Osborne v Auckland City Council HC Auckland CIV-2010-404-006582

[2011] NZHC 1132

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-006582

CIV-2010-404-006583

IN THE MATTER OF     of an appeal pursuant to s 93 of the Weathertight Homes Resolution Services Act 2006 and a judicial review pursuant to the Judicature Amendment Act 1972

BETWEEN  JOHN ANTHONY OSBORNE AND HELEN OSBORNE Appellants/Applicants

ANDAUCKLAND CITY COUNCIL Respondent

Hearing:         5 April 2011

Counsel:         T Rainey and J Wood for Appellant

D Heaney SC and C Goode for Respondent

Judgment:      9 September 2011

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Friday, 9 September 2011 at 11:00 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Rainey Law, PO Box 1648, Shortland Street, Auckland

Heaney & Co., PO Box 105391, Auckland 1143

OSBORNE AND OSBORNE V AUCKLAND CITY COUNCIL HC AK CIV-2010-404-006582 9 September

2011

Introduction

[1]      Mr and Mrs Osborne (the appellants) are the unfortunate owners of a leaky home.   On 14 February 2007 they filed a claim under the Weathertight Homes Resolution Services Act 2006 (the Act).   Section 14(a) of the Act provides that claims must be filed within 10 years of when the dwellinghouse was ―built‖.

[2]      The  appellants  challenge  by  way  of  judicial  review  a  decision  of  the Weathertight Homes Tribunal and a decision of the Chair of the Tribunal, finding that their claim was ineligible because their house was not built within the 10 year limitation period.1    The appellants also appeal a decision of the Tribunal removing

the respondent as a party to the proceeding.2

[3]      The primary issue in these proceedings is whether the appellants’ claim is time-barred.  At the heart of this matter is the question of whether or not the appellants’ house was built within 10 years before they commenced their claim with the Tribunal.  If it was, then the Tribunal erred by deciding that the appellants’ claim was ineligible and by removing the Council as a party to the proceeding.

Factual position

[4]      The general facts are not in dispute and can be briefly summarised.   On 9

March 1995 an application for building consent was made and in July 1995 construction of the house began.   On 15 August 1996 the Council made its final inspection of the property.  On 5 September 1996 the Council advised that a code compliance certificate would issue after the engineer’s observation certificate was received.     On  13  February  1997  the  Council  advised  that  code  compliance certificates would be forthcoming and on 19 February 1997 and 18 April 1997 code compliance certificates were issued.

[5]      The  appellants  purchased  the  property on  26 April  1997  and  discovered leaking later that year.  After failed attempts at repairs between July 1997 and 2002,

the appellants filed their claim under the Act on 14 February 2007.

1      CIV-2010-404-006583.

2      CIV-2010-404-006582.

[6]      The critical date for limitation purposes (under s 14(a) of the Act) is therefore

14 February 1997.  On the facts I consider that the physical construction of the house had been completed well before this date (it seems it was completed sometime prior to 15 August 1996) and therefore outside of the 10 year limitation period.  The code compliance certificates however were issued after the critical date and within 10 years of the claim being filed.  Whether the appellant’s claim is time-barred depends on what event dictates the point at which a house is considered to be built.

[7] The appellants did not at any time file a civil proceeding in negligence against the Council (for issuing the code compliance certificate) with this Court.3 It is common ground that the appellants are now time-barred under s 393(2) of the Building Act 2004 from bringing a claim in negligence against the Council (although at the time they filed their claim under the Act on 14 February 2007 they were within the Building Act limitation period).

Chair’s eligibility decision

[8]      The Chair made her decision on eligibility in three stages from 31 July 2007 to 18 September 2008.  The overall effect of the eligibility decision was to rule the claim eligible only in respect of the causes of action arising from the failed remedial works.

[9]      In her initial letter of 31 July 2007, the Chair noted that in order for the appellants’ claim to be eligible the building to which the claim relates must have been built (or alterations giving rise to the claim been made to it) within the period of 10 years immediately before the day on which the claim was filed.4    The Chair followed  the  approach  of  the  previous  Chief Adjudicator,  that  a  commonsense definition of built was ―when  the dwelling was substantially completed and first

occupied or fit for occupation‖.

