Song v M.T.V. Building & Construction Pty Ltd
[2025] VSC 3
•17 January 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2023 04223
| Zhendong Song | First Applicant |
| Jie Song | Second Applicant |
| v | |
| M.T.V. Building & Construction Pty Ltd | Respondent |
---
JUDGE: | Quigley J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 November 2024 |
DATE OF JUDGMENT: | 17 January 2025 |
CASE MAY BE CITED AS: | Song v M.T.V. Building & Construction Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2025] VSC 3 |
---
PRACTICE AND PROCEDURE — Application for extension of time to file notice of appeal pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) — Delay of one day — User error on RedCrest e-filing system — Self-represented litigants —Adequate explanation — Time period required for extension trifling — No prejudice — Extension granted —Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss 148(2), (5).
PRACTICE AND PROCEDURE — Application by non-solicitor for leave to represent company — Supreme Court (General Civil Procedure) Rules 2015 r 1.17 — Repeated advice to non‑solicitor of requirements to make formal application — Late filing of notice of appearance — No proper participation in proceeding until trial — Attempted late filing of affidavit attaching extensive pseudo‑legal material — Oral application at trial — Application based on pseudo‑legal arguments — Challenge to jurisdiction of the Supreme Court of Victoria — Not in the interest of justice to grant leave — Leave to appear refused — Worldwide Enterprises Pty Ltd v Silberman & Anor [2009] VSC 165; Lettieri v Strangio [2008] VSCA 205, applied —Nelson v Greenman & Anor [2024] VSC 704, considered.
PRACTICE AND PROCEDURE — Costs — Self‑represented litigants — Self‑represented litigants entitled to costs orders and to recover disbursements — Cachia v Hanes (1994) 179 CLR 403, Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; Hoe v Lennox [2020] VSC 262, McKechnie v Ma’a (in his capacity as the Governor of Port Phillip Prison) [2024] VSC 768, Ganesh v National Australia Bank Ltd [2021] VSCA 45, considered.
ADMINISTRATIVE LAW — Appeal from the Victorian Civil and Administrative Tribunal — Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148 — Domestic building contract — Whether question of law with real prospect of success identified — Leave to appeal granted on one question of law only — Omission by Tribunal to consider defect claimed by owners in decision and orders — Appeal allowed on one question of law only — Consequent orders.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Self-represented | |
| For the Defendant | No appearance |
TABLE OF CONTENTS
Introduction
Background
Permit and Contract
Stormwater dispute
Disputed Variations
Fixing stage invoice
DBDRV Orders
Owners’ notice to show cause
Application to the Tribunal
Orders of the Tribunal
Appeal to the Supreme Court of Victoria
Questions of Law and Grounds of Review
Questions of law
Grounds of Review
Question 1
Question 2
Question 3
Question 4
Question 5
Preliminary Matters
Extension of time to file application
Leave to appear on behalf of a corporation
Mr T. Mitevski’s involvement in the proceeding
Mr T. Mitevski’s oral application
Reasons for refusal
Consideration
Question 1: Was the work of connecting the stormwater drain from the property boundary to the MW stormwater drain in Argyle Street included in the Contract price?
Question 2: Were the Owners entitled to end the Contract on the date when they issued the termination notice?
Question 3: Is the Builder required to reimburse the Owners for any reasonable return costs they have already paid?
Defective floor boards
Defective shower in the laundry
Question 4: Are the Owners entitled to claim reasonable delay damages?
Question 5: What is the respective weight of the Builder’s evidence and the Contract and specifications?
Costs
Orders
HER HONOUR:
INTRODUCTION
In this proceeding, the applicants seek to appeal the orders made by Victorian Civil and Administrative Tribunal (the ‘Tribunal’)[1] on 8 August 2023 in the Building and Property List pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘VCAT Act’).
[1]The orders and reasons are recorded in the published decision of Song v M.T.V Building & Construction Pty Ltd (Building and Property) [2023] VCAT 914 (‘Tribunal’s Reasons’).
The applicants, Mr Zhendong Song and his daughter Ms Jie Song (the ‘Owners’), own a property in Argyle Street, Fawkner (the ‘Property’).
The respondent, M.T.V. Building & Construction Pty Ltd (‘MTV’ or the ‘Builder’), is a family‑owned building company that the Owners engaged to undertake works at the Property pursuant to a domestic building contract dated 9 March 2019 (the ‘Contract’).
The director of MTV is Mr Vojo Mitevski (‘Mr V. Mitevski’). His son, who refers to himself as ‘Mr Crown Tony Mitevski’ (‘Mr T. Mitevski’), represented MTV at the Tribunal and sought leave to represent the company in this Supreme Court proceeding (discussed from [49] below).
The orders the subject of the appeal included various declarations as to the interpretation of the Contract and liability for amounts owing between the parties under the Contract.[2]
[2]The orders are extracted in full at [25] below.
The applicants seek to have certain orders made[3] be set aside and the matter remitted to the Tribunal for re‑hearing.
[3]Being orders 1(b), 1(d), 1(e),1(f), 1(g), 1(h)iv and 1(j).
BACKGROUND
I set out below a summary of the relevant factual and procedural background to this proceeding.
Permit and Contract
In May 2018, the applicants obtained a planning permit from Moreland City Council for a new townhouse at the rear of the existing dwelling at the Property.
On 9 March 2019, the Owners and the Builder entered into the Contract. The building works are described in the Contract to be a ‘NEW TOWNHOUSE DWELLING’.[4]
[4]E‑Court Book (filed 28 October 2024 in S ECI 2023 04223, Supreme Court of Victoria) (‘Court Book’), 63.
Stormwater dispute
By April 2020, the parties were in dispute as to whether it was the responsibility of the Owners or the Builder to connect the stormwater drain which the Builder had created on the Property to the Melbourne Water (‘MW’) stormwater drain in Argyle Street, Fawkner.
The dispute remained unresolved and, on 19 May 2020, the Owners lodged an application with Domestic Building Dispute Resolution Victoria (‘DBDRV’).
Disputed Variations
The dispute between the parties escalated to include disputes about variations, with the Builder claiming several variations under the Contract.
Fixing stage invoice
On 22 August 2020, the Builder sent the Owners a fixing stage invoice for $97,500 and suspended work until the invoice was paid.
