Hon Christopher Finlayson

Hon CHRISTOPHER FINLAYSON (Attorney-General) : I move, That the Limitation Bill be now read a first time. At the end of this debate, I intend to move that the bill be referred to the Justice and Electoral Committee.

This is a great day for black-letter law, because it represents the day when reform of New Zealand’s Limitation Act 1950 will have finally begun. The Act has been widely criticised by the judiciary, litigators, academics, and members of the legal profession, and it is really quite unsatisfactory that this kind of important law reform should have taken so long. The “mother” of the Electoral Finance Act, Annette King, should have been working on reform of limitation, and on removal of the partial defence of provocation, rather than on spending her time developing Stalinist electoral legislation, which will forever be a blot on her record, like everything else she has touched. The people of Rongotai will not forget very easily at all.

Limitation periods are a very important part of the law, and have been for centuries. There has been a Limitation Act in England since 1623. Limitation periods must balance three interests. The first is the plaintiff’s right to bring a well-founded claim, which, in justice, the defendant should satisfy. The second is the defendant’s right not to be vexed by very stale claims, for without limitation periods people could face liability indefinitely. The third is the public interest in the timely resolution of claims, as expressed in the Latin maxims “Interest reipublicae ut sit finis litium.”—it is in the public interest that there be an end to litigation—and, as Mr Auchinvole was saying to me just the other day, “Vigilantibus, et non dormientibus, jura subveniunt.”, which means that the law assists those who are vigilant and who do not sleep on their rights. Limitation statutes were described by the former Chief Justice of England and Wales in 1825 as an “Act of peace”.

This bill has had a very lengthy gestation period. The Law Commission considered the 1950 Act in 1988, in 2000, and again in 2007, and concluded that limitation laws should be simplified and clarified.

Chris Auchinvole: What was the Government of the day?

Hon CHRISTOPHER FINLAYSON: The Labour Government did nothing on this issue, as on many issues, for 9 years. In December 2007 the Law Commission published an exposure draft bill for consultation, based on the commission’s earlier recommendations. The submissions on the draft bill raised a number of significant issues, so a working group, of which I was a member, was established to review the draft bill in the light of the submissions, and to address other technical issues. This bill implements the conclusions of both the Law Commission and the working group.

The 1950 Act is creaky and outmoded. It is fair to say that it is in an advanced state of legislative putrefaction. It drew on a 1939 English statute that was repealed many years ago. The 1950 Act does not adequately define very important concepts. In some cases its rules can be unfair, because people may be time-barred from gaining relief before they are even aware they have a claim. These flaws have led to a complex maze of case law in this area, and the Supreme Court has stated “The surgery now required is beyond the proper province of the courts.” This bill addresses these concerns by both improving and simplifying the general limitation rules.

First, the bill simplifies the rules considerably by providing a general civil limitation defence to most claims. The bill introduces a new concept called “money claims”, which is defined to include any claim for monetary relief, whether at common law, in equity, or under an enactment. This general defence will replace the piecemeal approach in the 1950 Act, which sets out different limitation periods for different causes of action. This reform means that the general civil limitation law will now cover claims for monetary relief for a breach of the New Zealand Bill of Rights Act 1990, and, in addition, claims for bodily injury will now be dealt with as money claims and the existing procedural requirements for bringing these claims will be removed.

The definition of “money claims” has a small number of exceptions. For example, claims for damages in respect of trespass or injury to Māori customary land that are not brought against the Crown will continue to be treated separately, in accordance with the scheme in Te Ture Whenua Maori Act 1993. The limitation period for almost all claims will be 6 years after the act or omission on which the claim is based. After this time has expired a defendant can raise a limitation defence against the claim. The bill provides some exceptions or modifications to this time period—for example, where the act or omission complained of occurred when the plaintiff was under 18 years of age, was incapacitated, or was unable to bring a claim. For minors, this ensures that the time period will start to run when the minority ends. If the claimant was incapacitated or became incapacitated during the limitation period, the courts will have a discretion to extend a limitation period where it is just to do so. Similarly, special exceptions or modifications will apply where the case involves acknowledgment of liability, part-payment, or fraud.

Secondly, the bill more clearly identifies the start of the primary limitation period. Currently, for most claims the limitation period begins to run on the date that the cause of action accrued—that is, the date on which all the elements necessary to establish the claim first came together. Identifying that date has been contentious and has added to the cost of litigation. Under the bill, the start date of the primary limitation period for most claims will simply be the date when the act or omission on which the claim is based occurred. That date will be readily identifiable. The bill also sets out special start dates for certain types of money claims. Other special limitation periods are created by other legislation, such as employment and securities legislation, the Fair Trading Act, the Commerce Act, and the Building Act. In the event of any conflict between the general rules in this bill and specific rules in other legislation, the specific rules will continue to prevail over the provisions in this bill.

Thirdly, the bill introduces a late knowledge period to address the difficulty caused when a current limitation period can end before a person knows enough to consider bringing a claim. The period will apply after the primary limitation period has expired in cases where the claimant has not known, and could not reasonably have known, the key facts required to make the claim within the primary limitation period. The late knowledge period will start on the date when the claimant has gained, or reasonably ought to have gained, knowledge of the key facts, and it will run for 3 years. The longstop period is a new feature of general limitation law, and I look forward to people making submissions on it to the select committee.

Finally, the bill addresses the issue whereby in some cases it may be inappropriate for a limitation period to bar relief, and in certain areas the court will have a discretion to enable relief to be granted even if a limitation defence can be made out. Those three areas include that where the case involves sexual abuse of a minor. It is important to note that the 1950 statute will continue to apply to claims for events occurring prior to the commencement of the Act.

In conclusion, the bill provides clearer and more comprehensive and accessible limitation law. It balances the interests of claimants to have access to justice, the right of defendants not to have to face stale claims, and the public interest. The bill will substantially improve the law. I commend the bill to the House.