Mooney v Fanissa Pty Ltd
[2024] VCC 1032
•12 July 2024
Christo
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-23-06833
| Christopher Mooney & Jodie Morzinek | Plaintiffs |
| v | |
| Fanissa Pty Ltd (ACN 005 619 330) t/as P.J. Pools and Spas | Defendant |
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JUDGE: | HER HONOUR JUDGE KIRTON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 June 2024 | |
DATE OF RULING: | 12 July 2024 | |
CASE MAY BE CITED AS: | Mooney & Anor v Fanissa Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1032 | |
REASONS FOR RULING
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Subject:CONTRACTS - BUILDING AND CONSTRUCTION – DOMESTIC BUILDING CONTRACTS
Catchwords: Building and construction – domestic building dispute – application under s 57 Domestic Building Contracts Act 1995 (Vic) to stay the proceeding on the basis that it concerns a “domestic building dispute”– swimming pool – whether proceeding could be heard by VCAT under subdivision 1 of Part 5 of the Act
Legislation Cited: Domestic Building Contracts Act 1995 (Vic); Domestic Building Contracts and Tribunal Act 1995 (Vic); House Contracts Guarantee Bill 1987 (Vic); Victorian Civil and Administrative Tribunal Act 1998 (Vic); Victorian Civil and Administrative Tribunal Rules 2018 (Vic); Civil Procedure Act 2010 (Vic).
Cases Cited:Nemirovskaya v Briggs [2022] VSC 685; The Trust Company Limited v Blue Train Cafe Pty Ltd [2024] VSC 232; Impresa Construction v Oxford Building [2021] VCC 1146; Uber Builders and Developers Pty Ltd v MIFA Pty Ltd & Anor [2021] VCC 1677; Nettleton v Vero Insurance Ltd & Anor [2008] VSC 554; Thurin v Krongold Constructions [2022] VSCA 226; Presser v Ocean View Properties Pty Ltd [2006] VSC 143; Radojevic v JDA Design Group Pty Ltd [2017] VSC 554; Radojevic v JDA Design Group Pty Ltd [2017] VSC 796; Eliana Construction v Ramani [2020] VSC 115; Kane Constructions Pty Ltd v Sopov [2005] VSC 237; Nettleton v Vero Insurance Ltd & Anor [2008] VSC 554; Nazari v Zedcorp Pty Ltd [2020] VCC 1936; EPH Enterprises Pty Ltd v Longboat Holdings Group2 Pty Ltd [2019] VCC 944; Lin Tiger Plastering Pty Ltd v Platinum Construction (Vic) Pty Ltd (2018) 57 VR 576; Eliana Construction v Ramani [2020] VSC 115; Krongold v Thurin [2023] VSCA 191; H Buildings v Owners Corporation [2017] VSC 802; Centurion Australia Investments Pty Ltd v APM Group (Aust) Pty Ltd [2023] VSCA 324; Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205; Lazaway Pools & Spas v Caldarera [1997] VDBT 67; Wilson and Anor v Lazaway Pools & Spas Pty Ltd (ACN 007 171 520) [2011] VCAT 1827; Drossos v Ultracourts Pty Ltd [2024] VCAT 230; Emmerson v Natural Pools Australia Pty Ltd [2020] VCAT 833; Fraser v Melbourne Pools Pty Ltd [2018] VCAT 1721; Tsaikos v Lazaway Pools and Spas [2016] VCAT 296; Clark and Anor v Lazaway Pools & Spas (ACN 007 171 520) [2011] VCAT 2131; Freedom Pools and Spas (ACN 101 657 167) v Watts [2011] VCAT 1534; N and J Rogers Pty Ltd trading as Performance Pools v Rippingale [2010] VCAT 1899; Parisi v Compass Pools [2007] VCAT 425; Brambles v Kemsley [2000] VSC 384.
Ruling: Application Granted, proceeding is stayed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | J Lipinski | Belleli King and Associates |
| For the Defendant | F Brimfield | SGM Legal |
HER HONOUR:
1 The role of the Building and Property List (BPL) of the Victorian Civil and Administrative Tribunal (VCAT), to be the primary forum in Victoria to resolve domestic building disputes has been eroded in recent years. While it is still acknowledged to be an expert tribunal, with members assigned to BPL because of their specialist knowledge and experience relevant to building and property matters,[1] decisions around the allocation of resources to VCAT and the BPL in recent years have led to a situation where it has been found, for case management reasons, to be incapable of hearing certain matters.[2]
[1]See for example, Nemirovskaya v Briggs [2022] VSC 685, 12 [31]; The Trust Company Limited v Blue Train Cafe Pty Ltd [2024] VSC 232, 6-7 [16]-[18]; Victorian Civil and Administrative Tribunal Rules 2018 (Vic) r 2.09(2).
[2] Impresa Construction v Oxford Building [2021] VCC 1146 (‘Impresa’); Uber Builders and Developers Pty Ltd v MIFA Pty Ltd & Anor [2021] VCC 1677 (‘Uber’).
2 In the present matter, the plaintiffs initiated a claim in this Court in respect of a defective swimming pool constructed by the defendant. They allege that the works are domestic building work,[3] the contract is a domestic building contract,[4] and the defendant owes the warranties implied into the contract by the Domestic Building Contracts Act 1995 (Vic) (the DBC Act). They have stated that their reason for commencing in this Court, rather than VCAT, was to “avoid the significant backlog in the Building and Property List of VCAT”.[5]
[3]Within the meaning of Domestic Building Contracts Act 1995 (Vic) ss 5-6.
[4]Ibid s 3.
[5]Affidavit of Nicholas Raso, affirmed 16 May 2024, Exhibit NR-1, 2 (‘Raso Affidavit’).
3 The defendant has applied for an order staying the proceeding in this Court under section 57(2) of the DBC Act. The plaintiff opposes the application. For the reasons set out below, I have determined that the criteria in s 57(2) have been met and I am obliged to stay the proceeding in this Court. I wish to make it clear that when applying s 57 of the DBC Act, it is not relevant to assess whether this Court or VCAT’s BPL would be more appropriate, better suited, more efficient, or quicker at managing and resolving this dispute. That type of analysis is required if an application is made under s 77 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) to strike out a proceeding in VCAT. Instead, s 57 of the DBC Act does not require a comparison of jurisdictions to determine which is the more appropriate. It requires only an analysis of the subject matter of the action, VCAT’s jurisdiction and the stage the proceeding has reached in the Court.
Section 57 DBC Act
4 Section 57 is located in Part 5, Division 2, Subdivision 1 of the DBC Act, which covers domestic building dispute proceedings within VCAT’s jurisdiction.
5 It provides as follows:[6]
[6]Domestic Building Contracts Act 1995 (Vic) s 57 (emphasis added) (‘DBC Act’).
VCAT to be chiefly responsible for resolving domestic building disputes
(1)This section applies if a person starts any action arising wholly or predominantly from a domestic building dispute in the Supreme Court, the County Court or the Magistrates' Court.
