In or around 2006, the owners entered into a domestic building
contract with the builder for the construction of a single
dwelling. The contract required the owners to make payments to the
builder upon completion of certain defined stages including,
inter alia, the 'frame stage' and the
'lock up stage'. The definitions of the stages in the
contract mirrored those in Section 40 of the Domestic Building
Contracts Act 1995 (VIC) ('the
On 4 December 2006, the builder requested payment for the frame
stage. At some point there arose a dispute between the parties
about the roof trusses which formed part of the frame stage works.
On 14 February 2007, the owners received a progress claim for the
lock up stage, which they subsequently refused to pay. As a result,
on 6 March 2007, the builder purported to suspend the works in
accordance with the contract. On 26 April 2007, the owners'
solicitors informed the builder's solicitors that the claim
for the lock up stage was invalid as, amongst other things, the
frame stage had not been reached.
The builder commenced proceedings in Victorian Civil and
Administrative Tribunal ('VCAT') on 3
July 2007 for a summary judgment on the lock up stage claim.
Deputy President McNamara decided the matter in favour of the
builder. He acknowledged that the owners disputed the frame stage
had been reached. However, he rejected the owners'
submission that the lock up stage claim was not payable if the
frame stage had not been completed. The Deputy President took the
view that each stage was separate and that a progress claim for one
stage might be payable notwithstanding an earlier stage had not
The owners further contended that the builder was not entitled
to the lock up stage payment as the lock up stage had not been
reached because the external wall cladding was not fixed. The
Tribunal also rejected this contention, noting that the Act does
not require a structure to be
Appeal to the Supreme Court
The owners appealed the decision to the Supreme Court.
Pagone J, who heard the appeal, rejected the owners'
submissions in relation to the stage payments being sequential. His
Honour agreed with Deputy President McNamara that completion of a
stage did not depend on all of the earlier stages having been
completed first. His Honour noted that although it seemed
'counter intuitive' that a claim for the lock
up stage could be made even though the frame stage had not been
properly completed, the stages are separately defined and there was
no basis to imply such a condition precedent.
In relation to whether the works had in fact reached lock up
stage, the owners contended that the proper construction of the
lock up stage was that the house should be secure 'rather
than impregnable'. His Honour, however, rejected that
submission and instead found that lock up only required that works
to be completed up to that stage as required under the relevant
plans and specifications.
This decision is authority for the proposition that:
Entitlement to claim for a particular stage of the works is not
dependant on the works having been completed in sequence
Lock up stage will be reached once the elements required in the
contract plans and specifications for the completion of that stage
have been satisfied and the extent to which the property is secured
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).