VCAT’s Jurisdiction Regarding Domestic Building Disputes Reaffirmed by County Court

Background

VCAT has jurisdiction in relation to domestic building disputes which are governed by the Domestic Building Contracts Act 1995 (Vic) (DBC Act). In this regard, section 57 of the DBC Act provides that VCAT is primarily responsible for resolving domestic building disputes.

Further, section 57(2) of the DBC Act provides that a court must stay any proceeding, which is a domestic building dispute, on the application of a party to the proceeding if:

(a) the action could be heard by VCAT; and

(b) the Court has not heard any oral evidence concerning the dispute itself.

The recent County Court decision in Mooney and Morzinek v Fanissa reaffirms VCAT’s jurisdiction after previous cases had challenged it.

VCAT’s Jurisdiction for Domestic Building Disputes Challenged  

In 2021, two landmark decisions were handed down by Judge Burchell (Uber Builders and Impressa Constructions), that held that due to significant delays at VCAT arising from resourcing issues that manifested during the COVID 19 pandemic, VCAT was unable to fulfil its function with respect to the efficient and timely management of domestic building disputes.  

Accordingly, the Court would not necessarily stay a proceeding, which is a domestic building dispute, pursuant to section 57(2) of the DBC Act, thereby challenging VCAT’s jurisdiction.

VCAT’s Jurisdiction for Domestic Building Disputes Reaffirmed

The case of Mooney and Morzinek v Fanissa has reaffirmed VCAT’s jurisdiction in relation to domestic building disputes. This case concerned a defective pool that was leaking significantly. 

The plaintiff commenced proceeding in the Court rather than VCAT. The defendant applied to have the action stayed pursuant to section 57(2) of the DBC Act on the basis that it was advantageous for the dispute to be heard at VCAT, including that it is less costly, more time-efficient and less formal.

The judgment provides that a stay application under section 57(2) of the DBC Act involves a consideration of the case management capabilities of VCAT. It does not involve a comparison of the Court’s and VCAT’s case management capabilities.

The court determined that VCAT could hear the action given that VCAT’s resourcing problems and delays have substantially diminished since 2021. Further, the court emphasised that smaller scale, less complex domestic building matters, such as the one in question, are particularly suited to being heard at VCAT.

As a result, defendant’s application for a stay of the proceeding under section 57(2) of the Act was granted.

Conclusion – The Victorian Government should legislate to clarify VCAT’s Jurisdiction

The key takeaway from this case is that smaller scale, less complex domestic building matters, can be heard at VCAT, thereby reaffirming VCAT’s jurisdiction. Conversely, larger, and more complex domestic building disputes, which require more robust case management, can be heard by the Court.

Given the ambiguity regarding VCAT’s jurisdiction with respect to domestic building disputes arising from the recent court decisions, it is important that the Victorian Government step in and legislate to clarify VCAT’s jurisdiction. For example, VCAT’s jurisdiction could be based on a claims capped at $300,000.

To learn more about any of the matters discussed here, or if you require legal assistance, please contact Chris Moshidis, Director and Principal Lawyer on +61 9521 7956 or chris@urbanlawyers.com.au.