By Andrew Steele - 13 Aug 2014
The Fleetwood Apartments leaky building case may be a
rare example of strict adherence to the law coming at the expense
of an early and cost-saving resolution. As part of settling the
claim, the Council effectively bought the apartment owners' claims
against the other defendants by taking an assignment. This meant
the Council stood in the apartment owners' shoes by pursuing the
defendants themselves.
If the assignment were effective the Council would almost
recover its settlement contribution. Only any surplus would go
to the apartment owners. That would put the Council out of
pocket by only a tiny amount, compared to the potential claim it
faced.
In the end, the Court overturned the assignment, holding that
only the apartment owners could pursue the other defendants.
On reviewing the settlement terms, the Court emphasised that the
law does not allow people who are unrelated to litigation to meddle
in and profit from it. The Council was only a
defendant. It was not sufficiently interested in the apartment
owners' claims to be allowed to pursue them.
Usually the Courts distribute liability between defendants based
on what is fair. If the settlement were effective, it would
usurp the Court's power under the Act. In other words, the
settlement could result in the Council bearing less than its fair
share.
In the future, it may be expected that settlements will not
involve such assignments. Leaky building owners may now need
to pursue their claims to trial themselves in order to secure a
just contribution to the cost of repairs.
If you have any questions about how the decision applies to your
case, or about your leaky building in general, please contact the
litigation
team at Martelli McKegg.