Victorian Consolidated Legislation

House Contracts Guarantee Act 1987 - SECT 38

What is not covered by the indemnity?

38. What is not covered by the indemnity?



(1) An indemnity under section 37 does not apply-

   (a)  to the builder or owner-builder covered by the HIH policy; or

   (aa) to the developer covered by the HIH policy, or



   (b)  to any loss if an indemnity is provided in relation to the loss by
        another contract of insurance which is-

   (i)  insurance required by order under section 135(1)(a) and (c) of the
        Building Act 1993 in relation to the carrying out of domestic building
        work or managing or arranging the carrying out of domestic building
        work; or

   (ii) insurance required by order under section 135(1)(b) and (c) of the
        Building Act 1993; or



   (ba) to any loss indemnified under the HIH policy that is a not a loss of a
        kind required by the relevant order under section 135 of the
        Building Act 1993 to be indemnified; or

   (c)  to any loss if a claim has been made under the HIH policy in respect
        of the loss and payment in full has been received by the claimant; or

   (d)  to any loss if-

   (i)  a claim for the loss was determined by the Tribunal or a court before
        the relevant date not to be a valid claim under the HIH policy; and

   (ii) the claimant is not entitled to bring any further proceedings on or
        after the relevant date to appeal against or seek a review of that
        determination; or

   (e)  to any loss if the building work to which the indemnity under the HIH
        policy applied commenced on site on or after 31 May 2001.

(2) If a claim has been made under a HIH policy in respect of a loss and
settlement has been reached or a determination has been made by the Tribunal
or a court in respect of the claim-

   (a)  the amount of the loss for which an indemnity is provided under
        section 37 in respect of the loss is the amount so agreed in the
        settlement or determined by the Tribunal or the court; and

   (b)  the amount of the loss for which an indemnity is provided under
        section 37 in respect of the loss is reduced by any amount paid by HIH
        or a liquidator of HIH to the claimant in respect of the claim on the
        HIH policy.

(3) Section 37 does not apply to indemnify a loss if the indemnity for that
loss under the HIH policy arises solely because-

   (a)  a claim for the loss has been made on the HIH policy on or after 16
        December 2000; and

   (b)  the claim is deemed to have been accepted under the HIH policy because
        it was not dealt with by HIH within the period specified by the
        policy.

(4) Nothing in subsection (3) prevents section 37 from applying to indemnify a
loss to the extent that the loss is indemnified under the HIH policy otherwise
than in the circumstances set out in subsection (3).

(5) If-

   (a)  a builder is entitled to an indemnity under a HIH policy in relation
        to building work; and

   (b)  the HIH policy was issued to comply with an order made before October
        1998 under section 135 of the Building Act 1993; and

   (c)  the building owner of the building work to which the HIH policy
        applies is not entitled to an indemnity under the HIH policy; and

   (d)  the builder is not entitled to an indemnity under section 37 in
        respect of the indemnity under the HIH policy because of subsection
        (1)(a)-

the building owner is entitled to an indemnity under section 37 in respect of
a loss to the same extent that the builder would have been entitled under that
section in respect of that loss if subsection (1)(a) had not been enacted.

(6) The exclusion by subsection (1)(aa) of a developer covered by a HIH policy
from an indemnity under section 37 in respect of building work does not affect
the right of any person who is the subsequent owner of the building or land on
which the building work was carried out and who is covered by that HIH policy
to an indemnity under section 37.

(7) The exclusion by subsection (1)(aa) of a developer covered by a HIH policy
from an indemnity under section 37 in respect of building work does not apply
to-

   (a)  a person specified in the Schedule in respect of a claim lodged by
        that person with HGFL on the date specified in the Schedule in respect
        of that person;

   (b)  a developer who lodged a claim with HGFL before 1 November 2001 if
        settlement of the claim was reached with HGFL before the date on which
        the House Contracts Guarantee (HIH Further Amendment) Act 2002
        received the Royal Assent.