Dawn v Carlisle Homes Pty Ltd
[2025] VSCA 58
•3 April 2025
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2023 0079 |
| DAVID-JON ROBERT DAWN | Applicant |
| v | |
| CARLISLE HOMES PTY LTD | Respondent |
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| JUDGES: | NIALL CJ, EMERTON P and GRAY AJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 29 January 2025 |
| DATE OF JUDGMENT: | 3 April 2025 |
| MEDIUM NEUTRAL CITATION: | [2025] VSCA 58 |
| JUDGMENT APPEALED FROM: | [2023] VCAT 660 (Judge Anderson, Vice President) |
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BUILDING CONTRACTS – Disputes between builder and building owner – Dispute about completion of building works under major domestic building contract – Domestic Building Contracts Act 1995 ss 11, 40, 42.
ADMINISTRATIVE LAW – Victorian Civil and Administrative Tribunal – Appeal from tribunal – Objections to jurisdiction on asserted constitutional grounds – No real prospects of success – Application for leave to appeal refused – Victorian Civil and Administrative Tribunal Act 1998 s 148.
PRACTICE AND PROCEDURE – Adjournment – Applicant a self-represented litigant who appointed legal representatives the day before the hearing – Application for adjournment to enable review and potential amendment of grounds of the application for leave to appeal – Whether prejudice to self-represented litigant – Whether applicant had impaired ability to present case – Reliance on mental state of applicant – No claim of impaired financial capacity – Reasons for delay not adequately explained – Applicant opposed any undertaking or condition requiring payment of judgment debt owing to respondent as condition of adjournment – Prejudice to respondent – Prejudice to administration of justice and other litigants – Adjournment refused.
PRACTICE AND PROCEDURE – Amendment – Application to rely on proposed amended application for leave to appeal raising matters under the Commonwealth Constitution ss 75(iv), 76(ii) – Asserted constitutional matters did not arise – Application refused.
CONSTITUTIONAL LAW – Asserted matter as to VCAT’s lack of jurisdiction to hear and determine disputes involving residents of different States – Asserted matter as to VCAT’s lack of jurisdiction to hear and determine proceedings involving claims under the Australian Consumer Law in its application as a law of the Commonwealth – Asserted constitutional matters did not arise – the Commonwealth Constitution ss 75(iv), 76(ii) – Judiciary Act 1903 (Cth) s 78B.
Australian Consumer Law and Fair Trading Act 2012, s 8(1).
Charter of Human Rights and Responsibilities Act 2006, ss 8(3), 24.
Civil Procedure Act 2010, s 7.
Commonwealth Constitution, ss 75(iv), 76(ii).
Competition and Consumer Act 2010 (Cth).
Domestic Building Contracts Act 1995.
Domestic Building Contract Regulations 2017, reg 13(1).
Judiciary Act 1903 (Cth), ss 78AA, 78B.
Supreme Court Act 1986, s 14C.
Supreme Court (General Civil Procedure) Rules 2015, r 19.03(4).
Victorian Civil and Administrative Tribunal Act 1998, ss 97, 98(1), 148(1)(a).
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; Citta Hobart Pty Ltd v Cawthorn (2022) 276 CLR 216; Sali v SPC Ltd (1993) 67 ALJR 841; (1993) 116 ALR 625, applied.
Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3) [2022] VSC 283; Creative Building Services v Jolene Investments [2013] NSWSC 391; Renbar Constructions Pty Ltd v Sader [2022] NSWSC 172, considered.
Eaton v ISS Catering Services Pty Ltd (2013) 42 VR 635; Mackenzie v Head, Transport for Victoria [2021] VSCA 24; Tucker v Commissioner of State Revenue [2023] VSCA 125, followed.
Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; Australasian Temperance and General Mutual Life Assurance Society Ltd v Howe (1922) 31 CLR 290; British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30; Crouch v Commissioner for Railways (Qld) (1985) 159 CLR 22; Mitsubishi Motors Australia Ltd v Begovic [2023] HCA 43; Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525; Thurin v Krongold Constructions (Aust) Pty Ltd (2022) 73 VR 403, referred to.
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| Counsel | |||
| Applicant: | Mr D L Epstein on the application for an adjournment The applicant was otherwise self-represented | ||
| Respondent: | Dr K Weston-Scheuber | ||
Solicitors | |||
| Applicant: | Belleli King & Associates | ||
| Respondent: | In-house counsel | ||
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TABLE OF CONTENTS
Summary
Factual context
The VCAT proceeding
The proceeding in this Court
Pre-hearing steps
Adjournment application
Hearing and post-hearing steps
Questions for determination
The building contract
Completion of the building works and final payment under the building contract
Consideration of grounds of Mr Dawn’s application
Ground 1: DBDRV assessment report and completion of the building works
Ground 2: Notice of completion and finding as to date of completion
Ground 3: Calculation of damages and demand for payment into trust of amount for final payment under the building contract
Ground 4: New claim of repudiation
Ground 5: VCAT’s award of settlement damages to Carlisle
Ground 6: The treatment of appliances and s 42 of the DBCA
Ground 7: Calculation of time and certain certificates
Ground 8: Refusal to allow amendment and the Magistrates’ Court Rules
Ground 9: Refusal to allow amendment and VCAT decision [16]
Ground 10: Refusal to allow amendment and Mr Dawn’s attempt to rely on the proposed further amended points of claim and the Australian Consumer Law
Ground 11: Refusal to allow amendment and Mr Dawn’s attempt to rely on the Australian Consumer Law
Ground 12: Refusal to allow amendment and principles applicable to amendments
Ground 13: Reliance on certain Federal Court cases
Ground 14:VCAT’s calculation of time and the slip rule
Additional proposed grounds and asserted constitutional matters
Conclusion
NIALL CJ
EMERTON P
GRAY AJA:
In Victoria, domestic building contracts are regulated by a statutory framework intended to maintain proper standards of building work ‘in a way that is fair to both builders and building owners’ and to enable disputes to be resolved ‘as quickly, as efficiently and as cheaply as is possible having regard to the needs of fairness’.[1] To make the system work as it is intended, parties need to remain focussed on achieving practical resolutions and to avoid overly technical or inflexible approaches. Otherwise, as this case illustrates, relatively minor issues can lead to protracted processes and costly outcomes.
[1]Domestic Building Contracts Act 1995, ss 1(a)–(b), 4(a)–(b).
Summary
The Victorian Civil and Administrative Tribunal (‘VCAT’), constituted by a Vice President, heard a claim by a building company (‘Carlisle’) for payment of the final claim under a domestic building contract (‘building contract’) and amounts attributable to delay, and a counter-claim by the building owner (‘Mr Dawn’).
VCAT made orders that Mr Dawn pay to Carlisle the final claim under the contract, a net amount owing to Carlisle by reason of delays in the performance of the building contract, interest and costs.
In calculating the net amount Mr Dawn was ordered to pay Carlisle for delay, VCAT calculated ‘settlement damages’ owing to Carlisle at a rate fixed under the building contract for around 92 weeks of delay by Mr Dawn from the time of completion of the works, and subtracted an amount it found owing to Mr Dawn by Carlisle at a rate fixed under the building contract as ‘agreed damages’ (called by VCAT ‘liquidated damages’) for 30 weeks of delay by Carlisle in achieving completion of the required works.
Mr Dawn applied for leave to appeal to this Court from VCAT’s orders.[2] Mr Dawn’s original application for leave to appeal filed in July 2023 contained 14 grounds or questions alleging errors by VCAT. By a proposed amended application for leave to appeal provided to the Court in August 2024, Mr Dawn retained those 14 grounds and added contentions that VCAT’s orders should also be set aside on grounds that the determination of the dispute involved an exercise of the judicial power of the Commonwealth that was beyond VCAT’s jurisdiction. Two such reasons were advanced: that the dispute before VCAT had an ‘interstate party not able to be tried in a tribunal that is not a Court of State’,[3] and that it had involved the determination of questions under a law of the Commonwealth.[4] Leave to appeal depends on whether we are satisfied that the appeal would have a real prospect of success.[5]
[2]Victorian Civil and Administrative Tribunal Act 1998, s 148(1)(a) (‘VCAT Act’); Supreme Court Act 1986, s 14C.
[3]However, this is not the wording of the Commonwealth Constitution, s 75(iv).
[4]Such a matter would be within federal jurisdiction under the Commonwealth Constitution s 76(ii), and is therefore beyond VCAT’s jurisdiction: Thurin v Krongold Constructions (Aust) Pty Ltd (2022) 73 VR 403; [2022] VSCA 226 (‘Thurin v Krongold’).
[5]Supreme Court Act 1986, s 14C.
We have decided that the asserted constitutional matters do not arise in this case, as explained at the end of these reasons for judgment. Leave to amend Mr Dawn’s application in the form of his proposed amended application for leave to appeal provided to the Court in August 2024 would be futile and is refused.
We have also decided that none of the applicant’s 14 grounds give rise to any real prospect of a successful appeal from VCAT’s decision, as explained in the section of these reasons below titled ‘Consideration of grounds of Mr Dawn’s application’. Leave to appeal as sought in Mr Dawn’s original application is therefore refused.
