New Zealand: Supreme Court finds leaky home construction limitation periods are not water tight

Osborne & Anor v Auckland City Council & Anor [2014] NZSC 67


After over seven years of litigation the Supreme Court has yesterday held that Mr and Mrs Osborne are entitled to seek relief for a leaky home claim which began in February 2007.

On 10 June 2014 the Supreme Court released a unanimous judgment concerning the limitation period for leaky homes claims under the Weathertight Homes Resolution Services Act 2006 (the "Act"). The effect of the decision is that the limitation period for claims under the Act will extend for 10 years from the date when building work which gives rise to the claim, including the issuing of code compliance certificates by a Council or territorial authority, is completed.

Previously the claims had to be brought within 10 years from when the physical building work was completed in line with the building consents. There can be a significant delay in the issuing of code compliance certifications and the decision provides a longer limitation period for home-owners wanting to sue their local authority for negligently issuing code compliance certificates.

The issue on appeal was the interpretation of section 14(a) of the Act and, particularly, the extent to which that section constrains the ability of a leaky home owner to take action and seek remedies under the Act.

The portion of section 14(a) which is the subject of the Supreme Court decision provides that a claimant will be eligible to make a claim under the Act where, amongst other matters, the dwelling house in question:

"...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..."

Parties to the proceeding made submissions on how this provision relates to section 393 of the Building Act 2004 (the "Building Act") which similarly provides at that "...civil proceedings relating to building work may not be brought against a person after 10 years or more from the date of the act or omission on which the proceedings are based"


The Osbornes purchased their home on 26 April 1997, a new building being substantially constructed by 15 August 1996. Code Compliance Certificates ("Certificates") were not issued by the Auckland City Council (the "Council") until 19 February and 18 April 1997. The house began to leak in late 1997 and repairs (for which building consents were not obtained) were carried out. The repairs were not effective. On 14 February 2007 the Osbornes took steps under the Act to sue the Council for loss suffered as a result of its negligently issuing the Certificates.

In June 2007 the Osbornes' claim was ruled ineligible under s14, by which time the 10 year period under s393 of the Building Act had elapsed from the date when the Certificates were issued by the Council. The Council argued that the Osbornes were consequently time barred from taking action against it under s393 for liability arising out of it issuing the Certificates on their leaky home.

The Decision

The Council contended that section 14(a) operates separately from (and more restrictively than) s393. The Osbornes argued that the words in s14(a) should be construed so that a claim is eligible under s14(a) if it is, or may be, within the s393 limitation period.

The Supreme Court considered the broad purposes of both statutes and their respective predecessors (the Weathertight Homes Resolution Services Act 2002 and the Building Act 1991), as well as the interpretation of s14(a) that had prevailed to date.

Prior to this decision, s14(a) had been interpreted as providing a constraint on being eligible to bring a claim under the Act and is, in some cases, particularly where the focus of liability is on the issuing of a Certificate, more strict than the ten year long-stop period provided for under the Building Act. On this interpretation, a claim becomes ineligible at the expiry of ten years from when it is built which, in a case of a dwelling house, is to be determined primarily by when it has been completed to the extent required by the building consent (commonly at the time of final inspection) which will be before a Certificate is issued.

In the Osbornes' case, their house was deemed habitable around August 1996 and was thus outside the s14(a) criteria by the time steps were taken in February 2007.

Court of Appeal Decision

The Court of Appeal largely upheld the existing interpretation and rejected that s14(a) should be construed as a paraphrase of s393. The Court of Appeal commented that Parliament deliberately adopted the narrower term "built" in s14(a) rather than the broader term "building work" in s393 which would include the issuing of Certificates. The Court was concerned that extending the commencement date for the 10 year period to the time when the Certificate is issued would unreasonably prolong the eligibility period in cases where the issuing of the Certificate is delayed, or never issued at all.

In keeping with the current interpretation of s14(a), the Court of Appeal conclude that a dwelling house will be "built" for the purposes of that section when it has been completed up to building consent standard, which in most cases will be when the dwelling house has passed its final inspection and before Certification.

Allowing the Appeal

The Supreme Court found a number of difficulties with this approach that would see s14(a) construed as imposing an independently operating limitation period which is virtually, but not exactly, the same as the s393 limitation period.

First, the Court held the date a house passes its final inspection is a strange starting point for a limitation period. In most instances it will be after the relevant acts or omissions of the builder but before the date the Certificate is issued, which will almost always be the last relevant act of any Council or territorial authority.

Second, the policy reasons behind the Act (for quick and facilitated resolution or adjudication of claims about leaky homes) are just as appropriate for the Osbornes' claim against the Council in February 2007 as they would have been if made six months earlier (and prior to the ten years lapsing from the final house inspection). In other words, the policy reasons outlined by the Court of Appeal do not justify drawing a distinction between the limitation periods in the two statutes.

Third, the Supreme Court found it inconceivable that Parliament would have intended s14(a) to bring different results than s393. Indeed, the previous interpretation was inconsistent with the legislative history and with what the Supreme Court took to be the purpose of maintaining consistency with the 10 year long-stop provision under the Building Act.


Section 14(a) of the Act, and the term "built", is to be interpreted by reference to the term "building work" in s393 of the Building Act and operate only to exclude claims which are necessarily barred by s393 of the Building Act. The effect of this decision is that the limitation period under s14(a) will now be extended for 10 years from the date when building work which gives rise to the claim, including the issuing of code compliance certificates by a Council or territorial authority, is completed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Jeremy Johnson
Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions