First come, first served - examining limitation defences in claims under the Water Act

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In Steedman v Greater Western Water Corporation [2023] VCAT 128, the applicant homeowner brought a claim for compensation, including damages plus interest and costs, under ss 157(1) and 19 of the Water Act 1989 (Vic) (Water Act) in relation to a flow of water.

Greater Western Water denied liability and argued that the claim was statute barred by reason of the six-year limitation period under the Limitation of Actions Act 1958 (Vic) (Limitation Act). Heard by the Victorian Civil and Administrative Tribunal (VCAT), VCAT was required to determine whether the cause of action under the Water Act was subject to the six-year limitation period under the Limitation Act.

Conflicting decisions

The Tribunal was tasked with reconciling two conflicting Supreme Court authorities including Lanigan v Circus Oz & Ors [2022] VSC 35 (Lanigan) and Osborne J in Ajaimi v Giswick Pty Ltd [2022] VSC 131 (Ajaimi).

Lanigan: In Lanigan, Supreme Court of Victoria Justice McDonald J held that the six-year limitation period under the Limitation Act did not apply to a statutory claim for compensation because the Tribunal is not a court for the purposes of the definition of 'action'.

Ajaimi: In Ajaimi, Justice Osborne of the Supreme Court of Victoria held that a contractual claim brought by a tenant for damages arising from water and sewerage ingress to leased property was subject to the Limitations Act. Osborne J found that the definition of ‘action’ was inclusive and not limited to proceedings brought in a court.

Where there are two decisions from the same court, and the latter appears not to have followed the earlier one, the earlier decision must be followed unless it is plainly wrong. However, the Tribunal, being a jurisdiction of lower order in the hierarchy, does not have the option of making such a finding. This is a matter to be addressed in an appeal.

The Tribunal followed the earlier decision of Lanigan and found that the applicant homeowner's cause of action under the Water Act was not the subject of the Limitations Act, and the limitations defence did not apply.

Key considerations

Litigants should be aware that VCAT is not a court and the same rules or defences will not always apply. Jurisdictional issues may also arise. When a dispute arises, litigants should carefully consider whether VCAT is the appropriate forum for their dispute in particular circumstances.

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