[10]     On the facts the Chair concluded that the building was first occupied in

September  1996  and  that  there  was  no  evidence  to  suggest  that  any  further

3      In terms of Body Corporate 188529 v North Shore City Council [2008] 3 NZLR 479 (HC).

4      Weathertight Homes Resolution Services Act 2006, s 14(a).

significant building work was carried out between that time and the time that the code compliance certificate was issued.  Accordingly, she concluded that the house was built by October 1996 and therefore the claim in relation to the original construction of the building was not eligible because the building was not built within the 10 years immediately before 14 February 2007.  However, the Chair noted that there was further work done on the property between July 1997 and 2000 and she thought it clear that any claim out of the additional work or alterations carried out between those dates could be eligible in terms of the 10 year time period.  She accordingly referred the matter back to the Department of Building and Housing to complete an assessment report based on a claim for the alterations, in particular the work undertaken between July 1997 and 2000.

[11]     In  response  to  an  application  seeking  reconsideration  of  the  decision contained in her letter of 31 July 2007, the Chair issued a formal decision dated 13

September 2007.   The Chair considered that if a claim was eligible in relation to alterations only, then the remedies that could be claimed under s 50 of the Act could only relate to that eligible claim.  She concluded that it would be contrary both to the express  provisions  of  the Act  and  the  intention  of  the Act  to  find  that  where alterations had been carried out within 10 years before the claim was filed, a claim for the original construction could also be eligible although the building was built more than 10 years before the claim was filed.

[12]     Subsequently,  an  assessor  contracted  to  the  Department  of  Building  and Housing was instructed to prepare a supplementary report in relation to the alteration work.  That report was completed and considered by the Chair.  In another formal decision dated 18 September 2008, the Chair noted the assessor’s conclusion that the claim in relation to the remedial works carried out during the period January to May

1999 did meet the eligibility criteria as set out in s 14 of the Act.  After setting out the requirements of s 14, the Chair stated that she accepted, on the basis of the information contained in the assessor’s report, that the claim for the alterations and remedial work met all the criteria listed and she accordingly concluded it was an eligible claim.

Removal of the respondent as a party

[13]     In an amended statement of claim filed on 8 June 2010 in the adjudication proceedings, the appellants claimed against the Council in both negligence and negligent misstatement with regard to inspections of the building work carried out pursuant to the building consent it issued and to the issue of a code compliance certificate. The Council sought to be removed from the proceedings.

[14]     In its decision dated 10 September 2010,5  the Tribunal traversed the factual background and then considered the legal principles relating to the removal of a person from adjudication proceedings pursuant to s 112 of the Act.  It noted that the Council’s removal application had three limbs:

(a)      The Tribunal had no jurisdiction as the Council had no involvement with the building after issuing the code compliance certificate on 18

April 1997.  It had no involvement in issuing consents or undertaking inspections in relation to the remedial works undertaken between February and May 1999.   The claim in relation to the original construction of the building had been deemed ineligible and the claim could only relate to the remedial works in which the Council was not involved.

(b)There was no tenable claim as there was no causative act or omission by the Council falling within 10 years of the date of the lodgement of the proceeding.

(c) There was no tenable claim as it was time barred by virtue of s 4 of the Limitation Act 1950 and all such acts and/or omissions alleged against the Council to have been causative of the appellants’ losses were timed barred by s 393 of the Building Act 2004.

[15]     The Tribunal then referred to the submissions filed by the appellants and by the Council.  The appellants submitted that the eligibility decision did not limit the

5      Osborne v Auckland City Council WHT TRI-2010-100-24, 10 September 2010.

legal causes of action in the subsequent adjudication.  The Council submitted that the appellants’ submissions sought to challenge collaterally the eligibility determination. The Tribunal agreed with the Council’s submissions and held that it had no jurisdiction to go behind the decision that the claim relating to the original construction of the building was ineligible.

[16]     The Tribunal found that the Council had established the claim against it was so untenable that it could not succeed.  The Council had no role in the 1999 remedial works  which  were  the  subject  of  the  eligible  claim.    It  therefore  granted  the Council’s application for removal from the proceeding.

Counsels’ submissions

[17]     The position of the respondent in these proceedings is that a dwellinghouse is built if both the owner and the Council consider it has been substantially constructed as contemplated by the building consent and all the building work has been done that would enable the Council to issue a code compliance certificate.  That is, a house is built when the physical building work has been completed.  The respondent submits that in this case physical construction of the house was completed before the Council’s final inspection on 15 August 1996 and therefore the house was built by that date (at the latest), some six months beyond the limitation period.

