LENDLEASE ENGINEERING PTY LTD (ACN 000 201 516) Applicant and OWNERS CORPORATION NO 1 PS526704E First Respondent OWNERS CORPORATION NO 2 PS526704E Second Respondent

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2021 0101
S EAPCI 2021 0114

LENDLEASE ENGINEERING PTY LTD (ACN 000 201 516)	Applicant/Cross-Respondent
V
OWNERS CORPORATION NO 1 PS526704E & ORS (according to the attached Schedule)	Respondents/Cross-Applicants

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JUDGES:	BEACH, NIALL and KENNEDY JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	27 May 2022
DATE OF JUDGMENT:	8 June 2022
MEDIUM NEUTRAL CITATION:	[2022] VSCA 105
JUDGMENT APPEALED FROM:	[2021] VSC 338 (Forbes J)

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BUILDING ACTION – Limitation of actions – Commencement date of limitation period – Occupancy permits – When limitation period begins where multiple occupancy permits issued – Whether limitation period commences on the date an occupancy permit is first issued in respect of the defective building work, or on the date of the ‘final’ occupancy permit – Building Act 1993, s 134 – Leave to appeal granted – Appeal allowed.

PRACTICE AND PROCEDURE – Application for joinder – Whether joinder permitted after expiry of limitation period – Whether open to find Owners Corporations acted on behalf of private lot owners – Victorian Civil and Administrative Tribunal Act 1998, ss 60, 97, 98 – Brirek Industries Pty Ltd v McKenzie Group Consulting (Vic) Pty Ltd (2014) 48 VR 558, considered – Leave to cross-appeal refused.

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Counsel
Applicant/Cross-Respondent:	Mr IG Waller QC with Mr HL Redd
Respondents/Cross-Applicants:	Mr H Foxcroft QC with Mr RA Harris
Solicitors
Applicant/Cross-Respondent:	Thomson Geer Lawyers
Respondents/Cross-Applicants:	Marchesin & Co Lawyers

BEACH JA
NIALL JA
KENNEDY JA:

These proceedings concern two applications made in a building action commenced in the Victorian Civil and Administrative Tribunal (the ‘VCAT’).
By the first application, the builder (‘Lendlease’) sought to dismiss certain claims made against it by two owners corporations (the ‘Owners Corporations’) on the basis that they were statute barred.[1] The key issue which arose was when the relevant 10 year limitation period commenced on a proper construction of s 134 of the Building Act1993 (the ‘Act’) (the ‘limitation issue’). Lendlease contended that time commenced to run from the time an occupancy permit was first issued in respect of the relevant defective ‘building work’ from which the claim arose. However, the Owners Corporations contended that the limitation period only ran from the date of the last occupancy permit issued in respect of the entire building project.
[1]The application was originally brought under s 75 of the Victorian Civil and Administrative Tribunal Act 1998 (the ‘VCAT Act’). However, consistent with the acknowledgment of Senior Counsel for the Owners Corporations, the parties accepted that the VCAT should finally decide the construction issue.
The second application raised a question of joinder (the ‘joinder issue’) in circumstances where the Owners Corporations sought to join private lot owners as claimants to the proceeding. Lendlease opposed this application on the basis that the claims were statute barred, in circumstances where it was undisputed that the time for the private lot owners to commence a proceeding in their own right had expired.
The VCAT upheld the position taken by the Owners Corporations in respect of both issues. A judge of this court subsequently allowed an appeal on a question of law[2] on the joinder issue, but dismissed Lendlease’s appeal on the limitation issue.
[2]Under s 148 of the VCAT Act 1998.
Lendlease now seeks leave to appeal in relation to the limitation issue, while the Owners Corporations seek leave to cross-appeal in relation to the joinder issue.
For the following reasons, we have determined that the judge was correct in respect of the joinder issue, but erred in respect of the limitation issue. Accordingly, leave will be granted in relation to the appeal, which will be allowed. We will refuse leave to appeal in respect of the cross-appeal.
LIMITATION ISSUE

Background

On or about 22 December 2004, Lendlease was engaged by 519 St Kilda Road Developments Pty Ltd (ACN 106 203 963) by way of a design and construct contract to carry out the construction of a project (the ‘Works’) known and described as ‘Chevron Apartments’ at the land comprised in Plan PS 526704E (the ‘Plan’) situated at 519–539 St Kilda Road and 1–19 Commercial Road, Melbourne, Victoria (the ‘Property’).
The Owners Corporations are the registered proprietors of the common property 1 and 2 (‘common property’) described in the Plan.
The Works comprised:
(a)the refurbishment of the existing Chevron Hotel into 67 apartments over three levels (‘Building 1’); and
(b)the construction of a new nine-storey apartment building comprising a further 232 apartments including three levels of below-ground car parking (‘Building 2’).
The Owners Corporations allege that the sunshade louvre system (‘Louvre Blades’) installed by Lendlease at Building 2 is defective and requires replacement.
The Works were completed in separable portions pursuant to six building permits. Four occupancy permits were also issued in respect of the Works as follows:
(a)Occupancy Permit BS14426/2005/0074/1P dated 23 June 2006 (‘OP1’), which certified that, amongst other things, all apartments (and associated common property) of Building 1 excluding Retail Tenancy 3, Apartments G04 and G05 were suitable for occupation;
(b)Occupancy Permit BS14426/2005/0074/2P dated 19 October 2006 (‘OP2’), which certified that, amongst other things, all apartments (and associated common property) of Building 1 excluding Apartments G04 and G05 were suitable for occupation;
(c)Occupancy Permit BS14426/2005/0074/3P dated 6 December 2006 (‘OP3’), which certified that, amongst other things, all apartments (and associated common property) were suitable for occupation excluding:
(i)Apartment Levels 7, 8 and 9 and Apartments G10, 210, 410 and 610 of Building 2; and
(ii)Apartments G04 and G05 of Building 1; and
(d)Occupancy Permit BS14426/2005/0074/4F dated 16 February 2007 (‘OP4’), which certified, that, amongst other things, all apartments (and associated common property) of both Buildings 1 and 2 were suitable for occupation.
Permits OP3 and OP4 relate to the alleged defective works which were undertaken on Building 2. The occupancy permits also operated cumulatively. Thus, as appears above, OP2 included all apartments the subject of OP1, but added Retail Tenancy 3. More critically, all apartments in Building 2 were included by OP3, save for those situated on levels 7, 8, and 9, as well as apartments G10, 210, 410 and 610 (and associated common property) (which were only included by reason of OP4).
The Owners Corporations commenced proceedings in the VCAT by way of points of claim filed on 13 February 2017. They made allegations of breaches of statutory warranties under the Domestic Building ContractsAct 1995, breach of contract, as well as negligence, and claimed damages in respect of the alleged defective Louvre Blades.
In its application to the VCAT made on 16 May 2019, Lendlease sought to strike out the claims of the Owners Corporations in respect of all apartments (and associated common property) of Building 2 except for:
(a)all apartments (and associated common property) situated on levels 7, 8 and 9 of Building 2 of the Property; and
(b)apartments G10, 210, 410 and 610 (and associated common property) of Building 2 of the Property.
Lendlease contended that the claims identified were brought more than 10 years after the date of OP3 (of 6 December 2006), which was the occupancy permit issued ‘in respect of the building work’ for the purposes of s 134 of the Act. However, the Owners Corporations contended that the limitation period only took effect from the last occupancy permit issued in respect of all building works, in this case OP4.

