Case CIV-2011-485-1308 Hepburn vs. Cunningham

A house built at 2000 with texture coated fibre cement is bought at 2007 by the plaintiff based on a positive "quick check" builder's report issued by the respondent. Although built with wide eaves, apparent cladding defects, such as lack of cladding/ground clearance, omitted by the inspector which is introduced by the agent. No Terms & Conditions form was signed by the plaintiff. 
3 years after the purchase, the house was marketed again and was inspected by RealSure on behalf of a purchaser with a report showing various weathertightness issues. 
The plaintiff subsequently applied through WHRS, which expert recommended partial repair costing 100k. 
The plaintiff gone further through High Court and sought more than 500k for damages with final decision in favor of plaintiff for 360k award with half to be paid by the inspector. 
Issues to be discussed:
Quick check vs. Rolls Royce service
Roles of Terms and Conditions
Significant issues, if not rocket science, to be reported
Duty to give clear advise rather than a report only

Determination 2011/056

Acceptable solution E2/AS1 is one way, but not the only way to demostrate compliance with the building code. 

Assessing a straighforward proposal should have been well within the capability of the Authority without aquiring a determination.



Herald news related with this case

Interesting points:

1.       The subject property is a leaky house, but not timber framed. It is structured with blockwork (Thermalite);

2.       No consultants, subcontractors and suppliers are liable, but only council with the developer;

3.       The remediation cost way exceeds the value of the building as was unaffected: 1.1m vs. 350k;

4.       It is likely to be uneconomical to repair the damage comparing with rebuilt;

5.       The pre-purchase inspection report says the house is “sound”, but the inspector was not sued;

6.       It is extremely hard to detect and inspect the leaking issues as normal ways of detecting and inspecting timber frame house are not suitable for this house;

7.       The actual amount awarded (515k) is based on a valuation report rather than any estimation done by any consultant. 


TRI 2009-100-000053

Interesting points:

  1. The pre-purchase property inspector is liable for the full recladding cost – $290,000.
  2. The inspector is a “Council approved inspector”, a Master Builder with over 30 years of industry experiences.
  3. The inspector is recommended to the purchaser by the real estate agent.
  4. The disclaimers set in the builder’s report did not make the inspector free of any liability.
  5. The pure reason for the inspection is to address if any weathertightness issue exist. 
  6. Local council is not within the list of respondents. 




Interesting points:


  1. Built at year 2006 under the new building act 2004 with cavity based plaster wall cladding
  2. The claimant noticed leak issue a day before settlement, but failed to advice Council to revocate the CCC and failed to withdraw from the purchase agreement
  3. The building was totally reclad by the claimant before application through WHRS
  4. No elevated moisture readings other than decking area, though moisture readings proved to be not reliable in terms of false negatives
  5. The driver causing total reclad is the lack of PEF backing rod behind expandable form window seal
  6. Targeted repair cost was estimated to be more than total reclad cost
  7. Council is the only party liable for the total claim: $263396, The developer, builder and other
  8. trades involved with construction have either left the country, become insolvent, not been located or died
  9. Vendor vanished after settlement



Interesting points:

  • “with denial of liability” settlement agreed between the owner and the roofer.
  • The pre-purchase inspector was an experienced inspector.  He had worked for a number of years with a leading property inspection company in Wellington.  He was also a qualified clerk of works. He was appointed as a tutor at the Central Institute of Technology and an examiner for AVA for Building Construction for NZ Certificates. He was a clerk of works at Victoria University Wellington and for a number of major Wellington contracts including the Old Government building, and further, he has been a BRANZ adviser.
  • The inspector has borrowed moisture meter from the Capiti District Council. 
  • The inspector failed to include in his report any warning about the limited accuracy of non-invasive moisture reading devices.
  • Any person driving by the house would see there were no eaves yet Mr Tribe makes no reference of this in his report.
  • The inspector had never used a level during inspection before this case.
  • The inspector is liable for $47591



Interesting points:

