Hon CHRISTOPHER FINLAYSON (Attorney-General) Link to this
I move, That the Limitation Bill be now read a second time. This bill was introduced in June 2009 to replace the 1950 Act that, as I noted last year, is creaky, outmoded, and long overdue for replacement. So this is indeed an exciting day for all of us because today we move a step closer to replacing the 1950 Act with a modern, clear, and comprehensive statute that will set out the general rules for determining the limitation periods for civil claims. Our rules are based on the United Kingdom limitation rules, which have been described as a “ghastly network of unreformed legal fossils impervious to natural understanding and intelligence”.
Hon CHRISTOPHER FINLAYSON Link to this
Some people may say that is the Labour caucus, but I am an issues politician and I do not like getting into personalities. The current labyrinth of rules can perplex even the most diligent lawyers. This bill will make them easier to understand and to apply. Important reforms are also introduced to avoid the sometimes harsh consequences of the current legislation. This bill implements the Law Commission’s recommendations following its review of the law of limitation defences in 2007. The Law Commission also carried out two earlier reviews in 1988 and 2000. The Law Commission recommended a new Act to simplify and improve the current rules. This bill clarifies the claims affected by limitation provisions, more clearly defines the commencement of limitation periods and the exceptions or modifications to those periods, and addresses the current unfairness in the law that a limitation period may end before a claimant knows that something is wrong.
The bill was referred for consideration in June last year to the Justice and Electoral Committee, which is chaired by that excellent MP for Whanganui, Chester Borrows. The committee has now completed a thorough examination of the bill and has recommended that it be passed with some further improvements and some clarifying amendments. I thank the committee for its work on the bill and for its helpful recommendations. The bill contains some complex rules, and the committee’s amendments are consistent with the bill’s purpose, which is to modernise and simplify the current legislation to make it more accessible.
The bill contains 60 clauses, and the committee’s recommended changes will affect approximately 18 of those clauses. The committee has also recommended inserting three new clauses in the bill. Many of the changes are of a technical nature to clarify the meaning or the scope of provisions. However, some changes are more substantive and are designed to address some problems raised in submissions or identified independently by the committee.
Clause 16 is a very significant provision. It gives the court the discretion to allow monetary relief in claims arising out of the sexual abuse of minors, even though a limitation defence could be established. The committee has recommended extending the court’s discretion to cover claims of physical and psychological abuse of minors by parents, step-parents, guardians, close relatives, or close associates. The committee observed that this type of abuse could have the same long-term effects as sexual abuse on a person’s decision when to make a claim. Research suggests that people are more likely to delay or avoid disclosing the abuse if the abuse is carried out in a family setting. The committee has also recommended extending this new discretion to claims for personal injuries that develop over a long time that are not work-related injuries covered by accident compensation.
The committee recognised that otherwise claimants may be unjustly time-barred by the new 15-year longstop defence, which is introduced by the bill. The new general longstop defence will enable a defendant to argue that a claim brought after 15 years is out of time, even if he or she did not know about the claim before then. In some personal injury claims, harm may not become apparent until much later than 15 years. Although these claims are likely to be rare, this will ensure that justice can be done in deserving cases.
The committee noted that there are divergent views on the length of the new longstop period, particularly in light of the 10-year longstop in the Building Act 2004. The Limitation Bill is intended to carry forward the general limitation rules for civil proceedings. Although there are benefits in having uniform limitation periods, different rules may be needed to address special circumstances in discrete policy areas. For this reason, other Acts, such as the Building Act, contain special limitation rules if appropriate.
The committee has also considered how the 1950 Act will continue to apply, and there are important changes to the transitional provisions that I am sure members will be very interested in. The new Act is intended to apply only to claims relating to acts or omissions after it comes into force on 1 January 2011. The current Act would continue to apply to claims based on acts or omissions before that date. This means that the current Act could continue to apply for many years, which may indeed be confusing. The committee recommended modifying its future operation by applying the new 15-year longstop to claims brought under the Act. There would be exceptions for some rare land claims, and claims where the limitation period is extended for disability or fraud.
The committee recommended that if a claims limitation period has ended before the new Act commences, or will shortly end afterwards, the claimant will have 5 years after the new Act commences in which to make the claim. The new longstop will not apply to any claim filed before the commencement of the Act.
The new longstop will affect only those claims where a court applies the reasonable discoverability test. This test was developed by the courts to address the harsh consequence that in some cases a statutory limitation period ends before a claimant knows that the damage has occurred. If this test is applied, the limitation period does not start to run until all of the essential elements of a claim are discovered or are reasonably discoverable. Without a statutory long-stop, defendants do not know when their potential liability will end. To date, the test has been applied only in negligence cases involving building work and personal injury claims. There are differing views on whether the courts will continue to develop this area of law in relation to claims under the 1950 Act after the new Act commences. The committee’s recommendation will mean that the old Act is phased out after 15 years from the commencement of the new Act, except in some very rare cases.
