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09/10/19 – How long does my liability last?

We are often asked by consultants working in the construction industry – “how long does my liability last?”. The answer is not always simple and in fact, it is sometimes quite complicated – given the different jurisdictions in which consultants practice, the different types of claims which can be brought and the different triggers for limitation periods to start to run.

Earlier this year, the Victorian Civil and Administrative Tribunal had cause to consider the applicable limitation period for a building action in Victoria where the building work had been done without a building permit and no occupancy certificate had been issued – Gledhill v Scotia Property Maintenance Pty Ltd (Building and Property) [2019] VCAT 422

Section 134 of the Building Act 1993 (Vic) provides that:

“Despite any thing to the contrary in the Limitation 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 … or, if an occupancy permit is not issued, the date of issue … of the certificate of final inspection of the building work”

Proceedings were commenced by the Owner of a residential apartment against the Builder who had undertaken repairs to her outside balcony 11 years after the work had been completed.

The Owner’s position was that because no occupancy permit or certificate of final inspection was issued and no permit for building work was obtained the 10-year limitation period had not started to run and the claim was within time.

The Builder contended that the proceedings were statute barred. The Builder argued that Section 134, properly construed, should be read so that if no occupancy permit or certificate of final inspection is issued the limitation period starts to run from the date of completion of the building work.

Tribunal Member Sweeney found that, given the circumstances of the case, Section 134 of the Building Act 1993 had no application in respect of the limitation period within which the Owner’s claim may be brought. As a consequence, the usual 6 year limitation period which applies for contractual and tortious claims in Victoria (Section 5 of the Limitation of Actions Act 1958) was the relevant limitation period to apply.

We will be looking at another issue for consideration when determining applicable limitations period in our upcoming webinar – Contract Negotiation, Formation and More – the differences in statutory limitation periods for breaches of a deed and breaches of an agreement across the various States. If you are interested in learning more about this issue, please join us on Thursday 17 October 2019. (Discounts available for PI insurance clients of our sister business, Planned Cover, and for our mailing list – contact us for details.)

Natalie Sullivan
Risk Manager

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