by CHARLOTTA HARPUR, HEANEY & PARTNERS
In March 2018, a number of families living in newly built houses within the Bella Vista subdivision in Tauranga were told by the Tauranga City Council that they had to leave their properties due to safety concerns.
Twenty-one properties at various stages of completion were affected and the evacuees were told to pack for a week. Little did they know then that they would not be able to return to their homes at all, as concerns about the construction of the houses were to be uncovered.
The involvement of the council in granting consents for the development, the decision to evacuate the residents and ultimately to settle the claims that followed have been well covered in the media.
The council engaged former Justice Paul Heath QC to investigate what went wrong and he delivered a detailed report on June 1, 2018.
In late 2015 and early 2016 the developer Bella Vista Homes Limited (in liquidation) obtained resource consent to divide 11 lots it owned within a subdivision into smaller lots. These were to become the Bella Vista development.
The lots were located on sloping land and the intention was to cut and batter the lots so as to create building sites on a lower and higher part of the land. Geotechnical reports were provided in support of the application.
The cut and batter was completed. The problem that arose was that sections of land required support by way of retaining walls.
None of the people involved – the developer, the contractors and the council – noted what Paul Heath QC described as being plainly obvious to a lay person: The construction of the houses should not have started until the retaining walls were in place. Some of the un-retained slopes were up to six metres high.
The RMA is concerned with the impact of developments on the natural environment, and is not concerned with whether the planned building work is likely to comply with the NZ Building Code, which comes into play when the buildings are designed and building consent is sought under the
Building Act 2004
So, how did such a situation arise despite the development involving a number of different professionals?
One answer lies with the limited responsibility sphere of each of those involved in the development, and also in part in the statutory regulatory regime.
The subdivision consent was granted subject to the Resource Management Act 1991 (the RMA).
The RMA is concerned with the impact of developments on the natural environment, and is not concerned with whether the planned building work is likely to comply with the NZ Building Code, which comes into play when the buildings are designed and building consent is sought under the Building Act 2004.
Those involved in the earthworks at subdivision stage were only concerned with the conditions under the resource consent, and had no responsibility for any subsequent Building Code issues.
Further, those involved in the site preparation and construction of the houses were only required to comply with the building consent plans. Those contractors and building inspectors were not technically required to look beyond the immediate building platform and consider the stability of the nearby steep batters.
When considered with hindsight, it seems that someone, somewhere, should have asked the right questions and not simply raced ahead with blinkers on. Paul Heath QC found that under the Building Act 2004 the health and safety of occupants can be considered and more should have been done.
Apparently, assurances had been made by the developer to the council, and others, that retaining walls would be constructed. Once the company was placed in liquidation, that never happened. Cyclone Hola was approaching and the potential for slips to occur led to the unprecedented step on March 9, 2018 to have the properties evacuated.
The council has settled with the home owners, essentially under the legal principle of ‘the last man standing’. This arises when a number of parties share responsibility for damage caused, but only one has, or is perceived to have, the pockets deep enough to pay.
It doesn’t matter whether one or 10 parties share responsibility – the one left standing has to pay the full damage.
Companies can fold, and individuals go bankrupt. Councils can do neither and are therefore often at the forefront of these claims, although there are others that should bear a greater burden for the errors.
The saga may well continue for some time with action taken by the council to recoup some of the damages paid from others involved in the development.
The main target for such action would usually be the developer, who sits at the centre of events and is responsible for the sequencing of the work and compliance.
In this case, recovery from the development company or its director is looking unlikely.