Finally, the committee recommended that the new discretion for abuse claims and claims for personal injury caused by a gradual process disease or infection not covered by accident compensation should also apply to claims under the 1950 Act that would be subject to the new longstop defence. This will lessen any unfairness that might otherwise result, and it will not revive any claims that are already statute-barred when the new Act commences.
In conclusion, I thank the committee again for its careful and thorough work on some very, very technical legal issues. I am confident that the committee’s recommendations will clarify and improve the law, and I commend the bill to the House.
RAYMOND HUO (Labour) Link to this
For those people who are watching the live coverage of this high-rating, not too terribly late-night show, via television or the Parliament website, I say that there is no need for them to thoroughly understand a recent Supreme Court ruling in order to truly appreciate the importance of this Limitation Bill. The Supreme Court’s ruling is the latest development in long-running litigation by the Commerce Commission against Carter Holt Harvey Ltd relating to the misgrading of timber prior to November 2003.
The Supreme Court has confirmed that the Commerce Commission is subject to the 3-year limitation period in section 43 of the Fair Trading Act 1986 when it brings proceedings for compensation on behalf of consumers. That issue may sound a bit dry or remote, but it is relevant to the Limitation Bill. What does not sound dry or remote is the nature of the case. I guess the mentioning of words such as “misgrading of timber” or “building material” will hit a nerve or push a button. I will come back to that case, Commerce Commission v Carter Holt Harvey Limited, either during the Committee of the whole House or at the bill’s third reading
Limitation law seeks to balance two interests. The first is that people have the right to bring claims to court when they have suffered an injury or some loss as the result of wrongdoing by another party. The second and equally important interest is that we ought not to let the period in which claims can be brought run indefinitely. We should not let plaintiffs sleep on their rights. The longer a plaintiff waits to bring his or her claim, the harder it is for the defendant to defend it him or herself, and the harder it is for courts to reach a good decision. Limitation periods allow potential defendants to get on with their lives without the threat of litigation forever lurking.
The bill implements the Law Commission’s recommendation to replace the existing Limitation Act 1950 with a new and modern regime. The new regime will encourage claimants to make their claims without undue delay and will protect defendants from the unjust pursuit of stale claims. The Limitation Act 1950 is old legislation and it needs to be upgraded. The Labour Party supports the proposed changes in this bill. However, although Labour agrees with most of the bill, we disagree with the provisions on longstop periods. The bill provides for a longstop period of 15 years for most cases, but only 10 years for Building Act cases. The reasons given for the shorter longstop period in the case of the Building Act—the complexity caused by multiparty building claims and failing memories—can also rise in other claims, so a shorter period is warranted. It should be 15 years for all claims. Owners of houses with latent defects should have just as long as others to bring forward their claims.
The bill simplifies the limitation regime by providing a general civil limitation defence to most claims. The new concept of money claims is introduced, and it is defined to include any claim for monetary relief. That replaces the haphazard approach taken by the 1950 Act, which sets out different limitation periods for different causes of action. The limitation period for most or all claims will be 6 years after the act or omission on which the claim is based. There are exceptions or modifications to this period in cases of minority or incapacity, or if there has been an acknowledgment of liability, part payment, or fraud. A 3-year late knowledge period is being introduced because there might be circumstances where people do not realise they have a cause of action. Currently the limitation period for most claims runs from the date the cause of action accrued; namely, the date on which all the elements necessary to establish the claim first came together. That has been very contentious and ambiguous. Under this bill, the start date for most claims will be the date when the act or omission on which the claim is based occurred.
The bill provides that a limitation defence cannot be used in cases of child sex abuse, no matter how much time has elapsed since that abuse took place. There is currently no statutory limitation period for claims under the New Zealand Bill of Rights Act; this bill rectifies that situation by bringing that Act under the definition of money claims and the 6-year limit.
The Limitation Act 1950 contains the general rules for determining the cut-off dates after which it is too late for a plaintiff to bring a civil claim. The most common period is 6 years and applies to claims founded on contract or tort, claims for an account, or claims in respect of a breach of trust. The current periods are subject to extension in a range of circumstances—for example, if the claimant is under 20 years of age or is of unsound mind, or because of fraud or mistake the claimant is unable to discover that a claim exists. There are difficulties with both the substance and the drafting of the 1950 Act. The 1950 Act, which followed closely the terms of the 1939 Act, is incomplete, misleading, and inaccessible. Judges have suggested that it is flawed and requires a complete legislative overhaul. The courts have made piecemeal attempts to cure the difficulties, but the overall result has been a lack of harmony. One major issue with the current legislation is that in some cases claimants can be barred from gaining relief by the limitation period before they even know they have a claim.
