Chen v Kevin McNamara & Son Pty Ltd - [2012] VSCA 63

SUPREME COURT OF VICTORIA

COURT OF APPEAL

LIMIN JAMES CHEN and MEI FANG XU	S APCI 2009 3826
LIMIN JAMES CHEN and MEI FANG XU	Appellants
v
KEVIN McNAMARA & SON PTY LTD (ACN 072 144 579)	First Respondent
and
GEORGE P DEUTSCH	Second Respondent

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JUDGES	MAXWELL P, REDLICH JA and ROBSON AJA
WHERE HELD	MELBOURNE
DATE OF HEARING	15 September 2011
DATE OF JUDGMENT	4 April 2012
MEDIUM NEUTRAL CITATION	[2012] VSCA 63
JUDGMENT APPEALED FROM	[2009] VSC 294 (Hargrave J)

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ARBITRATION – Building contracts – Legislative prohibition on reference of disputes to arbitration – Dispute over construction of inground water tank – Whether ‘domestic building contract’ – Whether works carried out under domestic building contract – Whether building permit required – Whether tank was class 10b structure under Building Code – Approach to classification of buildings and structures – Whether ‘retaining wall, swimming pool or the like’ – No permit required – Appeal dismissed – Domestic Building Contracts Act 1995 (Vic) ss 3, 4, 5(1), 14, 54, Building Act 1993 (Vic) ss 3, 16, Building Regulations 2006, Regulation 1801, Building Code of Australia cll 1.3.2, 1.3.3 considered.

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Appearances:	Counsel	Solicitors
For the Appellants	Mr Hugh Foxcroft SC	Francis V Gallichio
For the First Respondent	Mr John Digby QC with Mr Philip Marzella	Russell Kennedy
For the Second Respondent	No appearance

MAXWELL P:

I have had the advantage of reading in draft the reasons for judgment of Redlich JA. For the reasons given by his Honour, I too would dismiss the appeal.

REDLICH JA:

This is an appeal from orders made by Hargrave J in the Commercial and Equity Division of the Supreme Court of Victoria, refusing declarations sought by the appellants (‘the Owners’), that the arbitration instituted by the first respondent (‘the Builder’) against the Owners, and the nomination of the second respondent as arbitrator, were void and that his rulings regarding the dispute were a nullity. His Honour also refused injunctions to restrain both the Builder and the arbitrator from proceeding with the arbitration.

The Owners are the registered proprietors of 17 Yarradale Road, Toorak, a residential property with waterfront access. Between June and August of 2008, the Owners contracted with the Builder to design and construct building works on their property. Initially the work was confined to the construction of a tennis court, at the rear of the property. Later agreements between the parties saw the works expanded to include the addition of a large reinforced concrete rainwater storage tank (‘the tank’), with an approximate 100,000 litre capacity, to be built underneath the tennis court slab and various landscaping works around the property. The agreements also encompassed other associated works with the project, such as the transportation and barging of both machinery and materials along the Yarra River to the property.

By late 2008 a dispute arose between the Builder and the Owners in relation to the works. The Builder claimed moneys owed. The Owners denied all liability and claimed that the costs of the work were excessive and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] VSCA 63
Decision Date: 4 April 2012

CaseChat Overview and Summary

Chen, a homeowner, brought an action against Kevin McNamara & Son Pty Ltd, a building contractor, concerning the construction of an inground water tank on his property. The central issue was whether the dispute was subject to the prohibition on arbitration under the Domestic Building Contracts Act 1995 (Vic). The crux of the matter revolved around whether the work constituted a 'domestic building contract', and if the inground water tank was classified as a 'class 10b structure' under the Building Code of Australia, which would have necessitated a building permit.

The court had to determine if the work carried out was indeed under a domestic building contract as defined by the Act. Additionally, the court needed to establish if the inground water tank was a 'class 10b structure', which would require a building permit under the Building Act 1993 (Vic). The classification of the tank as a 'retaining wall, swimming pool or the like' under the Building Regulations 2006, Regulation 1801, was also examined. The court's approach to interpreting the Building Code and the relevant statutes was pivotal in resolving these questions.

After thorough examination of the statutory definitions and the Building Code, the court concluded that the inground water tank did not fall under the category of a 'class 10b structure', thereby not requiring a building permit. As such, the work was not covered by the prohibition on arbitration. The court dismissed the appeal, finding that the contract and the works performed did not fall within the scope of the Domestic Building Contracts Act 1995 (Vic). The decision underscored the importance of precise statutory interpretation and the application of the Building Code in determining the nature of building works and the applicability of legislative provisions.

Orders