  • The buyers new that the home had leaking issues before buying
  • The vendor claimed through WHRS, but got no compensation, as no invasive investigations were allowed, not enough evidences gathered, no experienced expert and lawyers were involved
  • The vendor carried out various partial repair works, but none of them effectively solved the weathertightness issues as most of works carried out without building consents and not under supervision of any weatherghtness expert
  • The vendor had to sell with clear notice of the weathertightness issues
  • Even though the buyer had obtained a pre-purchase inspection report with negative opinions, they did not show the report to anybody as they bought the house with a price significantly lower than the market value
  • The buyer failed to sue every respondents due to the doctrine of Volenti non fit injuria?
  • Even though the buyer has bought the property at a big discount, his net loss is still valued at $320,000



  • Repair works to failed elements within durability period requires building consent.
  • It is up to the owner to decide the scope of any repair work to failed elements
  • Notice to fix to be limited and specific to works carried out rather than the whole building

Determination 2011-108

A horizontal flashing highly relying on workmanship and not in compliance with manufacture's specification and any acceptable solutions is accepted by the manager Determinations as code compliant. 

TRI 2010-100-000112


A leaky building has been totally reclad with Hitex and found leak again.

Council, Hitex, former owner and pre-purchase inspector all found liable.


The inspector found liable because he has seen the MDU probes and mentioned in the report but wording was short and not eye-attractive and did not give any significance to it. The inspector did not show up during proceddings. 


Remediation cost is estimated to be around half million. but final fiture to be confirmed once it makes clear that whether council can accept a target repair propossal. 



A house with cedar and brick veneer wall cladding built at 2006 is assessed as a leaky home. 

Summary of this case



Although the presale inspection report did not identify any significant weathertightness issues, the inspector was found not liable, as the purchaser's decision relied on real estate agent's opinion rather than on the report.



The summary of that case is: High Court has upheld a WHT determination that had found an architect liable for omitting vents and references to manufacturer’s instructions on his plans.

The interesting point is the repair cost escalation as time goes by:

  1. July 2003 based on pre-purchase report prepared by Futuresafe, cost of repair approximately $10000;
  2. October 2003 a WHRS assessor estimated $10500 above on what the owner had spent based on Futuresafe’s report;
  3. 2007 the same WHRS assessor estimated $115500 for repair;
  4. 2007 the owner applied claim to WHT for $335500.


Auckland Council V Coleman

A pre-purchase inspector, currently a WHRS assessor and member of NZIBS, has carried out the inspection for the purchaser at August 2002. Even though the house was “structurally sound” according to the inspector’s opinion, the house was proofed as a leaky house at a later stage.

He was initially not a party in that case within WHT stage.

But the Council appeared. The inspector was found misleading and liable as he should be able pick some other key defects up such as lack of ground clearance and flashing defects. 


 Auckland Council V Coleman - continued TRI-2010-100-000117

The more interesting point is: the WHT later turned the High Court's decision down by insisting that the inspector upon issueing the report did not know and had not out to know that Council would suffer because of the report and in fact council did not suffer any loss because of the inspector's action. 

It is not clear whether this decision is a final. 



The purchaser is liable for 25% of the claimed cost for contributory negligence by not having a pre-purchaser inspection done before the auction.

From December 2008, buying a house without having a pre-purchaser inspection is regarded as a contributory negligence. 


 TRI-2011-100-000003 (21 March 2012)

Damages occurred but cladding and window details are in line with the James Hardie literature at the time of the construction. So no one is liable for that.


This case could be a proof that Harditex directly fixed to untreated timber itself is an issue. BRANZ could be a liable party in the future?


A new company can be the same name, but not taking over any liability of the old company. 




Huang V Auckalnd council

face-fixed rigid back stucco over untreated timber as a cladding system did not work and could never have worked in the Country. 



  • 1994 built townhouse found leaking 2003, council, architect, project manager, developer and inspector (future safe in liquidation) all been sued.
  • future safe found problem but failed to addess the leaking reason, pointing only for lack of maintenance.
  • problems were: subfloor vent, ground clearance, cladding control joint, flat timber cap, saddle flashing missing, jiab and head flashing inadiquate, wall penetration
  • inspector is liable for $9046 as did not discover the lack of subfloor ventilation.


A real estate agent found liable according to FTA to pay the purchaser 190k for misleading. 


A visual inspection of accessible components can provide reasonable grounds to form a view on whether a house as a whole complies with the Building Code. 



Retro insulate external wall framing by injecting Airform is not regarded as a complied method.