(2)The Court must stay any such action on the application of a party to the action if—
(a)the action could be heard by VCAT under this Subdivision; and
(b)the Court has not heard any oral evidence concerning the dispute itself.
(2A)The Court is not required to stay an action referred to in subsection (1) if the Court is satisfied that the action raises, or there are reasonable grounds for the Court to consider that the action may in the future raise, a controversy involving federal subject matter (within the meaning of section 57A(1) of the Victorian Civil and Administrative Tribunal Act 1998 ) that VCAT has no jurisdiction to exercise judicial power to resolve.
(3)This section does not apply to any matter struck out by VCAT under section 77 of the Victorian Civil and Administrative Tribunal Act 1998.
(4)If an action is stayed under this section, any party to the action may apply to VCAT for an order with respect to the dispute on which the action was based.
(5)If a person applies to VCAT under subsection (4) VCAT must notify the Court and on such notification the Court must dismiss the action.
(6)Subsection (5) does not apply if VCAT refers the matter to the Court under section 77(3) of the Victorian Civil and Administrative Tribunal Act 1998 .
6 On its face, there is little room for debate about the meaning of s 57(2). The legislation provides that if the prerequisites are met, the Court must stay the proceeding if the action could be heard by VCAT.
7 The prerequisites to a stay are that:
(a) the action arises wholly or predominantly from a domestic building dispute;
(b) the Court has not yet heard any oral evidence; and
(c) the action could be heard by VCAT under the Subdivision.[7]
[7]Nettleton v Vero Insurance Ltd & Anor [2008] VSC 554, 10 [15].
8 The section does not apply if:
(a) the Court is satisfied that the action raises, or may in the future raise, a controversy involving federal subject matter (within the meaning of s 57A(1) of the VCAT Act[8]; or
(b) the matter was previously struck out by VCAT under s 77 of the VCAT Act.
[8]This amendment was made to address the consequences of the decision of Thurin v Krongold Constructions [2022] VSCA 226.
9 Until recent years, the main controversies arising under s 57 involved the first prerequisite, that is, whether an action arose wholly or predominantly from a domestic building dispute.[9] However, more recently, the third prerequisite has become the subject of judicial consideration; namely, whether an action could be heard by VCAT.[10]
[9]See for example Presser v Ocean View Properties Pty Ltd [2006] VSC 143, 17 44 (‘Presser’); Radojevic v JDA Design Group Pty Ltd [2017] VSC 554 (‘Radojevic No.1’); Radojevic v JDA Design Group Pty Ltd [2017] VSC 796 (‘Radojevic No.2’).
[10]See for example Impresa (n 2); Uber (n 2).
10 The present application raises both those questions. Before I turn to answering them, it is important to set out the background and purpose to the inclusion of s 57 in the DBC Act. As Mukhtar AsJ said in Eliana Construction v Ramani,[11] “this Court has to ensure that if a person’s choice of bringing a dispute to this Court is going to be taken away, that should only occur assuredly in accordance with s 57.”
[11][2020] VSC 115, 17 [46].
The purpose of the Tribunal and s 57
11 Domestic building disputes have long been considered by government in the context of consumer protection. Since as early as 1962 Victoria has had schemes providing home owners with protection and guarantees for their builder’s work.[12] It should not be forgotten that the building industry led an early guarantee scheme, thanks to initiatives of the Master Builders Association of Victoria and the Housing Industry Association.[13]
[12]Building Contracts (Deposits) Act 1962 (Vic); Local Government Act 1958 (Vic), Division 1A, Part XLIX.
[13]Victoria, Parliamentary Debates, Legislative Council, 30 April 1987, 1347 (Alan Hunt); Housing Guarantee Fund Ltd v Yusef [1991] 2 VR 17.
12 In 1987 the government established the Housing Guarantee Fund Limited to provide consumers with more expansive guarantees of their builder’s work.[14] It was said in the Second Reading Speech for the House Contracts Guarantee Bill:[15]
Since it came to office in 1982, the Government has greatly improved the rights of consumers in many areas, including travel, credit, motor vehicle sales and fair trading. This Bill will add to that proud record.
The Bill is concerned, in essence, with contracts to build and improve houses.
[14]House Contracts Guarantee Act 1987 (Vic).
[15]Victoria, Parliamentary Debates, Legislative Council, 30 April 1987, 1345 (Joan Kirner, Minister for Conservation, Forests and Lands).
13 The current processes for resolving domestic building disputes commenced in 1995, with the introduction of the Domestic Building Contracts and Tribunal Act 1995 (Vic) (the DBCT Act). The purposes of the DBCT Act were to regulate contracts for the carrying out of domestic building work, to require builders carrying out domestic building work to be covered by insurance, to abolish arbitration, to commence the phasing out of the Housing Guarantee Fund as an option for dispute resolution (including its appeals committee), and to provide for the resolution of domestic building disputes and other matters by a new tribunal called the Domestic Building Tribunal.[16]
[16]DBC Act (n 6) ss 1, 14.
14 Part 5 of the DBCT Act established the Domestic Building Tribunal and set out its powers and procedures. Section 57 of the DBCT Act was largely in the same terms as the current sub-sections 57(1), (2), (3) and (4) of the DBC Act (set out above), save that the word “Tribunal” was used in place of “VCAT” throughout.[17]
[17]The other difference was that the word “dismissed” was used in place of the words “struck out” and “stayed” in ss (3) and (4), which reflected the use of those words in s 97 of the DBCT Act (the equivalent section to s 77 of the VCAT Act).
15 In the Second Reading Speech for the Domestic Building Contracts and Tribunal Bill,[18] the following comments were made by then Attorney General Jan Wade:
The reforms contained in this bill constitute a comprehensive and integrated package comprising: first, a domestic building disputes tribunal, providing a means by which builder and consumer disputes can be expeditiously and inexpensively handled at any stage of the building process or after…
The bill proposes the establishment of a Domestic Building Tribunal to resolve all domestic building disputes. The tribunal will be attached to the Department of Justice so that it can benefit from the support structure and expertise provided to a range of tribunals already attached to the Department - that is, administrative appeals, small claims and residential tenancies tribunals.
The tribunal will be non-legalistic and will deal with matters quickly and at minimal cost. A hearing of a domestic building dispute will be by a single legally qualified person, who will be able to call such expert evidence and assistance as is necessary in the interests of justice. The tribunal will have a wide discretion in the awarding of costs so that the concept of fairness is clearly adhered to. Legal representation will be permissible with the consent of all parties before the tribunal, or where directed by the tribunal due to the nature of the issues being considered.
The tribunal is to be established as a single point for the resolution of all domestic building disputes and courts will be required to refer matters brought before them to the tribunal for consideration unless the parties to the dispute explicitly request that the matter be dealt with by the courts.
…
It is the intention of sections 57 and 134 to alter or vary section 85 of the Constitution Act 1975. I therefore make the following statement under section 85(5) of the Constitution Act 1975 of the reasons for altering or varying that section.
