Background
In late 2013, Mr John Beveridge (‘Beveridge’) purchased an apartment in Fitzroy North from Prudentia Avitas Pty Ltd (‘Prudentia’), the developer and builder of the apartment complex.
Integrated Construction Management Pty Ltd (‘ICM’) had been engaged as a construction manager for the apartment complex’s construction and the subsequent defects liability period. In 2016, Prudentia was deregistered.
Shortly after purchasing the apartment, Beveridge sent ICM a list of defects. ICM agreed to fix several of these defects but failed to fix a persistent leak. Because of this, a dispute arose between the parties regarding liability for the defects.
Beveridge lodged an application in VCAT claiming that ICM had breached the statutory warranties set out in section 8 of the Domestic Building Contracts Act 1995 (Vic) (‘DBCA’) and seeking $18,600 in damages.
‘Builder’ or ‘Subcontractor’
Pursuant to section 8 of the DBCA, a builder warrants, amongst other things, that work it carries out under a domestic building contract will be free from defects (‘the Warranties’). The DBCA defines a ‘domestic building contract’ as excluding a contract between the builder and a subcontractor.
Beveridge asserted that ICM owed the Warranties. Member Calabro determined that Prudentia was the builder of the apartment complex (rather than ICM) for the following reasons:
- the majority of the building permits identified Prudentia as the builder;
- the building insurance was in Prudentia’s name; and
- there were no major domestic building contracts tendered as evidence.
ICM was found to be Prudentia’s subcontractor. That being the case, Member Calabro found that ICM did not owe Beveridge the Warranties as Prudentia would have and dismissed the claim.
We note that Beveridge had an ongoing claim with the VMIA, Prudentia’s domestic building insurer.
Takeaways
This case demonstrates the difference between a builder and a subcontractor. It is an important reminder to homeowners that they must properly identify the contracting builder before issuing proceedings for breach of the Warranties (particularly body corporate and lot owners who have purchased an apartment that was recently constructed or renovated by the previous owner).
