Local authority liability: an update

• Leaky Building Duty Extended to Commercial Buildings

In Body Corporate No 207624 v North Shore City Council (Spencer on Byron) [2012] NZSC the Supreme Court held that councils owe a duty of care to all owners of buildings whether they are residential or commercial. The duty is to ensure that those buildings comply with the building code and is currently restricted to the Building Act 1991.

Whether Councils owe a duty of care in relation to commercial buildings constructed under the Building Act 2004 has been left open. Because of the 10 year longstop limitation under the 1991 Act, commercial building owners should check now whether they have a case for leaky buildings under the law as restated in Spencer on Byron.

• Duty of Care Upheld for LIM Reports

The Supreme Court confirmed in Marlborough District Council v Altimarloch Joint Venture Limited and Others [2012] NZSC that councils owe a duty of care to the recipient of a Land Information Memorandum (LIM) if the LIM negligently misstates information it must contain.


LIMs contain two types of information: mandatory information under section 44A(2) of Local Government Official Information and Meetings Act 1987 and optional information under section 44A(3). The duty of care upheld by the Supreme Court is in relation to mandatory information only.

• Possible Liability for Advice at Pre-Lodgement Meeting

In Oteha Investments Ltd v S [2011] the High Court declined to strike out a developer’s claim in negligence against the former North Shore City Council (NSCC). The claim related to advice given by NSCC at pre-lodgement meetings. The Court found there is an arguable case that local authorities owed a duty of care in relation to pre-lodgement advice.

• Possible Liability for incorrect issue of section 224(c) certificate

In Swordfish Co Ltd v Buller District Council [2012] the High Court upheld the decision not to strike out the plaintiff’s claim in negligence. The council issued a section 224(c) certificate for a subdivision plan when the conditions of the plan had not been complied with. Swordfish purchased land in the subdivision and suffered loss when the necessary earth-fill and flood mitigation conditions had not been fulfilled.