APM Group (Aust) Pty Ltd v Centurion Australia Investments Pty Ltd

[2022] VSC 637

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2020 02323

APM GROUP (AUST) PTY LTD (ACN 095 366 546)	Plaintiff
v
CENTURION AUSTRALIA INVESTMENTS PTY LTD (ACN 166 487 118) ATF CENTURION MELBOURNE STUDENT VILLAGE TRUST	Defendant

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JUDGE:	Stynes J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 July 2022
DATE OF JUDGMENT:	25 October 2022
CASE MAY BE CITED AS:	APM Group (Aust) Pty Ltd v Centurion Australia Investments Pty Ltd
MEDIUM NEUTRAL CITATION:	[2022] VSC 637

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BUILDING AND CONSTRUCTION — Statutory construction — Whether the Domestic Building Contracts Act 1995 (Vic) applies to building work performed in relation to student accommodation — Domestic Building Contracts Act 1995 (Vic) ss 5(1)(a), 5(1)(e), 6(1)(c), 6(2) applied — Domestic Building Contracts Regulations 2017 (Vic) reg 8(b) applied — Verraty Pty Ltd v Richmond Football Club Ltd (2020) 63 VR 150 applied.

STATUTORY CONSTRUCTION — Domestic Building Contracts Act 1995 (Vic) s 5(1)(a) — Whether building work comprises the construction of a ‘home’ — Whether premises are ‘residential premises’ — Whether premises are ‘intended for permanent habitation’ — Re Maclaw No 651 Pty Ltd v HIH Casualty and General Insurance Ltd (1999) 15 VAR 302 applied — H Buildings v Owners Corporation [2017] VSC 802 applied.

STATUTORY CONSTRUCTION — Domestic Building Contracts Act 1995 (Vic) s 5(1)(e) — Whether building work is ‘on land that is zoned for residential purposes under a planning scheme’ — Effect of the Planning and Environment Act 1987 (Vic) and Victorian Planning Provisions — Consideration of mixed use zone and mixed use purposes — Fletcher Construction Australia Ltd v Southside Tower Developments Pty Ltd (1996) 11 VAR 1 applied — Piastrino v Seascape Constructions Pty Ltd [2022] VSC 202 applied.

STATUTORY CONSTRUCTION — Domestic Building Contracts Act 1995 (Vic) s 6(1)(c) — Whether building work relates to ‘a building intended to be used only for business purposes’ — Re Maclaw No 651 Pty Ltd v HIH Casualty and General Insurance Ltd (1999) 15 VAR 302 applied.

STATUTORY CONSTRUCTION — Domestic Building Contracts Act 1995 (Vic) s 6(2) — Domestic Building Contracts Regulations 2017 (Vic) reg 8(b) — Whether building work relates to ‘premises that are used or intended to be used at a school, university or other educational or training institution as accommodation for students or staff’ — Definition of ‘at’ — Degree of association or connection between premises and educational institution — Collector of Customs (Tas) v Flinders Island Community Association (1985) 7 FCR 205 applied.

WORDS AND PHRASES — ‘domestic building work’ — ‘domestic building contract’ — ‘home’ — ‘residential premises’ — ‘permanent habitation’ — ‘land zoned for residential purposes’ — ‘mixed use zone’ — ‘mixed use purpose’ — ‘business purposes’ — ‘student accommodation’.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	R Craig QC and W Stephenson	Thomson Geer
For the Defendant	R Andrew	Colin Biggers & Paisley

TABLE OF CONTENTS

A.. Introduction

B... Summary of Decision

C.. Background

D.. The DBCA

E... Legal principles

F... Issue 1 – Is the Building Work caught by s 5(1)(a) of the DBCA?

F.1          Issue

F.2          Relevant authorities

F.2.1        Maclaw

F.2.2        H Buildings

F.3          Submissions

F.3.1        Centurion’s submissions

F.3.2        APM’s submissions

F.4          Consideration

G.. Issue 2 – Is the Building Work caught by s 5(1)(e) of the DBCA?

G.1         Issue

G.2         Relevant authorities

G.2.1        Fletcher Construction

G.2.2        Piastrino

G.3         Submissions

G.3.1        Centurion’s submissions

G.3.2        APM’s submissions

G.4         Consideration

H.. Issue 3 – Is the Building Work excluded from the scope of the DBCA?

H.1         Issue

H.2         Submissions

H.2.1       Centurion’s submissions

H.2.2       APM’s submissions

H.3         Consideration

H.3.1       The business purposes exclusion

H.3.2       The student accommodation exclusion

I.... Orders

HER HONOUR:

A          Introduction

1. The plaintiff, APM Group (Aust) Pty Ltd (‘APM‘), is a commercial builder.

2. The defendant, Centurion Australia Investments Pty Ltd (‘Centurion‘), is the current owner of 5–17 Flemington Road, North Melbourne (‘the Property’).

3. In May 2017, Centurion engaged APM to perform building work for the purpose of further developing the Property, known at the relevant time as the ‘RMIT Village’, to increase the number of apartments there functioning as student accommodation (‘the Building Work‘).

4. The parties are in dispute about whether the Domestic Building Contracts Act 1995 (Vic) (‘DBCA‘) applies to the Building Work.

5. This decision addresses two preliminary questions under rule 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic):

   (a)Question 1: Does the DBCA apply to the Building Work?

   (b)Question 2: If so, did the parties’ contract include the price variation warning in the manner required by section 33(2)(a) of the DBCA?

6. Determining whether the DBCA applies to the Building Work involves a two-step process:[1]

   (a)First, determining whether the Building Work falls within the scope of s 5 of the DBCA;

   (b)Second, if so, determining whether the Building Work is excluded from the operation of the DBCA by s 6.

   [1]Domestic Building Contracts Act 1995 (Vic) s 3(1) (definition of ’domestic building work’) (‘DBCA’).

7. In relation to Question 1, the issues that arise for determination are as follows:

   (a)Issue 1: Is the Building Work captured by s 5(1)(a) of the DBCA as work comprising ‘the erection or construction of a home’? The key issue in dispute is whether the part of the Property that is the subject of the Building Work (‘the Premises‘) constitutes a ‘home’ as defined in s 3 of the DBCA, and specifically:

   (i)whether the Premises are ‘residential premises’; and

   (ii)if so, whether the Premises are excluded from the definition of a ‘home’ for being a ‘residence that is not intended for permanent habitation’?[2]

   [2]DBCA s 3(1) (definition of ‘home’ para (b)).

   (b)Issue 2: Is the Building Work captured by s 5(1)(e) of the DBCA as work associated with the construction or erection of a building:

   (i)on land that is zoned for residential purposes under a planning scheme under the Planning and Environment Act 1987 (Vic); and

   (ii)in respect of which a building permit is required under the Building Act 1993 (Vic)?

   (c)Issue 3: If the Building Work is caught by either ss 5(1)(a) or 5(1)(e), and is therefore domestic building work to which the DBCA potentially applies, is the Building Work excluded by operation of s 6 of the DBCA, specifically:

   (i)is the Building Work excluded under s 6(1)(c) for being ‘work in relation to a building intended to be used only for business purposes’; or

   (ii)is the Building Work excluded under s 6(2), by operation of reg 8(b) of the Domestic Building Contracts Regulations 2017 (Vic), as work carried out in relation to ‘premises that are used or intended to be used at a school, university or other educational or training institution as accommodation for students or staff’?

8. In relation to Question 2, the issue requiring determination is whether the price variation warning required by s 33(2) of the DBCA must appear on the same page of the contract as the contract price. The determination of this issue turns on the proper construction of ‘next to’ in s 33(2)(a) of the DBCA.

B          Summary of Decision

1. For the reasons set out below, I have determined each question as follows:

   (a)Question 1:  The DBCA does not apply to the Building Work.

   (i)Issue 1: The Building Work is captured by s 5(1)(a) because the Premises are residential premises intended for permanent habitation.

   (ii)Issue 2: The Building Work is captured by s 5(1)(e) because it was associated with the construction of a building on land that is zoned for residential purposes.

   (iii)Issue 3: 

   (1)The Building Work is not excluded from the operation of the DBCA by s 6(1)(c) because that exclusion does not apply to residential premises.

   (2)The Building Work is excluded from the operation of the DBCA by s 6(2) because the Premises were intended to be used at a university or other educational institution as accommodation for students or staff within the meaning of reg 8(b) of the Domestic Building Contracts Regulations 2017 (Vic).

   (b)Question 2:  Having regard to the answer given to Question 1, it is not necessary for me to consider or determine Question 2. 

C          Background

1. In around 2005, the Property was converted from a hotel to student accommodation affiliated with the Royal Melbourne Institute of Technology (‘RMIT‘).  The Property is situated approximately one kilometre from the main city campus of RMIT.

2. Centurion was incorporated on 28 October 2013.  It purchased the Property in 2014 with the intention of further developing it into what became known as the RMIT Village. 

3. On 21 December 2015, Centurion submitted a town planning application for the proposed redevelopment of two buildings within the Property to be used primarily as student accommodation.[3]  At that time, the Property was referred to as the RMIT Student Village.

   [3]Court Book 603, Application for Planning Permit dated December 2015.  All references to the Court Book in this judgment are to the PDF page rather than the numerated page.

