BIGCORP No.1: Overturning a few HOW Defect Claim Time Limits
The Owners – Strata Plan 57504 v Building Insurers' Guarantee Corporation (2008) NSWSC 1022
GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.
Quick Read
This 2008 NSW Supreme Court decision is the first in a trilogy of cases that were important to the evolution of building defects law in NSW. The dispute in a Surry Hills warehouse conversion strata title building about its defects covered a few issues including the validity of insurance policy time limits and whether an expert referee’s report should be changed by the Court. After comparing the policy to the Home Building Act 1989, the Court decided that the policy time limits were invalid and allowed the strata buildings defects claim. It also confirmed the referee’s findings except where the strata building conceded things. The decision was very important for all HIH insured strata buildings. But it was just the beginning, as it was followed by 2 more Court decisions about this strata building’s claim.
Implications
The key implications of this strata case are as follows.
BIGCORP should have raised the extra legal issues earlier in the case since they were always potentially available arguments and it did not have a good explanation for the delay.
The prejudice to the strata building was too great since it had lost the opportunity to act differently, to allow the new BIGCORP legal issues.
Home Building Act 1989 insurance had to be [at the time] for 7 years from Completion.
As long as a claim was notified during policy coverage and with 6 months of defect awareness, an insurer could not avoid liability by relying on the 7 year time limit.
Insurance provisions restricting rights under the Home Building Act 1989 are invalid.