Christine Meechan KC discusses the highly anticipated decision of the Supreme Court in Beca Carter v Wellington City Council. [1]

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The 10-year longstop in the Building Act does not prevent a defendant from bringing a claim for contribution against a third-party more than 10 years after the act or omission of that third party. 

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This was the conclusion reached by the majority of the Supreme Court in a judgment delivered on 18 September 2024 – exactly 11 months to the day after the appeal was heard. As a result, Wellington City Council can pursue its third-party claim against Beca Carter in proceedings arising from damage to the CentrePort building caused by the Kaikoura earthquake in 2016.

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It was a close decision, with two members of the Court dissenting (Glazebrook and O'Regan JJ). They concluded the ordinary language of section 393(2) of the Building Act 2004 means what it says: no relief can be granted in civil proceedings relating to building work more than 10 years after the date of the relevant act or omission, and this prohibition applies to third-party claims.

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Both the majority and the minority reached their respective conclusions after analysing the legislative history of the Building Act, the Limitation Act 2010 and the Law Reform Act 1936, the legislation which created the statutory right of contribution between tortfeasors.

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In delivering the judgment of the majority, Ellen France J emphasised the lack of any discernible intention by parliament to change the separate limitation regime that exists for contribution claims when it passed the Building Act 2004 and its 1991 predecessor. 

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The majority also highlighted the potential unfairness that would arise if a plaintiff, just as the 10-year period was about to expire, sued only one of several potential defendants, leaving the targeted defendant unable to pursue a contribution claim against the group of joint tortfeasors.

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The minority acknowledged that there were policy arguments that went both ways, but concluded that the key objectives of the Building Act reforms, which included the delivery of certainty in relation to time frames and protection from stale claims, would be thwarted if contribution claims were treated as an exception to the clear language of the longstop.

The Supreme Court’s decision puts to bed the uncertainty on this critical issue that had resulted from there being two differing lines of authority in the High Court. Or does it? The strong dissent by Glazebrook and O’Regan JJ reflects the fact that there is a valid alternative analysis available. As the former Chief Justice of the US Supreme Court, Justice Hughes, once said, “A dissent in a Court of last resort… is an appeal to the intelligence of a future day, when a later decision may possibly correct the error into which the dissenting judge believes the court to have been betrayed.”[2]

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For now, however, we have a decision that brings welcome clarity for all those involved in defective building litigation.

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Read more details about the case.

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References

[1] Beca Carter Hollings & Ferner Limited v Wellington Council [2024] NZSC 117.

[2] Charles Hughes, The Supreme Court of the United States 68 (1936).

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Photo: The New Zealand Herald, Mark Mitchell