4. On 14 July 2016, the Melbourne City Council issued a planning permit allowing: [4]

   Construction of a building and carrying out of alterations and additions for use as residential buildings (student accommodation) to provide additional student beds and retail tenancies (excluding hotel or tavern), with a reduction in the bicycle parking requirement in accordance with the endorsed plans.

   [4]Court Book 699, Melbourne City Council Planning Permit (No TP-2015-1204) dated 14 July 2016.

5. On 30 May 2017, the parties executed a design and construct contract titled ‘RMIT Village Asset Enhancement Initiative 2 Project’ (‘D&C Contract‘).[5]

   [5]Court Book 153, D&C Contract.

6. The Building Work, being the work to be performed by APM under the D&C Contract, comprised of the following, in summary:

   (a)the demolition of an existing building (Building B) on the Property;

   (b)construction of a new twelve storey building in its place;

   (c)construction of an additional two levels of studio apartments above an existing building (Building A) on the Property; and

   (d)renovation of parts of Building A.

7. The Building Work also included the construction of around 400 square metres of commercial space out of a total 6,000 square metres of gross floor area.  In total, the Building Work provided an additional 147 beds for students as follows:

   (a)80 studios;

   (b)nine 1-bedroom units;

   (c)nine 4-bedroom units;

   (d)two 5-bedroom units; and

   (e)two 6-bedroom units.

8. APM carried out the Building Work pursuant to a series of staged building permits from Stage No 1 (amended on 29 November 2017) through to Stage No 10 (issued on 4 June 2019).[6]  The final stage of the Building Work was certified by the Superintendent as having reached practical completion on 12 August 2019.[7]

   [6]Court Book 1110–1223, Building Permit Stage No 1 dated 3 October 2017 as amended on 10 October and 29 November 2017, Building Permit Stage No 2 dated 4 December 2017, Building Permit Stage No 3 dated 12 February 2018, Building Permit Stage No 4 dated 1 May 2018, Building Permit Stage No 5 dated 27 June 2018, Building Permit Stage No 6 dated 8 August 2018, Building Permit Stage No 7 dated 14 September 2018, Building Permit Stage No 8 dated 30 October 2018, Building Permit Stage No 9 dated 13 December 2018, Building Permit Stage No 10 dated 4 June 2019.

   [7]Court Book 1224, Certificate of Practical Completion dated 20 September 2019.

9. The completed buildings operated as student accommodation affiliated with RMIT until 31 December 2019 when the agreement with RMIT ended.[8] 

   [8]Court Book 386, Student Accommodation Agreement dated 1 March 2005.

10. Those buildings continue to be operated as student accommodation.  The Property is now known as ‘Dwell Village’.

D          The DBCA

1. As the D&C Contract was entered into on 30 May 2017, it is common ground that the relevant version of the DBCA was that in force as at 24 May 2017.

2. Section 1 of the DBCA identifies the main purposes of the Act as follows:

   The main purposes of this Act are—

   (a)to regulate contracts for the carrying out of domestic building work; and

   (b) to provide for the resolution of domestic building disputes and other matters by the Victorian Civil and Administrative Tribunal; and

   (c) to require builders carrying out domestic building work to be covered by insurance in relation to that work.

3. Section 3(1) sets out relevant definitions in the DBCA including:

   domestic building contract means a contract to carry out, or to arrange or manage the carrying out of, domestic building work other than a contract between a builder and a sub-contractor;

   …

   domestic building work means any work referred to in section 5 that is not excluded from the operation of this Act by section 6;

   …

   home means any residential premises and includes any part of a commercial or industrial premises that is used as a residential premises but does not include—

   …

   (b)       any residence that is not intended for permanent habitation; or

   …

   (f) any residence that the regulations state is not a home for the purposes of this definition;[9]

   [9]The Domestic Building Contracts Regulations 2017 (Vic) do not provide for any ‘residence’ that is not a home.

4. Section 4 sets out the objects of the Act as follows:

   The objects of this Act are—

   (a)to provide for the maintenance of proper standards in the carrying out of domestic building work in a way that is fair to both builders and building owners; and

   (b) to enable disputes involving domestic building work to be resolved as quickly, as efficiently and as cheaply as is possible having regard to the needs of fairness; and

   (c) to enable building owners to have access to insurance funds if domestic building work under a major domestic building contract is incomplete or defective.

5. Section 5 sets out the scope of building work to which the Act applies:

   (1)       This Act applies to the following work—

   (a)       the erection or construction of a home, …

   …

   (e)any work associated with the construction or erection of a building—

   (i)on land that is zoned for residential purposes under a planning scheme under the Planning and Environment Act 1987; and

   (ii) in respect of which a building permit is required under the Building Act 1993;

   ...

6. Section 6 then identifies building works that are excluded from the operation of the DBCA:

   (1)       This Act does not apply to the following work—

   …

   (c)any work in relation to a building intended to be used only for business purposes;

   …

   (2)This Act or a provision of this Act does not apply to any work that the regulations state is not building work to which this Act or that provision (as the case requires) applies.

7. Regulations 7 to 9 of the Domestic Building Contracts Regulations 2017 (Vic) (‘Regulations‘) identify further work excluded from the operation of the DBCA. Relevantly, reg 8 states:[10]

   For the purposes of section 6(2) of the Act, work carried out in relation to any of the following is not building work to which the Act applies—

   …

   (b)premises that are used or intended to be used at a school, university or other educational or training institution as accommodation for students or staff; …

   [10]Domestic Building Contracts Regulations 2017 (Vic) reg 8(b) (‘Regulations’).

E          Legal principles

1. The determination of the issues in dispute requires me to consider the proper construction of the DBCA.

2. The legal principles relevant to statutory construction were set out by the Court of Appeal in Verraty Pty Ltd v Richmond Football Club Ltd.[11]   In summary:

   [11](2020) 63 VR 150, [53]–[64] (Kyrou , Kaye and Sifris JJA).

   (a)the process of statutory construction starts with the actual text of the statute. The text, however, is to be considered in light of the context and purpose of the statute or particular provision including the mischief it is seeking to remedy;

   (b)determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials;

   (c)extrinsic materials cannot be relied on to displace the clear meaning of the text;

   (d)the court may depart from the literal meaning where, for example:

   (i)the literal meaning would conflict with other provisions of the statute;

   (ii)the literal meaning is inconsistent with the purposes of the statute;

   (iii)the literal meaning is incapable of practical application; or

   (iv)adoption of the literal meaning would lead to a result that is absurd, unreasonable or anomalous;

   (e)however, departure from the literal meaning will only be justified if the alternative construction is ‘reasonably open’ and ‘consistent with the language in fact used by the legislature’. 

F Issue 1 – Is the Building Work caught by s 5(1)(a) of the DBCA?

F.1       Issue

1. Section 5(1)(a) provides that the DBCA applies to works comprising the erection or construction of a home.

2. A ’home’ is defined in s 3 to mean any residential premises. Centurion submitted that the Premises are residential premises. This was not disputed by APM.[12]

   [12]Transcript of Proceedings, APM Group (Aust) Pty Ltd v Centurion Australia Investments Pty Ltd (Supreme Court of Victoria, Stynes J, 22 July 2022) 40.21–29 (‘Trial Transcript’).

3. The issue that remains in dispute is whether the Premises are excluded from the definition of ‘home’ by virtue of being ’any residence that is not intended for permanent habitation’ (‘the non-permanent habitation exclusion‘).

F.2       Relevant authorities

1. The parties both relied on legal principles derived from the decisions of:

   (a)Judge Davey in Re Maclaw No 651 Pty Ltd v HIH Casualty and General Insurance Ltd (‘Maclaw‘);[13] and

   (b)Justice Digby in H Buildings v Owners Corporation (‘H Buildings‘).[14]

   [13](1999) 15 VAR 302 (‘Maclaw’).

   [14][2017] VSC 802 (‘H Buildings’).

2. For convenience, I have set out a summary of the relevant parts of each decision below.

F.2.1    Maclaw

1. Maclaw is a decision of Judge Davey sitting in the Victorian Civil and Administrative Tribunal.

2. The building contract in that case was for the construction of a three-storey serviced apartment building.  Each of the serviced apartments had been sold to investors and were the subject of long-term leases to a company which conducted the business of a serviced apartment operator.  Provided the leases remained on foot, the owners of the serviced apartments had no right of occupancy.[15]

   [15]Maclaw (n 13) [3] (Judge Davey).

3. The two substantial questions raised on the application before his Honour were whether or not serviced apartments fell under ss 5(1)(a) or (e) of the DBCA, namely:

   (a)whether serviced apartments are a ‘home’ as defined in s 3 of the DBCA; and

   (b)alternatively, whether the work was associated with the construction of a building ‘on land that is zoned for residential purposes under a planning scheme’.

