Lendlease Engineering Pty Ltd v Owners Corporation No.1 & Ors [2021] VSC 338

by Jeanette Barbaro, Tom Kearney and Courtenay Wood

Key takeouts

Where more than one occupancy permit has been issued for a staged development, the limitation period commences on the date of the final occupancy permit for the whole of the building work.

Individual owners cannot be joined to a proceeding commenced by an owners corporation after the limitation period has expired.

Facts

Lendlease Engineering Pty Ltd (contractor) undertook building work that was delivered in four separable portions and four occupancy permits were issued.  The building work included the construction of louvered metal shade screens to the exterior of the building perimeter located in both the common property and private apartments.

On 13 February 2017, Owners Corporation commenced proceedings in the Victorian Civil and Administrative Appeals Tribunal (VCAT) alleging defects in louvered metal shades.  The contractor made an application to dismiss the proceeding on the basis that:

• the owners corporation could not bring a claim regarding allegedly defective louvres on private lots; and
• some claims had been brought more than 10 years after the relevant occupancy permit was issued.

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

There were two occupancy permits, dated 6 December 2006 and 16 February 2007, which related to the alleged defective works.

The owners corporation submitted that the limitation period commenced from the date of issue of the last occupancy permit, being 16 February 2007.  The contractor argued the limitation period commenced on the date of the first occupancy permit, being 6 December 2016.  VCAT agreed with the owners corporation and found that the claims were not time-barred.

In October 2019 the owners corporation made an application to join 137 private lot owners to address the issue that it could not bring claims for defects on private apartments.  Although the limitation period had expired, VCAT allowed the joinder on the basis that the owners corporation had commenced proceedings on behalf of the individual private lot owners.  The contractor appealed to the Supreme Court.

Decision

The appeal on the limitation question was dismissed.

Forbes J held the occupancy permit or certificate of final inspection that certifies the whole of the building work will be the operative permit for determining when the limitation period commences.  Therefore, the limitation period commenced on 16 February 2007.  The language of the Act makes a distinction between ‘an’ and ‘the’ occupancy permit.  The reference to ‘the’ occupancy permit in section 134 is a reference to the occupancy permit that best reflects the whole of the work in the building.

The appeal on the question of joinder was allowed.

First, VCAT did not have the power to join a new party after the expiry of the time period by application of its own procedural powers to act fairly.  Second, notwithstanding the expiry of the limitation period, there was no factual evidence open to VCAT to allow it to conclude the owners corporation was acting on behalf of the private lot owners in commencing proceedings.