New domestic building dispute regime jurisdictional concerns for the Building and Property Commission

A new domestic building dispute regime is coming to the Building and Property Commission (BPC)… But… Will BPC have jurisdiction to hear the dispute if a federal matter is raised or a party is an interstate resident?

As background, there is a line of cases starting at the High Court which have limited the jurisdiction of Tribunals and whilst BPC is not a Tribunal they remain real concerns.

Key cases limiting tribunal jurisdiction

Burns v Corbett

Where the High Court held by a majority decision that an implied limitation existed in the Constitution that prevents state parliaments from vesting jurisdiction over ‘federal matters’ in state tribunals.

Meringnage v Interstate Enterprises Pty Ltd

The Victorian Court of Appeal applied Burns v Corbett to explicitly limit the VCAT’s jurisdiction and ability to hear any ‘federal matters’. The practical effect of the decision is outlined on the VCAT’s website which states it cannot decide cases where “the parties are residents of different Australian states” or “the Commonwealth of Australia is a party”.

The website also states a party is an interstate party “based on when the application is lodged, not when the dispute started.”

Thurin v Krongold

This case considered whether the VCAT has jurisdiction to hear disputes involving Cth legislation and found it did not. The Supreme Court of Appeal reasoned that VCAT is not a ‘court of a State’ and therefore was not vested with federal jurisdiction by 39(3) of the Judiciary Act 1903 (Cth).

It was therefore found that any claim or defence genuinely raised and relying on a claim arising from federal legislation cannot be heard in the VCAT.

The implications for BPC

In short, the case law is clear. Effectively, only a Court has been granted authority to determine federal matters or hear matters with interstate parties.

This case law relates to disputes in Tribunals, however, the limitation may extend to other bodies. See the language of the High Court at paragraph 43 of Burns v Corbett:

“…a State law purporting to authorise an agency of the government of a State other than a court to determine, for example, a dispute between residents of different States would be invalid because Ch III left no room for such an adjudication.”

Practical problems ahead

The practical effect of this could be very problematic for the BPC’s dispute regime. What happens if a party before the BPC raises a genuine claim or defence under the ACL or other Cth law? How will it deal with this?

Or, what if the BPC forms the same view as the VCAT that the determination of whether a party is an interstate resident is made at the time of the application being lodged, what happens if a homeowner or owner-builder moves interstate and then has a BPC application?

Such jurisdictional issues may seem narrow, but such issues could be used by unscrupulous parties, say dodgy builders to pose as owner builders to seek displace the new regime.

Only time will tell.

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• building law
• litigation
• regulatory compliance