Factual context
The facts appeared in detail in VCAT’s reasons for decision.[6] It is only necessary to give a superficial account of them at the outset of these reasons. More detail relating to some aspects of the facts appears later in these reasons.
[6]Carlisle Homes Pty Ltd v Dawn [2023] VCAT 660 (‘Reasons’).
Mr Dawn was the owner of land in Clyde North, Victoria. In July 2018, Mr Dawn signed a building contract with Carlisle, for Carlisle to build a house on the land.[7]
[7]Ibid [3]. The building contract was a modified version of the Housing Industry Association’s Victorian New Homes Contract as updated in August 2017.
Under the building contract, payments were to be made progressively upon completion of the various stages of the works.
At the time of signing the building contract, at Carlisle’s demand, Mr Dawn also signed an acknowledgment agreeing to pay 10 per cent of the contract price into the trust account of Carlisle’s solicitors, representing a ‘final completion payment’[8] or — as it was called in the building contract — the ‘final claim’. On the same day, Mr Dawn paid that amount into the trust account.
[8]Ibid [174].
By January 2019, all other progress payments under the contract price had been made, leaving only the amount of the final claim held in Carlisle’s solicitors’ trust account.
On 21 January 2019, Carlisle sent a notice of completion and final claim to Mr Dawn. Mr Dawn disputed the final claim, pointing out various defects and contending that the work under the building contract remained incomplete. The parties compiled a list of defects and Carlisle did further work, but a further inspection and meeting in March 2019 did not result in an agreed outcome.
Mr Dawn commenced a dispute resolution process and, in October 2019, obtained a domestic building assessment report from a Domestic Building Dispute Resolution Victoria (‘DBDRV’) assessor that identified certain defective or incomplete items to be rectified and completed within 40 days.
The VCAT proceeding
In a VCAT proceeding commenced by Carlisle on 23 January 2020, Carlisle contended that it had remedied all defects and completed the works required under the building contract. Carlisle sought an order for payment of the final claim, which remained in its solicitors’ trust account.
The amount of money at issue at the start of the VCAT proceeding was relatively modest: $40,779.40, representing 10 per cent of the contract price. Mr Dawn disputed Carlisle’s entitlement to payment of the final claim and he counter-claimed against Carlisle, initially seeking significant damages for rectification.[9] Over time the amount in issue was further increased by the claims that each party made against the other for payments attributable to delays in performance of the building contract.[10]
[9]This claim was ultimately withdrawn by Mr Dawn: ibid [21], [59(m)].
[10]Ibid [34]–[35], [253].
The resolution of the competing claims related to delay required VCAT to reach a conclusion about whether the works required under the building contract had been completed and, if so, when.
Mr Dawn was legally represented until the day before the VCAT hearing. On that day, his legal representatives withdrew. On the evening of the first day of the hearing, Mr Dawn sent an email to VCAT about his capacity to present his case.
VCAT did not adjourn the hearing. VCAT heard the proceeding over 18–20 October 2022, and 9, 10 and 29 November 2022. Mr Dawn conducted his case himself, obtaining some assistance from his former lawyers outside the hearing room. VCAT commented that Mr Dawn presented his case ably.[11]
[11]Ibid [22]–[23].
There were numerous iterations of points of claim and points of defence and of counterclaim filed by the parties over the course of the proceeding, including during the hearing. VCAT granted leave for the parties to rely on most of these. On 17 November 2022, Mr Dawn sought to rely on a document described as a proposed ‘further amended points of counterclaim’. Leave to rely on that document was refused.
The issues addressed and determined by VCAT were:[12]
(a)whether Carlisle’s notification of the final claim before certain appliances were installed breached s 42 of the Domestic Building Contracts Act 1995 (‘DBCA’);
(b)whether Special Condition 5 of the building contract, allowing for the installation of appliances after payment of the final claim, breached s 42 of the DBCA, and was void under s 132 of the DBCA;
(c)whether Mr Dawn satisfied his obligation to make the final payment, and Carlisle’s claim to the final payment, by him tendering a signed release authority to Carlisle on 22 March 2019 marked ‘under protest’, and by Carlisle’s refusal to accept the document;
(d)whether the lodgement by Mr Dawn with Carlisle’s solicitors, Enterprise Law Legal Group Pty Ltd (‘Enterprise Law’) on 27 July 2018 of the amount of the final payment under the building contract, at the request of Carlisle, was a further ‘deposit’ exceeding 5 per cent of the contract price, in breach of s 11(1)(a) of the DBCA, entitling Mr Dawn to avoid the building contract at any time before completion;
(e)alternatively, whether Carlisle, by demanding the lodgement of the amount of the final payment before the commencement of the building works, breached s 40(3) of the DBCA, entitling Mr Dawn to avoid paying the final claim;
(f)a counterclaim by Mr Dawn for common law damages for the delay by Carlisle in completing the building works by the completion date.
[12]Ibid [20].
On 16 June 2023, VCAT published its reasons for decision and made orders that Mr Dawn pay Carlisle the sum of $102,949.33, also directing submissions on the question of costs.[13]
[13]Ibid [259].
VCAT concluded that:
(a)the building works were ‘complete’ for the purposes of the building contract ‘by the end of October 2019’[14] or — at the latest — in November or ‘by the end of November 2019’;[15]
(b)Carlisle was entitled to the final payment of $40,779.40;[16]
(c)Mr Dawn was entitled to ‘liquidated’ (ie, agreed) damages from 3 May 2019 (being the date VCAT found completion to be due) to 30 November 2019, at $250 per week, in the sum of $7,500;[17]
(d)Carlisle was entitled to recover settlement damages for the periods from 1 December 2019 to 23 March 2021 and 8 August 2022 to 25 January 2023 at $500 per week in the sum of $46,000;[18]
(e)Carlisle’s claim for interest on the net amount of $79,279.40 was allowed, in the sum of $23,669.93;[19] and
(f)the final payment sum of $40,779.40 plus its accrued interest would be available to contribute toward meeting the total sum of $102,949.33 owing by Mr Dawn to Carlisle.[20]
[14]Ibid [111].
[15]Ibid [59(g)], [108], [222].
[16]Ibid [253].
[17]Even though VCAT found that the work was completed by the end of October 2019, VCAT allowed Mr Dawn an additional month of agreed damages for November 2019: ibid [222], [252].
[18]Ibid [219], [224], [253].
[19]Ibid [256].
[20]Ibid [257]–[258].
Although not included in the papers before us, it is a matter of public record that VCAT also made a decision on costs, delivered on 28 June 2023.[21] VCAT ordered that Mr Dawn pay Carlisle’s costs of the VCAT proceeding up to and including 30 September 2022 on the standard basis, and thereafter on an indemnity basis, to be taxed in default of agreement.[22] Counsel for Carlisle, Dr Weston-Scheuber, tendered into evidence before us a letter from Carlisle dated 7 August 2023 in which Carlisle offered to accept the amount of $115,223.90 (not including work performed by Carlisle’s in-house general counsel) in satisfaction of that costs order. However, that figure is not agreed, and there has been no assessment of the costs owing under VCAT’s costs order.
[21]Carlisle v Dawn (Costs) [2023] VCAT 718.
[22]Ibid.
Save for the application of the $40,779.40 held in trust and its accrued interest toward satisfaction of Mr Dawn’s debt to Carlisle arising from VCAT’s orders on 16 June 2023, the debt owing by Mr Dawn to Carlisle under those orders remains unpaid. No stay of VCAT’s orders has been sought or granted.
The proceeding in this Court
Pre-hearing steps
In an application and accompanying written case filed on 17 July 2023, Mr Dawn sought leave of this Court to appeal VCAT’s decision given on 16 June 2023.
On 22 August 2024, Mr Dawn provided to the Court a proposed amended application for leave to appeal and proposed amended written case each bearing the date 15 August 2024, which added contentions referring to the Commonwealth Constitution. In a notice under s 78B of the Judiciary Act 1903 (Cth) (‘s 78B notice’) filed with the Court in August 2024, Mr Dawn asserted that the proceeding raised questions under the Commonwealth Constitution.
Prior to the hearing, Mr Dawn did not file an affidavit verifying service of the s 78B notice on the Attorneys-General of the Commonwealth, the States, and the Australian Capital Territory and Northern Territory.[23]
[23]Contrary to r 19.03(4) of the Supreme Court (General Civil Procedure) Rules 2015. Section 78B of the Judiciary Act 1903 (Cth), read with s 78AA, requires service of a notice on all nine Attorneys-General.
Up to the day before the hearing, Mr Dawn was not legally represented in this proceeding. On that day, the Court was notified by email that the applicant had engaged Belleli King and Associates (‘Belleli King’) as legal representatives. Late in the afternoon, the Court was notified by email from Belleli King that Mr Dawn sought an adjournment of the hearing.
