Supreme Court extends limitation period in building dispute transferred from VCAT

04 March 2024

The Supreme Court has delivered its judgment in the third instalment of Thurin v Krongold – a long running domestic building dispute directly impacted by VCAT’s jurisdictional woes.

In issue

  • On 16 February 2024, the Supreme Court of Victoria delivered its decision in Thurin v Krongold Constructions (Aust) Pty Ltd [2024] VSC 42, this is the third instalment of a long running domestic building claim by Lisa and David Thurin against their builder.
  • The primary questions before the Court were whether the Court had jurisdiction under s77(4) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic)(VCAT Act) to join invalidly joined parties to a VCAT proceeding as parties to the Court proceeding and to extend the time for doing so.

The background

In 2006, David and Lisa Thurin (the Thurins) engaged Krongold Constructions (Aust) Pty Ltd (Krongold) to demolish and rebuild their Toorak Home.

The Thurins allege that pipes ruptured in the newly built home in 2012 and 2015, and that Krongold as builder was responsible for the pipes’ defective installation. The Thurins engaged an expert who estimated that their loss and damage was over $3.5M and they asked Krongold to pay, which it declined.

The Thurins then commenced Victorian Civil and Administrative Proceeding BP715/2018 (VCAT Proceeding) against Krongold, seeking to recover their alleged loss and damage.

In its defence to the VCAT Proceeding, Krongold claimed that any loss and damage suffered by the Thurins was apportionable against parties including Casper Architecture and Design Pty Ltd (Casper) and Swan Hardware & Staff Pty Ltd (Swan Hardware) as they had breached the Australian Competition and Consumer Act 2010 (or the Trade Practices Act 1974, as it was then) and were therefore concurrent wrongdoers within the meaning of s24AH of the Wrongs Act 1958 (Vic). Krongold sought orders to join these parties to the proceeding.

The VCAT Proceeding was struck out by orders made on 13 December 2022 and the matter was referred to the Supreme Court.

Previous instalments of the dispute

Since the proceedings’ transfer to the Supreme Court, the Court of Appeal has issued two decisions on referral matters.

  • In the first referral decision, the Court of Appeal held that VCAT had the power under s77(3) of the VCAT Act to refer the matter to the Supreme Court.
  • In the second referral decision (which, we previously reported on), the Court of Appeal determined that a fresh proceeding was not required to be commenced in the Supreme Court. This is because as a referral, it did not constitute the bringing of an action for the purposes of time limits in s134 or 134A of the Building Act 1993 (Building Act). However, because VCAT did not have the jurisdiction to join Casper and Swan Hardware, the claims against those parties did not form part of the referral to the Court under s77.

The Victorian Parliament has otherwise passed the Justice Legislation Amendment Act 2023 (Amendment Act) which sought to overcome various legal and procedural issues arising from the earlier instalments of this proceeding. Insofar as the VCAT Act is concerned, the Amendment Act made changes to s77 of the VCAT Act to permit a court to extend any limitation period that applies to the commencement of a proceeding in relation to a matter referred to a court by VCAT.

The decision

In the current installment of the dispute, His Honour Justice Garde was required to consider whether the amendments to s77 of the VCAT Act would allow the Court to extend the limitation period applicable to the Thurins and Krongold’s claims against Casper and Swan Hardware. This included considering whether there was an inconsistency between sections 134 and 134A of the Building Act and s77(4) of the VCAT Act, which would prevent the Court from making an order extending the limitation period.

His Honour found there was no inconsistency between sections 134 and 134AA of the Building Act and s77(4) of the VCAT Act save in a small class of cases where limitation periods are extended by the Courts. Sections 134 and 134A impose a limitation period generally on building actions. Section 77(4) operates to empower a Court in specified and limited circumstances to extend the limitation period. Both provisions can operate conformably together.

Ultimately, His Honour concluded that it was in the interests of justice and fairness to make an order pursuant to s77(4) of the VCAT Act to extend the relevant limitation period and to join Swan Hardware and Casper as defendants to the Proceeding. This effectively restored the positions of the parties as at VCAT.

Implications for you

The decision provides helpful guidance as to when the Court will exercise its power to extend the limitation period applicable to matters referred to a Court pursuant to s77 of the VCAT Act.

Given that domestic building claims are often made on the eve of the expiry of the relevant limitation period, there are bound to be further instances where applications are required to extend limitation periods for claims against invalidly joined parties. This is likely to lead to further delays for parties.

Given these issues, we recommend keeping jurisdiction and limitations issues in mind in any VCAT cases you are involved in.

Thurin v Krongold Constructions (Aust) Pty Ltd [2024] VSC 42

The long-running saga of Thurin v Krongold has seen another issue regarding VCAT’s jurisdiction recently answered by the Vict...

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