I look forward to more debate at the Committee stage and at the bill’s third reading. Thank you.
CHESTER BORROWS (National—Whanganui) Link to this
I rise to speak in support of the Limitation Bill. It is great to see again some sort of understanding across the House of the validity of this bill and its worth to New Zealand, which we are all here to serve. The bill is another product from the Justice and Electoral Committee and the hard-working and efficient team that exists therein. The key message of the bill is that the goal of new limitations is to provide a defence to legal claims brought after a certain period of time. We have found over recent years that what has generally been a standard limitation period of 6 years is no longer applicable, and that a limitation can apply in different ways around the country. For instance, in Auckland where it rains a lot, boards rot quicker, so leaky home situations occur a lot earlier than they do in homes in Christchurch, for example, where new homes are built under the same building regulations but in a different climate. So it is important for purchasers of homes to have some assurance that if, for instance, it takes longer than usual to discover a defect in homes they have purchased, they will still be able to seek some compensation or damages against the parties responsible.
During the course of the debate in the select committee, a point was raised by the Hon David Parker about long-term delayed reaction injuries and the ability of claimants to access compensation or make claims in respect of those injuries. So the select committee worked with ministry officials to include that issue in the bill, and it is another very sound aspect in the bill. I look forward to the debate on the Limitation Bill, and I commend it to the House.
LYNNE PILLAY (Labour) Link to this
It is a pleasure to stand to speak on a relatively uncontroversial bill in this House. That does not happen very often. In the last 2 weeks we have had to sit through debate on bills that were passed with a very slim majority and no real public mandate. The Government has pushed through many bills that formed—
Chris TremainWell, what a funny majority it is when we look at the ACT Party. But it is all about—[ Interruption] Oh, they have woken up now. They have all woken up. It was very sad indeed that we saw workers’ rights—rights that had been hard-fought for, that respected workers and gave them dignity, and that had been based on trust—decimated by the National Government, hand in hand with the ACT Party, which is in a terrible mess. But tonight, at a quarter to ten, under urgency, this debate is not one of those occasions.
Getting back to the Limitations Bill, as Mr Assistant Speaker Roy knows I would like to, I am one of the many Labour members who will take a call tonight to speak in support of the bill. We are speaking in support of the bill because it went to the Justice and Electoral Committee and we listened very clearly to what the bill was about.
Hone HarawiraNo, no, on the workers’ rights legislation. That member lay down, had his tummy scratched, and did exactly what National wanted in terms of workers’ rights in New Zealand. So that is quite enough from that member.
My goodness, “Clark Kent” rides again; it is just everywhere. I know that Mr Assistant Speaker would want me to come back to the bill. And I think that he would appreciate other members of the House not creating a diversion from what the bill is about.
Never mind the new spectacles—“I look cool.”—and never mind going back to the past. This debate is about the Limitation Bill. We are here tonight to debate the Limitation Bill.
Clare CurranWell, I will need to take many calls on that one! But we are here to talk about the Limitation Bill. I think we should go back to the bill. I urge the House to do that, because there has been a little bit of slippage here. The Law Commission, the very hard-working and respected Law Commission, recommended that we replace the current 1950 regime with a new, modern regime. It is nice to see something modern happening in Parliament, is it not? We do not see that very often. This is one of those occasions where we are stepping up and moving forward, and the new regime—
—yee-ha—will encourage claimants to make their claims without undue delay, and protect defendants from the unjust pursuit of stale claims. I think that is really important.
I acknowledge Chester Borrows; he is a very hard-working member. He is looking a little bit tired at the moment, reclining back in his seat. But we all recognise Chester Borrows for the great chair he is. Even though the members of the Justice and Electoral Committee do not have a meeting of minds at all times, Chester Borrows is a very good chair of the committee. A Māori Party member acknowledges that with applause. It is a very hard-working committee. I ask the member how many bills have been before that committee.
Seventeen? I think it is more than that. It has been a very hard-working committee. Many members, including National members, often grieve that we are not referring the Sentencing Council legislation back to that committee. I think that would bring about a bit of passion. One of the sad things about the committee is we have seen piecemeal legislation on victims’ rights stuff, instead of the enactment of that very good bill, which is languishing on the Order Paper. We get bit by bit from the National Government. At least this bill is going in the correct direction. I will not say “right direction”, because most of its legislation goes in the right direction, but that is actually the wrong direction because it is a return to the right. But this legislation, limited though it is—being the Limitation Bill—is sound legislation. So I am very happy to talk about this bill in the House, and I would like to talk about—[ Interruption] It is not often I am happy in the House. I am actually pretty unhappy most of the time, because some dreadful legislation comes through the House.
