IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2009-004-001625

BETWEEN	SEAN LAKE Appellant

AND	NORTH SHORE CITY COUNCIL Cross Appellant

AND	BORIS & GIORDANA BACIC Respondents

Hearing:	11 March 2010

Appearances: E St John for Appellant
D Heaney SC and C	Goode for Cross-Appellant
B Bacic in person

Judgment:	1 April 2010 at 10:00 am

JUDGMENT OF ASHER J

This judgment was delivered by me on 1 April 2010 at 10:00 am pursuant to Rule 11.5 of the High Court Rules

………………………………………..
Registrar/Deputy Registrar

………………………………………..
Date

Solicitors:
D Heaney SC, Heaney & Co, PO Box 105391, Auckland (crg@heaneyco.com)
E St John, Barrister, PO Box 105 270, Shortland Street, Auckland (barrister@estjohn.co.nz) City Law, PO Box 6068, Auckland (mike@citylaw.co.nz)

LAKE V  BACIC HC AK CIV 2009-004-001625  1 April 2010

Preliminary

[1]       Sean  Lake  appeals  against  a  determination  of  the  Weathertight  Homes Tribunal ordering him to pay damages to the respondents, Boris and Giordana Bacic. The Bacics and the cross-appellant, the North Shore City Council, oppose the appeal. The North Shore City Council has lodged a cross-appeal on the basis that Mr Lake should have been held liable not only for a portion of the damage, but for all the damage to the property.  Mr Lake and the Bacics oppose that cross-appeal.

[2]       It can be recorded at the outset that the Bacics represented themselves and only presented a short submission.   They essentially succeeded before the Weathertight Homes Tribunal in obtaining judgment from the Tribunal against the North Shore City Council (“the Council”) for much of their claim, including awards for consequential losses and general damages.  The Council does not in this appeal contest the orders made against it (as distinct from the orders against Mr Lake). Therefore, the Bacics’ ability to recover their losses as a consequence of the adjudication is not under threat in this appeal.

[3]       The Bacics’ submission was, in essence, a complaint that both Mr Lake and the Council had, by the appeal and cross-appeal, delayed the payment to them of damages and their ability to get on with their lives.   Apart from making this submission, the Bacics did not seek to make any comment on the substantive issues. Various points as to procedure and timing that were mentioned in their written submissions were not pursued.

Background

[4]       On  17 October 1999  the  Bacics,  who  were  recent  immigrants  to  New Zealand, entered into an agreement for sale and purchase to buy Unit 2, 7 Panill Place, Browns Bay.   They ultimately settled that purchase on 6 November 2000, when they moved in with their young child.  The Unit was one of a group of eight that had been constructed between 1998 and 2000.  The original owner was Melview Ponderosa  Limited.    Prior  to  building,  that  company  had  sold  the  plans  to  a

company, Build Corp Developments Limited.   On 17 November 1999, Build Corp Developments Limited assigned the benefit of the agreement to Build Corp Holdings Limited, which then became Tulip Holdings Limited (“Build Corp”).   Build Corp has gone into liquidation.

[5]       The Bacics purchased off the plans.  The units were then in the process of construction.  A practical completion certificate had issued for the development on
2 October 2000.      The   Council   undertook   a   final   inspection   on   or   about

18 October 2000, and refused to provide a code compliance certificate.   In fact a code compliance certificate has never issued.

[6]       Mr and Mrs Bacic experienced problems emanating from construction of the unit from the day they moved in.   They vigorously pursued Build Corp and the Council in relation to the problems.   By late 2002 other unit holders were also concerned about cracks and water ingress issues.  However, no coordinated approach was taken to resolving the problems by the Body Corporate or the owners of the units.

[7]       On 6 January 2003, the Bacics lodged an application with the Weathertight Homes Resolutions Service.   They received a copy of the assessor’s report that followed, on 13 January 2004.  The report concluded that the dwelling was a leaky home,  and  that  the  claim  was  eligible to  be  heard  by the  Weathertight  Homes Tribunal.

