Centurion Australia Investments Pty Ltd v APM Group (Aust) Pty Ltd [2023] VSCA 324

Nikki Miller | Isobel Carmody | Morsaal Aimaq

Key takeout

The Victorian Court of Appeal has confirmed that construction works for student accommodation are exempt from the operation of the Domestic Building Contracts Act 1995 (Vic) (DBCA), even if the building is not located within the relevant educational institution.

Facts

This matter involved an application for leave to appeal a decision of the Supreme Court of Victoria, which held that a residential building used as student accommodation was exempt from the application of the DBCA.

Centurion Australia Investments (principal) engaged the APM Group (contractor) to carry out construction works at a student accommodation building.  The building was the subject of a student accommodation agreement between the principal and RMIT University, which (among other things):

• reserved some of the rooms in the building for RMIT University students, while other rooms could be rented to students from other universities or tertiary institutions;
• required RMIT University to identify the building as a housing option in relevant promotions and publicity (including via a link in its website), refer enquiries of potential students who seek accommodation to this building and maintain an affiliation with the building;
• conferred a licence to enable the principal to call the building ‘RMIT Village’.

The building was in relatively close proximity to a number of universities and tertiary institutions in and around the Melbourne CBD, including being within approximately four minutes’ walk to the University of Melbourne and 15 minutes’ walk to RMIT University.

The building was located on mixed-use zoned land under the relevant planning scheme.  A condition of the planning permit for the works carried out to the building by the contractor required the principal to enter into an agreement with the Responsible Authority under the Planning and Environment Act 1987 (Vic) that would include a term requiring:

• the building to be used for the exclusive accommodation of students enrolled full time at a secondary or tertiary level educational institution; and
• the students to vacate the student accommodation within three months of completing their full time studies.

The Supreme Court had found at first instance that the DBCA did not apply to student accommodation because of the application of the exclusion in regulation 8(b) of the Domestic Building Contract Regulations 2017 (Vic).  Regulation 8(b) provided that works that are on ‘premises that are used or intended to be used at a school, university or other educational or training institution as accommodation for students or staff‘ were excluded from the DBCA. The principal appealed that decision arguing that the exception for student accommodation only applies to student accommodation located in the educational institution.   

Decision  

The Court of Appeal agreed with the Supreme Court that the exemption in regulation 8(b) was not confined to student accommodation ‘within’ an educational institution and could apply to student accommodation located outside of an educational institution if that accommodation had sufficient connection to the relevant educational institution. 

The Court of Appeal considered that, having regard to the connection between the relevant building and RMIT University (recorded in the student accommodation agreement) as well as the ‘relatively close physical proximity‘ of the premises to RMIT University, the requirements of the exemption in regulation 8(b) were met. 

The Court of Appeal also made the following useful comments:

• The premises were excluded from the definition of a ‘home’ under the DBCA, in particular limb (b) of that definition, as they were not intended for permanent habitation because students were required to leave after completing their tertiary education.
• The subjective intention of a party as to long term or short term stays or the nature of the legal entitlement of a future occupier to use or occupy the building was irrelevant. 
• Rather what is determinative is whether the premises was intended to be used as a residential premises, by reference to the design purpose at of the relevant building at the time the building contract is entered into. In other words, whether the relevant building is designed to sustain ordinary living or enable people to reside in it.
• The premises did not fall within s 5(1)(e) of the DBCA because the land was located in a mixed use planning zone and so was not zoned for residential purposes.
• The proper construction of section 5(1)(e) is to confine its operation to land exclusively zoned for residential purposes.  However, buildings with residential components on mixed use zoned land are likely to still attract the operation of the DBCA under section 5(1)(a) of the DCBA as they would likely be captured by the definition of ‘home’.
• This could mean section 5(1)(e) has little practical application.