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[2025] NSWSC 438
General information, not legal advice.
Supreme Court of NSW
2025-05-08
Stevenson J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation:
Hearing dates: 28 April 2025; further written submissions 6 May 2025
Decision date: 08 May 2025
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision: Separate questions each answered “no”
Catchwords: BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – insurance – construction of home warranty insurance policy – separate questions – whether letter sent in 2012 constitutes a claim under the policy – whether letters sent in 2022 constitute claims within time under the policy – effect of s 92(5) of the Home Building Act – effect of long stop provision in s 103BC of the Home Building Act
Legislation Cited: Environmental Planning and Assessment Act 1979 (NSW)
Home Building Act 1989 (NSW)
Home Building Amendment Act 2014 (NSW)
Insurance Contracts Act 1984 (Cth)
Cases Cited: Drummond v Gordian Runoff Limited ACN 052 179 647 [2024] NSWCA 239
Dyldam Developments Pty Ltd v The Owners – Strata Plan 85305 (2020) 104 NSWLR 19; [2020] NSWCA 327
Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12
McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Texts Cited: D S L Kelly and M Ball, Kelly and Ball Principles of Insurance Law (2nd ed, 2001, Butterworths)
P Herzfeld and T Prince, Interpretation (3rd ed, 2024, Thomson Reuters)
New South Wales Legislative Assembly, Second Reading Speech, Home Building Amendment (Insurance) Bill 2002 (Hansard), 7 May 2002
New South Wales Legislative Assembly, Second Reading Speech, Home Building Amendment Bill 2011 (Hansard), 13 October 2011
Category: Procedural rulings
Parties: The Owners – Strata Plan No. 81376 (Plaintiff)
Dyldam Developments Pty Limited (First Defendant)
Amaline Properties Pty Limited (Second Defendant)
Insurance Australia Limited t/as Lumley Insurance (Third Defendant)
Representation: Counsel:
M A Ashhurst SC / D S Allen (Plaintiff)
M R Pesman SC (Third Defendant)
Solicitors:
Bannermans Lawyers (Plaintiff)
Mills Oakley (Third Defendant)
File Number(s): 2013/386026
The plaintiff (the “Owners Corporation”) is the owners corporation in respect of a 98 unit strata development in Parklea (the “Development”).
The first defendant, Dyldam Developments Pty Ltd (the “Builder”) built the Development on land then owned by the second defendant, Amaline Properties Pty Ltd (the “Developer”). There was, presumably, a building contract (the “Building Contract”) between the Builder and the Developer. It is not in evidence. It may have been oral. Both companies went into administration in 2022. The Builder is now subject to a deed of company arrangement. The Developer is in liquidation.
The only active party is the third defendant, Insurance Australia Limited trading as Lumley Australia (“the Insurer”).
On 29 March 2023, Darke J ordered that the Insurer be joined as third defendant on the basis that the date on which such joinder take effect “be determined at trial”.
On 6 October 2006, a predecessor to the Insurer issued a Residential Building Insurance Policy (the “Policy”) in respect of the Development.
The Owners Corporation has purported to make claims under the Policy in respect of allegedly defective works in the Development. The Insurer accepts, for present purposes, that the Development is affected by such defects. I was informed that the claim the Owners Corporation would seek to make out is in the order of $13 million.
I am answering separate questions ordered on 24 June 2024 by Ball J [1] directed principally to the question of whether the claims under the Policy are out of time.
The Insurer accepts that, if any of the claims have been made within time, the Policy responds.
The separate questions [2] are whether:
(a) a letter sent by the Owners Corporation’s solicitor to the Insurer on 21 February 2012 was a valid claim under the Policy; (b) the claim made in a letter sent by the Owners Corporation’s solicitor to the Insurer on 25 January 2022 was within time for a claim under the Policy; and (c) the claim made in a letter sent by the Owners Corporation’s solicitor to the Insurer on 28 June 2022 was within time for a claim under the Policy.
