Section 134 of the Victorian Building Act is the statutory mechanism by which a lawsuit for negligence can be lodged against a Victorian building practitioner for a period of up to 10 years from the date upon which the occupancy permit or certificate of final inspection is issued.
Once those 10 years have elapsed, the ability to lodge legal proceedings is severed. The seminal liability limitation period trigger date is the date of the legal instrument issued by the building surveyor which will either be a certificate of final inspection or an occupancy permit.
The 10-year limitation period was introduced to bring certainty to the whole area of the liability limitation periods for the initiation of legal proceedings to do with defective building work. It relies upon a regulatory instrument that unambiguously, if not unceremoniously, announces the date upon which the liability period begins to run. The concept had Napoleonic origins as the late Emperor`s judicial Tsars fashioned the doctrine “liabilitie decennial” – 10-year liability capping for the initiation of lawsuits.
Prior to the introduction of the doctrine, there was a competing line of judicial authority regarding the conundrum of the time that one had to issue legal proceedings before one was statute barred. One line of authority held that there was six years to issue proceedings from the date upon which the damage was discernible; this was called the “infinity plus six test.” Another held that time starts to run from when the damage occurred, which of course leads to the question, when precisely did it occur? The uncertainty became a fertile ground for expert witnesses to argue the toss over precisely when the six-year period began. The 10-year cap was designed to bring certainty to bear upon an area that used to be very contentious. It has achieved this outcome.
A building lawsuit has to be initiated under the auspices of a “building action.”
A building action is defined under section 129 of the Building Act as being a cause of action, including a counterclaim for loss or damage arising out of defective building work. Building work is a defined term under section 129 and includes the design, inspection and issuing of a building permit.
There are exemptions from the scope of a lawsuit based upon a building action. Section 130 provides that the 10-year cap, or guillotine as it were, does not restrict any right to seek damages for death or personal injury where such harm arose from defective building work.
The 10-year limit relies on the issuance of an occupancy permit (the regulatory instrument that the relevant building surveyor issues when the building work is fit for occupation) or a certificate of final inspection (the regulatory instrument issued when work of the nature of renovations and additions is completed.)
As these permits and certificates trigger the 10-year liability tail, they are critical regulatory instruments. If they are not issued, the 10-year liability period does not start to run.
In short, no occupancy permit, no 10-year liability cap. The result is a very murky “no man’s land” as the period for the initiation and conclusion of legal proceedings is an unknown. Maybe the proceedings will be governed by the Limitations of Actions Act 1958, and maybe not. One thing’s for sure, though: there is no ready answer.
Other key terms that merit definition in this area are relevant building surveyor (RBS) and building practitioner.
An RBS can be a private or a municipal building surveyor appointed to issue the building permit. Only an RBS can issue occupancy permits and certificates of final inspection.
Engineers, building surveyors, building inspectors, builders, quantity surveyors, draftspersons and architects are all defined by the Building Act as building practitioners. Indeed, the term “building practitioner” is a prescribed and protected title; one cannot hold out as being a building practitioner unless one is registered in the appropriate category with the Building Practitioners Board.
Building practitioners can all be joined and implicated in building actions. So too can subcontractors and any other parties that were involved and had responsibility for the generation of defective building work. However, building practitioners have to be insured by law as a prerequisite to registration in contradistinction to a great many members of the subcontractor fraternity who neither have to be insured nor come within the jurisdiction of the Building Practitioners Board.
Those who are unfamiliar with the Building Act might be oblivious to the existence of the 10-year long tail. They may mistakenly apprehend that different limitation acts of parliament are at play. It follows that, before contemplating the initation or defence of legal proceedings for defective work in the state of Victoria, one has intimate regard to the provisions of the Building Act. A failure to be aware of the relevant provisions could mean that one is shut out of legal proceedings by virtue of being statute barred, or alternatively builders could face lawsuits long after work is complete on account of the long tail.