Winslow Constructors Pty Ltd v Mt Holden Estates Pty Ltd; Lanigan Baldwin Pty Ltd v Mt Holden Estates Pty Ltd [2004] VSCA 159

Winslow Constructors Pty Ltd v Mt Holden Estates Pty Ltd; Lanigan Baldwin Pty Ltd v Mt Holden Estates Pty Ltd [2004] VSCA 159 - VSCA 2004 case summary — Zoe

[63]

"1. Purpose The main purposes of this Act are- (a) to regulate contracts for the carrying out of domestic building work; and (b) to provide for the resolution of domestic building disputes and other matters by the Victorian Civil and Administrative Tribunal; and (c) to require builders carrying out domestic building work to be covered by insurance in relation to that work; and (d) to amend the House Contracts Guarantee Act 1987, and in particular, to phase out the making of claims under that Act. 3. Definitions (1) In this Act - ... "builder" means a person who, or a partnership which- (a) carries out domestic building work; or (b) manages or arranges the carrying out of domestic building work; or (c) intends to carry out, or to manage or arrange the carrying out of, domestic building work; "building" includes any structure, temporary building or temporary structure and also includes any part of a building or structure; "building owner" means the person for whom domestic building work is being, or is about to be, carried out; "building site" means a place where domestic building work has been, is being, or is about to be, carried out; ... "contract price" means the total amount payable under a domestic building contract and includes- ... (c) the amount any third person is to receive (or it is reasonably estimated will receive) directly from the building owner in relation to the domestic building work to be carried out under the contract- (i) for conveying to the building site or connecting or installing services such as gas, electricity, telephone, water and sewerage; or ... ... "domestic building contract" 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; "domestic building dispute" has the meaning set out in section 54; ... "domestic building work" means any work referred to in section 5 that is not excluded from the operation of this Act by section 6; "major domestic building contract" means 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); 4. Objects of the Act The objects of this Act are- (a) to provide for the maintenance of proper standards in the carrying out of domestic building work in a way that is fair to both builders and building owners; and (b) to enable disputes involving domestic building work to be resolved as quickly, as efficiently and as cheaply as is possible having regard to the needs of fairness; and (c) to enable building owners to have access to insurance funds if domestic building work under a major domestic building contract is incomplete or defective. 5. Building work to which this Act applies (1) This Act applies to the following work- (a) the erection or construction of a home, including- (i) any associated work including, but not limited to, landscaping, paving and the erection or construction of any building or fixture associated with the home (such as retaining structures, driveways, fencing, garages, carports, workshops, swimming pools or spas); and (ii) the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage to the home or the property on which the home is, or is to be; (b) the renovation, alteration, extension, improvement or repair of a home; (c) any work such as landscaping, paving or the erection or construction of retaining structures, driveways, fencing, garages, workshops, swimming pools or spas that is to be carried out in conjunction with the renovation, alteration, extension, improvement or repair of a home; (d) the demolition or removal of a home; (e) any work associated with the construction or erection of a building- (i) on land that is zoned for residential purposes under a planning scheme under the Planning and Environment Act 1987; and (ii) in respect of which a building permit is required under the Building Act 1993; (f) any site work (including work required to gain access, or to remove impediments to access, to a site) related to work referred to in paragraphs (a) to (e); (g) the preparation of plans or specifications for the carrying out of work referred to in paragraphs (a) to (f); (h) any work that the regulations state is building work for the purposes of this Act. (2) A reference to a home in sub-section (1) includes a reference to any part of a home. 6. Building work to which this Act does not apply This Act does not apply to the following work- (a) any work that the regulations state is not building work to which this Act applies; (b) any work in relation to a farm building or proposed farm building (other than a home); (c) any work in relation to a building intended to be used only for business purposes; (d) any work in relation to a building intended to be used only to accommodate animals; (e) design work carried out by an architect or a building practitioner registered under the Building Act 1993 as an engineer or draftsperson; (f) any work involved in obtaining foundations data in relation to a building site; (g) the transporting of a building from one site to another. 54. What is a domestic building dispute? (1) A "domestic building dispute" is a dispute or claim arising- (a) between a building owner and- (i) a builder; or (ii) a building practitioner (as defined in the Building Act 1993); or (iii) a sub-contractor; or (iv) an architect- in relation to a domestic building contract or the carrying out of domestic building work; or ...."