The purpose of the bill is to provide clearer, more comprehensive law on general civil limitation defences. It balances fairly the right of claimants to have access to justice—and if there is anything that the whole of Parliament should hold dear, it is access to justice—with the right of defendants not to be disadvantaged by stale claims. There also is some clarity about the way that claims go. I can see my colleague Carmel Sepuloni, who is an incredibly talented young woman, nodding in agreement.
Exactly. She is nodding in agreement, because she is sharp. She not only has picked up her portfolios but is really on to it in terms of justice matters. I will go to the report from the Justice and Electoral Committee—
There is so much to say and so little time to say it. Give a guy new glasses and he goes crazy.
I want to talk about the bill. Many people may think that the Law Commission did a fantastic job, and that the legislation put before the House would go to a select committee and come back without being amended. But, no, that was not the case. I acknowledge once again, as I usually do, the fantastic select committee staff and officials—and I can see Chester Borrows nodding in agreement—who gave us incredible support and advice. Indeed, many changes were made to the bill. They were not particularly controversial; they were more technical in terms of making the bill work better in practice. But there was one controversial change, and it related to the defence to a money claim filed after an applicable period. There were a lot of views about whether the 15-year longstop period currently in the law should be aligned with the 10-year period in the Building Act. The Law Commission wavered a little—which is not like the Law Commission, but it did do so on this occasion—between the two periods. In its final report in 2007, the commission concluded that a 15-year longstop limitation period struck the appropriate balance between justice for claimants and certainty for the defendants. The main explanation given for retaining the shorter 10-year longstop limitation period for defective building claims was the complexity caused by multiple parties and fading memories. National members will know about fading memories, will they not? But that was part of our deliberation.
The Labour members on the committee believed that those issues are similar for many other causes of action, and saw no good reason at all for shortening the longstop limitation period for building cases. We believe that it is more appropriate for the same longstop period to apply to all policy areas for which longstop periods apply. That was one area where there was not necessarily a meeting of minds. Once again, the Labour members led the charge in terms of progression and in terms of listening to the submitters who came along on the day—well, not on the day; on several days. Unfortunately, they did not win the argument in that one area.
But we support the bill. We are proud of the select committee report, and we commend the bill to the House.
METIRIA TUREI (Co-Leader—Green) Link to this
I will address the Limitation Bill on behalf of my colleague Kennedy Graham. The purpose of this bill is to encourage claimants to make claims for monetary or other relief without undue delay by providing defendants with defences to stale claims. The bill would repeal and replace the Limitation Act 1950, and it is intended to implement the Law Commission’s recommendation to replace the current Act with a modern regime. Such a regime would encourage claimants to make claims without undue delay and would protect defendants from the unjust pursuit of stale claims.
In essence, three principal changes are envisaged in this bill. The bill would clarify a claim affected by limitation provisions; it would clarify the commencement of limitation periods and any exceptions or modifications; and it would address the unfairness that under the current law a limitation period may end before a claimant even knows that something is wrong.
The Green Party supports the broad thrust of this bill and will vote for it. Many initiatives in it will improve matters. We agree with the recommendations of the Justice and Electoral Committee pertaining to clarifying several definitions, especially extending the definition of “Disputes Tribunal”, defining the terms “trust” and “trustee”, and clarifying the date for the filing of a claim. More important, perhaps, we support the committee’s recommendation pertaining to the claims filed under the New Zealand Bill of Rights Act. Clause 11 defined a “money claim” as a claim for monetary relief at common law, in equity, or under an enactment. That would have included a claim for monetary relief in respect of a breach of the New Zealand Bill of Rights Act.
The committee was concerned that the bill would apply a limitation period to claims for monetary relief for a breach of the New Zealand Bill of Rights Act. Such claims, if time-barred, should be subject to discretion. The inclusion of such rights claims in the new limitation regime reflects the recommendations of the Law Commission. It is consistent with international human rights law. A reasonable limitation period needs to apply to such claims. Defendants need certainty as to whether their actions might be challengeable, so we are pleased with the recommendation on that matter. There is also the issue of late knowledge. There are certain legal complications attached to this, but it was clear that a fraudulent action by another party was one reason that a claim acquired late knowledge and that this should be included as a qualifying factor.