At the end of August 2020, the Owners received a quote from a contractor for $35,200 (inclusive of GST) to complete the stormwater drain connection.
DBDRV Orders
On 12 November 2020, DBDRV made an order requiring the Owners to pay the Builder $100,965.07. This fee comprised:
(a) the fixing stage invoice of $97,500;
(b) interest on late payment; and
(c) a variation of $1,100 in respect of the front fence.
DBDRV excluded consideration of the stormwater drain and the disputed variation amounts.
The Owners complied with the orders of DBDRV and made the payment by the end of November 2020. Despite this, the Builder did not return to the Property immediately, stating that it was unable to do so until after Christmas due to a prior commitment on another building site.
Owners’ notice to show cause
On 17 December 2020, the Owners gave notice to the Builder that the Builder was in substantial breach of the Contract and demanded the default be remedied within 10 days in accordance with the Contract.
The builder did not respond by 27 December 2020. Despite asserting an entitlement to end the Contract at that point, the Owners did not do so even though the Builder did not return to work.
Application to the Tribunal
On 5 December 2020, the Owners lodged a claim at the Tribunal in connection with the stormwater drain dispute.
The matter evolved at the Tribunal, with the Builder filing a defence and a counterclaim on 29 October 2021 seeking orders that the Owners pay it $72,800 for work done in relation to the existing dwelling (as distinct from the construction of the new townhouse), which it said was undertaken as a variation to the Contract. The Builder also claimed $15,043.20 for other variations.
The Owners filed a defence to the counterclaim on 22 February 2022. They also amended their points of claim on 15 March 2022 to seek damages of $241,165.45 together with costs and disbursements of $7,460.17.
The Owners filed a further amendment to their points of claim on 8 January 2023, pleading that they had terminated the Contract on 8 April 2022 in reliance on a notice of substantial breach of contract sent to the Builder on 9 March 2022.
The claim was heard by the Tribunal from 10 to 13 July 2023. The applicants appeared in person. The Builder could not be represented by its director, Mr V. Mitevski, because of his limited English. The company was instead represented by Mr T. Mitevski, who held a power of attorney from his father.
Orders of the Tribunal
On 8 August 2023, the Tribunal delivered its reasons and made the following orders:
1. The Tribunal declares under s 124 of the Victorian Civil and Administrative Tribunal Act 1998:
(a)the contract made between the applicant owners and the respondent builder includes four pages of civil design prepared by BCE;
(b) the scope of the work under the contract does not require the respondent to take the stormwater drain constructed within the site boundary across the site boundary to join the Melbourne Water Stormwater drain in the street;
(c) the scope of the work under the contract includes alterations and additions to the existing house on the site;
(d) the applicants’ termination of the contract in April 2022 was unlawful;
(e) the applicants’ claim for liquidated damages for delay must be dismissed;
(f) the respondent is entitled to an award in respect of variations of $13,138 but its counterclaim is otherwise to be dismissed;
(g) the adjusted contract sum including variations is $403,138;
(h) the applicants are entitled to have credited against the contract sum, apart from progress payments made against invoices, the following amounts:
i. $3,000 paid in advance in respect of the benchtop variation;
ii. $2,000 paid for kitchen appliances;
iii. $1,100 paid under an order from Domestic Building Dispute Resolution Victoria regarding repairs to the front fence; and
iv. a credit of $4,180 in respect of screw piles not installed.
(i) the amount paid or deemed to be paid under the contract by the applicants is $361,280 leaving a balance due of $41,858;
(j) the respondent is liable to the applicants for defects in the sum of $1,813;
(k)the liability of the respondent to the applicants for damages in respect of incomplete work remains to be assessed at a further hearing;
(l) the liability of the respondent to the applicants for damages in the nature of interest remains to be assessed;
2. There will be a further hearing concerning assessment of damages 10.00am on 9 October 2023 before Member Edquist, with an allowance of one day.
3. The hearing will be by way of videoconference unless one or other of the parties requests it to be in person. The registry will provide instructions as to how to participate in the hearing in due course.
4. By 28 August 2023, on the applicants must send the Tribunal and to the respondent an affidavit or statutory declaration setting out any further evidence regarding liability or quantum and attaching relevant documents in respect of their claim for damages in respect of completion of the works. The further evidence can be sent earlier if that suits the applicants.
5. By 25 September 2023, the respondent must send to the Tribunal and the applicants an affidavit or statutory setting out any further evidence regarding liability or quantum and attaching relevant documents in respect of the owners’ claim for damages in respect of completion of the works. The further evidence can be sent earlier if that suits the respondent.
6. The parties have liberty to apply for further orders prior to the hearing on 9 October 2023.
Appeal to the Supreme Court of Victoria
By their notice of appeal filed 6 September 2023 pursuant to s 148 of the VCAT Act, the applicants seek that orders 1(b), 1(d), 1(e),1(f), 1(g), 1(h)iv and 1(j) of the above orders be set aside and remitted to the Tribunal for re‑hearing according to law.
By way of orders made by the Tribunal in late 2023, the further hearing concerning assessment of damages set by order 2 of the 8 August 2023 orders was adjourned to 31 January 2024 and ultimately vacated until the determination of the Supreme Court appeal.
As at the Tribunal, both parties sought to self‑represent themselves at the Supreme Court trial.
QUESTIONS OF LAW AND GROUNDS OF REVIEW
Questions of law
The applicants’ notice of appeal identifies the following five questions of law:
Question of law 1
1. Whether or not the work of connecting the stormwater drain from the property boundary to the Melbourne Water stormwater drain in Argyle Street was included in the Contract Price?
Question of law 2
2. Whether or not the owner [is] entitled to end the Contract on the date when he issued the termination notice?
Question of law 3
3. If [the] work is defective [as] confirmed by an expert report, whether or not the builder must reimburse the owners for any reasonable return costs they have already paid?
Question of law 4
4. Are the owners entitled to claim reasonable delay damage even though they insist their position on the stormwater dispute?
Question of law 5
5. Between the builder’s evidence and the Contract & Specification signed by the parties, which weight is lower?
Grounds of Review
The questions of law were collectively supported by 12 grounds of review. Some of the grounds of review were difficult to decipher. I have done my best to make sense of them and provide a summary of the applicants’ position below.
