Council, engineer lose litigation escape attempt in Ponsonby's The Retro apartment case

Leaks at The Retro in Ponsonby have resulted in High Court litigation. Photo / Martin Sykes

The owners of Ponsonby's 23-unit Retro apartment block can continue to take action against Auckland Council and an engineer after those parties lost an attempt to escape the battle.

In the Retro Apartments Body Corporate and Jamac Holdings v Auckland Council, Omaha Investments No 1 and Maurice John Harris, Associate Judge Roger Bell in the High Court at Auckland ruled the council and engineer remain parties to the action.

The apartment owners are suing the council for negligence inspecting and issuing a code compliance certificate and the structural and civil engineering consultancy and its director for negligence.

The judge said the owners began litigation two years ago after the body corporate asked consultants to investigate deck defects in 2009. Repair work started but problems were more extensive than initially thought.

"In November 1999 the Auckland City Council granted a building consent for the apartments and construction started the following month. The council conducted a final inspection in January 2002.

"The engineer, who had prepared structural plans and structural calculations for the apartments, carried out a construction review to check that the apartments had been built in accordance with the building consent and the Building Code. In April 2002 it issued a "producer statement/construction review". On the same day the council issued a code compliance certificate," the decision said.

But leaks were discovered and by June, 2011, the body corporate had applied for an assessor's report on their building. They claimed $4.8m plus other damages to fix their building and take the necessary steps to proceed.

"The city council was allegedly negligent in carrying out inspections, not carrying out enough inspections, not requiring the builder and subcontractors to certify that their work had been carried out in accordance with the Building Code, and in issuing code compliance certificates when it could not be satisfied that the building work complied with the Building Code," the judge said.

The council then sued the engineer for negligent misstatement: "The council says that the engineer was negligent in issuing a producer statement when there were not reasonable grounds on which it could be satisfied that the building work complied with the Building Code. The council relied on the same defects as were pleaded in the plaintiffs' original statement of claim."

Justice Bell cited various other cases and time limitations in leaky building claims.

He then dismissed the engineer's strike-out application against the council and the council's strike-out application against the body corporate, meaning those parties remain in the action when the case returns to court.