Top bodies found liable for leaky homes

By Anne Gibson

The Government's building industry authority and the country's leading building research organisation have been found potentially liable for the billion-dollar leaky homes scandal.

Fifty homeowners in one of Auckland's largest rotting home disasters have succeeded in their claim against the Building Industry Authority and the Building Research Association, which approved products used in the construction of rotting places.

The owners of Ellerslie Oaks on Cawley St want $4.6 million and have taken action through the Weathertight Homes Resolution Service against the research association and the BIA - the statutory body that advised the Government on building controls, granted accreditation for building products and processes and approved building certifiers.

The victims have a determination from adjudicator John Green saying the two organisations owed a duty of care to the homeowners.

But the BIA's successors and the association are taking those 50 Ellerslie victims to the High Court at Auckland, seeking to have their organisations struck out of the claims.

If they succeed, they could seek costs against the Ellerslie victims for naming them in their claim.

John Gray of the Leaky Homes Action Group has called for the Government to pay for its role in the fiasco, but is worried about victims who challenge the state.

"It's a bit like poking a stick at a tiger," Mr Gray said. "The Government has made a commitment to take this all the way to the Supreme Court and people need to be well-resourced."

The BIA has so far escaped paying for the leaky homes scandal, which has instead hit local councils hard. Waitakere City Council this month backed away from challenging the High Court judgment awarding grandmother Colleen Dicks $250,900 to fix her rotten home.

RiskPool, which insures 82 councils including Waitakere, said it would challenge other cases.

The Ellerslie case differs from many others before the state or judiciary because those victims have got past the first base in their claim against the BIA. Other victims have failed.

Two years ago, the Court of Appeal ruled that victims seeking compensation could not sue the BIA because it was too far removed from the day-to-day decisions that caused the leaky building fiasco.

But Mr Green ruled the BIA was potentially liable in the Ellerslie case for two reasons:

* People had complained to it directly about private certifier ABC, which approved Ellerslie Oaks, but the BIA had failed to act on those complaints, he found.

* The BIA had received a bond from ABC, so was not at arms' length from the Ellerslie Oaks disaster.

Mr Green also found the Building Research Association was directly involved at Ellerslie because it had assessed the Harditex cladding system use there.

Weathertight Homes Resolution Service assessor Allan Miller found "numerous defects" at Ellerslie Oaks, and building expert Geoff Bayley estimated the townhouses would cost $3,621,962 to fix. That was an average of $169,426 for each end unit and $48,192 each for middle units.

Who's Who

* Building Industry Authority: Former government body which oversaw the building industry when most leaky homes were built. Now part of the Department of Building and Housing.

* Building Research Association: Industry organisation which approved products used in leaky homes.

* Weathertight Homes Resolution Service: Government-run service providing mediation or arbitration for owners of leaky homes.

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