The Owners filed written submissions[5] which expanded on the grounds relating to each of the proposed questions of law. At the hearing they made oral submissions which did not in any material way expand or deviate from the written submissions.
[5]The Owners filed submissions dated 2 June 2024 which were amended by submissions dated 24 October 2024, which are the version of the Owners’ submissions relied upon at the trial.
Question 1
In essence, the grounds of review in respect of the first question of law can be summarised as follows:
(a) the Member failed to consider the applicants’ material in respect of and/or incorrectly applied s 24(2) of the Domestic Building Contracts Act 1995 (Vic) (‘DBC Act’);
(b) the Member was incorrect when he referred to the ‘Services Connection Clause’ in Schedule 1 of the Contract because there is no such clause in the Contract and/or this phrase is not used in the Contract;
(c) the Member was incorrect in his statement at [32] of his reasons that the Services Connection Clause confirms that the Builder excluded from the Contract price amounts payable to third parties for services connection; and
(d) the Member misconstrued the Services Connection Clause and that, in contrast to the Member’s findings, the purpose of the clause is unclear and stormwater is not included in the exclusion table.
The grounds also included allegations that the Builder, by marking the Services Connection Clause with two diagonal lines within which was written the words ‘BY OWNER’, was a ‘trap’ designed as a ‘trick’ to obtain the Contract at a lower price.
Question 2
The grounds of review in respect of the second question of law are that:
(a) the Member’s refusal to consider the Owners’ termination notice of 17 December 2020 on the basis that it was not put in evidence was erroneous because the notice had been put in evidence;
(b) the Owners have a right to appeal to the Supreme Court; and
(c) the Member stated the Owners were in substantial breach of the Contract without citing any laws.
Question 3
The grounds of review in respect of the third question of law are that:
(a) the Member incorrectly applied the Competition and Consumer Act 2010 (Cth) by not allowing the Owners to claim rectification damages in respect of defective floor boards which the Owners decided to not replace; and
(b) the Member failed to include the Owners’ claim in respect of a separate alleged defect in the shower and laundry when making his orders.
Question 4
The ground of review in respect of the fourth question of law poses an additional question: ‘Are the owners entitled to claim reasonable delay damage even though they insisted their position on the stoemwater [sic] dispute?’
Alongside this question, the ground refers to:
(a) the Builder’s suspension of the building works subject to payment;
(b) there being a duration of 595 days between the beginning of the suspension on 22 August 2020 and 9 April 2022, being the date that the Owners claim the Contract was ended;
(c) a clause of the Contract which states that $350 per week is due to the Owner where the Builder delays in the building works; and
(d) the Member’s dismissal of the Owners’ claim for delay damages.
Question 5
The grounds of review in respect of the fifth question of law are that:
(a) the benchtop variation was not made in accordance with the Contract and, as such, the Member incorrectly ordered that the allowance under the Contract for the benchtop variation was $2,400; and
(b) the Member was incorrect in allowing $1,700 to the Builder in respect of the work performed on the shower and not allowing damages for the glass door, which had not been installed. The Owners allege that the shower drain is included in the specifications, and is therefore not a variation, the tanking was built for completing the drain and tapware was not installed.
PRELIMINARY MATTERS
There were various preliminary matters which I dealt with at trial prior to hearing the substantive application.
The first was an application by the applicants for an extension of time to file their notice of appeal, which I granted.
The second was an application made by Mr T. Mitevski to appear on behalf of the respondent corporation, which I refused.
During his oral submissions in respect of the second application, Mr T. Mitevski also made submissions seeking to challenge the jurisdiction of the Court on the basis that the Supreme Court of Victoria is unable to hear matters where a corporation is a party. This challenge was unsuccessful.
The reasons for my decisions as to the above preliminary matters are set out below.
Extension of time to file application
The applicant’s notice of appeal was filed pursuant to s 148 of the VCAT Act. Section 148(2) provides that ‘[a]n application for leave to appeal to the Trial Division of the Supreme Court must be made within 28 days of the order of the Tribunal unless the rules of the Supreme Court otherwise provide.’
The orders were made on 8 August 2023. Therefore, the notice of appeal was required to be filed with the Court on or before 5 September 2023. The notice of appeal was filed one day late on 6 September 2023.
The applicants agreed that the notice had been filed outside the 28‑day time limit. On the first page of their notice of appeal, the applicants left a notation explaining that they had attempted to file the notice on the night of 5 September 2023 and mistakenly believed it had been successfully uploaded to the Court’s RedCrest e‑filing system. The note states that they realised the mistake on 6 September 2024 and immediately uploaded the notice correctly onto the e‑filing system.
At the trial, the applicants reiterated this explanation as to their delay by way of oral submissions.
In accordance with the power in s 148(5) of the VCAT Act, I decided to grant the extension of time at the hearing on the basis that there was an adequate explanation for the failure to meet the deadline, the time period required for the extension was trifling and that there was no identified prejudice to the respondent.
Leave to appear on behalf of a corporation
The second preliminary matter was the question of whether I should grant leave for Mr T. Mitevski to represent the respondent corporation.
Rule 1.17 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the ‘Rules’) restricts the ability of a corporation to be represented in this Court by a non‑solicitor. It provides as follows:
1.17 Corporation a party
(1) Except where otherwise provided by or under any Act or these Rules, a corporation, whether or not a party, shall not take any step in a proceeding save by a solicitor.
Rule 1.17 is not absolute and is expressed as subject to the Rules.[6] This includes r 2.04(1) which enables the Court to dispense with compliance with r 1.17:
[6]Worldwide Enterprises Pty Ltd v Silberman & Anor [2009] VSC 165, [19] (‘Worldwide Enterprises’); Lettieri v Strangio [2008] VSCA 205, [17] (‘Strangio’).
2.04 Dispensing with compliance
(1) The Court may dispense with compliance with any of the requirements of these Rules, either before or after the occasion for compliance arises.
Mr T. Mitevski bore the onus of persuading me that I should dispense with r 1.17.[7]
[7]Worldwide Enterprises, [28]–[29].
Mr T. Mitevski’s involvement in the proceeding
As noted at [24] above, Mr T. Mitevski represented MTV at the Tribunal due to the limited English of his father, MTV company director Mr V. Mitevski.
