Limitation Bill

CHRIS TREMAIN (Senior Whip—National) Link to this

I seek leave for the Committee stage of the Limitation Bill to be taken as one question, with multiple calls.

Hon CHRISTOPHER FINLAYSON (Attorney-General) Link to this

I will not speak at any length on Part 1, which simply outlines the preliminary provisions, but I do want to say something about Part 2, which is, in many respects, the core of the bill and sets out that there are to be defences to money claims.

People will have 6 years from the events on which a claim is based to bring their claim before a defendant can argue that the claim is time-barred. If the claimant did not know about the claim within this time, he or she has an extra 3-year late knowledge period in which to make the claim. However, and this has been referred to by a number of speakers in the second reading debate, after 15 years from the date of those events, the defendant can argue that the claim is time-barred, and money claims are defined in clause 11.

I hear what Mr Parker said in his second reading speech, and I indicate to him that I was grateful for the very useful discussion we had about clause 16, which I think improved it. But I do take issue with him over the different periods. It all depends, at the end of the day, on the policy considerations governing a particular piece of legislation. This bill sets out the general rules of limitation.

There are, nonetheless, specific limitation periods in specific statutes for particular policy reasons. So, for example, in the Fair Trading Act, the period in which one can bring a claim is 3 years. In the Commerce Act there are, as I recall, a number of different periods because of the requirements of that legislation. In the Family Protection Act there is a particular limitation period that differs from what is contained in this legislation. So uniformity, I think, is to be encouraged, and it is one of the reasons why we have dealt with this legislation. Although it may seem to be rather boring technical legislation, it actually has very real consequences for people when they seek to bring claims in court. But, in my opinion, there is a difference between the 10-year period set out in the Building Act and the 15-year period here. As I say, this is a statute of general applicability.

The second point I want to address concerns clause 16, which is a very important clause. Mr Parker has accurately outlined the way in which this legislation has developed, and in particular the way in which clause 16 was amended by the Justice and Electoral Committee. In one of the early drafts of the bill, clause 16 was not there at all, and then it was decided to provide a clause that gave discretion to allow relief for a claim of sexual abuse of a minor because of the particularly horrific nature of that kind of proceeding. But it has been broadened out, and a number of changes have emerged as a result of the select committee’s deliberations.

Importantly—and this is brought out in new clause 16A—there is the omission of the requirement that the strength of the claimant’s case is to be a matter to be taken into account in exercising its discretion. As Mr Parker said, that widens the scope of clause 16 to include physical and psychological abuse of minors by parents, step-parents, and close relatives or associates, and it extends the discretion to allow relief for claims for personal injury caused by gradual process, infection, or disease that is not covered by accident compensation. So it is a very important change, and I agree with speakers who contributed during the second reading that it does improve the legislation. How many claims will there be? Well, who knows, but this is a particular form of harm and it is appropriate that we provide for it in this legislation.

Hon DAVID PARKER (Labour) Link to this

I thank the Attorney-General for those remarks, particularly in respect of the different longstop liability periods. I agree that we do not have, nor ought we to have, the same limitation period applying to absolutely all causes of action. I would say, in respect of the two examples that the Attorney-General used, that the Family Protection Act, of course, has a shortened period because one needs to distribute the proceeds of a will and let people spend it or use it for the purchase of a house, or use the assets they inherit after a period. Of course, when someone dies, one generally knows whether one is in the class of people who can make a claim under the Family Protection Act, and they are, essentially, close relatives of the deceased. They know that the deceased has died, and therefore they know that if they are going to challenge the will, they have a cause of action as a consequence of the death of their relative. So I do not see that as being a good reason or a good comparison with the Building Act.

In respect of the Fair Trading Act, similarly I would have said that most of the claims are things that will be known to a party within that period, and if they did not have a right under the Fair Trading Act, they would normally have a contractual right or claim, which, under this legislation, would have a longstop liability in case of a lack of knowledge on the part of the claimant or the person who is injured, which would actually be the 15-year longstop period.

Although I accept the proposition that there are some areas where one does have a shorter limitation period, I do not see the examples the Minister has given as being good justification for having a different rule from the general 15-year longstop period for building cases. I think those building cases are more similar to the other cases where we do have the 15-year longstop liability period than they are to the likes of the Family Protection Act or the Fair Trading Act cause of action. I again note that under the Fair Trading Act one generally has a contractual cause of action if one did not want to rely upon the Fair Trading Act cause of action. I see it as being more akin to general claims in tort or contract.