Adjournment application
On behalf of Mr Dawn, Mr Epstein applied for an adjournment of the hearing to allow his client an opportunity to reassess the grounds of appeal and consider whether they needed to be amended. Mr Epstein submitted that Mr Dawn could not adequately represent himself. He submitted that Mr Dawn would be impaired by mental difficulties he was suffering. He submitted that Mr Dawn should pay Carlisle’s reasonable costs thrown away and this would adequately address any prejudice to Carlisle. The application was opposed by Carlisle.
An application of this kind in a civil proceeding must be determined in light of the overarching purpose of the Civil Procedure Act 2010, ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’.[24] This includes consideration of any explanation for the need for the adjournment, the balancing of potential prejudice and harm, and the interests of justice.[25]
[24]Civil Procedure Act 2010 s 7.
[25]See, eg, Sali v SPC Ltd (1993) 67 ALJR 841; (1993) 116 ALR 625; [1993] HCA 47; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (‘Aon’); Eaton v ISS Catering Services Pty Ltd (2013) 42 VR 635, especially 647–648 [48]–[50] (Neave JA and Hargrave, Dixon AJJA); [2013] VSCA 361; Mackenzie v Head, Transport for Victoria [2021] VSCA 24, especially [44] (Tate and Kennedy JJA).
Adjournment applications are not to be considered solely by reference to whether any prejudice to the opposing party can be compensated by costs. The time of the court is a publicly funded resource, and inefficiencies in the use of that resource are to be taken into account, as well as the need to maintain public confidence in the judicial system.[26] The effect of adjournments on other litigants using the court has long been regarded as relevant.[27] What ‘might be perceived as an injustice to a party’ when viewed in isolation ‘may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources’.[28] The ‘need to avoid disruptions in the court’s lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard’ are ‘pressing concerns to which a court may have regard’.[29]
[26]Aon (2009) 239 CLR 175, 182 [5] (French CJ); [2009] HCA 27.
[27]Ibid [26], citing Sali v SPC Ltd (1993) 67 ALJR 841, 843–844 (Brennan, Deane and McHugh JJ); 116 ALR 625; [1993] HCA 47.
[28]Sali v SPC Ltd (1993) 67 ALJR 841, 844 (Brennan, Deane and McHugh JJ); 116 ALR 625; [1993] HCA 47.
[29]Ibid 849 (Toohey and Gaudron JJ).
Where the lateness of an adjournment application would make it inevitable that an adjournment would involve waste of court resources and inefficiency in the legal system overall, ‘[m]odern case management principles, as articulated in Aon, and as reflected in the Civil Procedure Act, support the refusal of leave to adjourn’.[30]
[30]Mackenzie v Head, Transport for Victoria [2021] VSCA 24, [44] (Tate and Kennedy JJA).
This was not an appropriate case for an adjournment.
Mr Dawn did not adequately explain his delay in obtaining legal representation. He commenced this proceeding in July 2023. The first time he took steps to engage legal representation was sometime between August and December 2024 when he contacted a law firm in East Malvern. Mr Dawn did not engage that firm to act for him, although he gave no explanation for this. He first contacted a solicitor at Belleli King, a firm that had assisted him in the past, via email on or about 20 December 2024. For more than a month after this, Mr Dawn was not aware of having received any response. He later realised he had received two responding emails from the solicitor at Belleli King. Regardless of why he missed the responses, clearly he did not follow up with Belleli King for more than a month. Ultimately he contacted Belleli King too late for a timely application for adjournment to be made.
Mr Dawn explained to us that he had been feeling overwhelmed and suicidal. He connected those feelings with this matter. He had not seen a medical practitioner about these issues. He told us, ‘I don’t see a medical practitioner for anything’. He had just been preparing to take his life prior to contacting Belleli King on 24 January 2025.
This was very concerning evidence. However, we were not persuaded that Mr Dawn would be unable to present his case in the event the adjournment was refused. Mr Dawn prepared the application for leave to appeal to this Court, and a proposed amended application raising two constitutional questions. He had represented himself in the VCAT hearing. Further, we were not persuaded that delaying the matter would be in anyone’s interests.
Mr Dawn told us that, from about the time he had commenced the proceeding in this Court, he had feelings of avoidance of the matter that made it difficult for him to work on it. His daughter had a serious operation in July 2024, and this had contributed to avoidance of preparing for this case. We did not regard these matters as justifying a late adjournment of the hearing.
There was no suggestion that his delay in obtaining legal representation was due to financial reasons. He told us that there would be no impediment to him writing a cheque immediately to cover the existing judgment debt and other amounts payable by him, which he quantified at $457,000.
On the evidence as a whole, we were satisfied that Mr Dawn’s lack of legal representation until virtually the last moment was essentially a choice made by Mr Dawn. We were also satisfied that the delay in changing his mind about legal representation and acting on that decision was not properly explained.
Further, in light of Mr Dawn’s evidence of his adequate financial capacity, the absence of any offer of an undertaking by him to pay the outstanding judgment debt arising from VCAT’s order weighed against granting an adjournment.
For all these reasons, we decided to refuse the adjournment, but we did so on the basis that Mr Dawn would be permitted to make further submissions in writing after the hearing in support of his proposed amended application, and for Carlisle to respond. That course balanced the need to avoid wasting the hearing date whilst giving Mr Dawn the opportunity to provide further submissions, with legal assistance if he so chose, and ensuring that the opportunity was not used to expand the case beyond his existing grounds. It should not be thought that such an opportunity will always be required or appropriate. In the usual case, the listed hearing date remains the occasion when argument is to be fully and finally developed.
Hearing and post-hearing steps
We then heard argument on the 14 grounds alleging error, which were severable from the alleged constitutional matters.[31] Mr Dawn represented himself in presenting argument on those grounds, although he did so with the assistance of Mr Epstein, who remained at the bar table. At the end of the hearing, we made directions to ensure proper notification to the Attorneys-General of the asserted constitutional matters, and for further submissions in writing in relation to Mr Dawn’s proposed amended application for leave to appeal.
[31]Judiciary Act 1903 (Cth) s 78B(2)(c).
Following the hearing, Belleli King’s instructions were withdrawn by Mr Dawn on 4 February 2025. Mr Dawn then filed an affidavit of service of his s 78B notice on all the Attorneys-General, but none of the Attorneys-General intervened or filed any submissions on the asserted constitutional matters.[32] The Court received further written submissions from Mr Dawn on 12 February 2024, and Carlisle’s responding submissions a week later. Mr Dawn’s further submissions said nothing further about the asserted constitutional matters, and in certain respects they went beyond the grounds articulated in Mr Dawn’s application. We address those further submissions, to the extent they related to the grounds of Mr Dawn’s application, in the section of these reasons below titled ‘Consideration of grounds of Mr Dawn’s application’.
[32]The only correspondence the Court received was a letter from the Victorian Government Solicitor’s Office dated 7 March 2025 on behalf of the Attorney-General for Victoria stating that they were considering the notice and would write to the Court as soon as they received instructions.
Questions for determination
As already noted, Mr Dawn’s application for leave to appeal raised 14 grounds for determination. We must determine whether those grounds have a real prospect of establishing error of law affecting VCAT’s orders.[33]
[33]Supreme Court Act 1986, s 14C. See also Tucker v Commissioner of State Revenue [2023] VSCA 125, [20]–[21].
Broadly speaking, the 14 grounds may be categorised as follows:
(a)Grounds 1, 2, 4 (in part), and 14, raising the questions: did VCAT err in law in concluding that the building works required under the building contract were completed by Carlisle by November 2019 and (on that basis) calculating and awarding settlement damages from December 2019?
(b)Ground 3, raising the questions: did VCAT err in law in concluding that Mr Dawn’s lodgement of the final payment amount under the building contract with Enterprise Law on 27 July 2018, at Carlisle’s demand, was not a deposit exceeding the amount permitted by the DBCA (s 11) or a progress payment or instalment demanded contrary to the DBCA (s 40)?
(c)Ground 5, raising the question: did VCAT err in law in awarding settlement damages to Carlisle (for periods from December 2019) in circumstances where it found Carlisle was itself liable to Mr Dawn for delayed performance (between May and November 2019), which led to an award of ‘liquidated’ (or agreed) damages?
(d)Ground 6, raising the question: did VCAT err in law in concluding that Carlisle’s demand for payment of the final claim before the appliances were installed was not in breach of s 42 of the DBCA?
(e)Grounds 4 (in part) and 7, raising the question: is Mr Dawn permitted to raise new arguments not properly raised before VCAT about alleged ‘repudiation’ and ‘fraud’?
(f)Grounds 8, 9, 10, 11, 12, and 13, raising the question: did VCAT err in law in not permitting Mr Dawn to rely on his proposed ‘further amended points of counterclaim’ provided to VCAT on 17 November 2022?
Further, in his proposed amended application for leave to appeal provided to the Court on 22 August 2024, Mr Dawn raised two additional grounds, concerning VCAT’s jurisdiction to hear and determine the matter, based on matters he asserted had arisen under the Commonwealth Constitution, ss 75(iv) and 76(ii). We must determine whether to grant leave to Mr Dawn to rely on this document and if so whether to grant leave to appeal on the basis of its contents.