Relevant statutory provisions

Section 134 of the Act provides:
134 Limitation on time when building action may be brought
(1)Despite anything to the contrary in the Limitation of Actions Act 1958 or in any other Act or law, a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work.
The stated legislative purposes of the Act in s 1 relevantly include:
(a)to regulate building work and building standards; and
…
(c) to provide an efficient and effective system for issuing building and occupancy permits and administering and enforcing related building and safety matters and resolving building disputes; and
…
(h)to limit the periods within which building actions and plumbing actions may be brought.
Section 3 includes the following relevant definitions:
building includes structure, temporary building, temporary structure and any part of a building or structure;
…
building work means work for or in connection with the construction demolition or removal of a building;
…
permit means building permit or occupancy permit.
Part 3 of the Act deals with building permits. Section 20 provides that a building permit may be a permit for the whole of the proposed building work, or for a stage of proposed building work. Section 21 provides that the requirement for occupancy permits must be specified in a building permit, and relevantly provides:
21 Requirement for occupancy permit
(1)The relevant building surveyor must specify in a building permit—
(a)whether an occupancy permit is required under subsection (2) in respect of the building work; and
(b)whether the occupancy permit is required for the whole or part of the building in respect of which the building work is carried out.
Part 5 deals with occupancy of buildings, while div 1 deals with the requirement for an occupancy permit. Section 39 relevantly provides:
39 Occupancy permit must be obtained
(1)If a building permit states that an occupancy permit is required for the whole of a building, a person must not occupy that building unless the occupancy permit has been issued under this Division for the building.
…
(2)If a building permit states that an occupancy permit is required for part of a building, a person must not occupy that part of the building unless the occupancy permit has been issued under this Division for that part of the building.
Section 40(1) provides that a person must not occupy a building in contravention of the ‘current’ occupancy permit or permits issued for the building. It also makes provision for penalty units to be paid in the case of contravention.
Section 41 provides that an application for an occupancy permit required by a building permit must generally be made by or on behalf of the owner (save for where the land is a lot under s 9AA(1) of the Sale of Land Act 1962).
Section 45 sets out particular matters that must be specified in an occupancy permit.
Section 46 provides:
46 Effect of occupancy permit
(1)An occupancy permit under this Division is evidence that the building or part of a building to which it applies is suitable for occupation.
(2)An occupancy permit under this Division is not evidence that the building or part of a building to which it applies complies with this Act or the building regulations.
Section 70 provides for amendment of a permit, while ss 71 and 72 provide for cancellation. The relevant building surveyor may cancel a permit under s 72 if it was obtained by fraud or misrepresentation. A permit may also be cancelled under other grounds under s 72 (including where it is no longer suitable for occupation (s 72(a)).
Section 134 has already been set out, above. It is found within div 2 of pt 9 of the Act, which deals with limitation of actions. Section 129 includes the following definitions:
building action means an action (including a counter-claim) for damages for loss or damage arising out of or concerning defective building work;
building work includes the design, inspection and issuing of a permit in respect of building work.
It was agreed that the VCAT proceeding was a building action to which s 134 applied.

Reasons

The judge identified that there was agreement that the application raised three matters which involved questions of law. Insofar as the limitation issue was concerned, she identified the question as follows:
[W]hether by proper construction of s 134 of the Act, in cases where multiple occupancy permits are issued in respect of a particular building project, a building action cannot be brought more than 10 years after the date of issue of:
the occupancy permit issued in respect of the allegedly defective building work in respect of which the claim for damages is based; or
the last occupancy permit issued in respect of the entire building project?[3]
[3]Lendlease Engineering Pty Ltd v Owners Corporation No 1 & Ors [2021] VSC 338, [6] (‘Reasons’).
After summarising the competing positions, the judge recorded that both parties relied on a decision of this Court in Brirek Industries Pty Ltd v McKenzie Group Consulting (Vic) Pty Ltd (‘Brirek’).[4]
[4]Reasons, [38]; citing Brirek Industries Pty Ltd v McKenzie Group Consulting (Vic) Pty Ltd (2014) 48 VR 558; [2014] VSCA 165 (‘Brirek’).
In Brirek an owner sued a building surveyor in negligence and for breach of a contract, but later sought to plead an alternative contract outside the relevant six year limitation period provided by the Limitation of Actions Act1958. The owner contended that the claim was covered by s 134 of the Act, and so was within time. The Court found that the owner was correct, and that the applicable time limit was provided by s 134. In so doing the court considered that actions for breach of contract and actions in tort were both actions for damages for loss or damage within the meaning of the term ‘a building action’ in s 134.[5] Section 134 also did not contain any express limitation that confined its application to cases in contract or in tort.[6]
[5]Brirek (2014) 48 VR 558, 588 [113] (Redlich, Whelan and Santamaria JJA); [2014] VSCA 165.
[6]Ibid 558 [114] (Redlich, Whelan and Santamaria JJA).
The court in Brirek also considered the reasons for the introduction of s 134.[7] Prior to s 134, a building claim brought for breach of contract accrued from the time of the occasion of breach, while a claim in negligence did not accrue until damage was suffered. In the case of latent defects in a building, a cause of action in contract might therefore have long expired before the defect was known, while conversely a claim in negligence would be available for many years after the date of the relevant contract. As the judge observed, legislation was therefore enacted to provide for a (single) 10 year limitation period.[8]
[7]Ibid 585–6 [103]–[106] (Redlich, Whelan and Santamaria JJA).
[8]Reasons, [41].
The judge also extracted the following statement in Brirek:
A solution is best understood with reference to the problem it was designed to solve; an answer with reference to the question that prompted it. However, although ‘context’ may reveal the mischief which gave rise to the enactment of a particular statutory provision and, possessed of an understanding of that context, a court will be assisted in the interpretation of that provision, care must be taken not to exaggerate the significance of ‘context’. Once the mischief or the problem is identified, various solutions to it may become apparent. The task of the court is to identify the solution that recommended itself to Parliament. To that end, it must strive to understand the meaning of the words and phrases in the provision to hand. The task is to construe the statutory provision, not the second reading speech. The court must be astute not to bend the words of the statute to accommodate some other solution to the problem that it may think the more desirable, or which some other jurisdiction has adopted.[9]
[9]Ibid [42]; citing Brirek (2014) 48 VR 558, 586–7 [108] (Redlich, Whelan and Santamaria JJA); [2014] VSCA 165 (citations omitted).
The judge concluded that s 134 is directed to constrain ‘widely divergent operations of time limits in building actions depending on how the action might be framed’. By reason of s 134, the time limit now operates from a single date: ‘the date of issue of the occupancy permit’.[10]
[10]Reasons, [43].
The judge considered that the section was silent as to ‘which permit’ was the operative permit for limitation purposes and considered that the question raised was ‘which permit is the operative permit for limitation purposes’.[11] After highlighting that there was no provision for extension, she questioned how the correct permit should be identified, having regard to the language and structure of the Act, in a way that seeks to achieve the goal (in a limitation context) to fix a time that is fair to both owners and contractors.[12]
[11]Ibid [44].
[12]Ibid [49].
The judge found that the structure and language of the Act as a whole gave direction to the proper construction. Clearly an occupancy permit may attach to the whole or part of a building, and there is a link between an occupancy permit and the work it covers, but she found that that does not necessarily lead to the conclusion that the occupancy permit that first identified that relevant work is the one that the legislation identified for limitations purposes.[13]
[13]Ibid [50].
In determining the proper construction, the judge placed emphasis on s 21 and considered that it was important that, even where a building permit was for a stage of work, it needed to specify if the whole building was to be subject of an occupancy permit under s 21(1)(b).[14] She placed emphasis on the different use of ‘an’ occupancy permit in s 21(1)(a) as compared with the use of ‘the’ occupancy permit in s 21(1)(b), and considered that the distinction was ‘deliberate’.[15] Thus, s 21(1)(a) covered the case where there was a series of occupancy permits, while s 21(1)(b) covered ‘the’ final occupancy permit issued in respect of the whole building. She went on to state:
Section 134 refers to ‘the occupancy permit’ so the limitation provision was not intended to apply from the varying dates of each occupancy permit required under subsection 21(1)(a) but has application from the occupancy permit identified in accordance with subsection 21(1)(b).[16]
[14]Ibid [53].
[15]Ibid [54].
[16]Ibid [55].
The judge considered that it was consistent with this view that time ran from a certificate of final inspection when an occupancy permit was not issued. The regime ensured that at a certain stage close to completion either an occupancy permit or a certificate of final inspection would be required over the whole of the building. This favoured a construction that ‘the occupancy permit that best reflects the whole of the work in the building covered by either occupancy permit or by the certificate of final inspection identifies the relevant permit and so the date for the purpose of starting time’.[17]
[17]Ibid [57].
The judge also considered that such a construction promotes the certainty of time limits for all parties, which is particularly important where no extension provision exists. It is a construction that was not dependent upon the way applications for building and occupancy permits might be staged. Thus, ‘the occupancy permit’ identified in accordance with s 21(1)(b), is distinguished from the effect of ‘an occupancy permit’, whose effect is as provided by s 46, and is consistent with ‘the occupancy permit’ as used in s 134.[18]
[18]Ibid [58] (emphases added).

The judge considered that this interpretation would result in the same applicable limitation period whether a contractor chooses to arrange the business of building work by progressive or sequential building and occupancy arrangements, or proceeds in relation to the building as a whole, matters which are entirely within the control of contractors and builders and outside the control of owners and purchasers. Thus, by selecting the occupancy permit as identified by s 21(1)(b), or the certificate of final inspection, it was Parliament’s intention and purpose to fix an identifiable date for the time to commence that was sufficiently proximate with the conclusion of the building work.[19]
[19]Ibid [60].
Notwithstanding, then, that an occupancy permit may provide that part of that building is suitable for occupation under s 46, the whole of the building subject to occupancy is not achieved until the last occupancy permit is granted.[20]
[20]Ibid [61].
The judge therefore found that OP4 was the relevant occupancy permit for the purposes of s 134, and that the proceeding commenced by the Owners Corporations was commenced within time (being within the 10 year period from the issue of OP4 of 16 February 2007 that covered the whole of the building).[21]
[21]Ibid [62].

