Centurion Australia Investments Pty Ltd (Principal) engaged APM Group (Aust) Pty Ltd (Contractor) to re-develop student accommodation known as ‘RMIT Village’, located approximately one kilometre from RMIT University (Works). The Works were the subject of a ‘Student Accommodation Agreement’ with RMIT University, which was novated to the Principal (Agreement). The Agreement provided, among other things, that the:

• Works would be affiliated with the University to provide priority accommodation to students;
• University would confer a license to enable the premises to be called ‘RMIT Village’; and
• University would promote the Works to its students and maintain a degree of control over the occupation of the Works by its students.

In the Supreme Court, the Principal contended that the DBC Act applied to the Works, so that it could have the benefit of (among other things) the statutory and implied warranties under sections 8 and 20 of the DBC Act. The Contractor sought a finding that the DBC Act did not apply to the Works.

Decision at First Instance

The Court at first instance held that the DBC Act did not apply to the Works, as the Works fell within regulation 8(b) of the DBC Regulations, which provides that work carried out in relation to “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” so it was not building work to which the DBC Act applies.

Although the Works were not located within the University, the Court held that “the relevant exception was that the premises that are used or intended to be used at a university or other educational institution as accommodation for students or staff”.[1]

While physical proximity was relevant, the Court held that the DBC Regulations are “not necessarily confined to a description of a physical location”, and the accommodation did not need to be located within the educational institution.[2] Rather, it was sufficient that there was “a close connection between the use and the residential premises” to engage the exclusion.[3] This was consistent with the clear intention of the DBC Regulations to exclude building works in relation to student accommodation from the operation of the DBC Act.[4]

The Principal appealed the Trial Judge’s decision, arguing that the DBC Regulations were erroneously construed by the Trial Judge.

Appeal Decision

The Court of Appeal upheld the Trial Judge’s decision. The Court on appeal agreed that the connection between the premises and the University was “not limited or confined to the physical location” and the DBC Regulations did “not expressly require that the premises be within the university or school”.[5] This was because (among other things) the Works were within a close physical proximity, and shared a connection with the objectives and obligations, of the University.[6]

The Court also resolved discrete issues on the application of the DBC Act. These were resolved as part of notices of contention raised by the Contractor. The Court further held, among other things, that:

• notwithstanding the temporal limit on student stays, the Works were intended for permanent habitation, although this was not, in itself, determinative of whether the DBC Act applied to the Works; and
• the Works were constructed on land that was not ‘exclusively zoned’ for residential purposes, and therefore did not attract the operation of section 5 of the DBC Act.[7]

Key Takeaways

This decision serves as guidance to construction industry participants to seek legal advice on the exemptions in the DBC Regulations. Failure to give due consideration to the DBC Regulations may result in unintended consequences, particularly in circumstances where the implied warranties under the DBC Act are not expressly stated in construction contracts.

Further information / assistance regarding the issues raised in this article is available from the authors, Bill Papastergiadis - Melbourne Managing Partner, Partners Nathan Cutts and Phillip Vassiliadis or your usual contact at Moray & Agnew.

[1] Centurion v APM, [75].

[2] Centurion v APM, [77].

[3] Centurion v APL, [104] – [106].

[4] Centurion Australia Investments Pty Ltd v APM Group (Aust) Pty Ltd [2023] VSCA 324, [3] (‘Centurion v APM’).

[5] Centurion v APM, [43].

[6] Centurion v APM, [45].

[7] Centurion v APM, [46].