As noted at the start of these reasons, we have concluded that none of Mr Dawn’s grounds have any merit and the proceeding is to be dismissed. Before explaining our reasons for these conclusions, it is necessary to turn in some detail to relevant aspects of the building contract and to some of the parties’ key actions that were taken in attempted performance of it.
The building contract
The building contract took a familiar form. Following formal preliminaries, it substantively began with several pages of particulars unique to the parties’ building project, which were followed in turn by 15 pages of schedules containing more details of those particulars, a signing page and a form for a deed of guarantee and indemnity, 23 pages of general conditions, and a two page consumer guide.
The general conditions contained a number of relevant definitions. One of these was ‘Building Works’, which in turn was informed by ‘Contract Documents’ and ‘Tender’:
‘Building Works’ means the works to be carried out and completed by the Builder as shown in the Contract Documents and as varied in accordance with this Contract.
‘Contract Documents’ means this signed Contract and the Conditions, signed Specifications, signed Plans, an Engineer’s Design, Tender, Colour Selection and any other documents attached to the Contract Documents.
‘Tender’ means the Contract Document specifying the Builder’s offer to construct and includes the details of the materials to be supplied as entitled and attached to this Contract.
Like the above definitional provisions, the particulars at the front of the building contract described the ‘Building Works’ in only very brief terms, likewise relying for detail on other documents, referring to 52 pages of ‘Specifications’, and 21 sheets of ‘Plans’. These documents were not included in the application book in this proceeding.[34]
[34]However, VCAT noted that a cook top, dishwasher and hot water service were included in the Tender as ‘appliances’: Reasons, [147].
The general conditions defined ‘Completion’ as follows:
‘Completion’ means that the Building Works to be carried out under the Contract have been completed in accordance with the Plans and Specifications set out in the Contract and is the day on which the Builder provides the Owner with the Notice of Completion (as issued pursuant to Clause 36.0).
This was consistent with sch 3 to the particulars of contract, addressing construction stages and progress payments, which included the following provision:
‘Completion’ means the Building Works are complete in accordance with the Contract Documents.
Other definitions of relevance included:
‘Building Period’ means the building construction time estimated by the Builder to carry out the Building Works as stated in Item 1 of Schedule 1, subject to Clause 34.
‘Final Claim’ means the Builder’s claim setting out the balance of the Contract Price due for payment by the Owner to the Builder, taking into account all monies paid by the Owner and all other amounts to be added to or deducted from the Contract Price under this Contract.
‘Final Payment’ means the payment of the amount of the Final Claim.
The Building Period was specified as 252 days, subject to permissible extensions under cl 34. Under cl 25 of the general conditions of the building contract, the Owner was to provide to the Builder exclusive possession of the land the subject of the Building Works within 7 days of receiving a request from the Builder. Clause 34 of the general conditions was entitled ‘Builder’s right to extensions of time’. Clause 34.3 provided:
If there is an extension of time due to anything done or not done by the Owner or by an agent, contractor or employee of the Owner, the Builder is, in addition to any other rights or remedies, entitled to delay damages worked out by reference to the period of time that the Building Period is extended and the greater of $250 per week or that amount set out in Item 12 of Schedule 1. Delay damages will accrue on a daily basis.
The amount specified in item 12 of sch 1 was also $250 per week.
Schedule 4 of the building contract, containing special conditions, included cl 5, which listed 12 categories of appliances denoted (a)–(l), and provided as follows:
5. Appliances
The following appliances (if included in the Tender) are to be installed by the Builder as part of the Building Works after the Final Payment is made under Clause 38:
(a) Oven(s)
…
(l) Decorative Lighting
To the extent that any of the above appliances were included in the Tender, sch 4 cl 5 above provided that they be installed after the Final Payment was made.[35] This is a point of significance in the matter before us.
[35]The Tender included a cook top, dishwasher and hot water service: Reasons, [147].
Clauses 36, 37 and 38 of the general conditions were also significant to the matter. They were each in a form modified from the standard HIA contract. Clause 36, entitled ‘Final inspection’, provided relevantly as follows:
36.0 When the Builder considers that the Building Works have reached Completion (except for the installation of the appliances (as applicable) listed in Special Condition 5), the Builder is to give to the Owner:
• a Notice of Completion; and
• the Final Claim.
36.1 Notwithstanding any other provision of this Contract, the Builder must not demand Final Payment until after the Builder has given to the Owner …:
• a copy of the occupancy permit under the Building Act 1993, if the building permit for the Building Works requires the issue of an occupancy permit; ….
36.2 The Builder and the Owner must meet on the Building Site within 7 Days of the Owner receiving the Notice of Completion and Final Claim to carry out an inspection in accordance with Clause 37.
…
(original emphasis)
Clause 37 of the general conditions was entitled ‘List of defects and Final Payment’, and relevantly provided:
37.0 When the Owner and the Builder meet on the Building Site to inspect the Building Works, the Builder will prepare a written list of all known defects and incomplete work (other than the installation of the appliances (as applicable) listed in Special Condition 5). Items identified by the Owner’s private consultant will be added to the list if the Builder determines these items are defective or incomplete (at the Builder’s discretion). The Builder and the Owner are to sign the list and each must keep a copy.
37.1 If the Owner does not sign the written list of items or there are no items to list as defective or incomplete (pursuant to Clause 37.0), the Owner must pay the Final Claim within a further period of 3 Business Days.
37.2 The Builder agrees to complete all works required to rectify any defects or to complete any works noted on the list prepared pursuant to Clause 37.0.
37.3 The Builder is to give the Owner a written notice when the work under Clause 37.2 has been done.
37.4 The Owner must pay the Final Claim within a further period of 3 Business Days after the Owner receives the Builder’s notice under Clause 37.3.
…
(original emphasis)
Clause 38 of the general conditions was entitled ‘Handover and Final Payment’, and relevantly provided:
38.0 When the Owner pays the Final Claim in cleared funds, and the payment of the Final claim is received by the Builder, the Builder must hand over Possession of the Land to the Owner together with all keys, certificates and warranties in the Builder’s possession.
…
38.4 When the Owner takes possession under this Clause 38, the Owner must give the Builder reasonable access to install the appliances (as applicable) listed in Special Condition 5.
38.5 Where either:
(a) the Builder has provided the Owner with written notice that the works under Clause 37.2 have been completed (in accordance with Clause 37.3);
or
(b) the Owner does not list any known defects or incomplete work,
and
(c) the Owner has failed to pay the Final Claim and take Possession as required under the Contract, the Owner is liable to pay Settlement Damages as defined in the Special Conditions.
38.6 Where the Owner pays the Final Claim but does not take Possession of the Land or any part of the Land, the Owner agrees and acknowledges that it, the Owner must:
(a) insure the property and provide such details to the Builder;
(b) authorise the Builder to trip the locks (so as not to open with the Builder’s key) and the Owner must retain all keys, remotes and settlement pack; and
(c) release, discharge and indemnify the Builder in relation to any claim, demands and costs relating to the security of the property.
(original emphasis)
Clause 13 of the special conditions in sch 4 of the building contract provided relevantly as follows:
The term “Settlement Damages” shall mean those sums that the Builder is entitled to be paid by the Owner as damages, to compensate the Builder in the following circumstances:
(i) To compensate the Builder for those expenses to secure and maintain the property in the circumstances described at Clause 38.5 of the General Conditions, in the amount of $500 per week;
…
Clause 41 of the general conditions was entitled ‘Owner’s claim for agreed damages’. Clause 41.0 provided:
If the Building Works have not reached Completion by the end of the Building Period the Owner is entitled to agreed damages in the sum set out in Item 9 of Schedule 1 for each week after the end of the Building Period to and including the earlier of:
• the date the Building Works reach Completion;
• the date this Contract is ended; and
• the date the Owner takes Possession of the Land or any part of the Land.
(original emphasis)
The amount specified in item 9 of sch 1 as agreed damages under cl 41 was $250 per week.
Completion of the building works and final payment under the building contract
On 27 July 2018, as well as signing the building contract,[36] Mr Dawn made two payments. He paid a 5 per cent deposit of the contract price to Carlisle, being $20,389.70[37] and he made a further payment of 10 per cent of the contract price, being $40,779.40, to Enterprise Law. The second payment was to be held on trust for the purpose of being a ‘final completion payment for CARLISLE’ as stated on a receipt given to Mr Dawn.[38] This was consistent with an acknowledgement Mr Dawn signed on the same day agreeing to the terms of a letter from Carlisle relating to the $40,779.40 payment. That letter indicated that interest on that amount would accrue to Mr Dawn’s benefit.[39]
[36]Reasons, [1].
[37]Ibid [172].
[38]Ibid.
[39]Ibid [174].
In January 2019, construction of the building was substantially completed.[40] We presume that all other progress payments under the building contract had been made, leaving only the amount of the final claim held in Carlisle’s solicitors’ trust account outstanding.
[40]Ibid [2].
On 21 January 2019, Carlisle sent an email to Mr Dawn stating that the building works had reached completion and enclosing a purported ‘Final Claim’. The purported ‘Final Claim’ stated that the balance owing of $40,779.40 was due for payment.[41]
[41]Ibid [41].