Proposed grounds of appeal

Lendlease advanced three proposed grounds of appeal.
The primary ground, proposed ground 1, alleged that the judge erred in upholding the VCAT’s construction of s 134 of the Act, and that she should have preferred Lendlease’s construction. Grounds 2 and 3 focused on aspects of the judge’s misconstruction. Thus, the judge also allegedly erred in her construction of s 21 of the Act (proposed ground 2), and in finding that relevant principles of certainty undermined Lendlease’s construction (proposed ground 3) .
Given that all three grounds raise a single issue as to the proper construction of s 134 of the Act, they will be considered together.

Lendlease’s submissions

Lendlease submitted that the legislative purpose of s 134 was clearly to limit building actions from being brought within 10 years after the issue of the occupancy permit in respect of the building work ‘to which the occupancy permit relates’. In the case of multiple occupancy permits, time must commence to run from the date of issue of the permit that relates to the building work the subject of complaint in the building action.
Lendlease highlighted the words, ‘whether or not the occupancy permit is subsequently cancelled or varied’ in s 134(1). It emphasised that the clock did not stop running even if there was a cancellation by reason of fraud or misrepresentation. It would be anomalous if subsequent occupancy permits were construed to ‘restart’ the limitation period given ‘cancellation or variation’ of a permit did not have such an effect.
The judge’s construction also raised issues as to whether an earlier occupancy permit ceased to be an occupancy permit for all purposes (on the issue of subsequent permits covering the same work) or whether this was confined to s 134 only.
The idea that the limitation period ‘restarted’ can also not be intended, given the definition of a building includes any ‘part’ of a building, and given that an occupancy permit can be issued for any part of a building.
Lendlease also submitted that the judge erred in relying upon s 21 to support her construction. Thus the structure of the section provides first, for the surveyor to specify whether an occupancy permit is required and, if yes, whether the (which could read ‘that’) permit is required for the whole or part of the building. The reference to ‘the’ occupancy permit in s 134 therefore assumes no special significance insofar as s 21 is concerned; it is simply the permit that was required by the surveyor pursuant to s 21. In oral submissions Lendlease also agreed that the use of the word ‘an’ occupancy permit would be of no assistance as the issue would still arise as to which occupancy permit was intended.
The fact that time runs from the certificate of final inspection where there is no occupancy permit also does not support the judge’s construction, given it is the only objective event for the legislature to fasten upon absent an occupancy permit.
Lendlease also contended that there was nothing uncertain about the fixing of the date of the occupancy permit by reference to the building work in respect of which defects are alleged. Even if some other date was thought desirable, this would involve bending the words to accommodate some other more desirable solution, contrary to the approach in Brirek.
In oral submissions Lendlease highlighted that s 134 was a limitation provision with no power of extension. It was clearly intended to constrain.
Lendlease also highlighted the absence of words which might justify reading the occupancy permit as a ‘final’ permit. Thus, although the word ‘current’ was used in s 40, there was no such word used in s 134. There was in fact no reference to the concept of a ‘final’ occupancy permit in the Act.[22] This was despite the fact that comparable New South Wales legislation provided for the limitation period to run from the date on which ‘the relevant final occupation certificate is issued’.[23]
[22]Although OP4 did purport to describe itself as an occupancy permit – stage 3 – ‘final’.
[23]Section 109ZK of the Environment Planning and Assessment Act 1979 (NSW); cited in Brirek (2014) 48 VR 558, footnote 23 (Redlich, Whelan and Santamaria JJA); [2014] VSCA 165.
Lendlease submitted that there were a number of adverse consequences which flowed from the judge’s construction. First, there might be two occupancy permits operative in respect of the same work. Secondly, the limitation period would effectively start, then stop and restart again on issue of the further permit. Thirdly, there may be no ‘final’ occupancy permit at all since occupancy permits might be issued in respect of a series of discrete works (rather than operating cumulatively as occurred in this case).

Owners Corporations’ submissions

The Owners Corporations submitted that the mischief with which s 134 of the Act was concerned was to provide certainty to property owners, builders and insurers as to when time ran for claims arising out of the negligent design and construction of buildings. This was said to be particularly self-evident from the second reading speech of the Building Bill.[24] Where building work was ongoing, certainty would therefore best be served if the reference to ‘the date of issue in the occupancy permit’ in s 134 of the Act meant the occupancy permit issued last in time. To operate a limitation period from an earlier, and not final, permit, only serves to reintroduce the evil the Act was designed to remove, namely ‘confusion and increased litigation risk’.
[24]Victoria, Parliamentary Debates, Legislative Assembly, 30 November 1993, 1346 (RI Knowles, Minister for Housing).
The Owners Corporations submitted that the construction of Lendlease would result in substantial disadvantage and injustice to subsequent purchasers who would likely have little or no knowledge of the number of occupancy permits issued, or which occupancy permit applied to which building work. Ultimately it tipped the scales too far in favour of a builder.
The Owners Corporations further relied on two of the guiding principles identified by Cavanough J in LU Simon Builders Pty Ltd v Victorian Building Authority (‘LU Simon’)[25] as follows:
[A] construction that would produce inconvenient, improbable or irrational consequences should be avoided if there is a competing construction that is reasonably open and would not produce such consequences.[26]
[T]he principle of legality, which requires … that statutes “be construed — in circumstances where constructional choices are open — so as to avoid or minimise encroachment upon rights or freedoms at common law”.[27]
[25][2017] VSC 805 (‘LU Simon’).
[26]Ibid, [29] (Cavanough J); citing Victorian WorkCover Authority v BSA Ltd [2017] VSCA 276, [19] (Maxwell P, Osborn and Kaye JJA). See also Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297, 305 (Gibbs CJ), 320–1 (Mason and Wilson JJ); [1981] HCA 26; Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408 (Brennan CJ, Dawson, Toohey and Gummow JJ); [1997] HCA 2; Legal Services Board v Gillespie-Jones (2013) 249 CLR 493, 509 [48] (French CJ, Hayne, Crennan and Kiefel JJ); [2013] HCA 35.
[27]LU Simon [2017] VSC 805, [30] (Cavanough J); citing Victorian WorkCover Authority v BSA Ltd [2017] VSCA 276, [16] (Maxwell P, Osborn and Kaye JJA). See also Momcilovic v The Queen (2011) 245 CLR 1, 46 [43] (French CJ); [2011] HCA 34; Al-Kateb v Godwin (2004) 219 CLR 562, 577 [19] (Gleeson CJ); [2004] HCA 37.
In terms of the first principle, the Owners Corporations provided examples where owners residing at different levels of a building might have different entitlements, depending on where the defective work occurred. This was said to be inconvenient and irrational. In terms of the second principle, acceptance of Lendlease’s construction would serve to maximise the curtailment of an owner’s rights.
The Owners Corporations submitted that, although s 134 speaks of subsequent cancellation and variation, it does not speak of the issuing of multiple occupancy permits. Further, that, while s 46 does contemplate multiple occupancy permits for different parts of the building, it is important that it also provides that the issuing of a permit is not evidence that the building or part of a building to which it applies complies with the Act or the building regulations.
The Owners Corporations also contended that the judge’s distinction in s 21(1) between ‘an’ occupancy permit in s 21(1)(a) and ‘the’ occupancy permit in s 21(1)(b) was properly made, but that their construction was correct in any event.
In oral submissions the Owners Corporations emphasised that it was necessary to construe s 134 in a modern context where there may be multi-storey buildings with multiple occupancy permits for different levels. They again pointed to the difficulty of trying to divine where the defective works were located in such cases, and submitted that purchasers might not know when particular occupancy permits were issued.
They also submitted that the final occupancy permit effectively deemed there to be compliance with the Act such that it was important that completion of the whole building was identified for limitation purposes, as well as for safety purposes. Where there were discrete occupancy permits (which did not operate cumulatively), s 134 should operate in respect of the last occupancy permit issued.

