Court gives hope to leaky-home owners

A Supreme Court decision could clear the way for $90 million in leaky-home claims.

Homeowners John and Helen Osborne have won an appeal that clarified the period of time in which they were eligible to seek leaky-home compensation under the Weathertight Homes Resolution Services Act.

The issue was whether a 10-year limitation period on claims should start from when a building was finished or from when it was officially signed off with a council code of compliance certificate.

In a decision today, the court ruled that it started from when the code of compliance certificates were issued, which in the Osbornes' case was at least six months after building work finished.

The couple applied for an assessor's report under the weathertight-homes law more than 10 years after their house became habitable but just inside a 10-year limitation period allowed by the Building Act for starting proceedings against the Auckland Council in relation to code of compliance certificates.

Tim Rainey, the Osbornes' lawyer, said his clients were "extremely happy ... to ultimately have got the outcome they had hoped for".

An Official Information Act request had shown 369 similar claims had been denied as ineligible on the same basis as the Osbornes had been. Some of the claims involved more than one dwelling and conservatively could be worth $80 to $90 million. It could be more, he said.

Those people were in exactly the same situation as the Osbornes. "The results in those eligibility decisions should now all be reversed," he said.

Claims made under the weathertight-homes law stopped the clock on all potential claims against parties that homeowners might sue while the claim was investigated, Rainey said.

Claims would ultimately mostly be against councils because the last step in the construction process was usually a council issuing a code of compliance certificate.

While there were claims throughout the country, most claims registered so far were in Auckland.

The Supreme Court decision had effectively left the Osbornes at the start of the process with their claim against the Auckland Council.

The council had previously made an offer to the Osbornes that would have ended the matter, but the council had insisted it would settle only if the Supreme Court agreed not to issue its judgment.

Explaining its decision to release the judgment, the court said it considered the public-interest factors in favour of releasing the judgment outweighed the advantages to the Osbornes of allowing the council settlement to become unconditional.

The questions raised were likely to affect people other than the Osbornes.

Rainey said the council offer had been confidential and he could not say what had been proposed.

"I can say it wasn't a difficult decision for the Osbornes to make to agree to settle their litigation on the basis proposed by the council," he said.

"Certainly the Osbornes would like the council to consider, if they were prepared to offer that amount of money before the decision came out, we believe they should be prepared to pay the same amount of money today.

"Otherwise it looks like the council was being cynical and using ratepayers' money to buy them [the Osbornes] off to avoid this judgment coming out, which I don't think would be a proper use of the ratepayers' money." The council said it would not comment until it had considered the judgment.

"The council's offer to the Osbornes is now null and void and the claim will go back to the [Weathertight Homes] tribunal," it said.

"This is not to say the claim is not capable of settling on different terms at a later date, but all the building parties of both the original works and the unconsented repairs will be included in the resolution of the claim." The court awarded the Osbornes costs of $25,000 and reasonable disbursements against the Auckland Council, which was the first respondent.

The appellants were also awarded costs on judicial review proceedings in the High Court and on their appeal to the Court of Appeal, with those courts to fix the amounts.