...I also agree with the basic proposition that, once it is established that the matter is a fair trading dispute within the meaning of s.108(1) of that Act, the Tribunal may hear the dispute, and issues concerning the legislation upon which reliance is placed can be clarified by amendment if required. I agree with the fundamental proposition that it matters not how the dispute came to be before the Tribunal. Once it is before the Tribunal, and is a fair trading dispute, the Tribunal can then hear it. This is a fair trading dispute. The Tribunal can hear it.

1. This dispute clearly falls within the definition of a consumer and trader dispute in s107(1) of the Fair Trading Act 1999 ('the FTA'):

(1) In this Part a consumer and trader dispute is a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to a supply or possible supply of goods or services.

1. A 'domestic building dispute' is relevantly defined in s54 of the DBCA as:

(1) (a) a "domestic building dispute" is a dispute or claim arising-

(b) between a builder and:

• (i) another builder; or
• (ii) a building practitioner...; or
• (iii) a sub-contractor; or
• (iv) an insurer

in relation to a domestic building contract or the carrying out of domestic building work. [underlining added]

1. 'Domestic Building Contract' as defined in s3 of the DBCA means a contract to carry out, or to arrange or manage the carrying out of, domestic building work other than a contract between a builder and a sub-contractor.
2. 'Domestic building work' as defined in s3 of the DBCA means any work referred to in Section 5 that is not excluded from the operation of this Act by Section 6. Section 6(a) relevantly provides that the DBC Act does not apply to any work that is excluded from its operation by the [Domestic Building Contracts] regulations. Regulation 6(h) of the _Domestic Building Contract_s Regulations 2010 excludes plumbing work as defined in Section 221C of the Building Act 1993. There is no question that the respondent was carrying out plumbing works under its sub-contract with the applicant.
3. Whether a dispute between a builder and a sub-contractor concerning a single trade is a 'domestic building dispute' as defined in s54 was first considered in Bartucca Tiling & Construction Pty Ltd v Hornsby Manor[3] (a decision of the former Domestic Building Tribunal), and recently by this tribunal in Owners Corporation PS505245E & Ors v Moresi Builders Pty Ltd & Anor[4] ('Moresi'). Both proceedings concerned disputes between a builder and a sub-contractor.
4. Mr Lithgow confirmed that he was aware of both decisions, but said that they were incorrect and should not be followed. I do not agree. Both decisions address the specific issues raised by the respondent in this proceeding. I adopt the observations and findings of the learned judge and learned senior member and add the following to the discussion.
5. In my view the narrow interpretation urged upon me by the respondent is to misunderstand s54 of the DBCA. As raised with counsel during the hearing, s54 does not require that a domestic building dispute arise under or pursuant to a domestic building contract. Such specific wording may well have limited the meaning of 'domestic building dispute' as suggested. However, these were not the words used in s54. Rather, s54 relevantly defines a 'domestic building dispute' as including a dispute between a builder and a sub-contractor in relation to a domestic building contract or the carrying out of domestic building work. [underlining added]
6. Although I do not have specific details of the contract between the builder and the owner/developer of the residential apartment development, there seems to be no issue that those works were being carried out pursuant to a domestic building contract, and that the works carried out under the contract were domestic building works. When a builder enters into a contract with a homeowner or developer for the construction of a home, which is defined in s3 of the DBCA to include any residential premises, the builder contracts to carry out all necessary works to construct that home. These works, of necessity, include works which must be carried out by single qualified tradespersons, whom the builder engages as sub-contractors. For instance, plumbing and electrical works may only be carried out by licensed tradespersons. The works carried out by those sub-contractors are works which are carried out in relation to a domestic building contract or the carrying out of domestic building work - they are not carried out pursuant to a domestic building contract.
7. In my view it is quite clear that the intention of the legislature was that the DBCA not apply to single trade contracts between a home owner and a contractor engaged directly by the owner. Although all of the requirements of the DBCA may not apply to the contract between a builder and a sub-contractor it was clearly intended that a domestic building dispute as defined in s54 includes any dispute that arose between them in relation to domestic building works for which the builder was ultimately responsible.
8. It would be an absurdity for disputes between a builder and its single trade sub-contractors not to be justiciable in this tribunal, in circumstances where a specialist tribunal (the former Domestic Building Tribunal), and then a specialist list, was created for the determination of disputes arising in relation to the construction of a home. This was clearly not the intention of the legislation. As Byrne J said in Greenhill Homes v Domestic Building Tribunal[5]:

... my general attitude to this legislation is that it should be construed liberally where this is necessary or convenient to ensure that all domestic building disputes and associated disputes are before the Tribunal. The indications within the Act itself would suggest that Parliament intended this result, not only in the context of the definition of "domestic building dispute". The functions of the Tribunal are not limited to hearing or resolving only those disputes.[6]

