VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
CIVIL DIVISION
BUILDING AND PROPERTY LIST	
vcat reference No. BP1230/2020	
CATCHWORDS	
DOMESTIC BUILDING DISPUTE – whether a business partnership existed - whether the payment of monies into a bank account held by one person is prima facie evidence that the holder of that bank account is a partner in the building business operated by the building practitioner to whom the money was paid – whether the deposit of monies into a bank account in the name of one person constitutes receipt by that person of those monies - whether the holder of a bank account in which monies are deposited benefits from those deposits - whether the Tribunal has jurisdiction to order the payment of money by way of restitution against a person who does not fall within any of the categories of persons or entities set out in s 54 of the Domestic Building Contracts Act 1995 (Vic)  - whether the requirement to demolish and rebuild partially constructed building works constitutes a total failure of consideration giving rise to a claim in restitution for money had and received. 	

first APPLICANT	Deborah Mason	
second applicant	Lance Swindells	
FIRST RESPONDENT	David Lancaster	
SECOND RESPONDENT	Sharlene Smith	
WHERE HELD	Melbourne/Videoconference – remote	
BEFORE	Deputy President E Riegler 	
HEARING TYPE	Hearing	
DATE OF HEARING	14 December 2022	
LAST DATE FOR FILING WRITTEN SUBMISSIONS	6 April 2023	
DATE OF ORDER	7 July 2023	
CITATION	Mason and Anor v Lancaster and Anor (Building and Property) [2023] VCAT 778	

THE TRIBUNAL ORDERS THAT:
1.	The first respondent must pay the applicants $50,500.
2.	The claim against the second respondent is dismissed.

3.	Costs reserved.

E Riegler 
Deputy President			

APPEARANCES:		
For the Applicants:	Mr Andrew Donald of counsel	
For the First Respondent:	In person (only at commencement of hearing)	
For the Second Respondent:	Mr A Ritchie of counsel	

Reasons
introduction
1.	The applicants were the owners of a residential property located in Simpson (the Property). On or around 24 June 2019 they entered into a building contract under which the first respondent (Mr Lancaster) agreed to renovate the existing dwelling located on the Property (the Contract). The Contract to renovate the dwelling was predominantly oral. There was no formal written document complying with s 31 of the Domestic Building Contracts Act 1995 (Vic); nor was there any documentation which set out the terms and conditions of the Contract. The only document said to be written evidence of the Contract was an invoice dated 24 June 2029 in the amount of $33,000 and which stated, in part:
Payment for materials for works 6 Kardella Street Simpson
2.	According to the applicants, the essential terms of the Contract were that:
(a)	the applicants would pay a deposit of $33,000;
(b)	the applicants would make further payments during the progress of the building work;
(c)	the building work would comprise;
(i)	renovations to the bathroom;
(ii)	an extension for a new kitchen and installation of a new kitchen;
(iii)	internal works converting the old kitchen into a dining room and extending the lounge room;
(iv)	construction of a new exterior deck;
(v)	the construction of an ensuite to the master bedroom;
(vi)	new flooring and windows;
(vii)	new roof;
(viii)	electrical rewiring;
(ix)	various plumbing works
(x)	installing colour bond external cladding;
(xi)	installation of a wood heater;
(xii)	replastering the interior the dwelling;
(xiii)	all repainting the interior of the dwelling; and
(xiv)	new doors and other fixtures.
(d)	the building works would commence in July 2019.
3.	It is uncontested that the applicants paid $33,000 into a CBA bank account in the name of the second respondent (Ms Smith) on 4 July 2019 and a further $12,000 into that same CBA bank account on 7 August 2019. At that time, Ms Smith and Mr Lancaster were a married couple and living together. They have since separated. 
4.	It is also uncontested that Mr Lancaster carried out building work on the Property during October 2019. That building work comprised installing concrete stumps and bearers forming part of the subfloor for the proposed extension and the exterior deck.
5.	According to the applicants, the building work performed by Mr Lancaster was defective and has since been demolished and rebuilt. Consequently, they contend that they received no benefit for the work undertaken by Mr Lancaster.
6.	The applicants claim against both respondents. The claim comprises several elements. First, they seek reimbursement of the monies paid under the Contract of $45,000. Additionally, they claim a further $5,500 being the cost of the demolishing and rebuilding the work undertaken by Mr Lancaster. 
7.	Mr Lancaster, who was self-represented and who initially appeared at the hearing on 14 December 2022 offered no defence and admitted the claim against him before leaving the remote hearing. Ms Smith was legally represented by Mr Alistair Ritchie of counsel. She denied all claims against her. 
8.	The applicants were represented by Mr Andrew Donald of counsel. Mr Donald submitted that the claim against Ms Smith is couched in terms of a claim in restitution or alternatively, contract. In essence, Mr Donald submitted that there was a total failure of consideration and as a consequence, the applicants were entitled to recover the whole of the amount which they paid under the Contract by way of a restitutionary claim derived from money had and received. In addition, the applicants claim a further $5,000 for the cost of demolishing and rebuilding the work undertaken by Mr Lancaster. The total amount claimed is $50,500. 
9.	Consequently, the hearing on 14 December 2022 proceeded on the basis that only the claim as against Ms Smith was to be heard, given that Mr Lancaster had admitted the full amount claimed against him and raised no defence or objection to an order being made to that effect. The position adopted by Mr Lancaster was consistent with his correspondence to the applicants dated 23 January 2023, where he stated, in part: 
I apologise for the circumstances in which this matter has been handled on my behalf, however I’m not currently in a position to make full payment of $45,000.00 for reasons I do not wish to go into at this stage. I am in a position to make payments of $1,000.00 per month to repay the debt owing.
10.	Although the above correspondence refers to a debt of $45,000, Mr Lancaster conceded the additional $5,500 claimed by the applicants at the commencement of the hearing on 14 December 2022. 
11.	At the conclusion of the hearing on 14 December 2022, both Mr Donald and Mr Ritchie sought leave to file further closing submissions and closing submissions in reply. To that end, orders were made for the filing of any further written submissions, the last of which were filed on 6 April 2023.
The issues
12.	The applicants’ claim against Ms Smith is premised on a finding that Ms Smith and Mr Lancaster were carrying on a domestic building business in partnership and that Mr Lancaster entered into the Contract as agent of that partnership. If that allegation is proven, the applicants claim:
(a)	that there was a total failure of consideration under the Contract; and as a result, the applicants are entitled to restitution from Ms Smith in the amount of $45,000, being the payments made under that Contract (the Restitution Claim); and/or 
(b)	alternatively, Ms Smith is jointly liable for breaching the terms of the Contract and as a result, the applicants are entitled to compensation for the loss which they have suffered by reason of that breach (the Damages Claim).
13.	I note that Mr Donald further submitted that even if the applicants are unable to prove the respondents were jointly carrying on business in partnership, the fact that payments were made into a bank account solely in the name of Ms Smith is sufficient, of itself, to entitle the applicants to recover under the Restitution Claim. 
were the respondents carrying on business in partnership?
14.	It is not contested that the amount of $45,000 was paid into a CBA bank account solely in the name of Ms Smith (the CBA bank account). Mr Ritchie submitted, and I accept, that fact alone is not determinative that Ms Smith and Mr Lancaster were operating a building business in partnership. 
15.	However, Mr Donald submitted that there are several other factors which support the applicants’ contention that Ms Smith was carrying on business in partnership with Mr Lancaster. Mr Donald referred to several provisions of the Partnership Act 1958 (Vic), which provide, in part: 