[18]   The appellant being time-barred in respect of the main application, the respondent submits that the Tribunal was also correct to remove the Council from the proceeding relating to the remedial work, as the respondent played no part in that process.

[19] The appellants submit that the Chair’s interpretation of s 14(a) of the Act was overly narrow. The word ―built‖ in s 14(a) should be read consistently with the definition of ―building work‖ in s 393 of the Building Act 2004, which, the appellants submit, includes the inspection of the construction of the building and the issue of a code compliance certificate. This interpretation, the appellants say, is consistent with the purpose of the provision. Parliament intended by s 14(a) only to exclude those claims that would have been time-barred by s 393 of the Building Act.

Since the code compliance certificates were issued within 10 years of filing their claim under the Act, the appellants submit that they have an eligible claim before the Weathertight Homes Tribunal.

[20]     In any event, the appellants submit that the Tribunal erred by removing the

Council as a party to the proceeding.

[21]     The appellants and respondent differ as to how I should approach the joint proceedings before me.   The appellants submit that a simple way to resolve the proceedings is to consider the appeal first.  If the appeal is allowed, there is no need to consider the more complex judicial review application.  The respondent, on the other hand, submits that the outcome of the appeal hinges on the decision I reach under the review; namely, the proper meaning of ―built‖ in s 14(a) of the Act.

[22]     I  agree  with  the  respondent  that  I  must  determine  the  judicial  review application first.  Whichever interpretation of ―built‖ is accepted necessarily dictates the success of the review and answers the question of whether the Tribunal was correct to remove the Council as a party to the proceeding.

The law

[23]     The appeal is by way of rehearing on the evidence as presented before the Tribunal.  The Court has all the powers of the Tribunal and the principles outlined in Austin, Nichols & Co Inc v Stichting Lodestar apply.6

[24]     As for the judicial review, the Court has jurisdiction to review the decisions of statutory bodies.7   Whilst (as the appellants point out) the intensity with which the Court will review the exercise of a statutory decision may vary according to the nature and consequences of the decision under review,8  I do not think that such

considerations significantly affect my approach in this case.  The issue raised under

6      High Court Rules, r 20.18; Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 (SC).

7      Judicature Amendment Act 1972, s 4.

8      See the discussion of Lang J in Auckland City Council v Attorney-General HC Auckland CIV-

2009-404-1761, 24 November 2009 at [44]–[51].

review is a narrow one (concerning the proper interpretation of s 14(a) of the Act)

and I intend to approach it afresh.

[25]     The meaning of an enactment must be ascertained from its text and in the light of its purpose.9  When interpreting a statute:10

[22] It is necessary to bear in mind that s 5 of the Interpretation Act 1999 makes text and purpose the key drivers of statutory interpretation. The meaning of an enactment must be ascertained from its text and in the light of its purpose. Even if the meaning of the text may appear plain in isolation of purpose, that meaning should always be cross-checked against purpose in order to observe the dual requirements of s 5. In determining purpose the Court must obviously have regard to both the immediate and the general legislative context. Of relevance too may be the social, commercial or other objective of the enactment.

[26]     I must determine what is meant by the word built as it is used in s 14(a) and in its legislative context.

Plain meaning

[27]     I begin with the text.  The Act does not define the word built.  Section 13 of the Act states that to be an eligible claim, a claim must meet the criteria stated in s

14.11    (The appellants’ submissions went to some length to try to persuade me that

the limitation period in s 14(a) is not part of the test for determining whether a claim is eligible, but is an assessment that becomes relevant only after a claim has found to be eligible. That is not what I read ss 13 and 14 to mean.)

[28]     Section 14 provides:

14       Dwellinghouse claim

The criteria are that the claimant owns the dwellinghouse to which the claim relates; and—

(a)       it was built (or alterations giving rise to the claim were made to it) before 1 January 2012 and within the period of 10 years immediately before the day on which the claim is brought; and

9      Interpretation Act 1999, s 5(1).

10     Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR

767 at [22] (footnotes omitted).

11     Or ss 15–18, which are not relevant in this case.

(b)       it is not part of a multi-unit complex; and

(c)      water has penetrated it because of some aspect of its design, construction, or alteration, or of materials used in its construction or alteration; and

(d)       the penetration of water has caused damage to it.

[29]     Built is the past participle of the verb to build.  Like Rome, houses are not built in a day.  The building process involves planning, construction and approval. The issue I must determine is whether post-construction approval (the issuing of a code compliance certificate) falls within the meaning of built or whether, as the Tribunal held, it refers to the point at which physical construction is completed.

