Weathertight Homes Tribunal

If you want to respond to a claim made against you to the Weathertight Homes Tribunal, you must make your response in writing within 25 working days of receiving the claim.

Your response must address each cause of leaking identified in the claim, stating:

• whether you accept or dispute the cause
• whether you accept or dispute responsibility and liability for the cause
• all the supporting evidence.

Requests for extensions to the time limit are unlikely to be granted unless there is a very good reason. If responses are not received in time, the Tribunal may progress the claim without them.

Joinder and removal applications

When a respondent believes other people or companies not named by the claimant are liable under the claim, they can apply to the Tribunal to have that person or company joined as a respondent.

The application must be filed in writing and should include:

• the correct name/s and current address of the person, company or entity
• evidence of the proposed respondent's liability
• their causative link to the claim.

A joinder application should be made prior to the preliminary conference, and must be served to the new party and all other parties at the same time as it is filed with the Tribunal.

If a respondent believes they have no liability under the claim, they can apply to be removed from the claim. Such removal applications must be filed in writing and served to the claimant and other respondents at the same time.

Removal applications will generally be considered during the preliminary conference. If the removal is disputed and cannot be decided without hearing evidence from witnesses, then the decision must wait for the formal hearing.

Common defences

Below we have highlighted some key points about what is required for each of these defences and arguments. It's important to remember that this informatoin should only be used as a starting point and not the basis upon which to build your entire response.

The most common defences opposing a claim are:

Mitigation of loss

Respondents will frequently argue that the claimants have failed to mitigate their loss by not undertaking repair work in a timely manner. The issue to be decided is whether the claimant has acted reasonably.

A claimant is only required to act reasonably. Whether he/she has done so is a question of fact in the circumstances of each particular case. He/she must however act not only in his/her own interests but also in the interests of the respondents and to keep down the damages so far as it is reasonable and proper by acting reasonably in the matter. One test of reasonableness is whether a prudent person would have acted in the same way.

Obviously, "reasonableness" is an all-important factor to take into consideration directly linking to the interests of the respondent/s. A flexible but fair approach is thereby called for. Claimants should not necessarily be expected to have chosen the cheapest option, but equally if the cost is excessive, then the amount awarded could be cut back.

For cases on mitigation of loss see:

• White v Rodney District Council: In finding that the claimants mitigated their loss, the High Court stated that the onus of demonstrating that the claimants did not act reasonably lies with the respondents and that it requires an assessment of all the evidence relating to the claimants' circumstances, why they acted in particular ways, and the relevant sequence of events.
• Hearn Family Trust v Parklane Investments Ltd (Interim Decision): The mitigation of loss argument failed as money spent on mitigation would have been wasted for it would not have prevented the claimants' loss in any event.
• Hartley v Balemi: By virtually watching their house slowly deteriorate before them and did not take reasonable steps to protect their investment, the claimants failed to mitigate their losses.  One of the claimants is a builder who would be expected to have some ideas on how to stop the leaks and if he did nto know, it woudl have been more of a reason to seek outside professional assistance.

Betterment and depreciation

When dealing with a claim for damage, after deciding liability (responsibility for the damage) and quantum (the amount) the Tribunal must consider whether the repair work will do more than restore the property to the condition that it would have been in if it had not been a leaky home.

For example, if through normal fair wear and tear the property would have required maintenance or a repaint anyway even if there had not been any weathertightness issues then the cost for such maintenance or a repaint may be reduced in deciding the amount respondents should pay.

In other words if the repairs or remedial work make the property "better" than before, it may be necessary to reduce the damage award in order to take "betterment" into account, which is similar to taking depreciation into account.

It is important to note however that if there are certain matters that are required in order for the repairs to comply with the requirements of the Building Code, it is unlikely that such repairs will be considered to be betterment, such as cavities. 