Analysis

In construing s 134 it is necessary to commence with the ordinary and grammatical meaning of the words used, taking into account both context and legislative purpose.[28] Consideration of context must be ‘in its widest sense’, including taking into account the surrounding statutory provisions, as well as the ‘mischief’ the statute is intended to remedy.[29] Importantly, however, as highlighted in the passage from Brirek, above, the task of the court is to identify the solution that recommended itself to Parliament.[30]
[28]R v A2 (2019) 296 CLR 507, 520–22 [32]–[37] (Kiefel CJ and Keane J), 545 [124] (Bell and Gageler JJ); [2019] HCA 35.
[29]Ibid 521 [33] (Kiefel CJ and Keane J), 545 [124] (Bell and Gageler JJ).
[30]Reasons, [42]; citing Brirek (2014) 48 VR 558, 586–7 [108] (Redlich, Whelan and Santamaria JJA); [2014] VSCA 165.
Commencing, then, with the language of s 134(1), a number of features suggest that time runs from the date an occupancy permit is first issued in respect of the defective work.
First, the relevant time period is expressly said to commence from the date of issue of the occupancy permit ‘in respect of the building work’. These words are to be given meaning. Moreover, given that a ‘building action’ (the subject of s 134) is defined as an action arising out of, or concerning, ‘defective building work’,[31] the phrase is naturally referable to the ‘defective building work’ the subject of the ‘building action’.
[31]Under s 129 of the Act.
Secondly, we agree with Lendlease that the phrase ‘whether or not the occupancy permit is subsequently cancelled or varied’ supports its construction. Parliament clearly intended time to run from the date an occupancy permit is first issued, even if it is ‘subsequently cancelled or varied’. It would be anomalous if subsequent occupancy permits issued in respect of the same work were construed to ‘restart’ the limitation period when ‘cancellation or variation’ does not have such an effect.
Finally, there is nothing in the language to suggest that Parliament intended the starting point to be some ‘final’, ‘current’, or ‘last’ occupancy permit. Although the concept of a ‘current occupancy permit’ is adopted for penal purposes (in s 40 of the Act), the word ‘current’ is not used in s 134 at all. The word ‘final’ is used in relation to a certificate of ‘final’ inspection, but the term ‘final occupancy permit’ is not adopted in s 134, or anywhere else in the Act. The choice to omit such language in respect of an occupancy permit the subject of s 134 appears to be deliberate. Parliament has instead evinced a clear intention to define an occupancy permit by reference to the relevant building work.
The ordinary meaning of the words therefore suggests that the occupancy permit ‘in respect of the building work’ is intended to apply to the occupancy permit that is first issued in relation to the defective building work the subject of the building action — not any ‘final’ occupancy permit.
The surrounding provisions also do not suggest that the words should be read in any other way. In relation to s 21, we accept Lendlease’s submission that the structure of the section provides, first, for the surveyor to specify whether an occupancy permit is required and, if yes, whether the permit is required for the whole or part of the building. There is no special significance in the use of the words ‘an’ and ‘the’. The reference to ‘the’ occupancy permit in s 134 also assumes no special significance. The fact that an occupancy permit may be required for ‘part’ of a building (under s 21(1)(b)[32]) also undermines any suggestion that the occupancy permit must necessarily be some ‘final’ occupancy permit that covers the whole of the building.
[32]Other provisions in the Act reflect that an occupancy permit may be issued in relation to ‘part’ of a building, for example, ss 39(2), 46, and 72.
The consequence of the approach of the Owners Corporations would also be that, although an occupancy permit would have effect when first issued in respect of a building, or part of a building, for the purposes of s 46, it may not be effective for the purposes of s 134 (if it was to be ‘reset’ by a subsequent permit which purported to incorporate the same matters). The uncertain effect of any occupancy permit in this way would undermine the very principles which the Owners Corporations seek to rely upon.
Thus, in this case four occupancy permits were issued. Each one was issued on the completion of certain stages but each later permit restated the building work that had been the subject of an earlier occupancy permit. So, for example, unit 201 in Building 1 was the subject of the first occupancy permit and, from that date, there was no impediment to occupation. The time limit in s 134 ran from the issue of the occupancy permit. However, the same unit was also described in the second occupancy permit even though no building work had been undertaken in respect of the unit between the first and second occupancy permit. On one view of the language of s 134 each permit might be described as an ‘occupancy permit in respect of the building work’ concerning unit 201. However, the language of s 134 requires the identification of the occupancy permit. To choose the later permit as being the relevant permit for the limitation period concerning unit 201 would mean that the clock would be reset on the issue of the second permit. That would not promote certainty, as the limitation period would depend on the happenstance, not required by the Act, as to the form of a later occupancy permit. It would ignore the critical fact that the relevant building work had been completed and was ready for occupation in accordance with the first occupancy permit.
We are also not satisfied that Lendlease’s construction would breach the principles espoused in LU Simon. Building actions can frequently give rise to issues in relation to the identification of defects, quite apart from the operation of s 134. In any event, any issues with identifying defective works and relevant occupancy permits does not justify discarding the clear language of the provision. It might also be readily accepted that there should be no encroachment on rights without clear statutory warrant. However, Parliament has clearly chosen where the line is to be drawn in this case. In so doing, although it has placed a bar on tort claims (which may not become manifest until after 10 years), it has actually extended the time for bringing claims in contract.[33]
[33]Brirek (2014) 48 VR 558, 583 [96] (Redlich, Whelan and Santamaria JJA); [2014] VSCA 165.
The construction we favour also better connects the limitation period with the building work said to be defective in the proposed building action. In this statutory scheme the concern expressed by the Owners Corporations that defects in work may not be detected until later work has been completed is addressed by the Act allowing for a 10 year limitation period. The spectre asserted by the Owners Corporations that later building work may be defective and impact on earlier stages which will have been the subject of an earlier occupancy permit is misconceived. In that case the limitation period will attach to the defective work.
Finally, it may be accepted that Parliament clearly intended to fix a single ‘clear trigger date’[34] with some ‘certainty’, consistent with the second reading speech. However, this purpose can readily be promoted[35] by reference to the date of issue of the occupancy permit in respect of the relevant work. The object of ‘certainty’ or alleged ‘unfairness’ does not otherwise justify ‘bending the words of the statute’ to accommodate some more desirable solution. As we have explained above, the alternative of multiple ‘resetting’ dates carries a degree of uncertainty in any event.
[34]Victoria, Parliamentary Debates, Legislative Assembly, 30 November 1993, 1349 (RI Knowles, Minister for Housing).
[35]In accordance with the Interpretation of Legislation Act 1984, s 35.
There will accordingly be leave to appeal, and the appeal will be allowed.
JOINDER ISSUE

Background

On 16 May 2019, Lendlease filed amended points of defence in the VCAT which included an allegation (at paragraph 1A) that the Owners Corporations were not the relevant owners of the Louvre Blades.
The Owners Corporations thereupon commissioned a report from a surveyor to identify where the Louvre Blades were located (on private property, common property, or both)(the ‘Reeds Report’).
On 4 October 2019, the Owners Corporations then made an application to the VCAT which sought to join 137 private lot owners to the proceeding, as well as to file and serve a proposed ‘Second Further Amended Points of Claim’ which sought to add claims made by the private lot owners. As the VCAT observed, the private lot owners sought to be joined ‘as co-applicants’.[36]
[36]Owners Corporation No 1 PSS526704E v Lendlease Engineering Pty Ltd (Building and Property) [2019] VCAT 1909, [4] (‘VCAT Decision’).
The joinder application relied on an affidavit of Steven Marchesin of 4 October 2019 (the ‘Marchesin affidavit’). Under ‘Reasons for the Joinder of Applicants’, Mr Marchesin cited paragraph 1A of the amended points of defence, the Reeds Report, and sought that any issue of whether the private lot owners were statute barred should be dealt with at the hearing of the joinder application and the strike out application.

The Marchesin affidavit also annexed a bundle of emails between the Owners Corporations’ manager, David Williams, and TressCox, solicitors, dated between June 2016 and February 2017 (the ‘relevant emails’) which will be referred to further, below.

Relevant statutory provisions

The relevant provisions of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’) include s 60 which provides:
60 Joinder of parties
(1)The Tribunal may order that a person be joined as a party to a proceeding if the Tribunal considers that—
(a)the person ought to be bound by, or have the benefit of, an order of the Tribunal in the proceeding; or
(b)the person’s interests are affected by the proceeding; or
(c)for any other reason it is desirable that the person be joined as a party.
(2)The Tribunal may make an order under subsection (1) on its own initiative or on the application of any person.
(3)On the application of a person who is entitled under section 73(4) to be joined as a party the Tribunal must order that the person be joined as a party.
Section 97 also provides that the VCAT must act fairly and according to the substantial merits of the case in all proceedings, while s 98 makes provision for the general procedures of the VCAT. This includes that the VCAT is not bound by the rules of natural justice, or the rules of evidence, and is to conduct each proceeding with as little formality and technicality as possible.