On 4 September 2008, a certifier, Mr Lyall Dix issued a document called “Occupation Certificate” (the “Certificate”) in respect to the Development purportedly pursuant to ss 109C(1)(c) and 109H of the Environmental Planning and Assessment Act 1979 (the “EPA Act”). [3] There is an issue as to the effectiveness of the Certificate.
The relevant strata scheme was registered on 4 November 2008. The 98 units in the Development have been occupied continuously since then.
The Owners Corporation commenced these proceedings in 2013 against the Builder and the Developer. The Owners Corporation alleged that, in breach of the statutory warranties implied in the Building Contract by s 18B of the Home Building Act 1989 (the “HBA”) (the “Statutory Warranties”), there were defects in the common property.
The Owners Corporation’s claim was later amended to include further claims for breach of settlement agreements made on 25 July 2017 between the Owners Corporation, the Builder, and the Developer (the “First Settlement”) and on 11 June 2021 between the Owners Corporation and the Builder, but not the Developer (together, the “Settlement Agreements”).
The Settlement Agreements obliged the Builder to complete identified rectification work. The Owners Corporation contends that the Builder did not complete all of that rectification work and that some of the rectification work that was done was defective. The Builder last attended the Development to carry out work under the Settlement Agreements on 20 December 2021.
The Policy contained many defined terms, denoted, in the usual way, by the use of capital letters; for example “Insured Event”. I will refer only to the wording of the definitions where necessary.
“Cover” was provided in Section 1.1:
“The Insurer agrees … to indemnify the Insured in respect of Insured Loss which results from an Insured Event which occurs during the Period of Insurance”.
“… loss or damage incurred during the Period of Insurance resulting from an Insured Event…”.
“ ... any event referred to in Section 2.1 of this Policy which occurs during the Period of Insurance”.
“This Policy only provides the indemnity referred to in Section 2 for the following period:
(a) in respect of loss or damage arising from non-completion of the Work, the period of 12 months commencing upon the date of the failure of the Contractor to commence the Work or the date of the cessation of the Work; or
(b) in respect of loss arising from a Structural Defect for the period of 6 years after the date of Completion of the Work …; or
(d) in respect of loss arising otherwise than from any such Structural Defect 2 years after the date of the Completion of Work …”.
Although the Policy contained a definition of “‘Completion’ of the Work”, as I discuss below, the date of completion for the purposes of the Policy is to be determined by s 3C of the HBA, [4] which provides for when “completion of residential building work” of a new building in a strata scheme occurs. Thus, the parties’ submissions as to when the “work insured” focused on that section and its implications so far as concerns the Certificate.
Section 2.1 provided for indemnification for an “Insured Loss” arising from:
“(a) non-completion of Residential Building Work under the relevant Contract;
(b) a breach of a Statutory Warranty, being loss or damage in respect of which the Insured cannot recover compensation from the Contractor or have the Contractor rectify because of the Insolvency, death or Disappearance of the Contractor;
(c) faulty design, where the design was provided by the Contractor;
(d) the non-completion of the Work because of early termination of the Contract for the Work because of the Contractor’s wrongful failure or refusal to complete the Work”.
“During the Period of Insurance and upon the occurrence of an Insured Event, the Insured is indemnified, subject to the Policy Limitations, for any Reasonable Costs incurred by the Insured in seeking to recover compensation from the Contractor for the loss or damage or in taking action to rectify the loss or damage.”
“The indemnities referred to and contained in Section 2.1 shall only apply if the Insurer suffers loss or damage because of the Insolvency … of the Contractor.”
“The period for making claims under the Policy ceases immediately the Period of Insurance expires.”
The insuring clause in the Policy is Section 1.1. It is that clause that sets out the cover provided by the Policy.
Relevantly, that cover is only in respect of an “Insured Event”: that is an event “referred to in Section 2.1” of the Policy “which occurs during the Period of Insurance”.
Insurance contracts are to be construed in the same way as any other commercial contract. [5]
The usual approach when construing such documents is that the words of a definition are to be read into the substantive enactment and the substantive enactment then construed. [6]
Adopting this approach, and omitting duplication, Section 1.1 reads:
“The Insurer agrees … to indemnify the Insured in respect of Insured Loss which results from [any event referred to Section 2.1 of this Policy…] which occurs during the Period of Insurance.”
