The best idea for dealing with a worrying problem can be to sleep on it. But not for too long, and certainly not for over a decade. We recently acted in a High Court appeal involving a leaky home and the exceptionally long time its owners took to act on their problem.
What happened.
Mr Sun was a builder — not the kind with a ute and a dog but rather one who buys some land and takes on contractors. In 2002, his mother bought a section in Albany in 2002 and contracted him to build a house on it, which she sold the following year to Mrs Gwak and Ms Kim.
A couple of years later during a heavy downpour, Mrs Gwak and Ms Kim saw there was water coming into the kitchen through one of the downlights. It appears they took no steps to get it looked at, or fixed, and made no contact with Mr Sun, as the builder with the warranty.
Then in 2012, they noticed more water coming in by same route. This time they got in a builder who tried to fix the problem with sealant. But again, it appears they made no contact with Mr Sun.
They did, however, get a full report from an independent building assessor - appointed by MBIE in its role as the government weathertightness agency - which reported that the home had widespread and systemic weathertightness deficiencies, and estimated a repair bill of nearly $300,000. He also noted various parties involved, and their responsibility for the defects. Mr Sun was listed as a contributing party to each defect.
But although they had a potential claim, Mrs Gwak and Ms Kim didn’t take it forward. And neither did they get any repair work started. Rather, they moved to Christchurch.
The following year they entered into a financial assistance package with MBIE, and said they tried without success to get quotes from builders in Auckland to get repairs underway.
Then in 2016 they returned to the home. But next, a fire caused interior damage. Discussions with the insurance company ensued, along with discussions with MBIE about a weathertightness claim, and remediation, the upshot being that the insurance company settled the fire claim while MBIE recommended getting a second assessment in light of further problems having become apparent.
By now it was 2018 and the estimated cost of repair had risen to nearly $500,000. They arranged finance for this, took on an architect and a builder and submitted a remediation plan to MBIE which it approved.
However, they then plumped instead for demolishing the building and taking a claim to the Weathertight Homes Tribunal against the various parties involved in the building, including Mr Sun, for $528,001.39.
Mr Sun sought to have himself removed from the claim on the basis that he had not personally carried out any of the building work, but the Tribunal declined his application.
After engaging us, Mr Sun then applied to be removed again on a different basis – that Mrs Gwak and Ms Kim had failed to act in a timely fashion, that it was now 17 years since his company - which was dissolved in 2013 - had built the house, he had not been given an opportunity to inspect or remediate the original home, he had no records from that time, and he was in no adequate position to respond.
This time the tribunal found in his favour: Mrs Gwak and Ms Kim had been aware since at least 2012 that they had a serious problem. A delay of seven years in commencing the claim was inexcusable.
The tribunal said Mr Sun’s position was seriously prejudiced by being unable to access company records or locate witnesses, or inspect the demolished home, and his application to be removed from the claim was granted.
Mrs Gwak and Ms Kim then went to the High Court seeking to have this decision overturned. They argued that, yes, there had been delay but that there was no material prejudice to Mr Sun.
Mr Sun asserted to the contrary.
The High Court agreed. It held that the delay was inordinate. Mrs Gwak and Ms Kim had been made aware in 2012 of the weathertightness problems of their home and their eligibility for various processes and assistance available under the Act. They could have lodged their claim at any time after mid-2012, perhaps earlier. And yet there had been a delay of some eight years.
It was no longer open to Mr Sun to properly defend the claim. He could not access relevant documents. He was unable to identify other relevant parties. He had lost the benefit of potential claims against the owners for indemnity or contribution. He could not obtain expert evidence in relation to the alleged weathertightness defects, the extent of any damage resulting or who was responsible for the defects, as the house had been demolished.
The prejudice this created was insurmountable. Mr Sun should be removed from the claim.
Lessons for anyone involved in the slow-moving nightmare that is the leaky homes saga.
If you have a leak: investigate, and act.
If you take too long to decide what you’re going to do, the clock may run out on you, or your case may lose strength if other parties can show they’ve been put at a disadvantage by your delay.
If your case is in the MBIE weathertightness system, do not assume someone will push you along. Our court system will step in and prod you if you come to a halt, but the MBIE regime is a different beast.
Talk to someone experienced! The leaky home landscape can be a quagmire. We have been on this ground for a long time now and can guide you through it.