VCAT decision

As indicated already, the VCAT permitted the joinder in this case notwithstanding that the time limit for the private lot owners to commence proceedings in their own right had expired. In so doing, the Deputy President appeared to make her decision on three bases.
First, she considered that her earlier decision in Owners Corporation PS 447493 v Burbank Australia Pty Ltd (Domestic Building) (‘Burbank’) was authority for the proposition that joinder of parties after the expiry of a time limit could occur where the claims were ‘closely intertwined’.[37] In that case, she had refused to summarily dismiss certain claims of individual lot owners who had been joined subsequent to the expiry of the limitation period.
[37]Ibid [37]; citing Owners Corporation PS 447493 v Burbank Australia Pty Ltd (Domestic Building) [2013] VCAT 1911, [40] (Deputy President C Aird) (‘Burbank’).
Secondly, she appeared to consider that the joinder was a ‘formality’, stating:
Here the claim concerns the total louvre system installed throughout Building 2. To find the claims in relation to part of the louvre system should have been brought at an earlier date, or by different persons, particularly in circumstances where, as discussed above, lot boundaries run through individual exterior sunscreens, would create an absurd and unworkable situation.
Not only is the claim that the entire louvre system needs to be replaced, it is not the case that part only of a screen can be rectified. In those circumstances it was entirely reasonable for the application to have been brought by the OCs. Joining the affected private lot owners as applicants, is in my view, in the unique circumstances of this proceeding, simply a formality.[38]
[38]VCAT Decision, [39]–[40] (emphasis added).
Finally, the Deputy President made the following finding:
In the peculiar circumstances of this case, I am satisfied that the OCs in commencing the proceeding were acting on their own behalf and on behalf of their members: the private lot owners. The claim has always been that the entire louvre system needs to be replaced: not that some only of the screens are faulty. The building action, which as defined in s 129 of the B (sic) Act is a claim for loss or damage arising from defective building work, was commenced within the 10 year limitation period.[39]
[39]Ibid [47] (emphasis added).

Reasons

Consistent with the background set out above, the judge found that the reason for the joinder application was ‘reactive’ to the amended points of defence.[40] Thus, it was necessary for the private lot owners to make separate claims given that the Owners Corporations could only maintain a claim insofar as they were the relevant owners of the Louvre Blades.
[40]Reasons, [89].
Although the Owners Corporations did not directly challenge this finding, they submitted, in oral submissions, that the private lot owners should have also been joined on a different basis. Thus, they contended that the private lot owners were parties whose ‘interests are affected’, which did not necessarily require them to have a claim in their own right. This was said to be, for example, because they might be affected by rectification works and/or so as to ensure that they would be bound by any decision.
The Owners Corporations did not identify anything in the materials before the VCAT which evidenced that the joinder application was made on this different basis. As summarised above, the material before us suggests that the key reason for the joinder application was to ensure that the private lot owners could make claims in circumstances where the Owners Corporations might be unable to successfully do so.
The judge was therefore correct to describe the joinder application as ‘reactive’ given that it was made, and considered, on the basis that the private lot owners sought to be joined ‘as co-applicants’, entitled to make claims in their own right. It is unnecessary in those circumstances to consider whether a joinder application might be successful on some different basis.
Returning, then, to the judge’s reasons, she considered that the joinder issue raised two agreed questions of law, as follows:
[W]hether the joinder application of the private lot owners ought to have been dismissed as, pursuant to s 134 of the Building Act, the owners’ claims were:
- out of time and statute-barred; and thus were
- doomed to fail?
[W]hether there was evidence to support the Tribunal’s finding that the Owners Corporations were acting on behalf of the private lot owners with respect to the claims the owners then sought to bring. Alternatively, whether that finding of the Tribunal was unreasonable or perverse?[41]
[41]Ibid [6].
In relation to the first question, the judge noted that the Act makes no provision for extension of time, and so joinder of a new party to a proceeding has the effect of commencing a new action by or against a new party. She considered that, as explained in Brirek, expiry of the limitation period does not preclude an amendment to rely upon a different cause of action between the same parties and r 36.01(6) of the Supreme Court (General Civil Procedure) Rules 2015 gives the Court the power to amend pleadings notwithstanding the expiry of a relevant limitation period.[42] Rather, the abrogation of the rule in Weldon v Neal (‘Weldon’)[43] by s 34 of the Limitation of Actions Act 1958 makes it clear that the Court must allow an amendment if satisfied that there is no prejudice to parties. In such circumstances, an amendment may be said to ‘relate back’, or take effect, from the time of issue of proceeding. However, the concept of ‘relation back’ in general does not extend to the joinder of new parties.[44]
[42]Ibid [71]–[72].
[43](1887) 19 QBD 394 (‘Weldon’); the ‘rule’ in that case provides that an amendment to pleadings should not be allowed so as to allow a plaintiff to set up a cause of action which would otherwise be statute barred.
[44]Reasons, [73].
The judge accepted Lendlease’s argument that the application for joinder was not simply procedural but of substance, properly characterised as commencing a new action, and stated that it was difficult to see how the joinder of a new party could be a ‘simple formality’, particularly after the expiry of a limitation period (other than in the particular factual context of the VCAT’s finding that the Owners Corporations were acting on behalf of the private lot owners).[45]
[45]Ibid [75].
The judge rejected the Owners Corporations’ submissions that joinder was permitted because of ss 97 and 98. She found that Brirek did not assist the Owners Corporations in this regard where what was sought was not an amendment of claims between existing parties, but rather the joinder of additional parties, noting that the limitation period in s 134 is expressed to apply ‘despite anything to the contrary in the Limitation of Actions Act or in any other Act or law’. It would be ‘anomalous and erroneous to conclude that the Tribunal, given jurisdiction to hear and determine building disputes, could have power to join a new party after the expiry of the relevant time limit by application of its own procedural powers to act fairly’.[46]
[46]Ibid [77].
The judge also found that the statutory provisions as interpreted and applied in The Owners – Strata Plan 30791 v Southern Cross Constructions (ACT) Pty Ltd (in liq) [No 2] (‘Southern Cross’)[47] (a case the Owners Corporations relied upon) were not relevantly analogous to the present case.[48]
[47][2019] NSWSC 440 (‘Southern Cross’).
[48]Reasons, [78]–[79].
The judge highlighted that the VCAT relied on its earlier decision in Burbank as clarified by Owners Corporation PS 517 029T v Hickory Group Pty Ltd (Building and Property) (‘Hickory Group’) (where an application to join parties was refused).[49] However, she considered that the ‘real distinction’ between these two cases was that Hickory Group concerned an application to join parties, whereas Burbank involved an application to summarily dismiss claims of parties already joined (where the issue was whether it was appropriate to deal with the claims in a summary way). The judge found that reliance on Burbank as authority for circumstances permitting joinder after expiry of the Act’s limitation period was ‘misplaced’.[50] The judge also accepted the submission of Lendlease that other decisions of VCAT (particularly Adams v Clark Homes Pty Ltd (Building and Property) (‘Adams’)[51] and Tsobinas v Katsouranis trading as CT Properties (Building and Property) (‘Tsobinas’)[52]) were consistent with the analysis that joinder of a party after the expiry of the time limit is impermissible.[53]
[49][2016] VCAT 731 (‘Hickory Group’).
[50]Reasons, [84].
[51][2015] VCAT 1658 (‘Adams’).
[52][2015] VCAT 739 (‘Tsobinas’).
[53]Reasons, [85]–[86].
In relation to the second question of law, the judge made the following finding:
On this basis it was not open to the Tribunal, at least on the weight of the evidence, to conclude that as a matter of fact the Owners Corporations were acting on behalf of relevant private lot owners. No argument that they were doing so as a matter of law was advanced in the Tribunal or before me. Indeed, as the Tribunal’s reasons by reference to the ‘peculiar circumstances of this case’ make clear, it was a factual rather than a legal conclusion.[54]
[54]Ibid [95].
In reaching this finding, the judge examined the relevant emails. The Owners Corporations had submitted that there was no evidence that the private lot owners were aware of the advice of TressCox contained in those emails, and that no reliance was placed on the emails for the purposes of this joinder application. However, the judge found that, to the extent that it was relevant and before the VCAT, such material could and should have informed any factual finding as to whether the action was commenced on behalf of the private lot owners. The absence of any attempt in pleadings or otherwise to identify affected members when the action was commenced also lessened rather than strengthened the Owners Corporations’ submission.[55]
[55]Ibid [93].
The judge thereby allowed the appeal on the question of joinder.

