News
Leaky buildings decision a legal first
The High Court has upheld a decision that a building contractor must fix problems in a major Auckland townhouse complex in a legal first ruling in New Zealand.
Justice Harrison has upheld an earlier arbitrator's award which found that Downer Construction (NZ) breached its contractual obligations by building units that were not watertight and directed Downer to go back and remedy the problems.
Bell Gully partner Christine Meechan, who has been acting for the developer Silverfield Developments (formerly Redwood Group No 8), says it is the first time the High Court has issued an order for specific performance against a building contractor which effectively directs the contractor to carry out remedial work.
"While it is legally important, what matters most is the successful result for our client which should ultimately lead to remedy for the owners and occupiers who have had to deal with the impact of defective homes."
Bell Gully was engaged by Silverfield Developments nearly four years ago after problems with water damage and other defects were discovered in the 65 townhouses in the Silverfield Terraces complex at St Lukes, Auckland. The cost of repairs was estimated at more than $4 million.
In 2003, the developer and building contractor referred their disputes to arbitration. The arbitrator, Tomas Kennedy-Grant QC, ruled that Downer had breached its contractual obligations by building units that were not watertight, and made an order for specific performance against Downer.
Downer appealed to the High Court on a point of law, namely the availability of specific performance as a remedy in this type of dispute.
Justice Harrison's reserved decision was released on 11 May, dismissing Downer's appeal and upholding the order for specific performance made by the arbitrator, and also ordering it to pay the developer’s costs.
For more information, please contact:
Josephine Gallagher
Senior Marketing and Communications Manager
Bell Gully
64 9 916 8664 or 021 190 3185
