Limitation and Leaky Buildings: when claims not involving construction or design defects run out of time

The latest chapter in Auckland’s biggest “leaky building” dispute saw aggrieved unit owners bring proceedings over their purchase of a unit in St Lukes Garden Apartments (St Lukes Gardens), alleging a conspiracy by the vendor, the vendor’s solicitor, their conveyancing solicitor, the Body Corporate’s lawyer, the Body Corporate, and the bank that financed the purchase, to conceal their knowledge that St Lukes Gardens was leaky as early as February 2013.

All but one of the defendants applied to strike out the claim against them. The vendor’s solicitor and the bank also applied for the defendant’s summary judgment. In a judgment delivered on 5 June 2026, the Court granted the applications for strike out and summary judgment, ruling that:

1. the allegations had no factual foundation and lacked merit;
2. the claims were brought out of time under the Limitation Act 2010; and
3. section 37 Weathertight Homes Resolution Services Act 2006 (WHRSA) did not apply.

The 280-unit St Lukes Gardens was the subject of one of the largest weathertightness claims in New Zealand in 2016. Repair costs have blown out since and are now projected to exceed $240 million.¹ Administrators were appointed to the Body Corporate in 2025.²

The plaintiffs purchased a unit in St Lukes Gardens in April 2013. Kiri Harkess and Linda Hui of McElroys acted for the conveyancing solicitor. The solicitor had no knowledge of leaky building issues, and the vendor’s pre-contractual disclosure materials and information from the Body Corporate did not disclose any weathertightness issues or WHRSA claim.

In August 2013, isolated leaks were discovered in a few apartments, leading to further investigation. On 2 February 2014, the Body Corporate resolved at an Extraordinary General Meeting (EGM) to bring High Court proceedings against the parties responsible for the defects, and to lodge a claim under the WHRSA.

The plaintiffs participated in the building defect proceedings and received funds as part of the settlement in 2019. They then issued these proceedings in late 2024, alleging that the weathertightness issues were known to the defendants at the time of purchase or were reasonably discoverable, and should have been disclosed to them.

After considering the affidavit evidence and hearing from the (self-represented) plaintiffs, the Court held there was no evidential basis to find that the defendants knew or could have known of weathertightness issues at the time of the plaintiffs’ purchase. To the contrary, the Body Corporate did not start investigating weathertightness concerns until after the purchase.

Further, the Court found that the allegations of negligence against the conveyancing solicitor were speculative, lacked foundation, and were demonstrably contrary to the documentary evidence. There was no evidence of a breach of duty of care. In reaching this conclusion, the Court observed that the solicitor’s defence had been hampered by the length of time that had passed since the original events and no longer having access to the relevant file.

Each of the five defendants raised a Limitation Act defence. The plaintiffs’ purchase of the property settled in April 2013, so their primary period under s 11(1)(b) ended in April 2019. The claim was out of time unless the plaintiffs could prove that they were not aware of the facts required to bring their claim until a later date (a ‘late knowledge date’ under s 14).

The Court held, as against the conveyancing solicitor, that the plaintiffs’ late knowledge date was August 2015 at the latest, when they (as part of the Body Corporate) engaged solicitors for the building defect proceedings. At this point, the plaintiffs uplifted their file from the conveyancing solicitor’s firm, and she informed them that their new lawyers may need to review her involvement in the purchase of their unit. The Court said the plaintiffs were or should have been aware at that stage of everything required to bring a claim against the solicitor.

The plaintiffs filed their claim nine years after the late knowledge date. That was well after the expiry of the late knowledge period and therefore statute-barred.

Section 37(1) WHRSA provides that the making of an application for an assessor’s report under s 32(1) has the same effect as the filing of proceedings in Court for Limitation Act purposes.

The plaintiffs submitted that the Body Corporate’s March 2014 application for an assessor’s report stopped time running for their claims against the defendants.

The Court held that s 37(1) did not apply when:

1. the homeowner is seeking to bring a claim against parties not involved in the design or construction of the property;
2. there is no allegation that the defendants caused or contributed to the damage;
3. The defendants otherwise have a limitation defence.

The Court adopted the view taken in Washington Apartments<³. In that case, Associate Judge Smith held that s 37(1) only stopped time running for claims involving weathertightness defects and damage because the other claims were not within the WHRSA’s scope.

Washington Apartments was about the interrelationship between s 37(1) WHRSA and the longstop limitation period under the Building Act 2004 rather than the Limitation Act. But since both limitation provisions have similar approaches to assessing limitation periods (turning on the specific act or omission giving rise to liability), the Court found that the same approach could apply in this case.

The plaintiffs’ claims alleged negligent conduct and advice in relation to their purchase of the unit, not its construction or design. The Court held that such claims are not within the WHRSA’s scope.

The Court distinguished Lee v Whangarei District Council,⁴ on the same basis as in Washington Apartments, namely that in Lee the Supreme Court was not concerned with the question of whether s 37 stopped time running for court claims to recover damages for non-weathertightness defects.

Building defect claims are both a terrible burden on owners and a frequent source of longtail liability for professionals. For the latter, defending a claim brought more than 10 years after the relevant events can be challenging with fading recollections and difficulty accessing documents. The existence of limitation periods is designed to address these issues, and it is good to see their proper application.

This is also the first time the High Court has considered s 37 WHRSA in a claim against parties who did not cause or contribute to the existence of building defects. The decision will assist solicitors and other non-construction professionals who get caught up in disputes about leaky buildings.

1. Body Corporate 346086 v Interested Parties [2025] NZHC 1984 at [4] and [7].
2. Ibid at [24].
3. Body Corporate 378351 v Auckland Council [2020] NZHC 1701.
4. [2016] NZSC 173

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