Section 57 relates to a person commencing an action in the Magistrates, County or Supreme courts where this matter arises wholly or predominantly from a domestic building dispute. In such cases, the court must dismiss the action if a party to the action requests this, the matter could be heard by the tribunal and the court has not heard oral evidence in relation to the dispute. The provision does not relate to matters dismissed by the tribunal under section 97. Any party to the dismissed court action may apply to the tribunal for an order in relation to the domestic building dispute. Section 134 expressly states the intention to alter or vary section 85 of the Constitution Act 1975.
The public policy rationale for this proposal is the intention to provide a single, inexpensive, time-efficient and expert forum for the resolution of domestic building disputes. Domestic building disputes are a special category of dispute where timeliness of resolution is critical, and where less formal proceedings are more likely to reach the heart of the matter than the full panoply of the law. Therefore, a party to the dispute should be able to have the option of taking advantage of the benefits offered by the tribunal if a matter is brought before the courts for resolution.
[18]Victoria, Parliamentary Debates, Legislative Assembly, 24 October 1995, 695 – 697 (Jan Wade, Attorney-General).
16 In 1998 the Domestic Building Tribunal was “merged into VCAT”.[19]
[19]Victoria, Parliamentary Debates, Legislative Assembly, 9 April 1998, 975 (Jan Wade, Attorney-General).
17 The establishment of VCAT was part of a package of reform initiatives to improve the operation of the tribunal system in Victoria. In the Second Reading Speech of the Victorian Civil and Administrative Tribunal Bill in 1998, the Attorney-General recognised that the previous 20 years had seen a significant growth in the number and variety of tribunals servicing the community. She stated:[20]
… they are now considered to be an integral part of the Victorian justice system. Over this time tribunals have been established as specialist bodies to deal with a variety of issues as particular needs have arisen. Compared to the courts they are intended to be relatively informal, inexpensive and efficient. In more recent times these have included new bodies such as the Domestic Building Tribunal. In this context the development of tribunals has been piecemeal and has taken place without any real consideration of the overall system by which Victoria strives to administer justice.
After the release of the discussion paper entitled Tribunals in the Department of Justice: A Principled Approach in October 1996 and extensive subsequent consultation, the government now wishes to introduce a package of reform initiatives to improve the operation of the tribunal system in Victoria. The Victorian Civil and Administrative Tribunal Bill is the central component of the government's reform initiatives to streamline administrative structures and enhance the current operations of tribunals.
The bill establishes the Victorian Civil and Administrative Tribunal. This new tribunal will … amalgamate a number of existing tribunals within the Department of Justice…
[20]Ibid, 972.
18 As part of the merger of the Domestic Building Tribunal into VCAT, the DBCT Act was amended to remove those sections which referred to the Domestic Building Tribunal and replaced them with references to VCAT. As noted above, s 57 of the DBC Act continued, with the only change being to adopt the wording of s 77 of the VCAT Act. The sections in Part 5 of the DBCT Act setting out the Domestic Building Tribunal’s powers and procedures are now reflected in the VCAT Act. Otherwise the balance of the DBCT Act largely continues today as the DBC Act.
Decisions prior to Impresa Construction v Oxford Building (Impresa) [21]
[21]Impresa (n 2).
19 As noted above, in the early years of the DBC Act, there were a number of challenges to the scope and effect of s 57. These authorities established fairly unanimously that it was parliament’s intention to make VCAT the primary forum for the resolution of domestic building disputes, and that provided the criteria in the section were met, a court has no choice but to stay the action before it.
20 One of the earliest examples of the superior courts directly considering s 57 is Presser v Ocean View Properties Pty Ltd.[22] This was a dispute concerning defective parquetry flooring in a penthouse apartment in a residential complex. The purchasers commenced the proceeding in the Supreme Court of Victoria against the developer, and the builder, subcontractor and architect were joined as third parties. The builder made an application to stay the proceeding under s 57(2). His Honour Habersberger J held as follows:[23]
One of the four purposes of the [DBC] Act is "to provide for the resolution of domestic building disputes" by the Tribunal …. This purpose would not be served, in my opinion, by deciding that it was not appropriate to grant a stay even though the dispute essentially centres on responsibility for the allegedly unworkmanlike carrying out of an item of domestic building work. Jurisdiction is given to the Tribunal by s.53(1) of the Act to resolve domestic building disputes and the Tribunal's role in this regard is emphasised by the fact that, pursuant to s.57(2), if the Tribunal has jurisdiction, the Court must stay an action on the application of a party to the action.
[22]Presser (n 9).
[23]Ibid, 17 [44] (emphasis added, citations omitted).
21 In Kane Constructions Pty Ltd v Sopov[24] the dispute concerned the renovation and extension of a disused boilerhouse, to create a mixed use development of 14 residential apartments, with office, gallery and restaurant spaces. There was a dispute as to whether the works were domestic building works within the meaning of the DBC Act, and then Chief Justice Warren left that question open. A proceeding had been commenced in VCAT, but was later referred to the Supreme Court of Victoria with the consent of the parties. In that context, and relevant for present purposes, her Honour made the following comments:[25]
The remaining matter to be considered, in any event, with respect to the application of the Domestic Building Contracts Act to the present case is a matter of the jurisdiction of the Court. VCAT is vested with exclusive jurisdiction over claims brought under the Act: see s.57 of the Domestic Building Contracts Act; also, ss.57 and 77 of the Victorian Civil and Administrative Tribunal Act 1998. It had transpired that proceedings were instituted before VCAT . However, in light of the proceedings in this Court, the presiding member of VCAT determined to refer the VCAT proceedings to the Supreme Court with the agreement of the parties, to be determined at the same time as the Supreme Court proceedings.
[24][2005] VSC 237.
[25]Ibid, 274 [896].
22 Nettleton v Vero Insurance Ltd & Anor[26] concerned a dispute between a homeowner and the insurer of the builder’s works. A proceeding commenced by the homeowner in the County Court of Victoria was stayed pursuant to s 57(2). On review to the Supreme Court of Victoria, Beach J concluded that this was not a domestic building dispute, and that the County Court proceeding did not arise wholly or predominantly from a domestic building dispute:[27]
.… s 57(2) provides that a stay can only be ordered if the proceeding could be heard by the Tribunal under Sub-division one. The section in Sub-division one which gives the Tribunal jurisdiction is s 53(1). That section provides that the Tribunal may make orders “to resolve a domestic building dispute”. That is, to resolve a domestic building dispute as defined by s 54. The dispute between the plaintiff and Vero is not a domestic building dispute. Therefore, any proceeding in relation to the dispute is not one that can be heard by the Tribunal under Sub-division one.
[26][2008] VSC 554.
[27]Ibid, 10 [16].
