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[2023] VCAT 169
respondent. Application dismissed. The Owners' claim for reimbursement of part or all of the $10,000 paid under the Design Services Agreement was dismissed because the agreement was not a major domestic...
The Owners paid $10,000 to a designer for pre-contract design services and later sought reimbursement. The Tribunal found the agreement was not caught by the Domestic Building Contracts Act because the Act and its regulation require the contract price to be more than $10,000; $10,000 is therefore below the 'major' threshold. The Tribunal also found the Owners were not pressured into signing, the designer had completed the agreed work, and the Owners had received more than $10,000 worth of value. The Owners' claim for reimbursement was dismissed.
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1,794 words · generated 29/06/2026
The Owners, Mr Nathan Frauenfelder and Ms Julie Kennedy, entered a Design Services Agreement with Sperway Development Pty Ltd trading as The Extension Factory for the sum of $10,000. The agreement was for the Designer to deliver design services for a proposed extension to the Owners' house, to be carried out before any major domestic building contract was executed [Background 1]. The draft agreement was left with the Owners on 10 June 2020 and signed five days later [Background 2]. The Owners later terminated the agreement about November 2020 after the Designer had performed the contracted design services, which included arranging a title search, a property report, a soil test, engineering computations, preparation of a detailed design, and an energy report [Background 3]. The Owners sought reimbursement of part or all of the $10,000 paid, bringing an application to VCAT (BP1495/2021). At hearing on 20 January 2023, Member C Edquist dismissed the application and provided written reasons on 20 February 2023 [Introductory Note 1–2; Order].
1 cited instrument linked from this judgment.
Key factual findings were that: the Design Services Agreement was enforceable (no persuasive evidence of pressure when it was signed after five days' consideration) [Background 2]; the contract price was $10,000 and therefore did not constitute a 'major domestic building contract' because the Act and the Regulations require the contract price to be more than the fixed amount (Regulation 6 fixed the relevant amount at $10,000) [Background 2–3]; the Designer had incurred around $4,700 in third-party expenses and reasonably valued internal costs of more than $6,000, so the Owners received value in excess of the $10,000 paid [Background 4]. On that basis the Tribunal dismissed the Owners' claim for reimbursement [Background 5; Order].
Two strands of reasoning led the Tribunal to dismiss the Owners' claim.
Statutory interpretation of the 'major domestic building contract' threshold: The Domestic Building Contracts Act 1995, s 3, defines a 'major domestic building contract' by reference to a contract price that is more than a specified amount; the regulations may fix a higher amount. Regulation 6 of the Domestic Building Contracts Regulations 2017 fixes the statutory amount at $10,000 for the purposes of the definition. The Tribunal applied the statutory language strictly: because the Act requires the contract price to be "more than" the fixed amount and Regulation 6 fixed that amount at $10,000, a contract with a contract price of exactly $10,000 does not meet the statutory threshold. Accordingly, the Design Services Agreement was not a 'major domestic building contract' caught by the Act [Background 2–3]. Put simply, the Tribunal read "more than $10,000" as strictly greater than $10,000, so $10,000 did not qualify.
Contract enforceability and performance/value: The Tribunal addressed the Owners' contention that they were pressured into signing and found that the timeline (agreement left on 10 June and signed five days later) and the evidence did not support an allegation of pressure. The Agreement was therefore enforceable [Background 2]. On performance, the Tribunal found that the Designer had completed the agreed design services and had incurred approximately $4,700 in third-party expenses and more than $6,000 in internal costs. Those findings led to the conclusion that the Owners received value in excess of the $10,000 paid. Because the Designer had performed the contract and the Owners had obtained the value, the Tribunal dismissed the Owners' claim for reimbursement [Background 3–5].
These two conclusions together disposed of the claim: the statutory protections for major domestic building contracts in the Act did not apply, the contract was valid, the services were delivered, and the Owners received more than they had paid.
Before this decision: The Domestic Building Contracts Act 1995 contains a statutory definition of 'major domestic building contract' linked to a monetary threshold; the regulations may fix the threshold. The statutory language has long used comparative language (for example, "more than" a specified amount). Prior to this decision, parties and practitioners may have disputed the effect of regulatory fixation of the threshold, and whether a contract priced exactly at the regulatory figure fell within the Act.
After this decision: The Tribunal applied a textual reading: because section 3 requires the contract price to be "more than" the amount fixed in the regulations, a contract priced at the fixed amount ($10,000) is not a 'major domestic building contract'. The judgment therefore provides a clear, authoritative application of that textual point at VCAT level: where the regulation fixes the threshold at $10,000, a $10,000 contract is not captured. The decision emphasises careful attention to statutory wording and the precise monetary figure. Practitioners should thus treat the regulatory figure as a strict threshold, where the Act's protection of 'major' contracts will only apply when the contract price exceeds the regulatory amount.
