Parliament addresses jurisdiction woes for domestic building disputes

Oct 30, 2023

The laws regulating the forum in which a domestic building dispute can be commenced have recently been amended as a result of the Court of Appeal’s decision in Thurin v Krongold Constructions [2022] VSCA 226.

Thurin v Krongold concerned claims against a builder for alleged defective building works. During the course of the VCAT proceedings claims were made (as is often the case) under the Australian Consumer Law, a federal statute. The VCAT’s decision was appealed, ultimately to the Court of Appeal, where it was held that VCAT did not have jurisdiction to hear domestic building disputes involving the interpretation or application of Federal legislation.

In the intervening time since the decision, an extraordinary case management initiative has been forced upon VCAT whereby cases involving Federal subject matter had to be struck out or transferred to other courts – often resulting in significant disruption and additional cost to the parties. Legislation to address the issue has been anticipated for some time.

On 10 October 2023, the Justice Legislation Amendment Act 2023 commenced, amending section 57 of the Domestic Building Contracts Act 1995 (Vic) (Act).  

Prior to the amendment, by virtue of the VCAT’s near exclusive jurisdiction to hear domestic building disputes under the Act, a proceeding commenced in a Court was liable at any time (until oral evidence had been heard) to be stayed and transferred to the VCAT under section 57.

Now, if a domestic building dispute raising any controversy that may be the subject of a federal law has been commenced outside of the VCAT, the proceeding will no longer be susceptible to a stay application. Practically, this means that proceedings concerning federal subject matter can now be sensibly commenced in either the Magistrates’ Court, County Court or Supreme Court of Victoria.

If you require assistance or advice on your domestic building dispute please contact Peter Lettieri in our Building and Construction Disputes team.