23 The two cases of Radojevic v JDA Design Group Pty Ltd (Radojevic No.1)[28] and Radojevic v JDA Design Group Pty Ltd (Radojevic No.2)[29] involved a review of a decision of the Magistrates Court of Victoria, considered by his Honour Ginnane J in the Supreme Court of Victoria. Building owners had brought a claim against their architect in the Magistrates Court, seeking damages for alleged breaches of contract for the provision of architectural services in connection with four residential apartments to be built on their land. The architect defended the action and counterclaimed for unpaid fees. The owners then sought a stay of the Magistrates Court proceeding pursuant to s 57(2) of the DBC Act. The Magistrate refused the application for the stay. The proceeding was then transferred to the County Court of Victoria as the quantum exceeded the Magistrates Court limit.
[28]Radojevic No.1 (n 9).
[29]Radojevic No.2 (n 9).
24 Radojevic No.1 was the determination of a summons brought by the architect to dismiss the judicial review proceeding. Radojevic No.2 was the hearing of the owners’ judicial review proceeding.
25In Radojevic No.1, Ginnane J held:[30]
The terms of s 57 of the DBC Act are clear and decisive of the abuse of process ground. Section 57(2) permits applications to stay court proceedings if the action ‘could be heard by VCAT under this Subdivision’ and ‘the Court has not heard any oral evidence concerning the dispute itself’. That is the position of the Magistrates’ Court proceeding. The terms of s 57 make it difficult to decide that a stay application made before the Court has heard oral evidence concerning the dispute or, the judicial review of a failure to grant a stay, are an abuse of process.
…
Once s 57(2) of the DBC Act is invoked and its preconditions established the court must stay the proceeding. It is not given a discretion to refuse to do so because of the extent of the preparation or procedural steps undertaken before the stay application was made. Section 57(4) and (5) have the effect that if an action is stayed under s 57(2), any party may apply to VCAT for an order with respect to the dispute on which the action is based. VCAT must then notify the Court and on such notification the Court must dismiss the action.
[30]Radojevic No.1 (n 9) 9,10 [32], [36] (emphasis added).
26 On the hearing of the application for judicial review, in Radojevic No.2, Ginnane J concluded that the work carried out by the architect was domestic building work within the meaning of the DBC Act. He then considered s 57 in detail and concluded that the Magistrate had erred in jurisdiction and by error of law on the face of the record in his interpretation of the section. He found that the word ‘must’ in s 57 is imperative, and does not confer a discretion. He held:[31]
Section 57 is located within Part 5 headed ‘VCAT Jurisdiction’ and Division 2 headed ‘Proceedings before VCAT’ and Subdivision 1 headed ‘Domestic building disputes’. It enables an application for a stay to be made … As indicated by the headings of the DBC Act to which I have referred, the provisions appear intended to direct ‘domestic building disputes’ to VCAT.
…
Prima facie, the use of ‘must’ in s 57(2) suggests that the Court has no discretion once s 57(1) and (2)(a) and (b) are satisfied. It is rare that the word ‘must’ does not impose an unqualified obligation. That is, the term is used in the imperative sense. In Victorian statutes the word ‘must’ is often used in place of the word ‘shall’ to convey a positive obligation. Section 45 of the Interpretation of Legislation Act 1984 deals with the meaning of the words ‘may’ and ‘shall’. Prima facie, the use of ‘must’ in s 57(2) suggests that the Court has no discretion once s 57(1) and (2)(a) and (b) are satisfied. In an earlier decision, Habersberger J appeared to consider that ‘must’ in s 57 was imperative [Presser].
Determining whether a provision is imperative or affords some discretion falls to be determined by ordinary principles of statutory construction.
…
The specificity and detail of the Act following recent reforms, the language and purpose of the provision, and the use of ‘may’ in surrounding provisions, suggest that the word ‘must’ in s 57 must be read as imperative. The purpose of s 57, that VCAT be chiefly responsible for resolving domestic building disputes and the purpose and objects of the DBC Act will be promoted by an imperative construction to the word ‘must’ in s 57.
[31]Radojevic No.2 (n 9) 10-11, 19-20, 21, [29], [64] - [65], [68] (emphasis added, citations omitted).
27 His Honour also considered whether the conduct of the proceeding and the timing of the application were relevant to his discretion in granting judicial review remedies. The application was made close to the trial date, and lead to significant delays. Ginnane J considered the DBC Act and also the overarching purposes of the Civil Procedure Act 2010 (Vic) (CPA). While critical of the timing of the application, he concluded:[32]
…However, I do not consider that the provisions of the CPA can remove the rights given by s 57 of the DBC Act to the Radojevics.
The Radojevics took steps that the DBC Act permitted them to take. …
The right of a party given by s 57(2) of the DCB Act, even the party who has commenced the proceeding, to apply for a stay at any time before the calling of oral evidence concerning the dispute is not conducive to the quick, efficient and cheap resolution of the dispute. Section 57 requires the attention of Parliament to determine if it should be amended to make it consistent with the objects of the DBC Act and the purposes of the Civil Procedure Act.
[32]Ibid 22, [73] - [74], [76].
28 A number of reported decisions of this Court have followed the findings of Ginanne J in Radojevic No.2 affirming that once it is established VCAT could hear the action, “must” in s 57 is to be read as imperative.[33] For example in Nazari v Zedcorp Pty Ltd, Judicial Registrar Burchell (as she then was) concluded:[34]
On the material before me, I am satisfied that the dispute between the parties was “in relation to a domestic building contract or the carrying out of domestic building work” and “arises wholly or predominantly from a domestic building dispute”. As such, the proceeding must be stayed in this court and the dispute can only be litigated in VCAT.
[33]See for example EPH Enterprises Pty Ltd v Longboat Holdings Group2 Pty Ltd [2019] VCC 944, 8 [32] (Lewitan J).
[34][2020] VCC 1936, 5 [25] (emphasis added, citations omitted).
29 The decision of Croft J in Lin Tiger Plastering Pty Ltd v Platinum Construction (Vic) Pty Ltd[35] considered whether an arbitration clause in a sub-contract between a builder and a plasterer was excluded by the DBC Act. The main issue in the case involved the method of determining whether the works of the plasterer fell under that Act.[36] Relevant to the present case was his Honour’s description of VCAT’s jurisdiction as being “mandatory and exclusive”.[37]
[35](2018) 57 VR 576; [2018] VSC 221;BC201806955
[36]See Nicholas Gallina et al, ‘The jurisdiction of the Victorian Civil and Administrative Tribunal to determine disputes involving building work’ (June, 2022) Australian Construction Law Bulletin, 57.
[37]Lin Tiger Plastering Pty Ltd v Platinum Construction (Vic) Pty Ltd (2018) 57 VR 576, 594 [47].
30 In Eliana Construction v Ramani,[38] Mukhtar AsJ provided a detailed analysis of the objects and purposes of the DBC Act, the role of VCAT and the operation of s 57. The proceeding involved several disputes, some of which were domestic building in nature, but His Honour found the predominant dispute arose out of a loan agreement. That combined with relief sought which may have been outside the powers of VCAT, led to his conclusion that the proceeding should not be stayed under s57(2). He held:[39]
The Tribunal is not a court of law but its role as the chief forum in domestic building disputes is given strong practical recognition in s 57 which compels a stay of any court action brought over a domestic building dispute.
