Section 11 of the Limitation Act 2010 – are there circumstances when the time limit does not apply?
Section 11 of the Limitation Act 2010 (the Act) provides a defense against money claims when a claim is filed 6 years or later after the date of the act or omission on which the claim is based. This is known as the claim’s ‘primary period’. The primary period commences the date the claim arose, such as the date of breach of contract or the debt became due.
Section 12 of the Act defines a ‘money claim’ as a claim for monetary relief at common law, in equity, or under an enactment.
A claim for monetary relief includes a claim:
- For money secured by a mortgage;
- For, or for arrears of, or for damages in respect of arrears of, interest in respect of a judgment debt;
- For monetary relief for a breach of the New Zealand Bill of Rights Act 1990;
- To have imposed, or recover, a civil penalty;
- To enforce a surety’s or other person’s obligations under, or to obtain through forfeiture, a bond or recognisance (for example, a bail bond).
When do different rules apply?
A claim for monetary relief does not include a claim [1]:
- For damages in respect of any trespass or injury to Māori customary land (see section 28 of the Act);
- For an account if, and only insofar if, the claim seeks relief that is not monetary relief (see section 32 of the Act);
- For contribution from another tortfeasor or joint obligor (see section 34 of the Act);
- On a judgment, or to enforce an arbitral award (see sections 35 and 36 of the Act);
- Under the Criminal Proceeds (Recovery) Act 2009;
- Under the Terrorism Suppression Act 2002.
Different rules apply for the above claims, as well as defamation claims, claims in respect of land, claims in respect of personal property, accounts, wills, contributions and judgments or awards, and claims under contract enactment. There are also special start dates for various other claims.
Section 35 of the Act states that there is no time limit to filing an application for a debtor to be adjudicated bankrupt or for an application to put a company into liquidation when it is based wholly or partly on a judgment. The effect of this is that if judgment against a debtor is awarded in your favour and they have failed to pay, you are able to file for their bankruptcy or liquidation even if 6 years have passed since the date of the judgment.
This position was accepted by the High Court in Re Dromgool, ex parte Jones [2].
When can the time limit be extended?
If a claim for monetary relief does not fall within the exclusion or different rules, it must be filed within 6 years of the date of the act or omission occurring, unless this date can be extended.
The claim’s primary period can be extended if a person discovers some-time after the act or omission that it has occurred [3]. This is known as the ‘late knowledge date’. This late knowledge period is often applied to building defect situations, where the defect may not be known by the claimant at the time it occurred. After the late knowledge date, a claimant has three years to file their claim.
This, again, is limited by the ‘longstop period’, which is 15 years after the date of the act or omission. Therefore, even if a person has late knowledge, they must file the claim within 15 years of the date of the act or omission occurring [4].
The purpose of these limitations is to promote the prompt application of justice, and prevent claims from being pursuable perpetually.
[1] Limitation Act, section 12(3).
[2] Re Dromgool, ex parte Jones [2020] NZHC 968 at [19].
[3] Section 14, section 11.
[4] Section 11.
