The buyers of a $3.65 million leaky home in the leafy Auckland suburb of Remuera have had their bid to recover "substantial" costs from Auckland Council thrown out by the Supreme Court.
They have also been ordered to pay $25,000 in legal costs to the council.
Peter and Patrick McNamara bought the new home at 19 Arney Cres though a family trust in 2004.
The sale was conditional on a code of compliance certificate being issued.
The building was later discovered to be leaky and the trust sought to recover costs from the former Auckland City Council through the courts, alleging negligence.
The council in 2004 confirmed a code of compliance certificate had been issued by Approved Building Certifiers Ltd (ABC). A copy was also supplied to the trust by the vendor.
However, the trust claimed ABC was not competent to issue the certificate due to a building code change in December 2002, after construction began.
ABC at that time carried out an exercise to identify which of its projects would be affected by the code change, and notified the council that it could not certify a number of projects.
The council was to assume certification responsibilities for the projects ABC could not certify, but the company did not list the Arney Crescent property among them.
The trust argued the council should have carried out its own independent exercise to determine which certifications it needed to take over.
It alleged the council was negligent by not taking over certification responsibilities, accepting ABC's compliance certificate, and informing the trust's solicitor a certificate had been issued.
The Court of Appeal found the council did not owe a duty of care because the building owner had opted to use a private certifier, rather than the council, to certify compliance.
The majority of the Supreme Court upheld that decision and dismissed the trust's appeal.
This evening, Patrick McNamara declined to comment on the ruling but said the amount of costs the pair had sought was a "substantial amount".
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