Court allows Wellington City Council’s contribution claim against an engineering firm to proceed
The Supreme Court ruled that the 10-year "longstop" limitation under the Building Act does not apply to contribution claims, allowing Wellington City Council’s claim against engineering firm Beca Carter Hollings & Ferner Ltd to proceed despite being filed after the longstop period.
The building, owned by CentrePort Ltd. and leased to the Bank of New Zealand (BNZ), suffered severe damage during the 2016 Kaikōura earthquake, rendering it unusable. BNZ, alleging negligence in the design and construction of the building’s substructure and superstructure, sued the council for granting building consents, inspecting the work, and issuing code compliance certificates. BNZ sought damages of approximately $101m, which included property damage and business interruption losses.
In response, the council sought a contribution from Beca under s. 17(1)(c) of the Law Reform Act 1936, claiming Beca had provided engineering services for the building’s design and construction. Beca, however, argued that the council’s claim was barred by the 10-year longstop under s. 393(2) of the Building Act, which prevents civil proceedings related to building work if initiated more than 10 years after the act or omission on which the claim is based.
Beca applied to have the council’s claim struck out, contending that the engineering firm’s involvement had ended with issuing producer statements for the substructure in 2007 and the superstructure in 2008. Since the council’s claim was not filed until 2019, Beca maintained that it was time-barred.
However, the High Court and Court of Appeal ruled in favour of the council, finding that the longstop provision in the Building Act did not apply to contribution claims governed by s. 34 of the Limitation Act 2010. Under the Limitation Act, a two-year limitation period applies to contribution claims, but this period does not begin until the original defendant’s liability has been established.
The Supreme Court upheld these rulings, dismissing Beca’s appeal. The court found that while broad, the Building Act’s longstop provision did not override the specific limitations framework for contribution claims under the Limitation Act. Therefore, the council’s contribution claim was not out of time.
