Elara apartment owners to fight $10 million compo claim rejection

The Elara apartment owners have launched an appeal against the Federal Court's decision to reject a $10 million compensation claim for defects to their Bruce complex.

The appeal to a full bench of the Federal Court will likely extend the owners' bid for compensation into a seventh year, as their lawyer concedes some won't be able to afford repairs to the Thynne Street apartment block if the challenge is unsuccessful.

Elara apartment owners, including David Allen, pictured above, will appeal the Federal Court's decision to reject their $10 million compensation claim.  Photo: Elesa Kurtz

Elara apartment owners, including David Allen, pictured above, will appeal the Federal Court's decision to reject their $10 million compensation claim. Photo: Elesa Kurtz

Members of the Elara body corporate agreed to fight the ruling at a gathering last week.

The Federal Court last month rejected the owners' bid for compensation from the Master Builders Fidelity Fund, ruling their application to the scheme had been made after the eligibility period had lapsed.

The fund was established to provide protection for consumers against incomplete building work, allowing claims in the event a builder dies, disappears or becomes insolvent. Owners are eligible to make a claim within 90 days of one of those events, provided the application is made within the five-year statutory warranty period.

The Elara owners made their first claim to the fund in August 18, 2017, more than five years after the eligibility period had expired. The owners' lawyers had argued grounds for them to make a claim had only arisen on July 20, 2017, following the collapse of the project's builder, B&T Constructions Pty Ltd.

In a judgment handed down on February 13, Justice Griffiths dismissed that argument, ruling the fund's trustees were only obliged to consider claims made in the five-year window.

A notice of appeal filed late week with the Federal Court, and obtained by The Canberra Times, show the owners will argue the judge "erred" on six points in his original ruling, including in finding that grounds for a compensation claim had not arisen during the mandated time period.

The owner's lawyer, Chris Kerin, said he believed the original judgment had not taken into account the purpose of the scheme, which was to protect consumers.

Mr Kerin said his clients still firmly believed they were entitled to the $10 million compensation. Compensation under the scheme is capped at $85,000 per apartment owner.

"The reality is that some of the owners cannot afford to [pay to fix their apartment]," Mr Kerin said.

"I was at last week's meeting [where they decided to appeal] and a number of people were quite distressed and emotional that they were in this situation."