Kia ora koutou
Last week, Minister of Building and Construction Chris Penk announced a number of reforms to the building consent system. Among these is a proposal to move from joint and several liability to proportionate liability. As more detail becomes available, and our insurers understand and comment on the implications, we will report on this in a future issue of Communique.
In the meantime this issue begins with an invitation for applications for this year’s NZACS Scholarship, and a link to the first of five papers on risk written by last year’s scholarship winner Mikayla Exton.
Many of us are likely to have never had an issue related to the proximity of powerlines to a proposed building, but two recent claims have highlighted some regulatory requirements which could easily be overlooked.
Board member John MacDonald has written an article highlighting consent issues with prefabricated meeting pods. Sales reps are naturally inclined to promote a product without necessarily pointing out its downsides, and this article is a reminder that we have a key role to consider compliance with the Building Code.Some recent notifications have prompted an article concerning correct floor levels, particularly with increasing numbers of flood events.
We have a few words on the implications of the recent Supreme Court decision in the Kaniere Family Trust v PGG Wrightson Real Estate Ltd case.
Renewal time isn’t that far away and so Aon have provided an update on the insurance market, with some positive news for members.
We finish up with some words from Board Chair Peter Marshall following the recent stepping down – after many years of valuable service - of Board Member Colin Orchiston, and Board Secretary Steve Graves.
Ngā mihi
Applications are now open for NZACS’s annual scholarship which is available to employees and principals of currently insuring NZACS member firms. The scholarship is aimed at building commercial and risk management skills and providing funding for further education, research, conferences and training in this area.The scholarship value is up to $25,000 (excl GST) and applicants can apply for all or part of the funding. Applications are due by 30th November. The application form contains more details and can be found on our website here.
The recipient of last year’s Scholarship, Mikayla Exton has written five short reports based on her attendance at a course entitled Integrating Risk into Strategic Decision Making at the Judge Business School*, University of Cambridge. The first one – ‘Risk to the Enterprise’ – is an excellent prompt for thinking about risks and proactive risk management at a practice level, and can be accessed here. The remaining four reports will be linked in future Communiques, and will also be made available in the Members’ area of the NZACS website.*The Business School is in the background of the photo of Mikayla and is an example of British architect John Outram’s 1990s work.
There have been two recent notifications arising from projects built near powerlines and so it’s worth drawing attention to the issues these may create. The other reason to highlight this item is because of the Health and Safety issues associated with overhead powerlines. Deaths due to a lack of identification of this hazard are not uncommon as evidenced in a coroner’s recent report into the death of a worker on a farm in 2023.
Lines companies have relevant information on their websites, for example from the Wellington Electricity Website: If you're building anything near overhead lines and poles (within 8.5 metres – or less, depending on the voltage), you'll need to comply with the New Zealand Electrical Code of Practice for Electrical Safe Distances (NZECP 34:2001).
This freely available COP is worth being aware of, and Figures 1 and 2 in the document provide quick reference guides.
If your building site has powerlines nearby, then consider the following:
Also note that there are restrictions on how close ‘fences made of conductive materials’ can be in relation to powerlines. Given the popularity of aluminium fencing, these rules are ones to be mindful of too.
Members working in the field of office design will be familiar with the increasingly popular “meeting pod” – proprietary prefabricated “furniture” that builds up into anything from a phone booth to a full-size meeting room.
It seems that users and suppliers have often assumed these pods don’t need Building Consent. Unfortunately it is not quite as simple as that. For example, offices are very likely to be sprinklered. NZS 4541:2020 paragraph 5.14.2 exempts furniture from sprinklering BUT ONLY if it is “not intended for occupation”. This means that pods may need sprinklers, and sprinklers are Specified Systems, and modifications to Specified Systems usually need a Building Consent.
The situation is being encountered often enough that AON, the sprinkler system certifier, has issued formal advice TN25-51 Meeting Pods. In summary, any meeting pod which has a ‘roof’ and is larger than 1.2m x 1.2m in plan, is likely to need to be sprinklered. This would no doubt apply to any other “occupied furniture” such as prefabricated audiology booths.
Experience suggests that not all pod suppliers are yet able to give good advice on this matter. As architects we are likely to be the best (or only) source of advice on the team looking at a “simple” office fitout, about whether Building Consent may be required. In any case you can be sure that if later embarrassment results, the architect will have been expected to know and speak up!
We have seen a few notifications recently arising from errors with floor levels and site levels. These can prove very costly if the building platform is set too low. The sources of these issues fall into two basic types:
Note also that from July 2024, the official vertical datum for surveying has been revised to New Zealand Vertical Datum 2016 (NZVD2016), replacing older local vertical datums (LVDs). This ensures consistency across the motu. The NZVD2016 standard is based on a reference surface rather than a network of benchmarks, which minimizes errors associated with local datums. All cadastral surveys now require the use of NZVD2016, with alternative datums generally not permitted. Check that your survey and surveyor meets these requirements.
