Landmark judgement clarifies 10-year limitation period for building actions

17 June 2022

News

Thomson Geer has won a landmark case clarifying for the Victorian building industry when the 10-year limitation period for commencing a building action takes effect.

The win in the Victorian Court of Appeal overturned an earlier Supreme Court decision which held that where multiple occupancy permits are issued for the same building works, the limitation period under section 134 of the Building Act 1993 (Vic) commences on the date of the ‘final’ occupancy permit for the works.

The Court of Appeal held that where multiple occupancy permits are issued, the 10-year limitation period will commence from the date the occupancy permit is first issued in respect of the relevant building work the subject of a building action.  The Court of Appeal confirmed that time does not stop and start each time a subsequent occupancy permit is issued.

Thomson Geer was also successful in a cross appeal in the matter.

The cross-appeal related to the application by two Owners Corporations and 137 private lot owners seeking to overturn the decision of the Supreme Court which refused to allow the joinder of the private lot owners to the proceeding on the basis that, by the time the joinder application was made, the claims of the private lot owners were out of time.

The Court of Appeal refused to grant leave in relation to the cross-appeal, upholding Thomson Geer’s submission that the Tribunal does not have the power to join a party as a claimant to a proceeding when the limitation period has already expired even in circumstances where their claims are ‘closely intertwined’ with the existing claim brought by another party.  In so holding, the Court of Appeal ruled that the Victorian Civil and Administrative Tribunal’s earlier decision in Owners Corporation PS 447493 v Burbank Australia Pty Ltd [2013] VCAT 1911, which permitted the joinder of parties after the limitation period had expired, was incorrect.

Thomson Geer Construction and Infrastructure Partners St John Frawley and Persa Buchanan acted in the Appeals.

St John, who was lead Partner in the matter, said: “The Judgement sets an important precedent for the building industry in Victoria.  We now have clarity and confidence on the issue of when the limitation period for commencing a building action starts to run and the extent of the Tribunal’s powers under s 60 of the Victorian Civil and Administrative Tribunal 1998 (Vic) to order the joinder of parties.”

Persa said: “The judgment is particularly significant given the recent prominence of large multi-story or multi-building developments where more than one occupancy permit may be issued for a development.  The Court of Appeal has helped to provide certainty for all stakeholders and industry participants. Parties dealing in this space must now take care to identify whether multiple occupancy permits have been issued in respect of a development to ensure that proceedings are commenced within time.”

The Court of Appeal judgement is Lendlease Engineering Pty Ltd v Owners Corporation No 1 [2022] VSCA 105.

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