By: Bill Conor and Julian Amato

At a glance

  • The court reaffirmed that claims for building defects made pursuant to the statutory warranties under section 32 of the Building Work Contractors Act 1995 (SA) must be filed within a strict 5-year period from practical completion, emphasising the Act’s balance between builder and homeowner interests.
  • The 10-year “long stop” limitation period under the Development Act 1993 (SA) does not operate to extend the 5-year time limit of the statutory warranties under section 32 of the Building Work Contractors Act. This highlights the need for careful assessment of relevant limitation statutes in construction disputes.
  • The decision underscores the importance of understanding legislative intent, context, and purpose, particularly in the interplay of multiple statutes impacting construction claims.

Duncan v Bert Farina Constructions Pty Ltd [2024] SASCA 67

The South Australian Court of Appeal’s decision in Duncan v Bert Farina Constructions Pty Ltd provides key insights for construction professionals and their insurers as to the interplay between statutory time limits for building work claims under the Building Work Contractors Act 1995 (SA) (BWCA) and the Development Act 1993 (SA) (DA).

Case Background

In June 2016, the appellants purchased a house in Morphettville (Property) which was constructed by Bert Farina Constructions (Builder) and reached practical completion in December 2015.

The appellants later claimed that the building work was defective, asserting breaches of the statutory warranties under section 32 of the Building Work Contractors’ Act 1995 (SA) (BWCA) and negligence.  A claim was filed against the Builder in July 2022. The Builder contended that the claims were statute barred as practical completion of the build occurred in December 2015 thereby the 5-year limitation for statutory warranties expired in 2020 and the 6 years limitation for negligence expired in 2021.

The owners argued that the time limit for commencing proceedings for breach of the statutory warranties was 10 years from the date of completion, by reason of the 10-year long stop limitation period pursuant to section 73 of the Development Act 1993 (SA) (DA). *

Legislation and Time Limits

  • Section 32 of the BWCA imposes a 5 year limitation period for initiating claims based on statutory warranties.
  • Section 35 of the Limitations of Actions Act 1936 (SA) (LoAA): Imposes a 6-year limitation period for tort claims (i.e. negligence).
  • Section 73 of the DA (now the Planning, Development and Infrastructure Act 2016 (SA) (PDI)): Imposes a 10 year long stop limitation period for claims regarding economic loss or rectification costs due to defective work.

Decision

The District Court of South Australia originally ruled that the appellants’ claims were out of time. That decision was upheld by the Doyle and Bleby JJA and Blue AJA in the Court of Appeal.

Their Honours also made the following key observations:

  • Legislative intent and context are vital in interpreting statutory provisions.
  • The BWCA aims to balance the interests of builders and homeowners with its strict 5-year limitation period.
  • Accepting that the 10-year limitation period in the DA applied would undermine the coherence of the BWCA.
  • The Court did not rule on the time limitation in tort but suggested that the DA’s 10-year limitation period would likely not extend the LoAA’s 6-year limitation period.

Key Takeaways

  • Claims made pursuant to the statutory warranties under section 32 of the BWCA must be initiated within five years of practical completion.
  • Early assessment of applicable time limits under various legislation (and the way they interact with one another) is crucial in disputes involving domestic building work.
  • Understanding the purpose and function of each statutory time limit is essential for effective legal strategy.
  • This case underscores that legislative intent, context, and purpose are critical components of statutory interpretation.

Our team are here to provide tailored advice on building disputes, time limits and the legislation considered in this article. Contact our authors to discuss how we can support you.

* This provision has been replaced by section 159 of the Planning, Development and Infrastructure Act 2016 (SA). The Court made clear that its findings apply irrespective of which of the two alternative provisions was in effect at the relevant time.