Limitation – leaky home owner left without a claim

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The recent High Court decision of Associate Judge Doogue in Lawrence Bunting & Sara-Jane Gardner v Auckland City Council found the owners of a leaky home were left with no recourse.

 

Their claim under the Weathertight Homes Resolution Service (WHRS) was deemed ineligible and their subsequent civil proceedings lodged in the High Court were struck out on the ground that it was time barred.

 

The applicants then sought a judicial review solely on the question of whether or not the Associate Judge erred in law when he ruled the proceedings were commenced out of time.

The facts 

By way of background, Bunting & Gardner (the applicants) are the owners of a townhouse in Orakei, Auckland, which was constructed for them between September 1994 and August 1995.

 

During this time the respondent, the Auckland City Council, carried out various inspections of the dwelling pursuant to its statutory duty. The respondent issued a final code of compliance certificate on 4 October 1996.

 

The townhouse was found to suffer from a number of leaks in early 2005 and, after initial remedial works failed, the applicants filed an application to the WHRS on 13 June 2006.

 

An assessor’s report, dated 11 August 2006, confirmed that the claim met the criteria set out in s 7(2) of the WHRS Act 2002 (“the Act”).

 

However, on 18 October 2006, the applicants were advised their claim under s 7 of the Act was, in fact, ineligible as they had filed their application more than 10 years after the townhouse was built.

 

The applicants then commenced the civil proceedings in question in the High Court on or about 27 April 2007. 

 

Both parties agreed that for the applicants to have a valid claim, the civil proceedings had to have been issued no later than 10 years from the date the respondent issued the code compliance certificate, as in accordance with s 393 of the Building Act 2004.

 

The pivotal question then became, on what date were proceedings issued?

 

Applicants’ argument

The applicants argued that the struck out proceeding was not time barred, as was ruled by the Associate Judge in the initial hearing of the matter, because section 55 (1) of the Act deemed that proceedings are filed on the day the application is made to the WHRS.

 

The applicants contend then that their proceedings were filed on or about 13 June 2006 when they first applied for a WHRS assessor’s report.

 

They argued their interpretation of section 55 (1) was correct, and their claim was validated because for the purposes of the Limitation Act 1950, and any other provision that imposes a limitation period, the making of an application under s 9 (1) is deemed to be the filing of proceedings in a court.

 

Respondent’s argument

Conversely, the respondent argued that the application under the Act was extinguished when the claim was determined to be ineligible by the WHRS as it was made 10 years after the townhouse was built, and that any subsequent claim or proceeding must qualify on its own account under any relevant limitation period.

 

The respondent contended that the applicable dates in this case were 4 October 1996 when it issued the code of compliance certificate, and 27 April 2007 when the applicants commenced the High Court proceedings.

 

On the basis of these dates the respondent argued that the applicants had not filed their proceedings within the 10-year limitation period stipulated in s 393 of the Building Act 2004, and the Associate Judge was correct in striking the original applications out.

 

Judicial decision

 
Justice Duffy dismissed the application to review Associate Judge Doogue’s decision, affirming that the correct position had been taken from the outset.

 

The applicants’ section 55 (1) argument was rejected on the basis that the intent of the section is to deem the application that has been filed to be a proceeding for the purpose of the Act, thereby avoiding any limitation problems should that application later be transferred to a court.

 

The applicants could not succeed as their application was ineligible under the Act. Justice Duffy opined:

“Once a claim is found to be ineligible, it is excluded from the scope of the WHRS Act and, consequently, all the provisions of the Act cease to apply to such an application.

 

“It follows that the struck out proceeding cannot be deemed to have been filed on 13 June 2006 and, therefore, to be within the limitation period. The Associate Judge was right to strike it out.”

 

Conclusion


The real obstacle that the applicants faced in this case was that their initial WHRS claim was ineligible, and their attempts to continue to rely on the date they filed that WHRS application when commencing separate civil proceedings in the High Court was always going to fail.

 

While it might seem like a harsh decision — with the aggrieved applicants left to face potentially a $300,000 bill for the cost of rectifying the defects and damages to their leaky home — it certainly serves as a timely reminder that the courts are strict in adhering to statutory limitations, and proceedings should be filed sooner rather than later when a statutory deadline is approaching.

 

This decision leaves uncertain whether the lodging of the claim in the WHRS would have been sufficient to stop the limitation period running if the claim was still eligible in the WHRS.