Falsified Blueprints, Failed Buildings: Can Owners Sue the Government for Flawed Building Approvals in Japan?

Judgment Date: March 26, 2013

Imagine the nightmare scenario: you invest in the construction of a new building, obtain all necessary government approvals, and complete the project, only to discover later that your architect falsified critical structural calculations. The building, once thought safe and compliant, is revealed to be at risk of collapse in a major earthquake, necessitating costly repairs and causing significant business disruption. In such a situation, can the building owner hold the local government responsible for the building official's failure to detect the architect's fraud during the building confirmation process? This complex question of state liability was at the heart of a Japanese Supreme Court decision on March 26, 2013 (Heisei 22 (Ju) No. 2101).

The Hotel Project and the Architect's Deception

The plaintiff, X, planned to construct a new business hotel in Y Prefecture. As required by law for a building of this scale (an 8-story reinforced concrete structure), X engaged a first-class architect, A, for the design. On August 24, 2001, X, through Architect A as his agent, submitted an application for building confirmation (建築確認 - kenchiku kakunin) to the relevant building official (建築主事 - kenchiku shuji), B, employed by Y Prefecture. The application included structural calculation documents prepared by Architect A, purportedly demonstrating the building's compliance with earthquake resistance standards under Japan's Building Standards Act (BSA - 建築基準法).

On September 10, 2001, Building Official B issued the building confirmation, certifying that the hotel plan complied with the BSA and related regulations. X proceeded with construction, and the building successfully passed mid-term and final inspections conducted by the building official.

However, in December 2005, sparked by news of a widespread structural fabrication scandal involving Architect A, it was discovered that the structural calculation documents for X's hotel had also been falsified by A. Investigations revealed that, due to these falsifications, the hotel was not sufficiently earthquake-resistant and was at risk of collapsing in a seismic event of intensity 6 or higher on the Japanese scale. Y Prefecture subsequently requested X to prepare and implement a retrofitting plan. X incurred substantial expenses for these repairs and suffered business losses due to the necessary hotel closure.

X sued Y Prefecture under Article 1, Paragraph 1 of the State Redress Act (国家賠償法 - Kokka Baishō Hō). This Act allows individuals to claim compensation from the state or public entities if public officials, in the exercise of public authority, illegally cause damage to them, either intentionally or negligently. X argued that Building Official B had been negligent in overlooking Architect A's falsified calculations and that issuing the building confirmation based on these flawed documents constituted an "illegal" act for the purposes of the State Redress Act, thereby making Y Prefecture liable for X's losses.

The lower courts (Kyoto District Court and Osaka High Court) dismissed X's claim. The High Court, for instance, reasoned that the primary purpose of the building official's review duty was to ensure public safety, and it did not extend to protecting the individual financial or property interests of the building owner who submitted the application. X appealed to the Supreme Court.

The Supreme Court's Framework for State Liability in Building Confirmations

The Supreme Court, in its judgment of March 26, 2013, ultimately dismissed X's appeal, finding no illegality on the part of Building Official B in this specific instance. However, in doing so, it laid out an important framework for assessing state liability in such cases:

I. The Building Confirmation System Does Protect the Building Owner's Interests:
The Supreme Court first overturned the High Court's narrow view on the scope of protection. It held that while the Building Standards Act and the building confirmation system primarily aim to ensure public safety by preventing the construction of non-compliant and dangerous buildings, this objective inherently includes the protection of the individual interests of citizens, including the building owner (建築主 - kenchiku-nushi) who applies for the confirmation. The Court reasoned that it would be difficult to argue that an owner who builds or purchases a building is not among the "people" whose life, health, and property the BSA (Article 1) seeks to protect. Therefore, a building official, when reviewing a building plan submitted by an owner, owes a certain professional legal duty (職務上の法的義務 - shokumu-jō no hōteki gimu) to that owner to act diligently in preventing the construction of an illegal building.

II. The Standard for Determining "Illegality" of a Building Confirmation for State Redress Act Purposes:
The Court then addressed when a building official's issuance of a confirmation could be deemed "illegal" under Article 1, Paragraph 1 of the State Redress Act.

• It acknowledged that the primary responsibility for ensuring a building's design complies with safety regulations lies with the qualified architect engaged by the owner. The Architect Act imposes duties on architects to design in accordance with legal standards and to perform their work faithfully.
• The building official, when reviewing plans prepared by a licensed architect, is entitled to conduct their review on the premise that the architect has fulfilled these professional duties.
• However, a building official's confirmation of a plan becomes "illegal" for SRA purposes if it is found that the building official, despite exercising the attention ordinarily expected in the performance of their duties (職務上通常払うべき注意 - shokumu-jō tsūjō harau beki chūi), overlooked a non-conformity with building regulations that should have been discoverable from the submitted documents. This includes situations where:
  • The plan's content is in clear violation of an explicit requirement of the building regulations.
  • There are obvious errors in the submitted documents.
  • Discrepancies exist between different parts of the submitted documents or data that a standard review process should have identified through cross-checking.
    Essentially, if a reasonably careful building official, following standard procedures, would have found the flaw, then overlooking it could constitute negligence leading to an "illegal" confirmation. The Court explicitly noted that this does not mean the building official has to re-perform all complex structural calculations from scratch or independently verify every piece of data in structural calculations certified by a qualified architect, especially when sophisticated falsifications are involved.