…
There is more to this than just a stay. Section 57(5) says that if an action is stayed ‘any party to the action may apply to VCAT for an order with respect to the dispute on which the action was based’. The consequence for the party that brought the court action is that upon notification that such a VCAT application has been made, ‘the Court must dismiss the action’.
…
The underlying rationale of s 57 of the Act is discernible. Domestic building disputes, even on a smallish scale, are notorious for becoming fractious and getting a life of their own. They are characteristically based on defective works or incomplete works or disputed variations in opposition to claims for money owing to a builder. They are known to attract legal expenses that exceed the claims. They can end up causing much personal and financial distress for owners, and lead to insolvency of builders, sometimes irrespective of result. Proceedings in VCAT are thought to ameliorate this. The Tribunal conducts proceedings informally, without technicality and on substantial merit. The Tribunal can inform itself on any matter as it thinks fit. The base rule is that each party is to pay their own costs, although the Tribunal has the discretion to order costs but ‘only if satisfied it is fair to do so‘.
Despite those considerations, this Court has to ensure that if a person’s choice of bringing a dispute to this Court is going to be taken away, that should only occur assuredly in accordance with s 57. Keeping steadily in mind that s 57 looks to the predominant dispute, the building works are of historical relevance, but not the subject of any dispute. The predominant dispute here is the enforceability of the loan agreement … The dispute here is not in relation to the amount of the debt or the adequacy or of works done or their compliance with the building contract…
[38][2020] VSC 115.
[39]Ibid, 1, 17-18, [2], [3], [45], [46] (emphasis added).
31 In Thurin v Krongold Constructions (Aust) Pty Ltd[40] the Court of Appeal noted:
On 22 May 2018, Mr and Mrs Thurin commenced a proceeding in VCAT seeking to enforce the expert determination. VCAT has jurisdiction under s 53 of the DBC Act to make orders to resolve a domestic building dispute. As explained later in these reasons, subject to an important qualification relating to federal jurisdiction, VCAT’s jurisdiction in this respect is to a substantial extent exclusive of the jurisdiction of Victorian courts. (DBC Act, s 57.)
[40][2022] VSCA 226, 2-3, [10] (McLeish, Niall and Walker JJA) (emphasis added).
32 In Krongold v Thurin[41] the Court of Appeal referred to s 57 in the context of its consideration of s 77 of the VCAT Act, and noted:
Section 57 of the DBC Act provides a mechanism that makes VCAT the primary venue for the determination of building disputes under that Act. It does so by providing that a court must stay an action if it could be heard in VCAT, and then by allowing for the matter to proceed in VCAT. However, s 57 does not deny the jurisdiction of the Supreme Court to hear a proceeding arising under the DBC Act, and expressly contemplates that VCAT may make a referral under s 77 of the VCAT Act. There is no reason to treat s 57 of the DBC Act as reflecting a limitation on the general power in s 77 of the VCAT Act. Its effect is to ensure that domestic building disputes that are commenced in a court are transferred to VCAT, but the section recognises that VCAT may refer matters to a court under s 77 without thereby triggering an obligation to send the matter back to VCAT.
[41][2023] VSCA 19115-16, [63] (Beach JA, McLeish JA, Niall JA) (emphasis added).
33 There have been many other reported decisions on applications for a stay under s 57(2). Those set out above are but a sample. There have also been many decisions which have reinforced the broad interpretation of “domestic building work” and discussed parliament’s intention to have VCAT as the primary dispute resolution body for such disputes. Many were summarised by his Honour Digby J in H Buildings v Owners Corporation.[42] Most recently, in considering s5(1)(e) of the DBC Act (the work to which the Act applies), the Court of Appeal in Centurion Australia Investments Pty Ltd v APM Group (Aust) Pty Ltd (Centurion)[43] noted:
The potential operation of s 5(1)(e) has been productive of divergent views. In part it is informed by a bigger picture consideration as to the extent to which the Act covers large scale residential developments or mixed developments, or whether the Act is confined to smaller scale typical residential house construction. In part that debate has centred around the consumer protection purpose of the Act, which may be less suited to larger scale development with either experienced developers or those with a higher appetite for risk.
In his detailed reasons for judgment in H Buildings, Digby J surveyed a number of cases in order to discern the fault lines between the competing views.
[42][2017] VSC 802.
[43][2023] VSCA 324, 20 [97] (‘Centurion’).
34 The Court of Appeal ultimately found it unnecessary in that case to resolve these competing views.
Impresa and Uber Builders and Developers Pty Ltd v MIFA Pty Ltd & Anor (Uber)[44]
[44]Uber (n 2).
35 As can be seen from the examples above, until 2021 the authorities largely focused on whether the proceeding in question arose from a domestic building dispute. The decisions of Impresa and Uber made that year focused instead on the third criteria; namely, whether VCAT could hear the dispute under Subdivision 1 of Part 5, Division 2 of the DBC Act.
36 The decision in Impresa was ultimately made on the basis that the dispute in question did not arise from domestic building work. However, in obiter dicta comments, her Honour Judge Burchell considered whether an application for a stay under s 57(2) would have been successful. She looked at the meaning of the words “could be heard by VCAT” in the context of the public policy of the DBC Act, VCAT and s 57.
37 She looked at VCAT’s resources and capacity at the time (being July and August 2021) and concluded that:[45]
[45]Impressa (n 2) 17,18 [53], [55] - [56].
Considering this [the under-resourcing of VCAT], the public policy rationale behind s57 of the Act appears to be frustrated. Allowing mandatory stay of proceedings to be heard in VCAT where there is a shortage of resources to meet the backlog of matters, where:
(a) time lines do not apply;
(b) VCAT will contact the parties 8-10 weeks from initiation with the proposed next steps;
(c) currently listed hearings fixed from October 2021 are being vacated and presumably refixed in priority of new initiations to ensure that adjourned hearings are heard within a reasonable timeframe; and
(d) where interlocutory hearings are being fixed some 8 months into the future,
all subvert the purpose of both the Act and the CPA to enable timely and cost-effective dispute resolution.
…
In my view, given the current under-resourcing of VCAT and the vacation of hearing dates and delays, the precondition imposed by this subsection arguably cannot be met when read in light of the overarching purpose of the Act. The backlog of matters and shortage of resources at VCAT currently means that this matter in fact could not be heard by VCAT.
Further, I reiterate what was stated in the second reading speech: “a party to the dispute should be able to have the option of taking advantage of the benefits offered by the tribunal if a matter is brought before the courts for resolution” (emphasis added). It is clear that the benefits of having the proceeding stayed and heard at VCAT — primarily, the timeliness of resolution — are an impossibility.
38 These findings were obiter dicta but I do not disagree with them.
39 Shortly after Impresa, the case of Uber came before Judge Burchell. This was an actual application for a stay under s 57(2). Relying on her comments in Impresa, her Honour held:[46]
[46]Uber (n 2) 4, 5-6, 7,10, 11, 13, [16] - [17], [23] - [24], [29], [36], [39] - [40], [48] (emphasis added, citations omitted).
