Weathertight e-news
Issue 4 – November 2009
In this issue we cover:
New Limitation proposed for claims in negligence
A new Limitation Bill
proposes a change to the time period for alleging negligence claims.
This affects future weathertight-related negligence claims, but makes no difference whatsoever to historic weathertight claims. It will only apply to negligence claims related to building work completed after the Bill becomes law.
It is proposed that the Bill be enacted on 1 July 2010. The current limitation period will continue to apply for building work completed before that date, even if defects are not actually discovered until after that date.
Currently, the six year limitation period for negligence claims runs from when the negligent work was discovered or was reasonably discoverable.
Because this date can be difficult to define, the Limitation Bill proposes having the six year limitation period running from the date the work was actually done. However, it also provides a three year “late knowledge” period, giving claimants three years to lodge a claim provided they can show they did not know, or could not reasonably have known, key facts about the claim until within those three years.
The bill will not change the 10 year criteria for bringing claims under the WHRS Act 2006 or within the 10 year limitation under the Building Act 2004.
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Claims Statistics for November 2009
As at 30 November 2009 the Department has received 5916 claims lodged for 7581 properties and completed assessments for 7470 properties.
Under the WHRS Act 2006 we accept applications for multi-unit properties as single claims.
Total claims
 |
 1278 resolved claims (22%)
 2692 closed claims (46%)1
 1946 active claims (33%) |
Find more information about
claims being processed and regional analysis.
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Distinguishing claimants and owners when applying to Tribunal
The Weathertight Homes Resolution Service process consists of two broad stages.
In the Assessment and Evaluation stage, a “claimant” is the person who applies to have an assessor’s report prepared for a building. The Chief Executive of the Department of Building and Housing will then determine if the claim is eligible.
An “owner” has the right to apply to the Weathertight Homes Tribunal for adjudication if the claim is eligible. The Adjudication stage starts when an application to the Tribunal is made.
The Tribunal recently determined that when making an application to the Tribunal, the owner and the original claimant must be the same. An original claimant could assign their claim to another person or entity to pursue. The original claimant still needs to own the property when application to the Tribunal is made.
The case of Darling & Others v Auckland City Council involved a transfer of property to a trust prior to 1 April 2007 – which is when the WHRS Act 2006 came into force. Adjudication was applied for after the new Act came into force.
The Darlings owned their property in their personal capacities when they applied to have an assessor report in 2004. Their claim was found to be eligible. The Darlings then sold their home to their family and assigned their claim to the trust. The trustees who held the property on behalf of the trust were the Darlings and a third trustee. The trustees made an application to the Tribunal in 2008.
The Tribunal held that the trustees of the Darling Family Trust were owner but they were not the original claimant. The Tribunal did not have jurisdiction to determine the claim because the trust was bound by the definition of ‘claimant’ in the Act. The original claimants were Mr and Mrs Darling personally and not Mr and Mrs Darling and the third trustee (as trustees for the Darling Family Trust).
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Final Ministry of Justice Seminar for 2009
Details of the last two seminars being offered by the Ministry of Justice in 2009 are set out below. If you are unable to attend a seminar but need more information, you can contact the Ministry. They will send you an information pack or make an appointment for you to meet with a case manager.
Remedies - what can be claimed?
Wednesday 9 December 2009
Auckland
To book a place please call 0800 777 757 or email WHTenquiries@justice.govt.nz
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Identifying the risk of imminent structural failure or health risk
Severe or imminent structural failures, or serious risk to health, are the highest categories of risk the Department’s assessors apply to buildings when assessing WHRS claims.
The assessor will obtain a structural engineer’s or laboratory report. The assessor may recommend that the territorial authority be advised that the building is potentially a dangerous or unsanitary building.
When assessors consider that buildings are in this category, the Department will formally notify the claimant, their body corporate and the local territorial authority of the potential seriousness of the problem.
Any tenants in the dwelling will be advised as soon as possible where the risk of structural failure or the risk to health may be high. The Department may advise restrictions to further access in the interests of health and safety.
The local authority then has responsibility under the Building Act for assessing whether the building is a dangerous or unsanitary building, and what further action may be required.
If you have any queries about categorising the risk of structural failure or risk to health, contact Mahi Winiata, Team Leader, Assessment Services on (04) 817 4422.
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Unit titles: Mortgagee or lender cannot be compelled to contribute to repairs
Unit owners have to pay any contribution to weathertight remediation or repairs that their body corporate legitimately demands of them. But mortgagees or lenders are not responsible for contributing to weathertightness-related costs.
In Body Corporate 322588 v K Mitchell Investments Ltd the Body Corporate argued that the mortgagees should contribute to weathertightness-related costs because the value of their investments (i.e. their securities over units) would increase.
The Court could not compel a mortgagee or lender to contribute. If it did, it would interfere with the separate contractual relationship between the unit owner and the lender.
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Damage and Determining Eligibility of a Claim
For a claim to be eligible, the WHRS Act 2006 requires the following:
- the dwellinghouse was built within 10 years immediately before the day on which the claim is filed (or within 10 years of the alterations made and giving rise to the claim)
- water has penetrated the dwellinghouse
- the dwellinghouse was damaged as a result of the penetration of water
If the Chief Executive decides a claim is ineligible because the house has not been damaged, the claimant may apply for that decision to be reconsidered by the Chair of the Tribunal.
Recent examples of damage in specific claims that were reconsidered and considered eligible include:
- high moisture readings
- bubbles in coatings caused by water penetration behind plaster
- saturated cladding causing moisture to soak into bottom plates
Each case is dealt with individually and there are often a number of factors like the ones above that need to be considered together before being able to say damage has occurred and whether a claim can is eligible.
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Weathertight review
The Minister for Building and Construction, Hon. Maurice Williamson, recently met with the Mayors of Auckland, Wellington, North Shore, Tauranga, Christchurch and Waitakere to discuss weathertightness issues. These Mayors represent the six most affected Councils.
The Minister reported that the Government is working closely with them on finding a solution to the problem. Any solution will be focused on fixing damaged homes rather than litigation.
The Minister has canvassed a number of approaches which the Mayors are considering. There will be no further comment until he has considered their response.
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