Proposed grounds of cross-appeal

The Owners Corporations proposed three grounds of cross-appeal.
The first two alleged that there was an error in finding that joinder was not permitted by the VCAT in the exercise of its discretion pursuant to ss 97, 98 and 60, having regard to the fact that the claims were ‘closely intertwined’. The third alleged that the judge erred in finding that it was not open for the VCAT to determine that the Owners Corporations were acting on behalf of the private lot owners when they issued the proceeding.

Whether error in relation to VCAT statutory powers (proposed grounds 1 and 2)

Owners Corporations’ submissions

The Owners Corporations submitted that, to meet its mandate under s 97 to ‘act fairly and according to the substantial merits of the case in all proceedings’, the VCAT must consider the policies that underlie the limitation statute, the Act, and its own procedures, including the general procedures set out in s 98 of the VCAT Act.
They submitted that the VCAT has a wide latitude to correct and clarify points of claim, and that it could not have been the intention of the legislature when enacting ss 97 and 98 not to allow relation back, and therefore arbitrarily bar an attempt to correct a good faith mistake or a crucial issue due to a limitation defence. They submitted that one self-evident purpose of ss 97 and 98 is to enable a claimant to correct a ‘pleading’ error after the limitation period has run if the correction will not prejudice the other party. This was said to be akin to 34 of the Limitations of Actions Act 1958, which abolished the rule in Weldon, and was held in Brirek to apply to a claim with a limitation period governed by s 134 of the Act (so that the amendment related back to the date of the original pleading).
The Owners Corporations also submitted that the amendment does not materially change the nature of the claim Lendlease faces in the VCAT proceeding.
In relation to proposed ground 2, the Owners Corporations submitted that the power of the VCAT to join a party to a proceeding under s 60 was very broad, and not expressed to be conditioned by any considerations other than those stated within the provision. They relied on a lack of prejudice given the private lot owners seek relief in relation to the same defects Lendlease has known about since February 2017.
They submitted that Burbank is strongly supportive of the joinder of the private lot owners to the proceeding even after the limitation period has expired, and suggested that the judge erred in the way she distinguished this case and the Hickory Group case. Rather, the VCAT refused joinder in Hickory Group as the claims were specific to alleged defects in each individual lot, whereas in Burbank, the claims of both the Owners Corporations and the private lot owners were ‘closely intertwined’ arising from the same alleged defective works in both common property and private property.
The Owners Corporations submitted that the Deputy President’s reasoning accorded with recent analogous authority in Southern Cross, and to the extent the judge sought to distinguish this case, she erred and gave no cogent reasons for doing so. She also erred to the extent that she found the decisions in Adams and Tsobinas were consistent with the analysis that joinder of a party after the expiry of the time limits is impermissible. Those cases were concerned with applications to join new parties as respondents, rather than an application to join new claimants pressing the same claim.
The Owners Corporations submitted that the judge therefore erred, in circumstances where the claims of the two Owners Corporations and the private lot owners against Lendlease were ‘so closely intertwined’ as not to change the nature of the proceeding or the cause of action raised.

Analysis

The addition of a new party when any limitation period applying to the claim by or against that person has expired is not allowed because such an addition would effectively defeat a limitation defence.[56] Although ss 97 and 98 give broad powers to the VCAT to adopt fair procedures, there is nothing in those provisions which suggests that this principle should be ignored or avoided. To the contrary, s 134 is expressed to apply ‘despite anything to the contrary in the Limitation of Actions Act or in any other Act or law’.
[56]Mabro v Eagle Star and British Dominions Insurance Co Ltd [1932] 1 KB 485, 487 (Scrutton LJ), 489 (Greer LJ); [1932] All ER Rep 411; Davies v Elsby Bros Ltd [1961] 1 WLR 170, 173 (Pearce LJ); [1960] 3 All ER 672; Saunders v Glev Franchises Pty Ltd (1995) 133 ALR 731, 735–6 (Sundberg J).
The reliance on Brirek is also of no assistance to the Owners Corporations for the reasons given by the judge. Thus, Brirek was concerned with the addition of a new cause of action between existing parties, not the joinder of additional parties.
Section 60 also does not enable the VCAT to join parties to defeat a limitation defence. Again, s 134 is clearly expressed to apply ‘despite’ any other Act. There is also nothing in s 134 which supports the existence of an exception if the claim (of the new party) is characterised as a ‘closely intertwined claim’. The decision of Burbank is incorrect to the extent that it says otherwise.
The decision in Southern Cross also takes the matter no further. The leave given to join private lot owners in that case was made pursuant to a completely different statutory regime under the Civil Procedure Act2005 (NSW). Section 65(2)(c) of that Act expressly permitted the court to allow an amendment to add a new cause of action and claim for relief after the expiration of the relevant limitation period in certain circumstances. Section 65(3) further provided that, unless the court otherwise ordered, any such amendment was taken to have had effect as from the date on which the proceeding commenced. The judge was therefore correct to hold that the statutory provisions as considered and applied in Southern Cross were not analogous to the relevant provisions in this case.
Proposed grounds 1 and 2 of the cross-appeal are without merit.

Whether Owners Corporations acting on behalf of private lot owners (proposed ground 3)

Owners Corporations’ submissions

The Owners Corporations suggested that it is arguable that, by reason of their obligation to repair and maintain common property, the two Owners Corporations may maintain an action to recover the entire cost, not just their share of the cost, in respect of the Louvre Blades and base plates (which straddle common and private property). It was also arguable that they might maintain an action to recover the entire cost of repairing or maintaining the Louvre Blades situated wholly on private lot owners’ property to the extent that they are chattels, fixtures, fittings or services related to the common property or its enjoyment.
The Owners Corporations contended that the judge erred insofar as she relied on the failure of the pleadings, when the original points of claim filed by the two Owners Corporations made claims on behalf of the private lot owners. In oral submissions, they highlighted that the claim contained particulars of damage which extended to privately owned lots.
The Owners Corporations also submitted that the evidence before the VCAT and judge regarding the knowledge the private lot owners had before the expiration of the limitation period was incomplete, and brought into existence for another purpose ie although they were annexed to the Marchesin affidavit, they were said to be in support of a separate application to join TressCox. They contended that the judge erred in relying on that evidence to fix the two Owners Corporations and each of the private lot owners’ knowledge in respect of their rights to pursue defects in the Louvre Blades. Further, that the knowledge of these persons should have been a matter for determination at the final hearing having heard all the evidence, rather than being based on material filed in support of an interlocutory application to join another party to the VCAT proceeding.
The Owners Corporations submitted that the judge also erred by finding that it was not open to the VCAT to conclude that it was arguable that the two Owners Corporations were acting on behalf of the private lot owners. She thereby elevated the test beyond one that is arguable based on the limited material, to what the VCAT ought to have found at a final hearing. They submitted that the characterisation of the matter as a factual one ignored arguments available to the private lot owners and the two Owners Corporations such as ratification.

In oral submissions they highlighted that the correspondence before the VCAT related to the strata title manager, rather than the private lot owners (or the Committee). Given that the ballot papers actually circulated did not distinguish between defects on common property and defects on individual lots, some private lot owners could have believed that the Owners Corporations were acting on their behalf.