[30]     In Auckland City Council v Attorney-General,12  Lang J was confronted with the same question under the predecessor to s 14(a) of the Act.13   He concluded that the natural and ordinary meaning of built is the point at which the house has been physically constructed.14    He rejected the argument that a house is built only when the Council finally inspects it and issues a code compliance certificate.  Although it may be difficult in some cases to ascertain the exact date that physical construction was completed, that should not undermine a proper construction of the section:

[92] … a dwellinghouse may also be regarded as having been built for the purposes of s 7(2) when the construction process has been completed to the extent required by the building consent issued in respect of that work.

[93] The building consent will generally be issued on the basis of plans and specifications that the applicant submits for approval when applying for the consent. Under this test the owner will need to have completed all work prescribed by the plans and specifications in relation to the physical construction of the house.

[94] I accept that very minor omissions or deviations from the plans and specifications should not operate to prevent a house from being regarded as having been built in terms of s 7(2). Where, however, the omissions or deviations are sufficient to result in the house failing its final inspection by the Council, I consider that they will have that effect.

[95] I also accept that this test may still leave some areas where it is difficult to determine whether work forms part of the physical construction process. By way of example, the completion of paintwork might not be regarded as part of the physical construction process even if the plans and specifications

12     Auckland City Council v Attorney-General HC Auckland CIV-2009-404-1761, 24 November

2009.

13     Weathertight Homes Resolution Services Act 2002, s 7(2), which is materially the same.

14 At [81].

prescribe the painting work that is to be carried out. In some cases, however, it will be necessary for such work to be carried out in order to complete the physical construction of the house for the purposes of the Act. This could be necessary, for example, to ensure that materials used in the construction process  comply  with  the  manufacturer’s  installation  instructions. Compliance with those instructions could be important to ensure that the dwellinghouse remains weathertight. In such a case the paintwork could properly be regarded as forming part of the construction work.

[31]     The appellants submit that Auckland City Council v Attorney-General can be distinguished because it was not necessary in the circumstances of that case for Lang J to determine whether the issuing of a code compliance certificate falls within the definition.  (That is because he determined that there had been physical construction within the 10 year limitation period.) While I accept that I am not bound by Lang J’s judgment, his reasoning is persuasive.

[32] I agree with the appellants that s 393 of the Building Act 2004 is relevant to the interpretation of s 14(a).15 As discussed below at [45], Parliament adopted the 10 year limitation period in s 14(a) from the 10 year long-stop period prescribed in the Building Act.

[33] Section 393 of the Building Act provides:

393      Limitation defences

(1)       The Limitation Act 2010 applies to civil proceedings against any person if those proceedings arise from—

(a)      building work associated with the design, construction, alteration, demolition, or removal of any building; or

(b)       the performance of a function under this Act or a previous enactment  relating  to  the  construction,  alteration, demolition, or removal of the building.

(2)       However, no relief may be granted in respect of civil proceedings relating to building work if those proceedings are brought against a person after 10 years or more from the date of the act or omission on which the proceedings are based.

(3)       For the purposes of subsection (2), the date of the act or omission is,—

15     Auckland City Council v Attorney-General at [91].

(a)       in the case of civil proceedings that are brought against a territorial authority, a building consent authority, a regional authority, or the chief executive in relation to the issue of a building consent or a code compliance certificate under Part

2 or a determination under Part 3, the date of issue of the consent, certificate, or determination, as the case may be; and

(b)       in the case of civil proceedings that are brought against a person in relation to the issue of an energy work certificate, the date of the issue of the certificate.

[34]     Building work is defined in s 7:

building work—

(a)       means work—

(i)      for, or in connection with, the construction, alteration, demolition, or removal of a building; and

(ii)       on an allotment that is likely to affect the extent to which an existing  building  on  that  allotment  complies  with  the building code; and

(b)       includes sitework; and

(c)       includes design work (relating to building work) that is design work of a kind declared by the Governor-General by Order in Council to be restricted building work for the purposes of this Act; and

(d)       in  Part 4,  and the  definition in  this section  of  ―supervise‖,  also includes design work (relating to building work) of a kind declared by the Governor-General by Order in Council to be building work for the purposes of Part 4.

[35]     I accept that a house is built when the building work is completed.   To describe it so is practically tautological.  But that raises the question of what is meant by ―building work‖?   The appellant says that the issuing of a code compliance certificate is part of the building work of a house.  I do not think that the words of the statute or the case law support that interpretation.

