1. Pursuant to s 119 of the VCAT Act, order 1 above is amended as follows:
   1. Pursuant to s 63(5)(b) of the Domestic Building Contracts Act 1995 (Vic), special condition 11 of the building contract between the applicant and the joined party is declared to be void because it is contrary to, or purports to annul, vary or exclude a provision of the Domestic Building Contracts Act 1995 (Vic) (within the meaning of s 132 of the Domestic Building Contracts Act 1995 (Vic)).

1. The applicant ('the builder') commenced this proceeding against the respondent, Domestic Building Dispute Resolution Victoria ('DBDRV'), seeking a review of a Dispute Resolution Order issued on 1 February 2023 by the Chief Dispute Resolution Officer of the DBDRV ('the DRO') pursuant to s 63 of the Domestic Building Contracts Act 1995 (Vic) ('DBC Act') ('the application').
2. The application is brought in the review jurisdiction of the Tribunal under s 51 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('the VCAT Act').
3. Under a major domestic building contract with the Joined Party dated 31 January 2022, the builder constructed a single storey brick veneer dwelling and lock up garage ('the building contract').
4. Ms Arbon, in house counsel, appeared for the builder.
5. The joined party is the owner of the land on which the building work was carried out. The joined party took no part in the proceeding.
6. DBDRV is an independent Victorian Government agency that assists parties involved in domestic building disputes. DBDRV was represented by Ms Colella, its senior legal advisor.
7. I conducted the hearing on 6 March 2025, when I gave oral reasons for my decision and made orders. I now provide detailed written reasons below.

1. On 21 November 2024, the joined party applied to DBDRV in respect of a dispute arising out of the building contract, namely, the alleged delay by the builder in bringing the works to practical completion, and his claim for liquidated damages ('the dispute').
2. On 19 April 2024, the parties participated in a conciliation conference hosted by DBDRV to resolve the dispute. However, they failed to resolve the dispute.
3. On 14 August 2024, DBDRV issued the DRO which required the builder, among other things, to:

'[p]ay the [joined party] the sum of $5,678.57 for a claim or entitlement arising under the domestic building contract dated 31 January 2022 ... by no later than 20 September 2024.'

1. The liquidated damages calculation, now challenged by the builder, was based on a commencement date being found to be 9 September 2022, and the completion date of 24 November 2023. Liquidated damages were found to run from 16 June 2023 (being 280 days from the commencement date) to 24 November 2023.
2. Following receipt of the DRO, the builder commenced the application.

1. The application enlivens the Tribunal's review jurisdiction in accordance with s 51(1) of the VCAT Act.
2. The review jurisdiction of the Tribunal enables the Tribunal to review a decision made by a decision-maker, which is determined by the scope of the relevant enabling enactment.
3. In the present case, the relevant enactment is the DBC Act, namely s 63.
4. Section 63 of the DBC Act provides:

(1) A person who is required to comply with a dispute resolution order may apply to VCAT for review of the decision to issue or amend the dispute resolution order.

(2) An application under subsection (1) must be made within 20 business days after the later of -

(a) the day on which the applicant was given a copy of the dispute resolution order or the amendment to the dispute resolution order (as the case requires); or

(b) if under the VCAT Act the applicant requests a statement of reasons, the day on which the applicant receives that statement of reasons or the applicant is informed under section 46(5) of that Act that a statement of reasons will not be given.

(3) An application under subsection (1) must be made on the ground that -

(a) the description in the dispute resolution order of the domestic building work that is defective or incomplete is incorrect; or

(b) the period specified in the dispute resolution order for carrying out the rectification or completion work is not reasonable; or

(c) a requirement in the dispute resolution order to take a specific action or to refrain from taking action is not necessary or is not reasonable.

(4) In determining an application for review of a dispute resolution order, VCAT may also make any order it considers fair in relation to the domestic building contract to which the dispute relates.