1. Judge Davey made several findings and observations that are relevant to the case before me:

   (a)He held that the owner’s intended use for the building is not relevant to the court’s consideration of whether the building is designed for use as residential premises.  Otherwise, it would be possible for the owner to change the intended use during the course of construction, with potentially serious contractual and insurance implications.[16]

   (b)He observed that it is important that there is certainty at the time the contract is entered into as to whether or not the contract involves domestic building work to which the DBCA applies. That question both affects insurance and also whether or not the contract is required to conform to the DBCA. Such certainty can only be achieved if it is possible to be determined at that point in time by the application of objective criteria. The objective criteria relevant to determining whether a building is a home is the design purpose of the subject building.[17]  The relevant question is whether the premises are being built to enable people to reside in them; it matters not whether the subjective intent is for short or long stays.[18]

   (c)In relation to the exclusion of residences ‘not intended for permanent habitation’,[19] his Honour stated that the reference to ‘permanent habitation’ is a reference to future use rather than current use.  The intention is to be derived objectively from the nature of the building structure.   In that case, the parties had conceded that each of the serviced apartments were built so as to have the potential to be used for permanent habitation.[20] 

   (d)In relation to the business purposes exclusion in s 6(1)(c), Davey J expressly rejected the submission that the operation of serviced apartments was a business. He observed that if that argument were correct, then an investor who leased out houses for rent as a business would also find that the houses at the time they were built were excluded from the definition of ’home’. He held that s 6(1)(c) refers to non-residential buildings and it is not concerned with whether or not the ultimate occupants of the premisses own, hire or lease the premises, provided those premises are residential premises.[21] 

   [16]Ibid [16]–[17] (Judge Davey).

   [17]Ibid [17] (Judge Davey).

   [18]Ibid [23] (Judge Davey).

   [19]DBCA s 3(1) (definition of ‘home’ para (b)).

   [20]Maclaw (n 13) [25] (Judge Davey).

   [21]Ibid [27] (Judge Davey).

2. His Honour concluded that the building work to construct the serviced apartments was domestic building work under s 5(1)(a) of the DBCA.[22]

   [22]Ibid [29] (Judge Davey).

F.2.2    H Buildings

1. In H Buildings, Digby J was required to consider whether the DBCA applied to a residential hotel complex that contained various types of apartment-style accommodation.

2. Section 3(d) of the DBCA explicitly excludes a ‘residential hotel’ from the definition of ‘home’ under the Act.

3. After referring with approval to the reasoning of Judge Davey in Maclaw, Digby J stated:[23]

   The task of determining whether the DBC Act applies to particular work as described in s 5(1) is to be approached with regard to the design purpose of the premises to be determined by the application of objective criteria, including the physical characteristics of the building, at the time the contract is entered into. For these purposes, subjective intent of the parties and actual later use of the development are irrelevant.

   [23]H Buildings (n 14) [77] (Digby J).

4. His Honour then stated:[24]

   [100] On the plain ordinary language of s 3(1) of the DBC Act, a ‘home’ includes any premises in which a person or persons reside or intend to reside. In my view, the natural and ordinary meaning of the words ‘residential premises’ describes a structure suitable for occupation as a natural person’s permanent home. Further, it is to be noted that s 3(1) of the DBC Act expressly stipulates that a residential premises may form part of a commercial or industrial premises.

   [101] … the operation of the Act requires the nature and status of a contract for the construction of work, falling within its scope to be determined by the time the contract regulated by that Act is entered into.

   …

   [104]  By reason of the temporal imperatives referred to above, the scheme and operation of the DBC Act requires ascertainment of the application of the DBC Act at the date of contract, at the latest.

   [105] Therefore, whether a structure falls within the definition of a ‘home’ in ss 3 and 5 of the DBC Act, also taking into account the exclusions referred to in s 6 of the DBC Act, necessarily requires the determination, inter alia, of whether, objectively determined, that structure is, by the time of contract for the performance of those works, intended to be used as residential premises. In my view, the intended use is likely to be most reliably ascertained by reference to the proposed buildings’ physical characteristics, in turn ascertained by reference to the design and specification of the relevant works.

   …

   [113] … the phrase ‘intended for permanent habitation’ in subsection (b) of the definition of ‘home’ in s 3 of the DBC Act is to be interpreted in accordance with Maclaw … and it is the physical characteristics and intended use of the building, ascertained in the manner that I have elsewhere indicated, rather than its actual use which are relevant.

   [24]Ibid [100], [101], [104], [105], [113] (Digby J).

5. His Honour held the evidence established that numerous and extensive parts of the development were in the nature of residential-style apartments that were sold (and intended to be sold) to separate purchasers, and were therefore ‘homes’ which do not come within the meaning of ‘residential hotel’.[25]  He reasoned:[26] 

   The residential apartments which constitute a substantive component of The Resort Torquay development are parts of the Works which objectively considered have the physical characteristics of a residential premises and are intended to be used as residential premises, ascertained by reference to their design and specification.

F.3       Submissions

[25]Ibid [120] (Digby J).

[26]Ibid [121] (Digby J).

F.3.1    Centurion’s submissions

1. In summary, Centurion submitted:

   (a)The apartments functioning as student accommodation at the RMIT Village were objectively intended for permanent habitation;

   (b)An apartment building with tenants that come and go after one or two years is still considered to be permanent habitation under the DBCA;[27]

   (c)The reference to permanent habitation in s 3 is a reference not to current use but to future use, and the intention as to future use is to be derived objectively from the nature of the structure;[28] 

   (d)Viewed objectively, the design of the building creates apartments that are suitable for permanent habitation, whether for students or other persons into the future, and therefore ought to be properly regarded as premises that are intended for permanent habitation;[29]

(e)Excluding buildings not intended for actual permanent habitation, such as a family’s holiday beach house or country retreat, would mean that those buildings would be deprived of the protections intended by the DBCA, not only for the present owner but for subsequent owners (who might wish to permanently reside in them). Such an approach would tend to defeat, rather than protect, the objects and purposes of the DBCA;[30] 

(f)The Court should not be persuaded by APM’s reliance on the limits of the planning permit because planning permissions can change.  There is no reason why the RMIT Village’s student accommodation could not be changed to serviced apartments or part-serviced apartments at a later time, for example.[31]  The planning permit does not affect the objective design intent of the residential premises at the time of entry into the contract.[32] 

[27]Trial Transcript (n 12) 118.11–17.

[28]Maclaw (n 13) [20], [25] (Judge Davey); H Buildings (n 14) [113] (Digby J).

[29]Trial Transcript (n 12) 45.28–46.1.

[30]Ibid 49.28–50.12.

[31]Ibid 46.19–26

[32]Ibid 47.13–16.

F.3.2    APM’s submissions

1. In summary, APM submitted:

   (a)In determining whether a building is a home for the purposes of the DBCA, the Court must have regard primarily to objective criteria existing at the time of the contract including the physical characteristics of the building, the design purpose of the premises and its intended use;[33]

   (b)The word ’permanent’ ordinarily means indefinite or enduring;[34]

   (c)The exclusion to the definition of ‘home’ requires consideration of what was objectively intended at the time of the contract.  The correct question for determination is whether there was an objective intention that the habitation be permanent.  An assessment of the suitability of the premises for permanent habitation is no substitute for the determination of the objective intention;[35] 

   (d)At the time of entry into the D&C Contract, the Premises were not intended for permanent habitation.  The planning permit did not allow for that to occur as any residency was temporally confined by reference to the ongoing education of occupants;[36]

   (e)The facts of this case can be distinguished from Maclaw and H Buildings.  They were cases involving multi-storey residential housing with self-contained apartments.  A factor in both cases was the potential for the properties to be on sold to consumers. The possibility of a sale of the apartments to individual owners is prohibited, as the planning permit in this case requires the Premises to be used as student accommodation.[37]

   [33]H Buildings (n 14) [91] (Digby J).

   [34]Ibid 71.3–4.

   [35]Ibid 75.11–14; 77.16–25.

   [36]R Craig QC and W Stephenson, ‘Plaintiff’s outline of submissions for trial of preliminary questions’, Submission in APM Group (Aust) Pty Ltd v Centurion Australia Investments Pty Ltd, S ECI 2020 02323, 27 July 2022, [35] (‘Plaintiff’s Written Submissions’).

   [37]Ibid [44(c)].

F.4       Consideration

1. It is apparent from the parties’ submissions that the areas of dispute are the meaning of ’permanent’, and the application of the non-permanent habitation exclusion to the facts of this case.

2. ’Permanent’ is not defined in the Act.  The Macquarie Dictionary defines it to mean:[38]

   lasting or intended to last indefinitely; remaining unchanged; not temporary; enduring; abiding. 

   [38]Macquarie Dictionary (8^th ed, 2020) ‘permanent’ (def 1).

3. ’Temporary’ is defined in the Macquarie Dictionary to mean:[39]

   lasting, existing, serving or effective for a time only; not permanent.

   [39]Ibid ‘temporary’ (def 1).

4. In construing ’permanent’, I must have regard to the context in which it is used. Centurion’s counsel drew my attention to the fact that serviced apartments, for example, are not caught by the non-permanent habitation exclusion, notwithstanding that tenants normally come and go.  He therefore submitted that ’permanent’, as it is used in the non-permanent habitation exclusion, may not mean forever.

