Owners Corporation defeats stay application to bring a building dispute: Significant decision under s 57 of the Domestic Building Contracts Act 1995 (Vic)
The issue of jurisdiction for the determination of domestic building disputes in Victoria has been an evolving one over the last decade. Significant decisions in this area include the decisions of Uber Builders[1] and Impressa Constructions[2], in which Judge Birchell found that VCAT was not capable of hearing domestic building disputes in 2021 due to case management considerations, as well as the Court of Appeal’s decision in Thurin v Krongold [3], which held that VCAT lacks jurisdiction to hear or determine proceedings involving issues arising under Commonwealth legislation.
More recently, there was the 2024 decision of Mooney v Fanissa [4], in which Judge Kirton, on an interlocutory application under s 57 of the Domestic Building Contracts Act 1995 (Vic) (DBC Act), found that the case management considerations which arose in 2021 were no longer relevant, and that VCAT was the primary forum for domestic building disputes to be heard. Consequently, the question of the appropriate forum in which to commence a domestic building dispute is not as simple as it once appeared to be.
A recent decision, however, obtained by KPA Lawyers on behalf of one of our Owners Corporation clients (the OC), has provided some clarity on how s 57 of the DBC Act will apply where a party has reasonably raised a claim outside VCAT’s jurisdiction with reference to the Thurin threshold.
Intro
Owners Corporation PS720260H v Wilkinson Developments Pty Ltd & Anor [2025] VCC 1848 is significant in two respects. Firstly, it provides further guidance on the circumstances that may satisfy the Thurin threshold for claims to be validly raised outside of VCAT jurisdiction, being “genuinely in controversy and that give rise to an issue capable of judicial determination”.[5] Secondly, it is the first authority under s 57(1)(b) of the DBC Act, providing guidance on how the courts may exercise their power under that section and confirming that, in appropriate circumstances, a procedural requirement will be cured in interests of access to justice.
Background
The decision concerned two interlocutory applications arising out of proceedings commenced in relation to a domestic building dispute in which the OC alleged defects in the common property in a medium to high density apartment complex. KPA Lawyers represented the OC and, due to circumstances which Judge Kirton found not to be the fault of the OC,[6] KPA Lawyers was instructed to act on behalf of the OC only three business days before the expiration of the 10-year limitation period under s 134(1) of the Building Act 1993 (Vic) (Building Act).[7] The proceeding was commenced in the County Court on 17 March 2025, one day before the expiry of the limitation period, and without the OC first obtaining a DBDRV certificate of conciliation, which is usually required to be obtained before commencing proceedings relating to a domestic building dispute in Victoria.[8]
The defendants applied to stay the proceeding under s 57(2) of the DBC Act on the basis that it was a domestic building dispute and must be stayed and commenced in VCAT. The decision of Fanissa confirmed that VCAT is the primary forum for domestic building disputes and the wording of s 57(2) affirms this position.[9] The operation of s 57(2) is not one of a discretionary nature but is mandatory,[10] based on the wording used in that section and the requirement of a court to stay proceeding upon application under s 57(2), subject only to the two qualifications that (a) the action could be heard by VCAT and (b) the court has not heard any oral evidence.[11] Had the defendants been successful in their stay application, this could have been fatal to the OC’s claim, as any freshly made claim in VCAT would have been statute barred.
The OC, in its application, sought the Court’s leave under s 57A(1)(b) of the DBC Act to bring and continue the proceeding in the County Court despite not first obtaining a DBDRV certificate of conciliation. Detailed affidavit material filed by the OC provided evidence of a potential claim existing against the defendants (and/or related entities) for alleged misleading and deceptive conduct under s 18 of the ACL (Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) and foreshadowed an intention to join related entities alleged to have made representations in regard to liability for and the rectification of defects. Judicial Registrar Muller initially dismissed the application for a stay and granted leave for the plaintiff to bring the proceeding. The defendants then sought a de novo review of that decision before Her Honour Judge Kirton.
