Legislative framework and issue

In Victoria, the Limitation of Actions Act 1958 (Vic) (Limitations Act) generally regulates causes of action that may be taken in Victoria. The Limitations Act provides a general six-year period from the date of the relevant cause of action, in which that action in contract or tort may be brought.[1]

The Building Act provides a ‘long stop’ ten-year limitation period for building actions under both contract, and tort (Long Stop Period).[2] The Long Stop Period imposed by the Building Act applies despite the Limitations Act.[3]

The Long Stop Period had previously been held to commence on issue of the certificate of occupancy or final certificate of the building work. Until this decision, the question of when the period commenced in the context of a project with staged permits remained unanswered.

Background

In 2021, the Owners Corporation No 1. PS526704E (OC) brought an action against Lendlease Engineering Pty Ltd (Contractor) for breach of warranties in respect of alleged defective building work performed at Chevron Apartments in St Kilda (OC Claim).

After the OC Claim was determined in the Victorian Civil and Administrative Tribunal (VCAT), then subsequently appealed by the Contractor in the Victorian Supreme Court (VSC), the VSC held that the Long Stop Period ran from the date of the last occupancy permit issued in respect of the entire building project.[4] The Contractor appealed the decision of the VSC. This question was one of a number addressed in the appeal.

Decision on Appeal

The Court of Appeal ultimately held in favour of the Contractor on the limitation of actions question. The Court of Appeal determined that:

• Parliament clearly intended the Long Stop Period to run from the date an occupancy permit is first issued for the building work, meaning that it would be anomalous if subsequent occupancy permits re-started that period;
• there is nothing in the language of s134 of the Building Act to suggest that Parliament intended the starting point to be some ‘final’, ‘current’, or ‘last’ occupancy permit; and
• the ordinary meaning of s134 of the Building Act suggests that the occupancy permit ‘in respect of the building work’ is intended to apply to the occupancy permit that is issued in relation to the defective building work the subject of the building action – not any ‘final’ occupancy permit.

Conclusion

In determining whether an action for defective building work is brought within the Long Stop Period, the parties must first determine the date of the occupancy permit for that allegedly defective work. If the occupancy permit for that work was issued more than 10 years before the claim was brought, the claim is likely to be out of time and ‘statute barred’.