AGE OLD BUILDERS PTY LTD V SWINTONS PTY LTD  VSC 307
Supreme Court of Victoria – 21 August 2003
Age Old Builders Pty Ltd (‘Age Old’) entered into a major domestic building contract with Swintons Pty Ltd (‘Swintons’) for the construction of four townhouses in Acland Street, South Yarra. Disputes began between the parties and the parties agreed to appoint a building consultant to conduct an independent assessment of the quality of the work, and to provide a determination with respect to the alleged defects. The determination was completed. Additional disputes arose in respect of extensions of time, extension of time costs and liquidated damages, and the parties agreed to appoint the building consultant to determine the disputes. Before the second determination was made Swintons advised the building consultant that the agreement for him to resolve disputes pursuant to the second determination was void on the grounds of section 14 of the Domestic Building Contracts Act 1995 (‘the DBC Act’) which states “Any term in a domestic building contract or other agreement that requires a dispute under the contract to be referred to arbitration is void.”
Swintons then issued proceedings in the Victorian Civil and Administrative Tribunal (‘the VCAT’). The building consultant made his determination in favour of Age Old in the amount of $125,679.30. Age Old then sought to uphold the second determination. VCAT determined that the agreement to have the building consultant make an expert determination was void, for contravening section 14 of the DBC Act. Age Old appealed to the Supreme Court on the grounds that the agreement was no caught by section 14 because it was an agreement referring a dispute to expert determination and not to arbitration.
Can arbitration be employed as the means of determining domestic building disputes?
What is the distinction between arbitration and expert determination?