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HOMEOWNER SUCCESSFULLY APPEALS VCAT DECISION: Fullinfaw v Neil Fletcher Design Pty Ltd [2019] VSC 142 (12 March 2019) ||| MTECC News edition 19.4

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HOMEOWNER SUCCESSFULLY APPEALS VCAT DECISION: Fullinfaw v Neil Fletcher Design Pty Ltd [2019] VSC 142 (12 March 2019)

Background

The Domestic Building Contracts Act 1995 (Vic) (‘Act’) allows no fault termination in accordance with section 41 of the Act. On 23 June 2016 the owners validly terminated a building contract entered into on 22 January 2015. The Tribunal ordered that the owners pay the builder $13,916. The owners’ claim for liquidated damages was rejected by the Tribunal on the basis that “the owners had no crystallized entitlement to liquidated damages as at the date the contract came to an end”.

Submissions on appeal limited to liquidated damages

The owners argued that the builder failed to lead evidence or prove its extension of time, the Tribunal had uncontroverted evidence supporting their liquidated damages, the Tribunal failed to recognise the claim for liquidated damages was payable independently of any other rights that the owners or the builder may have, liquidated damages are an accrued right once the building period is exceeded and that liquidated damages are recoverable as a debt.

The builders submitted that the owners had to do more than demonstrate that the builder failed to complete the works by 12 December 2015, that is exceeding 1½ times the period allowed to complete the works, in order to sustain their claim for liquidated damages.

Decision on appeal

His Honour Justice Garde held that:

[63]-[64] “the Tribunal appears to have overlooked that the agreed damages under cl 40 accrued weekly and that the owners were entitled to deduct them from the final payment. Their rights stemmed from s 8 of the Act and cl 40 of the contract, and were not affected by any provision in s 41.The owners’ claim for liquidated damages should have been upheld by the Tribunal. It is supported by the terms of cl40 and by the owners’ unchallenged evidence. The owners had plainly established that they were entitled to liquidated damages in the amount of $14,000.

The Court granted leave to appeal, allowed the appeal, set aside the Tribunal’s Orders allowing the owners the sum of $84.

Jim Stavris

 

MTECC seminar Wednesday 20 March 2019 RACV Club Melbourne

MTECC is presenting a 3-speaker seminar from 5.30pm on Wednesday 20 March 2019 at the RACV Club in Melbourne. The seminar will be followed by drinks and canapés.

The topics are:

  • “Rectification in construction contracts” by Nick Gallina
  • “What has happened to Contract and the Australian Consumer Law?” by Laina Chan
  • “ACP cladding issues update” by Michael Whitten QC

If you would like to attend please RSVP to miriam@chancery.com.au.

MTECC member seminar on ‘Lacrosse’ decision as part of ‘Commercial case update’ in LIV Commercial Law Intensive

MTECC member Andrew Downie is giving a seminar at 9.00am on Friday 22 March 2019 on the ‘Lacrosse’ VCAT decision as part of the Law Institute of Victoria Commercial Law Intensive. Details of the seminar and conference are here.

MTECC member publication

MTECC member Laina Chan has published a book with John Carter titled ‘Contract and the Australian Consumer Law’. Details of the book are here.

 

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