Geoff McLay

5 August 2009

Something happened yesterday never thought I would see actually happen. Two decades after the Law Commission first recommended wholesale reform of New Zealand Limitations Act 1950, Parliament gave the first reading to a new Limitations Bill. Up until yesterday Parliament had resolutely refused the pleas of Judges to deal with what has become an impossible mess as advocates have tried to fit within the structures of the old English limitations regime, new problems over sexual abuse claims and claims for economic loss under the rule in Hamlin.

Limitation law is often seen as arcane, but anyone who has had to advise either a plaintiff or a defendant caught in the web of the current statute, will see this is a cause for great celebration. As with any limitation statute there will be winners and losers as a result of the rules that Parliament is in the process of reforming. It deserves the attention of not just lawyers, but all advocates for civil justice. As already flagged by the Maori Party, there are significant issues to be argued about in relation to limitation periods that might apply to Maori customary land claims, and interesting debates are to be had as to what the proper age of majority ought to be.

For the first time New Zealand is to have its own indigenous limitations regime. New Zealand lawyers will no longer be able to rely on outdated English textbooks to resolve thorny issues of balancing the rights of plaintiffs to be heard and defendants to have certainty. The most radical proposal is the removal of "accrual of the cause of action" as being the beginning of limitation period, which can give vastly different results depending on whether one has a tort claim or a contract claim. There is to be a single rule which makes the start date, the time of the act or omissions that give rise to the claim. One of the prime drivers for New Zealand courts accepting that there might be concurrent liability in tort and contract is now to be removed.

For the first time fiduciary claims will be caught by the strictures of the Limitation act rather than by the more generous application of the doctrine of laches or delay. This might also be of some controversy to those who see equity as protecting a kind of vulnerability that makes a more discretionary approach to limitations more desirable. Certainly it ought to be the subject of submission in select committee. There will no longer be an advantage in trying to convince the Court that there was a fiduciary aspect of the claim simply as a way of getting around the limitation period might apply to a tort claim.

The limited fix of "reasonable discoverability" that New Zealand Courts have employed and economic loss cases, and to some extent sex abuse cases, to deal with injustices of plaintiffs being unaware of the damage that they had all the suffered, or unable to do anything about that harm, is to be replaced by a concept of " delayed knowledge" ( including where the plaintiff ought to have reasonably known) which can allow a period to be extended by further three years from the date of that knowledge. There is to be a maximum long stop period of 15 years which will bar almost all claims. One exception is to be sexual abuse claims that are subject to their own discretionary regime, somewhat modelled on what now exists in the United Kingdom. Plaintiffs and those cases in particular would be saved the rather harrowing effort to satisfy the somewhat odd test currently employed by the New Zealand courts.

Other potentially significant aspects of the reform is that claims under the New Zealand Bill of Rights Act would be subject to the same regime as other claims. Previously the New Zealand Court of Appeal had held that it preferred to analyse the claims are discretionary Sugrue (P F)Ltd v AttorneyGeneral [2004] 1 NZLR 207 (CA). Amongst rights advocates this will no doubt generate some controversy - As might the note in the "impact" statement:

Government as litigant: Government will benefit from greater clarity in this area in the same manner as other litigants. The introduction of a 6year limitation period for certain public law compensation claims will provide certainty and will encourage claimants to take actiondiligently.

Government as administrator of the courts: There may also be costs savings if courts are able to dispose more efficiently of claims where limitation is an issue. There may be some reduction in cases I plaintiffs and defendants are more readily able to determine how the limitation defence affects their claim. It is not possible to estimate these savings as there is no information about the number of cases where limitation is presently an issue and no means of quantifying the potentialimpact on litigation decisions.