From the time that the proceeding was commenced on 6 September 2023 until the day before the trial, no appearance was filed nor any step taken in the proceeding by MTV. With the exception of the matters discussed below, every document filed with the Court in this proceeding, including the Court Book, was completed solely by the applicants without input from Mr T. Mitevski or anyone else.
Over the course of 2024, Mr T. Mitevski attended various directions hearings convened by Judicial Registrars Keith, Conidi and Lorenz. It is clear from the notations in the ‘other matters’ to a number of the orders made by those Judicial Registrars that Mr T. Mitevski was made aware of the requirement to make a formal application to dispense with the requirements of r 1.17 to represent the company at the Supreme Court. No formal application was made and thus MTV was recorded as having made no appearance.
It is noted in the orders of Judicial Registrar Lorenz made 23 October 2024 that Mr T. Mitevski attempted on or around 22 October 2024 to file a physical letter with the Court by leaving the letter at the Court registry’s public service desk. On 23 October, Mr Mitevski was advised that the Court does not accept physical documents for filing and that all documents must be filed on RedCrest, the Court’s e‑filing software. Court staff requested that Mr Mitevski collect the envelope which he was told did not comprise part of the Court file.
At 10:25am on 25 November 2024 (the day before the trial), Mr T. Mitevski filed a notice of appearance for MTV. At 2:20am on 26 November 2024 (the morning of the trial), Mr Mitevski attempted to file a 13‑page affidavit attaching 272 pages of exhibits. A copy of the unsealed affidavit was sent to my chambers’ email inbox at this time.
The content of the affidavit and exhibits was wholly unhelpful. The substance of the material was, as is unfortunately too often the case in recent times,[8] replete with pseudo‑legalise catch phrases, nonsensical arguments, conspiratorial allegations, and Bible quotes and exhortations. The affidavit sought to invoke a ‘Doctrine of Impossibility’ to locate a public defender or solicitor who would ‘challenge their undisclosed oath’ to ‘Guilds’ and asked the Court to dispense with r 1.17 on the basis that ‘allegiance of solicitors may conflict with their duty to represent clients’ which may lead to unjust enrichment of Bar members.
[8]Most recently the subject of comment in Nelson v Greenman & Anor [2024] VSC 704 at [68]–[73] per Gobbo AsJ. Her Honour describing the pseudo‑legal arguments in that case as ‘nothing more than [a] carnival of absurdity drawn from a mishmash of delusional arguments’, a description which can be adopted here as being apt.
Attached to the affidavit were exhibits which were manifestly pseudo‑legal in nature. There were documents stamped with a seal of a fictitious court named ‘Themis Court of Natural Law – Terra Australis’, there were documents containing assertions that the Commonwealth Government is a ‘foreign privately owned American Company’. There were also out of context biblical references: ‘Thy Kingdom come, thy will be done on earth as it is in the spiritual heavenly realm’.
Needless to say, the material was nowhere near persuasive of why Mr T. Mitevski should be permitted to appear on the company’s behalf. This material alone could be relied on to reject the application to dispense with the r 1.17 requirement. However, Mr T. Mitevski attended the trial and made an oral application to dispense with the requirements of r 1.17.
Mr T. Mitevski’s oral application
At the hearing, I explained the rule enshrined in r 1.17 to Mr T. Mitevski and gave him an overview of some of the relevant factors I would consider in deciding his application. This included the time in the proceeding in which the application is made, the financial position of the company and the appropriateness of allowing a person who is not legally trained to represent the company.
Mr T. Mitevski explained that the company’s financial position was poor and had been out of work since 2020. When I asked if there was any supporting information in his proposed affidavit, he was unable to point me to a specific document but described the materials as a ‘generic outlay of the situation that the company is in’.[9]
[9]Transcript of Proceedings, Song v M.T.V. Building & Construction Pty Ltd (Supreme Court of Victoria, S ECI 2023 042233, Justice Quigley, 26 November 2024), 3 (‘Transcript’).
When I asked Mr T. Mitevski about why he waited so long to make the application to dispense with r 1.17, especially given the fact he had been directed to do so by the Judicial Registrars, Mr Mitevski insisted he made ‘multiple attempts’ to ‘address the issue’ and that there were ‘technicalities’ the family had been navigating through.
In the course of making his oral application to dispense with the requirements of r 1.17, Mr T. Mitevski made separate submissions challenging the jurisdiction of the Court to hear this matter.
He stated that he challenged the jurisdiction in ‘a very limited capacity’ and that there was a ‘question mark’ as to the fact that MTV is a ‘company with an ABN and an ACN’ and, as far as his research has indicated, that meant this case should be heard by the Federal Court of Australia, rather than the Supreme Court of Victoria.[10]
[10]Transcript, 4.
When questioned about whether he had undertaken legal training, Mr T Mitevski told me ‘I’m a constant student of many facets including the law.’[11]
[11]Transcript, 3.
Reasons for refusal
At the hearing, I refused to dispense with the requirements of r 1.17. I gave an oral ruling at this time; my reasons for doing so are recorded on the Court transcript.
The rule embodies the long‑established common law principle that this Court, as a superior court, has a discretion to determine who will be allowed to appear before it and that it will not allow an appearance by a person who has not been admitted to practise.[12] The rationale for restricting the ability of a company to appear without a legal representative relates to the proper, efficient and timely administration of justice and the protection of the interests of the parties to the litigation, including the relevant company itself.[13]
[12]Worldwide Enterprises, [16] citing Scotts Head Developments Pty Ltd v Pallisar Pty Ltd (Unreported, New South Wales Court of Appeal, 6 September 1994) (‘Scotts Head’).
[13]Hoser v Pelley (No 2) [2023] VSCA 14, [11].
The force of the rule was emphasised by the Court of Appeal in Strangio at [18]:
The law is clear. There are sound policy reasons why a corporation ought be represented by a lawyer. Nothing has been submitted in this hearing to warrant variation or exemption from that policy. … The rule is clear.
The person seeking to represent the company carries the onus to persuade the court that the rule should be departed from.[14]
[14]Worldwide Enterprises, [28].