The main point of debate in the select committee concerned monetary claims filed after the applicable period. There was a range of views over the merit of the longstop period as defined in clause 10(3)(b). There were suggestions that the 15-year limitation period should be reduced to align it with the 10-year limitation period prescribed in the Building Act. The Law Commission concluded after much deliberation that a 15-year longstop period struck the appropriate balance between justice for claimants and certainty for defendants. The argument for retaining the 10-year period for defective building claims was the complexity caused by the number of parties that might be involved and by the length of time, during which the memory of events becomes less reliable. The Green Party shares the view of Labour that these issues are similar for other causes of action. There is no good reason in our view for having a shorter longstop limitation period for building cases. It is an odd jurisprudence that would limit legal redress to the subjectivity of personal memory faculties. Having the same longstop period for all claims is more appropriate.
This is just a short call. The Green Party is satisfied that this bill will improve the law as it relates to the complex area of claims. We are happy to support the bill and we look forward to its further progress through the House.
SIMON BRIDGES (National—Tauranga) Link to this
I have been told that my friend Hone Harawira was going to take a call, which I must admit surprised me. But I come back to say what a great committee the Justice and Electoral Committee is. It has a fantastic chair in Chester Borrows, who does a great job as chair.
His deputy chair, Lynne Pillay, is not bad, as well, come to think of it.
I pay tribute to Lynne Pillay. Members saw her during her speech tonight. They saw the cool, calm, academic rigour that she brought to the Limitation Bill. She was a sucker for punishment in the committee on this bill, with the way that she drilled down into the detail and kept challenging us time and time again to get into the detail of the Limitation Bill. I take my hat off to Lynne Pillay for her work on the Limitation Bill.
It is great to be here tonight, speaking on this bill. Despite my five o’clock shadow now, at a couple of minutes to 10, I am nevertheless really switched on to this bill and the important matters of policy and principle that we are dealing with. I agree with Lynne Pillay. This bill is about access to justice and that is why we are here tonight.
As the Hon Chris Finlayson said, we are here tonight to do a noble thing. We are simplifying the 1950 Limitation Act and we are removing injustice. In the past it could well have been the case that some people discovered their claims after the expiration of the limitation period. Again, to come back to that great, learned expositor of the law Lynne Pillay, that is an access to justice issue. That is not to say that we are not balancing justice issues or the right of a putative plaintiff to bring their case on the one hand, and the right of a defendant to finality on the other side. There are those balancing of interests.
Here we are, just after 10 p.m. on Wednesday night, doing a noble thing for this country. We are debating important policies and principles. I could talk a lot more about this bill, but I say that it is a great bill and I am proud to be part of a Government that is bringing it forward and changing the rules in relation to limitation periods.
JACINDA ARDERN (Labour) Link to this
I have to point out the irony from the member who has just resumed his seat. Mr Simon Bridges, the lawyer, was being somewhat patronising to my very learned colleague Lynne Pillay. He claimed that she did not apply any legal rigour.
I raise a point of order, Mr Speaker. I take personal offence at that remark that I was being patronising. I normally am, but that speech was dead serious.
The ASSISTANT SPEAKER (Hon Rick Barker) Link to this
I say to the honourable member that this is a robust debate. I think he should take on board the words of his own colleagues and harden up a bit. One cannot be that sensitive here. If Ms Ardern had said that the member was being “matronised”, it might have been less offensive.
I would like to put on record that I think this is the first time a presiding officer has told a member to harden up.
I point out the irony in Mr Bridges delivering a speech that called on my colleagues to display legal rigour when he, the lawyer on the other side of the House, gave no analysis of this bill, whatsoever. I found that a little bit disappointing, because I expected a little bit more from my colleague in that regard. Despite all the comments he made about my colleague Lynne Pillay, I would have to say that no one on the Justice and Electoral Committee causes more of a stir in our meetings than Lynne Pillay. I do not think a meeting goes by without her defending the worth of the Sentencing Council. I want to mention the value of the Sentencing Council, which Labour will defend to the end.
I want to come to a number of more serious points on the Limitation Bill. Although there was a lot of agreement on both sides in terms of what this bill needs to achieve, there were about three areas of contention that I want to draw on. They will probably be discussed in greater detail during the Committee stage, but I want to flag them now. First off, I again highlight the fact that we were reviewing legislation that had its origins in the 1950s. Obviously, a lot of circumstances are known to us in the new, modern legal system, and they need to be addressed in any new regime around limitations.
When we were discussing this bill we weighed up the idea of giving certainty to defendants and reducing undue delay with the idea of building reasonable grounds on which a claimant might have reason to delay the claim that was to be put forward. Before I get into some of the depth of the bill, I point out that we continually hear from the Government some criticism as to how long Labour may or may not have taken to put forward various legislation, and there has been the argument that we demonstrated undue delay in bringing forward a review of the Limitation Act. When we are discussing legislation from 1950, I think that that criticism could extend to both sides of the House.