[8]       Mr and Mrs Bacic ultimately filed their application with the Tribunal on

15 May 2008.    That  claim  was  heard  on  13,  14  and  15 May 2009,  and  a  final determination was issued by the Adjudicator on 11 June 2009.

[9]       The Bacics’ unit is on three levels.  It is constructed of kiln-dried untreated timber wooden framing with exterior walls lined with Harditex fibre cement sheets. It has aluminium windows, a concrete tile roof, and is built on a concrete foundation. At the adjudication it was accepted by all experts that the Bacics’ unit was a leaky building.  It had suffered water ingress and consequent damage to timber framing as a consequence of poor workmanship.   Errors included inadequate installation of

flashings, and failure to seal the fibre cement behind flashings, unprotected cladding at the end of gutters, fascias that were wrongly lapped, and a lack of reinforcing to the corners in the cladding on either side of beams.  The experts also agreed that the flat tops to the deck balustrades and the top-fixed handrails were major causes of water ingress, and that there was a failure to adequately slope the top of the balustrades.  Significantly in relation to this appeal, the experts agreed that there was a lack of flashings in the windows on the west inter-tenancy wall between units 1 and 2.  There were no head flashings as required, and no adequate form of sealant.

The adjudicator’s determination

[10]     The adjudicator decided that the major contributing factors to the dwelling leaks  were  the  flat  tops  and  top-dash  mounted  balustrades,  the  poorly  installed parapet caps, unsealed fibre cement behind the metal flashings, and the lack of flashings in the west wall windows.

[11]     The adjudicator concluded that the claimants had established remedial work costs to the value of $182,643.75, together with consequential losses of $12,184 and general damages of $40,000.   She held that the Council was not negligent in processing the building consent application, but was negligent in carrying out inspections during the construction and certifying process.  She concluded that the Council had either not established a regime, or did not follow any regime that could identify key waterproofing issues, and that this was negligent.  She found that there were defects that were either readily apparent by a visual inspection, or by keeping appropriate records of changes to  the consented plans.   She  concluded that the Council was severally liable to pay 100 percent of the total damages.

[12]     There was a claim against James Fairgray, who was the “general director” of Build Corp.  The adjudicator observed that there was no evidence that Mr Fairgray was directly involved in the construction of the units or in the supervision of the construction.   These tasks were left to others.   She also held that an adequate management structure had been put in place in relation to the construction work and that, therefore, Mr Fairgray could not be liable on that basis.

[13]     The adjudicator also dismissed a claim against Mr Sgierski-Boreyko, who had been engaged by Build Corp as an expert to inspect and prepare a certificate of practical completion.  The adjudicator held that there was insufficient evidence that the claimants relied on the practical completion certificate, and that the certificate did not include certification of the design and the quality of the construction work.

[14]     The adjudicator also held that a Mr Allan Ford, who had been joined to the proceedings by Mr Lake, was not liable.   Mr Ford had been the director and shareholder of a company that had done some labour-only building at Panill Place. He had not been personally involved in the building work.   She also dismissed a claim on the part of the Council that the Bacics were guilty of contributory negligence, and held that they had not failed to mitigate.

[15]     The adjudicator held that Mr Lake was not the project manager for the Panill Place project, and that he did not have responsibility for ensuring that work was completed in accordance with technical literature and the plans and specifications. Accordingly, she held that he could not be responsible for the defects in relation to the deck and other more minor defects.  The Council cross appeals in respect of that decision.

[16]     However, she held that he was personally involved in installing the windows on the west wall.   She concluded that Mr Lake was negligent in “assisting and/or supervising” the installation in the west wall without any flashings, and in failing to ensure that they were installed so that they were weather-tight.  On this basis he was held to be responsible for one-third of the remedial costs and 27 per cent of the consequential losses and general damages.  Mr Lake appeals against that aspect of the decision.

The cross appeal

[17]     I propose dealing with the cross appeal before the appeal itself.   This is because in the cross appeal Mr Heaney has submitted that the adjudicator’s decision that Mr Lake should not be responsible in relation to all the defects because of the nature of  his  work  was  incorrect.  Obviously,  if  the  adjudicator  was  wrong and

Mr Lake is liable in relation to all his work, then Mr Lake’s appeal against a finding of liability for part of that work on the west wall windows is less likely to be successful.

