11-05-10
Heath Adams
A recent decision of the CTTT has added further light to the much vexed question of when the limitation period expires for defective building work claims.
Under the Home Building Act, proceedings must be commenced within 7 years after completion of the work. Often the question will arise as to whether the date of the completion of the works ran from:
- the date of the final inspection of the works – notwithstanding that further minor non-building works were required to issue the Occupation Certificate; or
- the date of the issue of the Occupation Certificate; or
- the date of the last payment claim paid to the builder completing the work.
In Vero Insurance Limited v Fillipi & Fagimo Pty Ltd (Home Building) [2009] NSW CTTT (31 December 2009) Tribunal Member Drurie held that he was bound to follow the decision in Abrahams v Degan [2009] NSWDC 315 where it was held that the date for the fixing of the completion works is “…the applicable date is the ‘date of the final inspection of the work’…”.
Relevantly, for claims under the Home Warranty Insurance Policies to be within time, the claim must be made either:
- Policies issued before 1 July 2002 - cover is provided for a period of seven years from the date of completion of the work or the end of the contract for the work (whichever is the later), for loss arising from defective work.
- Policies issued from 1 July 2002 - cover is provided for all losses, including loss arising from non-completion and in the event of the death, disappearance or insolvency of a builder, tradesperson, developer or owner/builder. Cover for loss arising from defective work is provided for a period of:
- six years from the date of completion of the work or the end of the contract for the work (whichever is the later), for loss arising from a structural defect, and
- two years for loss arising otherwise than from a structural defect.
- Policies issued from 19 May 2009 - cover is provided in the event of the suspension of the contractor licence of a builder or the tradesperson responsible for work on the home owner’s property for failure to comply with a money (compensation) order in favour of the home owner made by a Court or the Consumer, Trader and Tenancy Tribunal. The period of cover provided in this event is the same as for policies issued from 1 July 2002.
- From 1 July 2010 - the NSW Government will be underwriting and capitalising the Home Warranty Insurance Scheme. The same criteria as applies to policies issued from 19 May 2009 will apply.
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