Lee v Whangarei District Council - [2016] NZCA 258

IN THE COURT OF APPEAL OF NEW ZEALAND

CA656/2015
[2016] NZCA 258

BETWEEN	OLIVIA WAIYEE LEE Appellant
AND	WHANGAREI DISTRICT COUNCIL Respondent

Hearing:	4 May 2016
Court:	Winkelmann, Simon France and Woolford JJ
Counsel:	Appellant in person and T Connor (McKenzie Friend) F P Divich and H E Waldron for Respondent
Judgment:	15 June 2016 at 3.30 pm

JUDGMENT OF THE COURT

AThe application for leave to adduce fresh evidence is declined.
BThe appeal is dismissed.
CThe appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Winkelmann J)

Ms Lee had a house built for her in 2007 and early 2008. Because of significant defects in its construction, the exterior was not weathertight. On 21 May 2014, Ms Lee issued proceedings against the Whangarei District Council, alleging the Council had been negligent when undertaking inspections during construction. The Council applied for summary judgment against Ms Lee on the ground that her proceeding had no prospect of success as it was time barred under s 4(1)(a) of the Limitation Act 1950. That section provides that actions founded on tort “shall not be brought after the expiration of 6 years from the date on which the cause of action accrued”.
Associate Judge Bell entered judgment in the Council’s favour.[1] He was satisfied that Ms Lee discovered the damage to her house at least by 21 May 2008. Accordingly, when she commenced proceedings on 21 May 2014, she was outside the statutory time limit for commencing proceedings in negligence. Ms Lee now appeals his decision.

Some background principles

[1]Lee v Whangarei District Council [2015] NZHC 2777 at [70] [HC decision].

The issue for the Associate Judge on the Council’s application for summary judgment was whether the Council could establish on the balance of probabilities that Ms Lee’s claim against it could not succeed. It was not enough that the claim was merely weak.[2]
[2]Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [58]–[64].
For the Council to show the claim was time barred, it had to prove that before 22 May 2008 Ms Lee knew, or could with reasonable diligence have discovered, that the house had construction defects which resulted in the house not being weathertight. That follows from the fact that a cause of action accrues when each fact which it will be necessary for a plaintiff to prove has occurred.[3] Where the claim is based on negligence, damage is an essential part of the cause of action. Until the damage has occurred, the cause of action is not complete.
[3]Invercargill City Council v Hamlin [1994] 3 NZLR 513 (CA) at 536.
In Invercargill City Council v Hamlin, the Privy Council described how this rule applied within the context of a claim against a council for negligent inspection when the foundations of a house were found to be defective.[4] The Privy Council said that the…

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: [2016] NZCA 258
Decision Date: 15 June 2016 at 3.30 pm

CaseChat Overview and Summary

In Lee v Whangarei District Council, the Court of Appeal of New Zealand considered an appeal brought by Ms Olivia Waiyee Lee against the Whangarei District Council. Ms Lee alleged that the Council was negligent in its inspections during the construction of her house, which suffered significant defects. The Council applied for summary judgment, arguing that Ms Lee's claim was time-barred under s 4(1)(a) of the Limitation Act 1950, which provides a six-year limit for actions founded on tort. Associate Judge Bell found in favour of the Council, concluding that Ms Lee discovered the damage to her house before 21 May 2008, and therefore outside the statutory time limit for commencing proceedings in negligence. Ms Lee appealed this decision, arguing that the correct limitation period was the 10-year long stop contained in s 393 of the Building Act and that the defects she was now suing for were new defects identified by an expert in 2011, not those identified earlier. The Court of Appeal rejected Ms Lee's arguments, finding that the correct limitation period was indeed the six-year limit under the Limitation Act 1950 and that she knew or could with reasonable diligence have discovered the defects before 21 May 2008. The appeal was dismissed, and Ms Lee was ordered to pay the Council's costs for a standard appeal on a band A basis and usual disbursements.

Orders