Introduction
On 29 October 2021, in the decision of Uber Builders and Developers Pty Ltd v MIFA Pty Ltd1, the County Court reiterated its position that the present pandemic-induced delays in the Victorian Civil and Administrative Tribunal (VCAT) have become so severe that, despite being chiefly responsible for hearing domestic building disputes under legislation, VCAT could be bypassed in the current circumstances.
This finding makes overtly clear the County Court’s position on the interpretation of its obligation to stay proceedings for domestic building disputes where the dispute is one that “could be heard by VCAT” and provides significant comfort for parties that commencing proceedings for domestic building disputes directly in Victorian Courts is now a feasible option while conditions persist.
For further information on the delays currently affecting VCAT, please see our previous Critical Path article here.
What happened?
Under section 57 of the Domestic Building Contracts Act 1995 (Vic) (Act) a court must stay any action arising from “a domestic building dispute” as VCAT is to be chiefly responsible for resolving such disputes.
MIFA Pty Ltd (MIFA) entered into a construction contract with Uber Builders and Developers Pty Ltd (Uber) for the construction of 11 residential apartments, a basement carpark and a commercial space in Brunswick. A dispute arose regarding completion of the works, and Uber subsequently commenced proceedings in the County Court. MIFA argued that the County Court proceedings should be stayed on the basis that it was a domestic building dispute that could be heard by VCAT.
What did the Court decide?
In Impresa Construction Pty Ltd v Oxford Building Group Pty Ltd2, Judge Burchell commented that questions of delays and resourcing were relevant in considering whether a dispute was one that “could be heard by VCAT”. However, the stay application in Impresa was dismissed ultimately because Her Honour found that the dispute was not a domestic building dispute.
In the present case, the parties agreed that the dispute was a domestic building dispute. However, the Court held that VCAT’s capacity constraints alone were enough to dismiss the stay application and that this was a valid interpretation of the Act for the reasons suggested in Impresa.
Why is this important?
Until otherwise overruled by a superior court (such as the Victorian Court of Appeal), there is now a strong precedent that parties to domestic building disputes may commence proceedings in the County Court (and potentially the Supreme Court) rather than in VCAT while conditions persist.
This temporary freedom to choose which forum to commence proceedings in is one that must be carefully considered – each forum has its own strategic advantages and disadvantages which will turn on the particular facts of the matter.
How can HWLE help you?
HWL Ebsworth Lawyers has expertise in acting for all parties including owners, builders and subcontractors in building disputes across both the domestic and commercial setting. Please contact Leighton Moon or Paul Graham of our Construction and Infrastructure team with any enquiries.
This article was written by Leighton Moon, Partner, Tara Nelson, Senior Associate and Kai-Yang Goh, Solicitor.
1[2021] VCC 1677.
2[2021] VCC 1146.
