The High Court judgment on the Stadium Southland roof collapse has been released – and the total cost to Invercargill ratepayers is $10,000, Invercargill City Council Chief Executive Richard King confirmed today.
Mr King said Justice Dunningham in her decision found that the Council was 10% responsible for the collapse and Invercargill engineer Tony Major 90% responsible.
The judgment was for $16.9 million – and even though Council was apportioned only 10% of the blame, Council’s indemnifiers, RiskPool, may be required to pay the full amount if Mr Major is unable to meet his contribution of 90%.
Mr King said because the Council was fully insured, ratepayers had already paid the $10,000 excess and would not be required to pay anything more.
Background information:
The following is a statement from Heaney and Partners, the law firm that acts for Riskpool, the Invercargill City Council’s insurers. Riskpool is a mutual liability trust fund created by New Zealand local authorities to provide long-term, affordable professional indemnity and public liability protection solely for local government organisations.
Southland Stadium Roof Collapse 2010
On 18 September 2010 the roof above the community courts at Stadium Southland collapsed under snow load. The stadium has been repaired at significant cost funded predominantly by insurance proceeds but also by local councils and the community. The Trust which operates the stadium was insured with IAG and IAG commenced high court proceedings against the Invercargill City Council to recover the costs of the building.
The claim was heard in the Christchurch High Court this year. The claim was against both the council and Mr Tony Major, an Invercargill engineer who designed and was meant to observe the construction of the roof which subsequently failed. Justice Dunningham delivered the court’s decision on 20 August 2015 and held that the principal cause of the failure related to Mr Major’s performance but held that the Council also owed a duty of care to the Trust. The court allocated 90% of the blame to Tony Major and 10% to the Council. The Council’s liability arose from the issue of a code compliance certificate which from an administrative perspective should not have been issued without more supporting information. The judgment against the Council was for approximately $16.9 million. The claim has been on foot for some time and has been managed by New Zealand Mutual Liability Riskpool. It has been properly provided for in economic terms by the Council and will have very little financial impact on the Council.
An appeal is being considered because of the significant implications the judgment has for councils (and their ratepayers) throughout New Zealand, who routinely rely on producer statements from professionals involved in complex construction projects.
The Council noted that its officers were seen by the court to have been careful and acted responsibly but it had been let down by an administrative process. The events leading up to the Council’s liability occurred in 2000 and administrative systems and procedures have been improved since then and the council does not expect a repeat of this type of problem.