On 22 January 2019, an intended final inspection was conducted on-site and attended by Mr Dawn and Carlisle’s Construction Supervisor for the project, Mr Alex Durrant. Mr Durrant recorded a list of 151 defects identified by Mr Dawn, and although he did not agree that all items were defective he agreed to address them. Mr Dawn wrote to Carlisle on 29 January 2019 identifying further defective items.[42]
[42]Ibid [3].
An occupancy permit was issued on 9 February 2019. The permit stated that occupation was subject to certain conditions, including the installation of cooking facilities and the provision of power, gas, water and water tank/ solar hot water systems, if required, to the dwelling.
On 22 March 2019, a further inspection took place where Mr Dawn signed an agreement that all but three of the defects had been satisfactorily addressed: rock left on an adjoining site on which Carlisle intended to build another house, a dent to a window stiffener, and an aspect of the site cut. Mr Dawn marked all pages with the words ‘signed under protest’. Later that day, a hand-over appointment was scheduled at Carlisle’s offices with Mr Dawn, his wife and a Carlisle Team Leader present. At the meeting Mr Dawn provided a letter which authorised the release of the funds held on trust by Enterprise Law, but he had written ‘settled under protest’ in two places on it. Carlisle did not accept the documents with the notations. Mr and Mrs Dawn left the meeting without the property being handed over to them.[43]
[43]Ibid [5].
The parties were agreed that the following then occurred:
A further inspection and handover meeting was agreed to take place on 29 March 2019. Mr. Dawn attended the site and asked Mr Durrant where the appliances were. Mr Durrant said that a plumber had been booked to install the appliances later that morning. Mr Dawn left the site without accepting possession of the home.
As a result of this failed settlement meeting, Mr Dawn did not take possession of the property, the Final Claim (the last payment under the building contract) was not released to Carlisle and the property remained in Carlisle’s possession for an extended period.
In an email sent by Carlisle to Mr Dawn on 3 April 2019, Carlisle confirmed an offer made by it earlier by telephone that the appliances would be installed prior to Mr Dawn providing the required payment authorisation form. Mr Dawn did not respond to this email.
On 16 April 2019, Carlisle received emails from Mr Dawn dated 27 March 2019 and 5 April 2019, in which Mr Dawn raised 44 allegations of defective or incomplete work, that were not raised previously.
By letter dated 30 April 2019, Carlisle responded to the items in Mr Dawn’s emails dated 27 March 2019 and 5 April 2019, noting that seven items had been rectified, and other items were either not defective or would be addressed without admission of responsibility.
A further inspection and handover meeting was scheduled for 23 May 2019 but did not result in agreement.
Mr Dawn commenced an application for dispute resolution with the DBDRV. On 2 September 2019, the parties and the DBDRV attended the site for the DBDRV to conduct an assessment. On 2 October 2019, the DBDRV assessor provided his report, addressing the items raised by Mr Dawn, and assessing six of them as defective or incomplete. VCAT found that Carlisle attended to them by the end of November 2019 at the latest.[44]
[44]Ibid [222].
The VCAT proceeding commenced in January 2020.[45] VCAT later found that, in performing the work identified by the DBDRV assessment report by the end of November 2019, Carlisle completed the Building Works under the building contract, entitling it to final payment under the building contract and the transfer of possession back to Mr Dawn. VCAT found it was not necessary for Carlisle to have installed the appliances in order to entitle Carlisle to receive final payment and transfer possession back to Mr Dawn. VCAT found that the appliances were to be installed concurrently with the final payment and transfer of possession.[46] The appliances were ultimately installed on 25 November 2022.[47]
[45]Ibid [7].
[46]Ibid [159].
[47]Ibid [33(d)].
During the VCAT proceeding, Mr Dawn obtained a report identifying further items alleged to be defective or incomplete (‘Smith report’), and Carlisle addressed the majority of them in September and October 2020. VCAT did not find that this work was necessary to achieve completion under the building contract.[48]
[48]Ibid [111].
On 25 January 2023, Mr Dawn received the keys to the dwelling by post from Carlisle.[49]
[49]Ibid [8].
Consideration of grounds of Mr Dawn’s application
Ground 1: DBDRV assessment report and completion of the building works
Ground 1 of Mr Dawn’s application is that VCAT ‘erred in application of the law’ as follows:
Was VCAT required to bind the Respondent to complete the works required standard as per the decision of the Victorian Building Authority ‘VBA’ report as required by the Domestic Building Contracts Act . Is the VBA the authority of what constitutes proper workmanlike manner as required by the contract . Is the VBA the authority of whether or not the works were complete in accordance with the Building Act 1993.
The reference to ‘VBA’ report must be a reference to the DBDRV assessment report.
It is unnecessary to answer the questions posed by ground 1. That is because — even assuming the DBDRV’s identification of certain defects and incomplete work was determinative and binding as to the matters referred to in ground 1 — VCAT’s decision would have been the same. That is because VCAT concluded that the building works required under the contract were complete — entitling Carlisle to the final payment — only when Carlisle had performed the works identified in the DBDRV assessment report.[50] VCAT then found that the matters identified in the DBDRV report were attended to by Carlisle.[51] That work was ‘carried out between October and November 2019’.[52] This amounted to completion. At the hearing, Mr Dawn explained that he challenged that finding and that VCAT had meant to say that the works were completed in 2020. We do not accept this submission. Further, there was evidence before VCAT that the works were completed in October and November 2019.[53] There was no legal error involved in VCAT accepting this evidence.
[50]Ibid [99]–[101].
[51]Ibid [102].
[52]Ibid.
[53]Ibid.
Ground 1 identifies no error or law (or error of any kind) capable of affecting the conclusions of VCAT summarised above. It is unnecessary to consider those questions any further. Ground 1 has no prospect of success.
Ground 2: Notice of completion and finding as to date of completion
Ground 2 of Mr Dawn’s application is that VCAT ‘erred in application of the law’ as follows:
If the Works were not complete in accordance with the Contract, Building Act, and ACL at the time the Notice was sent was the Respondent required to serve the Applicant with a new notice in order to claim damages? Was VCAT entitled to calculate damages from the date used within the decision.
Carlisle sent Mr Dawn a notice of completion and final claim under cl 36.0 of the contract on 21 January 2019. VCAT found that the building works required under the contract were not complete at that time. As noted above, VCAT found that those works were completed by November 2019.
Does it follow, as suggested in the first part of ground 2, that Carlisle was contractually required to issue a fresh notice of completion and final claim at some date after completion of the works in November 2019? Mr Dawn’s further submissions after the hearing contended it was an essential term that a builder do so.
We do not accept that the building contract required a further notice and claim to be submitted. It must have been clear to both parties that a dispute soon erupted about completion and payment, and to make that even clearer, a dispute resolution process was then invoked and followed, and a proceeding in VCAT occurred, in which claims and counterclaims were made about payment of the final claim. There was no need for a fresh notice putting Mr Dawn on notice of Carlisle’s demand for payment. No useful purpose would have been served by Carlisle submitting another notice of completion and final claim.[54] On the contrary, doing so might have caused confusion, especially once a dispute resolution process had been invoked. For these reasons, we do not construe cl 36.0 of the general conditions of the building contract, or any other part of the building contract, as requiring a fresh notice and claim to be provided. Further, such a requirement would be contrary to the emphasis on being fair, efficient, quick, and cheap in the objectives of the DBCA.[55]
[54]Similar issues were considered, to similar effect, by the Supreme Court of New South Wales in Creative Building Services v Jolene Investments [2013] NSWSC 391, [29]–[32] (McDougall J), referred to approvingly in Renbar Constructions Pty Ltd v Sader [2022] NSWSC 172, [116]–[118] (Stevenson J).
[55]See [1] of these reasons, above.
Mr Dawn’s ground 2 also poses the question: was VCAT entitled to calculate damages from the date used in the VCAT decision, being 1 December 2019? No arguable ground of legal error has been established that could impugn VCAT’s conclusion that the building works were completed by the end of November 2019. It follows that Mr Dawn’s argument against VCAT using 1 December 2019 as the starting date for its calculation of all settlement damages has no real prospect of success either.
Ground 2 has no prospect of success.
Ground 3: Calculation of damages and demand for payment into trust of amount for final payment under the building contract
Ground 3 of Mr Dawn’s application is that VCAT ‘erred in application of the law’ as follows:
Was VCAT wrong in its calculation of penalties with respect to the Applicants claim that the Respondents holding of the Final Payment Amount in excess of the Building Contracts Act[?]
The reference to ‘penalties’ is a reference to amounts of damages for delay fixed at agreed rates under the building contract.
The reference to Carlisle’s ‘holding of the Final Payment Amount in excess of the Building Contracts Act’ is a contention that in July 2018 Carlisle demanded, and through its solicitors received and then held, the amount of $40,779.40 corresponding to the final payment, in breach of s 40 of the DBCA.