Evidence before the VCAT

It is important to set out material parts of the relevant emails before the VCAT.
Following the attendance of Mr Williams at the solicitors’ office, TressCox wrote an email dated 21 June 2016 to Mr Williams which identified that an issue which required further consideration was the location of certain defects. The email then set out the terms of s 134 of the Act, and stated:
Any legal proceedings against the builder must therefore be issued by 15 February 2017 failing which the Owners Corporation (and any lot owner with defective building works) will be statute barred.
The email also recommended that the Owners Corporations take immediate steps to determine the location and ownership of the defective property, and looked forward to receiving further instructions to assist and act ‘on behalf of the Owners Corporation further’.
In an email dated 11 August 2016 from TressCox to Mr Williams TressCox stated:
…it is our view that the boundary (being the median of the vertical structure) runs through the middle of the brown shade screens upwards. The steel plates, which are the defective component, are therefore privately owned as they are within individual lot boundaries.
On 30 August 2016, TressCox advised that, although the boundary as it affected the screens and baseplate of the screens was in part common property, the portion that was common property was relatively small so that the primary responsibility to rectify and pursue responsible parties was a private property issue. The email then noted:
Please advise how you the Owners Corporation now wishes to proceed. It may be of assistance for our office to prepare a circular to be sent by you as the Manager to lot owners affected advising those lot owners of their options in seeking redress.
We note that we do not act for private lot owners and would need to obtain instructions from each lot owner separately in order to do so. That said, any demands to be made and or any legal proceedings to be issued against the Builder can be run concurrently for each lot owner in VCAT.
The email again highlighted the 10 year statutory time limit, ‘failing which the Owners Corporation (and any lot owner with defective building works) will be statute barred’.
TressCox then sent a further email on 9 September 2016, which reiterated TressCox’s advice about the limited time period, and sought the provision of instructions without delay for them to undertake a number of steps, including the preparation of a circular to be sent to private lot owners affected advising those lot owners of their options in seeking redress, and preparing the wording for a circular and special resolution to be passed by the Owners Corporations to issue legal proceedings.
Mr Williams responded on 18 September 2016, stating that he was tempted to argue that the Owners Corporations ‘should/could assume a greater responsibility for the issue’.
On 28 September 2016, TressCox sent a further email reiterating their opinion that the Louvre Blades were in part on common property, and partly privately owned.
As the judge observed, TressCox had by this time clearly identified the need for a special resolution to commence proceedings, that private lot owners should be advised of their options, and that a claim needed to commence before the limitation period expired. There was also discussion as to the relative responsibility as between private lot owners and the Owners Corporations in pursuing action against Lendlease.[57]
[57]Reasons, [91].
On 9 December 2016, Mr Williams also sent an email to TressCox noting that there had been positive discussions with Lendlease, but that there was ‘still a risk they walk’. The committee was therefore ‘belatedly’ considering a special resolution and he therefore attached a first draft of a ballot paper for their consideration.
On 15 December 2016, TressCox sent an email to Mr Williams which enclosed a draft circular and draft ballot papers. The email contained the following statement:
We look forward to confirmation that a ballot to pass each special resolution has been sent to all lot owners. Given the forthcoming deadline we also recommend that after the circular and ballot papers have been sent, SG Strata or the Owners Corporations’ committee take steps to contact all lot owners (by telephone or door knock) to advise them of the ballot and its implications.
The attached draft circular entitled ‘Urgent notice to all owners — building defects & legal proceedings’ also included the following statement:
Private Property Defects
Your private lot may also be suffering from building defects. Buildcheck has identified that some private lots have defective shade screen baseplates, baths and tiling. The Owners Corporation cannot make demands or issue legal proceedings on behalf of private lot owners to rectify defects in private lots. If your private property has defective building works, you must take direct action against the Builder.
The notice also recorded that if the Owners Corporations did not issue legal proceedings they would be required to raise special levies against lot owners. Further, that TressCox was instructed to act for the Owners Corporations, but that private lot owners should immediately seek independent legal advice in respect to their rights. The ballot papers then contained the terms of two special resolutions to engage TressCox to act on behalf of the Owners Corporations, and to delegate to the Committee the power to conduct the proceedings.
In an email of 15 December 2016, Mr Williams described TressCox’s draft documentation as ‘way too detailed and negative,’ and rejected it in favour of a different version of the circular and ballot papers.
The information ultimately circulated stated that in order (for the Owners Corporations) to issue legal proceedings, a special resolution was required. The ballot papers delegated the power to conduct proceedings in relation to defective building works on common property to the Committee. As the judge observed, the information circulated did not articulate the way private lot owners might seek advice or redress, but simply asserted that outstanding defects were on common property, and made no express reference to taking action on behalf of private lot owners.[58]

Analysis

[58]Ibid [92].

The fact that it may be arguable that the Owners Corporations might maintain their own actions is completely irrelevant given that the joinder issue was concerned with an application made to allow the private lot owners to bring an action as claimants in their own right.
The Owners Corporations also mis-state the findings made by the judge. She did not ‘fix’ the Owners Corporations or the private lot owners with knowledge, given that their subjective belief has nothing to do with whether the Owners Corporations were in fact acting on behalf of private lot owners. Nor did the judge find that it was not open for the VCAT to conclude that it was ‘arguable’ the Owners Corporations were acting on behalf of the private lot owners. Rather, her actual finding was that it was not open for the VCAT to conclude (as it did) that the Owners Corporations were acting on behalf of the relevant private lot owners.
The Owners Corporations did not point to any reason or other evidence which suggested that the judge’s actual finding was incorrect. The references in the points of claim were insufficient, in circumstances where the weight of the evidence (advanced by the Owners Corporations themselves) amply supported the judge’s approach.
Proposed ground 3 is also unsustainable.
CONCLUSION
The following orders will be made:
(1)Leave to appeal is granted.
(2)The appeal is allowed.
(3)Paragraph 2 of the orders of the Honourable Justice Forbes made on 9 August 2021 is set aside, and in its place the following orders are substituted:
(a)The appeal is allowed.
(b)Paragraphs 1 and 3 of the Victorian Civil and Administrative Tribunal’s orders in Owners Corporation No 1 PSS526704E v Lendlease Engineering Pty Ltd (Building and Property) [2019] VCAT 1909 dated 5 December 2019 be set aside.
(c)Pursuant to s 148(7)(b) of the Victorian Civil and Administrative Tribunal Act 1998, order in lieu that the Owners Corporations’ claims in respect of all apartments (and associated common property) of Building 2 of the Property except for:
(i)all apartments (and associated common property) situated on levels 7, 8 and 9 of Building 2 of the Property; and
(ii)apartments G10, 210, 410 and 610 (and associated common property) of Building 2 of the Property
be dismissed.
(4) Leave to cross-appeal is refused.
The court will hear the parties separately in relation to the question of costs.
---

SCHEDULE OF PARTIES

S EAPCI 2021 0101

LENDLEASE ENGINEERING PTY LTD (ACN 000 201 516)	Applicant
and
OWNERS CORPORATION NO 1 PS526704E	First Respondent
OWNERS CORPORATION NO 2 PS526704E	Second Respondent

