Rea v Auckland Council - [2024] NZCA 313

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA259/2022
[2024] NZCA 313

BETWEEN	ANTHONY JAMES REA AND JUDITH MARY REA AS TRUSTEES OF THE WAIATARUA TRUST Appellants
AND	AUCKLAND COUNCIL First Respondent
AND	360 DEGREES LIMITED Second Respondent
AND	ANTHONY MARK CATHRO Third Respondent
AND	TONY CATHRO CONSTRUCTION LIMITED Fourth Respondent

Hearing:	6 June 2023
Court:	Courtney, Katz and Wylie JJ
Counsel:	T J Rainey, N Stone and D A Cowan for Appellants T Weston KC, E P Colenbrander and JRJ Knight for First Respondent No appearances for Second, Third and Fourth Respondents
Judgment:	15 July 2024 at 10.30 am

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellants must pay the first respondent costs on a band A basis for a standard appeal and usual disbursements. We certify for second counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Courtney J)

Introduction

In September 2021, Mr and Mrs Rea filed proceedings against a number of parties, including Auckland Council, claiming the costs of repairing defects in the residential property they owned as trustees of the Waiatarua Trust. They alleged negligence by the Council in relation to a Code Compliance Certificate (CCC) issued in 2013.[1] The primary period under s 11(1) of the Limitation Act 2010 had expired in early 2019. The Council applied to strike out the claim on the ground that it was time‑barred. Associate Judge Taylor granted the application.[2] Mr and Mrs Rea appeal against that decision.
[1]Other allegations of negligence were made that pre-date the issue of the CCC, but we confine our discussion to the CCC as it is the latest act or omission in time.
[2]Rea v 360 Degrees Ltd [2022] NZHC 916.
Mr and Mrs Rea maintain that the time in which a claim could be brought was extended by the late-knowledge provisions in the Limitation Act and that the “late knowledge” date is after 9 September 2018, less than three years before the claim was filed and therefore within time.[3] The issues on appeal are:
(a)What is required for the appellants to have “late knowledge” under ss 11 and 14 and in particular:
(i)What is the “act or omission” on which the claim against the Council is based, for the purposes of s 14(1)(a) and (b)?
(ii)For the purposes of s 14(1)(c), do the appellants require knowledge of a causal connection between the act or omission on which the claim is based and their loss or damage?
(b)When did the appellants gain actual or constructive “late knowledge” for the purposes of s 14(1)?
(c)Is it arguable that some of the appellants’ claims against the Council constitute a fresh cause of action that is not time barred?

The facts of the case

[3]Sections 11(2), (3) and 14(1).

The property is a split-level dwelling with an internal-access double garage in a basement. The building consent, issued on 12 December 2012, also included reinforced masonry concrete block retaining walls and decks. The property was developed by…

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] NZCA 313
Decision Date: 15 July 2024 at 10.30 am

CaseChat Overview and Summary

In Rea v Auckland Council, the Court of Appeal of New Zealand dismissed an appeal against the High Court’s decision to strike out claims brought by Mr and Mrs Rea against Auckland Council for the cost of repairing defects in their residential property. The Reas claimed that the Council had negligently issued a Code Compliance Certificate in 2013. The Council argued that the Reas' claim was time-barred under the Limitation Act 2010 and the High Court agreed. The Reas appealed, contending that they had “late knowledge” of the claim within the meaning of s 14(1) of the Limitation Act, and therefore their claim was not time-barred. The Court of Appeal considered whether the Reas had knowledge of the facts necessary to establish negligence on the part of the Council. It concluded that the Reas had actual or constructive knowledge of the relevant facts by March 2017, well before the limitation period had expired. The Reas had received multiple reports identifying defects in the property and knew that repairs would be required. A reasonable person would have begun investigating the matter and would have sought legal advice, which would have highlighted the urgency of the situation. The Court of Appeal held that the Reas' claim was time-barred and dismissed the appeal.

Orders