[18]     Section 93(1) of the Weathertight Homes Resolution Services Act 2006 (“the

Act”), provides:

93.	Right of appeal

(1)        A party to a claim that has been determined by the tribunal may appeal   on   a   question   of   law   or   fact   that   arises   from   the determination.

[19]     This must include a cross-appeal.  The principles relating to general appeals set out in Austin Nichols & Co. Inc v Stichting Lodestar  apply.   In light of the observations of the Supreme Court in that case, the appellate court in an appeal by way of re-hearing such as this should carry out its own assessment of the facts and should not hesitate to substitute its own findings of fact.  Thus the appellate Court must apply an independent judgment to the conclusions reached by the Court of first instance.  Nevertheless, Austin, Nichols & Co Inc v Stichting Lodestar makes it clear that the onus is still on an appellant to show that the first instance Judge or Tribunal was wrong.    I recognise that the Tribunal has the particular advantage of having heard the evidence.

[20]     Mr Heaney’s submission is in essence that the adjudicator reached the wrong finding of fact in assessing the nature of Mr Lake’s role.  He submits that Mr Lake was not only involved in the building work on the Bacics’ unit, but was in charge. He submits that it is irrelevant that Mr Lake was not a qualified builder or did not have any building training.  The fact that he was engaged as a site manager and had experience in the building industry was sufficient for him to have a duty of care. Mr Heaney submitted that he was “the face of the development”.  He relied on the decision of Body Corporate 185960 & KJ Gaitely v North Shore City Council and

Drew & Ors and the conclusion in that case that a Mr Agiler, whom the judge found had carried out the task of a project manager, owed a duty of care to the plaintiffs.

[21]     It is necessary to consider first the nature of Mr Lake’s role, and the work he did.

Mr Lake’s role

[22]     Mr Lake’s formal training was as a registered psychiatric nurse.  He first met the principal of Build Corp, Mr J McLennan, in the course of the construction of a home and hospital in which he had an involvement.  Mr Lake and his wife had an interest in the Beechworth Home and Hospital, and Mr McLennan assisted them as a building consultant.  Approximately three years before the completion of the Bucics’ unit, Mr Lake began to do regular work for Build Corp.   He had no written job description and no employment contract and was treated as a sub-contractor, being paid on a weekly basis.   Ultimately he was paid by automatic bank payment at
$576.92 gross weekly.   Mr Lake observed that this was a low level of income but one with which he was content given that he had some other means, having sold a rest home and was reasonably secure financially.

[23]     Mr Lake   described   his   role   as   that   of   an   “on-site   gofer”   or   “site administrator”.  He had no formal or informal qualifications in building and, I am told, before starting doing work for Mr McLennan’s company he had never worked in the building industry, save as a labourer.  He stated in his brief of evidence:

… I would go around the various sites; pick up dockets; ensure materials had arrived etc.  I was also responsible for ensuring that the sites were clean and secure.  My other tasks were organising the placement of water meters and other utilities for new sites, ensuring that respective trades people were on site, meeting with the [North Shore City Council] building inspectors and returning their reports back to the [quantity surveyors], chasing up trades people to complete anything which needed completing and calling for re- checks when the trades people advised me that their job had been completed. I didn’t do any tasks … concerning the construction of building of the developments.    I  was  purely  and  simply  the  coordinator  of  the  various projects in which John McLennan was involved.  Panill Place was not the only project I was involved in.

He later asserted that he totally relied on Mr Fairgray and Mr McLennan to advise him as to what he had to do.  He said that he would meet with Mr Fairgray every day.