(5) Without limiting subsection (4), VCAT may do one or more of the following -

(a) vary any term of the domestic building contract (including the completion date, the contract price, a provisional sum or the amount to be paid for a prime cost item);

(b) declare that a term of the domestic building contract is, or is not, void under section 132;

(c) declare void any unjust term of the domestic building contract, or otherwise vary the domestic building contract to avoid injustice.

1. In addition, s 51 of the VCAT Act sets out the Tribunal's powers when hearing and determining an application for review. The Tribunal stands in the shoes of the original decision maker, being DBDRV, and is permitted to conduct its own review on the merits of the application, without being bound by any prior decision. The review hearing is essentially a hearing de novo.[1]
2. Section 51 of the VCAT Act provides:

(1) In exercising its review jurisdiction in respect of a decision, the Tribunal -

(a) has all the functions of the decision-maker; and

(b) has any other functions conferred on the Tribunal by or under the enabling enactment; and

(c) has any functions conferred on the Tribunal by or under this Act, the regulations and the rules

(2) In determining a proceeding for review of a decision the Tribunal may, by order -

(a) affirm the decision under review; or

(b) vary the decision under review; or

(c) set aside the decision under review and make another decision in substitution for it; or

(d) set aside the decision under review and remit the matter for re-consideration by the decision-maker in accordance with any directions or recommendations of the Tribunal.

(3) Subject to subsection (4), a decision of a decision-maker as affirmed or varied by the Tribunal, or a decision made by the Tribunal in substitution for the decision of a decision-maker -

(a) is deemed to be a decision of that decision-maker; and

(b) subject to any contrary order by the Tribunal, has, or is deemed to have had, effect from the time at which the decision under review has or had effect.

1. Following an examination of each party's respective position, including the evidence, it will, therefore, be open to me to affirm the decision under review, vary the decision, set aside the decision and make another decision in substitution or set aside the decision and remit to DBDRV for re-consideration in accordance with any direction or recommendations I may make.

1. The builder seeks a varied order to the effect that the applicant's liability to the joined party is $3,571.43, calculated as follows:

An Order for Agreed Damages was issued to Sherridon Pty Ltd by the DBDRV to pay the Building Owner $5,785.71.00, however the days submitted by the owners were incorrect. As per the HIA Schedule 4 Special Conditions, Item 11 Building Period commences upon base stage being completed which was dated 09.09.2022. Notice of Completion and Occupancy Permit was issued to the client 09.10.2023. Building Period as per the HIA Contract is 280 Days, As construction overlapped the Christmas Period all clients were advised of the mandatory Christmas shutdown period of 15 Business Days. Based on our calculations the client is owed $3,571.43.[2]

1. The builder relies upon a single ground for review under s 63(3)(a), being the correctness of the amount payable as liquidated damages by reference to what it contends are the relevant dates in the contract.
2. There is no dispute about the reasonableness of the DRO or the commencement date of the works on 17 August 2022, the number of days allowed for the building period or whether liquidated damages are payable by the builder to the joined party.
3. The issue for determination is, therefore, whether the liquidated damages ordered by the DRO to be payable by the builder is correct?
4. I considered the parties' respective submissions and any evidence relevant to the application as to the basis for my calculation of the sum that ought to have been recorded in the DRO.

1. The building contract as put into evidence, the relevant terms of which are as follows:

Clause 10: The building period is 280 days, which includes actual building work and the estimates for delays ['the Building Period**']**.

Schedule 3: The following are the progress stages of work:

For the purposes of this contract the building period under Schedule 1 Clause 1constitutes [sic] and commences upon the builder completing the base stage' ['SC 11'].

Agreed damages for late completion of the Building Works:

the building Works are complete in accordance with the Contract Documents.