S EAPCI 2021 0114

OWNERS CORPORATION NO 1 PS526704E	First Cross-Applicant
OWNERS CORPORATION NO 2 PS526704E	Second Cross-Applicant
VICTOR RAYMOND JOSEPH MASCARENHAS and DEBORAH ELIZABETH MASCARENHAS	Third Cross-Applicants
SARATH BANDULA DELPACHITRA	Fourth Cross-Applicant
CAMPBELL ANDREW BLAIR MCKAY	Fifth Cross-Applicant
JANN CAROLINE CASEY	Sixth Cross-Applicant
WARIGA NOMINEES PTY LTD	Seventh Cross-Applicant
ELIZABETH JOAN GABRIEL-JONES and DAVID GABRIEL JONES	Eighth Cross-Applicant
VY THANH HUVNH and JASON PHENG KY	Ninth Cross-Applicants
DAVID CAMPBELL BYARS	10^th Cross-Applicant
ALPHA MINERVA MERCADO VILLEGAS and CITADEL MERCADO VILLEGAS	11^th Cross-Applicants
JEDIDIAH XAVIER GILBERT	12^th Cross-Applicant
VICKI JEAN CHUBB	13^th Cross-Applicant
SANJEEV BALASINGAM and SHARMILA KRISHNAMORTHI	14^th Cross-Applicants
CLAUDIO ESTEBAN GALLEGOS RIEDEMANN	15^th Cross-Applicant
CARMEL MARY O’SULLIVAN	16^th Cross-Applicant
PETER CHARLES BLUMBERGS	17^th Cross-Applicant
PAUL ANTHONY LEONARD	18^th Cross-Applicant
NIGEL STUART MURRAY and JENNIFER MARGARET MURRAY	19^th Cross-Applicants
ETEME ASIME ALI	20^th Cross-Applicant
SAGE JORDAN BAM-BRUTON	21^st Cross-Applicant
MUI KIM LOW	22^nd Cross-Applicant
YALING HUANG	23^rd Cross-Applicant
DAVID WAYNE ARMSTRONG	24^th Cross-Applicant
ANGELA NASSO and MICHAEL JOHN SMALE	25^th Cross-Applicants
TUNKU ALINA BINTI RAJA MUHD ALIAS	26^th Cross-Applicant
JENNIFER MARY THERESE MUSCAT	27^th Cross-Applicant
ANDREW KEITH DWYER	28^th Cross-Applicant
SLOBODANKA CALIC	29^th Cross-Applicant
FRED PEKAR	30^th Cross-Applicant
ALEXANDRA JISELLE YEE	31^st Cross-Applicant
BO ZOU	32^nd Cross-Applicant
JOHN SYDNEY WEDDELL	33^rd Cross-Applicant
CHANG ELIZABETH WAI QUEN and LIM ANNE	34^th Cross-Applicants
TERRY FOGARTY PTY LTD	35^th Cross-Applicant
ANGELA LUCIA SERRANO RODRIGUEZ and ALEJANDRO ROJAS SILVA	36^th Cross-Applicants
JEAN EDDY GOODSIR	37^th Cross-Applicant
YANLING ZHANG	38^th Cross-Applicant
ROBERT ANDREW CUTHBERTSON	39^th Cross-Applicant
GUEK CHOO MARY LENG	40^th Cross-Applicant
EILEEN PATRICIA KEALY	41^st Cross-Applicant
ST KILDA HOLDINGS (AUS) PTY LTD	42^nd Cross-Applicant
THE SAI MENG and THE SIEW WAH	43^rd Cross-Applicants
JOHN FRANCESCO VIRGONA	44^th Cross-Applicant
TOMAZS PIOTR MIELNIK	45^th Cross-Applicant
LOW MUI PING	46^th Cross-Applicant
WARIGA NOMINEES PTY LTD	47^th Cross-Applicant
KYLIE ANNE RUSSELL	48^th Cross-Applicant
BRIANA CHANTAL SEATON and ALISTAIR FRANCIS SEATON	49^th Cross-Applicants
BERNARD ENRIQUE COLLANTES	50^th Cross-Applicant
SUZANNE ASTORINO FORMICA	51^st Cross-Applicant
PING ZHOU and JIANRONG WANG	52^nd Cross-Applicants
KERYN ANNE TOPHAM	53^rd Cross-Applicant
LAYTON SHANNOS	54^th Cross-Applicant
DEIRDRE BRIDGET GRANTHAM and GEOFFREY WAYNE GOLDBURG	55^th Cross-Applicants
YATISHA BHAGWANDEEN	56^th Cross-Applicant
STEVEN PATRICK PETERSON and ELIZABETH MARGARET PETERSON	57^th Cross-Applicants
HELEN MAREE THORNEYCROFT	58^th Cross-Applicant
NEIL ANDREW HIGGINS and KIM MARIE MCMAHON	59^th Cross-Applicant
JIAN ZHONG DAVID DAI	60^th Cross-Applicant
ANDREW CRAIG COLVIN	61^st Cross-Applicant
LYNNE LOUISE DOBBER and CAITLYN VICTORIA DOBBER	62^nd Cross-Applicants
SUSAN DANIELE HOLLY	63^rd Cross-Applicant
CAO PHUOC MINH TRAN NGUYEN and ANDREW SWEE FONG TAY	64^th Cross-Applicants
YIT KENG KHOO	65^th Cross-Applicant
MATTHEW CHARLES FRANCIS and CAROLINE MAREE FRANCIS	66^th Cross-Applicants
ANDREW SIU YING FUNG and VICKIE LAI-LIN NG	67^th Cross-Applicants
STEVEN STYLIANOS KARISTIANIS	68^th Cross-Applicant
EVELYN WEI YING CHAN	69^th Cross-Applicant
KYLIE JANE EVERETT	70^th Cross-Applicant
FAVIO DANIEL HENQUIN and JUDITH MARIELA BAUERBERG	71^st Cross-Applicants
JACINTA MARIE BAINE	72^nd Cross-Applicant
CONSTANTINOS VLAHOS	73^rd Cross-Applicant
GLADIES VIOLET TEGUH and JASON TEGUH	74^th Cross-Applicants
MARIANNE ELIZABETH ROBERTSON	75^th Cross-Applicant
AMANDA NATALIE BRUTON	76^th Cross-Applicant
VIVEK ARORA	77^th Cross-Applicant
JOANNE MAREE O’BREE and GREGORY HUGH O’BREE	78^th Cross-Applicants
YENG HOK ALVIN TEO	79^th Cross-Applicant
LISA NICOLE BOYD	80^th Cross-Applicant
SIAN ELISABETH MILLER	81^st Cross-Applicant
SANDRA BRUCH	82^nd Cross-Applicant
ANGELA MARTINE ALLEN	83^rd Cross-Applicant
DAN BUIMISTRUC	84^th Cross-Applicant
ASAD AL KAFAJY	85^th Cross-Applicant
KUMI KOIKE	86^th Cross-Applicant
SHUN TSZ YANG and TIK WONG	87^th Cross-Applicants
SVEN JACK TAN	88^th Cross-Applicant
NEENA CHANDOLA and SANDEEP KUMAR CHANDOLA	89^th Cross-Applicants
CLAIRE SOERO	90^th Cross-Applicant
JANE MARIE DOWDALL	91^st Cross-Applicant
TIMOTHY JOHN GOODING and ROBYN JANE GOWER	92^nd Cross-Applicants
GAIL MARIE ASHWORTH and PHILLIP ALFRED ASHWORTH	93^rd Cross-Applicants
BENJAMIN ASHLEY CARRUCAN	94^th Cross-Applicant
XINXUAN XIE	95^th Cross-Applicant
STEVEN DAVID CARPENTER	96^th Cross-Applicant
EDWINA MARION BUTLER	97^th Cross-Applicant
FRANCIS JOSEPH BOWDEN and PHILLIPPA CATHERINE BOWDEN	98^th Cross-Applicants
JILL VALERIE STANSFIELD-SMITH and ROSS STANSFIELD-SMITH	99^th Cross-Applicants
LISHUANG GUO	100^th Cross-Applicant
NUSA WIJAYA	101^st Cross-Applicant
MICHAEL JOHN ABRAMSON	102^nd Cross-Applicant
XIAOCHUAN MO	103^rd Cross-Applicant
FABIAN ANDRES WOLF	104^th Cross-Applicant
QUADRIGA PROJECT MANAGEMENT SERVICES PTY LTD	105^th Cross-Applicant
CEDAR HOUSE INVESTMENTS PTY LTD	106^th Cross-Applicant
ROBYN JANE GOWER AND TIMOTHY JOHN GOODING	107^th Cross-Applicant
SUPATCHARA WATTANAVEKIN	108^th Cross-Applicant
DJOMBI ATILIO KOP and MARCELA YVONNE KOP	109^th Cross-Applicants
DAVID KEITH BRADSHAW	110^th Cross-Applicant
MCDONALD FRANCIS HOLDINGS PTY LTD	111^th Cross-Applicant
WAH LEA PTY LTD	112^th Cross-Applicant
LEONIE GAYLE KRONBORG	113^th Cross-Applicant
GREGORY BRIAN HALL	114^th Cross-Applicant
LI JEEN MAH	115^th Cross-Applicant
PEIXIAN HUANG	116^th Cross-Applicant
JANET RAY WATSON and PHILLIP JAMES LE GEYT	117^th Cross-Applicants
ANGELICA MARIA CORREA-LONDONO and ANDREW GLENN KAY	118^th Cross-Applicants
GREGARY TOTTEN CHASE	119^th Cross-Applicant
NORIKA ELFRIEDE MILES	120^th Cross-Applicant
LEAH MERCEDES KLOOGER	121^st Cross-Applicant
LYNN BEVERLEY CONLEY and BRUCE WILLIAM CONLEY	122^nd Cross-Applicants
IAN MCKENZIE	123^rd Cross-Applicant
SALLY SHADDOCK and STEPHEN ROSS SHADDOCK	124^th Cross-Applicants
NANCY JOY NORRIS	125^th Cross-Applicant
EDWINA MARION BUTLER	126^th Cross-Applicant
RUSCOL PTY LTD	127^th Cross-Applicant
ANNE ELIZABETH SIMONS and RUSSELL STANLEY COLMAN	128^th Cross-Applicants
ANDREW WILLIAM SEDITAS and DAVID STEWART WOOTTON	129^th Cross-Applicants
INDAH MIRANTI WIBAWA	130^th Cross-Applicant
PINGPING ZHANG	131^st Cross-Applicant
ANDREW MARK DYDUK	132^nd Cross-Applicant
DEBORAH HARDING	133^rd Cross-Applicant
FELICIA TANDIYONO and VALENCIA TANDIYONO and THERESIA TANDIYONO and ANTHONY TANDIYONO	134^th Cross-Applicants
MELROB PROPERTY MANAGEMENT SERVICES PTY LTD	135^th Cross-Applicant
MATHEW JAMES KEEGAN and ROHINE ALEXANDRA JANNU	136^th Cross-Applicants
INGRID MARGARET GORDON	137^th Cross-Applicant
KIM VINCS AND ROBERT VINCS	138^th Cross-Applicant
GEOFFREY SIMON KLOOGER	139^th Cross-Applicant
and
LENDLEASE ENGINEERING PTY LTD (ACN 000 201 516)	Cross-Respondent

[2022] VSCA 105

8 June 2022