The age-old limitation argument

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The High Court of New Zealand has recently presided over a long running claim brought by a landowner, Mr Daisley, in Daisley v Whangarei District Council [2022] NZHC 1372 which looked back in time to 1988.

What happened

Mr Daisley purchased land in New Zealand in 2004 which included a quarry. The seller of the land told Mr Daisley that the property came with the requisite council consent to quarry the land, issued by Whangarei District Counsel (the “Council”). This consent, issued in 1988, was indeed provided but remained in historical paper documents held at the Council, and not incorporated into any updated document system.

In November of that year, the Council contacted Mr Daisley advising that he did not have the correct consent to quarry. The Council proceeded to issue abatement notices between 2005 and 2009, eventually pursuing Mr Daisley in the Environment Court for acting without consent in the operation of the quarry.

In July 2009, Mr Daisley’s solicitor attended the Council to review hard copy documents and proceeded to find the 1988 Council consent that had been issued and allowed Mr Daisley to quarry. This is the first notification Mr Daisley had of the consent’s existence. He had in December 2009, sold the property for a reduced price. In 2011, the Council agreed that the consent was valid and Mr Daisley had been able to operate the quarry. All litigation was then dropped by the Council.

In August 2015, just shy of the 6 years since the consent had been found, Mr Daisley issued proceedings for negligence and breach of duty against the Council. Mr Daisley claimed loss of earnings, loss of value of the property and costs associated with the enforcement proceedings brought by the Council. The Council raised a limitation defence under New Zealand’s Limitation Act 1950.

What the court decided

The High Court held that the Council was not entitled to rely on the limitation defence despite the lengthy lapse in time. This was because there was a continuing breach of the Council’s common law duty owed to Mr Daisley from 2004 to 2009 when the consent was found, and a concealment of the consent.

Additionally, Mr Daisley had applied for consent to quarry in 2006 which was refused by the Council. The High Court held that Mr Daisley suffered immediate and continuing damage from that point on until 2011 when the enforcement proceedings were withdrawn.

There was also the additional point of concealment of the consent which prevented Mr Daisley of becoming aware of his right to claim negligence against the Council. This effectively froze the limitation period pursuant to s28(b) of the Limitation Act 1950, preventing Mr Daisley’s claim from being statute barred.

Whilst this case is not binding on UK courts, it is a good reminder of the importance of checking historical documents, and if none are available, submitting a limitation statement outlining all of the checks that have been undertaken in arriving at the conclusion that no documents are available – this may just reveal some holes in documentary evidence.