Section 3.1 provided that the indemnities in Section 2.1 “shall only apply” if, relevantly, the loss is because of the insolvency of the Builder.
In these circumstances, and untutored by authority, my conclusion would be that the Policy would only respond if the Owners Corporation suffered loss or damage by reason of, relevantly, a breach by the Builder of the Statutory Warranties, which loss or damage it could not recover from the Builder because of, relevantly, the Builder’s insolvency. That is, both the loss and its irrecoverability would have to occur before the Policy responded.
Construed that way, the insolvency of the Builder was a condition precedent to cover under the Policy. [7] There was no cover unless and until the Builder became insolvent; consistently with the nature of the cover provided by the Policy as being “last resort” cover. [8]
It would follow that, contrary to the submissions of Mr Ashhurst SC, who appeared with Mr Allen for the Owners Corporation, [9] there was no separate cover for the “reasonable costs” referred to Section 2.3. Section 2.3 was only engaged “upon the occurrence of an Insured Event”: that is an event referred to in Section 2.1. By reason of Section 3.1, that cover was only available if the Builder became insolvent.
In Drummond v Gordian Runoff Limited ACN 052 179 647*,* [10] the Court Appeal considered a home warranty insurance policy that contained an insuring clause that was, relevantly, in the following terms:
“We will provide insurance cover to you … for
a) Loss or damage resulting from non-completion of the Work because of the Insolvency, death or Disappearance of the Contractor; or
b) Loss or damage arising from a breach of Statutory Warranty, being loss or damage in respect of which you cannot recover compensation from the Contractor, or have the Contractor rectify, because of the Insolvency, death or Disappearance of the Contractor”.
As can be seen, unlike the insuring clause in the Policy, the insuring clause in Drummond did not refer to an “Insured Event”.
However, it appears that the “insured event” in that policy was “the occurrence of the defined loss or damage in circumstances in which there is also the irrecoverability on account of insolvency etc”. [11]
It can be seen that subparagraph (b) of the insuring clause in Drummond was in the same terms as Section 2.1(b) of the Policy.
In Drummond, the primary, and dispositive, issue was whether the terms of the policy in question incorporated the provisions of the HBA, such that the insurer’s refusal to pay due to a failure by the insured to give notice as required by s 103BB of the HBA engaged s 54 of the Insurance Contracts Act 1984 (Cth).
A secondary issue, which was considered by Stern JA [12] to not have any dispositive significance, was the identification of the “loss insured by the policy” and whether the occurrence of a defect in a property was “loss” under the policy or whether such “loss” only occurred at the point when the property owner is unable to recover compensation from the contractor by reason of, relevantly, the contractor’s insolvency. [13]
In relation to that issue, Stern JA concluded that, while the matter was “finely balanced”, the “better view” was that:
(a) the insuring clause drew a “distinction between the suffering of loss or damage, on the one hand, and the insured event, on the other”; and that, accordingly, (b) the “loss insured by the policy” was that loss or damage and not also its “irrecoverability on account of insolvency etc”. [14]
I am unable to see how the distinction detected by Stern JA in the insuring clause in Drummond exists in the insuring clause in the Policy that I am considering.
That is because the insuring clause in the Policy, Section 1.1, responds only to loss resulting from an Insured Event; that is an event referred to in Section 2.1, which events, by reason of Section 3.1, “only” attract indemnity “if the insured suffers loss or damage because of”, relevantly, the insolvency of the Builder.
For that reason, I see nothing in Drummond to compel a conclusion contrary to those set out at [32] to [34] above.
Mr Ashhurst only relied on the 21 February 2012 letter as “a claim for legal costs and expert costs”; that is, for the “reasonable costs” referred to in Section 2.3 of the Policy.
The 21 February 2012 letter was headed “Notification of Claim”.
