Judges back leaky-home owners over council

Sisters Lisa (left) and Michelle Turner have fought a major battle to win compensation for their leaky Mairangi Bay townhouse. Photo / Brett Phibbs

Owners in two townhouse complexes have been backed in drawn-out leaky-building repair battles with North Shore City Council, which lawyers say may affect rates.

The Court of Appeal yesterday rejected the council's argument against paying the multimillion-dollar repair bills for the 14-unit Byron Ave apartments in Takapuna and the 21-unit Sunset Terraces in Mairangi Bay.

Both complexes have had severe leaks and owners, including Byron's Pauline Hough and Sunset's Michelle and Lisa Turner, fought marathon battles through the High Court to win big awards.

The council appealed against both cases and lost.

The council issued building consent for the Byron Ave development, inspected it and signed that off but declined to issue a code compliance certificate.

On the Sunset development, the council inspected and issued code compliance certificates on the developments. North Shore Mayor Andrew Williams said the council's insurer RiskPool took the decision to appeal, partly to seek clarification on points of law.

Councils, including North Shore, have pleaded for the Government to play more of a role in paying for the leaky-building disaster, estimated to cost $11 billion to $22 billion to fix.

Building and Construction Minister Maurice Williamson ditched a deal he was negotiating with mayors last year. In the next few weeks, he is due to announce a new scheme, saying last month that discussions were held between representatives of the Prime Minister's Department, Finance, Treasury and Department of Building and Housing.

Paul Grimshaw, of Grimshaw & Co, representing owners in Byron Ave and Sunset Terraces, said the decisions strengthened the arm of his 6000 leaky-building victim clients but would probably not result in much higher rates for North Shore residents.

"It might increase rates marginally, to a degree, but these decisions are simply reaffirming High Court rulings and the council was already exposed to this already."

Further appeals to the Supreme Court would fail because the two decisions were so robust. "The council should quit while it's behind," he said.

Gareth Lewis, a Grimshaw partner who represented the Byron Ave owners, said the decisions were the most significant rulings on leaky homes since the disaster began to unfold about a decade ago.

"The court rejected arguments by the council that it should not owe a duty of care to investor-owners or owners in large-scale developments where other professionals are involved. In the Byron Ave decision, the court upheld High Court awards to the body corporate and the 12 owners of more than $2 million and increased the general damages awards for distress and anxiety for investor owners from $12,500 to $15,000, and for resident owners from $20,000 to $25,000."

HIGH COURT RULINGS

ONE
In May 2008, Justice Paul Heath ruled against Shore developers Robert and Kay Barton over Sunset Terraces, where a $1.9 million recladding is needed and $800,000 has already been spent on a patchup. The Bartons say they have no money to pay.

TWO
In July 2008, 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 the council. The project was by architect/developer Stephen Smythe.