Thurin v Krongold – the Saga Continues

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By Nieva Connell, Partner, and William Gordon, Associate

Introduction

Court of Victoria has handed down the latest in the increasingly long line of decisions relating to the claim by David and Lisa Thurin against Krongold Constructions (Aust) Pty Ltd and other parties (the most recent decision is Thurin v Krongold Constructions (Aust) Pty Ltd [2024] VSC 42 (the proceeding)).

The proceeding related to two applications concerning the power of the Supreme Court to extend the limitation period in claims relating to building disputes under Section 77 (4) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act).

The proceeding is the third instalment between the parties concerning the same issues.

Background

David and Lisa Thurin (the Thurins) engaged Krongold Constructions (Aust) Pty Ltd (Krongold) in 2008 to construct a new home at Whernside Avenue, Toorak.

The construction included the installation of pipes, which subsequently burst in 2012 and 2015. In 2018 the Thurrins commenced proceedings against Krongold in the Victorian Civil and Administrative Tribunal (VCAT). (VCAT proceeding)

Krongold subsequently joined Swan Hardware & Staff Pty Ltd (Swan Hardware) and Casper Architecture and Design Pty Ltd (Casper) as parties to the VCAT proceeding. Krongold alleged they had breached the Trades Practices Act 1974 (Cth) (which was the legislation that had been in effect when the construction contract was entered into) and were concurrent wrongdoers within the meaning of section 24AH of the Wrongs Act 1958 (Vic).

There was a long and complex procedural history, which has been the subject of other articles, but ultimately, in October 2022, Supreme Court of Victoria Court of Appeal held that VCAT did not have jurisdiction to hear proceedings involving federal law. This necessitated the striking out of cases involving federal law (under s 77 (1) of the VCAT Act) and the referral of such cases (under s 77(3) of the VCAT Act) from VCAT to an “appropriate forum” (such as the County and Supreme Courts); including the Thurin’s claim against Krongold to the Supreme Court (the Court subsequently found that VCAT could not validly refer the claim against Casper and Swan Hardware to the Court, which necessitated the Thurins and Krongold attempting to re-join Casper and Swan Hardware to the Supreme Court proceeding).

As a result of the Court of Appeal decision, and the striking out and referral of the VCAT proceeding by VCAT under s 77, the parties found themselves in a position where, on the face of it, any claim against Swan Hardware and Casper in the referred proceeding would be brought more than 10 years after the certificate of occupancy for the Thurin’s house had been issued. Sections 134 and 134A of the Building Act 1993 (Vic) (Building Act) provide a time limit of 10-years to commence an action under the Building Act. Many other parties found themselves in the same predicament, where limitations periods had seemingly expired.

As a result, s 77 (4) of the VCAT Act was amended by Victorian Parliament in late 2023, so that Courts could exercise their discretion in certain circumstances to extend time to commence proceedings; where VCAT strikes out the matter under s 77 (1) and refers a matter to a Court with appropriate jurisdiction under s 77(3).

The most recent decision

In the most recent instalment of the Thurin and Krongold proceeding, the Court considered whether Casper and Swan Hardware could be joined by the Thurins and Krongold to the newly created (referred) proceeding in the Supreme Court. In doing so, it addressed whether the Supreme Court has jurisdiction under s 77 (4) of the VCAT Act to join parties and extend time; whether the Court should make those orders; and, whether the specific provisions of ss 134 and 134A of the Building Act 1993 (Vic) (Building Act) prevent the Supreme Court making orders under s 77 (4) in relation to building matters.

Casper resisted its joinder to the new Supreme Court proceeding. Swan Hardware did not.

Extension of time

Section 77 (4) of the VCAT Act (as amended) provides that a Court may extend limitation periods that apply at the commencement of the proceeding, if it is satisfied that:

(a) The proceeding was struck out under s 77 (1) of the VCAT Act as VCAT did not have the jurisdiction to hear the proceeding, and the referred proceeding involves the same subject matter;

(b) The late commencement of the proceeding is attributable to the steps that person commencing the proceeding was required to do because VCAT had struck it out; and

(c) It is fair and reasonable to extend the limitation period.

Garde J held the VCAT proceeding was correctly struck out as VCAT did not have jurisdiction to hear it.

In relation to the procedural history of the proceeding and VCAT proceeding, Garde J was satisfied that the late commencement of the proceeding was attributable to the steps that the Thurins were required to undertake because VCAT had struck out the VCAT proceeding.

In determining whether granting an extension of time was fair and reasonable, Garde J noted multiple factors coming to his decision, but distilled down to basics, all the parties were prepared for trial and had participated in interlocutory steps, delays were not the fault of parties and Casper did not demonstrate that they had suffered any particular prejudice in the delay in joining them.

Garde J granted the extension of time sought by the Thurins and Krungold.

Competing legislation

It was argued that notwithstanding s 77 (4), the amendment to the VCAT Act did not apply to building actions because of the wording in ss 134 and 134A of the Building Act provides a limitation period of 10 years, and that the Thurins were out of time.

The Building Act specifically states that the limitation period applies “despite anything to the contrary in the Limitations of Actions Act 1958 (Vic) or in any other Act or law.”

Notwithstanding the above, Garde J stated the intention was made clear in Victorian Parliament as to the amendments of s 77 and that they were to apply to specific cases including this proceeding. Put simply, when amending the VCAT Act, the honourable Attorney-General stated that:
“I do not want people barred from a proceeding because they initiated it in the wrong court. That is an inherent unfairness….”

Garde J stated that the intention of amending the VCAT Act was clear, and it was clearly to avoid the issues faced in this proceeding. Whereas the provisions of the Building Act operate generally in relation to building matters.

Therefore, Garde J held s 77 (4) of the VCAT Act should be apply to override ss 134 and 134A of the Building Act.

Summary

Section 77 (4) does not create an automatic extension of time for cases referred by VCAT to another forum/Court. The proceeding demonstrates the discretion that the Court will apply when determining whether to grant an extension of time pursuant to s 77 (4) of the VCAT Act. Each case will turn on its own facts.

Further, it confirms that in accordance with ordinary statutory interpretation principles, where there are apparent inconsistencies in legislation, a Court will go beyond the legislation and look at underlying intention and purpose of the legislation to determine which legislative instrument should be applied.

For further information, please do not hesitate to contact us.

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