Finally, reconfirming all the theoretical site levels on site with the contractor at the very beginning of the project is crucial. Over-excavation of a site is a common error and not one able to be fixed quickly or cheaply.
Many law firms have issued commentaries on this case which went to the Supreme Court. The case essentially involved a family trust suing a real estate agent for incorrect statements about the yield of a dairy farm that they bought…and lost money on. For those that are interested in the detail here is a typical summary. The case is an important reminder to anyone making statements or giving advice in a professional capacity to remember the following:
The landscape for architects’ liability insurance is shaped by global capacity, catastrophe activity, regional market conditions, legal environments, and evolving risk factors. The insurance industry is characterized by cyclical patterns that are influenced by these factors. These cycles typically include periods of what are known as "hard" and "soft" markets.
We are currently in a soft market (commencing mid 2024, accelerating in 2025). There have been healthy insurer returns due to modified pricing, program structure and coverage terms. This has led to more insurance capacity and increased competition, with growth-focused insurers expanding appetite and capacity into New Zealand. Soft markets are characterized by lower premiums, insurers focused on growth over risk, expansion of new insurers and agents into the market, and widening underwriting appetite.
In a hard market (last seen 2019-mid 2024) insurers face higher demand for coverage, often due to increased risk or loss experiences, leading to higher premiums and stricter underwriting standards. These cycles can be affected by external factors such as natural disasters, economic recessions, or changes in regulatory environments, which can alter risk perceptions and capital availability. Typically hard markets last longer than soft ones.
As noted, we are currently in a soft market cycle, so what does this mean for NZACS Members? The good news is that for most members, (noting that claims costs and settlements, business growth and activity changes impact individual pricing) the cost of NZACS insurance is expected to go down. This also assumes a positive response from insurers to the recent announcement from the government concerning building liability changes.
For a more detailed commentary on the global insurance market, Aon’s Q2 2025 Report is available here.
At the last NZACS Board meeting Colin Orchiston stepped down after almost 30 years of involvement with NZACS. This was a significant milestone at many levels, and his contributions to NZACS and to the architectural profession in general were celebrated by the Board at the meeting.
Colin’s initial engagement with NZACS was as a co-opted member attached to the Claims Committee, at that time run by Graham Strez and Barry Millage. Following Barry’s retirement, Colin joined Graham as the co-claims committee director, a position he has held since.
Colin has always demonstrated an interest and understanding of legal aspects associated with the architectural profession, and after some study was admitted to the Arbitrators’ and Mediators’ Institute of NZ. He has also reported on the performance of building consent authorities; was a member of the LBP disciplinary committee; and lectured at Wellington Polytechnic. Colin has also led NZACS submissions on a variety of codes, standards and Building Act matters, and he also edited Communique for over a decade. All this time he has also continued to practise as an architect.
Colin’s deep understanding of contracts, construction law, technical matters, and the architectural process, combined with a clarity of thought and an understanding of architects’ behaviour, make for someone who has been of real value to the Claims Committee and to members over many years. Many members have welcomed his engagement when faced with issues that might seem overwhelming at the time, and his pragmatic approach together with his quick wit always ensured some balance being provided.
Although stepping down from the NZACS Board, Colin has agreed to remain on the Claims Committee for a further period whilst we consider others who might fill some very large shoes.Thank you, Colin, for your diligent and committed efforts on behalf of us all.
An organisation like NZACS relies on strong support and guidance on a myriad of management and compliance matters, and in this regard we have been very well served by PKF Kendons and in particular their director, Steve Graves. With Steve managing his retirement and stepping down from his role as secretary and accountant, it is appropriate to recognise the contribution he has made to NZACS.
Steve has been secretary and accountant since 1997, having taken up a role held by Ken Hayward from Kendons. Steve has guided the Board for these 28 years through many changes, both external and internal. Specific requirements around being a co-operative society required strong management and reporting on compliance matters, and this was recently made more complicated when NZACS wound up their own insurance company, Acanthus, in 2023.
As secretary and accountant, Steve was diligent in all Board-related matters, including minute taking, financial reporting, receiving of insurance premium revenue, regular communication with our insurance broker Aon, Rules reviews, and membership submissions. His similar role for the engineers’ equivalent of NZACS, CEAS has provided benefits to both organisations.
PKF Kendons will continue to provide support for NZACS through the appointment of Alastair Lloyd, a qualified accountant and director of PKF Kendons.