I continue to be of the view that the longstop period for building cases ought to be the same as it is for other cases. There should be alignment. I encourage the Committee to consider seriously the amendment that will be appearing on the floor of the House.

Hon CHRISTOPHER FINLAYSON (Attorney-General) Link to this

I wonder whether there is a way through the issue raised by David Parker that would satisfy everyone. The Building Act was enacted first, I think, in 1991, and re-enacted in 2004. It is under review at the moment, and it could well be that those arguments could be made in the context of the Building Act review, so that we do not get into a debate about whether the member’s proposed amendment is within scope or whatever. It could well be an issue that is deserving of careful consideration when the Building Act review is concluded. I simply offer that not as a peace offering but as sensible way forward.

Hon DAVID PARKER (Labour) Link to this

That is a very kind offer, but I like to have two bites of the cherry.

LYNNE PILLAY (Labour) Link to this

It is an absolute pleasure to come down to the Chamber again and speak on the Limitation Bill. I was in my office catching up on a bit of work, and I thought: “No—enough. I have to get back to this bill.”

I heard with interest the comments in terms of the waiting period in the bill, and I acknowledge the very good contribution of David Parker. That was something on which the Labour members showed a lot of leadership, and I am only sorry that all our very valid arguments were not brought into effect. What I do know is that this bill is long overdue. As I said earlier, in terms of the Government we have seen a lot of things we are not happy with come before the Justice and Electoral Committee, but especially before this House. But on this occasion this has been a common-sense bill, if I can use that term. It has clearer, more comprehensive law on general civil limitation defences. The bill is not all about defendants being disadvantaged by stale claims. It is also about having some clarity in terms of the whole system.

I acknowledge the work of the Law Commission. I note that under the previous Labour Government more Law Commission reports were implemented than were implemented under any other previous Government. Although I acknowledge Chester Borrows, who is a very good chair of the Justice and Electoral Committee, I also take this opportunity to acknowledge the former chair, who was me. During my time as chair of the Justice and Electoral Committee there were many bills that came before—

Hon CHRISTOPHER FINLAYSON (Attorney-General) Link to this

Hearing the dulcet tones of Lynne Pillay takes me back to those very happy days between 2005 and 2008 when we were getting ready for Government and she was the chair of the Justice and Electoral Committee. How we enjoyed working collaboratively and positively together on the electoral finance legislation! It was one of the thrills of my life! I regret to say that I was the one who was responsible for pulling the National members out of that select committee visit to Australia, because we do not believe in trips like that, which are primarily vacations. I remember receiving the itinerary from Ms Pillay, and I was so disappointed. I think there were two or three meetings a day, and she and her colleagues were going to be holed up at the Park Hyatt. They were going to be travelling business class, but I believe that people should fly economy class across the Tasman. I said: “Well, I am sorry, but the National members are required at home to serve the people.”, and we pulled out of the trip. But, nonetheless, I do acknowledge the honourable member, and I say that the Sentencing Council, which was an appalling edifice designed to straitjacket judges into giving particular sentences, is now consigned to the trash heap of history, just like the electoral finance legislation.

I want to say something about Part 4 of the Limitation Bill, because Part 4 contains some very interesting general provisions that relate to claims made in arbitration, limitation defences, and other enactments contracting out of defences and the pleading of defences. I refer honourable members to clause 41, which is one of the more fundamental principles of the bill. It says that if a defendant establishes a defence against a claim under the Limitation Act, then the court or tribunal cannot grant the relief sought but the claim itself is not extinguished. So one is prevented from bringing the claim, but the claim is not extinguished. That is at the very heart of what this limitation legislation is all about.

The other interesting part of Part 4—and I do not know that I have ever seen it before—is that the 1950 Act will be with us for many years, so the 1950 Act is amended and then repealed. The Acts specified in the schedule are consequently amended, and these are the important transitional provisions that officials work very hard on to knock into shape. I do not think I have ever seen a situation where an Act is amended and then repealed, but it will continue to apply to claims relating to events before 1 January 2011 and it will require claims to be brought by the latter of 15 years of the date of the act or omission or 5 years after the new Act commences. That is why clauses 23A to 23D are included. They bring across provisions to the 1950 Act relating to the longstop period and the discretion to allow relief, for example, for an action of abuse of an infant or the gradual process injury that we have been talking about.