For cases on betterment and depreciation look at:

• Tabram v Slater: The amount of the claim was reduced for betterment as the evidence showed that the stone cladding on the pillars cost more than the standard cladding that was used on the rest of the property.  Amounts were also deducted for the interior and exterior paintwork on teh basis of how long it would be before the house would need a repaint in any event.
• Jones v Sircombe: A reduction was made in terms of the roofing material used to re-roof the dwelling as the cost of the Colorsteel installed in 2005 which came with explicit warranties for 15 years, was twice the cost of the Onduline used.
• Sell v Harris: No reduction was made for betterment in substituting cedar weatherboard for monotek as it only involved a slight additional cost when the total systems for both cedar weatherboards and monotek are compared.

Contributory negligence

Section 3 of the Contributory Negligence Act 1947 also allows for apportionment of responsibility for the damage where there is fault on both sides or fault on the part of the claimant and other parties. Fault is defined in s2 as meaning:

"..negligence, breach of statutory duty, or other act or omission which gives rise to a liability in tort or would, apart from this Act, give rise to the defence of contributory negligence."

As outlined by the Contributory Negligence Act 1947, the defence of contributory negligence can only arise where a claim in tort or negligence has been made against the respondent alleging contributory negligence.

There is also a lengthy discussion on contributory negligence in the Auckland High Court's in Hartley v Balemi. Justice Stevens stated that the question of fault needed to be decided objectively and required the claimant to exercise such precautions as would someone of ordinary prudence.  A good discussion of the legal principles relating to contributory negligence can also be found in the High Court's decision in Sunset Terraces.

The situations that may give rise to arguments of contributory negligence in the Tribunal may therefore include:

• The claimants knowing, or ought to have reasonably known, of the weathertightness defects occurring to the house prior to purchase.
• Where the claimants had building work undertaken on the property and supervised the building work, for example, such as labour-only builders
• The claimants failing to take all reasonable steps to check out a property although they knew, or ought reasonably to have known, of the risks associated with monolithic-clad houses.
• The claimants failing to check the LIM report on the house, failing to check whether there was a Code Compliance Certificate or failing to obtain a building inspection report.  These arguments are still considered by the Tribunal to be moot.

Other examples of cases where the issue regarding contributory negligence was raised include:

• Byron Ave: The High Court reduced the Trust's claim by 25% as the trustees failed to take any steps to enquire into or to protect the Trust's position when they knew that the building had defects and that the Council refused to issue a Code Compliance Certificate due to those defects
• Folwell Family Trust v NC Developers Ltd: The claimant Trust, through the actions of its trustee, was contributorily negligent.  By contracting the various trades involved and without engaging someone of competence to supervise the construction work, particularly given the complex design associated with the assembly and installation of the roof window, the trustee assumed responsibility for the management of the build on behalf of the Trust.
• Lee v Napier City Council: The claimants were not contributorily negligent in failing to either carry out or obtain a pre-purchase inspection.  The fact that one of the claimants had previous building experience was irrelevant as the question of fault is to be determined objectively.
• Sell v Harris: The claimants' claim was reduced by 10% as the landscaping work carried out by the claimants after the construction was completed contributed to the damage occurring to the house.

Limitation periods

Even though a claim has been found eligible, all or part of the claim may not be successful because the limitation period for that particular claim has expired. These limitation defences can be raised where the claim has been found eligible as different limitation periods can apply to different types of claims. Whilst eligibility is based on 10 years from when the house is built, the date in which the house was built may not be the relevant date from which the time period starts.

Note: If a claim is found to be ineligible, only the Chair of the Tribunal has jurisdiction to reconsider that decision under section 49 of the Weathertight Homes Resolution Services Act 2006.  The Tribunal itself does not have the jurisdiction to reconsider that decision (Spooner Family Trust v Elle Cee Developments Ltd).  However respondents can still raise other issues of limitation as listed below.

