Victorian Consolidated Legislation

House Contracts Guarantee Act 1987 - SECT 12

Liability in legal proceedings

12. Liability in legal proceedings





(1) Subject to this Act, if an approved builder or an approved supervisor
becomes subject to a liability to a building owner or purchaser as a result of
legal proceedings brought in respect of domestic building work in relation to
which a guarantee is given under this Act, the State guarantees that
liability.

(2) Subsection (1) applies only if-

   (a)  the person who makes the claim-

   (i)  notified the approved guarantor of the legal proceedings before the
        appointed day and within 3 months of the proceedings being commenced;
        or

   (ii) notified VMIA of the legal proceedings on or after the appointed day
        and within 3 months of the proceedings being commenced; or

   (b)  VMIA is not prejudiced in dealing with the claim by the failure of the
        claimant to give the required notice under paragraph (a).

(3) Without limiting subsection (2)(b), VMIA can establish prejudice for the
purposes of that subsection by establishing that-

   (a)  the State could have recovered any sum payable by it in discharge of
        its liability had VMIA or the approved guarantor been notified of the
        proceedings within the required time but that it cannot make that
        recovery because of the failure to give that notice within the
        required time; or

   (b)  the approved guarantor could have recovered any sum payable by it in
        discharge of its liability under this section as in force before the
        appointed day had the approved guarantor been notified of the
        proceedings within the required time but that it could not make that
        recovery because of the failure to give that notice within the
        required time.