Having said that, I want to jump into those three areas of contention, which I have already pointed out and about which there was some lengthy and robust debate in the select committee. The first area of contention was the longstop period. I know that some of my colleagues have already discussed it. We had divergent views about a 15-year longstop period, as defined in clause 10. It relates to the time limit that would apply to one’s claim, whether the claim relates to personal injury or is a civil matter. It could even relate to building houses, and therein lies the rub. When it came to claims around the Building Act—
I tell Mr Borrows that I flag it again because I believe it was an important point. As chair of the Justice and Electoral Committee, he knows that this issue caused significant angst for the Opposition. Inconsistency in the law—as any good policy-maker, like the good sir, will know—causes some irritation. The Building Act 2004 differs from the Limitation Act in that it sets out a longstop period of 10 years. Some arguments were put before us as to why that was important. Some said that defective building claims, the complexity of the issues, and fading memories meant that those issues needed to be brought forward within a 10-year period, and that they would be known to the claimant within that period.
The fact that the Law Commission, in three different reports extending back as far as 1988, I believe, wavered in its view on this issue points to the fact that there is room for differing interpretation. My hope would have been that we err on the side of caution with this particular provision and that we default to the important premise of consistency. That was the view that the Labour members of the select committee brought to the table, and during the Committee stage I would like to hear a bit more discussion about the inconsistency in that area and about what is added by having two differing periods.
The National Government has put forward its package of remedial action around, for instance, leaky buildings, and the main set, I guess, of cases was brought forth in order to explain why we needed a different longstop period. The Government claims that that is a robust package, so I would have thought that nothing would be lost by building consistency between the two.
The second of the three areas of contention I want to discuss—there were a couple of other areas where that the select committee made changes, but, from my recollection, these were the three on which we made a significant contribution—was the discretion to allow relief for the claim of sexual abuse of a minor. Clause 16 gives the court or tribunal the discretion to allow monetary relief to be granted in respect of a claim of sexual abuse of a minor, even when a limitation defence had been or could be established. We recommended specially amending that clause to cover claims of non-sexual abuse of a minor based on the fact that they could have the same long-term effects as sexual abuse. I think this is consistent with where we have been heading in New Zealand in terms of not only sexual abuse cases but domestic violence. We have extended our definitions of violence and of abuse in our domestic violence law.
I think that there are a number of good reasons why allowing more discretion should extend beyond sexual abuse as well, because, at the end of the day, the question of whether monetary relief should be granted despite there being a limitation defence will be a judgment for the court, particularly when we are discussing cases that relate to minors. Those cases, because of the many psychological factors that are implicit in them, provide even more reason as to why we should look beyond what would otherwise be a longstop period.
Of course, we would not be standing alone in making such a judgment. As a select committee, we asked specifically to hear international evidence and good practice in this area. We heard that the United Kingdom and many Australian jurisdictions give similar discretion to disregard limitations in personal injury claims, which also include forms of abuse. So we are in keeping with other jurisdictions in this regard, and I think we have made the right amendments.
I want to touch now on the third area, which I hope we will have more discussion on later in this debate. I do not know that we have resolved this issue, which is about the discretion to allow relief for claims of gradual process, disease, or infection. Of course limitation applies to personal injury claims, and it does factor in the idea of late knowledge, but we expressed concern that the proposed longstop period could impose an unreasonable restriction on a person’s ability to claim, particularly where gradual process injuries were involved.
The argument we heard back from other members of the committee—and from officials to be fair—was that because we have a no-fault insurance scheme, in the form of the accident compensation scheme, we would not see as many cases in this area anyway, because gradual process, disease, or infection is most likely to be covered by that no-fault scheme. We had some level of discomfort that that was taken as a given, particularly at a time when there has been so much disruption to what otherwise we would have perceived to be unmovable parts of our accident compensation regime. It has in fact been proved that they are movable. Policies can be changed and people can be denied coverage, and then they have no access of redress, based on the way that this bill has been drafted. I will come back to that element further on in this debate, because I do not believe that it is something we have reached an end point on.
KANWALJIT SINGH BAKSHI (National) Link to this
I am pleased to take a call on the Limitation Bill. The purpose of this bill is to repeal and replace the Limitation Act 1950. As the Hon Chris Finlayson mentioned, the 1950 Act is creaky and outdated. This Act is based on the English statute of 1939 and that, too, was repealed long ago.
The Limitation Act 1950 has been reviewed thrice by the Law Commission—in 1988, 2000, and 2007. It was recommended that this Act be replaced with a new Act. The Law Commission identified that the current law is unfair, uncertain, and outdated. It also identified that some of the important terms are not defined in this Act.
The Justice and Electoral Committee, under the able leadership of Chester Borrows, heard submissions, which were duly considered, and it recommended some changes. This bill makes limitation law more accessible and up to date. This bill achieves a balance between the competing right of access to justice and the right of the defendant not to be accountable for stale claims. In conclusion, I say that this bill will make the law more comprehensive and clear. Thank you.