III. Potential Limitation on the Building Owner's Claim Based on Good Faith (信義則 - shingisoku):
Even if a building official's confirmation were found to be "illegal" under the standard outlined above (i.e., a discoverable flaw was negligently overlooked), the Supreme Court introduced an important caveat concerning claims brought by the building owner themselves:

• The building confirmation system is a regulatory framework imposed on the owner's freedom to build, from the perspective of public welfare.
• The safety and compliance of a building designed by an architect are, in the first instance, to be ensured through the architect's proper performance of their duties under the Architect Act.
• The building owner is the one who commissions the architect and submits the application for building confirmation based on their architect's plans.
• Considering these factors, the Court stated that it "cannot be denied that there may be cases where it would be contrary to the principle of good faith and fair dealing (信義則に反する - shingisoku ni hansuru) for the building owner (the applicant) to assert the illegality of the confirmation (which was issued in response to their own application, based on plans from their chosen architect) for the purpose of claiming damages under SRA Article 1, Paragraph 1."
  This determination would depend on a comprehensive assessment of various circumstances, including:
  • The owner's own awareness of (or culpability regarding) the non-conformity.
  • The nature and extent of the damage suffered by the owner.
  • The degree of the building official's negligence or their awareness of the non-conformity.
  • Other relevant factors specific to the case.

Application to the Facts: No "Illegality" by the Building Official Found in This Case

Applying this framework, the Supreme Court meticulously examined the specific falsifications made by Architect A and whether Building Official B should have detected them:

• Falsified Structural Modeling (e.g., treating linked shear walls as a single wall): The Court noted that building regulations at the time did not prescribe specific methods for structural modeling in computer analyses. Therefore, Architect A's modeling choice, while potentially problematic from an engineering standpoint, was not an obvious or explicit violation of regulations apparent on the face of the documents.
• Falsified Stiffness Ratios: Although the building's floor plans might have shown significantly fewer shear walls on the lower floors compared to upper floors (a potential indicator of stiffness issues), the submitted structural calculations (which were based on falsified input data fed into a ministry-certified calculation program) showed compliance with the required stiffness ratios. The Court found that it was not reasonable to expect the building official to doubt these professionally certified calculations or to independently re-calculate stiffness ratios from scratch for every application, especially when the submitted figures appeared compliant.
• Falsified Shear Force Values in Calculations: The structural calculation program used by Architect A required manual input of certain shear force values for assessing the adequacy of structural walls. While these manually inputted values were falsified, the Court noted that there were over 100 different ministry-certified structural calculation programs in use at the time, each with potentially different functionalities and input requirements. It would be an onerous burden, given the statutory time limits for review, for building officials to be intimately familiar with the detailed operational specifics of every program and to manually cross-verify every single inputted numerical value against voluminous raw program outputs in every application, particularly when there were no obvious red flags on the summary sheets.

Based on this detailed analysis, the Supreme Court concluded that Building Official B, by exercising the ordinary professional care expected of such an official, could not have been reasonably expected to discover Architect A's sophisticated and deliberate falsifications from the submitted application documents. Therefore, the building confirmation issued by B was not "illegal" for the purposes of SCEA Article 1, Paragraph 1. Consequently, X's claim against Y Prefecture failed.

The Concurring Opinions: A Deeper Dive into "Relative Illegality"

While the judgment was unanimous in its outcome, the concurring opinions revealed an interesting jurisprudential debate among the Justices regarding how to factor in the building owner's unique position (as the applicant who selected and commissioned the fraudulent architect) when assessing the "illegality" of the building official's actions.

• Justice Tahara's View: He argued that the "illegality" of the building official's conduct (i.e., whether they breached their duty of care) should be determined objectively based on the standards applicable to their professional duties. The building owner's own involvement, potential negligence, or the fact that they were the source of the flawed application should be considered separately, potentially under doctrines like comparative negligence or as a good faith limitation on their right to claim damages, rather than by altering the standard of "illegality" itself depending on who the claimant is.
• Justices Terada and Ohashi's View: They suggested a concept of "relative illegality." They argued that the nature of the interest protected by the building confirmation system and the corresponding duty of care owed by a building official might differ depending on the claimant. The duty owed to an innocent third party (e.g., a neighbor injured by a building collapse caused by an overlooked defect) could be judged by a different, perhaps more stringent, standard than the duty owed to the building owner who submitted the application (via their architect) that contained the very flaws. They posited that the building owner, being primarily responsible for ensuring their architect's competence and the accuracy of their application, might face a higher threshold in establishing the building official's "illegality" towards them.

The majority opinion, while ultimately finding no breach of duty by the official in this case, did include the "good faith limitation" on an owner's claim (Point III above), which aligns somewhat with the idea that the owner's unique position is a relevant factor, even if the initial assessment of the official's "illegality" is framed more objectively.

Conclusion

The Supreme Court's March 2013 decision in this structural fabrication case provides crucial guidance on the limits of state liability when building confirmations are issued based on fraudulent information supplied by a building owner's own architect. While affirming that the building confirmation system is intended to protect the owner's interests (alongside public safety), the Court set a standard for "illegality" that requires a demonstrable failure of the building official to detect non-conformities that would have been discoverable through the exercise of ordinary professional care. It recognized the primary responsibility of the architect and the practical limitations on building officials in scrutinizing complex, professionally certified documents for hidden, sophisticated fraud. Furthermore, the Court signaled that even if an official's error were found, the building owner's own role as the applicant and their relationship with their chosen architect could, under the principle of good faith, limit their ability to claim damages from the public entity. This ruling underscores the careful balancing act between public accountability and the primary responsibilities of private actors in the construction process.