TCM Builders Pty Ltd v Olyvia Nikou - [2013] VSC 322

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 02692 of 2012

TCM BUILDERS PTY LTD	Plaintiff
v
OLYVIA NIKOU	First Named Defendant
And
GEORGE KAY	Second Named Defendant

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	6 JUNE 2013
DATE OF JUDGMENT:	20 JUNE 2013
CASE MAY BE CITED AS:	TCM BUILDERS PTY LTD v OLYVIA NIKOU & ANOR
MEDIUM NEUTRAL CITATION:	[2013] VSC 322

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DAMAGES - Some defendant parties settle claims in VCAT proceeding with the payment of money – Remaining defendant party fails to settle VCAT proceeding – Matter proceeds to trial with adverse order made against remaining defendant party – Whether defence of ‘double compensation’ established in relation to settlement monies paid by the settling defendants – Principles of ‘double compensation’ defence – Evidentiary onus of proof shifts - Payment of settlement money not in respect of concurrent claims – Defence fails.

PRACTICE AND PROCEDURE - Order pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) that leave be granted to appeal decision of VCAT member – Principles as to leave to appeal VCAT order - Some defendant parties settle claims in VCAT proceeding with the payment of money – Remaining defendant party fails to settle VCAT proceeding – Matter proceeds to trial with adverse order made against remaining defendant party – Whether defence of ‘double compensation’ established in relation to settlement monies paid by the settling defendants – Principles of ‘double compensation’ – Evidentiary onus of proof shifts – Payment of settlement money not in respect of concurrent claims - Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Shnookal SC with Mr G Hellyer	Telford Story & Associates
For the Defendants	Mr T Mitchell	GPZ Legal

HIS HONOUR:

This is an application for leave to appeal and an appeal from orders made following the delivery of reasons of the Victorian Civil and Administrative Tribunal, Civil Division, Domestic Building List (the “Tribunal”) in a matter which was the subject of a proceeding before the Tribunal (the “VCAT Proceeding”).[1]
[1]TCM Builders Pty Ltd v Oliyvia Nikou and George Kay and Ors [2012] VCAT 277 (12 April 2012) (Senior Member Riegler)

The Plaintiff (the appellant), TCM Builders Pty Ltd is a builder and the Defendants (the respondents), Olyvia Nikou and George Kay, are the property owners who engaged the Plaintiff as a builder under an architect administered domestic building contract.

The Plaintiff commenced the VCAT Proceeding seeking the balance of the adjusted contract sum which it claimed was due and owing to it. The Defendants counterclaimed against the Plaintiff in respect of defects.

A number of other building professionals were joined by counterclaim in the VCAT Proceeding by the Defendants. Prior to the Tribunal hearing, the Defendants settled with all of the other building professionals (the “Settling Parties” comprising the Designer and Contract Administrator, the Landscapers and three groups of Engineers) in three separate settlement agreements. However, no settlement was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] VSC 322
Decision Date: 20 JUNE 2013

CaseChat Overview and Summary

TCM Builders Pty Ltd brought proceedings against Olyvia Nikou, along with other defendants, in the Victorian Civil and Administrative Tribunal (VCAT) seeking damages for building defects. The dispute centred on the quality of construction work and the liability of the defendants for any defects. The matter proceeded to trial with only one defendant, Olyvia Nikou, remaining as the party to be judged, after other defendants settled the claims by paying a sum of money. Nikou argued that she should not be liable for any damages as the settling defendants had already compensated the plaintiff for the same defects.

The legal issues before the court were whether the defence of ‘double compensation’ was established in relation to the settlement monies paid by the settling defendants and, if so, whether Nikou was still liable for damages. The court had to determine if the settling defendants' payment of money to the plaintiff constituted compensation for concurrent claims that overlapped with Nikou's liability, thereby relieving her from further liability. Additionally, the court needed to consider the principles governing the defence of double compensation and the shifting of the evidentiary onus of proof.

The court held that the defence of double compensation was not established as the settling defendants' payment did not relate to concurrent claims that overlapped with Nikou's liability. The court found that the payment was made in respect of distinct and separate claims, and therefore, Nikou remained liable for damages. The court also emphasised that the onus of proof shifted to the defendant to establish the defence of double compensation once the plaintiff proved a prima facie case. The court concluded that Nikou's defence failed as she did not discharge the onus of proof. The appeal against the VCAT decision was dismissed, and the adverse order against Nikou was upheld.

As a result of the court's decision, Olyvia Nikou remains liable for the damages awarded to TCM Builders Pty Ltd. The court's ruling reinforces the importance of the evidentiary burden in cases involving the defence of double compensation and highlights the need for defendants to clearly establish the nature of any settlement payments to avoid liability for concurrent claims.

Orders