Max Barber is a Solicitor with Franks Ogilvie. He joined the firm in early 2023 and was admitted as a barrister and solicitor in March 2023.
Max joined the firm from BNZ where he spent seven years working across client relations and personal banking. He gained his Bachelor of Laws from Victoria University of Wellington.
Summary
A husband and wife were unsuccessful in claiming against a local authority for a mistaken assurance that their pool complied with the Fencing of Swimming Pools Act 1987 (“FOSPA”).
Background
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, the Council’s advice was incorrect– the pool had never been FOSPA-compliant. The Council made this clear to the Plaintiffs in a pool inspection in 2019, and required the Plaintiffs to undertake expensive remediation, including installing a barrier that undermined the open-plan layout of the pool area and thereby reduced the market value of the property.
It was undisputed that the Plaintiffs were outside of the statutory deadline to make a claim in respect of the 2006certification. Well-established case law recognised that the Council owed a duty of care to the Plaintiffs in respect of that certification.
To get around the claims deadline, the Plaintiffs claimed against the Council in respect of the 2009 and 2012 inspections. They argued the claim on the basis that the inspections had given them a false sense of security that the pool complied with the FOSPA, thereby depriving them of an opportunity to sue in respect of the 2006 certification within the statutory limitation period.
The Council admitted negligence but disputed the existence of a duty of care.
The case
The Plaintiffs claimed against the Council in negligence, negligent misstatement, and breach of statutory duty. They claimed damages reflecting lost market value of their property, remediation cost, and general distress.
The deciding issue in the case was whether the Council owed the Plaintiffs a duty of care in respect of the 2009 and 2012 inspections.
The High Court
The High Court found that the Council owed the Plaintiffs a novel duty of care in negligence.
They found that a duty existed because the Council, as the sole body responsible for conducting FOSPA inspections, was the appropriate party to bear responsibility for failure to undertake them properly. Their statutory function meant it was inevitable that they would provide assurances to homeowners about FOSPA compliance, and that homeowners would take their assurances as read. The court drew an analogy with well recognised duty of care councils owe to those to whom they issue building and code of compliance certificates under the Building Act.
The court found that a duty in negligent misstatement existed, largely on the same basis.
However, the breach of statutory duty claim was rejected as there was no suggestion Parliament intended that a breach of the FOSPA would be enforceable as a civil action for damages.
The court went on to find that while the 2009 inspection was barred by the 10 year limitation period under the Building Act, the 2012 inspection was within time. Accordingly, the court awarded the Plaintiffs the majority of their claimed damages for lost amenity value, remediation costs, and general distress.
Court of Appeal
The Court of Appeal held that no duty of care existed, overturning the High Court. The result was that the Plaintiff’s claim against the Council for damages failed in its entirety.
The court held that it was wrong for the High Court to analyse the matter as a novel duty of care. They should have applied the orthodox test for negligent misstatement. The requirements for a duty of care in negligent misstatement were as follows:
a) Advice is given for a purposethat is made known to the adviser (expressly or implicitly);
b) The advisor knows that advice will be communicated to advisee (individually or as a class);
c) The advisor knows that the advice is likely to be acted on without independent inquiry; and
d) The advisee acts on the advice to its detriment
Requirements (a) and (d) were not met in this case.
Requirement (a) was not met because there was no connection between the purpose for which the advice was given and the loss suffered. The court drew on prior case law that established that the existence and extent of a duty of care owed in respect of a statutory function will be coloured by the purpose of the empowering statute.
The purpose of the Council’s inspection function under the FOSPA was to minimise the risk of harm to children. However, the claimed duty related to economic interests of property owners (who were the subjects rather than the beneficiaries of FOSPA regulation) in preserving their ability to sue the Council in respect of prior acts of negligence. Recognising such a duty would have clashed with the scheme of the FOSPA.
Requirement (d) was also unmet, in that the Plaintiffs had in no way relied on Council statements in the 2009 and 2012 inspections. They were not planning to sue the Council at any point prior to 2019. Reliance on the statements may have promoted a false sense of security, but it did not lead the Plaintiffs to take any step they would not otherwise have taken.
Accordingly, no duty of care in negligent misstatement existed. Following from this, the court refused to recognise a novel duty of care in negligence, holding that to do so would cut across the already well-established law.
Result
The Plaintiffs failed in their claim for damages against the Council on the basis that no duty of care existed.
The decision has the hint of unfairness, given that the Council was admittedly negligent in their original and subsequent inspections. However, as the Court of Appeal noted, the unfairness arose as an inevitable side effect of statutory limitation periods. It was not appropriate for principles underpinning the law of torts to be distorted, however harsh the consequences may have been for the Plaintiffs.
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 future information on this case or similar issues please contact Brigitte Morten, Director
In late 2023, the coalition government between the National, ACT and New Zealand First took office. The National/ACT coalition agreement stated that the Government would repeals 7AA of the Oranga Tamariki Act 1989. The repeal policy originated with ACT and ACT MP Karen Chhour became the Minister for Children.
