Maxtra Constructions Pty Ltd v Aust Group Holdings Pty Ltd

[2015] VCC 783

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL DIVISION
BUILDING CASES LIST

Case No. CI-15-01963

MAXTRA CONSTRUCTIONS PTY LTD	Plaintiff
v.
AUST GROUP HOLDINGS PTY LTD	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	12 June 2015
DATE OF JUDGMENT:	12 June 2015 (Revised 15 June 2015)
CASE MAY BE CITED AS:	Maxtra Constructions Pty Ltd v. Aust Group Holdings Pty Ltd
MEDIUM NEUTRAL CITATION:	[2015] VCC 783

REASONS FOR JUDGMENT

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Catchwords:            Practice and procedure – Stay application – Building dispute relating to ten storey apartment building with two retail spaces on the ground floor – Whether a “domestic building dispute” which “must be stayed” – Dispute also may relate to part of a building “used for business purposes” – Whether “appropriate” to stay that part of the dispute – Section 57(2) Domestic Building Contracts Act 1995 (Vic) – Section 188(2) Australian Consumer Law and Fair Trading Act 2012 (Vic) – Kane Constructions Pty Ltd v Sopov [2005] VSC 237 and Burbank Australia Pty Ltd v Owners Corporation [2015] VSC 160 considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P. Micevski	Rigby Cooke Lawyers
For the Defendant	Mr A. P. Downie	Fairweather Legal

HIS HONOUR:

1The question for determination on the present application is whether a dispute arising out of the construction of a ten storey building, with two retail spaces on the ground floor and 55 residential apartments, is a “domestic building dispute” within the meaning of section 54 of the Domestic Building Contracts Act 1995 (Vic).

2The plaintiff commenced a proceeding in this Court by Writ dated 23 April 2015 claiming extensions of time in order to meet a certificate issued by the architect deducting liquidated damages from payment claims made by the plaintiff pursuant to a building contract between the plaintiff as builder and the defendant as owner. If the dispute is a “domestic building dispute”, by section 57(2) of the Act, the proceeding must be stayed and the dispute can only be litigated in the Victorian Civil and Adminsitrative Tribunal.

3There are a number of decisions of the Supreme Court of Victoria which have considered a similar issue; most recently, the decision of McDonald J in Burbank Australia Pty Ltd v Owners Corporation [2015] VSC 160.

4Plaintiff’s counsel, Mr Micevski relied upon an earlier decision of Kane Constructions Pty Ltd v Sopov [2005] VSC 237, a decision of Warren CJ. I consider that, for the reasons articulated by McDonald J at paragraph 16 of Burbank that the decision of the Chief Justice in Sopov is distinguishable on its facts from the present case. The development considered by the Chief Justice was one which, as she described at paragraph 892, “involved mixed use development of residential, office and gallery and restaurant developed by a developer”. The dispute before McDonald J in Burbank related to a “multi-apartment development solely for residential purposes”.

5In the present case, I consider that the development under consideration involved “domestic building work” to which the Act applies.

6There remains a subsidiary issue; the effect of section 6 of the Act which excludes from the definition of “domestic building work”, “any work in relation to a building intended to be used only for business purposes”.

7Because of the nature of the dispute articulated by the builder in the statement of claim, it appears that the dispute relates to the whole of the development and is unlikely to be restricted to the two retail spaces on the ground floor. The Chief Justice drew attention to the possible relevance of the distinction between “domestic building work” and work where the building is also to be used for “business purposes”, at paragraph 892 of her judgment in Sopov.

8Defendant’s counsel, Mr Downie submitted that the dichotomy is best dealt with by the application of section 188 of the Australian Consumer Law andFair Trading Act 2012 (Vic), which provides that the Court must stay a proceeding if the proceeding could be heard by VCAT and “the Court is satisfied that the proceedings would be more apprioriately dealt with by VCAT”.

9It is clear that the broad definition in the Act of “a dispute or claim arising between a purchaser of goods or services and a supplier of goods and services in relation to a supply of goods or services”, which enlivens s. 188, is capable of having application to the present dispute, insofar as the dispute may not be covered by the Domestic Buiding Contracts Act.

10In my view, if a substantial part of the dispute in this Court must be stayed by operation of section 57(2) of the Domestic Building Contract Act in respect of the domestic building dispute, then it is appropriate that the proceeding should be stayed, insofar as the dispute relates to the building work excluded by that Act. To do otherwise, would leave the parties in a very difficult position to decide how their disputes might be determined, either in this Court or at VCAT.

11Accordingly, I propose to order that the proceeding be stayed pursuant to section 57(2) of the Domestic Building Contracts Act 1995 (Vic) and section 188(2) of the Australian Consumer Law and Fair Trading Act 2012 (Vic).

12The costs of the proceeding, including the costs of the defendant’s summons filed 22 May 2015, are to be reserved for determination by the Victorian Civil and Administrative Tribunal, upon the hearing of any proceeding issued by the plaintiff in relation to the dispute articulated in this proceeding, or if no such proceeding is issued within a reasonable period, upon application to this Court.

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Certificate

I certify that these 2 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 12 June 2015 and revised on 15 June 2015.

Dated: 15 June 2015

Olivia Bramwell    

Associate to His Honour Judge Anderson