Victoria’s Supreme Court of Appeal confirms the Building Act 10-year limitation period runs from the date of the occupancy permit issued in respect of the works, not of the entire project: Lendlease Engineering Pty Ltd v Owners Corporation No 1 PS526704E & Ors [2022] VSCA 105

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By Nieva Connell, Partner and Holly White, Lawyer

In late 2004, Lendlease was engaged to refurbish the Chevron Hotel into 67 apartments and construct a new nine-storey apartment building. The works were completed in separable portions pursuant to six building permits with four occupancy permits being issued.

On 13 February 2017, the Owners Corporation commenced a VCAT proceeding against Lendlease alleging the sunshade louvre system installed at the new building was defective. The defective sunshade system was subject of an occupancy permit issued on 6 December 2006. Lendlease argued the claim was brought more than 10 years after the date of the occupancy permit and as such section 134 of the Building Act statute barred the action.

The Owners Corporation submitted the limitation period ran from the date of the last occupancy permit issued in respect of the entire building project, the last occupancy permit was issued on 16 February 2007.

The VCAT preferred the Owners Corporation’s position and Lendlease unsuccessfully appealed the decision to the Supreme Court of Victoria.[1] Lendlease brought an application to appeal to the Supreme Court of Victoria, Court of Appeal.

The Court of Appeal commenced by considering the ordinary and grammatical meaning of the words used in section 134, taking into account both context and legislative purpose, finding the language suggests that time runs from the date an occupancy permit is first issued in respect of the defective work. The Court of Appeal considered the surrounding provisions, finding there was no suggestion the words should be read in any other way. It considered Parliament’s intention in introducing section 134, finding Parliament clearly intended to fix a single ‘clear trigger date’ with some ‘certainty’, consistent with the second reading speech.

The Court of Appeal gave leave to appeal, and allowed the appeal, concluding the limitation period ran from the date of the occupancy permit for the alleged defective works.

https://aucc.sirsidynix.net.au//Judgments/VSCA/2022/A0105.pdf

[1] Lendlease Engineering Pty Ltd v Owners Corporation No 1 PS526704E & Ors [2022] VSC 338.

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