The only other point I make—and it is good that the law finally is clarified in this country—relates to clause 53. That will provide that the clause will apply to a civil proceeding before a New Zealand court or tribunal whenever the substantive law of a foreign country is to be applied in that proceeding, and it provides that the limitation of that foreign country is part of the substantive law of the country and must be applied accordingly. For many years there was academic debate about whether limitation law was procedural or substantive. The Choice of Law (Limitation Periods) Act 1993 of New South Wales and the Foreign Limitation Periods Act 1984 of the UK clarified the point for those jurisdictions, and it is now clarified here. I note also in clause 54 the public policy exception for limitation law of foreign countries is to apply except in relation to Australia. Part 4, as I said, contains some very important transitional provisions. The reason for that is that the 1950 legislation will be with us for many years to come.

Hon DAVID PARKER (Labour) Link to this

I am somewhat disappointed that the Attorney-General was not quite as excited about clause 8. Clause 8A of the Limitation Bill was another notable addition as a consequence of Mr Corry’s submission to the Justice and Electoral Committee, which raised the issue of equitable claims.

Of course, equitable claims are not common law claims, so the Limitation Act generally does not apply to them, and neither does the Limitation Bill. But the position has grown in the equitable courts that they apply analogous limitation periods to equitable claims. So although the common law or the statute law relating to limitation does not directly apply to equitable claims the courts, by analogy, apply similar rules, because they want to properly balance these interests between people having rights to pursue redress for their injuries against a duty of people to pursue their claims with alacrity once they have the knowledge that enables them to do so.

Mr Corry submitted to the select committee. He is very learned in those matters, and he might have been one of the authors of the Law Commission report. I am not positive about that, though I see the Attorney-General nodding there. He made the suggestion that we clarify that through this legislation we were not stopping through new legislation the courts, by analogy, applying Limitation Bill provisions to equitable claims. In order to clear up that possible unintentional consequence, clause 8A of the bill was introduced. It states: “Nothing in this Act prevents it from being applied by analogy to a claim in equity to which no defence prescribed by this Act applies.” I hope that I have given the Clerk enough time to decide whether my amendment is in scope. I will not say anything further for the moment.

RAYMOND HUO (Labour) Link to this

I acknowledge the contributions made by my colleagues and by the Attorney-General. The Limitation Bill introduces the new unifying concept of a money claim—namely, a claim for monetary relief whether in common law, in equity, or under an enactment. Part 2 sets out the regime relating to the defence to money claims. There is the general civil limitation defence to a money claim if the defendant can prove that the date on which the claim is filed is at least 6 years after the date of the act or omission on which the claim is based. This is known as the primary period.

The 6-year period does not apply if the claimant has late knowledge of the claim. In the case of late knowledge, it is a defence of a claim if the defendant can prove that the date on which the claim is filed is at least 3 years after the late knowledge date, or if the claim is made 15 years after the date of the act or omission on which the claim is based—namely, the longstop period. This provision, set out in Part 4, is designed to prevent indeterminate liability and applies to non-money claims.

The late knowledge date is defined by clause 13 as the date on which the claimant gained knowledge, or, if earlier, the date on which the claimant ought reasonably to have gained knowledge, of all the certain specified key facts that the claimant must know in order to make the claim. The requisite facts are set out accordingly. The primary period is 2 years and not 6 years for defamation, but the late period might apply in certain circumstances.

Earlier, in the bill’s second reading, I cited the 2009 Supreme Court case Commerce Commission v Carter Holt Harvey Ltd. The issues are relevant to this particular bill, and particularly relevant to a late knowledge period. According to Bell Gully, it is relevant to this bill in respect of reasonable discoverability. As drafted, the bill does not define knowledge, nor does it specify the degree of knowledge required before the claimant is taken to know or ought reasonably to know the specified facts. I quote: “It is therefore likely that, in the absence of amendments to the Bill, the Supreme Court’s decision in the Carter Holt Harvey case will influence the application of the Limitation Bill, once enacted”. So I wish that the responsible Minister, the Attorney-General, would take a call and enlighten us on this particular issue. Thank you.

