CBL Insurance Ltd v Skordakis - [2014] VSC 659

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2012 06974

CBL INSURANCE LTD	Appellant
(Formerly Contractors Bonding Limited)
v
NICHOLAS SKORDAKIS	Respondent

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JUDGE:	GINNANE J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 August 2014
DATE OF JUDGMENT:	19 December 2014
CASE MAY BE CITED AS:	CBL Insurance Ltd v Skordakis
MEDIUM NEUTRAL CITATION:	[2014] VSC 659
JUDGMENT APPEALED FROM:	Skordakis v Contractors Bonding Limited (Domestic Building) [2012] VCAT 1735 (Senior Member Walker)

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INSURANCE – Domestic building – Home Warranty Insurance – Two contracts for building works – Deemed acceptance of claim – Whether building works covered by policies of insurance – Claim accepted – Consent orders for quantum hearing – Whether insurer can contend that building work not covered by policies of insurance – Damages for non-completion not deducted – Point not raised – Whether can be raised on appeal – Building Act1993 ss 135, 137A, 137D – Domestic Building Contracts Act 1995 s 1.

APPEAL – Questions of law – Decision by VCAT concerning building works covered by certificates of insurance – Damages for non-completion not deducted – Contention about calculation of loss and damage not put to VCAT – Whether contention can be a question of law for appeal – Victorian Civil and Administrative Tribunal Act 1998 s 148.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr H Foxcroft QC and Mr M H Whitten	Rigby Cooke
For the Respondent	Mr A J Kelly QC and Mr S G R Wilmoth	E C Legal

TABLE OF CONTENTS

The facts.......................................................................................................................................... 1
The Home Warranty Insurance Policy....................................................................................... 6
Domestic Building Insurance Ministerial Order...................................................................... 8
Mr Skordakis’ notice of contention........................................................................................... 12
The fifth question of law............................................................................................................ 14
CBL’s submissions in respect of the fifth question of law.......................................... 16
Mr Skordakis’ submissions on the fifth question of law............................................. 18
Analysis............................................................................................................................... 19

Questions of law one, two, three, four and six....................................................................... 24
The seventh question of law...................................................................................................... 25
The parties’ submissions.................................................................................................. 26
Analysis............................................................................................................................... 28

Conclusion................................................................................................................................... 29

HIS HONOUR:

The appellant, CBL Insurance Ltd (‘CBL’), appeals against an order of the Victorian Civil and Administrative Tribunal (‘the Tribunal’) made on 15 November 2012 that it pay the respondent, Mr Nicholas Skordakis, the sum of $260,982, pursuant to two policies of domestic building insurance issued to him by CBL in respect of townhouses to be built in Bulleen.

The appeal is limited to questions of law. The questions that the appellant relies on concern the Tribunal’s findings as to the contract under which domestic building works were undertaken and whether these works were insured under the policies of domestic building insurance issued by CBL. A secondary issue is the quantum of Mr Skordakis’ entitlement under the policy.

The facts

Mr Skordakis was the owner of land in Bulleen. On 1 May 2007, he entered into a contract with a builder, Springvalley Waterhouse Developments Pty Ltd (‘Springvalley’), to construct two townhouses upon this land, for a price of $705,000 (‘First Contract’).…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] VSC 659
Decision Date: 19 December 2014

CaseChat Overview and Summary

The case of CBL Insurance Ltd v Skordakis involved the insurer, CBL Insurance Ltd, and the insured, Skordakis, with the dispute centred on the coverage of home warranty insurance policies for domestic building works. The matter was initially heard by the Victorian Civil and Administrative Tribunal (VCAT) and subsequently appealed to the Supreme Court of Victoria. The central issue in the case was whether the building works carried out under two separate contracts were covered by the policies of insurance issued by the insurer. The tribunal had ruled that the claim had been deemed accepted, and consent orders were made for a hearing to determine the quantum of damages. The insurer argued that the building works were not covered by the policies and that damages for non-completion should be deducted from the claim. However, this argument was not raised before VCAT, leading to the question of whether it could be considered a question of law on appeal.

The court examined whether the contention about the calculation of loss and damage, which was not presented to VCAT, could be raised as a question of law in the appeal. The relevant statutory provisions from the Building Act 1993 and the Domestic Building Contracts Act 1995 were considered in the context of the dispute. The court held that the contention regarding the calculation of damages was not a question of law but rather a factual issue that should have been raised before VCAT. As such, the insurer's argument that damages for non-completion should be deducted from the claim could not be considered on appeal. The Supreme Court of Victoria dismissed the insurer's appeal, affirming the VCAT's decision that the building works were covered by the policies of insurance.

The final orders of the court were that the appeal by CBL Insurance Ltd was dismissed, and the consent orders made by VCAT for a hearing to determine the quantum of damages remained in effect. The court's decision underscored the importance of ensuring all contentions and arguments are raised before the relevant tribunal to avoid the risk of them being considered outside the scope of the appeal process. The insurer was unable to challenge the VCAT's decision on the basis of the calculation of damages for non-completion, as this issue had not been put forward during the initial proceedings.

Orders