In Worldwide Enterprises at [20],[15] Forest J distilled the following principles guiding the application of r 1.17:
[15]Quoted in Worldwide Enterprises Pty Ltd v Silberman (2010) 26 VR 595, 602 [39]–[41] (Weinberg JA, Bongiorno JA agreeing at 607 [74]).
(a) The starting point, as r 1.17 shows, is that usually a company will not be permitted to appear without a legal representative. However, the rule is not absolute.
(b) Where such circumstances warrant it, a company may be permitted to ‘take a step’ without being represented by a legally qualified person.
(c) The following matters are relevant to determining whether such circumstances have been shown:
(i) the manner in which the case has progressed at the time that the application is made;
(ii) the manner in which the case can proceed in the future without a solicitor;
(iii) the complexity of the issues involved in the case;
(iv) whether the lack of disciplinary measures in relation to the person seeking to represent the company will affect the administration of justice;
(v) whether the case can be conducted in an orderly and responsible fashion without a solicitor;
(vi) whether there are financial considerations which would inhibit a company from obtaining legal representation;
(vii) the stage which the case has reached;
(viii) whether the defendant is likely to expend more funds in defending the claim absent a solicitor acting for the company; and
(ix)what effect, if any, permitting a company to appear without a solicitor will have on Court resources and, particularly, the effect upon other litigants in the Court List.
I observed that from the material filed overnight, both its content and its timing did not give me confidence that Mr T. Mitevski could or would be able to assist the Court in the presentation of the case for the company. Further, his (albeit half‑hearted attempt) to challenge the jurisdiction of the Court to deal with the proceeding also demonstrated to me that it would not be in the interests of justice, nor the efficient and timely consideration of the real matters in dispute between the parties, to dispense with the requirement for a company to appear in the proceeding by way of a solicitor.
In light of my refusal, I did not hear further submissions from Mr T. Mitevski on the substance of the applicants’ appeal. However, he and his family remained in the courtroom to observe the hearing.
CONSIDERATION
Section 148 of the VCAT Act allows a party to a proceeding to appeal an order of the Tribunal to this Court. The section does not distinguish between an interim or final order and as such permits an appeal in relation to virtually any order of the Tribunal.[16]
[16]VCAT Act s 3 defines ‘order’ as including an ‘interim order’. See Biddle v Allan [2012] VSC 538, [28].
The appeal jurisdiction of this Court under s 148 of the VCAT Act is not automatic. The first step is for the Court to decide whether leave to appeal should be granted and, if leave is granted, whether the appeal should be allowed.
For leave to appeal to be granted, I must be satisfied that the application identifies a question (or questions) of law and that the question (or questions) has (or have) a reasonable prospect of success.
For the reasons which follow, save for one issue raised in respect of Question 3, I am not satisfied that the questions of law otherwise raised by the applicants have a reasonable prospect of success.
Question 1: Was the work of connecting the stormwater drain from the property boundary to the MW stormwater drain in Argyle Street included in the Contract price?
This question challenges the Tribunal’s construction of the Contract and its application of that construction to the facts found by it on the evidence.
The Tribunal made its relevant findings on the terms of the Contract insofar as it relates to the stormwater connection at [19]–[37] of its reasons.
The Tribunal noted the acknowledgement by both parties that Schedule 1 to the Contract was relevant. That schedule sets out the amounts payable which are excluded from the Contract price and includes the following:[17]
[17]This part of Schedule 1 was referred to by the Member as the ‘Services Connection Clause’.
ItemEstimate
1 Conveying connection or installation of
(a) Gas$
(b) Electricity $
(c) Telephone to one point $
(d) Water$
Sewerage$
Further, the Services Connection Clause was altered by the addition of parallel lines scored diagonally across the provision within which were the words ‘BY OWNER’ marked in handwriting. It was common ground between the parties that the effect of the amendment was to confirm that the Owners were responsible for amounts payable to third parties in relation to the building works. The difference between the parties was that the Owners insisted their obligation to pay connection fees was limited to gas, electricity, telephone, water and sewerage and does not extend to stormwater.
The Owners disputed that making the connection between the stormwater drain constructed by the Builder on the Property and the MW stormwater drain on Argyle Street is the Builder’s responsibility. They relied on the drainage plans found in the civil engineering drawings prepared by the Owners’ engineers, highlighting that on the outfall drain plan a connection to the MW asset is shown. The same connection was shown in a larger scale drainage plan as well.
The Owners acknowledged that the only plans expressly referred to in the Contract were seven plans prepared by IBA Building Design (‘IBA’) and 10 sheets of engineering designs by BCE Design Pty Ltd (‘BCE’). The Owners accepted that the 10 sheets of engineering designs referred to constitute the structural engineering design. They contended, however, that there were four further sheets prepared relating to civil works for the site which also formed part of the Contract. Mr Song gave evidence that the civil works plans were prepared prior to the execution of the Contract and was sent to the Builder and should have been included in the Contract.
The Builder’s submission in respect of the civil plans was simply that they were not referred to in the Contract. The Tribunal found against the Builder on this point.[18] The IBA plans refer to the drainage plan and, in particular, noted that ‘driveways, stormwater, civil works, stormwater drainage shall be as per engineers drawings’. The Tribunal concluded this must be a reference to the BCE civil works plans and in this way they are incorporated by reference. The Tribunal concluded that the BCE civil design plans form part of the Contract and that the Builder is bound to perform the works contained in the plans subject to the terms of the Contract.
[18]Tribunal’s Reasons, [24]–[26].
The Tribunal went on to consider cl 16.0 of the Contract which is an interpretation clause that provides:
If there is any inconsistency between these Contract conditions and the related Contract Documents, they take priority in the following order:
·these Contract conditions;[19]
·the Specifications; then
·the Plans.
[19]Referred to by the Senior Member as the ‘general conditions’.
The Tribunal agreed with the Builder’s submission that it follows that any requirement of the plans is subordinated to the general conditions of the Contract.[20] Consequently, the Builder’s obligations under the civil engineering plans are limited by the Services Connection Clause contained in Schedule 1 referred to above.
[20]Tribunal’s Reasons, [31].