The parties agreed that the dispute is a domestic building dispute within the meaning of s 57.
The primary issue is whether the proceeding ‘could be heard by VCAT under this Subdivision’ (s 57(2)(a)).
….
The key issue in dispute is whether the test in s 57(2)(a) imports case management considerations of the kind I identified in Impresa...
Those case management concerns involve the timely and cost-effective resolution of disputes – concerns which VCAT cannot effectively address in the COVID-19 era (due to the Tribunal’s delays and backlogs).
…
In my view, the reasoning in Impresa is applicable to this proceeding. Accordingly, case management considerations are imported into a construction of s 57(2)(a). Courts ought not be restrained in using the full force and effect of the powers contained in the CPA.
…
I further accept Uber’s submissions that the fact that previous judicial considerations of s 57(2)(a) have not imposed a temporal consideration on the expression “could be heard” is not authority which is inconsistent with Impresa.
…
As such, the elements of s 57(2) have only had reason to be considered primarily as a result of the COVID-19 pandemic.
Therefore, the interpretation in Impresa is preferable, and case management concerns are imported into a construction of s 57(2)(a). Accordingly, this proceeding could not be heard in VCAT under subdivision 1 of Part 5 of the Act.
…
For the forgoing reasons, I find that the proceeding is an action arising wholly or predominantly from a “domestic building dispute” (s 57(1)). However, the proceeding could not be heard by VCAT under subdivision 1 of Part 5 of the Act (s 57(2)(a)). Accordingly, the defendants’ summons dated 1 October 2021 is dismissed.
40 I do not disagree with her Honour’s determination that case management concerns may be imported into a construction of s 57(2)(a).
41 However, those decisions were made at a time when VCAT was significantly under resourced and unable to meet its obligations (at least in respect of domestic building cases) to “enable disputes involving domestic building work to be resolved as quickly, as efficiently and as cheaply as is possible having regard to the needs of fairness.”[47]
[47]DBC Act (n 6) s 4(b).
42 The question now is whether that situation has changed and whether VCAT’s capability to hear the present case, having regard to case management considerations, is still a relevant factor in the interpretation of s 57(2)(a).
VCAT since 2021
43 The case management considerations identified by Judge Burchell in 2021 are no longer relevant today.
44 It is public knowledge that VCAT has appointed a significant number of new members since 2021, with an aim of clearing the backlog and reducing waiting times.[48] A number of these new members have expertise in domestic building and consumer disputes. The management of the backlog in the Residential Tenancies Division of VCAT has had a “massive improvement”.[49] An “updated program to accelerate progress [of the backlog program] in the coming year” is underway.[50]
[48]Jaclyn Symes, ‘New VCAT Members to Clear Backlog and Reduce Wait Times’ (Media Release, 28 November 2023).
[49]VCAT, Annual Report (Annual Report, 2023), 4.
[50]Ibid.
45 The BPL in VCAT has implemented a case management practice of allocating a hearing date for multi-day hearings only once they are ready to be heard. At present, for a 3 day hearing (as this matter is) once parties confirm all interlocutory steps are completed and a compulsory conference or mediation has occurred, and the matter is ready for hearing, it is anticipated they will be allocated a hearing date within 6-9 months.[51]
Plunkett v Portier Pacific Pty Ltd (‘Plunkett’)[52]
[51]I am aware of these matters in my role as a Vice President of the Tribunal and through the regular consultation process between this Court and VCAT as I explained in Koolio Pty Ltd v Owners Corporation 1 PS618397Y [2024] VCAT 273. See also VCAT, Annual Report, 2023, 18, where the case management process is described.
[52][2024] VCAT 205 (‘Plunkett’).
46 In the present matter, both parties referred to the recent decision of the President of VCAT, Justice Woodward, in Plunkett. The plaintiff contended that it provided support for its submission that VCAT is not able to hear the present case, and the defendant submitted it is authority in support of the converse.
47 Plunkett involved an application under s 77 of the VCAT Act, in which the Tribunal had to consider whether there would be a more appropriate forum to manage and hear claims made under the Australian Consumer Law.
48 It is important to note that the decision was not made in the context of s 57 of the DBC Act and did not involve a domestic building dispute. Section 77 of the VCAT Act requires the Tribunal to consider whether another jurisdiction (such as another tribunal, court or any other person or body) would be “more appropriate” than VCAT to deal with the subject matter of the proceeding. That exercise involves a comparison of jurisdictions. On the other hand, as stated above, s 57 of the DBC Act does not require a comparison of jurisdictions. Instead, s 57 requires the Court to consider only the subject matter of the action, VCAT’s jurisdiction and the stage the proceeding has reached in the Court.
49 The plaintiffs rely on the President’s comments in Plunkett that the Coronavirus pandemic and associated lockdowns resulted in “substantial backlogs” in the Building and Property List, “which still exists today”.[53] They say this demonstrates there has been no change in the state of VCAT’s capacity from what was accepted by her Honour Justice Burchell in Uber.
On the other hand, the defendant submitted that Plunkett is relevant in that the President sought to establish certain indicia of the kinds of disputes that would not be suitable for case management and determination in the Tribunal. Justice Woodward observed that, “(i)n my view, one or more of the following elements would ordinarily prompt consideration of whether the subject matter of a proceeding would be more appropriately dealt with by the County or Supreme Court.”[54] These elements are summarised as follows:
(a) with respect to civil proceedings not in VCAT’s exclusive jurisdiction, for example, claims under the DBC Act, where claims and counterclaims are together significantly in excess of the Magistrates’ Court’s $100,000 jurisdictional limit, and certainly where the claims exceed the County Court’s historical jurisdictional limit of $500,000;
(b) where the hearing including any closing submissions is estimated to last 10 days or longer;
(c) where the proceeding involves multiple parties;
(d) where the proceeding will benefit from regular case management by a single judicial officer;
(e) where the proceeding has a history of frequent interlocutory applications; and
(f) where the proceedings involves novel points of law, or particularly complex and detailed facts.
[53]Plunkett (n 51) 13 [40(m)] - [40(n)].
[54]Ibid, 14 [42].
50 The defendant submitted that, if the presence of those factors are indicative of matters that are better suited to being dealt with by a court, then the absence of those factors mean will mean they are capable of being dealt with by the Tribunal, absent some other compelling reason (such as the possibility of federal subject matter being raised).
51 I agree with the defendant’s submission, but repeat that an application for a stay under s 57 of the DBC Act involves only a consideration of the case management capabilities of VCAT. It does not involve a comparison with whether this Court would be a more appropriate forum. Accordingly, the question is not whether this Court would be able to manage the proceeding ‘better’ than VCAT; it is whether VCAT is capable of hearing it. If a matter does not raise one or more of the factors identified in Plunkett, the conclusion may be drawn that VCAT is capable of hearing the matter.
52 I will now address the submissions made in the current proceeding in the context of the background, purpose and meaning of s 57 as set out above.