5. It is common ground, and I accept, that when applying the non-permanent habitation exclusion to the facts of this case, the following principles derived from the decisions of Maclaw and H Buildings apply: 

   (a)‘permanent habitation’ is a reference to future use rather than current use; 

   (b)the question of whether a premises is ’intended for permanent habitation’ is to be approached with regard to the design purpose of the premises as determined by the application of objective criteria, including the physical characteristics of the building (ascertained by reference to the design and specification of the relevant works), at the time the contract is entered into; and

   (c)whether a structure falls within the definition of a ‘home’ in ss 3 and 5 of the DBCA, also taking into account the exclusions in s 6, requires the determination, inter alia, of whether that structure is, at the time of entry into the contract, intended to be used as residential premises.

6. Centurion relied on the physical characteristics of the Premises in support of its contention that it was suitable for permanent habitation. 

7. The physical characteristics of the Premises and the amenities it provides are described in the town planning drawings which Centurion’s counsel informed me, without objection, became the architectural drawings and were incorporated into the D&C Contract.[40]

   [40]Trial Transcript (n 12) 11.5–29.

8. The drawings of the ground floor plan describe communal lounges, studies, outdoor areas, bin stores and lift lobbies.

9. The level 1 floor plan[41] describes:

   (a)studio apartments comprising kitchenettes, bathroom facilities, and an area to serve as both a bedroom and living area;

   (b)a communal area providing for a student hub and quiet study areas; and

   (c)two multi-bed units with kitchenettes and two bathrooms.

   [41]Court Book 674, Level 1 floor plan (TP-A101 Rev D).

10. The level 2 floor plan[42] reveals that the Building Work included a similar arrangement with two multi-bed units.  I note that the balance of the drawing shows the arrangement of a number of existing smaller units, but these do not form part of the Building Work.

    [42]Court Book 675, Level 2 floor plan (TP-A102 Rev D).

11. The level 3 floor plan[43] reveals that the Building Work included:

    (a)the construction of studio apartments comprising a bedroom area, kitchenette and bathroom;

    (b)a multi-bed unit with its own kitchenette and two bathrooms; and

    (c)a one-bedroom apartment with kitchenette and bathroom.

    [43]Court Book 676, Level 3 floor plan (TP-A103 Rev D).

12. The level 4 floor plan[44] describes works similar to that on level 3.

    [44]Court Book 677, Level 4 floor plan (TP-A104 Rev C).

13. The level 5 floor plan[45] describes works similar to that on level 3.

    [45]Court Book 678, Level 5 floor plan (TP-A105 Rev C).

14. The levels 6 and 7 floor plan[46] describes works similar to level 3 within Building B, and the construction of numerous single studio apartments within Building A.

    [46]Court Book 679, Levels 6 and 7 floor plan (TP-A106 Rev C).

15. The levels 8 to 11 floor plan[47] describes works in relation to Building B similar to that on level 5.

    [47]Court Book 680, Levels 8 to 11 floor plan (TP-A108 Rev C).

16. It is plain from the physical description of the Premises set out above that they are suitable for permanent habitation, albeit that the confined spaces and shared facilities may not suit every taste or budget.  However, physical characteristics are not the only factor relevant to the task of determining whether or not the Premises were intended for permanent habitation.   

17. In this case, the design purpose of the Premises is also informed by:

    (a)the purpose of the Building Work as revealed by the D&C Contract; and

    (b)the planning permit.

18. The D&C Contract is titled ’RMIT Village Asset Enhancement Initiative 2 Project’.  It is common ground that the purpose of the Building Work was to develop the RMIT Village to increase the number of beds on offer for student accommodation. 

19. This purpose is consistent with the terms of the planning permit which only permitted:[48]

    Construction of a building and carrying out of alterations and additions for use as residential buildings (student accommodation) to provide additional student beds and retail tenancies (excluding hotel or tavern), with a reduction in the bicycle parking requirement in accordance with the endorsed plans.

    [48]Court Book 699, Melbourne City Council Planning Permit (No TP-2015-1204) dated 14 July 2016.

20. It was a condition of the planning permit that prior to the commencement of the Building Work (excluding demolition), Centurion had to enter into an agreement with the responsible authority under s 173 of the Planning and Environment Act 1987 (Vic) with the following terms:[49]

    The accommodation provided on the subject land is to be used for the exclusive accommodation of students enrolled full time at a secondary or tertiary level educational institution and to be vacated within three months of completion of full-time studies.

    The building to operate at all times in accordance with the Management Plan as required by Condition of this permit to the satisfaction of the Responsible Authority. The Management Plan must establish a set of ‘house rules’ for the use, to be followed thereafter, to the satisfaction of the Responsible Authority. The plan must ensure that a suitably qualified full-time manager with responsibility to oversee student behaviour permanently resides on the site and must detail the maintenance, cleaning, garbage storage and collection, supervision, and security of the site.

    [49]Court Book 699, Ibid cl 5.

21. A ‘section 173 agreement’ is a legal contract.  A feature of this type of agreement is that it can be recorded on the title to the land so that the owner’s obligations under it bind future owners and occupiers of the land.

22. As required by the permit, a section 173 agreement was entered into by Centurion and Melbourne City Council on 30 July 2018.[50]  This agreement is recorded on the certificate of title for the Premises.[51]  However, as this agreement post-dates the D&C Contract, I have not had regard to its terms for the purpose of determining the intention in relation to the Premises.  As noted above, intention must be assessed at the time of the D&C Contract.

    [50]Court Book 1176–89, Instrument AR309079T executed on 1 August 2018.

    [51]Court Book 296, Certificate of title (Vol 11487 Folio 965).

23. APM relies on the planning permit to submit that the Premises were not intended for permanent habitation.  However, in my view, and having regard to the applicable legal principles identified above, the non-permanent habitation exclusion is concerned with whether the residential premises are intended to be permanently inhabited.  It is not concerned with the actual length of stay of any particular occupant.  Consequently, I consider that the provisions of the planning permit which strictly limit the length of stay of students are not determinative.

24. Having regard to the design purpose of the Premises, it is plain that it was suitable for permanent habitation and that it was intended to be a permanently inhabited residential premises.  To put it another way, there is no evidence to suggest that it was intended to be used as a residential premises for only a temporary period and then used, say, as a business premises thereafter. 

25. Accordingly, I find that the Premises do fall within the scope of s 5(1)(a) of the DBCA.

G Issue 2 – Is the Building Work caught by s 5(1)(e) of the DBCA?

G.1      Issue

1. Section 5(1)(e) provides that the DBCA applies to any work associated with the construction or erection of a building:

   (a)on land that is zoned for residential purposes under a planning scheme under the Planning and Environment Act 1987 (Vic) (‘P&E Act’); and

   (b)in respect of which a building permit is required under the Building Act 1993 (Vic).

2. It is common ground that the Building Work is work which required a building permit. Therefore, the key issue in dispute is whether the Premises were on land zoned for residential purposes under a planning scheme under the P&E Act.

G.2      Relevant authorities

1. The following authorities are relevant and important to the determination of the issue in dispute. 

G.2.1   Fletcher Construction

1. In Fletcher Construction Australia Ltd v Southside Tower Developments Pty Ltd (‘Fletcher Construction‘),[52] Byrne J was required to determine whether the DBCA applied to building works performed in relation to a multi-storey apartment building that was located in a ‘mixed use zone’ under the relevant planning scheme.

   [52](1996) 11 VAR 1 (‘Fletcher Construction’).

1. The building works comprised the refurbishment and conversion of an existing ten storey office building into 151 residential units, a caretaker’s apartment, gymnasium, convenience shop, and other retail and cafe premises. The proprietor relied on both ss 5(1)(a) and (e) to contend that the DBCA applied to the subject building work.

2. The builder conceded that the reference to ‘a home’ in s 5(1)(a) applies to a multi-residence building or multi-storey residential building, since such buildings do in fact comprise a number of homes, and the singular ‘home’ is taken to include the plural ‘homes’ in accordance with s 37 of the Interpretation of Legislation Act 1984 (Vic).

3. While his Honour concluded that the subject apartment building did meet the definition of ‘home’ within s 5(1)(a) so as to attract the application of the DBCA,[53] he observed: [54]

   There are, however, some indications in the Act and in the Second Reading Speech which suggest the definition may not be so wide; that it was the intention of the Parliament to provide a legislative framework for contracts and disputes concerning building work of a more modest character and to protect parties to more conventional domestic building projects from the consequences of an inequality of bargaining power rather than to interfere with major commercial transactions.

   [53]Ibid 4 (Byrne J).

   [54]Ibid 3 (Byrne J).

4. Justice Byrne went on to consider the proprietor’s alternative argument that s 5(1)(e) applied to the building work. This required him to construe s 5(1)(e), and in particular, the meaning of the words ’land that is zoned for residential purposes’.

5. The relevant land was subject to the Melbourne Planning Scheme and located in the ’Central Melbourne–Southbank Zone’ (‘CMS Zone‘).  It was a zone created for a number of purposes including:

   (a)to provide for a mixture of commercial, arts-related, entertainment, residential and light industrial development which complements the function of central Melbourne;

   (b)to encourage development adjacent to the Yarra River which complements the recreational use of the river and its banks;

   (c)to encourage urban design improvements so that the physical environment offers variety, interest, safety and convenience to people in the area;

   (d)to encourage high density housing, particularly in multi-use buildings, to assist the retailing and entertainment functions of central Melbourne;

   (e)to encourage the establishment and assist the retention of smaller office and industrial activities which service Central Melbourne;

   (f)to encourage the retention of those features of the area which enhance its appearance or give it character or provide a sense of identity; and

   (g)to encourage the retention and use of buildings of historic or architectural significance.

