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We have a client (a builder) who lifted up a granite benchtop by a few inches from one end to allow for some adjustments to be made to the cabinetry it was sitting on. It then cracked right through the centre and has to be replaced.

The insurer has declined his contract works insurance claim, calling this faulty workmanship, saying that workmanship may include "carrying out their work with reasonable care and skill". We disagree on the basis that even a builder could not be expected to reasonably know that this action, lifting it just a few inches at one end, could cause the benchtop to crack as it did. Any reasonable person, even a construction professional, would not expect something to crack like that in that scenario. He clearly didn't!

Certainly, if the benchtop supplier did this they could be accused of faulty workmanship (because they would know better), but not someone who doesn't have their level of knowledge or skill. The assessor suggested that the "insured did not have the required knowledge and skill" to complete this task with all reasonable care. Surely, if he didn't have the knowledge it can©t be faulty workmanship and must be accidental. For argument's sake, if he did have the required knowledge and skill but still did it that way, it would seem to definitely be faulty workmanship, so they can©t have it both ways.

The insurer has argued that our client should have googled how to correctly lift the benchtop prior to performing this action and since they didn©t seek to obtain the "required knowledge and skill" this is faulty workmanship.

In summary, is it faulty workmanship if you know something is incorrect and do it anyway? If you don©t know something is incorrect and do it, then that must be accidental? Finally, can the failure to research the correct methodology be "faulty workmanship" if in a scenario such as this the action being performed may seem as minor as a small lift of a few inches?

Reply:  Crossley Gates

The leading New Zealand authority on the application of the words “faulty workmanship” in a policy exclusion is Tevcorp Holdings Limited v QBE [2000] NZHC 001095. The High Court held that in relation to workmanship, “faulty” is the equivalent of 'negligent'.

So was the builder negligent? The test for negligence is not a google search but rather whether the standard of care the builder exercised fell below the standard of care of a reasonably competent builder in the same situation. In order to prove this in court, an expert builder would be called to give evidence of what a reasonably competent builder would have done in the circumstances.

September 2020

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