Uber Builders and Developers Pty Ltd v Mifa Pty Ltd

[2021] VCC 1677

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

BUILDING CASES LIST

Case No. CI-20-05801

Uber Builders and Developers Pty Ltd (ACN 607 768 061)	Plaintiff
v
MIFA Pty Ltd (ACN 394 617 969)	First defendant
and
Michael Hristovski	Second defendant

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JUDGE:	Her Honour Judge Burchell
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	28 October 2021
CASE MAY BE CITED AS:	Uber Builders and Developers Pty Ltd v MIFA Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2021] VCC 1677

RULING
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Subject:CONTRACTS – BUILDING AND CONSTRUCTION – DOMESTIC BUILDING CONTRACTS

Catchwords:              Building and construction – application to stay a proceeding on a basis that it concerns a “domestic building dispute” under the Domestic Building Contracts Act 1995 (Vic) (“DBCA”) – whether proceeding could be heard by VCAT under subdivision 1 of Part 5 of the Act

Legislation Cited:      Domestic Building Contracts Act 1995 (Vic); Interpretation of Legislation Act 1984 (Vic); Civil Procedure Act 2010 (Vic)

Cases Cited:Impresa Construction Pty Ltd v Oxford Building Group Pty Ltd & Ors [2021] VCC 1146; Barcrem Pty Ltd v Nisiotis [2019] CCV 106; Northern Territory v Collins & Anor (2008) 249 ALR 621; Radojevic v JDA Design Group Pty Ltd & Anor (No 2) [2017] VSC 796; National Builders Group IP Holdings Pty Ltd v CAN 092 675 164 (In Liq) & Anor [2015] VSCA 260; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Berry v Melbourne Magistrates’ Court [2001] VSC 228; Swintons v Age Old Builders Pty Ltd (2005) 13 VLR 381; David Miller v Graeme Miller & Ors [2018] VSCA 1

Ruling:  Application dismissed

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms J Anthony-Shaw	Nicholas W Albon
For the Defendants	Mr N Andreou	Robert James Lawyers

HER HONOUR:

Introduction

1By a written contract dated 22 May 2017, the first defendant (“MIFA”) engaged the plaintiff (“Uber”) to design and construct 11 residential apartments, a basement carpark, and a commercial space at 15 Breese Street, Brunswick.

2By summons dated 1 October 2021, the defendants applied for a stay of the proceeding pursuant to s 57 of the Domestic Building Contracts Act1995 (Vic) (“DBCA”) together with its costs of the application.

3The defendants contend that the preconditions in s 57 of the DBCA are satisfied and accordingly, I must stay the proceeding. Uber objects to the application.

4In my view, the defendants’ application must be dismissed. My reasons are set out below and I will make the following Orders; the proceeding is adjourned to a subsequent administrative mention on 12 November 2021 by which time the parties are to advise the Court in writing by email whether they are ready to proceed and if so whether any orders are sought by consent on the papers for the listing of the proceeding for trial in this Court. 

Procedural History

5Uber commenced this proceeding by writ and statement of claim dated 23 December 2020. The prayer for relief relevantly seeks:

(a)   declarations that:

(i)the date of practical completion was 22 March 2019 or alternatively 27 June 2019;

(ii)Uber was entitled to receive, and the Superintendent was obliged to issue, a Certificate of Practical Completion that the Works had reached Practical Completion on 22 March 2019, alternatively 27 June 2019;

(iii)Uber is entitled to an extension of time for practical completion;

(iv)MIFA is estopped from resiling from its representation that it would not make any claim for liquidated damages;

(v)As a consequence of (i)-(iii), alternatively (iv), MIFA was not entitled to, and Uber was not indebted for, any liquidated damages for delay;

(vi)the Superintendent’s, alternatively MIFA’s, purported reversal of the value of the Approved Variations was invalid;

(vii)the Superintendent’s, alternatively MIFA’s, purported deductions for liquidated damages were invalid; and

(viii)MIFA is estopped from resiling from its representation that the Approved Variation were approved on a final basis;

(ix)the December Payment schedule should have been issued in the sum of $16,666.38 owing by MIFA to Uber.

(b)   An order that MIFA pay Uber damages for breach of contract or compensation pursuant to s 236 of the ACL in the sum of $179,166.38 or such other sum as the Court considers appropriate. 

6On 26 March 2021, Judicial Registrar Muller made consent orders setting the proceeding down for trial on 11 October 2021 and providing for a standard pre-trial timetable.

7Under cover of an email dated 20 July 2021, the defendants’ then legal representatives (KCL Law) foreshadowed an application to stay the proceeding pursuant to s 57 of the DBCA.

8Later that day, the plaintiff’s legal representatives informed the Court that the application was opposed.

