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Dover Beach Pty Ltd v Geftine Pty Ltd

Dover Beach Pty Ltd v Geftine Pty Ltd

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Case Copied 17 December 2008 62 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 3805 of 2006

DOVER BEACH PTY LTD (ACN 096 781 636)

and

TIM STONE

Appellants

GEFTINE PTY LTD (ACN 005 456 468)

Respondent

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JUDGES:	ASHLEY and REDLICH JJA and COGHLAN AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	12 March 2008
DATE OF JUDGMENT:	17 December 2008
MEDIUM NEUTRAL CITATION:	[2008] VSCA 248

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Contract – Major domestic building contract – Whether contract ‘void against builder’ for breach of s 31(1)(l), Domestic Building Contracts Act 1995, or for breach of s 136(2) or s 176(2A), Building Act 1993 – Importance of building insurance – Scheme of Acts by which different consequences imposed for different breaches – Specified consequences of breach of each relevant provision a penalty – Held, contract not void by reason of breach of those provisions – Per curiam, builder would have been entitled to restitutionary relief if denied contractual relief.

Costs – Offer of settlement – Offer by building owner to settle with builder for specified amount, plus such costs as tribunal might allow in lieu of agreement by parties – Whether offer complied with requirements of s 112, Victorian Civil and Administrative Tribunal Act 1998 – Whether offer incomplete, ambiguous or uncertain – Whether tribunal erred in finding offer not ambiguous or uncertain – Held, offer complied with requirements of section.

Domestic Contracts Building Act 1995, s 31(1).
Building Act 1993, s136(2), s 176(2A).
Victorian Civil and Administrative Tribunal Act 1998, s 112.

APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr S G O’Bryan SC with Mr A G Cameron	Best Hooper Solicitors
For the Respondent	Mr P T Baker	McKean & Park Lawyers

ASHLEY JA:

This appeal, brought from an order made by the Victorian Civil and Administrative Tribunal (‘the tribunal’) constituted by a deputy president, challenges a finding made by the tribunal that a building contract entered into between a builder and an owner was ‘void against the builder’ by reason of provisions of the Domestic Building Contract Act 1995 (‘the Act’).[1] The principal question which arises is whether the builder’s failure to take out domestic building work insurance rendered the contract void.[2] In consequence of the tribunal so holding, a counter claim raised by the builder, Dover Beach Pty Ltd (‘Dover’) in response to a claim by the owner, Geftine Pty Ltd (‘Geftine’) was in large part held not to be maintainable. By leave, Dover now challenges that conclusion.[3]
[1]The tribunal also referred to provisions of the Building Act 1993. They were relevant to but not decisive of its decision. A number of provisions of that Act were relied upon by the parties on the appeal.
[2]There is a related question, raised by Notice of Contention, whether the builder’s failure to be appropriately registered had that effect.
[3]The appeal involves questions of statutory construction, and thus raises a question of law as required by s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998.

A second question arises in the appeal. The…

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: [2008] VSCA 248
Decision Date: 17 December 2008

CaseChat Overview and Summary

In Dover Beach Pty Ltd v Geftine Pty Ltd, the Commercial and Administrative Division of the Supreme Court of Victoria was called upon to determine the enforceability of a major domestic building contract in light of alleged breaches by the builder of specific statutory provisions. The building owner, Dover Beach Pty Ltd, sought to have the contract declared void due to the builder's failure to provide evidence of building insurance, as required by s 31(1)(l) of the Domestic Building Contracts Act 1995, and other statutory provisions. The builder, Geftine Pty Ltd, argued that the contract should not be voided and that any breach of the relevant sections resulted in specified consequences, not voiding the contract.

The court was required to interpret the statutory provisions and assess whether the builder's breaches rendered the contract void or if the specified consequences of the breaches amounted to a penalty, which would also render the contract void. Additionally, the court had to consider the effect of the alleged breaches on the enforceability of the contract and whether the builder would have been entitled to restitutionary relief if denied contractual relief.

The court held that the specified consequences of the breaches were indeed penalties under the relevant statutes, but these penalties did not render the contract void. The court clarified that the scheme of the Acts imposed different consequences for different breaches, and the specified consequences for the breaches in question were not voiding the contract. Furthermore, the court found that the builder would have been entitled to restitutionary relief if the contract had been declared void due to the breaches. The court also found that the offer of settlement made by the building owner to the builder complied with the requirements of the Victorian Civil and Administrative Tribunal Act 1998, and that the tribunal had not erred in finding the offer not ambiguous or uncertain.

The court did not declare the contract void but instead left the matter to be resolved on the merits, recognising that the builder could have been entitled to restitutionary relief if the contract had been declared void. The court found that the offer of settlement complied with the statutory requirements, affirming the tribunal's decision.

Orders