[24]     This description was essentially accepted by the adjudicator.   Mr Heaney submits that the adjudicator was wrong in doing so.  He relied on some particular extracts  from  the  evidence.     He  relied  in  particular  on  some  statements  by Mr Fairgray and Mr McLennan as to Mr Lake’s role.  Mr Fairgray said that it was the project manager and the site manager’s role to coordinate the job, and that site managers were responsible for ensuring that the house was built in accordance with the consent, and for arranging inspections and ensuring that Council requirements were carried out.  Mr McLennan said in cross-examination that he had a supervisory role and the role of a facilitator on site.  Mr McLennan agreed in cross-examination that Mr Lake would have picked up knowledge about the Building Code and the Building Act, and the steps that were necessary to take to achieve Council compliance.

[25]     Both Mr Fairgray and Mr McLennan were defendants in the proceedings.  It was in their interests to minimise their responsibility and to attribute that responsibility to others.  Their evidence must be seen in this light.  Mr McLennan did concede under cross-examination that Mr Lake did not have any skills when it came to working on weathertight home issues.  Mr Fairgray, while minimising his role, emphasised the role of other site specific project managers, (as distinct from site managers), who would visit the project two or three times a week.  Mr Fairgray’s role was to ensure that work was completed in a timely way and in accordance with the plans and specifications.

[26]     The   adjudicator   elsewhere   in   his   adjudication   did   not   consider   that Mr Fairgray was sufficiently involved in the construction work to be personally liable.  She appeared to consider that Build Corp itself was liable to the Bacics, but it was in liquidation.   It was Mrs Bacic’s evidence that all variations came through Mr Fairgray and not Mr Lake.   Quantity Surveyors were employed when code of compliance, or payment sign off issues arose.  There was other evidence that specific project managers were on occasions employed by Build Corp and that they were

called  project  managers  as  distinct  from  site  managers.    Mr McLennan  said  in answer to questions from the adjudicator that the role of ensuring that work was finished  and  completed  properly  was  that  of  the  project  manager.    There  was evidence  from  Mr Fairgray  that  a  specific  project  manager,  Mr Lee Yan,  was working on the development until December 2000.  Mr Fairgray specifically agreed with  the  proposition  that  Mr Lake’s  role  was  that  of  a  “site  gofer  or  site administrator”.  It was also Mr Lake’s uncontested evidence that at times he would sweep and do other menial labouring jobs on site.

[27]     A reading of the evidence gives the unmistakable impression that Mr Lake’s role was that of a coordinator, facilitator and, where necessary, labourer, but not that of a person applying any building knowledge or expertise to work on the site.  The skills he had developed as a registered nurse and as a person who had been involved in the running of a hospital or rest home, meant that he was able to make sure that contractors were on site when required, that the Council officers were contacted when necessary, and that generally the instructions that he received as to how the building should proceed were put into practice and carried out efficiently and on time.  The role was essentially one of administration and labour.  It did not involve the application of building skill, whether in design or actual construction, and he did not hold himself out as doing this more skilled work.  The adjudicator summarised the position in this way:

… Mr Lake did not have the responsibility for ensuring work was completed in accordance with technical literature and the plans and specifications.  He did not have the qualifications to do this work and there was no evidence that he was asked or required to do it.

This assessment was not only open to the adjudicator on the evidence before her but was, in my view, the only proper conclusion to reach on the basis of the evidence, read as a whole.

[28]     The question then arises whether a person who has such a role owed a duty of care to the Barcics.

Approach to whether Mr Lake owe a duty of care

[29]     In New Zealand the issue of whether a duty exists is approached in two stages.   These are the two stages referred to in Anns v Merton London Borough Council.     The Court considers first whether there is a sufficient relationship of proximity or neighbourhood such that in the contemplation of a wrongdoer, carelessness on that wrongdoer’s part may be likely to cause damage to the plaintiff. If that question is answered in the affirmative, the Court then considers whether there
are any policy considerations which ought to negative, or reduce or limit the scope of the duty or the class of persons to whom it is owed.  This approach has been widely followed in New Zealand.   It must be noted, however, that the boundaries between proximity and policy are not clear, and overlap.