9I then made timetabling orders that day for the filing and service of affidavits and submissions on the stay application and listed the summons for 27 August 2021 at 9.30am before the Judge in Charge of the Building Cases List (“JIC”).

10On 10 August 2021, KCL Law filed a notice of ceasing to act for the defendants.

11On 11 August 2021, I made orders:

(a)   granting KCL Law leave to cease acting for the defendants;

(b)   listing the proceeding for further directions on 27 August 2021 before the JIC; and

(c)   vacating my orders dated 20 July 2021; and

(d)   putting the second defendant on notice that, as a self-represented litigant, he would require leave to represent the first defendant company.

12On 23 August 2021, Robert James Lawyers filed a notice of solicitor acting for the defendants.

13On 27 August 2021, I made orders transferring the proceeding to the Building Cases List and adjourning the further directions hearing to 17 September 2021.

14On 16 September 2021, I made consent orders:

(a)   vacating the trial listed for 11 October 2021;

(b)   adjourning the further directions hearing to 29 October 2021;

(c)   listing the stay application on 29 October 2021; and

(d)   timetabling the filing and service of affidavits and submissions in respect of the stay application.

The Stay Application

15As foreshadowed above, on 1 October 2021, the defendants filed a stay application pursuant to s 57 of the DBCA.

16The parties agreed that the dispute is a domestic building dispute within the meaning of s 57.

17The primary issue is whether the proceeding ‘could be heard by VCAT under this Subdivision’ (s 57(2)(a)).

Legal Framework

18Section 57 of the DBCA provides that the Court must stay a proceeding if:

(a)   the proceeding arises “wholly or predominantly from a domestic building dispute” in the County Court (s 57(1));

(b)   the action could be heard by VCAT under subdivision 1 of Part 5 of the Act (s 57(2)(a)); and

(c)   the Court has not heard any oral evidence concerning the dispute itself (s 57(2)(b)).[1]  

[1]        Barcrem Pty Ltd v Nisiotis [2019] CCV 106 at [8].

19The word “must” in s 57(2) indicates that once subsections 57(1), 2(a) and 2(b) are satisfied, the Court has no discretion and must grant a stay.

20The terms that are central to the determination of this application are relevantly defined by the Act as follows (emphasis added):

(a)   “domestic building dispute” is a dispute or claim arising between a building owner and a builder, in relation to a domestic building contract, or the carrying out of domestic building work (s 54);

(b)   “domestic building contract” means a contract to carry out, or to arrange or manage the carrying out of, domestic building work other than a contract between a builder and a sub-contractor (s 3); and

(c)   “domestic building work” includes the erection or construction of a home (ss 3 and 5).

Section 57(1) – domestic building dispute

21There is no dispute that the proceeding concerns a domestic building dispute. Section 54 of the DBCA defines ‘domestic building dispute’ as follows:

“(1) A domestic building dispute is a dispute or claim arising—

(a) between a building owner and—

(i) a builder; or

…

in relation to a domestic building contract or the carrying out of domestic building work; or

…”

22Uber is a ‘builder’ and MIFA is a ‘building owner’. The work to which the Act applies (i.e.: domestic building work) is defined in s 5, and matters are excluded in s 6. The plaintiff concedes that the contract between the parties is for domestic building works. Accordingly, the requirement in s 57(1) is satisfied.

Section 57(2)(a) – whether VCAT could hear the dispute

23The key issue in dispute is whether the test in s 57(2)(a) imports case management considerations of the kind I identified in Impresa Construction Pty Ltd v Oxford Construction Group Pty Ltd (“Impresa”).[2]

[2] [2021] VCC 1146.

24Those 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).

25The defendants contend that ‘could be heard’ means the ability (i.e.: jurisdiction) of VCAT to hear the proceeding; the phrase does not import temporal case management considerations.

26In support of that contention, the defendants note that:

(a)   My decision in Impresa was obiter dicta only.

(b) When interpreting a statute, the starting point is the words of the legislation. The court is not to fill gaps. The full wording of s 57(2)(a) is that “the action could be heard by VCAT under this Subdivision”. The Subdivision is Division 2 of Part 5, which is headed “VCAT Jurisdiction”.

(c) There are no words in s 57(2)(a) which suggest a temporal element. This is unsurprising as the Court’s mandatory obligation to order a stay would vary depending on the extent of delays in VCAT.

(d) A temporal consideration requires the court to compare the delay parties are likely to experience in the County Court vis-à-vis at VCAT, which is difficult to predict and will not assist in interpreting the DBCA.

27Whereas, Uber endorses my view that s 57(2)(a) cannot be satisfied given the current backlog of matters and shortage of resources at VCAT, and the overarching purpose of the DBCA and the Civil Procedure Act 2010 (Vic) (“CPA”) to facilitate the timely and cost-effective resolution of disputes.

