Auckland Council, James Hardie appeal ruling on leaky building claim made beyond 10-year limit

Auckland Council and James Hardie New Zealand argued in the Court of Appeal yesterday against a High Court ruling that apartment owners could join a leaky building lawsuit after the expiry of the 10-year limit on claims by piggybacking on claimants within the same complex who had met the deadline.

On September 1 last year, Justice Patrick Keane ruled 15 unit owners from Oteha Valley Estate, an 18-unit residential complex at John Jennings Drive, Albany, were able to pursue a multi-unit complex claim by joining claims made by two unit owners within the 10-year limit of the building being completed. The complex suffered water damage estimated to cost $2.84 million to repair.

The code compliance certificate for the complex was issued on May 3, 2000 but the multi-unit complex claim was made on November 9, 2012. A further complication was that the two unit owners who claimed within the 10-year period withdrew their claims on the advice of the Ministry of Business, Innovation and Employment, to join the multi-unit complex claim.

Justice Keane had ruled that the date the earlier of the two individual claims was brought should be considered the date the multi-unit complex claim was brought. He said the wording of the Weathertight Homes Resolution Services Act 2006 deemed the new, multi-unit complex claim to have been brought on the date on which the earlier withdrawn, individual claim was commenced.

Appealing that decision yesterday, Auckland Council counsel Stephen Price said the wording of section 37 of the legislation showed any claim must have been brought by the 10th anniversary of the code compliance certificate being issued, and "nothing in other sections can be read as damaging that."

Mr Price said the Weathertight Homes Act was "not about granting paramountcy of money recovery," rather it was about making the claims process efficient.

Tim Rainey, counsel for the body corporate, said if an existing individual claimant joined a new claim, the filing date for the existing claim applied to the new claim.

Justice Ellen France, who is president of the Court of Appeal, asked Price whether the end result of his argument was that some parts of the complex would be repaired using money from individual claims, and the balance not.

Price said there would be some owners who would be able to recover money, and some who would not, because those owners did not bring a claim within their time limit.

Justice France also asked whether the two claimants who had withdrawn their claims to join the multi-unit claim, on the advice of the chief executive of the Ministry of Business, would be able to continue with those individual claims if it was ruled that the multi-unit claim was not able to be pursued. Price said he was unsure, and said he would consult with James Hardie New Zealand.

Justices France, Lynton Stevens and Helen Winkelmann reserved their decision.


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2 Comments & Questions

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One wonders why we do not see a law change, at least for the benefit of people for whom new buildings built today can be expected to be leaky. It is idiotic that there is a 10 year claim period for a building component that is supposed to last 50 years, for which damage might only be evident (at the 10-year point) through destructive testing.

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I think there is a Court of Appeal ruling that supply of defective building products might not be subject to the 10 year limitation period.

Apart from suppliers, the only other player likely to be standing after 10 years from completion of building work is the Council.

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