[36]     In my view, building work is defined by the process of physical construction of  a  house,  not  the  approval  process  that  occurs  subsequently.    That  was  the

conclusion of Lang J in Auckland City Council v Attorney-General.16     It is also consistent with the interpretation adopted by Glazebrook J in Klinac v Lehmann,17 considering the equivalent definition under s 2 of the Building Act 1991:

[45]  It  is  clear  from  these  definitions  that  building  work  encompasses conduct undertaken in connection with the actual process of constructing, altering or demolishing a building. …

[37] The issuing of a code compliance certificate is not building work; it is ―the performance of a function … relating to‖ building work.18 That also appears to me to be consistent with how the term building work is used in ss 40 to 43 of the Building Act 2004.

[38]     This conclusion is further reinforced by the Supreme Court’s discussion in Gedye v South, where the Court, considering the limitation period under s 91(2) of the Building Act 1991,19 stated:20

[41]  Subsections (3), (4) and (4A) of s 91 define the date of the act or omission on which a proceeding against an authority or certifier is based, as the date of the relevant consent, certificate or determination; or the date that an accreditation certificate was relied on. Hence, it is not the building work itself which comprises the act or omission, but the approval of the work (or reliance on that approval) which sets time running for the purposes of the longstop  provision. These subsections, therefore, identify conduct  of the defendant which comprises the relevant act or omission. Most often this will not frustrate the statutory purpose. The issue of a certificate (or the like) will typically occur at about the same time as the building work itself. But there will be exceptions, as this case illustrates with reference to the claim against the City Council.

[39]     My conclusion based on a plain interpretation of s 14(a) is that a house is built when the building work, that is, the physical construction, is completed to the

extent required by the building consent issued in respect of that work.

16 At [92].

17     Klinac v Lehmann (2002) 4 NZ ConvC 193,549 (HC) (emphasis added).

18 Building Act 2004, s 393(1)(b) & (2).

19 The predecessor of s 393 of the Building Act 2004.

20     Gedye v South [2010] NZCA 207, [2010] 3 NZLR 271 at [41] (emphasis added).

Purpose

[40]     The  appellant  submits  that  the  plain  meaning  interpretation  that  I  have adopted is inconsistent with the purpose of the Act.

[41]     The Act was passed as a response to the phenomenon in New Zealand of leaky building syndrome.  Rather than requiring claimants to seek redress through the courts, the Act establishes a framework by which claims in relation to leaky dwellinghouses can be resolved or determined through specialist mediation and adjudication services. The purpose of the Act is:21

(a)       to provide owners of dwellinghouses that are leaky buildings with access to speedy, flexible, and cost-effective procedures for the assessment and resolution of claims relating to those buildings; and

(b)       to provide for certain matters relating to the provision of a package of financial assistance measures to facilitate the repair of those buildings.

[42]     I  distil  from  the  appellants’ submissions  two  broad  arguments  as  to  the

purposive interpretation.  First, a broad interpretation of the eligibility criteria in s

14(a) is consistent with the purpose of the Act, which is to assist owners of leaky homes  to  resolve  claims  in  a  speedy  and  efficient  manner.    The  legislation  is designed to help people in the very position in which the appellants find themselves.

[43]     Secondly, the appellants submit that Parliament’s intention in respect of s

14(a) was that it should be read consistently with the 10 year long-stop period in the Building Act.  It would defeat the purpose of the Act if (for limitation purposes) time started to run under the Act’s eligibility criteria before it started to run under the Building Act.   Parliament would not have intended for leaky home owners to file dual claims (with the Court and the Tribunal) on the basis that the Tribunal might find a failure in the eligibility criteria notwithstanding claimants having a legitimate

claim before the Court.22

[44]     There is some force to these submissions.

21     Weathertight Homes Resolution Services Act 2006, s 3.

22     Cf Bunting v Auckland City Council HC Auckland CIV-2007-404-2317, 21 December 2007, Associate Judge Doogue at [36].