6. Justice Byrne considered the Melbourne Planning Scheme insofar as it concerned the relevant CMS Zone in order to characterise what it was that the Scheme intended to be the principal or characteristic purpose for the land in its area.  He observed that the relevant zone was one of a number of Business Zones and not a Residential Zone.  Unlike other zones in the Business Zones group, the CMS Zone did not have in its description or title any suggestion of a residential purpose.  He stated:[55]

   As did counsel for the proprietor, they also submitted that the stated purposes of the zone are of less significance for my task than the controls imposed upon the use of land by cl 308B-1. I think there is much to be said for this because the purposes are expressed in terms of such generality that it is difficult to see how they assist in the application of the scheme to s 5(1)(e).

   …

   The difficulty is that, likewise, little guidance is to be had from an examination of the controls imposed on land in those zones which are grouped under the heading Residential Zones and those grouped under the heading Business Zones. Each of them contemplates that the land may be used for one or other of a variety of residential purposes, all but two without the need for a permit. Against this background, I feel entirely unable to say that any one or more of the permitted purposes should be taken as being more or less important, significant or characteristic of the zone than any other. I am however, reluctant to conclude from this that any building work of whatever kind which is carried out on land in any of these zones falls within the definition of domestic building wok unless exempted by s 6.

   [55]Ibid 8 (Byrne J).

7. His Honour then described his task as identifying the intent of Parliament in enacting the DBCA and including in s 5(1)(e) a reference to building work on land zoned for particular purposes.[56]  He reasoned that:[57]

   (a)the legislation is concerned with building work which is of a residential or domestic nature, rather than a commercial or non-residential character;

   (b)the words in paragraph (e) should be construed with this in mind, particularly having regard to the residential or domestic flavour of all the other paragraphs in s 5(1);

   (c)however the term ’building’ in paragraph (e) cannot be restricted only to a residential building, given work associated with the erection or construction of a home is covered by paragraph (a); and

   (d)what appears to be intended is that the Act should apply to work of a non-residential character but which is carried out on land which itself has a residential character.

   [56]Ibid (Byrne J).

   [57]Ibid 8–9 (Byrne J).

8. He stated:[58]

   It may be taken, therefore, that the expression “zoned for residential purposes” is not to be read in a technical sense. It is common enough to hear in ordinary speech reference to “a residential zone” or to “land zoned residential”. Such an expression in common speech is a reference to those zones which have long been called “residential” of one kind or another in planning schemes notwithstanding that other uses may be permitted and notwithstanding that residential uses may be permitted in other zones. To my mind this is the meaning which should be given to “zoned for residential purposes” in para (e). So understood, the drafter’s use of the words “purposes” in the expression “residential purposes” assumes some significance. It shows an awareness that different sorts of residential uses are contemplated in planning schemes, hence the plural “purposes”. It does not contemplate land which is zoned for residential and non-residential purposes. It must be zoned for residential purposes, allowing for the possibility that some other use of an ancillary or a subsidiary nature may also be provided for. The requirement of para (e) is therefore satisfied only where residential use or uses of the land are the principal or predominant purpose for land use permitted by the zone.

   [58]Ibid 9 (Byrne J).

9. Justice Byrne concluded:[59]

   The Central Melbourne - Southbank Zone is a mixed use zone. It is one of a number of Business Zones. An examination of its planning controls and its stated purposes makes it clear that land within its area could not be described as “zoned for residential purposes”. I conclude that s 5(1)(e) is not concerned with building work on the subject land.

   [59]Ibid (Byrne J).

G.2.2   Piastrino

1. Piastrino v Seascape Constructions Pty Ltd (‘Piastrino‘)[60] is a recent decision in which Delany J was required to consider, amongst other things, whether the construction of a mixed use development which incorporated both domestic and non-domestic elements constituted ‘domestic building work’ under the DBCA. The development was situated on land that was zoned for commercial purposes,[61] and involved the construction of four apartments, modifications to a hair salon, and the installation of a car stacker.[62]

   [60][2022] VSC 202 (‘Piastrino’).

   [61]Ibid [19] (Delany J).

   [62]Ibid [3] (Delany J).

2. Relevantly, Delany J considered the application of s 5(1)(e) of the DBCA. He first referred to the decision of Byrne J in Fletcher Construction that the requirement of s 5(1)(e) is satisfied only where residential use or uses of the land are the principal or predominant purpose for land use permitted by the zone.[63]  He then observed that Fletcher Construction predated the introduction of the Victorian Planning Provisions (‘the VPPs‘) pursuant to Part 1A of the P&E Act. Part 1A was introduced into the P&E Act by amending legislation in 1996, and the VPPs came later.[64]

   [63]Ibid [108] (Delany J).

   [64]Ibid [109] (Delany J).

3. His Honour ultimately concluded that due to the introduction of the VPPs, there is no longer a need to look beyond what constitutes a residential zone in the VPPs by undertaking a separate analysis to determine the principal or predominant purpose for land use permitted by the zone in question.  He stated:[65]

   [65]Ibid [110]–[114] (Delany J) (citations omitted).

   [110]  The structure of the VPPs is to distinguish, on a State-wide basis, between Residential Zones and Commercial Zones.  Taking as an example the Port Phillip Planning Scheme (‘PPPS’), being the scheme which has application to the Property, cl 1 states that the purposes of the planning scheme are:

   • To provide a clear and consistent framework within which decisions about the use and development of land can be made.

   • To express state, regional, local and community expectations for areas and land uses.

   • To provide for the implementation of State, regional and local policies affecting land use and development.

   [111] The PPPS provides for Residential Zones including Mixed Use Zones, Residential Growth Zones, General Residential Zones, and Neighbourhood Residential Zones. The construction of a home is generally an ‘as of right’ or ‘Section 1 – Permit not required’ use, in Residential Zones. Other uses may also be permitted, depending on the particular residential zone. Permits may be granted for Section 2 uses as provided for in the planning scheme. In a Mixed Use Zone, Section 1 uses, in addition to residential uses, include food and drink premises not exceeding 150m² leasable floor area, and a medical centre with a ground floor area not exceeding 250m². Section 2 uses in a Mixed Use Zone include retail premises.

   [112] I do not consider that, following the introduction of Part 1A of the P&E Act and the VPPs, when determining what constitutes land zoned for residential purposes in s 5(1)(e), it remains necessary to look beyond what constitutes a Residential Zone in the VPPs and to undertake a separate analysis in order to determine the principal or predominant purpose for land use permitted by the zone under consideration.

   [113] To undertake that analysis is unnecessary now that the VPPs provide a State-wide co-ordinated framework for planning schemes in Victoria. That is their purpose, as provided for in s 4A(1) of the P&E Act. Section 6(2)(b) of the P&E Act provides that a planning scheme may regulate or prohibit the use or development of any land. The structure of each planning scheme includes the incorporation of State-standard provisions and of local provisions. The State-standard provisions must consist of provisions from the VPPs. The task of identifying land suitable for inclusion in Residential Zones, in particular municipal districts, and of amendments to planning schemes, is taken up by the P&E Act.

   [114] Given the comprehensive State-wide planning regime now in place pursuant to the P&E Act, including the VPPs and State-standard provisions concerning zones, I consider that the reference to ‘land’ zoned for ‘residential purposes’ in s 5(1)(e) is to be read as reference to Residential Zones as defined and as provided for in the VPPs, and not to Commercial Zones. Commercial Zones include Business 1, 2 and 3 and Commercial 1. Building work in a Commercial Zone, including Commercial Zone 1, is not ‘domestic building work’ that falls within s 5(1)(e). Building work of whatever description in a Residential Zone is building work falling within s 5(1)(e).

G.3      Submissions

G.3.1   Centurion’s submissions

1. In summary, Centurion submitted:[66]

   [66]R Andrew, ‘Defendant/Plaintiff by counterclaim’s submissions’, Submission in APM Group (Aust) Pty Ltd v Centurion Australia Investments Pty Ltd, S ECI 2020 02323, 27 July 2022, [69]–[73] (‘Defendant’s Written Submissions’).

   (a)The Premises are situated on land that is zoned as a ‘Mixed Use Zone’ (‘MUZ‘) under the Melbourne Planning Scheme (‘the Scheme‘);

   (b)The Scheme describes the following purposes of the MUZ:

   (i)to provide for a range of residential, commercial, industrial and other uses which complement the mixed use function of the locality;

   (ii)to provide for housing at higher densities;

   (iii)to encourage development that responds to the existing or preferred neighbourhood character; and

   (iv)to facilitate the use, development, and redevelopment of land in accordance with the objectives specified in a schedule to this zone;

   (c)The relevant Planning Practice Note published by the Department of Environment, Land, Water and Planning was issued to provide information and guidance about the purposes and features of residential zones in Victorian planning schemes.  Relevantly, it provides:[67]

   The residential zones are a suite of statutory tools for a planning authority to implement state and local policies and strategies for housing and residential growth in their planning scheme to better plan for residential development.

   Strategic use of the residential zones can give greater clarity about the type of development that can be expected in a residential area, allow a broader range of activities to be considered and better manage growth.

