New owners cannot be forced to comply with a Building Act ‘notice to fix’ ignored by a previous owner, the High Court ruled in a test case where owners of a pig farm sold out within a week of being ordered by Waikato Regional Council to fix an effluent pond.
The High Court was told NZ Pork Ltd as owner of a pig farm on Rawhiti Road at Te Aroha was issued in September 2016 with a ‘notice to fix.’ Waikato Region was concerned about stability of an effluent pond embankment. Within days, NZ Pork sold the farm to Poseidon Holdings Ltd. Companies Office records identify that Paparoa Trustees Ltd is a major shareholder in both companies.
Waikato Region challenged a District Court ruling that Poseidon Holdings as the new owner could not be held liable for the default of previous owner, NZ Pork.
In the High Court, Justice Wylie ruled there is no blanket Building Act obligation forcing a new owner to remedy non-compliance by a past owner. There are specific Building Act rules where a current owner has to make good previous owner’s defaults. Examples include: fire alarm and sprinkler systems; earthquake proofing; swimming pool fencing and maintenance of a building warrant of fitness.
Waikato Regional Council v. Poseidon Holdings Ltd – High Court (26.05.23)
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