The letter continued, under the heading “Notification and claim”:
“• My client has notified me of loss or damage suffered and/or to be suffered as a result of the existence of defects existing in the common property of 11 Glenvale Avenue Parklea (“Premises”).
• Detail of that loss or damage is set out in the attached documents.
• The existence of defective and/or non-compliant work in the Premises, as referred to in this and earlier correspondence to you, amount to breaches of the implied statutory warranties contained in the Home Building Act 1989.
• I understand that you issued a policy or policies of Home Owners Warranty Insurance in relation to the construction of my client’s property as evidenced in the attached example Certificate of Insurance.
• By operation of, without limitation, the Home Building Act 1989, its regulations, and the terms of the applicable insurance policy or policies, you are liable to indemnify my clients for their loss and damage suffered and to be suffered, and their costs incurred and to be incurred arising from those breaches and defects as detailed above.
• Where the matters detailed in this correspondence and the attached documents have not previously been notified to you and/or claimed, my clients hereby notify you of those matters.
• Some of the matters referred to in the attached correspondence may have previously been notified to you by my client. Where previous notification and/or claims with respect of such matters have already been made by my client, this correspondence provides certainty that those matters are notified and claimed by my client.
• My client also notifies you with respect to:
(a) any defective and/or non-compliant work and/or loss or damage that is directly or indirectly related to the defective and non-compliant work referred to in this correspondence, previous correspondence and/or the attached documents;
(b) any defective and/or non-compliant work that is of a similar nature to the defective and/or non-compliant work referred to in this correspondence, previous correspondence and/or the attached documents but not specifically identified therein.”
“• My client also notifies you of consequential loss and damage incurred and/or to be incurred in relation to the matters notified …:
…
l) legal and expert costs - legal and expert costs related to the building defects claim in relation to the defects including my client’s costs of enforcing the statutory warranties and protecting your subrogation rights”.
The 22 February 2012 letter certainly purported to be a “claim”. That purported claim was in relation to work then done under the Building Contract and was for “defective and non-compliant” work; and not, for example, for non-completion of the work or faulty design. That is, the purported claim was for the “Insured Event” referred to in Section 2.1(b) of the Policy; one predicated on, relevantly, the insolvency of the Builder, and not an “Insured Event” referred to in Sections 2.1(a), (c), or (d) of the Policy.
However, as at 21 February 2012, the Owners Corporation was not entitled to make such a claim under the Policy, whether for “reasonable expense” or at all. That is because there had been no “Insured Event”. The Builder was not then insolvent. The condition precedent inherent in the definition of “Insured Event”, repeated within Section 2.1(b), and repeated generally in relation to Section 2.1 as a whole in Section 3.1, had not occurred.
In those circumstances the 21 February 2012 letter cannot be construed as a “claim” for the purposes of the Policy. It is for that reason that the answer to the first question is “no”.
However, as Mr Pesman SC, who appeared for the Insurer, accepted, the letter was available as a notification to the Insurer for the purposes of s 103BB(3) of the HBA which provides, relevantly:
“103BB Time limits for policies issued from 1.7.2002
…
(3) When a loss becomes apparent during the period of insurance but a claim cannot be made during that period because an insured event has not occurred, a claim can be made after the period of insurance (as a delayed claim) but only if –
(a) the loss was properly notified to the insurer during the period of insurance … and
(b) The beneficiary under the contract of insurance making the claim diligently pursued the enforcement of the statutory warranty concerned after the loss became apparent.” (Emphasis in original.)
Implicitly, Mr Pesman’s acceptance of the engagement of s 103BB was an acceptance that, by the 21 February 2012 letter, the Owners Corporation as the “beneficiary under the contract of insurance” had “diligently pursued the enforcement of the statutory warranty” against the Builder and the Developer.
Thus, the effect of the 21 February 2012 letter was that the Owners Corporation was entitled to make a claim in relation to the loss notified in that letter after the “Period of Insurance” referred to in the Policy; provided that an “Insured Event” had occurred and that the claim was made within the “long stop” limitation period in s 103BC(1) of the HBA: to which I will return. [15]
As I set out above, when Darke J ordered that the Insurer be joined as third defendant to these proceedings, his Honour ordered that the date on which such joinder take effect “be determined at trial”.
