Hronopoulos v Building Appeals Board - [2022] VSC 376

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2020 04488

BETWEEN:

PAUL HRONOPOULOS & ANOR (according to the attached Schedule)	Plaintiffs
v
BUILDING APPEALS BOARD & ORS (according to the attached Schedule)	Defendants

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JUDGE:	Mukhtar AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	8 February 2022
DATE OF JUDGMENT:	4 July 2022
CASE MAY BE CITED AS:	Hronopoulos v Building Appeals Board
MEDIUM NEUTRAL CITATION:	[2022] VSC 376

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BUILDING AND CONSTRUCTION — Domestic building work involving partial demolition on building site — Necessity to install ‘protection work’ to protect adjoining property from risk of damage or instability — Statutory obligation on building party to insure against damage to adjoining property — Distinction between insurance over the adjoining property and insurance for building party’s liability for damage to the adjoining property — Building Act 1993 (Vic) s 93(1)(a).

ADMINISTRATIVE LAW — Relief in the nature of certiorari — Building Appeals Board —Determination that type of insurance obtained by building party did not satisfy statutory requirements — Whether determination was invalid for jurisdictional error or error of law on the face of the record.

INSURANCE — Contract of general insurance — Indemnity insurance cover for liability to a third party — Whether benefit of the insurance cover extends to third party beneficiary to enable direct recourse to the insurance cover — Meaning of ‘benefit of the insurance cover’ — Insurance Contracts Act 1984 (Cth) ss 11, 20, 48.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D Fairweather, solicitor	Fairweather Legal Pty Ltd
For the First Defendant	No appearance	Victorian Government Solicitor
For the Second and Third Defendants	No appearance	Unrepresented litigants

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Summary of reasons.......................................................................................................................... 5

The statutory field of the Board’s decision................................................................................... 7

The facts............................................................................................................................................... 8

The Policy – who was covered?..................................................................................................... 11

The Policy – what risk was covered?............................................................................................ 11

The endorsement for protection works....................................................................................... 14

The decision in Colonial Range..................................................................................................... 17

The Insurance Contracts Act 1984 (Cth)....................................................................................... 20

The plaintiffs’ case before the Board........................................................................................... 23

The Board’s determination............................................................................................................. 27

The grounds of this application.................................................................................................... 31

The first basis: failing to take into account, or give proper consideration to, relevant matters that it was bound to take into account........................................................................................... 34

The second basis: the Board relied on irrelevant considerations........................................... 35

The third basis: legal errors........................................................................................................... 38

The prospect of a financial penalty under the Act for non-compliance............................... 45

Summation........................................................................................................................................ 46

HIS HONOUR:

Introduction

This judgment is of an application for judicial review by which the plaintiffs seek an order in the nature of certiorari to quash a determination made by the Building Appeals Board of Victoria (‘the Board’) as constituted by three members.[1] The plaintiffs were the moving parties at the Board, having initiated a referral to the Board under the Building Act 1993 (Vic) (‘the Act’) of two disputes with the owners of an adjoining residential property.[2] The Board dismissed the plaintiffs’ twofold application in a…

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: [2022] VSC 376
Decision Date: 4 July 2022

CaseChat Overview and Summary

The case of Hronopoulos v Building Appeals Board revolves around a dispute concerning the adequacy of insurance coverage in relation to building work carried out by the appellant, Hronopoulos, on a residential property in Victoria. The Building Appeals Board determined that the insurance policy held by Hronopoulos did not meet the statutory requirements under the Building Act 1993 (Vic). This determination was made in the context of a partial demolition and the installation of ‘protection work’ necessary to safeguard an adjoining property from potential damage or instability. The crux of the legal battle is whether the Board's determination was flawed due to a jurisdictional error or an error of law apparent on the record.

The central legal issues in this case pertain to the interpretation of statutory obligations under the Building Act 1993 (Vic), specifically section 93(1)(a), which mandates the building party to insure against damage to adjoining properties. A critical question was whether the insurance policy procured by Hronopoulos adequately covered the risk to the adjoining property or merely insured Hronopoulos's liability. Additionally, the case examined the applicability of the Insurance Contracts Act 1984 (Cth) in determining the scope of the insurance coverage and whether it extended to the third-party beneficiary, allowing direct recourse to the insurer.

In adjudicating the case, the court meticulously analysed the statutory language and the terms of the insurance policy. It found that the statutory requirement for insurance against damage to adjoining properties was intended to provide a direct benefit to the adjoining property owner, enabling them to seek compensation directly from the insurer. The court concluded that Hronopoulos's policy did not confer such direct benefit, as it only indemnified Hronopoulos's liability and did not extend to the third-party beneficiary. Therefore, the Board's determination was upheld as correct, as it was not vitiated by any jurisdictional error or error of law. The court found that the Board had correctly interpreted the statutory obligations and applied them to the facts of the case.

The final orders of the court confirmed the validity of the Building Appeals Board's determination and dismissed Hronopoulos's appeal. The Board's decision that the type of insurance obtained by Hronopoulos did not comply with the statutory requirements remained in place, reinforcing the necessity for building parties to secure insurance that provides direct benefit to adjoining property owners in the event of damage.

Orders