The Tribunal concluded, looking at the Services Connection Clause as a whole, its intention was clear. It confirmed that the Builder has excluded from the Contract price amounts payable to third parties in relation to service connections.[21] The Member found that this supports the Builder’s submission that no distinction should be drawn between water and stormwater. Further, the Tribunal agreed with the interpretation urged by the Builder that the specification appended to the Contract headed ‘Services’ reads ‘Services connecting from outside the border of the property by owner’. The Tribunal concluded that this provision is consistent with the Builder’s interpretation of the Services Connection Clause.[22]
[21]Tribunal’s Reasons, [34].
[22]Tribunal’s Reasons, [35].
Consequently, the Tribunal found that it was established by the evidence that the Builder was not entitled to make the required stormwater drain connection to the MW stormwater drain in the street. This had to be done by the contractor approved by MW and, MW, or the approved contractor, had to be paid directly for the work. The Tribunal accepted the Builder’s submission that, because the stormwater connection fee had to be paid to a third party by the Owners, connecting the stormwater drain on the Property to the MW asset is contractually a responsibility of the Owners.[23]
[23]Tribunal’s Reasons, [36].
A difference of opinion as to the outcome is not an error of law. The assertion that the Builder, by marking the Services Connection Clause with two diagonal lines within which was written the words ‘BY OWNER’ was a ‘trap’ designed as a ‘trick’ to obtain the Contract at a lower price is not borne out by a review of the manner in which the Tribunal has construed the Contract and by reference to the evidence.
The allegation that the Tribunal misconstrued s 24(2) of the DBC Act has no substance.
Section 24 of the DBC Act provides as follows:
24Builder may exclude certain items from contract price
(1) This section applies if a builder wishes to exclude from the contract price the amount any third person is to receive in relation to the work to be carried out under a domestic building contract—
(a) for the conveying, connection or installation of services such as gas, electricity, telephone, water and sewerage; or
(b) for the issue of planning or building permits.
(2) The builder may exclude any such amount by stating in the contract immediately after the contract price first appears in the contract—
(a) that the cost of the work or thing to which the amount relates is not included in the contract price; and
(b) a reasonable estimate of how much the amount is likely to be.
I can discern no error in the Tribunal’s analysis of the contractual provisions. The Tribunal has analysed the Contract in a standard and uncontroversial manner. I can see no ambiguity in the handwritten markup of the Services Connection Clause which clearly indicates that all items contained in the clause are the responsibility of the Owners.
I find that there is no error identified in the Tribunal’s analysis and there is no substance to this first question of law.
Question 2: Were the Owners entitled to end the Contract on the date when they issued the termination notice?
The Tribunal dealt with the issue of whether the Owners lawfully terminated the contract at [49]–[65] of the Tribunal’s Reasons.
The provisions of the Contract which are in issue in respect of the purported termination of the Contract is found at cl 43. Clause 43.2 entitles the Owners, if the Builder is in substantial breach of the Contract, to give the Builder a written notice to remedy the breach within 10 days after the notice is received and stating that if the substantial breach is not remedied as required, the Owner intends to end the Contract.
Clause 43.3 provides that if the Builder does not remedy the substantial breach stated in the notice within 10 days of receiving the notice, the Owners may end the Contract by giving a further written notice to the Builder to that effect.
On 17 December 2020, the Owners sent a notice to the Builder stating that the Builder was in substantial breach of the Contract. The Owners took no steps to terminate the Contract after issuing this notice. The Tribunal considered that this action was ineffective to terminate the Contract pursuant to cl 43.
On 19 March 2022, the Owners issued a further notice to the Builder headed ‘Notice to the builder of being in substantial breach of the contract again’.[24] The notice referred to cl 43.2 of the Contract and asserted that the Builder had suspended the carrying out of the building works, delayed the building works for a long time and caused defects referred to in a specified expert witness report dated 24 February 2022 and a supplementary report dated 16 March 2022.[25]
[24]Tribunal’s Reasons, [51].
[25]Tribunal’s Reasons, [51].
By notice dated 8 April 2022, the Owners gave further notice to the Builder which referred to both the notices of 17 December 2020 and 19 March 2022 and advised that ‘it is with great regret we are sending you this further written notice to end this Contract’.
The Tribunal identified the question for determination as whether the Owners lawfully terminated the Contract. The Tribunal concluded that the notice of 17 December 2020 was superseded by the notice of 19 March 2022. The Tribunal noted that the notice of 17 December 2020 was not in evidence and stated it did not warrant consideration.[26] To the extent that the Owners argued before me that the Tribunal was in error by refusing to consider the validity of the 17 December 2020 notice on the basis that it was not put in evidence, I consider that that the Tribunal’s Reasons do clearly demonstrate that the Member considered that the notice had been superseded by the 19 March 2022 notice and otherwise lapsed due to inaction of the Owners subsequent to their issuing of this notice to the Builder.
[26]Tribunal’s Reasons, [53].
The Tribunal considered for two separate reasons the notice was not effective and not a proper basis upon which the Owners could terminate the Contract by the notice of 8 April 2022.
The first of these reasons was that the notice of 19 March 2022 was not sufficiently particularised. For a notice of substantial breach of the type in question to be valid, it must be in sufficient detail regarding the substantial breaches to be rectified to enable the Builder to take steps to rectify the breaches in the nominated time period. The Tribunal found on the facts that the notice of substantial breach of 19 March 2022 fell foul of this principle in several respects:
(a) There was no stipulation of what suspension of works was being referred to or relied on. This was illustrated by the fact that the Builder could have raised arguments in relation to several apparent suspensions of the work. This included the dispute in respect of the connection of the stormwater drain in April 2020. Discussions concerning this problem continued to May 2020. The Tribunal commented that the notice was invalid insofar as it related to the refusal of MTV to carry out work outside the Property boundary for the stormwater drain because the Tribunal found that the Builder was entitled to refuse to carry out work outside the property boundary.
(b) On 22 August 2020, the Builder sent a fixing stage invoice for $97,500 and asked for the invoice to be paid within 24 hours. The covering email advised that work would stop until the payment had been made. Notwithstanding that this suspension was unlawful,[27] the Owners took no issue with this position and did not terminate the Contract or even give notice of their intention to do so. The Owners made no payment for seven days and the Builder’s position became validated by the passing of time. The Tribunal recorded that if this was the suspension being relied upon, the Owners’ notice of 19 March 2022 was ineffective. The Owners continued to refuse to pay the fixing stage invoice until DBDRV made an order on 12 November 2020 requiring them to pay.
