Mason v Fraser

In the matter of Mason v Fraser, the Supreme Court of Victoria was called upon to review a decision of the Victorian Civil and Administrative Tribunal (VCAT) concerning the sale of a property with alleged building defects. The Masons, the purchasers of the property, initiated legal proceedings against the Frasers, the sellers, for breach of warranties implied into the contract of sale under the Building Act 1993 (Vic). The Masons argued that the Frasers had failed to disclose known defects in the building works, which were not mentioned in the pre-purchase report. The Frasers, in turn, claimed that the Masons' action was statute-barred due to the passage of time since the building works were completed.

The primary legal issues that the court needed to address were the interpretation of the limitation period for actions related to defective building works, and whether the alleged defects were disclosed in the pre-purchase report. Additionally, the court had to determine if the award for defects to work carried out by the owner-builder was applicable, and whether there was a denial of natural justice. The Masons contended that the limitation period for their claim should be calculated from the date of the final inspection of the building works or the completion of the works where no final inspection took place, while the Frasers argued that the limitation period started from the execution of the contract of sale.

The court found that the Tribunal was incorrect in its interpretation of the limitation period for the warranties implied by s 137C of the Building Act. The court held that the warranties operated from and may be sued on for the length of the 'prescribed period' set out in s 137B, which is consistent with a contextual interpretation of the relevant sections. The court held that this construction avoids the unusual and unsatisfactory result of a limitation period of up to 12.5 years for works performed by an owner-builder without a permit, no matter how small those works were. The court found that the only cause of action not statute-barred was the claim for breach of warranties relating to the second storey works. The court also held that the Masons' action was a 'building action' within the definition in s 129 of the Act, and thus attracted the operation of s 134 of the Building Act.

The Supreme Court of Victoria set aside the decision of VCAT and remitted the matter for reconsideration in light of the court's findings. The court held that the Masons' action for breach of warranties relating to the second storey works was not statute-barred, and that the Tribunal should reconsider the merits of this claim. The court did not make any orders regarding the other claims made by the Masons.