Victory for leaky-building owners

Owners of the huge Sacramento housing complex in Botany Downs - where many units are rotten and face possible demolition - are claiming victory after the High Court upheld their right to sue the Government's former building agency.

An application by the former Building Industry Authority (BIA) to have all claims against it struck out in the country's biggest leaky-building case has not been successful.

The BIA was facing three claims of negligence by the Sacramento body corporate.

The three BIA applications to have the claims struck out were dismissed but the court concluded that the aspect of claims against the BIA relating to its failure to amend the building code should be struck out.

"It's very cheery news," said a lawyer for Sacramento's owners, Paul Grimshaw.

"We can only hope now that the Government through the BIA lives up to what we regard are its obligations to owners in New Zealand."

The decision by Justice Hugh Williams in the High Court at Auckland is regarded as important for anybody in New Zealand owning a leaky home built with untreated timber.

Sacramento body corporate chairman Chris Kittow said Justice Williams' judgment did not affect the $19.2 million claim for remedial works at Sacramento and its general damages claim of $3.06 million for loss of value due to stigma and consequential costs.

The total claim is likely to rise before the case goes to trial, probably next year.

There are two plaintiffs, the body corporate and Mr Kittow, each suing 10 defendants - the building certifiers, builders, architects, the suppliers of cladding systems, the developer and project manager including the BIA.

There are 17 third parties listed in the case comprising some defendants who have joined parties such as other suppliers and various insurers.

"It's a very large case. It keeps growing. That's the problem," said Mr Kittow, who was waiting to see if the BIA would appeal.

A Crown Law Office lawyer, Garth Stanish, said no decision has been made on an appeal.

The BIA, or effectively the new Department of Building and Housing that replaced it last year, was still considering its options, he said.

Mr Grimshaw said that up to 3000 owners of leaky buildings throughout New Zealand would be happy with the judgment.

"The BIA is obviously Government-backed and so has unlimited funds, one would hope.

"The judge recognises that a duty may well be owed by the BIA whereas, of course, the BIA has been saying, 'We have no duty at all to the home owners of New Zealand', and the judge has said, 'I think not'."