[45] I accept that Parliament in passing the Act intended that the 10 year eligibility criterion in s 14(a) of the Act should be consistent with the 10 year long-stop provision in s 393(2) of the Building Act 2004. That is obvious from statements made during the reading of the first Bill in the House of Representatives23 and from the commentary by the Social Services Committee on the Weathertight Homes Resolution Services Amendment Bill:24

Ten-year long-stop limitation period

The ten-year long-stop limitation period is a long-standing provision first enacted in the Building Act 1991 and now contained in section 393 of the Building Act 2004. The provision applies to all claims in respect of building work, and was included in section 7 of the WHRS Act when it was enacted in 2002. The effect of the provision is that any claim in respect of a leaky building must be brought within ten years of when the dwellinghouse was built or altered.

Some submitters recommended that the ten-year long-stop limitation period of making WHRS claims be removed or extended to 15 years, or should revert to the ―six years from the time of discovery‖ under the Limitation Act

1950.  Claimants believe that many homeowners will not recognise the signs of a lack of weathertightness until more than ten years have passed.

For a number of reasons, we do not support any amendment to the ten-year long-stop limitation period.   Current insurance contracts are based on the ten-year limitation period, and any amendment to the provision would affect the insurance market.  Insurers may also be reluctant to provide insurance for damage that is more than ten years old, as the older the damage for which a claim is made, the harder the claim is to defend.   It is very difficult to determine liability after ten years as gathering and hearing evidence and making decisions on liability are complicated by the passage of time.

Industry participants have now accepted this provision as a necessary limitation on the liability of participants in the construction of buildings. Any amendment may prompt calls for a replacement measure with a similar effect of providing certainty regarding the nature and extent of potential legal claims for building work.   Territorial authorities and building practitioners are unlikely to support the WHRS process if this provision is removed.

Moreover, the types of building that fit the profile outlined in the Hunn report appear to be showing signs of water ingress well within the ten-year limit-the current average age of a dwelling when the claimant applies to the WHRS is 5.9 years.  The ten-year provision motivates people to make their claims quickly.   An education campaign being developed will inform consumers about the signs of non-weathertightness and the limitation period that applies to leaky building claims.

23     (19 November 2002) 604 NZPD 2156–2157, Hon Dr Michael Cullen.

24     Weathertight Homes Resolution Services Amendment Bill 2006 (75-2) at 7–8.

[46] The appellants’ submission that the limitation period under the Act should be read as the same as the Building Act limitation period is attractive. The period of 10 years was chosen because of the long-stop period in the Building Act. If councils may be perused as defendants in civil proceedings before the courts within 10 years of negligently issuing code compliance certificates, it makes sense that the same proceedings should be possible before the Tribunal, under the legislation specifically designed to address leaky home claims. The appellant submits that the plain meaning interpretation adopted at [39] above draws an arbitrary distinction between the two statutes’ limitation periods.

[47]     There  is  something  unsatisfactory  about  a  situation  where  people  in  the position of the appellants are expected to file dual claims (with the court and the Tribunal) to preserve their position in the event that they do not meet the Tribunal’s threshold test.

[48]     I also agree that from the textual interpretation which I have adopted (above) it is more difficult to establish the date on which a house was physically built — when the final nail was hammered and the last board painted — as opposed to when a code compliance certificate was issued.  (Although that was a point considered and

dismissed by Lang J in Auckland City Council v Attorney-General.)25

[49] Notwithstanding these considerations, and with great sympathy for the appellant’s position, I have concluded that the purpose of the s 14(a) limitation period supports the textual interpretation which I have adopted at [39].

[50] First, and importantly, Parliament did not adopt the same language and structure of s 393 of the Building Act under s 14(a) of the Act. The two provisions are drafted very differently and they serve different purposes. Section 14(a) of the Act is drafted exclusively; it is a threshold test which applies only to those claimants whose claims meet the eligibility criteria under the provision. Whereas s 393(2) of the Building Act is drafted inclusively; it exists for the protection of defendants and prevents claims from progressing in relation to building work undertaken after 10

years from the date of filing.

25     At [86], [95].

[51]     The focus of the Act is concerned with resolving claims arising from the defective construction of homes.   The longer the period of time between physical construction and when the Tribunal hears a claim, the more difficult it will be to establish the cause of defects in a building.   As noted by the respondents, code compliance certificates are often issued well after physical construction is completed and there are currently thousands of homes in New Zealand that are lived in without code compliance certificates.  It cannot realistically be concluded that such homes are not built.  Moreover, if a claim were eligible based on the date the certificate was (negligently)  issued,  that  could  lead  to  inquiries  by  the Tribunal  into  allegedly defective construction undertaken well over 10 years before the date of filing.  I do not think that is in line with the purpose of the Act.