Hon DAVID PARKER (Labour) Link to this
I rise with some pleasure to talk on the Limitation Bill. This is important legislation that updates the current Limitation Act 1950, which obviously, from its title, is already 60 years old. I thank the Attorney-General for his careful consideration of the issues in this bill—in particular, in relation to gradual process injuries, which is an issue that I will come back to.
The Limitation Bill is important legislation because it tries to balance two interests. On the one hand, we have the public interest in enabling people who have been wronged to pursue through the courts a remedy to compensate them for the wrong that has been done to them. We want them to have that right, and for it not to taken off them unduly. On the other hand, we have an interest in ensuring that the quality of justice is good, by making sure that these disputes are resolved in a timely manner, before people forget, before witnesses die, and before documents are lost, because those things are important in making a good decision.
We also have the important public interest in making sure that the sword of Damocles does not for ever hang over the person who did the wrong; people should be able to move on with their lives after a reasonable period of time, if the claim that is hanging over them is not pursued. So the general rule is that people have 6 years to take their claim. If they do not take their claim within 6 years, then they lose their rights. That 6-year period currently runs from when the cause of action arises, but what that means is complex and I do not have time to go into it.
That test is changed slightly in this legislation, but in changing that test we are also introducing a more clear exceptions policy. There are occasions when the normal 6-year rule would be unfair, because people through no fault of their own do not know enough of the facts to ascertain that a wrong has been done to them, or to know whom they should sue. So there is an exception when there is a lack of knowledge on the part of the injured person that would prevent them from bringing a claim within that 6-year period. The general rule has an exception that can extend that period for a longer period, but that longer period is in itself limited by what we call a longstop date, beyond which, no matter what one’s rights may have been, the rights have been lost because too much time has elapsed. That is how we balance those two interests.
There are a couple of exceptions to that. An important exception to the normal 6-year rule is in respect of minors who have been sexually abused. Obviously, they could be abused at age 3 and still be under the care and control of the person who abused them until they leave home many years later. If a 6-year limitation period applied in that case, it would be causing an injustice to the children who were abused in their homes, and who would have no effective remedy. So that is one of the public policy reasons why we have an exception in respect of sexually abused children. That exception is in the old Limitation Act and is carried forward into this legislation, which is a good thing.
There is another exception that we in the Labour Party are worried about. It relates to gradual process injuries. People might be exposed to asbestos in the workplace, and they might not know that they have been exposed to asbestos in the workplace until asbestosis develops a number of years later. If there was a 6-year limitation period, well, the illness could happen after those 6 years; if there was a 15-year longstop period it could happen even after 15 years, so those people would be without a remedy.
The bill came to the Justice and Electoral Committee without there being an exception in respect of gradual process injuries. One of the justifications for that was that if the injury was work-related, or even if it was not work-related but accidental, the claimant would have cover under the accident compensation scheme. But when Labour members reflected on that at the select committee, we thought: “Who’s to know what future accident compensation rules will be? Who’s to know whether some of these things will, or will not, be outside the cover of the accident compensation scheme?”. It was notable to us, when we looked back at the old 1950 Act, that that Act had not been amended by the Accident Compensation Act of 1972. It sat alongside it, so that if people had cover under the Accident Compensation Act and it was stated that those people had no rights outside that Act, then that was covered in the Accident Compensation Act and not in the Limitation Act.
It became clear to us that from a principled point of view we needed to do in New Zealand what they had done in Canada, which was one of the comparisons we had. We needed to have an exception in respect of process injuries, and if those process injuries were long term and they were covered by the accident compensation scheme, then that scheme would take care of them, and no one would have any other risk because their claims were settled under accident compensation legislation. But if they did not have cover under that legislation, then they ought not to lose their rights because of the provisions in the new Limitation Bill. We took that to the Attorney-General and the Attorney-General looked at it. I thank the Attorney-General, because I thought he showed wisdom and open-mindedness in being willing to look at that, and then in agreeing to that as an exception.
There is one other issue that I will deal with, because although Labour will be backing this bill because it is a good bill, I disagree with the Government in respect of having a longstop liability period for non-building claims that is different from the period for building claims. We are saying that we will have a longstop liability period for 15 years, except for some of those rare exceptions relating to sexual abuse of minors and gradual process injuries. After that 15 years, even if people did not have knowledge to bring their claims earlier, they will lose all of their rights. But in respect of building cases, we are saying that we are sorry but people will not get the same longstop liability of 15 years; they will get only 10 years.
