Olivia Waiyee Lee v Whangarei District Council

JurisdictionNew Zealand
CourtSupreme Court
JudgeGlazebrook J
Judgment Date22 December 2016
Neutral Citation[2016] NZSC 173
Date22 December 2016
Docket NumberSC 68/2016

[2016] NZSC 173

IN THE SUPREME COURT OF NEWZEALAND

Court:

William Young, Glazebrook, Arnold, O'Regan and McGrath JJ

SC 68/2016

BETWEEN
Olivia Waiyee Lee
Appellant
and
Whangarei District Council
Respondent
Counsel:

T J Rainey and J Heard for Appellant.

A R Galbraith Qc and F P Divich for Respondent.

Appeal against a Court of Appeal decision which held that the appellant's claim against the Whangarei District Council was out of time pursuant to s37(1) Weathertight Homes Resolution Services Act 2006 (“WHRSA”) (application of Limitation Act 2010 to applications for assessor's report) — the appellant's house, constructed in 2007 and 2008, was leaky — in August 2008 the appellant applied for an assessor's report under s32(1) WHRSA — in March 2010 the appellant initiated an adjudication in the Weathertight Homes Tribunal which was terminated on the basis of s60(5) WHRSA (right to apply for adjudication of claims — owner of a dwellinghouse may not apply to have an eligible claim adjudicated if it was the subject of an arbitration that had already commenced) as appellant had also commenced arbitration proceedings under the Construction Contracts Act 2002 — whether, pursuant to s37(1) WHRSA, the application for an assessor's report stopped the clock for limitation purposes.

The issue was whether, pursuant to s37(1) WHRA, the application for an assessor's report stopped the clock for limitation purposes.

Held: Against the background that the LA 1950 applied only to “courts”, the effect of s37(1) WHRSA was to make it clear that the LA applied to the Tribunal's proceedings. A purpose of s37(1) WHRSA was not to limit the concession referred to in s37(b) WHRSA to proceedings under the WHRSA. If that had been the purpose, it would have been expressed in clear language, particularly in the context of a statute intended to provide a scheme to benefit consumers.

An application for an assessor's report was not an application for adjudication. “Claim” was effectively used in two senses in the WHRSA: to mean both an application for an assessor's report and an application for adjudication. The first claim (for the assessor's report) did not lead inexorably to the second (adjudication).

The purpose of s37(1) WHRSA was to “stop the clock” on limitation while the dwelling was assessed, allowing homeowners to make informed decisions about their options without, in the meantime, any legal claim they may have becoming time-barred. Interpreting s37(1) WHRSA more narrowly risked those with leaky homes falling into procedural traps. Interpreting s37(1) WHRSA in that way would not give rise to an inconsistency with s54 WHRSA (application of s37 if claim terminated under s52(4) or 53(4)) and s141 WHRSA (new claim in respect of same dwellinghouse in multi-unit complex). The effect of those sections was to allow a new claim to be brought with added claimants but, for limitation purposes, benefiting from the time of application of the original claimant.

Section 56 WHRSA (termination of claims not pursued) was mechanism for dealing with those who failed to pursue claims. Once a claim has been terminated in that manner, it could not be filed again. If the chief executive was diligent in monitoring the progress of claims and used that power when necessary, the concern about open-ended liability would be misplaced.

Section 37(1) WHRSA applied in limited circumstances. To be eligible, a dwellinghouse (or multi-unit complex) must have been a leaky home built prior to 1 January 2012. It was limited to the particular dwellinghouse (or multi-unit complex) that was the subject of the application under s32(1) WHRSA and was limited to the particular application which must be made by the owner of the dwellinghouse.

The Council had known about the claim against it since March 2010 when L filed an application for adjudication against it. That was well within time for limitation purposes. L should not, however, have commenced or continued those adjudication proceedings while she was involved in proceedings outside the WHRSA dealing with the same subject matter. Her adjudication was thus terminated by the Tribunal. The claim against the Council had never been adjudicated. Section 60(5) WHRSA prevented it being adjudicated while other proceedings were extant. There was nothing in the WHRSA or the policy behind it to suggest that a claim could not be revived once the other proceedings against a different party had been completed.

The clock was stopped for limitation purposes when L had applied for an assessor's report. Her proceedings filed in the HC against the Council were not statute barred.

The appeal was allowed. The order for summary judgment was set aside.

JUDGMENT OF THE COURT
  • A The appeal is allowed. The order for summary judgment is set aside.

  • B Costs of $25,000 plus usual disbursements are awarded to the appellant. We certify for second counsel.

  • C If not agreed, costs are to be set in the High Court and the Court of Appeal in the light of this judgment.

