Last week our Supreme Court held that a local authority in issuing
building inspection certificates owes a duty of care in relation to
commercial buildings. This followed our Court of Appeal holding in 1991
that owners of houses rely upon local authority building consent
processes and a substantial revision of the reasoning by the Supreme
Court in 2011 when it held that owners of apartments were owed a duty of
care, regardless of whether they owned the apartments as occupiers
(which might have seen a duty resting on a health and safety rationale)
or investors (although there is a suggestion that this was to recognise
the tenants' rights as occupiers).

In /Body Corporate 207624 v North Shore City Council/ [2012] NZSC 83
(http://www.nzlii.org/nz/cases/NZSC/2012/83.html), the Supreme Court was
concerned with a hotel. The Court of Appeal had recognised a sharp
division between dwellings and commercial buildings: this line was
erased by the Supreme Court, and it has to be said that the line was not
all that logical. However, in its approach to recognising the duty of
care, the Supreme Court seems to have erased quite a bit more. Proximity
tends to depend upon the twinned concepts of assumption of
responsibility and reliance or vulnerability: although there is no
majority decision as such, the longest analysis (provided by Chambers J)
rejects reliance in favour of the control given to the local authority.
I have to say - this decision does not really read like that of a top
level appellate Court: it looks more like a lower Court judgment, where
the Judge is trying to persuade himself that no superior Court has told
him he can't do what he wants to do.

On the other hand, there is a very serious analysis by William Young J
in dissent, where he raises concerns about the role that policy is
playing and the inability of Courts to adequately resolve policy
arguments. He says (and I tend to agree) that the majority has simply
decided that because the harm was foreseeable, that satisfies the
proximity requirement and, in the absence of countervailing policy
grounds, there must be a duty of care. The case is giving me
conniptions: not because of the recognition of the duty so much as the
methodology the Court employed to get to that result. Having said that,
we are still a long way from establishing liability: it may well be that
the local authority reasonably took at face value certificates by the
various experts to the effect that they had deployed their expertise so
there was nothing to worry about.

Barry Allan