   (d)In the Planning Practice Note, the MUZ is clearly identified as one of the six types of residential zones that currently exist under the VPPs; 

   (e)Accordingly, the MUZ is a residential zone under the applicable planning scheme, and therefore, the subject land is ‘zoned for residential purposes’ within the scope of s 5(1)(e).

   [67]Court Book 591, Department of Environment, Land, Water and Planning, Planning Practice Note No 78: Applying the Residential Zones, June 2015.

G.3.2   APM’s submissions

1. In relation to the proper construction of s 5(1)(e), APM submitted, in summary:

   (a)Section 5(1)(e) should be construed in accordance with the analysis of Byrne J in Fletcher Construction. It was submitted that Byrne J construed ’residential purposes’ in s 5(1)(e) to be words of limitation not allowing for land which had a mixed purpose;[68]

   (b)In Piastrino, Delany J adopted a different approach. He found that the application of s 5(1)(e) was to be determined by reference to whether the particular zone in question fell within the definition of a residential zone in the Victorian Planning Provisions, without considering the substantive uses provided for under that zone;[69]

   (c)Delany J’s approach should not be followed for the following reasons:

   (i)it is inconsistent with the approach adopted by Byrne J in Fletcher Construction. Delany J treated the articulation of residential zones in the VPPs as being dispositive of what constituted land zoned for residential purposes. The introduction of the planning provisions did nothing to change the text of the DBCA and therefore cannot change the proper construction of the phrase ’zoned for residential purposes’. In circumstances where Byrne J’s analysis was extensive and based on a close textual examination of the DBCA, it was not open to Delany J to depart from it;[70]

   (ii)if Delany J was going to take a different route, he needed to first find that Byrne J was plainly wrong when he construed the phrase ‘zoned for residential purposes’ to exclude multi-use zones;[71]

   (iii)on a proper examination of s 5(1) of the DBCA, it is not what was intended. The first four paragraphs of s 5(1) are dedicated to defining different kinds of work that are associated with homes. The word ‘home’ is defined in s 3 to exclude particular types of properties. Taken together, the sections provide a sophisticated regime targeted at defining the scope of the DBCA principally by reference to works associated with homes. If s 5(1)(e) was interpreted as applying broadly to include any building on land zoned for mixed use purposes, this sophisticated regime would apply only in very limited circumstances. In particular, given the breadth of works for which a building permit is required, one would only have to consider whether the Property was a home if it was constructed on a non-residential zone. That would completely reverse the structure and logic of s 5(1) and give primacy to s 5(1)(e);[72]  

   (d)In relation to the application of s 5(1)(e) to the facts of this case, APM noted that the relevant zone under the Melbourne Planning Scheme is a Mixed Use Zone. APM submitted that the range of uses for which a planning permit is not required within a MUZ (including for art galleries, offices, shops, and food and drink premises) is broader than in other residential zones under the Scheme which typically do require a planning permit for the same uses.  In that context, it is clear that residential uses of the land are not the principal or predominant purpose for land use permitted by a Mixed Use Zone.  The MUZ is intended for mixed use, including non-residential uses.  Non-residential uses are not ancillary or subsidiary to residential uses in a Mixed Use Zone, but are given equal primacy by the planning scheme.[73]

   [68]Trial Transcript (n 12) 83.16–18.

   [69]Plaintiff’s Written Submissions (n 36) [48].

   [70]Ibid [49]–[50]; Trial Transcript (n 12) 86.29–87.31.

   [71]Trial Transcript (n 12) 88.11–89.10, 93.24–94.5.

   [72]Plaintiff’s Written Submissions (n 36) [51]–[53].

   [73]Ibid [55]–[56].

G.4      Consideration

1. My task in the present case is to:

   (a)construe the phrase ’land that is zoned for residential purposes’ in s 5(1)(e); and

   (b)determine whether the Property is situated on such land.

2. Justice Byrne construed s 5(1)(e) in Fletcher Construction.  He held that the reference to ‘land that is zoned for residential purposes’ is a reference to land in a zone in which residential use or uses are the principal or predominant permitted purpose for land use.  I find no error in his analysis and adopt his Honour’s construction.

3. I have also been assisted by the decision of Delany J in Piastrino.  He observed that Fletcher Construction predated the introduction of the Victorian Planning Provisions, and outlined the purpose of those planning provisions.  He concluded:[74]

   I do not consider that, following the introduction of Part 1A of the P&E Act and the VPPs when determining what constitutes land zoned for residential purposes in s 5(1)(e), it remains necessary to look beyond what constitutes a Residential Zone in the VPPs and to undertake a separate analysis in order to determine the principal or predominant purpose for land use permitted by the zone under consideration.

   [74]Piastrino (n 60) [112] (Delany J).

4. The key criticism levelled against Delany J’s decision is that it is inconsistent with the approach adopted in Fletcher Construction because he treated the description of residential zones in the VPPs as being dispositive of what constituted land zoned for residential purposes.

5. I disagree.  As I read the reasons of Delany J and paragraph [112] in particular, I consider he adopted the approach of Byrne J and held that the determination of what is the principal or predominant purpose is informed by the classification of the zones under the VPP.   

6. In any event and contrary to the submissions of APM, I find no error in his analysis and consider it consistent with the reasoning and determination of Byrne J, noting that:

   (a)Byrne J stated:[75]

   It is common enough to hear in ordinary speech reference to “a residential zone” or to “land zoned residential”. Such an expression in common speech is a reference to those zones which have long been called “residential” of one kind or another in planning schemes notwithstanding that other uses may be permitted and notwithstanding that residential uses may be permitted in other zones. To my mind this is the meaning which should be given to “zoned for residential purposes” in para (e).  

   (b)The land being considered by Byrne J was located in a mixed use zone characterised by the relevant scheme as a Business Zone.  He concluded that land within that zone could not be described as being ’zoned for residential purposes’.

   [75]Fletcher Construction (n 52) 9 (Byrne J).

1. Further, the approach described by Delany J enhances certainty in the application of the DBCA to building works. It is desirable that, as far as possible, business people in the construction industry and those dealing with them should know with some certainty whether the DBCA is applicable to their project.[76] That question both affects insurance and also whether or not the contract is required to conform to the Act.[77] 

   [76]Ibid 4 (Byrne J); Maclaw (n 13) [17] (Judge Davey)

   [77]Maclaw (n 13) [17] (Judge Davey).

2. It is unhelpful to require business people in the construction industry to unpick the stated uses and purposes of zones to determine, on a contract by contract basis, the principal or predominant permitted purposes for land use.  That is a challenging task even for experienced judges assisted by counsel.  As noted by Byrne J:[78]

   … I feel entirely unable to say that any one or more of the permitted purposes should be taken as being more or less important, significant or characteristic of the zone than any other.

   [78]Fletcher Construction (n 52) 8 (Byrne J).

3. In relation to APM’s submission that Byrne J construed ‘residential purposes’ in s 5(1)(e) to be words of limitation not allowing for land which had a mixed purpose, I disagree. I find there is nothing in the language he used that prevents land located in a mixed use zone being characterised as land zoned for residential purposes. To the contrary, the test propounded by his Honour expressly allows for other purposes provided that residential use is the principal or predominant purpose.

4. Turning now to the application of s 5(1)(e) to the Property.

5. It is common ground that the Property is located in a residential zone as defined and provided for in the VPPs. I therefore find that it is on land ‘zoned for residential purposes under a planning scheme’ for the purpose of s 5(1)(e).

6. I disagree with APM’s submission that the sophisticated regime under s 5(1) would apply only in very limited circumstances if s 5(1)(e) were to be interpreted as applying broadly to include any building on land zoned for mixed use purposes. I do not find that s 5(1)(e) applies broadly to include any building on land zoned for mixed use purposes. I find that it applies in this case to land within one of the six residential zones identified in the relevant planning scheme.

H Issue 3 – Is the Building Work excluded from the scope of the DBCA?

H.1      Issue

1. Having found that the Act applies to the Building Work under both ss 5(1)(a) and (e), the question remains whether the Building Work is then excluded from the scope of the DBCA either:

   (a)under s 6(1)(c) for being ‘work in relation to a building intended to be used only for business purposes’ (‘the business purposes exclusion‘); or

   (b)by operation of s 6(2) and reg 8(b) of the Regulations, for being work carried out on ‘premises that are used or intended to be used at a school, university or other educational or training institution as accommodation for students or staff’ (‘the student accommodation exclusion‘).

H.2      Submissions

H.2.1   Centurion’s submissions

1. In relation to the business purposes exclusion, Centurion submitted that:[79]

   (a)The business purposes exclusion is concerned with the purpose for which the building has been erected.  It excludes purpose-built structures such as offices, shops and factories;[80] 

   (b)Provided the work in question is ‘domestic building work’, then the owner’s motives behind procuring that construction work are irrelevant;[81]

   (c)It is common ground that APM intended to operate the Premises as a business providing student accommodation. If this fact were enough to exclude the Building Work from the operation of the DBCA, then the door would be open for unscrupulous developers to seek to avoid the application of the DBCA (and the standards of quality it imposes) by claiming that they intend to operate any units they construct as a business as a commercial landlord. Any subsequent purchasers of such units would be deprived of the protections provided by the Act, and the objects of the Act would therefore be easily defeated.[82]

   [79]Defendant’s Written Submission (n 66) [61]–[62].

