Troise v Blue Key Properties Pty Ltd (Building and Property) [2025] VCAT 9
Facts
In Troise v Blue Key Properties Pty Ltd (Building and Property) [2025] VCAT 9, Anna Maria Troise and Luciano Troise (“the owners”), entered into a domestic building contract with Blue Key Properties Pty Ltd (“the builder”), for the construction of a residential property. A dispute arose regarding the completion of the building works, specifically related to the issuance of a conditional occupancy permit. This permit outlined that all appliances and services had to be fitted off and commissioned before occupation of the property could occur. The owners contended that the building works were incomplete, while the builder argued otherwise, leading to this legal proceeding.
Submissions from Both Parties
Applicants' Submissions:
The owners argued that the issuance of a conditional occupancy permit did not signify the completion of building works. They contended that the outstanding conditions indicated that the property was not ready for occupation, and therefore, the builder had not fulfilled their contractual obligations. The applicants relied on the Tribunal’s decision in Barbour v Australian Elegant Homes Pty Ltd [2018] VCAT 1242, where it was held that a stage of construction is either complete or it is not, and a permit with outstanding conditions fails to meet the threshold for completion.
Respondent's Submissions:
The builder maintained their stance that the occupancy permit, even with conditions, indicated that the building works were substantially complete. They argued that the applicants were obligated to make the final payment as per Special Condition 6 of the building contract, which required payment within 14 days of the issuance of the occupancy permit. The respondent contended that this condition was enforceable and did not contravene the Domestic Building Contracts Act 1995 (“the DBC Act”). The owners sought the cost of rectifying defective works identified through an expert report conducted on 24 August 2021 which came to $443,812.00.
Principles Used to Come to Decision
The Victorian Civil and Administrative Tribunal (VCAT), led by Senior Member C. Edquist, considered several important legal principles. One of the primary issues was whether a conditional occupancy permit constituted sufficient evidence that the building works were complete under the terms of the contract. The tribunal also examined the interplay between contractual terms and statutory provisions, particularly the DBC Act. A key focus was whether specific contractual conditions that required final payment within 14 days of the issuance of the occupancy permit were enforceable, given that the permit had outstanding conditions.
Decision
VCAT ruled that the issuance of a conditional occupancy permit did not signify the completion of building works. Senior Member Edquist emphasised that a stage of construction is either complete or it is not, and a permit with outstanding conditions fails to meet the threshold for completion. This decision was consistent with the reasoning in Barbour v Australian Elegant Homes Pty Ltd [2018] VCAT 1242. The tribunal further found that Special Condition 6 of the building contract, which mandated final payment within 14 days of the issuance of the occupancy permit, was invalid as it conflicted with the provisions of the DBC Act. As a result, the tribunal concluded that the applicants were justified in claiming that the building works were incomplete, and the builder could not enforce payment based solely on the conditional permit.
Lessons/New Principles
This case primarily deduced that a conditional occupancy permit does not indicate that building works are complete as completion requires the fulfillment of all conditions outlined in the permit. Secondly, the decision reaffirms that contractual terms must align with statutory obligations under the DBC Act, and any provisions that contradict these legal standards are unenforceable. Finally, this case reinforces the importance of legal precedents, such as Barbour v Australian Elegant Homes Pty Ltd, in guiding the interpretation of building and contractual disputes.
Conclusion
The tribunal determined that the issuance of a conditional occupancy permit did not equate to the completion of the building works. Thus, the owners were not obligated to make the final payment under the building contract based solely on the permit.
VCAT invalidated Special Condition 6 of the contract, which required payment within 14 days of the issuance of the occupancy permit, as it conflicted with the Domestic Building Contracts Act 1995 (DBC Act). The tribunal highlighted that all conditions tied to the permit must be satisfied before completion could be deemed achieved, reinforcing the owners’ position that the works remained incomplete.
How we can assist…
At Bastion Legal, we help everyday Australians navigate complex legal issues with practical, straightforward advice. Our team is dedicated to resolving disputes, protecting rights, and achieving fair outcomes. Whatever challenge you’re facing, we provide clear guidance, strong representation, and practical solutions tailored to your situation.
If you’re facing a situation like the one discussed above, you do not need to face these issues alone. We’re here to protect your interests and work towards the outcome you deserve.
Contact us today for a free consultation and take the next step with confidence.