The first point I make is that this is irrelevant to the leaky building issues in Auckland, because the Limitation Bill that we are considering will apply only to causes of action that arise from the date the bill is passed, so it will not apply to those leaky buildings that we already have in Auckland. So the difference between the 10-year and 15-year period in respect of building cases is irrelevant to the problems that we already have in Auckland, and elsewhere, with leaky buildings. But I see no difference in principle between a building claim, a professional negligence claim, and a claim where someone acting as my agent could without my knowledge defraud me of some of the money that was due to me, the principal, from that agent. In that case, if an agent is defrauding me I have 15 years to pursue my claim—up to a 15-year longstop period—if knowledge has not been reasonably available to me that would have enabled me to bring my claim earlier. Yet we say in respect of a building claim that we can have only 10 years; I do not understand the logical reason for the difference. A failure in the foundations of a house can happen after 10 years but not be apparent before that, and after that 10-year period it will become the problem of the building owner because the longstop liability period will click in at 10 years.
The justification we were given at the select committee for the difference was that building claims had complexity because multiple parties were involved. We have the architect, the engineer, the builder, and maybe the concrete layer or someone who has put the steel work into the foundations inappropriately, so it is true that there are multiple parties. OK, that might add a bit more complexity than would be the case in respect of a simple action between a principal and a single agent, but there are plenty of cases where there is complexity as to fact, and if someone cannot prove a case on the balance of probabilities—in a case of complex facts such as a building case—in that period between 10 and 15 years, that person’s case will fail. I cannot see the reason in principle for having a different longstop liability period for people who suffer a failing building. That could be the loss of the most important asset in their lives; the foundation of the house could fail and the house could be largely worthless.
The other argument we heard was that in Building Act cases we have fading memories. But we have fading memories in all old cases, so I do not see a difference in principle there. I am not sure whether it will be in the scope of this bill, because that is something I will need to check with the Office of the Clerk, but assuming it is within the scope of this bill, I will be promoting at the Committee stage an amendment to have the same longstop liability period applying to Building Act cases as to all other cases, because I do not see the difference in principle. We can argue that the periods should all be 10 years: that Building Act cases should have a 10-year longstop period and that other cases should too. But we say that they should all be consistent; they should all have either 10 years or 15 years as their longstop period. Thank you.
HEKIA PARATA (National) Link to this
Tēnā koe, Mr Assistant Speaker Barker. Huri noa i tō tātou Whare, tēnā koutou katoa. I am pleased to stand to take a short call on the Limitation Bill. Indeed, I was motivated to rush to the House once I realised that the Attorney-General was, as usual, giving his comprehensive and incisive rendition of this bill’s coverage, its heritage, and its legacy. It is important that we have the opportunity to hear that kind of leadership in the House—
Chris Hipkins—and to inspire that response from Mr Hipkins. Our backbench members were motivated to get here as soon as possible to support the passage of this legislation through the House.
This is an important bill. As my colleague Simon Bridges said earlier, and as members opposite have reiterated, the bill sets out to balance the rights of both the claimant and the defendant. The allocation and management of rights is an issue that continues to vex Parliament after Parliament, and this bill takes the opportunity to clarify the area of legislation that allows claimants to bring their causes of action before the court, and allows defendants to know that they will not be subject to claims long past the time when one might say it is fair for them still to be heard.
As previous speakers have noted, the Law Commission has reported on this bill three times: first in 1998, then in 2000, and again in 2007. The 1950 Limitation Act has exercised the Law Commission somewhat in that it has taken such a long period of time to finally bring the bill to the point where it is now at. Legislation is imminently to be passed, and it will give greater certainty to people who are engaged in the process of having their rights heard, balanced, and judged.
Far be it from me to continue to rehearse the technical detail that our Attorney-General has covered so well. I congratulate the chair of the Justice and Electoral Committee, Chester Borrows, who has shepherded the bill through the process in the careful and cautious, yet comprehensive, way that characterises—she said, alliteratively—all the work that has to be done by the chair. The chair also carries a significant body of work. I think we have heard tonight that 17 bills are before the very hard-working Justice and Electoral Committee, to the membership of which I have only recently been promoted.
Of course other members, too, if they try hard enough, could also find themselves, one day, on the Justice and Electoral Committee, although that possibly does not apply to everyone in the House tonight.
I also acknowledge the deputy chair, who stands ready to support, at a moment’s notice, the work the chair has done. As we have noted in the House earlier, we are constantly challenged by the diminutive Ms Pillay, who has a giant concern for, and commitment to, the Sentencing Council. Of course, we also have the incisive Mr Quinn and his rapid, thrusting, and razor-sharp interventions, which continue to keep us on our toes, and each thrust is parried by the inimitable Mr Parker. It has been an absolute joy to be a part of that process, and I look forward to further debate on the bill this evening. Thank you.