I am not conducting the trial of the proceedings, but I am, rather, determining separate questions.
In any event, as I have concluded that the 21 February 2012 letter did not constitute a “claim” under the Policy, the question of when the joinder of the Insurer to the proceedings takes effect is of no significance.
There is no dispute that, in these letters, the Owners Corporation made a claim for indemnity under the Policy.
The question is whether these claims were made within time.
These claims can be dealt with together as it is common ground that these two claims are both either made within, or out of, time.
The Insurer contends that both claims are out of time by reason of the “long stop” limitation period provided for in s 103BC(1) of the HBA:
“Despite any other provision of this Act, a contract of insurance entered into under this Part before, on or after 1 July 2010 does not in any circumstances provide insurance cover in respect of loss unless a claim in respect of the loss is made to the insurer within 10 years after the work insured was completed.”
“A contract of insurance that is in force in compliance with this section in relation to residential building work (the original work) done by a person extends to any residential building work done by the person by way of rectification of the original work.
Note. Accordingly, this section does not require a separate contract of insurance in relation to the rectification work.” (Emphasis in original.)
The Owners Corporation contends that the effect of s 92(5) is that because, pursuant to the Settlement Agreements, the Builder agreed to perform rectification work, the claims were made within two or six years from “Completion of Work” for the purposes of Section 4.1 of Policy. [16]
Section 92(5) was introduced into HBA by the Home Building Amendment Act 2014 (NSW) with retrospective effect.
I was informed by Counsel, and my own research has confirmed, that this is the first time when s 92(5) has received judicial consideration.
As I have said, the parties’ submissions as to when, for the purposes of the long stop limitation period in s 103BC(1) of the HBA, the “work insured was completed” focused on the Certificate.
It was common ground that, assuming the Certificate was not a nullity, completion of the original work under the Building Contract took place on 4 September 2008. [17]
Section 3C of the HBA applies to “residential building work comprising the construction of a new building in a strata scheme”.
Section 3C(2)(a) provides that:
“(2) The completion of residential building work to which this section applies occurs on –
(a) the date of issue of an occupation certificate that authorises the occupation and use of the whole of the building …”.
The Certificate is expressed to be a “Final” certificate for the “Whole” of the “building works”.
In the Certificate, Mr Dix certified, relevantly:
“• if any building work has been carried out, a current construction certificate (or complying development certificate) has been issued with respect to the plans and specifications for the building, and
• the building is suitable for occupation or use in accordance with its classification under the Building Code of Australia.”
The Owners Corporation contends that the Certificate was not effective because the Development had been constructed inconsistently with the construction certificate to which the Certificate referred.
The Development is configured on an east-west axis upward from north to south and comprises buildings with units on two levels.
Some of the lower level units on the southern side of the Development have, on the southern boundary, and accessible from and on the same level as the living areas, a sub-floor space that was described in a brochure prepared by the Builder at the time as a “rumpus room”. The spaces are built into an embankment to the south and configured so that they have, just below their roof level, two small windows facing to the south looking over the top of the embankment. The relevant development approved the nominated area as a sub-floor space.
The interior of these spaces and the position of the windows facing to the south are depicted in the attached photographs. Photo - Court Book p 121 (200 KB, pdf) Photo - Exhibit JSB-1, p 21 (2.91 MB, pdf)
The Owners Corporation and Insurer each called expert evidence in relation to this issue. The Owners Corporation’s expert was Mr Allan Harriman, a fire safety engineer and building regulations consultant. The Insurer called Mr Joshua Curan, a registered certifier and practicing building surveyor.
Both experts agreed that the sub-floor areas did not achieve required natural light and ventilation requirements under the Building Code of Australia to be treated as habitable spaces.
The relevant construction certificate made no provision for the two windows in the spaces. The experts agreed that the Certificate did not cover any unauthorised building work and did not have the effect of authorising the installation of the two windows.
