Stewart v Sherridon Pty Ltd [2024] VCC 1023 

Chris Hey  | Michael Lo  |  Stacey Clough

Key takeout

A builder must comply with sections 37 or 38 (as applicable) of the Domestic Building Contracts Act 1995 (Vic) (Act) to effect a valid variation under a major domestic building contract, notwithstanding special conditions under the contract which may entitle the builder to unilaterally vary the contract or building plans.

Facts

Mr and Mrs Stewart (owners) entered into a major domestic building contract with Sherridon Pty Ltd (builder) for the construction of a dwelling and garage in a new estate.  The contract included preliminary plans consistent with the owners requests for the garage to be situated along the western boundary of the lot, and for eaves to be omitted from the garage.

A special condition to the contract reserved the right of the builder to amend the siting of the works in its sole discretion, subject to the provision of services, council requirements or developer requirements.

Amended plans were provided by the builder to the owners whereby the dwelling structure was re-sited by approximately 1 meter as against the preliminary plans.  The amended plans were ultimately accepted by the owners, and the builder commenced the building works.

One of the issues before the court was whether by reason of the special condition to the contract, there was a valid variation within the meaning of s 37 of the Act.

Decision  

The court held that in the circumstances, there was no valid variation within the meaning of s 37 of the Act because the provision of amended plans did not amount to, or constitute, a notice required by s 37(1) of the Act.

In doing so, the court considered that notwithstanding the special condition, the builder was still required to comply with sections 37 or 38 (as applicable) of the Act to effect a valid variation.

The variation, being the movement of the site of the proposed structure, was conveyed solely by lines on the drawing and was therefore not a notice under s 37(1) of the Act because to be effective it was required to be in writing and in English – and the drawing lines were not.