In February 2011, BNZ leased a new, purpose designed and built, office block on reclaimed land in Wellington from CentrePort Limited. Following the Kaikoura earthquake in November 2016, the building was irreparably damaged and was demolished.
In August 2019 BNZ sued the Wellington City Council in negligence in granting the building consent and in its building inspections and issuing the code compliance certificate. Damages sought were in excess of $100 million. In September 2019, the City Council filed third party proceedings against Beca Carter, the structural engineers engaged by CentrePort for the design of the building, and Professor Mander, who peer reviewed the design.
Beca applied to the High Court to have the third party proceedings struck out as being out of time. Beca's position was that it provided its design services in March 2008, in which case the limitation period had expired when the Council filed its third party claim in September 2019.
The issue at the core of the judgment is whether or not the 10 year longstop period in s 393(2) of the Building Act 2004 applies to third party tortfeasor claims. The BNZ's claim against the Council was within time, but at that stage the 10 year longstop under s 393(2) for the claim against Beca for contribution under s 17 of the Law Reform Act had expired some 18 months before.
The difficulty for the Council was a clear line of authority that, even though the third party claims were issued against Beca within a month or so of the primary proceedings between the BNZ and the Council being issued, the longstop date still applied. As the "act or omission" on which the third party proceedings were based were committed by Beca in March 2008, the s 393(2) longstop for those actions expired before the BNZ issued its proceedings. As observed by Fitzgerald J in Minister of Education v James Hardie New Zealand [2018] NZHC 22:
"... there is no suggestion in the legislative history that cross-claims as between building professionals and/or territorial authorities, or third party contribution proceedings, were to be excluded from the finality and certainty which was sought through the longstop provision. Had such an important and broad exclusion been intended from the otherwise plain words used, one might have expected Parliament to have said so expressly."
While that statement is clear in relation to primary proceedings, its application in relation to contributory proceedings is not so clear.
Under the solidarity rule, plaintiffs are not obliged to pursue all joint tortfeasors for their respective contributions to the losses. Those plaintiff's can simply sue the "deep pockets", and leave it to the joint tortfeasors to then seek recovery. The injustice of this approach arises where, as in this case, the primary proceedings are issued towards the end of the 10 year longstop date, leaving no time for third party proceedings to be issued for recovery from joint tortfeasors. It is in that context that s 17 of the Law Reform Act was passed, and the concept of additional limitation periods for contributory claims were maintained in s 34 of the Limitation Act 2010.
The core issue, then, is the interface between s 393 of the Building Act, and s 17 of the Law Reform Act and s 34 of the Limitation Act - does the longstop override the extended limitation period?
In BNZ v Wellington City Council, Beca Carter & Mander [2021 NZHC 1058, the High Court held that the Law Reform and Limitation Acts create a code for contributory claims which is not overriden by the Building Act; the longstop period of 10 years applies only to the primary claim, leaving an additional period of 2 years for contributory claims.
On that basis, Beca's strike out application failed.