For Carlisle’s delay in completion, VCAT calculated ‘liquidated’ (agreed) damages under the building contract (general conditions cl 41.0 and sch 1 item 9) at a rate of $250 per week from 3 May 2019 to 30 November 2019 in favour of Mr Dawn.[56] VCAT also calculated settlement damages under the building contract (general conditions cl 38.5 and special conditions cl 13) at $500 per week from 1 December 2019 to 23 March 2021, and from 8 August 2022 to 25 January 2023, in favour of Carlisle.[57]
[56]Reasons, [242].
[57]Ibid [224].
The first part of Mr Dawn’s ground 3 asserting error in the calculation of these amounts was dependent on his success in establishing an error of law in respect of his Honour’s conclusion that the works were complete by the end of November 2019 or that a further notice of completion and final claim was required to be served by Carlisle. As we have already explained, neither of those grounds has any merit. It follows that this part of ground 3 also fails.
The balance of ground 3, together with the applicant’s written case, contends that VCAT also erred in relation to Carlisle’s requirement that Mr Dawn pay an amount equivalent to 10 per cent of the contract price, representing the final payment under the building contract, into Carlisle’s solicitor’s trust account upfront.
The building contract was for a price of $407,794.00, and so was a ‘major domestic building contract’ to which pt 3 of the DBCA applied at the time of VCAT’s decision. Division 2 of pt 3 was entitled, ‘What contracts must, and must not, contain’. In pt 3 div 4, s 40 was entitled ‘Limits on progress payments’. Subsection (1) defined various stages of work on major domestic building contracts, sub-s (2) prescribed the maximum amounts (by reference to percentages of contract price) builders could claim for progress payments for the various defined stages of work for three types of major domestic building contracts, and sub‑s (3) imposed a requirement that applied for other types of major domestic building contracts. However, s 40(4) permitted the displacement of sub‑ss (2) and (3) by agreement of the parties. It provided:
(4)Subsections (2) and (3) do not apply if the parties to a contract agree that it is not to apply and do so in the manner set out in the regulations.
Regulation 13(1) of the Domestic Building Contract Regulations 2017 relevantly provided:
(1)For the purposes of section 40(4) of the Act, when parties to a major domestic building contract agree that section 40(2) and (3) of the Act do not apply to that contract, the manner of agreement is to include in the major domestic building contract—
(a)a warning in the form of Form 1 in Schedule 1, which is signed by the building owner before the building owner signs the major domestic building contract; and
(b)a clause in the form of Form 2 in Schedule 1, which is signed by the building owner and the builder before they sign the major domestic building contract.
The domestic building contract in this case contained the warning referred to in reg 13(1)(a) and the clause referred to in reg 13(1)(b). Thus the suggestion that the demand for the $40,779.40 breached s 40 has no merit.
Further, we note that Mr Dawn also contended before VCAT that the demand for lodgement of the $40,779.40 on 27 July 2018 breached s 11 of the DBCA, because it amounted to a requirement for a deposit of more than 5 per cent of the contract price. Out of abundant caution, we address this contention too. We do not think this argument has any merit either. As explained by VCAT, the amount of $40,779.40 paid into trust on 27 July 2018 was a provision for security for payment of the final payment, not a deposit.[58]
[58]Ibid [183].
In his further submissions, Mr Dawn added another contention to the effect that prepayment into a solicitor’s trust account of 10 per cent of the contract price conflicted with s 12 of the DBCA. That section appears not to apply. He may have intended to refer to s 132 of the DBCA, which prohibits contracting out of the protections provided under the Act. Mr Dawn has not demonstrated any arguable case that the building contract breached this prohibition.
No argument that a breach of the DBCA or its regulations occurred in relation to the demand for the $40,779.40 has been established to have any prospects of success. This part of ground 3 also fails.
In his further submissions, Mr Dawn also contended that VCAT failed ‘to properly consider whether the liquidated damages clause imposed a penalty rather than a genuine pre-estimate of loss’, contrary to High Court authority.[59] The clauses of the building contract relied upon in assessing ‘settlement damages’ for Mr Dawn’s delay at $500 per week are referred to in paragraphs 61 and 62 above. VCAT considered whether that amount represented a genuine pre-estimate of loss by reference to the evidence in a detailed analysis over several paragraphs of its decision.[60] Mr Dawn has not established any legal error in VCAT’s analysis. We note that amongst many other things, VCAT took into account costs to insure the property, while it remained in Carlisle’s possession. We note that cl 38.6 (reproduced in paragraph 61 above) would have placed this obligation on the owner if the owner had paid the final claim and not taken possession. We consider it reasonable for this cost to be recoverable by Carlisle by way of settlement damages under cl 38.5. There was no discernible error in VCAT’s conclusion that settlement damages represent a reasonable pre-estimate of Carlisle’s holding costs.
[59]Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30; Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525; [2016] HCA 28.
[60]Reasons, [211]–[220].
In his further submissions, Mr Dawn submitted that the arguments he advanced relating to Carlisle’s demand for the 10 per cent upfront payment into trust are in some way relevant to the question of whether the ‘liquidated damages clause’ was enforceable. We do not consider there to be any such connection.
Ground 3 has no prospect of success.
Ground 4: New claim of repudiation
Ground 4 of Mr Dawn’s application is that VCAT ‘erred in application of the law’ as follows:
When the Respondent failed to complete the works determined to be defective by the VBA in accordance with their report did that constitute a repudiation of the Contract? Is the Respondent to claim liquidated damages as defined within the Contract when the Respondent refused to be bound by the terms?
Mr Dawn’s further submissions also included arguments that Carlisle had repudiated the building contract. The argument that Carlisle repudiated the building contact was not made before VCAT. It is too late to raise that argument now. Its determination would depend on evidence and an assessment of the facts. Ground 4 is incapable of establishing error of law on the part of VCAT.
Further and in any event, Mr Dawn pointed to no evidence on which it would be reasonable to conclude that either party repudiated the contract, still less accepted any repudiation by the other party.
Ground 4 has no prospect of success.
Ground 5: VCAT’s award of settlement damages to Carlisle
Ground 5 of Mr Dawn’s application is that VCAT ‘erred in application of the law’ as follows:
Is it justified to claim a penalty defined within the contract when the penalty contemplates the offending party having the benefit of retaining monies when those monies have been paid in full. Was VCAT right to allow the calculation when the claiming party is themselves in breech [sic]?
Mr Dawn alleges error of law on the basis that VCAT allowed a claim for 92 weeks of settlement damages in favour of Carlisle under the building contract even though VCAT also found that (prior to 1 December 2019) Carlisle did not complete the building works in a timely manner. Mr Dawn characterises Carlisle as having breached the contract. On that basis, he contends that VCAT should not have allowed any damages to Carlisle in respect of the period from 1 December 2019.
Although it is true that VCAT found that Carlisle had not performed the contract on time, we do not construe the building contract as thereby precluding Carlisle from receiving settlement damages after its belated performance of the contract, and for the period Mr Dawn was in default. It was only after Carlisle had performed the contract (on and from 1 December 2019) that VCAT allowed Carlisle’s claim for liquidated damages. For these reasons, no error of law arises.
Ground 5 has no prospect of success.
Ground 6: The treatment of appliances and s 42 of the DBCA
Ground 6 of Mr Dawn’s application is that VCAT ‘erred in application of the law’ as follows:
Was VCAT wrong to determine that the exclusion of appliances was not a contravention of section 42 of the DBCA[?]
VCAT noted that a cook top, dishwasher, and hot water service were not installed at the time the final payment was claimed.[61] However, VCAT concluded that the installation of these appliances was not ‘work carried out under the contract’ within the meaning of the DBCA, s 42(a).
[61]Ibid [147].
Mr Dawn contended that Carlisle breached the DBCA in connection with its demand for upfront payment into trust of 10 per cent of the contract price in various ways. One of these was that the demand was not permitted in accordance with s 42 of the DBCA. Section 42 provides:
A builder must not demand final payment under a major domestic building contract until—
(a)the work carried out under the contract has been completed in accordance with the plans and specifications set out in the contract; and
(b)the building owner is given either—
(i)a copy of the occupancy permit under the Building Act 1993, if the building permit for the work carried out under the contract requires the issue of an occupancy permit; or
(ii)in any other case, a copy of the certificate of final inspection.
We agree with VCAT’s conclusion that the building contract provided that installation of appliances included in the Tender and listed in special conditions cl 5 did not form part of the work to be carried out under the contract prior to Carlisle being entitled to final payment. That finding was supported by the terms of the contract itself, as carefully analysed by VCAT.[62] The provisions of the building contract reproduced earlier in these reasons at paragraphs 57–61 make it clear that VCAT’s analysis was correct. No arguable error of law has been identified.
[62]Ibid [139]–[153].
Mr Dawn contended at the hearing and in his further submissions that the contract could not lawfully exclude the installation of appliances in this manner. He did not provide any persuasive basis for this assertion. We are not satisfied that it is correct. He contended that this conclusion amounted to treating a contract as prevailing over a statute. That is not so. The DBCA s 42 operates by reference to what the parties have agreed in their contract.