Decision
Proceeding involved “federal subject matter”
Her Honour accepted that there were reasonable grounds to consider that the action raises, or may raise, a controversy involving “federal subject matter” by reason of the affidavit material and the foreshadowed ACL claim. Although the plaintiff had not yet particularised loss and damage or filed a proposed amended pleading, Her Honour, on the evidence before her, was satisfied that there were reasonable grounds to consider that the action raises, or may in the future raise, a controversy involving a federal subject matter which VCAT has no jurisdiction to exercise judicial power to resolve.[12]
The plaintiff put forward affidavit material from the solicitor with conduct of the matter, who deposed to the reasonable belief held by KPA Lawyers that a claim could be raised against the defendants and/or related entities for misleading and deceptive conduct contrary to s 18 of the ACL. Further, the OC manager provided lengthy evidence of material facts which could support such a claim.[13]
The defendants submitted that for s 57(2A) of the DBC Act to apply, the details of the proposed federal claim are required to be set out with sufficient precision and particularity for the defendants to be able to respond meaningfully, or to be able to be determined.[14] Further, the defendants stated that there was no indication how the representations are said to be actionable, how they are said to result in loss and damage, or what loss and damage is said to have been sustained.[15]
However, Justice Kirton rejected the defendants’ submissions and relied upon paragraphs 58 and 59 of the Thurin decision to state that the identification of a matter in the federal jurisdiction “might therefore take shape before the issues have been delineated in pleadings at all”.[16] At paragraphs 21 to 24 of the decision, Her Honour further detailed the evidence which had been provided by the plaintiff and determined there was sufficient basis for her to consider that these claims under the Act (including any future claims to be made against the defendants’ related entities) arise wholly or predominantly from a domestic building dispute within the meaning of s 57(1). Her Honour found that, whilst loss and damage had not yet been particularised which was said to flow from any ACL breaches, that does not mean that a claim is not genuinely raised, going on to say “that a plaintiff has not yet set out the remedy it seeks at the early stage of raising a claim does not mean it is incapable of argument”.[17] Accordingly, s 57(2A) of the DBC Act was applied and the defendants’ stay application was refused.
Leave under s 57A(1)(b) of the DBC Act granted nunc pro tunc
As there were previously no authorities providing guidance in relation to the court exercising its power to grant of leave under s 57A(1)(b) of the DBC Act, the parties made submissions on the wording of s 57A and principles of statutory construction which should be considered in its application. The defendants submitted that, on plain reading of s 57A, leave must be granted before a proceeding is commenced, meaning that the plaintiff should have issued a summons on originating motion to seek and obtain leave before filing the writ and statement of claim. In response, the plaintiff submitted that the differentiation of the wording between s 57A and s 56 demonstrated the legislature’s intention that different procedures apply in different jurisdictions and s 57A is concerned with the future conduct of the proceeding rather than what occurs prior to it being commenced.[18]
Her Honour found that the court’s power under s 57A(1)(b) is a power that can be exercised after a proceeding has been commenced and went on to state that to find otherwise “would create an absurd situation where a plaintiff, on the cusp of a limitation period, must first apply by summons for leave to issue a proceeding, have that application heard and determined, and then if leave is granted, file a writ and statement of claim, all before the limitation period expires. That is a practical impossibility in cases such and the present. The result would be that the plaintiff is deprived of access to justice.”[19]
Her Honour stated that her view was that s 57A should not be interpreted in a way which would have the practical effect of shortening the limitation period provided under s 134 of the Building Act by an indeterminate period of time, going on to state that the indeterminate period of time would be a result of unknowns such as a court’s listing availability to hear an application for leave or DBDRV’s capacity to assess new applications and issue a certificate of conciliation.[20] It was also found that the requirement to obtain a certificate of conciliation is not a substantive requirement but a procedural requirement which can be cured by the cured the court’s exercise of its power under s57A(1)(b).[21]
The above decision provides further clarification as to circumstances where a claim will be considered as reasonably raised where, on its face, it is reasonably capable of legal argument and which is outside the jurisdiction of VCAT, especially in the context of any interlocutory applications under s 57 of the DBC Act. It emphasises that s 57A should not be applied so as to shorten limitation periods in practice or unjustly deny plaintiffs access to justice in time sensitive domestic building disputes.
Conclusion
[1] Uber Builders and Developers Pty Ltd v MIFA Pty Ltd & Anor [2021].
[2] Impresa Construction v Oxford Building [2021] VCC 1146.
[3] [2022] VCSA 226 (‘Thurin’).
[4] Mooney & Anor v Fanissa Pty Ltd [2024] VCC 1032 (‘Fanissa’).
[5] Thurin (n 3) [55].
[6] Owners Corporation PS720260H v Wilkinson Developments Pty Ltd & Anor [2025] VCC 1848 (‘OC v Wilkinson’) [52].
[7] Ibid [51].
[8] Domestic Building Contracts Act 1995 (Vic) s 56.
[9] Fanissa (n 4) [1].
[10] Ibid.
[11] Domestic Building Contracts Act 1995 (Vic) s 57(2).
[12] Fanissa (n 4) [9].
[13] OC v Wilkinson (n 6) [14].
[14] Dawn v Carlisle Homes [2025] VSCA 58 [154].
[15] OC v Wilkinson (n 6) [17].
[16] Thurin (n 3) [58]-[59].
[17] OC v Wilkinson (n 6) [24].
[18] Ibid [34-35].
[19] Ibid [44-45].
[20] Ibid [47].
[21] Ibid [64].