28In support of that contention, Uber notes that:

(a)   A plain reading of the word ‘could’ does not exclude temporal considerations. Rather, the Macquarie Dictionary definition is broad and encompasses a reference to possible events or situations, and includes the meaning “to happen to be true on certain occasions or in certain instances”.[3]

(b)   Whether or not one imports temporal considerations to the phrase ‘could be heard’, my interpretation falls within its plain meaning. The words ‘under this Subdivision’ do not alter the ordinary meaning but rather incorporate additional requirements of the Subdivision.

(c) My interpretation does not add words to s 57(2). The interpretation in Impresa accords with the ordinary and contextual meaning of the DBCA.

(d) It is permissible to have regard to the context and purpose of the DBCA, even where there is no ambiguity.[4]

(e)   My reference to the second reading speech was appropriate.[5]

(f) The objects in s 4(b) of the DBCA and the Second Reading Speech afford at least equal weight to considerations of cost and time. In that respect the plaintiff will face significant delay at VCAT, and it has accumulated over two years’ of legal costs, which are likely not recoverable at VCAT.

(g)   The previously described, the resourcing constrains on VCAT set out in Impresa are unprecedented. Accordingly, the fact that previous authorities have not imported temporal concerns to the phrase ‘could be heard’ does not detract from my interpretation. 

(h) My reliance upon the overarching purpose of the CPA is appropriate as it applies to all civil proceedings, including applications under s 57 of the DBCA.[6]

[3]        Macquarie Dictionary (Macquarie Dictionary Publishers, online edition, 2021).

[4]        See, eg, Interpretation of Legislation Act 1984 (Vic) s 35(a).

[5]        Northern Territory v Collins & Anor (2008) 249 ALR 621 at [99].

[6]CPA ss 7 and 8; Radojevic v JDA Design Group Pty Ltd & Anor (No 2) [2017] VSC 796 [73] (“Radojevic”).

29In 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.[7] 

7 National Builders Group IP Holdings Pty Ltd v CAN 092 675 164 (In Liq) & Anor [2015] VSCA 260 at [7].

30I do not accept the defendants’ submission that the Court is effectively inserting words into the legislation. Rather, the analysis in Impresa involved a holistic assessment of the text, context and purpose of the DBCA. For example, the analysis notes:

(a) One of the main objectives of the DBCA is “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” (s 4).[8]

(b)   

The second reading speech is consistent with that purpose:

“The public policy rationale for [s 57] 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.”[9]

(c) The current context of the DBCA is that: “It is common knowledge that VCAT has experienced delays in its hearings since the beginning of the Coronavirus pandemic. If a mandatory stay of proceeding is granted for the present matter to be heard at VCAT, parties will not have their matter heard until a date much later than if the matter were heard in this Court.”[10]

[8]        Impresa at [46].

[9] Ibid.

[10] Ibid at [47].

31That analysis is consistent with the usual approach to statutory interpretation.[11]

[11]        See, e.g., Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 366–370.

32Further, I do not accept that the phrase “under this Subdivision” indicates that the phrase ‘could be heard’ refers to a jurisdictional ability alone, for two reasons.

33First, that construction would have absurd implications. Section 57(2)(a) would have no work to do or any limiting purpose beyond s 57(1), since VCAT has jurisdiction over all “domestic building disputes”. On the defendants’ construction, any domestic building dispute ‘could be heard by VCAT’. It is to be presumed that Parliament inserts words into an Act for a purpose (and in this instance, to constrain the kinds of disputes which can be stayed).

34Further, the second reading speech indicates that the plaintiff has an option to issue proceedings relating to a domestic building dispute in VCAT, and this is not mandatory (up to any stay application):

“Domestic building disputes are a special category of dispute where timeliness of resolution is critical, and where less formal procedures 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 the matter is brought before the courts for resolution.”[12] (emphasis added)

[12]        Hansard, Legislative Assembly, 24 October 1995, at 697.

35The apparent purpose of the legislation, therefore, is that the plaintiff has a choice of jurisdiction as between VCAT and the County Court. That choice is inconsistent with a plaintiff being forced into VCAT merely because VCAT has concurrent jurisdiction over the dispute. Parties can consent to jurisdiction as it is uncontroversial that this court may hear and determine a “domestic building dispute”.[13] Section 57 is only triggered by an application of a party to the action made before the court has heard any oral evidence concerning the dispute itself.[14] 

[13]        Radojevic at [67].

[14]        Berry v Melbourne Magistrates’ Court [2001] VSC 228 at [71].

36I 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.

