A husband and wife successful sued a local authority for a mistaken assurance that their pool complied with the Fencing of Swimming Pools Act 1987 (“FOSPA”).
In 2008, Ms Buchanan and Mr Marshall (“Plaintiffs”) purchased a property in Nelson. A selling feature of the property was its centrally located open-plan swimming pool area. The Tasman District Council had certified in 2006 that the pool complied with the FOSPA. This was confirmed in subsequent pool inspections in 2009 and 2012.
However, in 2019 the Council went back on its earlier advice. The pool area had in fact never been compliant with FOSPA. Expensive remediation works were required, which included installation of a barrier that undermined the open-plan nature of the pool area, damaging the amenity value of the property.
Despite having a good claim, the Plaintiffs were barred from suing the Council in respect of its 2006 certification, as such a claim would be outside the statutory deadline imposed by the Limitation Act 2010. To get around this technicality, the Plaintiffs sued the council on the basis that the later inspections gave them false assurance that deprived them of the opportunity to sue the Council for negligence in the original inspection.
The Council admitted negligence but disputed the existence of a duty of care.
The court applied the well-established three-factor framework for assessing a novel duty of care:
1. Whether it was reasonably foreseeable that the Plaintiffs would suffer loss;
2. Whether the Council was the best party to bear responsibility for the loss; and
3. If so, whether there was any policy reason why the Council should not bear the loss
The court found that the loss was reasonable foreseeable. Section 10 of the FOSPA clearly contemplated that Councils would advise pool-owners on compliance, and it was predictable that pool-owners could suffer remediation and amenity loss if advice was negligent.
Additionally, the Council was the best party to bear responsibility for the loss. Councils regularly provided homeowners with assurances that their pools were FOSPA-compliant, and it was ordinary practice for them to be relied on. In this sense, the role of councils in FOSPA inspections was held to be significantly similar to their role in issuing building consents and codes of compliance, where a well-established duty of care applies.
Finally, there were no public policy arguments against recognising a duty of care. Recognising a duty would not promote a flood of legal claims – any liability that existed would be to a small and well-defined class (pool-owners). Legal risk would not disincentivise councils conducting pool inspections either as FOSPA inspections are now mandatory under Part 2 of the Building Act 2004.
Accordingly, the court held that the Council owed the Plaintiffs a duty to conduct the 2009 and 2012 inspections with reasonable care.
A duty was also found based on the separate doctrine of negligent misstatement, largely for the same reasons that a general duty of care was recognised. However, the Plaintiffs’ claim for breach of statutory duty failed, as the court held that Parliament did not intend for FOSPA to ground a private legal claim.
Limitation statutes are statutes that bar civil claims unless they are filed by a statutory deadline. Two relevant limitation statutes applied in this case – the 10-year deadline under s 393 of the Building Act 2004 applied, and the 3 year ‘late knowledge’ deadline under s 11(3)(a) of the Limitation Act 2010.
The 10-year Building Act deadline applied to both inspections, as they ‘relate[d] to building work’ per the requirement of s 393. This barred the claim based on the 2009 inspection, as the claim was filed 11 years after the inspection. However, the claim based on the 2012 was within the deadline.
The 2012 claim was also held to be within the Limitation Act deadline. The ‘late knowledge’ date under s 14 was held to be the date of the 2019 inspection. Prior to this date, the Plaintiffs had no reason to suspect the 2012 inspection had been conducted negligently. The claim was filed in 2020, well within the three year deadline applicable under s 11(3)(a).
The Plaintiffs claimed damages from the Council to compensate them for remediation costs, loss of amenity value to their property (as measured by reduction in market value), and for emotional distress. They were largely successful in recovering all of these losses, with some minor and technical exceptions.
This was outside the norm for a case framed around a lost opportunity to sue, where damages are usually discounted to account for the possibility of the barred claim (in this case, the claim base on the 2006 certification) being unsuccessful. Palmer J held that this case differed from the norm, in that the negligent conduct was an act rather than an omission, and that in any event it was virtually certain that the Plaintiffs would have recovered in respect of the 2006 certification had the Council not negligently assured them that their pool was FOSPA-compliant.
The court also declined to discount the damages for contributory negligence. It was reasonable for the Plaintiff’s to have relied on the Council’s negligent advice without further enquiry.
The Plaintiffs were successful in their claim against the Council for negligence and negligent misstatement relating to the 2012 inspection. They were awarded damages compensating them for remediation works, loss of amenity value of their property, and emotional distress.
Note: Swimming pool inspections are now governed by a similar regime under Part 2 of the Building Act. It is highly likely that the duty of care recognised in this case will apply under the new regime.
Update: On 20 August 2024, the Supreme Court granted the Plaintiffs leave to appeal. The sole question on appeal will be whether the Court of Appeal was correct to hold that there was no duty of care owed by the Council to the Plaintiffs when carrying out FOSPA inspections.
For further information on this case or similar issues please contact Director, Brigitte Morten
