Byron the Court considered negligent mis-statement claims based on a CCC but at no point did it consider a negligence claim based on a CCC.  The Court of Appeal appears to have read something into the Supreme Court judgment which isn’t there.

It will be interesting to see whether the Supreme Court considers there are classes of building defect cases which fall outside of the Spencer on Byron principle because of special circumstances which render it inappropriate to impose a duty of care on councils.  One hopes the Court will also address the issue of the duty of care owed by councils at the CCC stage in pure negligence claims as this will be important in the many cases where plaintiffs are within time to sue in respect of the issue of the CCC only.

 

Gareth Lewis, Grimshaw & Co