Carter Holt Harvey Limited (CHH) appealed against the Court of Appeal’s refusal to strike out actions against it in negligence by the Minister of Education (MOE), who also cross-appealed the Court of Appeal's decision to strike out MOE's negligent misstatement claim against CHH. CHH had manufactured allegedly defective “Shadowclad” sheet and cladding systems which were installed in schools throughout New Zealand. The Supreme Court unanimously held that all of MOE's negligence claims were arguable and required examination in the light of proper factual findings at trial.
The principal point of interest in this case arose in relation to section 393 of the Building Act. That section provides for (among other things) a 10-year long stop limitation period in relation to civil proceedings that relate to "building work". CHH argued that the proceedings related to “building work” under that provision and therefore the 10-year limitation period in the Act prevented the respondents from bringing a large number of their claims.
The Court held that section 393 does not apply to claims related to defective building products and materials, and so these claims are not related to “building work” for the purposes of the provision. As a result, the 10-year limitation period of section 393 does not apply:
The fact that the product has been used in the construction of a building does not mean that the civil proceedings against the manufacturer/supplier are proceedings relating to building work. They are proceedings relating to negligent manufacture and the supply of defective products, to which the usual rules that limitation periods arise on discoverability apply.
Of note, the Supreme Court deliberately expressed no view as to whether a contribution claim (such as by CHH against the installers of its products) would be time barred by the longstop provision - ie, whether to leave suppliers of materials 100% liable; or whether to overwrite the benefit enjoyed by those involved in building work who would otherwise be protected by the section 393 longstop. The Court simply stated that whatever view may be expressed, the outcome would be anomalous.
See the Court's decision here.