[52]     In such circumstances there would be considerably few potential defendants who could appear before the Tribunal; arguably only the council responsible for issuing  the  certificate  would  remain  potentially  exposed  to  liability.    Although eligible claims do legitimately proceed before the Tribunal with only a council as the defendant, reading the limitation period as a long-stop from the date of physical construction increases the possibility that timely claims will be lodged that also sheet home responsibility to other potential defendants (such as building contractors).

[53] This interpretation of s 14(a) seems to me to be consistent with s 393(2) of the Building Act. Claims based on negligently issued code compliance certificates are able to proceed before the courts on the basis that they are the performance of a function relating to building work, as opposed to being building work in themselves. A 10 year limitation period running from the date of physical construction (building work) was adopted from the Building Act. But the concept of claims arising from functions ―relating to‖ building work was not incorporated into s 14(a). In my view this difference shows that a distinction was intended.

[54]     The appellants’ submission as to the arbitrariness of the distinction between the two limitation periods does not take their argument far.  Limitation periods are inherently arbitrary.  They are simply a line drawn in the sand by Parliament.  There is nothing innately right or just about where in particular the line is drawn beyond

the principle that defendants should not be potentially exposed to liability for their actions in perpetuity.

[55]     Finally, this interpretation is consistent with the purpose of the Act to provide speedy and cost-effective relief to claimants.  The process under the Act is designed to encourage people to bring claims early.  Applicants who sit on their claims risk relinquishing their entitlements to the advantageous procedure created under the Act. If claimants bring delayed claims in respect of negligent council inspections, and are found to be ineligible under the Act, they remain entitled to seek relief from the courts.  But they bear the cost of doing so and do not receive the benefit of the Act’s procedure (which they might have had had they acted sooner).

[56] For these reasons, I am of the view that the purpose of the Act is consistent with the interpretation of s 14(a) which I have reached at [39].

Decision on judicial review

[57]     My  decision  is  that  under  s  14(a)  of  the Act,  a  necessary  criterion  for determining  whether  a  claim  is  eligible is  that  the physical  construction  of the dwellinghouse must have been completed within the period of 10 years immediately before the day on which the claim is brought.

[58]     The decision of the Chair does not materially differ from this conclusion (although it appears she relied on the date of occupation as opposed to physical construction).  I therefore dismiss the application to review that decision.  I am not satisfied that any of the grounds of review relied on by the defendants26 can succeed in light of my conclusion on the proper interpretation of s 14(a).

[59]     I have found on the balance of probabilities that the physical construction of the appellants’ house was completed by 15 August 1996.  Their claim was lodged with the Tribunal some ten and a half years later.  Because it was lodged outside of the Act’s limitation period, I find that the Tribunal properly held that the appellant’s

claim was ineligible.

26     The  grounds  are  mistake  of  law,  mistake  of  fact,  failing  to  take  into  account  relevant considerations or relying on irrelevant considerations.

Decision on appeal

[60]     The appellants are time-barred from pursuing claims arising from when the dwellinghouse was built.  The Tribunal accepted that the appellants’ claim in respect of the 1999 remedial works was eligible but that the respondent was not properly a party to that claim.   The appellants submit that the Tribunal erred by making its decision to remove the respondent.  They say the decision was made solely on the basis of counsels’ submissions rather than any evidence to support the submissions.

[61]     I disagree.  It is clear from the materials filed in this Court that the appellants’ basis for attributing liability to the respondent for the remedial works related solely to the respondent’s issuing of the code compliance certificate.  That action was the performance of a function relating to the original building of the house.   It had nothing to do with the subsequent remedial works.   Based on the facts and on counsels’ submissions,  I am  satisfied  that  the  respondent  played  no  role  in  the remedial works.  There can be no basis for finding the respondent liable in respect of them.

[62]     I find that the Tribunal properly removed the Council from the proceeding as there was no arguable cause of action against the respondent.  I therefore dismiss the appeal.

[63]     I understand that my decision places the appellants in the regrettable position that they are unable to pursue their claim before the Tribunal and it is now too late to bring a claim in the courts.  It is not a decision that I have arrived at lightly.  But it is a conclusion that I think must flow from a proper construction of the Act.

Costs

[64]     Having  been  successful  in  defending  the  appeal  and  the  judicial  review proceedings, the respondent would normally be entitled to costs.  If the parties are

unable to agree on the issue of costs, I will receive memoranda from counsel.

Woolford J