(c) Even after payment was made, the Builder did not go back to work and the Tribunal recorded that if the suspension of work that the Owners were relying upon was this occasion, they were on stronger grounds, but even here the Tribunal considered the Builder had a valid justification for not returning to the site. This was because Mr Song had not relented in his insistence that the Builder had to perform the connection of the stormwater drain to the MW asset in the street outside the property line.
[27]As the Owner has seven days to make payment of a progress claim per Contract, sch 1 item 7.
The second substantial breach allegation was that the Builder delayed the project for a long time. The period of delay is not specified in the notice of 22 March 2022 and the Tribunal found that this was a critical omission because the Builder is entitled to know the period of delay being complained of. It was explained that this was so because it is possible under the Contract for the Builder to have lawful justification for causing a delay. The Tribunal considered that while the Builder was entitled to suspend works, the Builder was also entitled to claim time in respect of performance of variations requested by the Owners. Whether the Builder was entitled to be granted an extension of time in respect of particular variations would depend on the nature of the variation and the impact on the time it would take for the Builder to complete the works as a whole. The Tribunal noted that these were not matters explored at the hearing.
Finally, the Owners argued that the Builder was in substantial breach because of defects in the works. The Owners did not specify which defects but generally referred to two expert reports. The Tribunal referred to previous decisions of the Tribunal which established that it was not permissible to purport to particularise a notice of substantial breach of contract by referring generally to an expert’s report which itself contains reference to a number of defects. For this reason, the Builder must know what it has to do in order to comply with this notice of substantial breach and, unless the Builder knows which defects are being relied upon, the Builder will not know what defects it must rectify or dispute.
I note finally that the second broad basis for holding the notice of 19 March 2022 as ineffective was the Tribunal’s view that the Owners were in substantial breach of Contract themselves in relation to the connection of the stormwater drain issue.[28]
[28]Tribunal’s Reasons, [63]–[64].
I can discern no error in the Tribunal’s analysis and conclusion that cl 43 was not validly engaged and the Owners did not lawfully terminate the Contract as alleged.
Question 3: Is the Builder required to reimburse the Owners for any reasonable return costs they have already paid?
As noted at [35] above, the Owners’ grounds of review underpinning this question of law were that:
(a) the Tribunal incorrectly applied the Competition and Consumer Act 2010 (Cth) by not allowing the Owners to claim rectification damages in respect of defective floor boards which the Owners decided to not replace; and
(b) the Member failed to include the Owners’ claim in respect of a separate alleged defect in the shower and laundry when making his orders.
The Owners relied on a report of an expert of Mr Andrew White which was adopted as his evidence at the hearing before the Tribunal. Several defects were identified and of particular issue raised by Question 3 is the defective floor boards and a shower in the laundry.[29]
[29]Tribunal’s Reasons, [132]–[135].
Defective floor boards
The defect identified by Mr White was that the floorboards were running out of parallel with the perimeter walls by an average of 10 mm.[30] The Tribunal noted that it had the benefit of viewing the floorboards at the site inspection. The Tribunal agreed with Mr White’s observation that the floorboards are visible from a normal viewing position, but also noted that the fact that the border is out of parallel with the perimeter walls was barely noticeable.[31] The Tribunal recorded that it had made the observation at the site inspection of how good the floor looked and that Mr Song advised that it had been sanded and stained. He inferred from this that Mr Song had no intention of replacing the floorboards and, when this was put to Mr Song at the hearing, he confirmed that he ‘could live with the floor’.[32] Given the cost of rectification was assessed by Mr White at $6,496 exclusive of builder’s margin, contingency and GST, he found that it would be inappropriate to make an award of damages in relation to the floor in circumstances where it is clearly not going to be replaced.
[30]Court Book, 143.
[31]Tribunal’s Reasons, [133].
[32]Tribunal’s Reasons, [134].
The Tribunal noted that the usual rule regarding recovery of damages for breach of building contract is that the owner is entitled to be put in the position where the contract works have been properly performed, subject to the rectification works being reasonable and necessary.[33] This exception means an owner cannot exploit a technical defect in order to secure a windfall award of damages. The Tribunal concluded that this is precisely what would occur if damages were allowed for the floor. The Tribunal dismissed this part of the claim on this basis.
[33]Tribunal’s Reasons, [135].
I discern no error of law in the Tribunal’s analysis of this part of the defects claim. The Owners did not explain how this legal analysis was inconsistent with the provision of the Competition and Consumer Act 2010 (Cth).
Moreover, on its face, the Tribunal’s refusal to award damages in circumstances where it would allow the Owners to exploit a technical defect in order to secure a windfall is, in my view, consistent with authority, including the position taken by courts that rectification damages, while normally the prima facie measure damages for defective works, should be reasonable, and be refused where the proposed rectification is ‘out of all proportion to the benefit to be obtained.’[34] The applicants did not make any submissions as to why the Tribunal’s decision was incorrect in this regard and thus have not satisfied me that the order should be set aside.
[34]Naqebullah v Victoria [2024] VSCA 307, [92]–[93] citing Bellgrove v Eldridge (1954) 90 CLR 613, 617, Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272, 288 [17] and South Parklands Hockey & Tennis Centre Inc v Brown Falconer Group Pty Ltd (2004) 88 SASR 65, 85 [90].
Defective shower in the laundry
The defect referred to by the applicants is described at item 13.8 of Mr White’s report dated 24 February 2022 as follows:
1. There has been a shower installed into the laundry.
2. There has been no visible water stop provided for the shower cubicle.[35]
[35]Court Book, 150.
Insofar as the defect referred to in the expert report is raised, the grounds alleged that the defect is identified in the expert report and an estimated cost to remediate is $3,478.75 (including GST). The Owners submitted that they engaged a tradesperson to remediate it at $5,141 (including GST) and sent the evidence to the Tribunal during the hearing. A copy of the invoices was included in their affidavit material filed with the Court. No mention of this item is made in the Tribunal’s order relating to defects summarised at [139] of the Tribunal’s Reasons.