This VCAT decision does not purport to change the statutory language; it interprets it in a way that gives effect to the words "more than". It will be persuasive in similar tribunal and lower court contexts, though its precedential weight is limited to VCAT decisions unless followed by higher courts.
"As the contract price of the Design Services Agreement was $10,000, I find that it was not itself a major domestic building contract." [Background 3].
"The Design Services Agreement was drafted on behalf the Designer by Mr John Eades and was left with the Owners for their consideration on 10 June 2020. It was signed by them five days later. In these circumstances the Owners' allegation that they were pressured into signing the Agreement is not made out. I find that the Design Services Agreement is an enforceable contract." [Background 2].
"I find ... the Designer had expended approximately $4,700 in favour of third parties ... and ... internally incurred costs valued reasonably at more than $6,000 ... As a consequence, the Owners have received value of more than $10,000 for the performance of the design services." [Background 4].
"For these reasons, the Owners claim for reimbursement of part or all of the sum of $10,000 from the Designer is dismissed." [Background 5].
This decision will be directly relevant where:
Key triggers: contract price exactly equal to the regulatory threshold; evidence of completed design services with invoices for third-party costs and records of internal costs; and an allegation of pressured signing where contemporaneous circumstances show time for consideration.
This judgment does not discuss subsequent judicial consideration or appellate treatment; it is a VCAT decision rendered in early 2023. The written reasons do not cite or rely on higher court authority for the specific rule that 'more than' is strictly greater than the fixed regulation amount; the Tribunal applies a straightforward textual interpretation [Background 2–3]. To establish how superior courts have treated the same specific statutory point, practitioners will need to search case law databases for appellate or Supreme Court decisions on the Domestic Building Contracts Act and the effect of the regulationally fixed amount. The present decision is, however, a clear statement of VCAT's approach and will be persuasive in tribunal and similar fact patterns.
Appellate or higher court treatment: The decision rests on textual interpretation at VCAT level. It remains open whether a Supreme Court or appellate court would adopt the same strict reading in every context, or whether other interpretive considerations (such as purpose or legislative history) might yield a different view in edge cases.
Aggregation of charges or ancillary fees: The decision focused on the contractual "contract price" figure. Questions can arise where parties structure fees as multiple agreements, staged contracts, or where additional fees are payable, whether those amounts should be aggregated for the 'major' threshold will require careful factual and legal analysis.
Treatment of internal 'value' assessments: The Tribunal accepted the Designer's evidence of internal costs valued reasonably at more than $6,000. In closer cases, the method for valuing internal costs and what evidentiary standard is required to demonstrate that the owner received equivalent value may be contested. Future disputes may require more granular evidentiary proof or expert valuation to establish whether value provided equals the payment.
Scope of pre-contractual design agreements: The decision recognises that parties can enter design services agreements that sit outside the Act's protections if they fall below the threshold. The interaction between such pre-contractual agreements and later building contracts, particularly where the pre-contract work is incorporated into, or credited against, later building contracts, may raise further legal issues not explored in this case.
Consumer protection overlaps: Where a contract is excluded from the Domestic Building Contracts Act by reason of the regulatory threshold but involves residential owners, other consumer protection laws or statutory obligations could potentially come into play; the decision does not address those possible overlaps.
Conclusion Frauenfelder v Sperway Development Pty Ltd is a concise VCAT decision applying a literal reading of the Domestic Building Contracts Act and its regulations to conclude that a $10,000 design services agreement is not a 'major domestic building contract' where Regulation 6 fixes the relevant amount at $10,000. The Tribunal also found the contract was valid, the design services were performed, and the Owners received value in excess of the payments, leading to dismissal of the reimbursement claim. The decision is particularly useful for practitioners advising clients about threshold issues under the Act and the evidentiary requirements for resisting restitutionary claims after performance of contracted design services.
For the reasons given at the hearing, the application is dismissed.
a domestic building contract in which the contract price for the carrying out of domestic building work is more than $5000 (or any higher amount fixed by the regulations);
For the purposes of the definition of major domestic building contract in section 3(1) of the Act, an amount of $10 000 is fixed.
Frauenfelder
Sperway Development Pty Ltd
Application dismissed. The Owners' claim for reimbursement of part or all of the $10,000 paid under the Design Services Agreement was dismissed because the agreement was not a major domestic building contract, was enforceable, the Designer had performed the services, and the Owners received value exceeding $10,000 (Order; Background [2]–[5]).