The main limitation periods that apply to WHT claims include:

• Section 14 of WHRSA 2006 provides that for a claim to be valid the dwellinghouse must be built within a period of 10 years immediately before the day on which the claim is brought. A person brings a claim by applying for an assessor's report under section 9.
• For claims of negligence the limitation period is 6 years from the time of the negligent actions (s4 Limitation Act). However, if it is a latent defect as is often the case with leaky buildings the time begins to run when the claimant discovers, or ought with reasonable diligence to have discovered the defective state of the property (Invercargill City Council v Hamlin and Sunset Terraces (CA)).
• In contract, the time period must be within six years of the date of the breach of the contract - section 4 Limitation Act 1950. This is subject to an extension for disability, acknowledgement and part payment or fraud and mistake as set out in sections 24-28 of the Limitation Act.
• Section 91(2) Building Act 1991 & section 393 Building Act 2004 prohibits civil proceedings arising from building construction 10 years after the date of the act or omission on which the proceedings are based. This is the "long stop" period - ie, even if it is not statute barred in tort (discoverability test) a claim could be barred under the Building Act.

For cases on Limitation periods see:

• Simpson Family Trust v Wellington City Council: Even though the claim was brought within 10 years of the date of when the house was built, it was brought 6 years after the date the claimants discovered the damage.  As a result almost all of the respondents had the claims against them struck out as the claims against them were time-barred under the Limitation Act 1950.
• Kells v Auckland City Council: The High Court confirmed the Tribunal's decision that the joinder of parties in the Tribunal is different from in civil proceedings in the court.  The relevant limitation period for the filing of claims in the Tribunal is 10 years, and the filing of that claim with the Department of Building and Housing stops time running against all parties.
• Patridge Family Trust v McClune: All of the respondents were removed from the claim because the work they carried out which led to the leaks, occurred more than 10 years before the claimants filed their claim.
• Burns & Ors as Trustees for the Future Holdings Trust v Argon Construction Ltd: The claimants discovered a substantial number of defects in early 1997 and argued that they noticed signs of leaking in late 2003.  The claim was not filed until May 2004.  In finding that the 1997 discovery was made when the nature of the defects and the required remedial work were not fully understood until 2003, the High Court refused to strike out this claim prior to hearing as it was not clear when the cause of action accrued.

If a respondent is successful in arguing all the elements of these defences, the Tribunal can either remove that respondent from the proceedings or deliver a judgment stating that the respondent was not responsible for the damage.

Claims Subject to Previous Settlement or Determination

Under sections 60(5) and (61(1) of the Weathertight Homes Resolution Services Act 2006, claimants are barred from having their claim adjudicated in the Tribunal if their claim has already commenced elsewhere.  But what happens if the claim before the Tribunal has already been resolved elsewhere?

Although the Weathertight Homes Resolution Services Act 2006 does not specifically provide for situations where a claim has already been resolved elsewhere, it is well established in New Zealand law that parties cannot re-litigate questions that have already been judicially determined.  This is known as res judicata or estoppel.  In order to be successful in a claim of res judicata or estoppel the following elements must be established:

• The decision relied on must be a judicial decision; and
• The decision must be made by a court or tribunal of competent jurisdiction; and
• The decision must be final; and
• The decision must determine the same question as that in the litigation in which estoppel is raised or the decision involves the same issues; and
• The parties to the judicial decision, or their privies, were the same persons as the parties to the proceedings in which estoppel is raised.

Case Examples:

• Hamilton v O'Donnell Brick and Tile Ltd: The claim was dismissed because the subject matter of the claim before the Tribunal had already been determined in the Disputes Tribunal, in effect amounting to res judicata.
• Kidd v Grumball: The claim was terminated as the subject matter was already determined in the Disputes Tribunal.
• Easton v Mayers: A builder was unsuccessful in raising the defence of res judicata in arguing that the work done by him was the subject of a claim against him by the previous owner in the Disputes Tribunal in 1998.  However the Tribunal found that the parties to the proceedings in the Disputes Tribunal were not the same parties in these proceedings as the previous owner was not the claimant in the proceedings before the Tribunal.
• Manuel Family Trust v Waitakere City Council: The builder successfully argued that the same issues to be determined by the Tribunal were identical to the issues raised in the District Court.  Also in the District Court proceedings Mr and Mrs Manuel jointly owned the property as individuals.  However in the Tribunal, the Trust owned the property of which Mr and Mrs Manuel were trustees.  The Tribunal therefore held that Mr and Mrs Manuel, as trustees, were the same party in the District Court proceedings.  For these reasons the Tribunal reduced the amount of the claim by 15%.