As for s 42(b), VCAT found that a certificate of occupancy had been issued on 9 February 2019 and provided to Mr Dawn on 11 February 2019.[63] This was clearly a reference to the occupancy permit.[64] Mr Dawn argued before VCAT that the occupancy permit was issued too late, as Carlisle had already given its notice of completion and final claim. VCAT rejected this argument,[65] and Mr Dawn has not established any basis for concluding that VCAT erred in doing so. Thus the cumulative requirements of s 42 were satisfied. Before us, Mr Dawn made a related submission that the ‘certificate of occupancy’ was founded on a fraudulent document. We address Mr Dawn’s submissions about the occupancy permit issued in this case under the next heading.
[63]Ibid [45].
[64]See paragraph 69 above.
[65]Reasons, [112]–[132].
Ground 6 has no prospect of success.
Ground 7: Calculation of time and certain certificates
Ground 7 of Mr Dawn’s application is that VCAT ‘erred in application of the law’ as follows:
Was VCAT wrong in its calculation time by allowing the respondent to rely on the certificate of Occupancy fondeded [sic] on a fraudlent [sic] Plumbers Certificate of Complance [sic] made out in contrvention [sic] of the 221ZZH.
Mr Dawn’s further submissions addressed the ‘certificate of occupancy’ at some length.
The reference to a ‘certificate of occupancy’ must be a reference to the occupancy permit issued on 9 February 2019. There is no reference in that document to a plumber’s certificate of compliance. Nor, as we noted at the hearing, was there a plumber’s certificate of compliance in the application book before us. Further, we were not taken to any evidence that Mr Dawn made a claim in the VCAT proceeding that a plumber’s certificate was fraudulent and that the occupancy permit was based on a fraudulent document. These are matters that would have involved precision about the alleged fraud, notice to anyone alleged to have perpetrated the alleged fraud, evidence to be adduced and facts to be found. No error of law has been identified by Mr Dawn belatedly raising these allegations. In any event, the allegations are too vague for us to understand, let alone determine.
In any event, VCAT’s calculation of time for the assessment of settlement damages did not date from the issuing of the occupancy permit. As already explained, that calculation was based on VCAT’s finding of completion of the building works required under the contract.
Ground 7 has no prospect of success.
Ground 8: Refusal to allow amendment and the Magistrates’ Court Rules
Ground 8 of Mr Dawn’s application is that VCAT ‘refused amended Pledings [sic] in the case’, or (in other words) refused to allow an amendment, as follows:
Was VCAT wrong to not allow the amendment prior to the start of the trial as per Magistrates’ Court General Civil Procedure Rules 2020.
Mr Dawn did not explain why he relied on the rules of the Magistrates’ Court in framing this ground. We are not satisfied that they had any relevance to VCAT’s deliberations. VCAT’s deliberations about various amendments sought by Mr Dawn were summarised in the VCAT decision.[66] VCAT allowed a number of amendments made early in the hearing but refused to allow Mr Dawn to rely on his ‘further amended points of counterclaim’ provided on 17 November 2022. That document was provided very late, essentially after the substantive hearing was completed and prior to final submissions. VCAT explained that this document was ‘drafted as a submission in response to Carlisle’s submission on whether Mr Dawn’s delay damages claim must be limited to the amount of liquidated damages specified in the building contract’.[67] While noting that the document was generally confined to issues previously raised by Mr Dawn, VCAT said that the document also went ‘beyond those matters and, for example, refers to the Australian Consumer Law (“ACL”). I have taken these to be references to the ACL text forming part of Victorian law…’.[68] VCAT noted that the specific provisions relied upon by Mr Dawn in that document were ss 21, 60–65, and by inference, s 23.[69] VCAT concluded:
I do not consider that it is appropriate to permit Mr Dawn to raise new issues, particular[ly] at the late stage the proceeding had reached when they were first mentioned. Further, the issues are not raised with sufficient clarity for me to determine whether Mr Dawn wished to raise additional genuine disputes that went beyond the amendments he had earlier sought.[70]
[66]Ibid [9]–[21].
[67]Ibid [15].
[68]Ibid [16].
[69]Ibid [17].
[70]Ibid [18].
VCAT was not required to refer to any particular rules or indeed general principles relating to decisions to allow amendments. VCAT had broad discretion to make decisions as to the conduct of the case provided it acted fairly.[71]
[71]VCAT Act 1998, ss 97, 98(1).
Ground 8 is incapable of raising any arguable error of law on the part of VCAT.
Ground 9: Refusal to allow amendment and VCAT decision [16]
Ground 9 of Mr Dawn’s application is that VCAT refused to allow an amendment as follows:
Was VCAT incorrect in its decision at 16 that the facts of the case were not substantially the same? Is it correct that the facts were the same but the rights relied upon were further highlighted?
We have already referred to what VCAT said in paragraph 16 of its reasons.[72] Nothing in that paragraph discloses an arguable error of law on the part of VCAT.
[72]See paragraph 123 above.
Ground 9 has no prospects of success.
Ground 10: Refusal to allow amendment and Mr Dawn’s attempt to rely on the proposed further amended points of claim and the Australian Consumer Law
Ground 10 of Mr Dawn’s application is that VCAT refused to allow an amendment as follows:
Was VCAT wrong to stipulate that the inclusion of the consumer rights in the Applicants further amended points of claim were new when the ACL rights are an essential term of the Contract?
This ground appears to refer to statutory warranties in the building contract said to arise from the Australian Consumer Law.[73] In circumstances where Mr Dawn (belatedly) withdrew his claim for damages for defective work[74] it is not clear that references in the ‘further amended points of counterclaim’ to statutory warranties imposed by the Australian Consumer Law would have had any forensic purpose. In any event, as VCAT explained, the document came too late and the added issues in it were not raised with sufficient clarity. No error in VCAT’s reasoning, and certainly no error of law, has been demonstrated.
[73]Competition and Consumer Act 2010 (Cth) sch 2 (‘Australian Consumer Law’).
[74]Reasons, [21].
Ground 10 has no prospects of success.
Ground 11: Refusal to allow amendment and Mr Dawn’s attempt to rely on the Australian Consumer Law
Ground 11 of Mr Dawn’s application is that VCAT refused to allow an amendment as follows:
Was VCAT required to allow the Applicants amendment to include the Applicants rights contained within the Australian Consumer Laws ‘ACL’?
This ground is essentially the same as ground 10, and we repeat our preceding reasoning and conclusion.
In Mr Dawn’s further submissions, Mr Dawn contended that the refusal by VCAT to allow Mr Dawn to rely on the ‘further amended points of counterclaim’ was a denial of procedural fairness. Carlisle responded that this contention fell outside the grounds of Mr Dawn’s application for leave to appeal. Perhaps it may be arguable that this contention has some connection with ground 11. If so, in any event, Mr Dawn has not established an arguable claim for breach of procedural fairness by VCAT. The refusal by VCAT to allow him to rely on the document did not deprive him of a fair opportunity to make his case in VCAT. He had been legally represented up to the commencement of the hearing, was permitted to file amended points of defence and counterclaim early in the hearing, and only sought to rely on the ‘further amended points of counterclaim’ after the substantive hearing had come to an end. It was by then too late for him to raise new matters.
Ground 11 has no prospect of success.
Ground 12: Refusal to allow amendment and principles applicable to amendments
Ground 12 of Mr Dawn’s application is that VCAT refused to allow an amendment as follows:
Was VCAT required to allow the amended pleadings to include the rights afforded to the Applicant in accordance with Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd[?][75]
[75]Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3) [2022] VSC 283 (‘Business Service Brokers’) (citation in original text).
In a very useful passage in Business Service Brokers, Connock J set out the principles that apply to applications for leave to amend pleadings in civil litigation.[76] We repeat what we said in paragraph 124 above. Section 98(1) of the VCAT Act 1998 does not require VCAT to comply with the principles developed in civil litigation in courts. In any event, there is no basis for concluding that VCAT might have misunderstood or materially departed from these principles in deciding not to allow Mr Dawn to rely on his ‘further amended points of counterclaim’. Mr Dawn’s references to the Australian Consumer Law in that document were insufficiently clear to enable an understanding of the claim he sought to make. The document was served at the very end of a protracted proceeding and hearing, following multiple earlier amendments. Not only is no error of law demonstrated in refusing leave to Mr Dawn, but we are satisfied that VCAT could not possibly have reached any other conclusion. In other words, VCAT’s exercise of discretion was not only free from legal error, but it was also clearly correct.
[76]Ibid [22]–[31].
Ground 12 has no prospect of success.
Ground 13: Reliance on certain Federal Court cases
Ground 13 of Mr Dawn’s application is that VCAT refused to allow an amendment as follows:
Was VCAT required to allow the amended pleadings to include the rights afforded to the Applicant in accordance with the rules Established in Décor Corporation Pty Ltd v Dart Industries Inc (1991)[77], Advanced Holdings Pty Ltd v Commissioner of Taxation (2020)[78] and Davidson v Official Receiver [2021][79]. Is the argument made in KTC [sic]
‘While those two criteria may not represent a “hard and fast rule” (Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238; [2011] FCAFC 156 at [29]), they nevertheless provide “general guidance which the Court should normally accept”: Rawson Finances Pty Ltd v Commissioner of Taxation [2016] FCAFC 95 at [39].’
[77]Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; [1991] FCA 844 (citation in original text).
