On 18 August 2021, the County Court of Victoria (Court) took the opportunity to provide poignant commentary regarding how Victorian Civil and Administrative Tribunal’s (VCAT) under-resourcing has resulted in VCAT effectively being ‘prevented from being able to perform its function and role’ when it handed down its decision in Impresa Construction v Oxford Building [2021] VCC 1146.
Despite being unsuccessful, the builder, Oxford Building Group Pty Ltd (Oxford), had applied for a stay of a proceeding on foot before the Court involving its subcontractor, Impresa Construction Pty Ltd (Impresa), pursuant to section 57 of the Domestic Building Contracts Act 1995 (Vic) (the Act).
If Oxford’s application had been successful, Oxford or Impresa would have had to separately apply to VCAT for an order in respect of the dispute, only for the dispute to be delayed and not resolved in a timely manner.
Court’s decision on Oxford’s stay application
Section 57 of the Act provides, in effect, that if a person starts an action arising ‘wholly or predominantly from a domestic building dispute’ in the Court, the Court must stay any such action on the application of a party to the action, if the action could be heard by VCAT under subdivision 1 of Part 5 of the Act and the Court has not heard any oral evidence concerning the dispute itself.
The Court ultimately found that the dispute before it was not an action arising wholly or predominately from a ‘domestic building dispute’ within the meaning of the Act, and on this basis, the Court dismissed Oxford’s application.
In arriving at that decision, the Court considered (among other things) that a ‘domestic building dispute’ includes a dispute or claim arising between a builder and a subcontractor in relation to a ‘domestic building contract’ or the carrying out of ‘domestic building work’, and the construction contract the subject of the dispute was not a ‘domestic building contract’ to which the Act applied.
The Court held that despite the contract being unusual, on a fair reading of the contract as a whole, it is a contract between a builder and a subcontractor (meaning that it does not satisfy the term ‘domestic building contract’ as defined in the Act).
Under-resourcing of VCAT
Despite not forming part of the Court’s disposition of Oxford’s application, in its reasons the Court took the opportunity to shed light on VCAT’s current ability to efficiently resolve disputes (given that VCAT is the forum Oxford and Impresa would have had to use had Oxford’s application been successful).
As the Court observed, one of the main objectives of the Act 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’. This objective also accords with the purpose of the Civil Procedure Act, ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’.
It is common knowledge that VCAT has experienced delays in its hearings since the beginning of the coronavirus pandemic. In this regard, the VCAT website indicates that ‘COVID-19 has impacted normal timeframes for hearings …’ and VCAT is ‘working hard to address the delays’. Specific to VCAT’s Building and Property List, the website says that ‘due to COVID-19 … time frames do not apply’. VCAT also notes that it will ‘assess your application and contact you within 8-10 weeks to give you a date to come to VCAT; ask for more information if we need it; [or] let you know if we can’t deal with your dispute’.
Given the state of affairs in VCAT, the Court stated that it is arguable whether VCAT would even be able to list the hearing of this dispute until long after the date on which the Court could have accommodated the hearing.
On this point, the Court stated that: ‘Allowing mandatory stay of proceedings to be heard in VCAT where there is a shortage of resources to meet the backlog of matters, where:
- time lines do not apply;
- VCAT will contact the parties 8-10 weeks from initiation with the proposed next steps;
- currently listed hearings fixed from October 2021 are being vacated and presumably refixed in priority of new initiations to ensure that adjourned hearings are heard within a reasonable timeframe; and
- interlocutory hearings are being fixed some 8 months into the future;
all subvert the purpose of both the Act and the Civil Procedure Act to enable timely and cost-effective dispute resolution.’
Take home points
With Victoria now in its sixth lockdown and no guarantee there will be no further lockdowns in the future due to COVID-19, unless VCAT is injected with additional resources to help curb the growing backlog, parties to domestic building disputes will need to prepare for their disputes to not be resolved in a timely manner.
More information
For information on the VCAT process or advice, please contact Darren Cain, Principal Lawyer and Head of Construction and Infrastructure, on (03) 8600 8835 or dcain@kcllaw.com.au, or Dominic Brown, Senior Associate, on (03) 8600 8851 or djbrown@kcllaw.com.au.
Author
This Construction and Infrastructure case note was authored by Dominic Brown, Senior Associate.
Note: This update is a guide only and is not intended to constitute legal advice.