Does the action arise wholly or predominantly from a domestic building dispute?
53 The plaintiffs contend that the first prerequisite for a stay under s 57(2) is not met, in that the defendant does not admit that the dispute is a domestic building dispute in its Defence.[55] The plaintiffs submit that therefore, the Court cannot be satisfied that the action arises wholly or predominantly from a domestic building dispute as required by s 57(1) of the DBC Act.
[55]Defence filed in the County Court Proceeding, 26 March 2024, 2 [4(a)].
54 I do not accept this submission. The nature of the dispute is to be determined by reference to its subject matter, not any pleading of a party. The proceeding involves a swimming pool constructed by the builder for the owners. The plaintiffs’ letter of demand exhibited to the affidavit of Nicholas Raso[56] states the following matters:
(a) the plaintiffs are the owners of the property in Torquay
(b) pursuant to a domestic building contract dated 16 April 2021 the owners engaged the defendant to supply and construct a concrete inground swimming pool and spa at the property.
(c) The plaintiffs submitted an application for dispute resolution with Domestic Building Dispute Resolution Victoria [DBDRV] who issued a certificate of conciliation on 23 June 2023.
(d) clause 2.1 of the building contract sets out the express warranties, which are also implied into the contract by s 8 of the DBC Act.
[56]Raso Affidavit (n 5), Exhibit NR-1, 7-8.
55 In their Statement of Claim, the plaintiffs repeat those factual matters and plead that the works the subject of the building contract comprised domestic building work within the meaning of s 5(1)(a)(i) of the DBC Act.
56 There is extensive authority to the effect that the construction of a swimming pool on a residential property, as a standalone contract, is domestic building work for the purposes of the DBC Act. The first reported decision is of the Domestic Building Tribunal, where Deputy Chairperson Cremean in Lazaway Pools & Spas v Caldarera[57] expressly considered this question and concluded:
In my view, for the reasons I have given, the Tribunal does have the jurisdiction sought to be asserted by the applicant under the 1995 Act. I consider it has such jurisdiction under s5(1)(e). I regard a swimming pool as a structure and thus a building. Work done on the construction or erection of a swimming pool I regard as work associated with its construction or erection. Being within s5(1)(e) such work, being work not excluded under s6, is domestic building work. A dispute or claim arising in relation to such work is, in consequence, a domestic building dispute under s54(1) as defined in s3(1). I therefore find in favour of the Applicant on the preliminary jurisdictional issue raised for consideration by the Tribunal.
[57][1997] VDBT 67, 5 [10].
57 This decision was followed by Senior Member Walker in Wilson and Anor v Lazaway Pools & Spas Pty Ltd (ACN 007 171 520), who held:[58]
In the case of Lazaway Pools v Calderera [1997] VDBT 67, the predecessor to this tribunal, the Domestic Building Tribunal, determined that for the purpose of this legislation, a swimming pool was a building. In arriving at that conclusion the learned Tribunal member considered a number of authorities as well as the definitions set out in the Act and it was not put to me on behalf of the Builder in this case that that conclusion was erroneous.
I am not bound by the decision referred to but it is strongly persuasive. It appears to be a well reasoned decision by a highly qualified and experienced building member and I see no reason to take a different view.
[58][2011] VCAT 1827, 7 [21] - [22].
58 Many other decisions have accepted, or not questioned, the application of the DBC Act to the construction of swimming pools on residential land.[59]
[59]See for example Drossos v Ultracourts Pty Ltd [2024] VCAT 230; Emmerson v Natural Pools Australia Pty Ltd [2020] VCAT 833; Fraser v Melbourne Pools Pty Ltd [2018] VCAT 1721; Tsaikos v Lazaway Pools and Spas [2016] VCAT 296; Clark and Anor v Lazaway Pools & Spas (ACN 007 171 520) [2011] VCAT 2131; Freedom Pools and Spas (ACN 101 657 167) v Watts [2011] VCAT 1534; N and J Rogers Pty Ltd trading as Performance Pools v Rippingale [2010] VCAT 1899; Parisi v Compass Pools [2007] VCAT 425.
59 As can be seen from these subsequent decisions, the construction of a swimming pool (which requires a building permit) on land which is zoned for residential purposes, is work to which the DBC Act applies, by reason of s 5(1)(e). This subsection was recently considered in Centurion, where the Court of Appeal concluded that the subsection applies where land is exclusively zoned for residential purposes. They noted the overriding focus of the Act is on residential buildings and construed s5(1)(e) in that context.[60]
[60]Centurion (n 42) 21 [103].
60 In the present case, there is no evidence before me that the land was not exclusively zoned for residential purposes. I make no criticism of any lack of evidence, because the plaintiffs do not dispute the construction of the swimming pool is domestic building work, and the defendant has not denied this.
61 I also note that DBDRV only accepts applications for domestic building work disputes.[61] While DBDRV’s acceptance of the application is not determinative, it is further evidence of the nature of the building works.
[61]Domestic building work disputes are defined as “a domestic building dispute arising between a building owner and – (a) a builder; or (b) a building practitioner….;or (ba) an engineer engaged in the building industry; or (c) a sub-contractor; or (d) an architect – in relation to a domestic building work matter: DBC Act (n 6) ss 44(1), 45A.
62 In any event, the defendant has offered to provide an undertaking that if the matter were to commence in VCAT, it would not dispute that the proceeding is a domestic building dispute. That is an appropriate undertaking if there is no doubt the works are domestic building works.
63 Having determined that question, the next area of contention is whether or not the action “could be heard” by VCAT.
Could the action be heard by VCAT?
64 Both parties concede there is no jurisdictional reason why VCAT cannot hear this dispute. The relief sought is that which VCAT provides under Part 5, Division 2, Subdivision 1 of the DBC Act. No federal matter is raised and the defendant has confirmed it does not intend to raise any federal matter. Accordingly, the question is whether, having regard to case management considerations, VCAT is capable of hearing the action.
65 The dispute is a common, typical domestic building dispute. In the defendant’s words, it is “vanilla”. The plaintiffs’ claim is for an allegedly defective pool, which it says must be replaced. They have served an expert report from BSS Group which alleges flaws in the pool’s construction which causes it to leak. That report recommends replacement.
66 The defendant’s defence pleads that the plaintiffs’ expert report is wrong and has misinterpreted what the plans and drawings required, that the pool is structurally sound, the leaking has stopped, and that the pool does not need to be replaced.
67 The parties are agreed that the hearing time will be three days. There are only two parties to the proceeding and the defendant has advised that it does not intend to join any other party. The evidence will involve assessing the expert opinion evidence and applying the s 8 warranties. There are no complex technical or legal issues.