On its face, the omission at [139] appears to be an inadvertent error. From [123]–[139] of the Tribunal’s Reasons, the Tribunal goes through each defect identified in items 13.1–13.7 of the report and makes a finding as to the existence of the defect and damage allowance. The laundry shower defect, which is item 13.8, is the final defect listed in the report and is the only defect omitted by the Senior Member. This indicates to me that this final item was omitted in error.
The omission is unfortunate because there is nothing else in the Tribunal’s Reasons which indicate whether the Senior Member accepted Mr White’s evidence as to the existence of the alleged defect or the estimated cost to remediate it.
It is clear from the Tribunal transcript that the defect was discussed at the Tribunal hearing. It shows that on 12 July 2023 (being the day before the site inspection), both Mr White and Mr V. Mitevski were questioned about the existence of the alleged shower defect. In particular, the exchange between Mr V. Mitevski and the Senior Member commencing at page 412 of the Court Book demonstrates that the Senior Member would determine whether the alleged defect existed after completing the site inspection. In the exchange, Mr V. Mitevski denied the existence of the defect and (on the hypothetical scenario that the Member were to accept the evidence of the defect) challenged the quantum of the repair costs. In the exchange, the Senior Member also foreshadowed that he would provide Mr V. Mitevski with an opportunity to put MTV’s position as to the existence of the defect after the site inspection.
While the Senior Member at [11] of the Tribunal’s Reasons notes that 13 July 2023 was to be the final day in which the hearing came before him, the parties only provided the Court with hearing transcripts for 10–12 July. It is unclear whether this is because 13 July 2023 was used solely for the site inspection (and thus no transcript was produced) or due to an oversight.[36]
[36]The date of the site inspection is not specifically noted in the Tribunal’s Reasons. However, the site inspection is repeatedly referred to as occurring ‘tomorrow’ in the transcript of the hearing on 12 July 2023. See, eg, Court Book 461.
There is no material before me which directly indicates what the Senior Member’s finding was in respect of the alleged defect. What is in evidence is the expert report and the invoice for the payment of the works which corresponds with the defect assessed by the expert.
In these circumstances, order 1(j) is affected by error and should be set aside insofar as it fails to incorporate the liability (if any) in respect of the shower defect referred to at item 13.8 of Mr White’s report. I will direct that the assessment of liability referred to at order 1(j) be reconsidered by the Tribunal so as to incorporate an assessment of the liability (if any) in respect of the alleged shower defect. In doing so, the Tribunal should maintain and adopt its liability assessment in respect of the other defects set out at [123]–[140] of the Tribunal’s Reasons as those assessments are not affected by any discernible error.
Question 4: Are the Owners entitled to claim reasonable delay damages?
By Question 4, the Owners claim entitlement to reasonable delay damages. This claim was rejected by the Tribunal as delay was caused by the Owners insisting on the Builder taking the stormwater drain across the boundary to the street to join the MW stormwater drain. The Owners submit that there are no facts to demonstrate that they were in substantial breach of the Contract between 25 November 2020 and 9 April 2022.
In my view, the Tribunal having found that the Owners’ insistence on the stormwater drain connection being carried out by the Builder constituted a breach of the Contract on the Owner’s part, the corollary of this is that there would be no entitlement to delay damages.
Having found as I have that the Tribunal was correct in its interpretation of the Contract in respect of the stormwater drain issue, it follows that the Owners are not entitled in the circumstances to seek delay damages.
Accordingly, I do not accept that there is a valid question of law raised by the Owners in respect of Question 4.
Question 5: What is the respective weight of the Builder’s evidence and the Contract and specifications?
The grounds supporting this proposed question are somewhat confusing. They seemed to be referring to what weight is to be afforded to specifications in the Contract and the allowance specified and the explanation provided by the Builder at the hearing. The underlying complaint seems to be that the Tribunal accepted the Builder’s evidence over the reference to certain items in dispute in the expert report of Mr White.
It is a matter for the Tribunal to interpret and apply the Contract at first instance where that is in issue. The finding of facts is also the task of the Tribunal, recognising that the VCAT Act entitles the Tribunal to inform itself as it sees fit and the rules of evidence do not apply, subject to the rules of natural justice.[37]
[37]VCAT Act ss 98(1)(a)–(b).
The question posed by the Owners here is to challenge the Tribunal’s findings on the facts. This is not a question of law formed in this manner which has any prospect of success.
If the question is asking about weight to be given to a particular matter, that is a matter for the Tribunal. I discern no error in the Tribunal’s approach and analysis on this issue.
COSTS
At trial, the applicants did not address me on the question of costs and there is no mention of costs in their notice of appeal or submissions.
While the applicants as successful self‑represented litigants cannot be compensated for their time and labour spent in preparation of their case or attending court, they are entitled to make a claim for out of pocket costs.[38] These could include court fees, searches of court files and transcripts.[39]
[38]Cachia v Hanes (1994) 179 CLR 403, 408, 410–14, 417; Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333, 339 [1]; Hoe v Lennox [2020] VSC 262, [26]–[27]; McKechnie v Ma’a (in his capacity as the Governor of Port Phillip Prison) [2024] VSC 768, [24]; Ganesh v National Australia Bank Ltd [2021] VSCA 45, [89].
[39]See, eg, Hoe v Lennox [2020] VSC 262, [27].
As the applicants were successful on Question 3, did not make submissions as to costs and the evidence before me in respect of costs is limited, I will provide them with an opportunity following judgment to file written material in respect of any application for costs.
ORDERS
I will make orders refusing leave to appeal on all questions save for part of Question 3.
In respect of Question 3, insofar as it refers to the omission by the Tribunal to determine the item relating to the defect of the shower in the laundry, I will grant leave to appeal and allow the appeal.
Pursuant to s 148(7)(a) and (d), I will make an order that order 1(j) be set aside insofar as it fails to incorporate the liability (if any) in respect of the shower defect referred to at item 13.8 of Mr White’s report. I will direct that the assessment of liability referred to at order 1(j) be reconsidered by the Tribunal so as to incorporate an assessment of the liability (if any) in respect of the alleged shower defect. In doing so, the Tribunal should maintain and adopt its liability assessment in respect of the other defects set out at [123]–[140] of the Tribunal’s Reasons because those assessments are not affected by any discernible error.
I will also provide the parties an opportunity to make submissions as to any application for costs.
---
0
16
0