Recent Landmark Supreme Court Decision

June 19, 2014

By Philip O’Sullivan

The recent Supreme Court decision, Osborne v Auckland Council has finally ended a great deal of confusion, heartache and needless cost to affected homeowners over the last 12 years, brought about by the Building Acts 1991 & 2004 limitation clauses; 10 years from the date of the act or omission on which the proceedings are based, being different to s14(a) the Weathertight Homes Resolution Services Acts 2002 & 2006 (WHRSA), which says that the claim must be made within 10 years of the house being built.

The Osbornes purchased a new home in 1997.  Construction work on the house had been substantially completed in August 1996 and final code compliance certificate was issued during April 1997. The house began to leak in late 1997 and repairs were subsequently carried out. These repairs were not effective.  They then applied for an Assessor’s report under the WHRSA in February 2007.  This report found that the house became habitable on or around 15 August 1996 and was therefore outside the eligibility criterion specified in s14(a) of the WHRSA.

On the basis of this report, the chief executive of the Ministry of Business, Innovation and Employment determined that the appellants’ claim was not eligible.  After various appeals the matter found its way to the Supreme Court which has held that in effect the date of issuance of the final CCC is the date the home was “built”, effectively removing this confusion.  This is good news for the affected homeowners who also had their claims declined due to this technicality, but bad news for Councils and rate-payers.  These homeowners can complete their claim and now also apply for the Financial Assistance Package.

The NZ Herald reported on June 11 “The Osbornes’ lawyer Tim Rainey said yesterday the judgment meant there were potentially 369 claimants previously deemed ineligible who could push for a re-hearing.  But today Ministry of Business, Innovation and Employment resolution services general manager Adrienne Meikle said “upon examination, we believe that yesterday’s decision only affects a small number of past claimants and we would welcome any of those past claimants who think they are affected by this decision to contact us.  All current and future claims received will now have the Supreme Court decision applied to them. At this stage, we are unable to quantify how many future claims we may now receive as a consequence of the Supreme Court’s decision, however [the ministry] has adequate resources to address any increase in future claims,” she said.  “Yesterday’s judgment in the Osborne case means that we now have certainty on the meaning of the word ‘built’ in relation to claims bought under the Weathertight Homes Resolution Services Act.”   Ms Meikle said the Supreme Court decision meant there was now “certainty” over when the 10-year period began.”

However it should be remembered that the 10 year long stop provision runs from the date of the “act or omission” so in the Osbornes case they will likely only have one party to sue, and that is the Council.

Please note that the above information is not intended as legal advice and rather is the opinion of the writer. If you need any further advice on this matter please contact us.

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