Owners Corporation PS505245E and Ors v Moresi Builders Pty Ltd and Anor (Domestic Building) [2011] VCAT 1630
Facts
In Owners Corporation PS505245E and Ors v Moresi Builders Pty Ltd and Anor (Domestic Building) [2011] VCAT 1630, the Owners Corporation PS505245E and individual lot owners (“the applicants”), initiated proceedings against Moresi Builders Pty Ltd (“the builder”). The builder was responsible for constructing their residential multi-unit residential complex located in Richmond. The dispute centred on alleged defective plumbing works within the development, which the applicants claimed resulted in significant water damage and associated issues affecting the habitability and value of their properties.
The applicants sought rectification of these defects and compensation for the damages incurred. Given that the plumbing contractor involved had entered liquidation, the second respondent in the case was Zurich Australian Insurance Ltd (“the insurer”), the insurer that provided the relevant plumbing insurance coverage.
Applicants' Submissions:
The applicants contended that the builder breached their contractual obligations by delivering substandard plumbing work, leading to defects that caused water ingress and damage to the property. The works that suffered from these alleged defects were a leaking roof, gutter and downpipes system. The applicants argued that these defects were a direct result of the builder's failure to exercise due care and skill as mandated by the Domestic Building Contracts Act 1995 (“DBC Act”). Furthermore, the applicants contended that, in light of the plumbing contractor's liquidation, the insurer, was liable to cover the costs associated with rectifying the defective plumbing works and the resultant damages.
Respondents' Submissions:
The builder denied responsibility for the alleged defects, asserting that the plumbing works were executed in accordance with the contractual specifications and relevant building standards. The builder argued that the defective works were due to factors beyond its control or were the responsibility of other parties. The insurer on its part, sought to have the claim dismissed on jurisdictional grounds. The insurer contended that the Victorian Civil and Administrative Tribunal (“VCAT”) lacked the authority to adjudicate the matter, arguing that plumbing work was excluded from the definition of "domestic building work" under Regulation 6 of the Domestic Building Contracts Regulations 2007. They maintained that, as a result, the dispute did not fall within the purview of the DBC Act, and consequently, VCAT did not have jurisdiction to hear the case.
Principles Used to Come to Decision
The tribunal examined the interpretation of Regulation 6 of the Domestic Building Contracts Regulations 2007, which lists certain single trades or occupations excluded from the definition of "domestic building work" under the DBC Act. Regulation 6 of the Domestic Building Contracts Regulations 2007 states:
“6. Building work to which Act does not apply - work to be carried out under a contract for one type of work only
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 key issue was whether plumbing work, when performed as part of a larger residential construction project, fell within this exclusion, thereby impacting VCAT's jurisdiction over the dispute.
Decision
Senior Member Riegler of VCAT dismissed the insurer's application to strike out the claim, affirming the tribunal's jurisdiction to hear the matter. The tribunal held that the exclusion in Regulation 6 applies only to standalone contracts for single trades, such as plumbing, when they are not part of a broader domestic building project. In this case, since the plumbing work was integrated into the overall construction of a residential building, it constituted "domestic building work" under the DBC Act. Therefore, VCAT had the authority to adjudicate the dispute concerning the alleged defective plumbing works.
Lessons/New Principles
This decision clarifies that trades like plumbing are not excluded from the definition of "domestic building work" under the DBC Act when performed as part of a comprehensive residential construction project. The ruling underscores that VCAT maintains jurisdiction over disputes involving such integrated works, even if individual trades are listed in Regulation 6. Builders and contractors should be aware that all aspects of construction within a domestic building project are subject to the provisions of the DBC Act, and any defects arising therein can be settled by VCAT.
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