The construction and building sector in Victoria is governed by stringent legal requirements designed to protect homeowners, developers, builders, and contractors. The Victorian Civil and Administrative Tribunal (VCAT) plays a pivotal role in adjudicating disputes in this space, particularly when it comes to contractual compliance, construction defects, and statutory warranties.
In early 2025, Sumner v Nobes (Building and Property) [2025] VCAT 96 (Sumner v Nobes) set an important precedent for assessing defective workmanship and enforcing builder obligations under the Domestic Building Contracts Act 1995 (Vic) (DBC Act). Alongside this case, other recent VCAT decisions—Troise v Blue Key Properties, Castellan v Icecorp, Plunkett v Portier Pacific, and Mooney v Fanissa—illustrate how VCAT is applying the law in disputes over construction defects, delays, and lease maintenance obligations.
This article examines these recent VCAT rulings and their broader impact on the construction industry.
Summer v Nobes (Building and Property) [2025] VCAT 96: A Defining Case in Construction Defects
Background
The dispute in Summer v Nobes arose from a domestic building contract between the homeowner, Sumner, and the builder, Nobes. Sumner alleged that Nobes failed to complete the work as stipulated in the contract, resulting in significant defects, including structural deficiencies, the use of substandard materials, and non-compliance with building standards. Sumner sought rectification costs and damages.
Nobes defended the claim, asserting that the defects were minor and did not justify contract termination or financial compensation. The central issue before VCAT was whether the defects amounted to a fundamental breach of contract or if they were minor issues that did not compromise the building’s overall integrity or safety.
After reviewing expert evidence and considering builder obligations under the DBC Act, VCAT ruled in favour of Sumner, determining that the defects constituted a breach of statutory warranties. The Tribunal ordered rectification and compensation for the homeowner, reinforcing that builders are responsible for proving compliance with statutory and contractual obligations and must take proactive steps to rectify defects to avoid legal liability.
Key Legal Takeaways from the Decision
- The Role of Expert Evidence in Construction Defect Disputes:
VCAT placed significant weight on independent expert reports to assess the extent and severity of the alleged defects. An expert building inspector identified multiple instances of non-compliance with statutory warranties.
Implications for Builders and Property Owners:
- Homeowners and builders should engage qualified experts early in the dispute resolution process.
- Builders must ensure their work complies with statutory standards, as expert reports are highly influential in legal proceedings.
- Providing Evidence in Construction Defect Disputes
VCAT determined who bore the burden of proof in Summer v Nobes:
- Builders are responsible for demonstrating that their work complies with contractual obligations and statutory warranties.
- Homeowners must provide clear, documented evidence of defects, including photographs, reports, and communications.
This principle was reinforced in Troise v Blue Key Properties Pty Ltd [2025] VCAT 9, where the Tribunal ruled against a developer who failed to properly communicate delays, seek necessary approvals, and adhere to agreed project timelines, resulting in financial liability.
Best Practices for Builders and Developers:
- Maintain comprehensive project records to demonstrate compliance with contractual and legal obligations.
- Document all contract variations and quality assurance checks to prevent disputes.
- Distinguishing Between Minor and Major Defects
In Summer v Nobes, VCAT distinguished between minor defects and major breaches. Minor defects, such as paint inconsistencies or surface imperfections, do not justify contract termination or claims for damages. Major defects, including structural failures, water ingress, or safety hazards, can warrant compensation, rectification, or even contract termination.
Key Takeaway for Industry Professionals:
- Builders and developers should address minor defects promptly to prevent disputes from escalating.
- Homeowners and property buyers must differentiate between minor issues and fundamental defects before seeking legal remedies.
- Sellers must disclose known defects to avoid liability for misrepresentation.
This principle was similarly applied in Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205, where a property buyer successfully claimed compensation for undisclosed structural and water damage discovered after settlement. VCAT ruled that the seller failed to meet disclosure obligations.
- Builder Responsibility and Good Faith in Dispute Resolution:
A decisive factor in Summer v Nobes was whether the builder made reasonable efforts to resolve the defects before legal action was taken. The Tribunal found that Nobes failed to engage in good faith dispute resolution, which strengthened Sumner’s case.
This ruling is consistent with decisions in Mooney v Fanissa Pty Ltd [2024] VCC 1032 and Castellan v Icecorp Pty Ltd [2024] VCAT 1220, where landlords were held liable for failing to respond to maintenance complaints. These cases emphasise the importance of proactive engagement in defect resolution.
Key Lessons for Builders:
- When defects are reported, engage with homeowners to resolve the issues before litigation arises.
- Ignoring defect complaints can lead to higher damages, increased legal costs, and reputational risks.
Wider Implications for the Construction and Building Sector:
The Summer v Nobes decision, along with other key VCAT rulings, highlights several important trends in the construction and property industry:
- Expert Evidence is Crucial in Construction Disputes:
- Tribunals increasingly rely on independent experts to assess defect claims.
- Builders and homeowners should retain expert reports to support their case before a dispute escalates.
- Builders Must Act in Good Faith When Addressing Defects:
- Courts and tribunals expect builders to engage with clients and attempt resolution before litigation.
- Failing to do so can result in penalties, damages, and reputational harm.
- Proper Contractual Documentation is Essential:
- As seen in Troise v Blue Key Properties, failing to meet project timelines and quality benchmarks can lead to legal liability.
- Builders and property owners should ensure all contract variations or dispute resolutions are documented in writing.
- Landlords and Property Owners Must Fulfil Maintenance Obligations:
- Cases like Castellan v Icecorp and Mooney v Fanissa reinforce that landlords must ensure leased properties are safe and habitable.
- Ignoring structural defects or failing to disclose them can lead to legal action and compensation claims.
The Summer v Nobes case, alongside other decisions, highlights the importance of expert evidence, contractual compliance, and proactive defect resolution in the construction industry. These rulings provide valuable guidance for those involved in construction, property development, and building maintenance, emphasising the need for clear documentation, expert assessments, and good faith engagement to mitigate risks, ensure compliance, and avoid costly litigation.