Hobday v Selwyn District Council - [2024] NZHC 550

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-462

[2024] NZHC 550

UNDER the Building Act 2004, the Contract and Commercial Law Act 2017 and in tort

BETWEEN

EMMA-LOUISE HOBDAY and JASON LYNDON ZACHARY HOBDAY

Plaintiffs

AND

SELWYN DISTRICT COUNCIL

First Defendant

KYE DAVID JOHNSON, JUSTINE MARGARET JOHNSON and RICHARD

CROCKFORD GRAY, as trustees of the Cornelius Johnson Family Trust

Second Defendants

Hearing: 4 March 2024

Appearances:

E J Walton and T S Burtenshaw for Plaintiffs C Harpur and N Ravaji for First Defendant

A D Marsh for Second Defendants (watching brief)

Judgment:

14 March 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

HOBDAY v SELWYN DISTRICT COUNCIL [2024] NZHC 550 [14 March 2024]

[1] Emma-Louise Hobday (Emma) and Jason Hobday (Jason) instructed their then solicitors to issue proceedings against the Selwyn District Council (the Council) and the Cornelius Johnson Family Trust (the Trust) (the second defendants), arising from poor workmanship in respect of a property Emma and Jason purchased from the Trust in 2014.

[2] Kye and Justine Johnson, who are trustees of the Trust, are also directors of Kye Johnson Builders Ltd. The Trust was originally the owner of the land purchased by Emma and Jason and the house which they purchased was built by Kye and Justine’s building company, or at least that is the understanding of Emma and Jason.

[3] The Council issued a building consent for the property on 20 September 2011. The Trust applied for a Code Compliance Certificate on 15 October 2012 that was issued on 18 October 2012.

[4] Emma and Jason say that in September 2022, they learnt their house was not watertight. They were not sure how to proceed but had heard about the Leaky Homes Tribunal and approached the Council for help. How that contact was made is not in evidence but given the Council cannot locate any emails from Emma and Jason in 2022, it may have been oral contact. On 16 September 2022, a Council employee sent Emma and Jason an email advising he had discovered the Weathertight Homes Resolution Service were not receiving new claims after 31 December 2021. He referred to the possibility that Emma and Jason may have the ability to claim against the builder of the property. His email concluded:

As you are rapidly approaching the 10 year warranty period limitation, the owner should seek legal advice sooner rather than later.

[5] Emma and Jason acted on that suggestion and their then solicitors filed a statement of claim in this Court on 17 October 2022 —one day within the 10 year long stop limitation period.

[6] Unfortunately, it appears due to an oversight by Emma and Jason’s then solicitors, the statement of claim was not served within one year of being filed.

[7]Rules 5.72 and 5.73 of the High Court Rules 2016 (the Rules) provide:

5.72Prompt service required

(1)The statement of claim and notice of proceeding…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] NZHC 550
Decision Date: 14 March 2024

CaseChat Overview and Summary

Emma-Louise Hobday and Jason Lyndon Zachary Hobday, a married couple, filed a claim against the Selwyn District Council and the Cornelius Johnson Family Trust for poor workmanship in a property they purchased in 2014. The central issue was whether the court should grant an extension of time for serving their statement of claim, which was not served within the one-year statutory period as required by the High Court Rules 2016. The Council opposed the extension, arguing that the 10-year long stop limitation period under the Building Act 2004 had expired, barring the plaintiffs' claim unless an extension was granted.

The court considered whether the application for an extension should be assessed under rule 1.19 or rule 5.73(2) of the Rules. It concluded that rule 5.73(2) applied as the plaintiffs' claim was in the third category identified in Kleinwort Benson Ltd v Barbrak Ltd, where the writ had ceased to be valid and the limitation period had expired. The court noted that in such cases, the plaintiff must show "good reason" for the delay in serving the claim, and the reason must be strong, especially if the defendant has an accrued right to plead the statute of limitation.

The court examined the factors presented by the plaintiffs, such as the relatively short delay in serving the claim, the significant cost of repairing their home, and the merit of their claim supported by expert evidence. However, the court found that the plaintiffs' primary hardship—the loss of their cause of action against the Council—was a necessary consequence of the limitation period having expired and did not constitute a good reason for extending the time. The court also considered that the plaintiffs had a remedy against their former solicitors who failed to serve the claim in time. Ultimately, the court declined to extend the time for serving the statement of claim, and ordered the plaintiffs to pay the Council's costs on a 2B basis plus disbursements.

Orders