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Fortune Manning Examine A Council Case

Monday 8 May 2017, 6:06PM

By Beckie Wright

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The Court of Appeal recently released their decision for the case of Invercargill City Council v Southland Indoor Leisure Centre Charitable Trust. The case follows the collapse of the roof of the Invercargill community courts on 18 September 2010. The Trust, as owners, alleged the Council had been negligent when it issued a code compliance certificate for the defective building. The Trust claimed the Council had issued the certificate of compliance despite the building failing to meet the standards of the Code.

The Trust was time-barred from claiming that the Council negligently performed its statutory functions of issuing consents and carrying out inspections. As a result, the only claim was one of negligent misstatement requiring proof of specific reliance.

The existing case law established a general duty of care owed by local authorities to building owners for consenting, inspection, and certifying. While this suggested a straightforward answer, the Court of Appeal described the case as “conceptually unique,” and rejected the Trust’s claim in negligent misstatement against the Council.

The decision was based on three main justifications:

It is not fair, just or reasonable to impose liability on the Council in a situation where the owner’s own negligence, or the negligence of their contractors, has been the cause of loss.
The Trust did not rely solely on the code compliance. Rather, they relied on the Council to approve the work performed by their contractors. The Court of Appeal did not consider this enough to prove specific reliance.
The Trust relied on their own experts and was indifferent to the certificate of the Council. The problems with the roof warranted further investigation despite the code compliance. The code compliance was only relied upon to ensure the building could remain functional in the interim.

Fortune Manning state it is therefore important to note from this case that a council’s liability for negligent certificates is limited in scope and will not extend to the situation where the owner, or their contractors, is the true cause of the defect.  Ultimately, just because a council issues a certificate of code compliance does not mean it can later be blamed for the mistakes of a third party.

To find out more about Fortune Manning and their legal services, please visit the website at http://www.fortunemanning.co.nz .