[78]Advanced Holdings Pty Ltd v Commissioner of Taxation (2020) 281 FCR 149; [2020] FCAFC 157 (citation in original text).
[79]Davidson v Official Receiver [2021] FCAFC 73 (citation in original text).
The cases cited in ground 13 are not relevant to the present case. They are cases concerning the criteria for a grant of leave to appeal to the Full Court of the Federal Court of Australia from an interlocutory decision of a judge of that court.
Ground 13 has no prospects of success.
Ground 14:VCAT’s calculation of time and the slip rule
Ground 14 of Mr Dawn’s application is that VCAT ‘erred in inviting in the application of the slip rule when requested to do so’ as follows:
On the handing down of the ruling His Honour errored in the calculation of time in his ruling deeming the date for completion to be November 2019. The applicant made submissions to the Judge that this was an error and needed to be corrected however no correction was made and no reply to the request was received.
As already mentioned in the contexts of grounds 1, 2, and 4, Mr Dawn has not demonstrated any error of law on the part of VCAT in connection with its finding that the building works were completed by November 2019, and on that basis calculating settlement damages due from Mr Dawn to Carlisle from 1 December 2019.
Mr Dawn contended that VCAT had made a slip, and that it intended to start that calculation in October 2020, based on its findings about rectification of defects identified in the Smith report. This is not so. It is clear from VCAT’s reasons for decision that it did not regard rectification of defects identified in the Smith report as necessary to the completion of the building works required under the building contract. The VCAT decision makes it clear that VCAT was satisfied that the building works required under the building contract were completed by the end of November 2019.
Ground 14 has no prospect of success.
Additional proposed grounds and asserted constitutional matters
In his proposed amended application for leave to appeal and written case, Mr Dawn raised two matters about VCAT’s jurisdiction. He submitted VCAT had no jurisdiction in the proceeding before it, for either or both of the following reasons:
(a)VCAT did not have jurisdiction to determine a ‘dispute involving an interstate resident’;[80]
(b)the dispute before VCAT involved claims under the Australian Consumer Law, and their determination would have involved an exercise of federal judicial power.
[80]Mr Dawn relied on Burns v Corbett (2018) 353 ALR 386; [2018] HCA 15.
The first ground of objection to VCAT’s jurisdiction is easily dealt with. There is no constitutional limitation on VCAT’s power to determine a claim ‘involving an interstate resident’ per se. Rather, there is a limitation on VCAT determining a dispute ‘between residents of different States’ within the meaning of s 75(iv) of the Commonwealth Constitution. That provision confers original jurisdiction on the High Court to determine disputes between residents of different States, and so any such determination would be beyond the jurisdiction of a body that is not a court of a State, such as VCAT.[81]
[81]Thurin v Krongold (2022) 73 VR 403, 406 [5a], 413–414 [42]–[45] (McLeish, Niall and Walker JJA); [2022] VSCA 226.
However, the dispute determined by VCAT was not a dispute ‘between residents of different States’ within the meaning of s 75(iv). The dispute before VCAT was between a natural person and a corporation. Section 75(iv) of the Commonwealth Constitution does not apply to a dispute between a corporation and a natural person (even if the natural person is resident in a State other than Victoria).[82]
[82]Australasian Temperance and General Mutual Life Assurance Society Ltd v Howe (1922) 31 CLR 290, 295–296 (Knox CJ and Gavan Duffy J), 326–334 (Higgins J agreeing); [1922] HCA 50 (Howe’s Case). Howe’s Case remains binding: Crouch v Commissioner for Railways (Qld) (1985) 159 CLR 22, 34 (Mason, Wilson, Brennan, Deane and Dawson JJ); [1985] HCA 69; British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30, 51 [37] (McHugh, Gummow and Hayne JJ); [2003] HCA 47.
The constitutional matter asserted by Mr Dawn does not arise and the first ground of objection to VCAT’s jurisdiction has no prospect of success.
The second ground of objection, that Mr Dawn raised claims before VCAT relying on the Australian Consumer Law, requires an analysis of what Mr Dawn actually submitted to VCAT.
As discussed, at a late stage of the proceeding Mr Dawn sought leave to rely on a document in the nature of a submission styled as ‘further amended points of counterclaim’ and referring in certain places to the ‘Australian Consumer Law’. VCAT disallowed Mr Dawn’s application to rely on that document. In this Court, Mr Dawn relied on that document as the principal basis for his assertion that the proceeding before VCAT involved matters of federal jurisdiction. He also asserted that the Australian Consumer Law had always applied to the building contract, irrespective of the late timing of his ‘further amended points of counterclaim’. We will assume, for the purposes of this case, that a claim under the Australian Consumer Law as applied as a law of the Commonwealth would be a matter arising under a law of the Commonwealth, within the meaning of s 76(ii) of the Commonwealth Constitution, and would be beyond VCAT’s jurisdiction, at least provided the ‘claim’ meets certain minimum requirements, which we will now address.
Did Mr Dawn’s references to the ‘Australian Consumer Law’ in his proposed ‘further amended points of counterclaim’ mean that he had raised a claim under the Australian Consumer Law (applied as a law of the Commonwealth) and that VCAT had no jurisdiction to hear and determine the proceeding from the time he provided that document?[83] We think not.
[83]Thurin v Krongold (2022) 73 VR 403, 413–414 [42]–[50] (McLeish, Niall and Walker JJA); [2022] VSCA 226.
In Thurin v Krongold,[84] the Court of Appeal was considering a claim within federal jurisdiction that had been made in a VCAT proceeding in clear terms and in a timely manner. The claims under the Australian Consumer Law in this case are far from clear and were not made in a timely way. Did they give rise to a matter arising under a law of the Commonwealth, with the scope of s 76(ii) of the Commonwealth Constitution? In Citta Hobart, the plurality of the High Court explained that for a matter to fall within s 76(ii) of the Commonwealth Constitution, it is enough that the relevant claim be ‘genuinely in controversy and that it give rise to an issue capable of judicial determination’ or ‘genuinely raised and not incapable on its face of legal argument’.[85] Their Honours also referred to a claim that is ‘legally coherent’.[86]
[84](2022) 73 VR 403; [2022] VSCA 226.
[85]Citta Hobart Pty Ltd v Cawthorn (2022) 276 CLR 216, 234 [35] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ); [2022] HCA 16.
[86]Ibid 234 [37].
In our view, Mr Dawn’s references to the ‘Australian Consumer Law’ in the proposed ‘further amended points of counterclaim’ did not articulate such a claim under the Australian Consumer Law. Although the document refers to the ‘Australian Consumer Law’, it did not explain the use Mr Dawn was seeking to make of the Australian Consumer Law with sufficient precision and particularity for Carlisle to be able to respond meaningfully, or for VCAT to determine. The submissions Mr Dawn made in this Court do not shed any real light on what his intended claims were either. They seem inconsistent with what was written in the ‘further amended points of claim’ before VCAT, and have shifted over the course of this proceeding.
Further, as already explained, there was no discernible error, and certainly no error of law, in VCAT’s decision not to allow Mr Dawn to rely on the contents of his ‘further amended points of claim’ at such a late stage of the VCAT proceeding. This decision was partially informed by the lack of clarity of the contents that document, and to that extent the two factors — imprecision and lateness — were related.
Both the imprecision and the lateness of Mr Dawn’s attempt to rely on the Australian Consumer Law lead to the same conclusion: Mr Dawn did not make a claim under the Australian Consumer Law before VCAT so as to result in it becoming any part of the controversy between him and Carlisle.
For these reasons, the second constitutional matter asserted by Mr Dawn does not arise, and the second ground of objection to VCAT’s jurisdiction has no prospect of success.
Further and in any event, VCAT took the view that Mr Dawn’s references to the ‘Australian Consumer Law’ were references to the Australian Consumer Law applying as a law of Victoria.[87] Because no Attorney-General intervened in response to Mr Dawn’s s 78B notices, we will not express a concluded view on this issue. Suffice it to say we see no reason to doubt the correctness of VCAT’s view. We note that it is supported by remarks of the High Court in Mitsubishi Motors Australia Ltd v Begovic.[88] The Court noted that the text of the Australian Consumer Law is applied as a law of the Commonwealth to the conduct of corporations and is applied in Victoria by s 8(1) of the Australian Consumer Law and Fair Trading Act 2012, and that VCAT’s jurisdiction in the case derived from the latter.[89] We also note that s 131C(1) of the Competition and Consumer Act 2010 (Cth) provides that pt XI of that Act is not intended to exclude or limit the concurrent operation of laws of the States.
[87]Reasons, [16].
[88][2023] HCA 43, [12] (Gageler CJ, Gordon, Steward, Gleeson and Jagot JJ).
[89]Ibid.
In light of the views we have formed that Mr Dawn’s objections to VCAT’s jurisdiction have no prospects of success, there is no utility in considering further Mr Dawn’s application to amend his application for leave to appeal and written case. That application is refused.
Conclusion
As none of the grounds relied on by Mr Dawn have any real prospect of success, his application for leave to appeal will be refused.
We will hear the parties on the question of costs.
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