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House Contracts Guarantee (HIH Further
Amendment) Bill
Circulation Print
EXPLANATORY MEMORANDUM
Clause 1 provides that the purpose of the Bill is to further amend the
House Contracts Guarantee Act 1987 ("the Principal Act") in
relation to the Domestic Building (HIH) Indemnity Scheme ("the
Scheme") and for other purposes.
Clause 2 provides that the amending Act is deemed to have commenced in
its entirety on 8 June 2001. This is the day after Royal Assent to
the House Contracts Guarantee (HIH) Act 2001, and thus the
date that the substantive amendments to the Principal Act that
implemented the Scheme commenced.
Clause 3 provides that the House Contracts Guarantee Act 1987 is
called the Principal Act throughout the Bill.
Clause 4 inserts new definitions in section 35 of the Principal Act.
These definitions are the same as those in the Domestic Building
Contracts Act 1995, except for the definition of "developer",
which is based on the definition used in the Ministerial Order
made under section 135 of the Building Act 1993 on 30 October
1998.
This Clause also provides that the principal place of residence of
an owner is not counted in the number of homes that determine
whether an owner is a developer.
Clause 5 inserts a new section 36A in the Principal Act that provides
explicitly that it is the intention of the Act to affect the rights of
parties to proceedings that are currently before any court or
Tribunal.
Clause 6 inserts a new sub-section (2) in section 37 of the Principal Act
that provides that an indemnity under the Scheme is provided to
a person who would have had an indemnity from HIH but for a
541249 BILL LA CIRCULATION 2/11/2001
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provision in the HIH policy that such an indemnity does not exist
if HIH ceased to trade.
Clause 7 inserts new sub-sections (1)(aa), (1)(ba), (3), (4), (5) and (6) in
section 38 of the Principal Act.
New section 38(1)(aa) excludes developers from the State
indemnity.
New section 38(1)(ba) excludes any losses in respect of
insurance other than insurance of a kind required by the relevant
Ministerial order under the Building Act 1993 from the State
indemnity.
New section 38(3) provides that a State indemnity does not arise
solely through the passage of 90 days since the date a claim
under a HIH policy was received by HIH.
New section 38(4) provides that new section 38(3) does not
preclude a State indemnity arising through reasons other than the
passage of 90 days since the date a claim under a HIH policy was
received by HIH.
New section 38(5) provides that a State indemnity is provided to
a homeowner despite the fact that under the HIH policy it was
the builder, not the homeowner, who was the insured. A builder
is precluded from receiving a State indemnity by virtue of section
38(1)(a) of the Principal Act.
New section 38(6) provides that the exclusion of a developer
from receiving a State indemnity because of section 38(1)(aa)
does not affect the right of a subsequent owner of a home to a
State indemnity.
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