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