   [80]Maclaw (n 13) [27] (Judge Davey).

   [81]Re Watpac Australia Pty Ltd (1996) 1 Qd R 229, 232 (Williams J).

   [82]Trial Transcript (n 12) 32.21–28, 33.17–34.29.

2. In relation to the student accommodation exclusion, Centurion submitted the following, in summary:

   (a)It conceded that if the Building Work had been performed on RMIT’s land, then the exclusion would apply.[83]  During oral submissions, Centurion’s counsel clarified its position that the engagement of the exclusion does not depend on who owns the land, but rather, whether the accommodation is located on premises owned, occupied or leased by the relevant educational institution;[84]

   (b)The exclusion under reg 8(b) does not apply to the Building Work because:[85]

   (i)the Premises are not premises located ‘at’ a school, university or other educational or training institution; and

   (ii)while the student accommodation was affiliated with RMIT at the time the D&C Contract was entered into, it was never a part of RMIT and was not on any land owned by RMIT.  It is on land owned by Centurion.  It was a private business providing accommodation to students not just from RMIT but also to students from other university institutions;

   (c)The text of the exclusion refers to premises (which is generally regarded to be a singular building) at a school, university or other institution. The indefinite article ‘a’ is also singular. If the drafter had intended the exclusion to apply to accommodation buildings that were not on premises owned, occupied or leased by the institutions that use them, they could have expressly provided for this. Instead, the language used in reg 8(b) supports a construction which limits the exclusion to premises located as part of a particular school, university or institution;[86] 

   (d)If the Court were to adopt an expansive definition of ‘at’ as proposed by APM so that the exclusion applies to any student accommodation near an institution or somehow related to an institution, it would be very easy for an unscrupulous developer to seek to avoid the application of the DBCA and thereby deprive the owner of the accommodation of the Act’s protections.[87] 

   [83]Ibid 123.22–24.

   [84]Ibid 122.17–31.

   [85]Defendant’s Written Submission (n 66) [65]–[68].

   [86]Trial Transcript (n 12) 121.31–122.21.

   [87]Ibid 59.15–23.

H.2.2   APM’s submissions

1. In relation to the business purposes exclusion, APM submitted by its written submissions, in summary:[88]

   (a)The entire purpose of the Property was that it would be leased to students as student accommodation for profit; 

   (b)This was not a property where individual units were intended to be sold to individual purchasers for use as their permanent residence. Clause 5 of the planning permit required Centurion to enter into a ‘section 173 agreement’ which was binding on subsequent purchasers. This section 173 agreement was required to include a covenant that ’the accommodation provided on the subject land is to be used for the exclusive accommodation of students enrolled full time at a secondary or tertiary level educational institution’.[89]  As such, it is evident that the Property was intended to be owned by a single entity and operated in a commercial manner. 

   [88]Plaintiff’s Written Submissions (n 36) [60]–[63].

   [89]Court Book 699, Melbourne City Council Planning Permit (No TP-2015-1204) dated 14 July 2016, cl 5.

2. APM did not address this issue in its oral submissions.

3. In relation to the student accommodation exclusion, APM submitted, in summary:[90]

   (a)Regulation 8(b) is directed to a particular class of accommodation, namely accommodation for ’students and staff’.  It is not controversial that the Premises are accommodation for that purpose.  The planning permit restricted the use of the Premises to students enrolled full time at a secondary or tertiary level educational institution;

   (b)Centurion’s attempt to confine the operation of the exclusion to premises situated on land owned by universities and other educational institutions should not be accepted. Instead, given the plain intent of reg 8(b) to exclude student accommodation from the scope of the DBCA, the word ’at’ should be interpreted broadly as requiring an association, connection or nexus between the accommodation in question and educational purposes and institutions;[91]

   (c)The DBCA fundamentally disrupts parties’ freedom of contract by regulating the terms on which a builder can enter into a contract with a building owner for domestic building work.[92]  It does so to address the inequality of bargaining power between individual owners and builders rather than to interfere with major commercial transactions.[93] In that context, it is unsurprising that there are numerous cases cautioning against the application of the DBCA to contracts between sophisticated, arms-length commercial parties;[94]

   (d)Cases involving the application of the DBCA to buildings intended by developers to be on-sold to individual consumers can be seen as a logical exception to this rule. If such properties were not covered, subsequent purchasers would be deprived of the DBCA’s protections;

   (e)This however is not such a case. The conditions of the planning permit require the Property to be used as student accommodation exclusively. As a result, there is no real prospect of the Property being subdivided and on-sold as individual units. Extending the DBCA’s protections to entities like Centurion and to properties like the present one would therefore represent an unwarranted intrusion into contracts between sophisticated commercial entities that is not justified by any potential transfer to individual owners.

   [90]Plaintiff’s Written Submissions (n 36) [64]–[71]; Trial Transcript (n 12) 97.26–99.7.

   [91]Collector of Customs (Tas) v Flinders Island Community Association (1985) 7 FCR 205, 212 (Sheppard, Wilcox and Everett JJ).

   [92]See, eg, DBCA ss 8, 11, 13, 14, 32, 33, 40.

   [93]FletcherConstruction (n 52) 3 (Byrne J); see also HIA Insurance Services Pty Ltd v Davy (2003) 7 VR 512, [36] (Eames JA, Callaway and Vincent JJA agreeing); Winslow Constructors Pty Ltd v Mt Holden Estates Pty Ltd (2004) 10 VR 435, [110] (Hansen AJA, Callaway and Buchanan JJA agreeing); Kane Constructions Pty Ltd v Sopov [2005] VSC 237, [888]–[895] (Warren CJ).

   [94]Ibid.

4. In applying the exclusion to the present case, APM submitted:[95]

   (a)The language of the DBCA and Regulations, considered in light of their context and purpose, indicates that the Act is not intended to apply to the Building Work;

   (b)There is no dispute that the Premises were intended to be used, and actually were used, to accommodate students;

   (c)The location of the Premises does not change its character;

   (d)In circumstances where there is a legal requirement in the planning permit tying the use of the Property to educational institutions within Melbourne, and a historical and legal connection with a particular tertiary institution, namely RMIT University, the exclusion is engaged.

H.3      Consideration

[95]Plaintiff’s Written Submissions (n 36) [64]–[71]; Trial Transcript (n 12) 99.7–103.15.

H.3.1   The business purposes exclusion

1. In relation to the business purposes exclusion, I refer to the decision of Maclaw in which Judge Davey said of s 6(1)(c):[96] 

   The reference to “business purposes” should be given its ordinary meaning and in my opinion it refers to non-residential buildings.  It is not concerned with whether or not the ultimate occupants of the premises own, hire or lease the premises provided those premises are residential premises.

   [96]Maclaw (n 13) [27] (Judge Davey).

2. This authority was relied on by Centurion.  APM did not seek to contradict this authority by its written or oral submissions.  

3. I agree with Judge Davey’s construction.  Therefore, I find that the business purposes exclusion does not apply to the Premises which is a residential premises.

H.3.2   The student accommodation exclusion

1. In relation to the student accommodation exclusion, the key issue in dispute between the parties is the proper construction of ’at’ as it appears in reg 8(b) of the Regulations.

2. On the one hand, Centurion submits that the student accommodation needs to be a part of the educational institution, or on land owned, leased or occupied by it, for the exclusion to be engaged.  On the other hand, APM submits that ‘at’ should be construed more broadly, requiring only an association or connection between the accommodation in question and the institution for the exclusion to apply.

3. APM relies on the decision of Collector of Customs (Tas) v Flinders Island Community Association (‘Collector of Customs’)[97] in support of its submission. In that case, the respondent operated a generator which supplied electricity to nearby houses located on a housing estate for the occupation of members of an Aboriginal community. The Court was required to determine if the respondent was entitled to a rebate on fuel under s 164(1)(b) of the Customs Act 1901 (Cth). The rebate was payable on fuel purchased for use ’at residential premises’ to meet the domestic requirements of residents of the premises. The generator was located outside the curtilage of the houses supplied by the generator. It was argued that it was critical to a claim for a rebate that the actual consumption of the fuel, its ’use’, had to be upon land which could properly be described as residential premises; that is, within the curtilage of one of the houses.[98]

   [97](1985) 7 FCR 205 (‘Collector of Customs’).

   [98]Ibid 211 (Sheppard, Wilcox and Everett JJ).

4. The Court considered the degree of locational connection necessary to meet the word ’at’, and observed:

   (a)The word ‘at’ is a word of flexible meaning.  In some contexts, it means ‘within’.  It may also be used in the sense of ’near to’ or ’adjacent to’.  The word ‘at’ is more naturally used to refer to a place of indefinite limitation.  The meaning of the word depends very much upon context and subject matter;[99]

   (b)Had it been intended that ‘at’ requires the use of fuel to take place upon the particular parcel of land constituting the relevant residential premises, it would have been more natural for Parliament to have used the preposition ’in’ or ‘within’.[100]

   [99]Ibid 211–2 (Sheppard, Wilcox and Everett JJ), discussing Mintern-Lane v Kercher [1968] VR 552, 554 (Newton J) and Homer v Homer (1878) 8 Ch D 758, 772–3 (Baggallay LJ), 775–6 (James LJ).