JACINDA ARDERN (Labour) Link to this

I want to come back to an element of the Limitation Bill that I raised in my first reading speech. It was an issue that has been discussed at great lengths within the Justice and Electoral Committee and I would not mind hearing the Minister’s view on this. This was the discretion to allow relief for claims of gradual process disease or infection. Obviously, when the bill first came to us it had a 6-year primary limitation period for monetary claims for personal injury claims, to which, of course, the late knowledge requirements and the 15-year longstop period would also apply. Many submitters presented to us during the select committee process that that might be an unreasonable limitation, particularly if a person was seeking to obtain relief for a latent personal injury caused by gradual process disease or infection. As I mentioned in my previous speech, one of the many arguments we heard was that New Zealand is different from some of the other jurisdictions we heard about, based on our no-fault accident compensation scheme. We did, however, seek advice on this issue so that we could consider how this rule applied in other jurisdictions, particularly when it came to gradual process disease or infection. The UK and Australia seemed obvious jurisdictions for us to examine. We noted that in those countries, courts were given the discretion to disregard limitation defences when it came to physical or mental conditions.

LYNNE PILLAY (Labour) Link to this

I will follow on from Jacinda Ardern. The member’s last words were that we cannot assume all things are equal—

GRANT ROBERTSON (Labour—Wellington Central) Link to this

It is true that I was sitting in my office, wading through various piles of paper—which is a great thing to be doing during the urgency period—when I saw that the Limitation Bill was being debated and thought that I needed to be in the Chamber. As my colleague Lynne Pillay said, it is unusual for us on the Labour benches to see a Government bill and say that it is practical and common sense. It was probably a bill from the previous Labour Government that was inherited by National, but in this case we have to give credit where credit is due and say that this bill has come through with the Minister in charge, Chris Finlayson, leading the way and breaking new ground in this Chamber. That is what the Minister is doing with the Limitation Bill.

I am pleased to take a call in the Committee stage, and I draw further attention to David Parker’s amendment. It is important that in a common-sense bill like this one we look for consistency. If we provide something like the longstop period, and if we say it is important and useful, then we should try to apply it consistently. The problem with this bill, as I understood it while I sat up in my office listening intently to the speeches—particularly those by David Parker, Lynne Pillay, and Jacinda Ardern—arises when it comes to the Building Act and for the very people whom the National Party has come to Parliament to represent. Perhaps those people are leaky building owners, and I ask why they should not get the ability to have a 15-year longstop period in a case that involves the Building Act. That is precisely what David Parker’s amendment is designed to do: to extend the period from 10 years to 15 years.

I think that we all know, particularly those of us in metropolitan areas, and have dealt with people who have had leaky buildings and leaky homes. There is no overestimating the seriousness of that problem for those people. The effects of leaky buildings take a period of time to become obvious. In my electorate of Wellington Central there has not been an end to the claims. More and more people have become interested in the issue. Building products that were used in the 1990s are becoming less and less durable and people are concerning themselves about this problem. The Limitation Bill has the opportunity to help address some of those issues, and it is important to look at what the Justice and Electoral Committee said in its report to Parliament about this issue. It stated that there were divergent views about the question of the longstop period. That is significant in a bill as important as the Limitation Bill, which perhaps for some people is a technical bill, but which for many people has a very, very practical provision for them if they have an issue under the Building Act.

In three separate reports on the issue of the longstop period—in 1988, 2000, and 2007—the Law Commission changed its mind about whether the longstop period should be 10 or 15 years. In 2007 the Law Commission concluded that a 15-year longstop period struck the appropriate balance between justice for claimants and certainty for defendants. It is a difficult balance to strike, ensuring that people have the ability to have their say and have some kind of redress for what has occurred to them, but not extending that opportunity out for ever and a day making providers feel like they have a liability for their whole lifetimes.

David Parker has put forward an amendment and I think it is well worth reading out. It would insert a new clause 60 after clause 59, which is a good thing—making sure it is sequential is important. Clause 60 would read: “Notwithstanding any other provision in this Act or the Building Act 2004, the longstop period under the Building Act 2004 is hereby amended to 15 years so as to align with the general longstop period provided under this Act.” That is it, in essence, in a nutshell, to make sure that we actually get some consistency and some ability for those people who have been affected by issues relating to the Building Act to know that they have that longstop period of 15 years.

So I really do ask the National members to take a call and explain to us why they do not believe there should be this kind of consistency. I know that the Minister is a person who takes his responsibilities seriously on issues such as these. The Limitation Bill is one that he would have pored over for hours and hours in his office, going through each clause word by word to make sure that it is precise and accurate.