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Relief for owners of commercial leaky buildings

By Andrew Steele - 12 Oct 2012

The towering 22 storey Spencer on Byron Hotel in Takapuna, Auckland is a renowned luxury hotel 500 metres from Takapuna Beach with panoramic views of Rangitoto Island, Auckland Harbour and the Hauraki Gulf.  It's perhaps the stand-out building on the North Shore, but it's carried a dark secret.  It's a "leaky building".

That fact has now caused the hotel to make legal history. A Supreme Court decision yesterday overturned the Court of Appeal and the accepted law of many years. The decision opens the way for commercial building owners throughout New Zealand to take legal action against their local council. If council inspectors carry out their work negligently, or issue code compliance certificates in circumstances where they should not have, damages may be obtained from the council.

It has been long-standing law that councils owe a duty of care to building owners when inspecting residential buildings.  The Supreme Court has now decided that there was no principled basis for distinguishing between the liability of those who played a role in the construction of residential buildings as against the construction of non-residential buildings.


Andrew Steele


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