   [100]Ibid 213 (Sheppard, Wilcox and Everett JJ).

5. The Court held that the word ‘at’ as it appeared in s 164(1)(b) should be taken to require a close connection between the use and the residential premises, but not use within the residential premises. It held that what constitutes a sufficiently close connection must depend on the circumstances of the particular case. The Court noted that the policy evinced by the legislation was for a rebate to be given in respect of using fuel for the generation of electricity for domestic purposes, as contrasted with the generation of electricity by a commercial or local government supplier, for example. The Court concluded that it is consistent with that policy, and the use of the word ’at’, that the generation takes place in physical proximity to the supplied houses and that the resultant electricity be used only at premises falling within the definition of ‘residential premises’.[101] 

   [101]Ibid (Sheppard, Wilcox and Everett JJ).

6. While the Court acknowledged that decisions based upon the meaning of a word used in a different context are of limited assistance, it was assisted by the English Court of Appeal’s decision in Homer v Homer.[102]  It quoted extensively from that decision, including the reasons of James LJ who stated:[103]

   According to Richardson’s Dictionary, ‘at’ is used to denote near approach, nearness or proximity, adjunction or conjunction, association or consociation, connection; and that would seem to be its natural or ordinary idiomatic use in the English language. It may sometimes be equivalent to ‘in’ or ‘within’, but not because the word itself includes the idea of ‘inclusion’ within limits, but by reason that inclusion involves association or consociation.

   [102](1878) 8 Ch D 758.

   [103]Ibid 775–6 (James LJ).

7. I have been assisted by the Court’s analysis in Collector of Customs.

8. The definitions of ’at’ provided by the Macquarie and Oxford English Dictionaries confirm that the word has a flexible meaning.

9. The Macquarie Dictionary defines ‘at’ as follows:[104] 

   1.  a particle specifying a point occupied, attained, sought, or otherwise concerned, as in place, time, order, experience, etc., and hence used in many idiomatic phrases expressing circumstantial or relative position, degree or rate, action, manner: to stand at the door; to aim at a mark; at home; at hand; at noon; at zero; at work; at ease; at length; at a risk; at cost; at one's best.

   2.  a particle with the same force as in used with place names: to live at Darwin.

   ….

   Usage:  This is the preposition of choice to express a simple concept of location, the location being thought of as a precise position on a map. There are other prepositions which express location more particularly: in (within the area of), near (close to), by (alongside), on (on top of), under (beneath), etc. The preposition at can be interchangeable with these in some circumstances but always with the loss of the more detailed information.

   [104]Macquarie Dictionary (8^th ed, 2020) ‘at’ (defs 1, 2).

10. The Oxford English Dictionary provides numerous definitions including:[105]

    1. a.  The most general determination of simple localization in space, expressing, strictly, the simple relation of a thing to a point of space which it touches; hence, usually determining a point or object with which a thing or attribute is practically in contact, and thus the place where it is, when this is either so small as to be treated as a mere point, or when the exact relation between the thing and the place is not more particularly expressed by the prepositions close to, near, by, about, on, in, over, under, etc., all of which may at times be covered by at.

    …

    5.  At, as distinguished from in or on, is sometimes used to express some practical connection with a place, as distinguished from mere local position: cf. in school, at school; in or on the sea, at sea; in prison, at the hotel.

    [105]Oxford English Dictionary (3^rd ed, 2000) ‘at’ (defs 1(a), 5).

11. Relevantly, the Oxford English Dictionary notes at the commencement of the definition:[106]

    At is used to denote relations of so many kinds, and some of these so remote from its primary local sense, that a classification of its uses is very difficult.

    [106]Ibid ‘at’ (preamble).

12. In this case, I am concerned with its meaning as it appears in reg 8(b).

13. A key purpose of the DBCA is to regulate contracts for the carrying out of domestic building work to provide, amongst other things, for the maintenance of proper standards in the carrying out of domestic building work in a way that is fair to both builders and building owners.[107]

    [107]DBCA s 4(a).

14. ‘Domestic building work’ is defined by reference to ss 5 and 6. Section 5 sets out the building work to which the DBCA applies, while section 6 sets out the building work to which the Act does not apply. Both sections are directed to the character of the building work and the intended use of the structure that is built, the purpose being to identify the scope of domestic building work to which the DBCA applies.

1. Regulation 8 is made under s 6(2) and sets out further building works to which the DBCA does not apply. Regulation 8(b) expresses a clear intention that the Act does not apply to building work carried out in relation to student accommodation. On its face, the engagement of that exclusion does not depend on who owns the land. Also, the location of the premises does not change the character of the building work or the intended purpose of the premises.

2. The issue I must determine is whether, having regard to the text, purpose and context of the DBCA and the Regulations, the word ‘at’ in reg 8(b) should be construed to require that the building work in relation to student or staff accommodation must be carried out on or within land that is owned, leased or occupied by an educational institution before the reg 8(b) exclusion is engaged.

3. In my opinion, if the statutory drafter had intended that the use of the premises was required ‘within’ or ‘on’ land owned or occupied by an institution, they could have used those words or other words to denote location with greater precision than ‘at’.

4. It is common ground that if the Building Work was performed on land owned or occupied by RMIT University, the exclusion would be engaged.  In my view, it makes little sense why the exclusion would be engaged in that circumstance, but not, for example, in relation to student accommodation that is closely associated or connected with RMIT but located on neighbouring land. 

5. In my view, a more harmonious construction of ‘at’ as it appears in reg 8(b) is achieved by a broader definition requiring a close association or connection between the accommodation in question and the educational institution. Physical proximity may be a relevant factor, but it is not a requirement that the accommodation be located within the educational institution as contended by Centurion. I consider that the broader construction:

   (a)is reasonably open and consistent with the available definitions and ordinary usage of the word ‘at’; 

   (b)is consistent with the clear intention of reg 8(b) to exclude building works in relation to student accommodation from the operation of the DBCA. There is no apparent reason why it should matter whether the building work relating to student accommodation is done on land owned or occupied by the educational institution with which it is associated; and

   (c)properly directs attention to the character of the building work and the intended purpose of the premises (ie, whether it is intended to be used as accommodation for students or staff), rather than its relative location.

6. Having regard to the following facts, I find that there is a sufficient association or connection between the Premises and an educational institution so as to engage the exclusion:

   (a)There was a student accommodation agreement made between the previous developer and RMIT (‘RMIT Agreement‘).[108]  The recitals to the RMIT Agreement record, amongst other things, that: [109]

   [108]Court Book 375, Student Accommodation Agreement dated 1 March 2005.

   [109]Court Book 387, Ibid recitals.

   (i)the previous developer and RMIT had agreed to enter into this agreement ’pursuant to which the [RMIT] Village will be affiliated with the University to provide accommodation for [students, academics or employees of RMIT] and the parties will co-operate in relation to the operation and marketing of the Village’; and

   (ii)RMIT would be given priority rights for its students, academics or employees to occupy the Village although RMIT had no obligation to guarantee any level of usage of the Village;

   (b)The parties to the RMIT Agreement agreed, amongst other things, that:

   (i)the objectives of the RMIT Agreement were to make reasonably priced, clean and safe accommodation available for students, academics or employees of RMIT on a priority basis; to promote the efficient and effective management of the Village; and to maintain a strong affiliation between RMIT and the Village to enable the objectives to be achieved;[110]

   (ii)RMIT would assist in the marketing of the Village to its students, academics or employees;[111] and

   (iii)the previous developer would offer a number of scholarships to students of RMIT with whom it entered into a residential agreement;[112]

   (c)The RMIT Agreement was varied[113] and then novated from the previous developer to Centurion prior to its entry into the D&C Contract.[114]  Therefore, at the time of the D&C Contract’s execution, RMIT University was affiliated with the proposed student accommodation;

   (d)Under the RMIT Agreement, the previous developer obtained a licence from RMIT to use the intended business name of ‘RMIT Village on Flemington’.  By the time that Centurion purchased the land, the business name being used for the Premises was ‘RMIT Village’;[115]

   (e)There is physical proximity between the student accommodation and RMIT University (it is approximately a 15 minute walk to RMIT’s main campus).[116]

   [110]Court Book 395–6, Ibid cl 2.

   [111]Court Book 400–1, Ibid cl 5.

   [112]Court Book 408, Ibid cl 11.

   [113]Court Book 565, Variation Agreement dated 8 August 2012.

   [114]Court Book 576, Student Accommodation Agreement – Novation Agreement dated 24 January 2014.

   [115]Court Book 51, Witness Statement of Chee Min Kong, [13].

   [116]Court Book 51, Ibid [16].

7. As such, I find that the Property is excluded from the operation of the DBCA by virtue of s 6(2) of the Act and reg 8(b) of the Regulations.

8. Accordingly, I conclude that the answer to Question 1 is that the DBCA does not apply to the Building Work performed by APM.

9. Having regard to the outcome of Question 1, it is not necessary for me to consider or determine Question 2 in relation to whether the D&C Contract included the price variation warning in accordance with s 33(2)(a) of the DBCA.

1. Orders

1. I will hear from the parties as to the form of order and costs.