[30]     In considering proximity between a person working on a building site to the owner, it is necessary to focus on the following matters:

a)	the qualifications, experience and skill of the respondent;

b)	the assumption of responsibility on the part of the respondent;

c)	the degree of reliance of the claimant on the respondent.

d)	the respondent’s ability to foresee loss in the event of negligence; and e)	analogous cases.
[31]     The question that arises is whether Mr Lake had a special skill, or assumed responsibility for the application of a special skill.   Whether it is fair, just and reasonable to hold that a duty is owed by a defendant to a plaintiff in a situation not covered by authorities is conventionally addressed in terms of proximity and policy.

Proximity is  concerned  with  the  nature  of  the  relationship  between  the  parties:

Attorney-General v Carter.

[32]	In assessing the assumption of responsibility I bear in mind the observations in Rolls-Royce New Zealand Limited v Carter Holt Harvey Limited:

[99]      Assumption  of  responsibility  for  a  statement  or  a  task  does  not usually entail a voluntary assumption of legal responsibility to a plaintiff, except in cases where the defendant is found to have undertaken to exercise reasonable care in circumstances which are analogous to, but short of, contract, and it is foreseeable that the plaintiff will rely on that undertaking. If that is the case then, subject to any countervailing policy factors, a duty of care will arise. In other cases, the law will deem the defendant to have assumed  responsibility  where  it  is  fair,  just  and  reasonable  to  do  so: Attorney-General v Carter, at pp 168 – 169 (paras [23] – [27]). Whether it is fair, just and reasonable to deem an assumption of responsibility and then a duty of care will depend on a combination of factors, including the assumption of responsibility for the task, any vulnerability of the plaintiff, any special skill of the defendant, the need for deterrence and promotion of professional standards, lack of alternative means of protection and so on – that is, essentially the matters discussed above at paras [58] – [65]. Wider policy factors will also need to be taken into account.

[100]    Finally, we note that assumption of responsibility for the task cannot be sufficient in itself, at least insofar as the negligent construction cases are concerned. If it were, then the result in Simaan (which has been so widely approved) could not be justified, as the subcontractor in that case had clearly assumed responsibility for the task of supplying glass that accorded with the contractual specifications. The question in Simaan was whether the subcontractor had assumed responsibility to the plaintiffs and the answer given in the case, although not expressed in that manner, was that it had not. Any assumption of responsibility was only to the direct contracting party.

[Emphasis added]

Mr Lake’s skills and assumption of responsibility

[33]     Mr Lake was called the “site manager”.  The job description of a respondent is, of course, not conclusive, although it may provide some indication as to the nature of the experience and skill and assumption of responsibility of a particular respondent.  The skill that Mr Lake brought to bear was of an organisational nature. He might have been liable in negligence if organisational failures caused loss to the

Bacics.   However, the failures at issue in this case are failures of building workmanship.  In that area Mr Lake had no experience or skill at all.

[34]     The fact that a person has no experience or skill in a particular area does not mean that that person owes no duty of care if that person has, despite lack of experience and skill, assumed responsibility for skilled work.  However, there is no evidence that Mr Lake did assume any responsibility in his general on-site work for the quality of specific building work.  That was left to the builders.  His job was just to get them there on time, and to make sure the work was finished.

[35]     There was a managerial aspect to Mr Lake’s work on site.   He appears to have had skills in that area, and was responsible for making sure that sub-contractors arrived on site at the appropriate time, and that the Council was informed and that inspections were also arranged within the appropriate timeframe.   The timeframe itself does not appear to have emanated from Mr Lake; rather, he was informed as to when things should happen.

Reliance

[36]     There was also no specific reliance by the Bacics on Mr Lake.  Undoubtedly they saw him as part of the organisation that they relied on in general.  They may well have seen him as the “face” of Build Corp at times.   But there can be no suggestion, for instance, that they entered into the contract with Build Corp because of Mr Lake’s involvement.   There is no suggestion that during the work he put himself forward to them as having any particular building skill, or that they relied on him to apply such a skill.

