Defective Plumbing Works, Domestic Building Work and VCAT Jurisdiction | Owners Corporation PS505245E v Moresi Builders Pty Ltd [2011] VCAT 1630
3 min read
19 June 2023
Facts
In Owners Corporation PS505245E and Ors v Moresi Builders Pty Ltd and Anor (Domestic Building) [2011] VCAT 1630, the Owners Corporation and individual lot owners ("the applicants") commenced proceedings in the Victorian Civil and Administrative Tribunal ("VCAT") arising from alleged building defects within a residential multi-unit development in Richmond, Victoria.
The applicants alleged that defective plumbing works caused water ingress and consequential damage throughout parts of the development. The proceeding was brought against Moresi Builders Pty Ltd ("the builder"), which was responsible for the construction of the development.
The plumbing contractor engaged on the project had entered liquidation. As a result, the applicants also joined Zurich Australian Insurance Ltd ("the insurer"), which had issued the relevant plumbing insurance policy.
Importantly, the decision did not determine whether the alleged plumbing defects were established. Rather, it concerned a preliminary jurisdictional challenge brought by the insurer regarding VCAT's authority to hear the claim.
Applicants' Submissions
The applicants alleged that defective plumbing works formed part of the construction of the residential development and had caused water ingress and related damage.
They contended that the works constituted "domestic building work" within the meaning of the Domestic Building Contracts Act 1995 ("DBC Act"). Accordingly, they argued that VCAT had jurisdiction to determine the dispute and any associated claims arising from the alleged defective works.
The applicants further sought relief against the insurer following the liquidation of the plumbing contractor.
Respondents' Submissions
The insurer applied to strike out the claim against it on jurisdictional grounds.
Zurich argued that plumbing work was excluded from the definition of "domestic building work" pursuant to Regulation 6 of the Domestic Building Contracts Regulations 2007. It submitted that because the claim concerned plumbing work, the dispute fell outside the operation of the DBC Act and therefore outside VCAT's domestic building jurisdiction.
The insurer relied on Regulation 6(h), which provides:
"For the purposes of section 6(a) of the Act, work is not building work to which the Act applies if the work is to be carried out under a contract in relation to one only of the following types of work –
(h) plumbing work as defined in section 221C of the Building Act 1993."
The central issue was whether plumbing work performed as part of a larger residential construction project was excluded from the DBC Act merely because plumbing was listed as a single trade under Regulation 6.
Tribunal's Reasoning
Senior Member Riegler considered the purpose and operation of Regulation 6 within the broader legislative framework of the DBC Act.
The Tribunal found that Regulation 6 was directed at contracts involving only a single trade or occupation. The exclusion was intended to apply where a contract related solely to plumbing work or another specified trade.
However, where plumbing work formed part of a broader domestic building project involving the construction of residential premises, the work remained domestic building work for the purposes of the DBC Act.
The Tribunal rejected the insurer's interpretation, finding that such an approach would produce an artificial distinction between individual components of a residential building project and the project as a whole.
Decision
VCAT dismissed the insurer's strike-out application and confirmed that it had jurisdiction to hear the proceeding.
The Tribunal held that the Regulation 6 exclusion applies only to standalone contracts for a single trade. It does not exclude plumbing work that forms part of a broader residential building project.
Accordingly, the alleged plumbing works formed part of "domestic building work" under the DBC Act, and VCAT had jurisdiction to determine the dispute.
Key Takeaways for Builders, Owners Corporations and Insurers
This decision provides important guidance regarding VCAT jurisdiction in domestic building disputes involving defective plumbing works.
First, the case confirms that plumbing work is not automatically excluded from the DBC Act simply because plumbing appears as a listed trade in Regulation 6 of the Domestic Building Contracts Regulations 2007.
Second, where plumbing work is integrated into a residential construction project, it will generally constitute domestic building work and remain subject to the protections and dispute resolution framework established under the DBC Act.
Third, builders, owners corporations, lot owners and insurers should be aware that VCAT will look at the overall character of the construction project rather than isolating individual trades when determining jurisdiction.
The decision reinforces VCAT's broad jurisdiction over residential building disputes and confirms that parties cannot avoid the operation of the DBC Act by characterising integrated building works as standalone trade services.
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