68 I note that in Plunkett, the President has identified the value of the claim as one of the factors relevant to an assessment of a more appropriate forum under s 77 of the VCAT Act. That factor must be read in the context of the nature and complexity of the calculations required to assess the damages sought. It is common in domestic building disputes that the damages sought, being the cost of rectification or replacement, commonly exceed $100,000. In the present matter, the quantum of the claim is estimated to be $253,000; which, although more than the Magistrates Court limit, is common in the BPL.[62]
[62]The 2023 VCAT Annual Report records that approximately half of claims initiated in the BPL are for a value of less than $100,000 and half are for more than that amount, or have no value stated. Matters with no value stated are commonly claims where the amount of loss and damage is not known at the time of initiation, which indicates they are claims involving multi-unit developments, a variety of issues and larger claims: VCAT, Annual Report, 2023, 45.
69 The exercise to be performed by the Tribunal, if it accepts that the defendant is liable to the plaintiffs, is to assess the reasonableness of the quotes for rectification or replacement. The final number reached will be the product of that assessment. The number itself does not add any extra complexity to the matters to be decided.
70 In any event, as I have detailed above, the Plunkett factors may be relevant when comparing more appropriate forums under s 77 of the VCAT Act. That is a different question than what is to be determined in an application for a stay under s 57(2) of the DBC Act.
71 As noted above, VCAT’s resources have improved since 2021. As at the date of this application, there is no reason for me to find that VCAT cannot hear this action. This is exactly the kind of claim that parliament intended the Domestic Building Tribunal be tasked with adjudicating when the DBC Act was first enacted.
72 I note that the plaintiffs have stated that their reason for commencing in this Court was to “avoid the significant backlog in the Building and Property List of VCAT”.[63] As noted above, the delays in VCAT’s BPL are not now so excessive that VCAT cannot hear this action.
[63]Raso Affidavit (n 5) Exhibit NR-1, 2.
73 Further, it is appropriate that the parties in this case have the benefits of the Tribunal. That is, as explained in the Second Reading Speech, “a single, inexpensive, time-efficient and expert forum for the resolution of domestic building disputes … where less formal proceedings are more likely to reach the heart of the matter than the full panoply of the law”.[64]
[64]Victoria, Parliamentary Debates, Legislative Assembly, 24 October 1995, 697 (Jan Wade, Attorney-General).
74 It is important that “the forum fit the fuss”.[65] The present matter is precisely the type of claim that will benefit from VCAT’s less formal case management processes. VCAT may offer the parties a mediation with one of VCAT’s panel mediators who has technical qualifications (such as an engineer or building consultant), or is a lawyer experienced in building disputes. It may also, or alternatively, require the parties to attend a compulsory conference under s 83 VCAT Act with an experienced Tribunal member, for the purposes of identifying and clarifying the nature of the issues in dispute in the proceeding, promoting a settlement of the proceeding, and/or identifying the questions of fact and law to be decided by the Tribunal. VCAT may order a joint conference of experts prior to the hearing, to be facilitated by an experienced member or mediator (under Schedule 3 to the VCAT Act). The cost of those ADR processes is included in the application fee.
[65]This phrase is first credited to Professor Frank E. A. Sander of Harvard Law School, in his Varieties of Dispute Processing speech at the 1976 Pound Conference, but is now commonly used by advocates of appropriate dispute resolution (ADR).
75 Conversely, and noting that I have not taken into consideration a comparison with this Court as part of my determination, I point out that all courts and tribunals are operating with reduced funding.[66] This Court is in no different a situation than VCAT. The sizeable increase in initiations in the Building Cases List in this Court combined with the reduced resources available means that parties in this Court will usually have to choose and pay for their own external mediator and facilitator. A judicial resolution conference or the assistance of a division lawyer is unlikely to be available. Further, this Court is not able to conduct the hearing any earlier than VCAT. The trial date currently allocated is May 2025. If the matter were ready for hearing, VCAT would be allocating a similar date. If the matter is not ready for hearing in May 2025 in this Court, the next available date is likely to be 12 months further. The time lines to trial aimed for in the Commercial Division (within 8 or 12 months) and the management of interlocutory steps by judicial registrars, division lawyers and a dedicated Commercial Registry team,[67] can no longer be met. Accordingly, the plaintiffs’ intention of a speedier resolution by commencing this action in this Court will not be achieved.
[66]See for example ‘Government’s cuts to courts to delay justice for Victorians: Cleeland’ (The Euroa Gazette, Online 5 June 2024)< Division Omnibus Practice Note, 8 [7].
The timing of the defendant’s application
76 The plaintiffs have also contended that the defendant only made this application once the Court had allocated a trial date, and this somehow indicated that there was a lack of good faith on their part. I do not accept this contention. The proceeding was commenced in December 2023. The parties were asked to provide proposed minutes of consent orders for the first timetabling orders to list the matter up until trial. Those orders were filed in February 2024 and the orders were made allocating a trial date.
77 From the affidavit of Mr Raso, it appears that the defendant put the plaintiffs on notice as early as February 2024 that they would be making this application. They did so on 20 February 2024 and it ultimately came on for hearing today.
78 Further, as Ginnane J noted in Radojevic No.1, the DBC Act does not provide a time limit. An application can be made at any time up until oral evidence has been heard. The only disincentive to do so may be the question of costs.
Orders
79 As I have determined that the prerequisites to s 57(2) have been met, namely:
(a) the action arises wholly or predominantly from a domestic building dispute;
(b) the Court has not yet heard any oral evidence; and
(c) I am satisfied that VCAT can hear this action,
I am obliged to stay the proceeding. The word ‘must’ in s 57(2) is an imperative term.
80 I will order the proceeding is stayed under s57(2).
Costs
81 My preliminary view is that the costs of the proceeding thrown away, including the costs of this application, should be costs in the proceeding. This is a case where the plaintiffs had a legitimate basis for commencing the proceeding in this Court at the time they did. The decisions of Impresa and Uber were largely unchallenged at that time. I make no criticism of their choice of forum.
82 However, in the same vein, the defendant was justified in making their application for a stay. They correctly point out that VCAT’s case management capabilities have changed 2021.
83 I consider this case analogous to the comments of Beach J in Brambles v Kemsley[68] where he held:
In my opinion the plaintiffs were quite justified in making the application to the court they did that day. Even though, in the events that have transpired, many of the plaintiff’s actions in this Court are now stayed by virtue of the provisions of section 57 of the DBCA, I consider that the appropriate order to make in respect of the costs of this application is that the parties bear their own costs and I so order.
[68][2000] VSC 384, 2 [6].
84 Presumably, the plaintiffs will commence a proceeding in VCAT. Any such application would cause VCAT to notify this Court, which will then dismiss this proceeding.[69] Liberty to apply may be reserved in respect of costs, so that an application in this Court may be made if the parties cannot agree at the conclusion of the VCAT proceeding as to the costs of this proceeding, and/or if VCAT is unable or unwilling to determine the costs of this proceeding, and/or if the plaintiff does not issue a proceeding in VCAT or the proceeding is not prosecuted with due diligence.
[69]DBC Act (n 6) s 57(5).
- - -
Certificate
I certify that these 27 pages are a true copy of the ruling of her Honour Judge Kirton delivered on 12 July 2024.
Dated: 12 July 2024
Jessica Meaney
Associate to Her Honour Judge Kirton
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