These cases involved a large residential apartment complex in Bruce called Elara Apartments which suffered from significant building defects. Elara Apartments was constructed by B & T Constructions (ACT) Pty Ltd (the Builder). Initially the owners corporation commenced ACT Supreme Court proceedings against the Builder claiming numerous breaches of statutory warranties under the Building Act.
After engaging in several years of settlement negotiations with Ivan Bulum, a director of the Builder, the Builder was liquidated and the owners corporation commenced Federal Court proceedings against the MBA Fidelity Fund for failing to respond to the claim made on the MBA Fidelity Fund by the owners corporation.
While the owners corporation failed to persuade the original judge and the appeal judges of the merits of their claim, the Federal Court did outline how the MBA Fidelity Fund Scheme was to operate. This was important given the opaque nature of the Scheme and the multiple interpretations as to how the Scheme should operate.
Much of the reasoning of the judges turned on statutory interpretation principles that are beyond the scope of this text to explain.
However, in short, while the Full Federal Court noted that the MBA Fidelity Fund made a material misstatement of the rights of fidelity fund certificate holders in relation to a condition to the making of a claim against the MBA Fidelity Fund, ultimately the Court held that the owners corporation should have made a claim on the MBA Fidelity Fund within 90 days of becoming aware of the existence of the grounds of the claim. That is, the claim on the MBA Fidelity Fund should have been made well before the commencement of the ACT Supreme Court proceedings against the Builder on 17 May 2013.
It should be noted that this decision made the ACAT decision in Das & Anor v Master Builders Fidelity Fund (Civil Dispute) [2015] ACAT 6 otiose.