New Zealand law contains several limitation periods. A limitation period prevents people from making old or stale claims against others. A person must act within the correct timeframe or risk not being able to take any action. Consider the following scenario:

A person purchases a house that is only 8 years old. Initially the house is fantastic, but after two and a half years the house begins to have weathertight issues. The repairs will cost several hundreds of thousands of dollars. It was not the owners fault but what action can be taken to fix the situation? The owner could bring a claim against the architect or the builder, however, the house is over 10 years old. There is a limitation period which prevents claims relating to defects which arise more than 10 years after the construction or the building work. That leaves the homeowner in a difficult position because he or she has no right of redress.

Limitation periods arise in many different areas of law, including debt recovery, employment, family and building / construction. Below are four limitation periods to be wary of:

Debt - Recovery of money owed

When a person has money owed to them, he or she usually has only 6 years to recover the debt before the limitation period applies.

The 6 year period starts from the date the debt is owed to the creditor, or the date which the debtor last acknowledges the debt, or pays any part of it. After the limitation period has expired, the creditor can no longer chase the debtor for the outstanding amount.

However, an exception applies where the creditor has late knowledge of the claim. The limitation period for this exception is 3 years after the late knowledge date.

In any case there is a longstop limitation period of 15 years after the date of the act or omission which means the debtor cannot claim for the money owed.

Employment - Personal grievances

An employee has 90 days to raise a personal grievance with his or her employer.

The 90-day period begins on the later date of, either:

  • The day the action alleged to amount to a personal grievance occurred; or
  • The date at which the action alleged to amount to a personal grievance came to the notice of the employee.

However, the employer may consent to a personal grievance being raised after the expiration of the 90 day period.

If the employer does not consent, the employee may apply to the Employment Relations Authority for leave to raise the personal grievance out of time. The ERA will only grant leave to do so if the delay was caused by exceptional circumstances.

An exceptional circumstance includes where the employee has been so traumatised by the matter that he or she was unable to properly consider raising the grievance within the 90 day period.

Family - Division of Relationship Property

When a couple separates it is necessary for them to decide how they want to divide their property.  In many instances, a couple may agree to the division of relationship property following separation (and in some cases before, or during, the relationship by way of a Contracting Out Agreement).

However, if the parties cannot agree, an application to the Family Court can be made to divide the relationship property.

The time in which the application to the Family Court must be made depends on whether the parties were in a de facto relationship, civil union, or marriage.

When the parties were in a de facto relationship, an application must be filed within 3 years from the date the relationship ended.

When the parties were married or in a civil union, an application must be filed within 1 year from the date the civil union or marriage is dissolved.

Building / Construction - Residential building defects

Residential building work is covered by a warranty which ensures that:

  • The work will be compliant with law and regulation;
  • The work will be completed with reasonable skill and care; and
  • The work will be completed in a reasonable timeframe if no time frame is agreed.

These warranties last for 10 years, regardless of whether the builder or contractor agrees.  Any claims after the 10 year period cannot depend on the implied warranties.

Summary

There are many limitation periods of which a person must be wary.  At Rainey Collins we have experts in all areas of law who can help navigate limitation periods, which are often complicated.