Foreseeability

[37]     Mr Lake’s ability to foresee loss must be seen in the context of his expertise and work.   Naturally, he could foresee loss should Build Corp fail through its designers and builders to erect a weatherproof dwelling.  However, in terms of his own personal function on site it is difficult to see how it would have occurred to him that anything he was doing might  cause  any loss in that area.   He  could have

reasonably assumed, as the Bacics did, that all matters of the design and build were being carried out in accordance with good industry standards.  Any failures on his part would result in losses to his employer, Build Corp, in that the completion of work would be delayed because builders and building inspectors would not arrive, or that work could not proceed because the site was dirty and unkept.  That delay could have an impact on the owners, the Bacics, but that was not the issue before the adjudicator.   Direct loss to the Bacics arising from his lack of building skills and knowledge was not foreseeable.

Analogous cases

[38]     This set of facts can be usefully compared to the facts on the case relied on by Mr Heaney: Body Corporate 185960, Gaitely & Ors v North Shore City Council. In that case Duffy J accepted that Mr Gailer could be liable to the plaintiffs because he was the project’s manager.  She could see no reason why a person who took on the task of managing the construction of a residential development should not incur the same liability as that imposed on contractors, architects or engineers.  However, she observed that where the liability arose turned on the particular circumstances, an “enquiry into the responsibilities attached to the particular role, as well as the actions
and omissions of the person who occupied that role, will be necessary”.

[39]     In that case Mr Gailer had been appointed as manager of the project.   He arranged for the floor plan specifications and working drawings for submission and the approval of the joint venture.   He actually obtained the building consents in respect of construction work.  He arranged for the sale of the completed project and conducted the financial administration for the joint venture.  He paid all accounts due in respect of the construction.   The relevant agreement expressly provided that he would cause the buildings to be constructed in a good and workmanlike manner in strict accordance with the plans and specifications in any building contract.  There was evidence that he actually did these things and that his work was consistent with being a project manager.  There is a clear contrast between what Mr Gailer did and

what Mr Lake did.  Mr Gailer was truly in command of the project.  Mr Lake was not in control, and had certain jobs that did not require building skills.

[40]     I note that another distinguishing factor between Mr Gailer's position and that of Mr Lake, was that Mr Gailer had an equity interest in the project, (although in the part of her judgment where Duffy J refers to this, she was considering the liability of Mr Gailer as a project manager and not a joint venture).  In contrast Mr Lake, while a contractor, was receiving a modest remuneration on a weekly basis, consistent with him having a limited and unskilled role.

[41]     I have not been referred to any other closely analogous cases.  There are, of course, some decisions where directors have been held personally liable for onsite work on leaky buildings, for instance Hartley v Balemi.    Also, there have been a number where liability has not been so extended: Body Corporate No. 188273 v Leuschke Group Architects Ltd, Drillien v Tubberty.   Mr Lake was not a director of Build Corp and, if anything, these cases serve to support a conclusion that he did not owe a duty of care.

Conclusion on duty of care

[42]     Thus, I conclude in relation to the duty of care that Mr Lake did not have any particular design or building skills, did not hold himself out as having such skills, and was not relied on in any specific way for such skills.   He did not assume responsibility for the building being weather tight, or the competence of the design and building work.  I conclude that there was no proximity in a duty of care sense between Mr Lake and the Bacics.

Standard of care

[43]     Unsurprisingly, given Mr Lake’s lack of experience in skill and building and the limited nature of his role, there was no evidence showing that he had been in any

personal way negligent in the sense of being careless, save for evidence of some specific involvement in relation to the windows in the west wall, which is dealt with at [45] - [54].  No act on his part can be pointed to which led to a defect.  Given the limited nature of his role and his experience and knowledge, there was nothing that he could have usefully done which would have prevented the defects in relation to any specific items of building.  Any systemic failures in how the construction was arranged and supervised were caused by the errors of others further up the chain of command, who may be seen as more prone to findings of liability.  The Council did not appeal the adjudicator’s decisions in regard to Mr McLennan, Mr Fairgray or Mr Ford, so I express no further views on that.

Conclusion on the cross appeal

[44]     Therefore, I conclude that the adjudicator was quite right to hold Mr Lake not responsible for the defects to the deck and the more minor defects.  He did not do the building work that gave rise to these defects.  He did not supervise that work.  He might have organised the builders to be there on time to do it, and Council inspectors to come and look at it, but that is not enough.