Section 7AA imposes a duty on Oranga Tamariki to show practical commitment to the principles of the Treaty of Waitangi by directing its internal processes towards reducing disparate outcomes for Māori children in state care, and by entering strategic partnerships with iwi or Māori organisations in some cases.
Shortly after the Government took office, several Māori claimants submitted claims in the Waitangi Tribunal arguing that the repeal policy breached the principles of the Treaty of Waitangi.
During the resulting inquiry, the Tribunal directed several questions about the policy to the Minister.
In March 2024, Cabinet agreed to enact legislation to repeal s 7AA. The Crown then informed the Tribunal that the Minister’s evidence was no longer necessary because the policy was now a Cabinet decision. The relevant Cabinet Paper was provided as evidence of the basis of the decision, and Oranga Tamariki officials would give supplementary evidence in person.
The Tribunal disagreed that the evidence was no longer necessary. It directed further questions to the Minister, seeking the identities of “prominent individuals” and “anecdotal evidence” identified in the Cabinet Paper as supporting the case for the repeal Bill.
The Crown maintained its position that the Minister would not give evidence. In response, the Tribunal issued a summons to the Minister, compelling her to provide evidence sought.
The Crown applied for judicial review of the summons decision to argue that Chhour should be exempt from a subpoena.
The case
The Crown alleged in both courts that the summons was unlawful because the evidence was not relevant to the inquiry, and because the ‘heightened requirements of comity’ in the case meant that it was inappropriate to issue the summons.
Relevance
Both the High Court and Court of Appeal rejected the relevance challenge. However, the two courts came to opposing conclusions regarding the value of the Minister’s evidence.
The High Court accepted the Minister’s evidence would not add much to that provided by the Cabinet Paper and by officials. However, the threshold for evidential relevance was low, and the Minister’s evidence would clearly meet it.
The Court of Appeal disagreed that the Minister’s evidence had nothing to add. The Crown had acknowledged in the Tribunal that the repeal policy reflected “a philosophical or political viewpoint not reducible to empirical analysis”. The ACT Party was the genesis of the viewpoint, notwithstanding Cabinet’s subsequent adoption of the policy pursuant to the National/ACT coalition agreement. In this context, the Minister’s personal evidence was highly relevant and the High Court had erred in saying otherwise.
Comity
Comity is a constitutional convention that mandates mutual respect and restraint between the different branches of government. Its purpose is to avoid clashes between the separate branches of government that could undermine the constitutional order. Like all constitutional conventions, it is not directly legally enforceable.
Historically, the convention has arisen most often between Parliament and the judiciary. However, the convention is not necessarily confined to that relationship.
The High Court held that the requirements of comity in this case were heightened. This was because the Tribunal was exercising powers similar to that of a court, and requiring the Minister to give evidence personally on a Cabinet decision could infringe collective ministerial responsibility and Cabinet confidentiality (themselves constitutional conventions).
The heightened requirements of comity meant the Minister’s evidence had to be ‘clearly necessary’ to the purpose of the inquiry, rather than the lower threshold of relevance. As the Tribunal already had the Cabinet Paper and evidence from officials as evidence, the Minister’s evidence was not clearly necessary. Accordingly, the summons decision was unlawful.
The Court of Appeal overturned the High Court decision on this point.
In their judgment, the Court of Appeal emphasised that the purpose of the convention was to avoid conflicts over the powers and privileges of the branches of government, citing the law of Parliamentary privilege as a notable example. There was no potential for similar conflict in this case.
The Tribunal was not acting judicially. Its summons power was being exercised pursuant to an investigation and not an adjudication of rights and duties between parties. The Tribunal could not make legally binding orders, with its function being instead to deliver non-binding recommendations to the Crown about compliance with Treaty principles. Additionally, it ceased to have investigatory jurisdiction as soon a policy was embodied in a Bill that had been introduced to Parliament.
The court also disagreed that summonsing the Minister would breach collective responsibility and Cabinet confidentiality. The repeal policy was the Minister’s in substance, and the Minister could speak to it without compromising any Cabinet proceedings.
Because of this, there was no potential in this case for the type of institutional conflict that the comity convention existed to protect. The High Court had been wrong to apply the ‘clearly necessary’ requirement, and the summons was lawful.
Result
The appeal was allowed, but the court made no order. This would have been redundant given when the case was heard, the Tribunal had already made its final report, and the repeal Bill was before the House of Representatives.
The decision nonetheless provides a rare example of judicial comment on the ambit of important constitutional conventions and the influence they can have on legal rights and duties.
At the time of writing, the Oranga Tamariki (Repeal of Section 7AA) Amendment Bill is before the Social Services and Community Select Committee, which is due to report back on 21 November 2024.