37VCAT has acknowledged on its website and newsletters[15] due to an increasing workload and the difficulties imposed by the COVID-19 pandemic, the Building and Property List at VCAT (“BPL”) is no longer able to offer hearing dates in a timely manner.[16] Currently, the BPL has vacated or may have to vacate a number of hearings due to the lack of available members. The next available date for a multi-day hearing is approximately 14 months away. Indeed, the delays in the BPL are likely to remain significant for some time. To assist with a “blitz” of the backlog of their already adjourned and not reached matters, VCAT has referred tranches of BPL cases to Judges of the Commercial Division of the County Court who are Vice Presidents of VCAT[17] to hear and determine complex proceedings which will be fixed for hearing from February 2022 onwards. 

[15]        See Building & Property List Update from VCAT Communications dated 19 August 2021.

[16]See: 

^17.       See: the event the parties are interested in a faster and potentially more cost effective determination, they are encouraged to consider whether arbitration of the dispute may be suitable. It is possible for domestic building disputes (as defined under the DBCA) to be referred to arbitration by agreement between the parties.[18] There are a number of time-bound and fixed price schemes available. The court’s arbitration list, launched on 7 July 2021, is available to recognise and enforce any award and assist with procedure for parties to resolve all or part of their dispute by arbitration.

[18]        Swintons v Age Old Builders Pty Ltd (2005) 13 VLR 381.

39As such, the elements of s 57(2) have only had reason to be considered primarily as a result of the COVID-19 pandemic.

40Therefore, 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.

Further CPA Considerations

41Uber raised various further submissions in opposition to the summons. These included that a summons under s 57 is a ‘step in the proceeding’,[19] which must accord with the overarching obligations under the CPA (which it says the defendants did not do).

[19] s 29(1)(e) of the Civil Procedure Act 2010 (Vic).

42These submissions were in support of whether the defendants’ s 57 application was in breach of their overarching obligations under the CPA and in particular their paramount duty to further the administration of justice (s 16), the obligation to not take any step unless the person reasonably believes that the step is necessary to facilitate the resolution or determination of the proceeding (s 19) and to use reasonable endeavours in connection with the civil proceeding to act promptly and to minimise delay (s 25). The argument was two-fold. First, where it may be open to the Court to prevent an application being made under s 29(1)(e) of the CPA[20] and, second, on the question of costs in the event the defendants were successful. 

[20]        David Miller v Graeme Miller & Ors [2018] VSCA 1 at [48].

43A court has the power to make certain orders in relation to steps taken by a party under s 29, if the court makes a finding that a party has breached any overarching obligation under the CPA. In the present case, it would require a separate inquiry into whether there were breaches of the overarching obligations with further affidavits and submissions on the particular issue. The defendants did not avail themselves of filing reply submissions despite the right to do so pursuant to court order. The allegations contained in the plaintiff’s written submissions therefore were not met by the defendants. The factors relevant to the question must be deposed to in the affidavits relied on by the parties in any s 57 application.

44As was discussed by Ginnane J in Radojevic, a s 57 application can be made very late in a proceeding and even when a trial has commenced. The implication of Radojevic, is that in considering ss 7(2), 19, 24, 25 and 28 of the CPA there could be adverse costs consequences in making such a late application without good reason. In my view, this complaint may also be magnified if it involves a larger or more complex dispute.

45There may, however, be valid reasons why a party may wish the proceeding to be heard and determined by VCAT, for example, cheaper fees, different costs rules, different rules of evidence, informality, a low cost claim and self-representation. It is noted, that Radojevic did not consider the powers contained in s 29(1)(e) of the CPA and its potential interplay with s 57 of the DBCA where there has been a finding of a breach of the CPA.

46Parties to domestic building cases issued in this Court are therefore reminded that:

(a)   a number of County Court judges are appointed as Vice Presidents of VCAT and may hear and determine VCAT proceedings in that capacity;

(b) any late application to seek to stay the proceeding pursuant to s 57(4) of the DBCA may attract adverse cost implications or other sanctions and powers available under the CPA; and

(c) the parties may provide written undertakings by consent on the papers to this Court to agree that they will not make a s 57(4) DBCA application in the County Court proceedings. This is particularly in light of the current delays experienced in VCAT and that ultimately VCAT may determine that their proceeding would be best managed by a VP of this Court in any event.

47In circumstances where I reject the summons, it is unnecessary to examine the further CPA contentions in the present case.

Conclusion

48For 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. The defendants are to pay the plaintiff’s costs on a standard basis to be taxed in default of agreement (unless either party has a basis for a different costs order). I invite the parties to prepare draft orders to give effect to these reasons. I will determine any issue concerning costs on the papers. 

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Certificate

I certify that these 13 pages are a true copy of the judgment of her Honour Judge Burchell delivered on 29 October 2021.

Dated: 29 October 2021

Simon Bobko

Associate to her Honour Judge Burchell