1. The facts below are agreed between the parties:
   1. the builder is liable to pay liquidated damages in an amount to be determined on review;
   2. the builder issued to the joined party a letter of commencement of work dated 17 August 2022;
   3. the base stage was completed on 9 September 2022 and the Building Period of 280 days did not commence until that date in accordance with SC 11;
   4. the builder issued a tax invoice to the joined party for the base stage dated 9 September 2022;
   5. an inspection was carried out in accordance with Contract clause 36.2;
   6. the joined party did not make the final payment until 23 September 2023;
   7. the joined party took possession on 24 November 2023; and
   8. DBDRV did not take into account penalty interest for late payment of the final invoice by the joined party.

1. In summary, Ms Arbon submitted on behalf of the builder:
   1. the builder concedes during the hearing that it owes liquidated damages to the joined party in the sum of $4,107, not $3,571.43 as set out in the particulars to the application;
   2. a notice of completion ('the Notice') and a certificate of occupancy ('the Occupancy Permit') were issued to the owner on 9 October 2023 when the builder considered the work was complete;
   3. completion occurred on the date of the handover inspection on 27 October 2023, when the builder and joined party each signed the Notice; and
   4. the builder should not be penalised for late payment of an invoice.
2. The builder did not provide any calculations for the amount included in the Application.

1. Ms Colella submitted on behalf of DBDRV:
   1. the figure recorded in the DRO is correct, based on the terms of the building contract;
   2. the Occupancy Permit was issued in September 2023;
   3. the Notice issued on 27 October 2023, included incomplete work;
   4. Building contract clause 37.2 provides, the builder is to rectify any defective works before the works have reached completion, that it cannot have been before 27 October 2023 as this was the date of the inspection by the parties, which referenced incomplete work in the Notice;
   5. the DRO is based upon works not being completed until 21 November 2023;
   6. DBDRV cannot consider a DRO in respect of penalty interest; and
   7. the date of completion of the building works was 24 November 2023, as is recorded in screenshot of the builder's online dashboard (Screenshot), adduced into evidence.

1. In response, Ms Arbon submitted:
   1. the practical completion inspection was held for the joined party to identify any minor defects that could be remediated at a later date;
   2. the Screenshot does not form part of the building contract and is, otherwise, dated 24 November 2023; and
   3. the installation of turf, as part of the building contract, is not completed until the owners move in so they can maintain it and prevent it from dying.

Is SC 11 an unjust term of the building contract?

1. I consider that SC 11 gives the builder a liberty to complete the base stage at any time after receiving the deposit.
2. Subject to the implied obligation of the builder to proceed with the works in a diligent fashion, I consider that SC 11 gives a wide latitude to the builder in respect of the duration of the base works. That is, because the time from which the builder becomes liable to pay liquidated damages for delay if it fails to reach practical completion by the date for practical completion does not start at the date the builder first commences the works.
3. Section 31 of the DBC Act sets out what contracts must and must not contain. It provides:

(1) a builder must not enter into a major domestic building contract unless the contract -

(g) states the date when the work is to start, or how that date is to be determined; and

(h) if the date is not yet known, states that the builder will do everything that is reasonably possible for the builder to do to ensure that the work will start as soon as possible; and

(i) states the date when the work will be finished, or if the starting date is not yet known, the number of days that will be required to finish the work once it is started (emphasis added).

1. In the circumstances, I find SC 11 is contrary to s 31(1)(g) of the DBC Act and, therefore, contravenes s 132 of the DBC Act.[3]

When did the builder achieve practical completion of the building works?

1. During the hearing I viewed, as a shared document via Zoom, the Notice of Completion dated 9 October 2023. It was clear from the document that the builder had not completed the landscaping works required under the building contract.
2. Ms Arbon submitted that it was clear from the terms of the Notice that the builder would complete the landscaping works by 9 November 2023 after the joined party took possession. The practical reason for this, she explained, was that upon the joined party taking possession, he would be able to maintain the grass. Had the builder installed the grass before the joined party took possession, the grass would likely have died.
3. In Troise v Blue Key Properties Pty Ltd (Building and Property),[4] the builder issued a final claim under the contract, accompanied by an occupancy certificate. The builder submitted the appliances would be installed and commissioned following handover to prevent theft or damage. Notwithstanding this explanation, not being satisfied that the works had been brought to completion before the claim was issued, Senior Member Edquist declared the owner was not liable to pay the final claim. The builder's purported notice of completion was therefore not valid, and the purported conditional occupancy permit was not valid because the works contracted were found not to have been completed.
4. Section 42 of the DBC Act relevantly provides that:

