IN the recent Supreme Court decision of Brirek Industries Pty Ltd v McKenzie Group Consulting (Vic) Pty Ltd [2014] VSCA 165, it was held that home owners can now sue their builder up to 10 years after a certificate of occupancy has been issued.
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The decision clarifies two conflicting limitation periods prescribed in the Building Act 1993 (Vic) (Building Act) and the Limitations of Actions Act 1958 (Vic) (Limitations of Actions Act), as well conflicting decisions in the Victorian Civil and Administrative Tribunal and the County Court.
Section 134 of the Building Act provides that "despite anything to the contrary in the Limitations of Actions Act 1958 or in any other Act or law, a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work…"
Section 5 of the Limitations of Actions Act puts a six- year limitation on claims brought in simple contracts or torts.
It was argued by Brirek Industries Pty Ltd, the property owner, that section 134 of the Building Act created a separate limitation regime in respect of building actions.
It was further argued that the 10-year limitation period compared to a six-year limitation period would be a more beneficial interpretation for consumers dealing with latent defects or defects that do not manifest themselves which might develop over an extended period.
It was argued by McKenzie Group Consulting (Vic) Pty Ltd, the building surveyor, that the purpose of section 134 of the Building Act was to address situations where a plaintiff did not become aware that it had suffered damage, by reason of negligence only, until considerably later than the time the breach was committed.
The court found in favour of Brirek Industries Pty Ltd in that the Building Act created its own limitation regime that stood on its own and was not further limited by the Limitations of Actions Act.
This decision is logical and in keeping with the intent of the Building Act.Readers wishing to bring a building action now have a 10-year period from the date when the occupancy permit was issued or the date of issue of the certificate of final inspection to commence a building action, regardless of whether the action is in negligence or contract.
Disclaimer: Readers should seek independent legal advice as this article is for information purposes only. Zoe Broadbent is a solicitor at Beck Legal, Bendigo.
