The Victorian Supreme Court of Appeal has provided helpful judicial determination of s 134 of the Building Act 1993 (Vic). The Court of Appeal found the limitation period for actions brought under the Building Act is within 10 years of the date an occupancy permit was first issued with respect to the alleged defective building works and not from the later date of a final occupancy permit.
The decision considered whether the relevant 10-year limitation period commences under s 134 of the Building Act 1993, when the works related occupancy permit is issued or when the final or last occupancy permit for the project is issued.
On or about 22 December 2004, Lendlease was engaged to carry out the construction of a project known as ‘Chevron Apartments’. The Owners Corporations (OC) are the registered proprietors of the common property. The works were completed in separable portions pursuant to six building permits. Four occupancy permits were issued in respect of the works certifying the apartments were suitable for occupation; on 23 June 2006 (First), 19 October 2006 (Second), 6 December 2006 (Third) and 16 February 2007 (Fourth).
The OCs commenced proceedings in VCAT on 13 February 2017 alleging that the sunshade louvre system installed on Building 2 by Lendlease were defective and required replacement (Defective Works). The Third Permit related to the alleged defective works; the Fourth Permit related to conclusion of all works. The occupancy permits operated cumulatively.
The OC contended that the 10-year limitation period, imposed by section 134 of the Building Act, within which to bring an action, commenced from the last occupancy permit issued in respect of all building works, in this case the Fourth.
The decision at VCAT
VCAT upheld the position taken by the OC, finding the relevant commencement date of the limitation period was from the date of the final occupancy certificate.
The decision at the Supreme Court
The court dismissed Lendlease’s appeal on the limitation issue, finding that the limitation period commenced upon the issuing of the Fourth permit, being within 10 years from 16 February 2007, meaning the OC had commenced proceedings in time.
The Supreme Court of Appeal decision
Lendlease sought leave to appeal in relation to the limitation issue. The Court of Appeal held in favour of Lendlease, interpreting that s 134 means as follows:
‘‘the occupancy permit ‘in respect of the building work’ is intended to apply to the occupancy permit that is first issued in relation to the defective building work the subject of the building action — not any ‘final’ occupancy permit.”
In this case that meant the limitation period commenced from the issuing of the Third Permit, and not the Fourth and final certificate of occupancy issued upon conclusion of the entirety of the building works. This meant the OCs were statue barred, having issued proceedings more than 10 years from the date of the Third permit.
Implications for you
Claimants and insurers now have clarity with respect to the limitation period for actions brought under the Building Act. Section 134 claims must be brought within 10 years of the date an occupancy permit was first issued with respect to the alleged defective building works and not from the later date of a final occupancy permit.