REASONS

(Given by Glazebrook J)

Para

Introduction

[1]

The WHRS Act

[5]

Limitation provisions

[5]

Assessor's reports

[7]

Adjudication

[13]

Transfer of proceedings

[15]

Withdrawal of claims

[16]

Termination of claims

[19]

Other relevant provisions

[23]

Background

[25]

Issues

[35]

The text of s 37(1)

[36]

Scheme and purpose

[41]

Legislative history

[48]

Significance of ss 54 and 141

[53]

Open-ended liability

[57]

Effect on the Council

[63]

Effect of termination

[64]

Conclusion

[67]

Result and costs

[71]

Introduction
1

Section 37(1) of the Weathertight Homes Resolution Services Act 2006 (the WHRS Act) provides that the filing of an application by the owner of a dwelling-house for an assessor's report under's 32(1) of that Act has the same effect for the purposes of the Limitation Act 1950 (the 1950 Act) as filing proceedings in a court. The issue in this appeal is the extent to which s 37(1) “stops the clock” for limitation purposes.

2

Ms Lee applied for an assessor's report on 12 August 2008. Her position is that proceedings she eventually filed in the High Court on 21 May 2014 against the Whangarei District Council are therefore to be treated as having been “brought” on 12 August 2008 for the purposes of s 4(1)(a) of the 1950 Act. This section provides that an action (defined in s 2(1) to mean “any proceeding in a Court of law other than a criminal proceeding”) founded on tort “shall not be brought after the expiration of 6 years from the date on which the cause of action accrued”.

3

The High Court rejected Ms Lee's argument on the application of s 37(1). 1 This meant that the court proceedings had to have been filed within six years of the cause of action accruing. The Court held that Ms Lee's cause of action accrued before 21 May 2008, referring to reports obtained by Ms Lee in February and April 2008 and letters to the builder and the cladding manufacturers in May 2008 showing

Ms Lee understood the nature of the problem with the dwelling. 2 It followed that her High Court proceedings were brought out of time and summary judgment was given in favour of the Council. 3 The Court of Appeal upheld the High Court decision. 4 Leave to appeal on the effect of s 37(1) was granted by this Court on 3 August 2016. 5
4

In this judgment we discuss the relevant parts of the legislation and the background to these proceedings, before identifying and dealing with the issues in the appeal.

The WHRS Act

Limitation provisions

The WHRS Act
5

At the relevant time s 37(1) of the WHRS Act provided: 6

37 Application of Limitation Act 1950 to applications for assessor's report, etc

(1) For the purposes of the Limitation Act 1950 (and any other enactment that imposes a limitation period), the making of an application under section 32(1) has effect as if it were the filing of proceedings in a court.

6

This Court referred to s 37(1) in Osborne v Auckland Council but did not need to determine its scope in that case. It did recognise that it could be construed as

meaning that the stopping of time is not confined to claims which proceed under the WHRS Act. 7

Assessor's reports

7

Section 32(1)(a) provides that “an owner of a dwellinghouse who wishes to bring a claim in respect of it” may apply for an assessor's report. Claim and claimant are defined in s 8:

claim means a claim by the owner of a dwellinghouse that the owner believes–

  • (a) has been penetrated by water because of some aspect of its design, construction, or alteration, or of materials used in its construction or alteration; and

  • (b) has suffered damage as a consequence of its penetration by water

claimant

  • (a) means a person–

    • (i) who applies to the chief executive to have an assessor's report prepared in respect of a building; or

    • (ii) whose claim is transferred to adjudication under section 120 or 121; and

  • (b) includes a claimant's successor by operation of law

8

Section 14 deals with the requirements for an eligible claim with regard to a single dwellinghouse:

14 Dwellinghouse claim

The criteria are that the claimant owns the dwellinghouse to which the claim relates; and–

  • (a) it was built (or alterations giving rise to the claim were made to it) before 1 January 2012 and within the period of 10 years immediately before the day on which the claim is brought; and

  • (b) it is not part of a multi-unit complex; and

  • (c) water has penetrated it because of some aspect of its design, construction, or alteration, or of materials used in its construction or alteration; and

  • (d) the penetration of water has caused damage to it.

9

The procedure and eligibility criteria for bringing a claim in a multi-unit complex differ from those for a single dwellinghouse. The provisions (set...

To continue reading

Request your trial
2 cases
  • Body Corporate 202692 v Auckland Council
    • New Zealand
    • High Court
    • 27 September 2019
    ...ss 23A and 23B(1)(b) into the Limitation Act 1950. 9 Johnson v Watson [2003] 1 NZLR 626 (CA). 10 Lee v Whangarei District Council [2016] NZSC 173. 11 Kells v Auckland City Council HC Auckland CIV 2008–404–1812, 30 May 12 Heaney v Auckland Council [2018] NZHC 2738. 13 Walton v Holden NZWHT ......
  • Body Corporate 328392 v Auckland Council
    • New Zealand
    • High Court
    • 22 June 2021
    ...26 27 28 29 30 Kells v Auckland City Council HC Auckland CIV-2008-404-1812, 30 May 2008 (Asher J). Lee v Whangarei District Council [2016] NZSC 173, [2017] 1 NZLR Body Corporate 202692 v Auckland Council [2019] NZHC 1976 [Retro Apartments]. Body Corporate 378351 v Auckland Council [2020] NZ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT