1. The respondent's application pursuant to s.75 of the Victorian Civil and Administrative Tribunal Act 1998 is dismissed.
2. The parties have leave to make an application for costs in respect of the respondent's application. Any such application must be made within 30 days.
3. The proceeding is listed for a directions hearing on 11 December 2024 at 3pm for 1 hour before Member R Bennett for the Tribunal to hear any costs application and make further orders for the future conduct of the proceeding.

1. In this proceeding, the applicant ('Owner') brings a claim for damages for alleged defective building work by the respondent ('Builder') under a building contract for works to the Owner's property, being a warehouse conversion ('Property'), in Richmond in 2009.
2. The Builder has made an application under s.75 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act') for summary relief against the Owner on the basis that the Owner's application dated 17 October 2020 is statute barred under s.134 of the Building Act 1993 (Vic) ('Building Act'), having been commenced more than 10 years after the Certificate of Final Inspection dated 12 January 2010.
3. The Owner disputes the Builder's application on the basis that the proceeding has been commenced within the 10-year limitation period, which commenced after the Occupancy Permit dated 19 October 2010.
4. The Builder's application was heard on 23 April 2024. Orders were made for the parties to file further submissions.
5. The Builder has filed outline of submissions dated 8 December 2023 and submissions dated 3 July 2024 in support of its application. The Builder relies on an affidavit of David Tankovich, director and owner of the Builder, dated 29 August 2023. The Owner has filed submissions dated 29 May 2024 and relies on an affidavit of the Owner dated 11 November 2023.

75 Summary dismissal of unjustified proceedings

(1) At any time, the Tribunal may make an order summarily dismissing or striking out all, or any part, of a proceeding that, in its opinion -

(a) is frivolous, vexatious, misconceived or lacking in substance; or

(b) is otherwise an abuse of process.

(2) If the Tribunal makes an order under subsection (1), it may order the applicant to pay any other party an amount to compensate that party for any costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding.

(3) The Tribunal's power to make an order under subsection (1) or (2) is exercisable by -

(a) the Tribunal as constituted for the proceeding; or

(b) a presidential member; or

(c) a member who is an Australian lawyer.

(4) An order under subsection (1) or (2) may be made on the application of a party or on the Tribunal's own initiative.

(5) For the purposes of this Act, the question whether or not an application is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process is a question of law.

1. The power under s.75 of the VCAT Act involves a discretion that can only be exercised once the Tribunal forms the opinion required by either s.75(1)(a) or (b). The principles applicable to exercising the discretion are summarised as follows:[1]

the proceeding must be obviously unsustainable in law, can on no reasonable view justify relief, or must be bound to fail.

the power to order summary dismissal should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried. Indeed, it must be "very clear" that the proceeding is 'absolutely hopeless'.

a proceeding should not be summarily dismissed if the ultimate fate of the proceeding depends upon disputed questions of fact that could be established by evidence yet to be adduced or tested.

the respondent to a proceeding bears the persuasive burden of showing 'that the complaint is undoubtedly hopeless'.

1. The correct approach to adopt on an application under s.75(1) is to take the applicant's case as its highest and assume that the applicant will be able to prove each fact alleged in the claim(s) in question.[2]
2. In Smeaton v Accident Compensation Conciliation Service,[3] Deputy President Macnamara (as his Honour then was) stated:

It is not appropriate to make a determination of summary dismissal under section 75 if the matter is at all arguable or if the outcome of the proceeding turns in any way upon any contested piece of evidence depending, for instance, on credibility.

1. In this case, as Ginnane J held in Baker v Culvenor,[4] the correct approach to be adopted where an application pursuant to s.75 of the VCAT Act concerns a limitation provision, is that stated by the High Court in Wardley Australia Ltd v Western Australia,[5] being:

We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in the interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.

1. Section 134 of the Building Act reads as follows:

134 Limitation on time when building action may be brought

(1) Despite anything to the contrary in the Limitation of Actions Act 1958 or in any other Act or law, a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work.

(2) Despite subsection (1), a building action may be brought more than 10 years but less than 15 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work if -

(a) the building action is a cladding building action; and

(b) the building action has become or becomes prohibited on or after 16 July 2019 but before 1 December 2023 by this section as in force at any time before the commencement of section 49A of the Building Amendment (Registration and Other Matters) Act 2021.

(3) In this section -

"cladding building action" means a building action in connection with, or otherwise related to, a product or material that is, or could be, a non-compliant or non-conforming external wall cladding product.

1. Section 129 of the Building Act reads:

129 Definitions

In this Division -

building action means an action (including a counter-claim) for damages for loss or damage arising out of or concerning defective building work;

building work includes the design, inspection and issuing of a permit in respect of building work.

1. For the purpose of the Builder's application, it is not disputed that the Owner and Builder entered into a building contract dated 27 November 2008 for works at the Owner's Property ('building contract') and the Builder carried out and completed building work under the building contract.
2. The Builder submits that the questions the Tribunal must decide in this application include:

For the purposes of s 134(1) of the Building Act, was the occupancy permit dated 19 October 2010 issued in respect of any "building work" the subject of the building contract between the Owner and the Builder1, and

If yes, does the Owner's claim allege defects in relation to any "building work" the Occupancy Permit is said to be issued "in respect of".

For the purposes of s 134(1) of the Building Act, was the occupancy permit dated 19 October 2010 issued in respect of the works the subject of the Owner's claim in the proceeding?

1. Regardless of the proper formulation of the above questions, for the reasons below, I find the determination of these questions is a matter for the Tribunal at final hearing and are not appropriate for determination at this interlocutory stage of the proceeding. I have little doubt that these questions and other matters will be incorporated into a list of issues for determination at the final hearing.

1. The Builder relies on matters deposed to in the affidavit of David Tankovich dated 29 August 2023. In summary, Mr Tankovich states a building permit for the building work at the Property was issued in January 2009 and the Builder brought the building work to practical completion in January 2010. The relevant building surveyor ('RBS') issued a Certificate of Final Inspection ('CFI') on 12 January 2010. The Builder was not involved in the subsequent process which involved the Owner having to obtain a new building permit and the RBS issuing an Occupancy Permit ('OP') dated 19 October 2010 for the change of use of the Property from warehouse shell to dwelling.
2. The Builder submits that the 10-year limitation period to bring the proceeding under s.134 of the Building Act commences from the date of the CFI. As the Owner commenced the proceeding well after 12 January 2020, his proceeding is statute barred.
3. The Builder submits that it is very clear that the Owner's proceeding is absolutely hopeless because:
   1. The building contract says nothing about the Builder effecting a change of use of the Property by obtaining a building permit for the change of use of the Property, and ultimately obtaining an occupancy permit in relation to any 'change of use'. The building permit dated 6 January 2009 titled 'Third floor extension to existing townhouse' issued for 'alterations' to the 'existing dwelling & 3rd floor extension', was, under the building contract to be obtained and paid for by the Owner. The building permit had nothing to do with any change of use. It specified that 'A Certificate of Final Inspection is required prior to the occupation or use of this building'.
   2. The ultimate 'change of use' to the Property was an endeavour separate to the building contract and the works which were the subject of the Building Contract and the building permit. It was an endeavour instigated wholly and independently by the Owner in circumstances where the Owner's financier raised a requirement for an occupancy permit.
   3. It is plain on the Owner's evidence that, not only did the Builder have nothing to do with the change of use process, the issue of the change of use would never have been brought to the Owner's attention if his financier had not raised it.
4. Accordingly, the Builder submits that its application must succeed as the CFI is the only document contemplated by s.134(1) of the Building Act, which was issued "in respect of the works" the subject of the building contract.
5. The Builder further submits it is immaterial that the CFI was later rescinded or 'subsequently cancelled or varied', as the limitation period does not start again and to do so would be anomalous.
6. The Builder submits the principle in Lendlease[6] is equally applicable to the CFI in this case, as only the CFI was issued "in respect of the works" that are alleged to be defective by the Owner. Accordingly, the CFI is the relevant and only document issued 'in respect of' the building works.
7. The Builder also submits that the limitation period commences from the date of the CFI because the building permit for the change of use shows that no building work (or any work) was required by the Builder. Further, there are no "defects" alleged by the Owner in respect of the change of use building permit. The alleged defects arise from the works which are the subject of the original building permit and the building contract.

1. The Owner submits that the Builder's application should be dismissed because the fate of the proceeding depends on disputed questions of fact, which can be established by evidence yet to be adduced or tested, including the primary question in paragraph [15] above.
2. Alternatively, the Owner submits it is not "very clear" that the proceeding is "absolutely hopeless" and, to the contrary, the proceeding involves complex questions of fact and law on which the Owner's position is at least arguable.
3. With respect to the defects claimed in relation to combustible cladding, the Owner submits that he can rely on s.134(2) of the Building Act, such that these items cannot be statute barred in the manner alleged by the Builder.

1. On 17 October 2020, the Owner commenced the proceeding in the Tribunal. In his undated Points of Claim attached to his application, the Owner claims damages from the Builder of $281,830.00, comprised of:

(1) Costs of "remaining repair works": $235,189.00;

(2) Relocation, contents removal and storage costs: $13,900.00;

(3) Cost of "repair works to date": $15,944.00; and

(4) Costs incurred "in pursuit of repairs": $16,797.00.

1. The Points of Claim attach an Inspection Report by Fabio Piccinin of the Victorian Building Authority which concerned 145 items inspected, of which 65 items are considered to be defective building work.
2. On 23 July 2021, the Owner filed a list of items of alleged defective building work in respect of which he brings a claim. Under item 126, he writes:

The type of Alucobond panel installed has been identified as a combustible cladding material which presents a high risk of fire propagation in the event of fire. Rectification requires removal of the Alucobond cladding and replacement with an alternative cladding material that is correctly installed, fully waterproof and of a non-combustible material type.

1. The Owner submits that the issues to be determined by the Tribunal in deciding whether to exercise its discretion under s.75 are:
   1. Does the ultimate fate of the proceeding depend on disputed questions of fact that could be established by evidence yet to be adduced or tested?
   2. Is the proceeding obviously unsustainable in law, unable on any reasonable view justify relief or bound to fail? That is, is it "very clear" that the proceeding is "absolutely hopeless"?

Does the ultimate fate of the proceeding turn on disputed questions of fact?

1. The Owner refers to recent authority of East St Falls Pty Ltd v L.U Simon Builders Pty Ltd[7] which makes clear that the determination of whether a building action is barred by s.134 of the Building Act turns on questions including:
   1. What are the particular defects in the building works being alleged?
   2. What is the date of issue of the occupancy permit (or certificate of final inspection) in respect to the particular item of building work alleged to be defective?
   3. Has the application, in respect of a particular defect, been made more than 10 years after the date of issue?
2. The Owner submits that the above questions concern questions of fact and, in this case, all the questions are in dispute.

Was the Occupancy Permit issued in respect of the Works for the purposes of s.134(1) of the Building Act?

1. The Owner submits this primary question will require the Tribunal to construe the Occupancy Permit, in particular, what if any "building work" is captured by the OP. This will require the Tribunal to construe what is meant by the words "Change of Use" and "Warehouse shell to dwelling" when found under the headings "nature of works" and "part of building" respectively. Construing the OP will also require the Tribunal to consider it as one with the building permit dated 20 September 2010 ('subsequent permit') and the 1996 planning permit, as these documents are referred to in the OP.
2. It has been held that a building permit is a statutory regulatory instrument and, as such, should be construed in accordance with the usual rules of statutory construction.[8]
3. The Owner submits these principles are equally applicable to an occupancy permit, being a document issued by a building surveyor pursuant to the Building Act. However, one respect in which permits differ from other statutory instruments is that they are to be construed to achieve practical results, and not read as documents drafted with legal expertise.[9]
4. It is well settled that statutory construction must begin with a consideration of the text and so the task must end. However, the statutory text must be considered in its context, which includes extrinsic materials.[10]
5. Having regard to extrinsic materials is particularly permissible in cases where the meaning of text is ambiguous.[11]
6. The Owner accepts that the proper construction of the Occupancy Permit is a question of law. However, the Owner submits the following questions, which also need to be addressed as part of the primary question, are questions of fact: Having construed what (if any) building works are covered by the OP, do the works fall within those covered by the OP? Is the OP an occupancy permit issued "in respect of" the works?[12]
7. The Owner submits, having regard to these principles, the question of whether the works fall within those covered by the OP, involves questions of fact because the Tribunal will be required to give, where possible, the words of the OP their ordinary meaning and then decide whether it is reasonably open to hold that the Works fall within those words. The reason why the Tribunal will need to give, where possible, the words of the OP their ordinary meaning is because permits are to be read to achieve practical results and not read as documents drafted with legal expertise.
8. The question of whether the OP is an occupancy permit issued "in respect of" the works involves questions of fact because the words "in respect of" are used in s.134(1) according to their ordinary meaning. That is, "in respect of" means "regarding, relating or referring to".[13]

Is it "very clear" that the proceeding is "absolutely hopeless"?

1. The Owner submits the answer to this question is 'no'. The primary question involves complex questions of both fact and law. The determination of these questions also relies on evidence not yet before the Tribunal, including the 1996 planning permit and the 'endorsed plans'. Therefore, the Tribunal cannot be satisfied that the answers to these questions are "very clear".
2. Further, even though the construction of the OP and subsequent permit are questions of law, there is ambiguity in the words of these documents. Accordingly, the Owner submits extrinsic materials available via the RBS, which provide insight into the context in which the OP was issued and what was trying to be achieved by its issue, will be required to properly construe the OP (for example, internal working notes and/or guiding industry documents).
3. The approach that the Owner submits should be taken by the Tribunal in assessing this issue is equivalent to that recently taken by Senior Member Vassie in East St Falls. That case concerned an application by the owner to amend its points of claim to include further allegations of defective works against the respondent builder. The builder opposed the amendments on the basis that, inter alia, the amendments would introduce building actions brought outside the time limits under s.134 of the Building Act. The Tribunal permitted the owner to amend its claim to include alleged defects in relation to timber cladding.[14]
4. Contrary to the Builder's position, the Owner submits the reasoning in Lendlease supports the Owner's position. In determining whether the period in s.134(1) commences from the first occupancy permit issued and not a subsequent occupancy permit, the Court of Appeal had specific regard to the words 'whether or not the occupancy permit is subsequently cancelled or varied' which appear in s.134(1) and concluded these words supported the construction in question.[15]
5. However, while these words appear in s.134(1) with respect to occupancy permits, the equivalent words do not appear with respect to certificates of final inspection. The Owner submits this evinces a clear intention by parliament that the issue of a certificate of final inspection may be usurped as the trigger point in s.134(1) by a subsequent event (for example, the issue of an occupancy permit). An occupancy permit usurping a previously issued certificate of final inspection is supported by the qualifying words "if an occupancy permit is not issued", which appear before the words concerning certificates of final inspection. That is, if an occupancy permit has issued, the date of issue of any certificate of final inspection is no longer relevant.
6. The Owner acknowledges there are arguments against such an interpretation. However, for the purpose of the Builder's application, the Owner submits that the Tribunal only needs to be satisfied the Owner's position is arguable.

1. With respect to the defects which are 'connected with' or 'otherwise related to' combustible cladding, the Owner submits the proceeding cannot be said to be hopeless or bound to fail because the Owner can also rely on s.134(2) of the Building Act. In this case, s.134(2) extends the period within which the Owner can bring a claim in relation to defects to an external wall cladding product to 15 years after the date of the CFI, even if the Builder is correct about the application of s.134(1) to the proceeding.
2. The Owner submits that all defects which concern the cladding are defects which are 'connected with' or 'otherwise related to' a product that is, or could be, a non-compliant or non-conforming external wall cladding product. This is because the Owner's list alleges that the Alucobond panelling installed by the Builder has been identified as combustible. The Owner submits that the following items in the List are defects which are connected with or otherwise concern the cladding: 2, 25, 31, 66, 80, 90, 96, 108, 109, 113, 115, 126 and 127.
3. Since the decision of East St Falls, the Owner acknowledges that, to the extent s.134(2) of the Building Act applies, it will only work to save that part of the claim related to the cladding defects. The correct approach to take when determining whether s.134 bars a 'building action' is one that focuses on the individual defects in question, not the cause of action.[16]

1. The Builder submits that the CFI and the OP are clear on their face and do not require interpretation or extrinsic evidence to be considered. Put simply, the Builder's position seems to be the CFI has been issued "in respect" of the building work carried out by the Builder under the building contract and, per Lendlease and for other reasons, the limitation period under s.134 of the Building Act commences from the date of the CFI. Conversely, the OP has not been issued 'in respect' of the building work and, therefore, the limitation period cannot commence from the date of the OP. Accordingly, the Owner's proceeding is clearly hopeless or bound to fail and ought be dismissed under s.75 of the VCAT Act.
2. The Builder's application is superficially meritorious. On its face, the Owner's proceeding appears to be statute barred by reason of the proceeding having been commenced more than 10 years after the CFI dated 12 January 2010.
3. However, after considering the parties' evidence and submissions, I am satisfied that it is not clear that the Owner's proceeding is hopeless or bound to fail on the grounds the Builder's defence that the proceeding is statute barred under s.134 of the Building Act.
4. I accept the Owner's submissions that there are disputed questions of fact which will need to be determined. For example, I am satisfied the question 'Is the OP an occupancy permit issued "in respect of" the works?' involves factual issues, as does the related issue of whether the CFI has been issued "in respect of" the works.
5. This case appears to involve novel circumstances in which an occupancy permit has been issued after a certificate of final inspection. The consideration of the circumstances involves disputed questions of fact. For example, there does not seem to be agreement between the parties as to the scope of work under the building contract or whether the alleged defective work relates to the contractual scope of work. These matters are relevant to the determination of whether the CFI has been issued "in respect" of the building work.
6. I also accept that there are questions of law and matters of statutory interpretation which will need to be determined. The Builder relies upon Lendlease to support its submission that the date of issue of the CFI triggers the relevant limitation period to run, despite the OP having issued subsequently. The Owner submits the decision can be distinguished from the proceeding because it concerned multiple occupancy permits being issued in respect of the same works and not an occupancy permit being issued after a certificate of final inspection.
7. The Builder submits that the OP is clear on its face, as is the CFI, and no further investigation or interpretation is required. I disagree. The application and interpretation of s.134 of the Building Act is in issue, particularly the issue of the words 'whether or not the occupancy permit is subsequently cancelled or varied' not following certificates of final inspection in s.134(1).
8. I further find that these matters are arguable and the proper time for determination of the issues in dispute is at a contested hearing, when all evidence has been given by the parties (including expert opinion) and the parties have filed closing submissions in relation to the evidence and the relevant law.
9. The Builder submits that the cladding related defects have not been pleaded and there are no expert reports in relation to them, despite the Owner having been ordered to obtain expert opinion. Accordingly, the Owner does not have the right to rely on s.134(2) of the Building Act. I do not accept these submissions. There may be merit in the Owner's position that cladding related defects have been pleaded and constitute a 'cladding action' under s.134(2) and, accordingly, the Owner may enjoy the benefit of an extended limitation period under the Building Act. I find these matters have been raised by the Owner in the proceeding and are arguable. It would be inappropriate to determine the other issues in the Builder's application and let this issue go to final hearing for determination. The issues are related and require determination at the same time. The appropriate time is final hearing.
10. For the above reasons, I find this is not a proceeding where the Tribunal should exercise its discretion under s.75 of the VCAT Act to summarily dismiss the proceeding at this interlocutory stage. It is not the "clearest of cases" which would permit such an exercise. I am satisfied the outcome of the proceeding will turn on complex questions of law and fact, both of which require evidence not presently before the Tribunal and which ought be tested at final hearing.
11. Accordingly, I will dismiss the Builder's application under s.75 of the VCAT Act.

