KEY POINTS:
Owners of a large Ponsonby apartment complex are trying to drag the Government into their $3 million leaky building court claim, seeking to reverse case law which has so far allowed the state to escape any direct liability.
Residents of the 37-unit Siena Villas in Burgoyne St have applied to the Court of Appeal to hear their case, but are deciding this week whether to seek leave to go directly to the Supreme Court.
They fear the Court of Appeal might reject their case, so are considering applying to the highest authority.
The nub of their case is that they want money from the Government for its role in the leaky building scandal, estimated to affect 40,000 to 60,000 houses nationally and cost $5 billion to $11 billion.
The Ponsonby homeowners say the Government's former Building Industry Authority should be held accountable for its actions, despite case law which has so far allowed the BIA to be struck out from litigation.
Previous action against the BIA failed after the Sacramento case two years ago when the state organisation was found to be too far removed from the day-to-day decisions which caused the leaky building catastrophe.
But now the owners want to name the BIA for its involvement in their case.
Their lawyer, Tim Rainey at Grimshaw & Co, said yesterday an application had been filed in the Court of Appeal but the owners might instead seek leave to bypass that court and apply to go to the Supreme Court.
In 2005, the Ponsonby residents took their case to the High Court at Auckland and named the BIA - as Her Majesty's Attorney-General - in litigation against a large group which included the Building Research Association of New Zealand (Branz), Approved Building Certifiers, Barfoot & Thompson, Babbage Consultants, James Hardie NZ and others.
Branz appraised products used for the units, ABC inspected many units and Barfoots marketed the complex as "a touch of Italy - Ponsonby fringe".
The agency also said: "We are certain you will be delighted with the standard of workmanship of your apartment and the professionalism of the developer."
On June 19 last year, Justice Patrick Keane granted the BIA's strike-out application, citing the Sacramento case which set the precedent for the BIA to be withdrawn from law suits.
In that case, 153 homeowner victims at Botany Downs tried to sue the Government authority but lost and were forced to abandon their appeal after the Government threatened to seek costs.
That scared off many other plaintiffs, who have instead claimed money from councils for inspecting and giving consent to their leaky buildings.
But the Ponsonby residents, who live on a ridge where the North-Western Motorway feeds into Spaghetti Junction, are about to challenge the precedent and are seeking to directly involve the BIA.
The BIA was the Crown entity set up in 1992 to manage building legislation but was dissolved in 2004 when its functions were merged into the Department of Building and Housing.
Siena Villas was initially estimated to cost $1,807,312.50 to fix but Rainey said yesterday the price had risen considerably since the residents lodged their action and they are now seeking around $3 million. The units at 8-18 Burgoyne St were developed by Stephen Taylor who contracted Babbage Consultants to design them, the claimants said.
The complex went up in 2000 and 2001 and was clad in the Harditex system. But a year later, owners noticed defects which included significant water entry, timber decay, problems with the cladding and damp insulation.
"The units ... have become contaminated with the fungus Stachybotris atra which poses a threat to the health and safety of the occupants in the Siena Villas development," their claim states.
Rainey said some residents had repaired their units despite not winning any money in court so far.
The claimants say the BIA is liable because it owed a duty of care to the residents who bought properties constructed according to building rules which the BIA controlled, including the Building Act.
There was a relationship of sufficient proximity between the BIA and the residents because the BIA had overall responsibility for the Building Act 1991.
Even though the BIA was warned many times about the leaky building crisis before the issue became public, it failed to act, they say.
It also had exclusive control over the approval of private building certifiers and their insurance arrangements, it charged a fee for approving these certifiers under the act, and private certifiers approved many of the Ponsonby units.
Julia Black, crown counsel for the Crown Law Office in Wellington, filed a statement of defence saying the BIA had no knowledge of many of the claimants' statements, denying them and stating it was not required to plead to many of the claims.
Bill Porteous, former BIA chief executive, swore an affidavit in the Ponsonby case, supporting the BIA's application to be struck out.
Barfoots also defended its involvement. Peter Hunt at McElroys Solicitors said promotional material included a disclaimer saying the information was not a representation and there was no warrant it was correct. Barfoots denied the claim brought under the Fair Trading Act and said people were not misled.
Chapman Tripp filed a statement of defence for James Hardie NZ, citing technical information documents for the installation of Harditex and referring to Branz's appraisal of the cladding product.
Although it admitted the units leaked, James Hardie said it had insufficient knowledge of the source of leaks. It also cited testing and investigation of its cladding by Building Technology, a company wholly owned by Branz.
Court fight
* Owners of the three-level Siena Villas are fighting for money from the Government.
* Their claim is directly against the Building Industry Authority.
* The claim was rejected by the High Court but residents have applied to the Court of Appeal.
