AG Advanced Construction Pty Ltd v Shao

The case of AG Advanced Construction Pty Ltd v Shao involved a dispute between the plaintiff, AG Advanced Construction Pty Ltd, and the defendant, Shao. The plaintiff, a builder, had been engaged by the defendant to construct a new home on his property under a domestic building contract. However, the building works were significantly delayed and ultimately not completed. As a result, the defendant terminated the contract under section 41 of the Domestic Building Contracts Act 1995 (Vic). The Victorian Civil and Administrative Tribunal (VCAT) subsequently ordered that the plaintiff recover damages from the defendant for defective work completed before the termination. The plaintiff sought leave to appeal and to appeal the VCAT decision, arguing that the defendant was not entitled to recover damages for defective work completed prior to termination.

The primary legal issue before the court was whether the defendant, who had terminated the domestic building contract under section 41 of the Act, was entitled to recover damages from the plaintiff for defective work completed before the termination. The court also considered whether the defendant's reliance on section 41 precluded a subsequent claim for damages for defective works. In reaching its decision, the court referred to the case of Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331, which established that the termination of a domestic building contract under section 41 does not preclude a party from seeking damages for defective works completed prior to termination. The court further noted that the defendant had not made a claim for restitution in the VCAT proceeding, and thus a section 148(7)(b) order for a refund of overpayment was not appropriate.

The court found that there was an error of law in the VCAT decision, and therefore granted the application for leave to appeal and allowed the appeal. The VCAT orders for the recovery of damages by the defendant from the plaintiff were set aside. In addition, the court considered whether it was appropriate to make a section 148(7)(b) order for a refund of overpayment, and concluded that such an order was not appropriate in the circumstances. The court referred to the case of Christ Church Grammar School v Bosnich & Sehr [2010] VSC 476, which established that reliance upon section 41 of the Act does not preclude a party from seeking a section 148(7)(b) order. However, the court found that no claim for restitution had been made in the VCAT proceeding, and thus a section 148(7)(b) order was not appropriate.

In conclusion, the court granted the plaintiff's application for leave to appeal and allowed the appeal. The VCAT orders for the recovery of damages by the defendant from the plaintiff were set aside, and the court found that a section 148(7)(b) order for a refund of overpayment was not appropriate in the circumstances.