Therefore, in terms of s 3C of the HBA, the Certificate did not have the effect of authorising any occupation or use of the whole of the building, in that it did not authorise such occupation or use including those two windows.
Mr Ashhurst submitted that the consequence of these matters was that the Certificate was a nullity, that occupation of the Development was never authorised and that “work insured” for the purposes of s 103BC of the HBA was never completed; and thus, that the long stop limitation period in that section has never commenced to run.
I do not accept that submission.
Section 109H(2) [18] of the EPA Act provided that:
“An occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent … have been met.” (Emphasis added.)
Assuming that it follows from what I have set out above that the Certificate was issued in contravention of s 109H, I do not accept that it follows that the Certificate is thereby a nullity.
The relevant principle is that:
“An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition …”. [19]
The issue of whether an occupation certificate issued in breach of s 109H(2) of the EPA Act was invalid was considered by White JA in a different case involving the Builder, Dyldam Developments Pty Ltd v The Owners – Strata Plan 85305. [20]
White JA, with whom Simpson AJA agreed, observed:
“… Parliament has not said that an occupation certificate issued in breach of s 109H is invalid. Section 109H(2) can also arguably be seen as no more than a direction to the persons authorised to issue an occupation certificate, breach of which could lead to disciplinary sanctions … or criminal sanctions… A finding that an occupation certificate is void for non-compliance with s 109H(2) would potentially expose occupiers of a building to criminal liability under s 109M [of the EPA Act]”. [21]
His Honour concluded that the question of whether a breach of s 109H(2) rendered a certificate invalid was “finely balanced”. [22]
Emmett AJA considered that it was “significant that s 109H does not strike down a certificate issued in contravention of s 109H”. [23]
In my opinion, the better view is that a certificate issued in breach of s 109H(2) is not invalid.
Elsewhere in the EPA Act, Parliament provided that a certificate issued in specified circumstances “has no effect”. [24] The fact that Parliament made no such provision in s 109H tends against the conclusion that Parliament intended for such a consequence to follow if a certificate was issued in breach of s 109H.
Further, the consequences of such invalidity also tell against it being the intended consequence of non-compliance with s 109H(2). If, as the Owners Corporation contends, the Certificate was a nullity by reason of its asserted non-compliance with s 109H(2), this would have the startling result that the Owners’ occupation of the building since 2008 has been unlawful. [25] That outcome would result in significant public inconvenience, a consequence that tells against invalidity being the intended effect of breach of s 109H(2). [26]
As I have said, s 92(5) of the HBA has not previously been a subject of judicial consideration.
Mr Ashhurst submitted that the effect of s 92(5) was that the long stop limitation period in s 103BC(1) of the HBA “starts again for rectification work done by the original contractor under a new contract”.
Mr Ashhurst submitted that if time under the long stop limitation provision in s 103BC(1) of the HBA did start to run on the date of the Certificate, 4 September 2008, and:
“ … within the ten year long stop period there was an agreement for additional work to be carried out that was covered by s 92(5), [then] the effect of s 92(5) was to recommence a fresh period of the ten-year long stop”.
I see nothing in the words of s 92(5) that could lead to that conclusion.
It would have the alarming effect of potentially extending the long stop limitation period in s 103BC, and thus the term during which an insurer under a policy required by the HBA was on risk, for up to 10 years and up to something that might approach 20 years. Indeed, had the Builder not fallen into insolvency, as long as it performed work every six years, the Policy would respond indefinitely: an outcome that Parliament sought to avoid by enacting s 103BC. [27]
It is evident from the words used in s 92(5) that the method adopted by the Parliament to confine its potentially wide application was to tether its application to circumstances where the insurance contract was “in force”.
Thus, the natural and ordinary meaning of the words used in s 92(5) is that for so long as the relevant contract of insurance is “in force” it will “extend” to rectification work, carried out by the same “person” who carried out the “original work”: but would no longer do so once the contract of insurance was no longer “in force”.
The evident object of the section was to encourage owners and builders to resolve their disputes by a process of rectification of the works, rather than by resolution in the courts or other relevant tribunals leading to a monetary judgment.