For further information on this case or similar issues please contact Director, Brigitte Morten
The Covid-19 Recovery (Fast-track Consenting) Act 2020 (“FTCA”) was enacted to facilitate economic and social recovery from the impacts of Covid-19. It allowed referred and listed projects to be consented by an expert panel rather than requiring them to go through ordinary resource consenting procedures.
Hiringa Energy Ltd and Balance Agri-Nutrients Ltd (“Respondents”) sought to establish a renewable wind energy facility with infrastructure for the production of hydrogen as an alternative transport fuel. They sought consent for the project under the FTCA and the Minister referred the project to an expert panel for consent (“Panel”).
The project required a number of wind turbines to be installed on site. Evidence showed the turbines obstructed the view of Taranaki Maunga (mountain) from the rohe (governance area) of various hapū in the area. The Panel accepted that obstruction of the view of the maunga could have adverse cultural impacts on the hapū.
The Respondents engaged with the hapū prior to the consent hearing. No consistent view was expressed. Some hapū tentatively supported the project while others were opposed. The existence of the turbines was the major sticking point.
As a result, the Respondents agreed to take various actions (including limiting the number of turbines to four and decommissioning them after a maximum of 35 years) to mitigate the damage to the taonga. The Panel granted the consents and included these agreements as consent conditions.
Several hapū and the designated post-Treaty settlement governance entity in the area (“Hapū Appellants”) and Greenpeace appealed the consent decision to the High Court. The High Court dismissed the appeal, and the Hapū Appellants and Greenpeace appealed to the Court of Appeal.
This case brief describes Hapū Appellants’ appeal.
Under the FTCA, panel decisions were appealable on questions of law only. Accordingly, the court noted it was not concerned with whether the Panel decision was right or wrong - their enquiry was confined to whether the Panel had correctly understood and applied the relevant law.
The Hapū Appellants argued the Panel had made an error of law as their decision was inconsistent with the principles of the Treaty of Waitangi.
Treaty clauses
‘Treaty clauses’ are a term used colloquially to describe statutory provisions that require (usually) public decision-makers to engage in some way with the principles of the Treaty of Waitangi. These clauses are the primary means by which the Treaty has binding effect in New Zealand law; the Treaty itself not being directly enforceable in the courts. The courts have created the Treaty principles on a case by case basis, beginning with the landmark Lands decision in 1987.
The FTCA Treaty clause required decision-makers under the FTCA to “act consistently” with the Treaty principles. This was a bottom line requirement – a decision that was inconsistent with the Treaty principles would be unlawful regardless of the extent to which it promoted the purposes of the Act.
What Treaty principles applied
The Hapū Appellants argued that the “active protection” Treaty principle applied. As the parties agreed that the turbines could cause spiritual harm, the Hapū Appellants argued that active protection required the Panel to decline the consent or require an alternative site for the turbines where they did not obstruct the view.
The court rejected this argument. Relevant case law and Waitangi Tribunal decisions had established that the overarching Treaty principle was ’partnership’. The Crown and Māori were obliged to act in good faith and reasonably in their dealings, a requirement which implied an element of give and take.
The active protection principle was an element of partnership – the courts and Waitangi Tribunal had noted that in some cases, the Crown must take an active role in protecting Māori interests in order to satisfy the principle of partnership. An example was the decision of the Broadcasting Assets case in the Privy Council, which found that the partnership principle required the Crown to take an active role in preserving Te Reo.
As an element of partnership, the active protection principle was necessarily fluid. The court emphasised that the principle had never given Māori veto rights over Crown decisions that would harm their interests.
Was the Panel’s decision inconsistent with the Treaty principles?
The court held that the Panel’s decision was consistent with the partnership and active protection principles.
The Crown’s interest strongly favoured allowing the project to proceed, as there was no dispute from the Hapū Appellants that it was inconsistent with the purpose of the Act. This interest had to be balanced against the interest of the Hapū Appellants in preserving their relationship with the maunga.
The court held that the Hapū Appellants’ interest had been sufficiently protected. They noted the hapū most affected had been supportive of the project, there had been ample engagement with all effected hapū, and the engagement had resulted in a number of consent conditions that protected the taonga relationship with the maunga.
As a result, the consent decision was consistent with the Treaty principles and there was no error of law.
Result
The appeal was dismissed on all grounds. The decision has not been appealed to the Supreme Court, meaning the Respondents’ project is free to proceed on the conditions agreed by the Panel.
The court declined to award costs against the Hapū Appellants on the ground that they had brought the appeal in the public interest.
This case is an important reminder that the Treaty of Waitangi is not directly enforceable in New Zealand law. Even where an Act gives strong status to the Treaty principles, the courts will balance the interests of the Māori parties against the public interest underlying development. The Treaty does not give Māori veto rights over public projects that affect their physical, economic, or spiritual interests.
For further information on this case or similar issues, please contact Director, Brigitte Morten