1. I concur with and adopt the comments made Judge Davey in Bartucca Tiling :

It is my opinion that were I to adopt the interpretation of the Regulation which has been urged on me by Mr Harvey that would also create an unworkable situation. Although clearly the head contract in the present circumstances would be within the jurisdiction of the Tribunal the sub-contract would be excluded. Presumably the sub-contract dispute would need to be heard in a court. In those circumstances not only would it substantially prevent the Tribunal from hearing all domestic building disputes, which I am satisfied is a major purpose of the legislation, it would also create the risk of inconsistent decisions being made between the Tribunal when hearing a dispute between an owner and a contractor concerning sub-contract work and a court when hearing a dispute relating to the same facts except that it would be a dispute between the contractor and subcontractor. For those reasons if the Regulations were to have the effect in their present form as contended for by Mr Harvey it would produce an unworkable result which I am satisfied would be contrary to the intention of parliament.

and Riegler SM in Moresi at [18] (before confirming the tribunal had jurisdiction under the FTA):

If I accepted Mr Andrew's interpretation of Regulation 6, it would mean that the DBC Act would not give the Tribunal jurisdiction to hear and determine a dispute between a builder and its subcontractor in relation to any of those single trades referred to in Regulation 6. In other words, a builder could not claim against its plumber, electrician, painter, plasterer, tiler, glazer and other trades described under Regulation 6, unless those sub-trades did more than one type of work. That clearly could not have been the intention of Parliament.

1. The applicant seeks its costs of this application on an indemnity basis, and relies on a letter from its lawyers to the respondent's lawyers dated 27 March 2012 in which it made the following proposal after noting at paragraph 4 that the respondent's application was misconceived and that it would be seeking its costs on a full indemnity basis:
   1. In the circumstances, the Applicant hereby makes the following proposal; which is open for acceptance for 7 days from the date of this letter:

6.1 The Respondent agrees to withdraw its objection to the Tribunal's jurisdiction and the parties agree to vacate the hearing on 24 May 2012; and

6.2 The parties agree to immediately write to the Tribunal and seek a mediation be allocated as a matter of urgency.

1. This offer described in paragraph 6 is open to be accepted (in writing) until 5pm on 3 April 2012. If it is not accepted and the Respondent insists on proceeding to the hearing on 24 May 2012, the Applicant will seek costs of a full indemnity basis in regard to preparing for and attending such jurisdiction hearing.
2. If this offer is not accepted then this letter shall be used on the question of costs with an application being made for costs on a solicitor client basis from the date of this letter and in accordance with the principles applied in Calderbank v Calderbank (1975) 3 ALL ER 333 and Cutts v Head [1983] EWCA Civ 8; (1984) 1 ALL ER 597.

1. Under s109(1) of the VCAT Act each party bears its own costs unless the tribunal is satisfied it is fair to exercise its discretion under s109(2) to make an order for costs having regard to the matters set out in s109(3). In the circumstances of this application I am satisfied that it is fair to make an order for costs in favour of the applicant having regard to s109(3)(c) and (e):

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;

(e) any other matter the Tribunal considers relevant

1. In circumstances where there are two previous decisions which are relevant to the question of the tribunal's jurisdiction under the DBCA, and where the Victorian Court of Appeal has confirmed that in determining the tribunal's jurisdiction regard must be had to the enabling enactments, not to claims made in an application or Points of Claim, this application clearly has no tenable basis in fact or law. The respondent's attention was drawn to the tribunal's decision in Moresi, by the applicant's lawyers, immediately following the directions hearing at which the question of jurisdiction was raised, yet it persisted with its contentions offering nothing new. The respondent's position was that the previous decisions were incorrect and ought not be followed. Similar contentions to those that were seemingly before Judge Davey and Riegler SM were simply re-agitated.
2. The Calderbank offer dated 27 March 2012 is relevant under s109(3)(e). Although the parties proceeded to mediation, by consent, on 14 May, settlement was not achieved and the jurisdictional hearing proceeded, as scheduled, on 24 May.
3. I note the hearing on 24 May was short. Both parties had filed short statements of facts and contentions: both are approximately 3 pages, which I read before the hearing.
4. Following a short jurisdictional hearing I made my ruling, as noted above, and proceeded immediately to conduct a directions hearing when directions were made for the further conduct of the proceeding including the scheduling of a 4 day hearing in August 2012.
5. I am satisfied it is appropriate to exercise the tribunal's discretion under s109(2) and order the respondent to pay the applicant's costs of and incidental to the respondent's argument on jurisdiction save for the costs of attending the hearing on 24 May, and that these costs should be on a solicitor/client basis consistent with the Calderbank offer.
6. The directions hearing concluded at 2.40 p.m, the jurisdictional hearing having been listed for 2.15 p.m. In circumstances where the usual period allocated for a directions hearing in this List is half an hour, and noting the parties were legally represented at the first directions hearing on 1 March, I am not persuaded that any order for costs should be made for counsel's appearance at the jurisdictional hearing. Those costs will be reserved.

[1] [2002] VCAT 1041

[2] [2003] VSCA 11

[3] [1997] VDBT 84

[4] [2011] VCAT 1630

[5] [1998] VSC 34