A contract of insurance is “in force” for so long as it is liable to respond to a claim. [28] As Mr Pesman put it, “there has to be cover available”. Once a point has been reached where the contract of insurance cannot respond to a claim, so that no cover is available, it can no longer be said to be “in force”.
Under the Policy, a claim could only be made during the Period of Insurance; [29] that is, in the events that happened, for up to six years after the completion of the work on 4 September 2008.
However, as I have explained, the effect of the Owners Corporation’s solicitor’s letter of 21 February 2012 was, by reason of s 103BB of the HBA, to permit the Owners Corporation to make a claim “after the period of insurance”.
But that entitlement was subject to the long stop limitation period in s 103BC(1) of the HBA. That period ceased “10 years after the work insured was completed”: on 4 September 2018. The Policy then ceased to be “in force”.
The effect of s 92(5) of the HBA was to extend the Policy to the rectification work contemplated by the 25 July 2017 First Settlement. But the fact remained that by reason of s 103BC(1) a claim had to be made by 4 September 2018. No such claim was, or could then have been, made because there had not then been an “Insured Event” to which the Policy responded. By the time an “Insured Event” occurred, in 2022 upon the Builder going into administration, the long stop limitation period had long passed.
The result is that the 2022 claims were made out of time. Thus, the answer to the second and third questions is also “no”.
Each of the separate questions must be answered “no”.
I will invite submissions as to costs and the further steps to be taken in the proceedings.
**********
As his Honour then was.
Which I have reformulated in a manner with which the parties agree.
Now ss 6.3, 6.4, 6.10 of the EPA Act.
See [69] below.
For example, McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at 589; [2000] HCA 65 at [22] (Gleeson CJ).
See the authorities gathered at P Herzfeld and T Prince, Interpretation (3rd ed, 2024, Thomson Reuters) at [3.40], especially Kelly v The Queen (2004) 218 CLR 216 at 253; [2004] HCA 12 at [103] (McHugh J).
See D S L Kelly and M Ball, Kelly and Ball Principles of Insurance Law (2nd ed, 2001, Butterworths) at [5.0120].
Drummond v Gordian Runoff Limited ACN 052 179 647 [2024] NSWCA 239 at [111] (Stern JA, Mitchelmore JA agreeing); New South Wales Legislative Assembly, Second Reading Speech, Home Building Amendment (Insurance) Bill 2002 (Hansard), 7 May 2002.
For convenience, and without intending any disrespect to Mr Allen, I will henceforth refer only to Mr Ashhurst.
Supra.
See [115] of the judgment of Stern JA (Mitchelmore JA agreeing).
With whom Mitchelmore JA agreed; White JA having dissented and not addressed this question.
At [89].
At [114]-[115].
See [61] below.
See [20] above.
As I have said at [21] above, the Policy contained a definition of “‘Completion’ of the Work” but, by reason on s 3C(2)(a) of the HBA, the question is to be answered by reference to s 3C, not by reference to the definition on the Policy.
Now s 6.10(1).
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 388-389; [1998] HCA 28 at [91] (McHugh, Gummow, Kirby and Hayne JJ).
(2020) 104 NSWLR 19; [2020] NSWCA 327 at [88].
Ibid at [88].
Ibid at [89].
Ibid at [102].
See EPA Act, 109F(1A), now s 6.8(2), which provides that a construction certificate issued after building work has commenced “has no effect”.
EPA Act, s 109M.
Project Blue Sky Inc v Australian Broadcasting Authority (supra) at 392.
New South Wales Legislative Assembly, Second Reading Speech, Home Building Amendment Bill 2011 (Hansard), 13 October 2011.
See Kelly and Ball (supra) at [7.0050] – [7.0060].
The combined effect of cll 4.1 and 8.7: see [20] and [25] above.
Headings formatted
The Owners - Strata Plan No. 81376
Dyldam Developments Pty Ltd [2025] NSWSC 438
(2020) 104 NSWLR 19
(2004) 218 CLR 216
(2000) 203 CLR 579
(1998) 194 CLR 355