Time limit key in leaky home case

A dispute between Olivia Yee Lee and the Whangarei District Council over this house on Sandford Rd in Ruakaka has ended up in the Supreme Court. Photo / John Stone

A homeowner has partially succeeded in her appeal to the Supreme Court, alleging negligence by the Whangarei District Council in a leaky building case.

Olivia Wai Yee Lee first took proceedings against WDC in May 2014 for alleged negligence in inspecting her house while it was under construction on Sandford Rd in Ruakaka between 2006 and 2008. She applied for a building consent for the house in August 2006, and it was granted by the council in October.

Work began in January 2007 and council staff carried out a number of inspections. But the house failed its final inspection in March 2008, and the council sent a notice for Ms Lee to address a number of issues with spouting, internal and roof gutters, and rainwater heads.

WDC successfully applied to the High Court for summary judgment against her on the grounds Ms Lee's proceeding against it was filed out of time under the Limitation Act 1950. The Act has a time limit of six years for proceedings against a territorial authority.

In its application for summary judgment, the council said Ms Lee knew the house had been built with significant defects prior to May 21, 2008 and its construction did not comply with the New Zealand Building Act and the Building Code.

Ms Lee's decision not to file a claim under the Weathertight Homes Resolution Services Act 2006 showed she knew the defects reduced the value of the house, the council said.

Her appeal against the summary judgment in the Court of Appeal was dismissed and she then went to the Supreme Court.

The highest court noted that in February 2008, Ms Lee engaged a building consultant to assess the house. He noted faults in exterior cladding, roof draining and balconies. Another report was prepared by a building surveyor in April 2011 who listed defects that had not been previously identified.

The Supreme Court allowed her to argue, in the substantive appeal, whether the application for an assessor's report under the Watertight Homes Resolution Services Act 2006 "stopped the clock" for limitation purposes with regards to proceedings against WDC - which means whether or not the period between February 2008 and April 2011 falls within the six-year limitation period.

Ms Lee was reluctant to comment on the case as it was still before the court but said it had been a struggle for her to get this far in legal proceedings.

Ms Lee lives in the house with her family. The matter for determination - whether, in terms of the Weathertight Homes Resolution Services Act 2006, the application for an assessor's report "stopped the clock" for limitation purposes with regard to the proceedings against the respondent - will now go back before the courts.