The appeal - the west wall

[45]     Two windows were installed in the west wall some months after the Bacics had settled and taken possession, and all work had ended.  It was common ground that the windows were installed without flashings or adequate sealant, and that these windows leaked and were a source of damage.

[46]     Despite her general finding as to Mr Lake’s assumption of responsibility, the adjudicator held him liable in relation to the west wall.  She stated:

[The] situation is, however, somewhat different for the windows that were installed in the west wall.   Mr Lake accepts that he came back with the builders in January 2001 to help install these windows.  He knew where the windows  were  to  be  fitted  and  was  involved  in  cutting  the  holes  and installing the windows.   He was the only person supervising this work on behalf of Build Corp.  I, therefore, find Mr Lake was negligent in assisting and/or supervising the installation of the windows in the west wall without any flashings.  He was negligent in failing to ensure that they were installed

so that they were weathertight.  That was a responsibility Mr Lake took on when he helped to install the windows.

[47]     Thus, the adjudicator must have concluded that contrary to her findings as to Mr Lake’s general involvement in the work, there was something different about the nature of what he did when he came back after the general completion of work, to assist with the installation of windows in the west wall.

[48]     I accept Mr St John’s criticism of the adjudicator’s terminology when she described Mr Lake as negligent in “assisting and/or supervising” the installation of the windows without flashings.   The insertion of the two words “and/or” creates ambiguity, and is generally to be avoided in judicial or quasi-judicial decisions.  The two words “and/or” in general can be said to indicate an uncertainty on the part of the speaker as to which of two possible conclusions apply.  It denotes matters that
can be taken either together or as alternatives.    Was she saying that Mr Lake was

negligent in both assisting and supervising?  Or is the meaning of the sentence that she is not able to say whether he was assisting or supervising, but whichever it was, he was negligent in any event?   The reference in the next sentence to supervision indicates the latter.  It is necessary to consider the evidence that is relevant to that issue.

[49]     Mr Lake undoubtedly did assist in the installation of the windows.  However, it is by no means clear that he supervised their installation.  There was no evidence- in-chief about the installation of the windows, as the specific allegation only arose in the course of the hearing before the adjudicator.  Mr Lake gave evidence about the installation of the windows, when being questioned by his counsel.   He was also questioned about the windows in the west wall by the adjudicator and by the Council’s barrister.  There were some questions about the west wall by the Bacics, and limited specific examination of other witnesses.   The following points can be made about the west wall evidence:

a)        Mr Fairgray made it clear that while at times he was described as the project manager for Build Corp, there were specific project managers for specific jobs (as distinct from site managers).  He indicates in his

evidence  that  the  project  manager  for  the  Panill  Place  job  was  a Mr Lee Yan.   Mr Yan seems to have had no involvement with the west wall windows.

b)        The west wall was created without windows, but in the knowledge that windows would be installed at a later date.  The windows were non-opening windows.

c)	The  exact  history  of  the  ordering  of  the  windows  is  not  known.

However, it is clear that Mr Fairgray would have liaised with the Bacics.  On Mr Lake’s evidence Mr Fairgray contacted him and asked him to “organise a couple of builders” to put in the windows.  It is not entirely   clear   whether   the   builders   were   initially   chosen   by Mr Fairgray or another project manager rather than Mr Lake.  It seems that it was not Mr Lake, as that is the tenor of his evidence, and is consistent  with  Mr Fairgray’s  evidence  that  it  was  the  project managers who would choose contractors for particular jobs.

d)	The  windows  themselves  were  ordered  by  someone  other  than

Mr Lake, possibly Mr Fairgray or another project manager.

e)        Mr Lake physically collected the windows and brought them to the site.

f)         Mr Lake went on site with the builders and had some involvement in the actual building work.  He cut an initial hole, and then the builders finished the work off.   Presumably, therefore, he saved the builders time by creating the initial aperture, and then left it to the builders to trim the aperture and make it to the correct dimensions.

g)        Mr Lake assisted the builders in carrying the windows up the stairs and in holding the windows while they were being installed.   The

builders finished off the work.  In the process of doing this Mr Lake became covered in plaster dust.

h)	No  head  flashings  were  installed  when  the  windows  were  put  in.

Under  cross-examination  Mr Lake  conceded  that  he  knew  what flashings were.   He was asked whether the windows came with flashings and stated that he did not recall that flashings were provided. In cross-examination there was the following exchange:

Ms Goode:	Wouldn't that have rung alarm bells for you since you were carrying them up the stairs?

Mr Lake:   No, because as far as I knew they were special types of windows.

Ms Goode: That didn't require flashings?

Mr Lake:   I don’t know if they required flashings or not. I’m not a builder.

[50]     This  analysis  shows  that  any  difference  between  Mr Lake’s  role  in  the installation of the windows in the west wall, and his involvement in the earlier building work at the Panill Place project, was  of a slight degree.   He was not responsible for the design of the windows, or the planning for them.   It was not shown that he was responsible for choosing the builders.   He did not apply any building expertise, save for the presumably crude skills involved in cutting a hole in a wall.   His work can be seen as involving less skill than that of the builders employed, because the job required building expertise, and Mr Lake did not have it.

[51]     In coordinating builders to get on site, and in helping them in a labouring role, Mr Lake was doing no more than he had before.  It could be said that he went a little further in that the cutting of the hole in the wall would have involved knowing roughly where the hole should be, and using some tools.  However, the skilled work of completing the hole and placing the window was left to the builders.   Thus, consistent with his previous work he was acting as a coordinator and a labourer and helper.  He was not using experience or skill as an installer of windows.  Specifically it cannot be said that his proximity to the Bacics jumped to a different level of proximity solely because he helped create the hole and was aware that there was no

flashing supplied or put in.   Nothing that he did could be seen as involving an assumption of responsibility on his part.  His attendance on site was incidental from the Bacics’ point of view; it could have been any person who arrived to put in the windows.  There was no specific reliance on him.  His lack of any assumption of responsibility for weatherproofing issues is demonstrated by the fact that it was builders who were selected to install the windows, rather than it being left to him.

[52]     Further,  there  is  no  indication  of  any breach  of  the  standard  of  care  by Mr Lake.  Clearly he was aware that windows had flashings and what they were for, but he was not challenged on his assumption that this must have been a particular type of fixed window that did not require a flashing.  There was nothing to show this to have been an unreasonable assumption.   There is no basis for a finding of carelessness on his part.

[53]     The adjudicator’s consideration of this issue was understandably short, given the very large number of issues she had to deal with in her decision.  I recognise the advantage that she had in hearing the witnesses and assessing their credibility. However, the analysis shows that her conclusion that Mr Lake was negligent because he “helped” to install the windows in the west wall without any flashings was wrong. Assuming a finding that he supervised the work, the nature of his supervision was to ensure that the builders turned up and completed installing the windows; it was not to supervise the quality of the work done.

[54]     The adjudicator’s finding of responsibility in relation to the windows in the west wall cannot be reconciled with her earlier finding (which I have concluded was correct), that Mr Lake did not have responsibility for ensuring that work was done in accordance with good standards.   The essential nature of his role did not change between the time when he did the main body of work, and when he helped in the installation of the windows.  He owed no duty of care and was not negligent.

Conclusion on the appeal

[55]     I conclude, therefore, that the adjudicator was in error in determining that Mr Lake was negligent in assisting in the installation of the windows in the west wall.

Result

[56]     The appeal is allowed, and the cross-appeal is dismissed.

Costs

[57]     It is my tentative view that Mr Lake should have costs on a 2B basis against the cross-appellant, the North Shore City Council.  I would not be inclined to order costs against the Bacics, given the incidental and very limited role they played in the hearing.  This is a provisional view only, as I have not received any submissions on costs.

[58]     If the parties cannot agree on costs, I make the following timetable directions:

a)	The appellant is to file costs submissions within seven days.

b)	The cross-appellant (North Shore City Council) and respondents (the

Bacics) should file submissions in reply within a further seven days.

……………………………..

Asher J