The Weathertight Homes Resolution Services Act
The concern about leaking through cladding systems is well
known. The government’s response was to create this Act, which was passed
together with the Construction Contracts Act (CCA) in November 2002.
To facilitate the assessment of damage relating to
leaking housing; to provide for the
resolution of disputes arising as a result of those assessments; to provide the owner with remedies for the
recovery of payments for remedial work, and/or to put in place such work.
The Act has set up a Weathertight Homes Resolution
Service, which is a government sponsored organisation specifically tasked
with dealing with “leaky buildings”.
For a nominal fee, owners of “leaky buildings” may lodge a claim with
the WHRS. The WHRS building assessors
will report on the nature and extent of damages, the remedial work and costs
involved, and identify who may be potentially liable. That report is subject to review before the claim is accepted.
If the claim is accepted, the WHRS will appoint a
mediator with a view to reaching a confidential agreed settlement between
the parties. If the mediation
settlement is suitably witnessed by the mediator, it will be deemed final and
binding, and enforceable. Breach of the
agreement would amount to a breach of contract actionable in court.
Adjudication may be commenced in the absence of
mediation, or if mediation fails to
resolve the issues with all the parties.
Therefore the parties involved may or may not have been parties at the
mediation. Again, the application fee
is nominal, with the WHRS appointing the adjudicator and underwriting the
costs. The claimant may specify who are
to be the parties, and the adjudicator has the power to compel any others to be
part of the process and bound by the outcome.
The nature of the adjudication has been devised to
encourage parties to settle in mediation, and is an entirely different process
to adjudication in the Construction Contracts Act. It is a public, judicial process more akin to District Court proceedings
but with the provision that parties may be represented by non-legals.
The adjudicator’s determination must deal with
liability and costs, and may deal with any matters as would a court - such as
interest, injunctions, specific and general damages, and who should meet the
costs of the adjudication. The
determination is binding, but may be appealed in a District Court: the outcome
of that appeal is final.
Nothing in the Act replaces the dispute resolution
provisions in a contract, and where a leaky
building matter is already part of an arbitration, or is submitted to
arbitration, (or proceedings in a court or Disputes Tribunal) an adjudication
cannot proceed.
Definitions
and terminology:
Dwellinghouse: The Act only applies in the
case of housing, which includes apartments, flats, or units within a building
used as housing, and includes attached items like gates and fences. Hospitals, hotels, institutions and the like
are not included.
A leaky building means a dwellinghouse where water has penetrated as a result of any
aspect of the design, construction, alteration or materials used in the
preceding 10 years. Note that it is not
limited to failure of the cladding system.
An owner includes a
beneficiary of a trust, and a shareholder in a company formed to own the
dwellinghouse.
These notes are provided by Orchiston Architects Ltd, Architecture & Dispute Resolution, P.O. Box 9136 Wellington, ph 04 5627 438, based on information as at 20/08/06. They remain the copyright of Orchiston Architects Ltd, and may be copied and redistributed if and only if reproduced in full without any change in content whatsoever to the notes, letterhead/logo, and this footer. They are intended as a general guide only, and not specific advice: the author accepts no responsibility for persons acting or not acting upon the information herein, and specific advice should be sought from the author or other suitable professional in respect of particular issues as and when required.