[132]

The respondent submitted that a number of conclusions could be drawn from the plain meaning of s.5 of the DBC Act. First, the main focus is on works performed. Secondly, it is contemplated that different aspects of "associated work" may be performed by different persons. I infer that this is due to the various examples of works provided as examples in s.5(1)(a)(i) requiring specialised expertise. Thirdly, s.5 does not suggest that there could not be a separate contract for the associated works. Indeed s.3(2) of the DBC Act contemplates that a builder and building owner may agree to carry out domestic building work on a home in stages under a series of separate contracts. Fourthly, the section contemplates preliminary work done prior to any house construction work. This is evident from s.5(1)(a)(ii), (f) and (g) which deal with site work, the preparation of plans and specifications and the provision of sewerage, drainage and water supply. Fifthly, the respondents submit that there is nothing within the DBC Act from which it could be inferred that an existing contract to construct a home is a precondition to "associated works" being governed by the DBC Act. Otherwise, an inconsistency would arise whereby identical works would not be covered by the DBC Act either in the absence of a housing construction contract or if such a contract was entered into subsequently. Sixthly, s.5(1)(a)(ii) and (f) contemplate work performed outside the particular building site on which the home is to be constructed. This is clear from para.(f) which covers work required to be performed to gain access to a site. Finally, the respondent submits that the singular "home" can also mean the plural based on ordinary principles of interpretation under s.37 of the Interpretation of Legislation Act. This contention appeared to find favour with Eames, J.A. in HIA Insurance Services.[25] Furthermore, the plural references in s.5(1)(a)(i) and (c), which include "driveways", "garages", carports", "swimming pools" and "spas", strongly suggest that the singular "home" was intended to import the plural.

[156]

It is also necessary to consider the Building Act as some provisions contained therein impact upon domestic building work. Section 135 of the Building Act allows the Minister, by order, to require certain builders to be covered by insurance and s.137A of that Act outlines what insurance cover may, by order, be required in respect of domestic building work. Section 137B covers owner builders and provides that a person who constructs a building must not enter into a contract to sell the building within the prescribed period unless the person is covered by insurance which includes the warranties specified in s.137C and has obtained a building report. Section 137B(4) allows a person who enters into a major domestic building contract with a builder for the construction of more than four homes to apply to the Director of Consumer Affairs to exempt the builder from the requirement to be covered by the insurance in respect of that building work and defer compliance until any of the homes are to be sold. The Explanatory Memorandum to the DBC Bill explains the intent of this provision as providing an option to a financier/developer who may not wish to obtain the benefit of insurance cover but will be required to provide insurance cover to a purchaser at the time of sale. This is reflected in cl.5.5.4 of the Ministerial Order. This provides one indication that the intent of the DBC Act is to protect individual home owners rather than commercial developers, a point which was noted by Eames, J.A. in HIA Insurance Services. Finally, s.137E provides that a person must not enter into a contract for the sale of land on which a home is being constructed, or is to be constructed, before the completion of the contract unless the building work is or will be constructed under a major domestic building contract. This ensures that the appropriate insurance will be in place as required by the Ministerial Order. The Explanatory Memorandum to the DBC Bill states that the intent of this provision was to ensure that the purchaser will have the protection of minimum contractual provisions and/or implied statutory warranties and the required insurance.

At a glance

Court

Decision date

Before

Source

Judgment (208 paragraphs)

Legislation Cited (2)