In Troise v Blue Key Properties Pty Ltd (Building and Property) [2025] VCAT 9 (2 January 2025) Senior Member Edquist considered, among other things, whether:

• completion of building works under a domestic building contract occurred at the time the builder issued a conditional occupancy permit; and
• a special condition requiring payment of the builder’s final claim within 14 days of the occupancy permit, was enforceable and/or contracting out of the Domestic Building Contracts Act 1995 (‘DBC Act’).

The owners’ central argument was that completion was not achieved when the builder purportedly issued its letter of completion, because the occupancy permit upon which the builder relied was conditional and was not a valid occupancy permit. The occupancy permit stated the following condition:

“Occupancy is subject to the following conditions-

All appliances and services to be fitted off and commissioned prior to occupation.”

SM Edquist found at [38] to [42]:

“The owners rely on the Tribunal’s decision in Barbour v Australian Elegant Homes Pty Ltd [2018] VCAT 1242 (‘Barbour’). In that case an issue arose as to the validity of a report issued by the relevant building surveyor concerning the frame stage, which contained the words “Approved-subject to.” Senior Member Kirton, as her Honour then was, held at [70] that the frame stage approval had not been given. One of the findings made underpinning that conclusion, at [73], was that SM Kirton did not accept that Part 4 of the Building Act allowed for either conditional or unconditional stage approvals. She went on to note that s 40(1) of the DBC Act also did not allow such a distinction. A stage is either complete, or it is not……

……I note, with respect, that this approach is consistent with that adopted by the Court of Appeal in Cardona v Brown [2012] VSCA 174

…..I reject the builder’s contention that the certificate of occupancy was valid because it permitted the owners to move in once they had fitted off and commissioned all appliances and services.”

Notwithstanding this, the builder argued that the owners were required to pay the final claim by reason of Special Condition 6 of the building contract, which stated:

“The Owner shall have 14 days to make the final payment after the certificate of Occupancy has been issued from the authority.”

SM Edquist found at [65]:

“Special Condition 6 must be struck down under s 132(1)(a) of the DBC Act as it is contrary to the DBC Act, alternatively it purports to vary or exclude a provision of the DBC Act.”

In conclusion, the Tribunal found that whether completion had been achieved turned on the terms of the contract - see [48].

Surprisingly, SM Edquist’s findings did not refer to s42 of the DBC Act, which relevantly defines when completion is achieved.