When work is to be considered to have been completed

A builder must not demand final payment under a major domestic building contract until -

(a) the work carried out under the contract has been completed in

accordance with the plans and specifications set out in the contract; and

(b) the building owner is given either -

(i) a copy of the occupancy permit under the Building Act 1993 , if the building permit for the work carried out under the contract requires the issue of an occupancy permit; or

(ii) in any other case, a copy of the certificate of final inspection.

1. I do not accept the proposition that it is open to parties, before all the works under the contract have been brought to completion, to agree on completion as having occurred for the purpose of the builder obtaining a final payment under the terms of the contract. It offends s 42 of the DBC Act.
2. Notwithstanding the builder issued a copy of the Occupancy Permit to the joined party, I find the builder was not entitled to issue the demand for final payment until the landscaping work was completed.
3. Having declared that SC 11 is void and of no effect and noting the number of days comprising the Building Period, I find the relevant start date of the works to be 17 August 2022 and find that the base stage was completed in accordance with the builder's tax invoice on 9 September 2022.
4. While it remained the position of DBDRV, that the works were brought to completion on 24 November 2023 according to the builder's online dashboard, I do not consider this to be the case.
5. The joined party paid the final balance to the builder on 23 November 2023, the day before taking possession.
6. I therefore find, in the absence of further evidence, the works were completed on 23 November 2023 in accordance with s 42(a) of the DBC Act.

1. Not being satisfied on the evidence before me that either the builder or the DBDRV arrived at a correct figure for liquidated damages payable to the joined party, I make the following calculations:
   • Commencement: 17 August 2022;
   • Completion: 23 November 2023 = 463 days (66 weeks);
   • 463 days less Building Period (280 days) = 183 days;
   • 26.14 weeks x $250 liquidated damages allowance per week = $6,535.71

1. I find DBDRV's calculation of liquidated damages payable by the builder to the owner to be incorrect.
2. There will be an order that liquidated damages payable to the joined party is $6,535.71.
3. Even though DBDRV did not order penalty interest in the DRO, none would be payable since the building work was not completed at the time the builder issued its demand for final payment.
4. Accordingly, the Order will be varied, inter alia, to record the sum of $6,535.71 payable by the builder to the joined party and to set aside any further right of review by the builder in the Tribunal.
5. The parties will have liberty to apply on the question of costs.

1. [1] Harris v Caladine [1991] HCA 9; (1991) 172 CLR 84; For a general discussion of the nature of a review hearing, DBDRV Scheme and the Tribunal's powers see Excellent Homes Pty Ltd v Domestic Building Dispute Resolution Victoria (Building and Property) [2022] VCAT 699.

[2] Endorsed on application form filed by the builder.

1. [3] During the hearing I declared SC 11 void, as an unfair term of the Contract on the basis that it cannot be left open to the builder to decide when the base stage should be completed. Although an order was made to this effect as pronounced, when drafting order 1 above a slip occurred, whereby, the order was made in accordance with s 53 of the DBCA when it ought to have been made under s 63 of the DBCA, hence, a correcting order will be included under the sub-hearing 'other orders.'

[4] [2025] VCAT 9. See also Cardona v Brown [2010] VSC 368; Sumic v Muzaferovic (Domestic Building) [2013] VCAT 1862; Alpha Developers and Promoters Pty ltd v Advance Building & Engineering Pty Ltd [2015] VCAT 317; Dawn v Carlisle Homes Pty Ltd [2025] VSCA 58.