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The courts are beginning to nail developers personally for the multi-billion-dollar rotting-homes crisis.
Landmark rulings have been made against the chiefs of two big Auckland projects.
Decisions from the High Court at Auckland have held developers financially accountable, a move hailed as extremely significant by lawyer Matt Josephson of leaky-building specialists Grimshaw & Co.
"The big news is that developers are being held liable despite the fact that they used a company. The two cases are fact-specific but it's got to be good news for homeowners."
Developers' personal assets, such as their houses, were no longer automatically protected and could be used in claims for settlement in big disputes, he said.
In the first case, Justice Paul Heath ruled that prominent developer Greg Nielsen must pay $1,199,389 for creating poorly built leaky townhouses at 3 Laxon Tce, Newmarket.
Mr Nielsen, who sought legal aid but ended up representing himself, has been involved in many Auckland leaky-housing complexes.
In the second case, Justice Ailsa Duffy ruled against North Shore developer/project manager Brian Gailer for his role in the leaky 10-unit complex Kilham Mews near the Northcote shopping centre. A settlement hearing is pending but judgment of more than $1 million is expected to be made against him.
Order for the payment of $1.8 million to $1.9 million is being sought, of which Mr Gailer is expected to pay $1.4 million and North Shore City Council the rest.
Lawyer David Heaney, whose firm Heaney & Co acts for most councils on leaky-building issues, said the decisions provided hope for many victims.
"It has always been the case that those involved in building of leaky homes who have been negligent in the way they performed their function have been exposed to liability and now the courts are finding even directors of development companies liable."
Last May, Justice Heath ruled against Shore developers Robert and Kay Barton over the leaky Sunset Terraces in Mairangi Bay, where a $1.9 million re-cladding is needed and $800,000 has already been spent on a patchup. The Bartons say they have no money to pay.
Last July, Justice Geoffrey Venning said the $2 million-plus he awarded to owners of the leaky 12-unit Byron Ave estate in Takapuna would most likely be paid by North Shore City. The project was by architect/developer Stephen Smythe.
For most of this decade, developers have successfully escaped footing the bill for leaky homes by winding up project-specific companies once buildings are up and sold, well before leaks are discovered.
That has left victims with few places to turn except against wealthy councils.
Auckland and Wellington mayors met National before the election to discuss dividing the cost between the Government, councils and homeowners, and Auckland City Mayor John Banks has cried out against developers, builders and contractors.
He has promised to name and shame them and said it was wrong they were getting off scot-free.
Mr Josephson said leaky-building case law was still evolving but judges in the two latest cases had ruled the developers had a "non-delegable duty", meaning they could not pass the buck or hide behind companies.
The rotting-homes scandal has blighted thousands of homeowners forced to choose between a widely criticised state-funded system perceived to be too cumbersome or face the expense of litigation.
Mr Gailer described the ruling against him as "nonsense" and said he had no assets. Mr Josephson, who acted for Kilham Mews' owners, is confident of getting payment.
John Gray, president of the Homeowners & Buyers Association which is dealing with 4000-plus leaky-building victims, welcomed the latest decisions but blamed councils for signing off shoddy buildings.
* 3 Laxon Tce, Newmarket
Large townhouse project of 21 units.
Developed by Greg Nielsen.
Built May 1999-January 2000.
Severe water ingress rotted frames.
Nielsen ordered to pay $1.1 million.
* Kilham Mews, Northcote
10-unit complex at 6 Exmouth Rd.
Built August 1997-March 1998.
Developed by Brian Gailer.
Numerous leaky building problems.
$1.8-$1.9 million claim.
