Thurin v Krongold Constructions (Aust) Pty Ltd [2024] VSC 42: Extension of limitation periods under s77(4) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic)

Executive Summary

This case dealt with the apparent inconsistency between s77(4) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act), which confers power on courts to extend limitation periods for proceedings struck out by VCAT where federal jurisdiction is invoked, and ss134 and 134A of the
Building Act 1993 (Vic) (Building Act), which sets a 10-year limitation period for bringing a building action ‘despite anything to the contrary
… in any other Act or law’.

In this long running case, the Court:

• allowed the joinder application of the owner and builder (to add two third parties, being the supplier and architect firm as defendants to the proceedings); and
• extended the limitation period for the owner to claim against the architect firm.

Parties in VCAT building disputes now have certainty that they will not be out of time in bringing later court proceedings if the VCAT dispute is struck out based on federal issues being invoked.

Background

The January 2024 edition of our Critical Path set out the factual background. In short:

• In 2008 the Plaintiff owners (Thurins) engaged the Defendant contractor (Krongold);
• The engagement was to install pipes in a new home construction in Toorak;
• The installed pipes ruptured in 2012 and 2015;
• The Thurins commenced VCAT proceedings against Krongold;
• Krongold made claims against the architect (Casper) and supplier (Swan) as concurrent wrongdoers;
• The VCAT proceeding was struck out and the matter referred to the Supreme Court in Thurin v Krongold Constructions (Aust) Pty Ltd¹ and Krongold Constructions (Aust) Pty Ltd v Thurin;²
• In the first referral decision, the Court of Appeal held that VCAT had power under s77(3) of the VCAT Act to refer the matter to the Supreme Court as the claim against Swan enlivened federal jurisdiction;
• In the second referral decision, the Court of Appeal held that the making of a referral to the Supreme Court invoked the jurisdiction of the Court without the need for an initiating process; and VCAT did not have jurisdiction to join Casper or Swan as respondents to the VCAT proceeding; and
• Following the two referral decisions, in October 2023, Parliament amended s77 of the VCAT Act to permit a court to extend any limitation period that applies to the commencement of a proceeding in relation to a matter referred to the court by VCAT subject to compliance with certain conditions.

In Thurin v Krongold Constructions (Aust) Pty Ltd [2024] VSC 42, the Supreme Court considered whether it could join Casper and Swan and if it had jurisdiction under s77(4) of the VCAT Act to extend the limitation period applicable to building actions as any fresh proceeding by the Thurins or Krongold against Casper and Swan would have been barred under the Building Act.³

Key issues

Garde J had to consider three key issues.

Issue 1 – Does the Court have jurisdiction under s77(4) to join parties and extend time?

There was no dispute that VCAT had validly struck out the VCAT proceeding under s77(1) and referred the matter to the Supreme Court under s77(3) of the VCAT Act. Krongold’s claim against Swan involved federal issues and as a result the whole matter was within federal jurisdiction and VCAT had no power to hear such a claim or to join Caper and Swan.

Before considering the power to extend time, Garde J needed to be satisfied of several things: a close nexus as to subject matter with the VCAT proceeding that was struck out;⁴ delay in commencement of a proceeding is attributable to the additional steps a person was required to take to have it determined by the court,⁵ and that it is fair and reasonable to do so.⁶

Garde J found:

• that there was a ‘close nexus’ between the fresh claim brought against Casper and the claim that was struck out in VCAT as it involved the same allegations that defective pipes were installed in the same building work at the same property;⁷ and
• if not for the fact that federal jurisdiction was invoked in the VCAT proceeding, the Thurins’ claim against Casper would have been heard and determined in that jurisdiction (ie the fresh joinder application of Casper was attributable to the additional steps required to have the claim determined in the Supreme Court).⁸

and therefore, that the Court had jurisdiction under s77(4) of the VCAT Act to join Casper and Swan to the proceedings and to extend the limitation period.

Issue 2 – Should the Court nevertheless make orders under s77(4)?

The Court considered whether it was fair and reasonable to exercise its discretion to extend time under s77(4). Garde J held, among other things, that it was fair and reasonable to do so as Casper was a necessary party to the court proceeding, the delays due to jurisdictional challenges were not the fault of any party, and it was in the interest of justice.⁹

Issue 3 – Is the Court prevented from making orders under s 77(4) in relation to building matters?

The Court dealt with the apparent inconsistency between s77(4) of the VCAT Act and ss134 and 134A of the Building Act by applying the well-established principle of construction to subordinate a general provision to a more specific provision dealing with the same subject matter.¹⁰ Garde J:

• held that s77(4) of the VCAT Act was the more specific provision;
• found that s77(4) was not rendered nugatory by ss134 and 134A of the Building Act;
• observed that in amending s77(4), it was the intention of Parliament to empower the courts to preserve the rights of parties to all ‘justiciable controversies’, including building matters, where VCAT strikes out a proceeding due to federal issues being invoked;¹¹ and
• determined that there was no indication in the language of s 77 that it does not apply to the case or to building actions generally.

Key Takeaways

This case is a good example of how courts approach the exercise of their discretion, in this case under s77(4) of the VCAT Act to extend limitation periods where a VCAT matter is struck out due to the Tribunal lacking jurisdiction.

It is also a reminder of the courts’ approach in applying well established principles of construction when dealing with apparent conflicting statutory provisions.

If you would like any further information about this case or have any other query, please don’t hesitate to contact us.

This article was written by Theo Kalyvas, Partner, Fin Neaves, Senior Associate, and Joseph Li, Law Graduate.

¹(2022) 407 ALR 187 (McLeish, Niall and Walker JJA) (first referral decision).
²[2023] VSCA 191 (Beach, McLeish and Niall JJA) (second referral decision).
³Noting that Swan did not resist the application against it – see para [1].
⁴s77(4)(a) of the VCAT Act.
⁵s77(4)(b) of the VCAT Act.
⁶s77(4)(c) of the VCAT Act.
⁷Para [95].
⁸Para [103].
⁹Para [108].
¹⁰Para [133] referencing Ombudsman v Loughton (2005) 64 NSWLR 114 [19] (Spigelman CJ).
¹¹Para [127].