Know your limits!

What is and isn’t ‘building work’ under the Building Act’s long-stop limitation provisions? Some recent cases have explored the answer to that question

Long-stop limitation provisions are time limits within which legal proceedings must be initiated. The Building Act 2004 imposes a ten-year long stop on claims for defective building work. The ten years is measured from the date of the act or omission giving rise to the claim, which might be the issue of the code compliance certificate or some earlier date like practical completion.

While the limitation provisions in the Act can provide an absolute defence in court, the ten-year long stop in Section 393 of the Building Act 2004 only applies, “in relation to building work”. If a defendant believes a claim is statute barred (has exceeded the legal time limit for action) due to the ten-year long stop, they will usually apply to strike out all or part of a plaintiff’s claim against them.

Defining ‘building work’

In September 2010, Stadium Southland’s roof collapsed after a heavy snowstorm. The building owners, the Southland Indoor Leisure Centre Charitable Trust, issued proceedings against the Invercargill City Council and a consulting engineer.

The Council joined a second firm of consulting engineers who had carried out a peer review of the original design, in addition to some further redesign work. That second firm of consulting engineers (and their employees) sought to strike out the causes of action against them, relying in part on Section 393.

They argued that their work (carrying out a structural review and producing a design review letter), although related to design, was still classified as “building work” and, because this work was done more than ten years before the proceedings against them commenced, the claim was statute barred. The High Court agreed with their position. “Building work” in the 2004 Act did include “design work”.

The Court noted “building work” is defined to mean work “for, or in connection with, the construction, alteration, demolition, or removal of a building”. Further, the Act defines “construct” as including  “…to design, build, erect, prefabricate, and relocate the building”.

The High Court emphasised that, in each case, what is “building work” is a fact-specific inquiry.

Therefore, where design work is specific to a particular building, it’s likely to be building work. However, if consultancy services are not directed at a particular building, the outcome may be different.

In another High Court decision, a party who carried out geotechnical reports on earthworks for a subdivision was not able to rely on the definition of “building work”. In that example, the reporting was not for, or in “connection with the construction, alteration, demolition or removal of a particular building”.

As a postscript, the Southland Indoor Leisure Centre Charitable Trust has recently succeeded in its claim against the Council.

The Council was found negligent in the exercise of its statutory duties; ie, in issuing a Code Compliance Certificate (within the ten-year long-stop provision) for the premises in circumstances where the Court found it had no information to reasonably conclude that the remedial building work* complied with the building code. The requirements of the building consent for that remedial work had never been satisfied.

*In November 1999, during construction of the stadium, excessive deflections were observed in the roof trusses that had been erected above the community courts area. Remedial works were necessary to address the deflections. A revised building consent was obtained for the revisions involved in the remedial works. The building opened in 2000.

In September 2010, Stadium Southland’s roof collapsed after a heavy snowstorm. This photo was taken during the reconstruction phase

About Harkness Henry

This article was written by Karen Shaw, a Senior Associate at Harkness Henry, Hamilton in the firm’s litigation team.

For any further advice or queries about construction law please contact Karen at karen.shaw@harkness.co.nz; or Litigation Partner Kevin Bond, at kevin.bond@harkness.co.nz