[1] Axicom Pty Ltd v Melton CC [2020] VCAT 190 at [9] per Dwyer DP condensing the principles summarised by Justice Garde P in Owners Corporation No. 1 PS537642N v Hickory Group Pty Ltd (Building and Property) [2015] VCAT 1683.

[2] Dundas Terrace Pty Ltd v Owners Corporation PS5341300K (Owners Corporations) [2019] VCAT 571 per Member L Johnson; Hickory at [12] per Justice Garde P.

[3] Smeaton v Accident Compensation Conciliation Service [2010] VCAT 1236 at [13].

[4] Baker v Culvenor [2019] VSC 224 at [31]- [32].

[5] Wardley v Western Australia [1992] HCA 55; (1992) 175 CLR 514.

[6] Lendlease Engineering Pty Ltd v Owners Corporation No 1 PS526704E & Ors [2022] VSCA 105. The Court of Appeal held that in determining when the 10-year limitation period commenced, in circumstances where there were several occupancy permits issued, the relevant occupancy permit was the one issued "in respect of" the building works which were the subject of the dispute.

[7] East St Falls Pty Ltd v L.U Simon Builders Pty Ltd (Building and Property) [2024] VCAT 416 (Senior Member Vassie) ('East St Falls').

[8] Pegasus Building Pty Ltd v Curlis; Laghaien v Curlis [2018] VSC 484 ('Pegasus Building') at [45] (Cameron J) citing Protean (Holdings) Ltd v Environment Protection Authority [1977] VicRp 5; [1977] VR 51, 55 (Gillard J)

[10] Thiess v Collector of Customs & Ors [2014] HCA 12; (2014) 88 ALJR 514, 518 [22] (French CJ, Hayne, Kiefel, Gageler and Keane JJ).

[11] Citywide Service Solutions Pty Ltd v Rosata [2023] VSCA 281 at [83] (Beach, Osborn JJA and Forbes AJA).

[12] To understand why these questions involve questions of fact, the Owner refers to the following passage in Chopra v Department of Education and Training [2019] VSCA 298; (2019) 60 VR 505 at 527 [88] (Tate, Whelan and Kyrou JJA):

The principles for distinguishing between questions of law, questions of fact and mixed questions of law and fact are well established. However, those principles are difficult to apply in practice. What is the proper meaning, as a matter of construction, of a statutory provision is usually a question of law. Ordinarily, whether facts fully found fall within a statutory provision, properly construed, is a question of law. However, where the statute uses words according to their ordinary meaning and it is reasonably open to hold that the facts as found fall within those words, the question whether they do or not is one of fact.

[13] Burton v Commissioner of Taxation (2019) 372 ALR 193, 206 [56] (Logan J). That these words are to be given their ordinary meaning is clear from the approach expressly taken by the Court of Appeal in Lendlease Engineering Pty Ltd v Owners Corporation No 1 PS526704E & Ors [2022] VSCA at [68] (Beach, Niall and Kennedy JJA).

[14] Senior Member Vassie stated: To be able to be sure that an allegation of a defect in timber cladding - a building action - is time-barred, one would need to link the defect clearly to an occupancy permit earlier than 27 March 2009... I have not been able to do that (at [53]).

It is not absolutely clear, at least to me, whether it was the first permit or the fifth permit that covered lot E 201. If it was the fifth permit, items i-iv set out in paragraph 54 above constitute building actions that have begun within the 10-year limitation period. If it was any earlier permit, those building actions would not have begun in time (at [59], emphasis added).

The High Court of Australia [citing the Wardley passage at paragraph 20 above] has sent a loud and clear warning of the risk attendant upon deciding issues such as these at the interlocutory stage... (at [60]).

The first permit's description gives it the appearance of a wide application to levels 1 and 2 while the fifth permit appears to have a more specialised purpose. Without more information available at the moment, I would think that there is a strong probability that it is the first permit that is applicable to lot E 201. But a strong probability is not enough. Refusing a litigant leave to amend its case because the proposed amendment is time-barred is a serious thing to do. Unlike the aluminium composite panels claim which was "the clearest of cases", the timber cladding claim is not the clearest of cases.