5	Definition of partnership
(1)	Partnership is the relation which subsists between persons carrying on a business in common with a view of profit and includes an incorporated limited partnership within the meaning of Part 5.
6	Rules for determining existence of partnership
In determining whether a partnership does or does not exist regard shall be had to the following rules –
…
(3)	The receipt by a person of a share of the profits of a business is prima facie evidence that that person is a partner in the business, but the receipt of such a share or of a payment contingent on or varying with the profits of a business does not of itself make that person a partner in the business …
16.	Mr Donald submitted that Ms Smith shared in the profits of the domestic building business and as a consequence, Rule 6(3) of the Partnership Act 1958 (Vic) raises a rebuttable presumption that Ms Smith is a partner in the business. In support of that submission, Mr Donald also referred to the judgment of the Full Court of the Federal Court of Australia in Momentum Productions Pty Ltd v Lewarne, where Spender, Jessup and Middleton JJ stated:
29. 	It was agreed that the respondent was to receive a share of the profits in the business of the hotel. In those circumstances, the effect of r (3) in s 2(1) of the Partnership Act was that, prima facie, the respondent was a partner in the business. However, the appellants stressed the second limb of the opening passage of the rule, namely, that the receipt of a share of profits does not of itself make the recipient a partner in the business concerned. That is true, of course, but pars (a) – (e) of the rule show examples of the circumstances in which the receipt of a share of profits need not lead to the conclusion that the recipient is a partner. Paragraph (d) and (e) refer to situations in which, quite clearly, partnership would be negatived by the context. Paragraph (d) refers to a situation where monies are advanced on loan, with the lender receiving a share of the profits by way of or in the place of interest. Even then, such an arrangement does not “of itself” make the lender a partner, but only where the contract in question is in writing and signed by or on behalf of all the parties thereto.
17.	Mr Donald also referred to a decision of the New South Wales Supreme Court in AM Marketing Pty Ltd v Howard Media Pty Ltd, where Barrett J stated:
76	It is implicit within the s 1 definition that, for a partnership to exist, three conditions must be satisfied: first, a business must be carried on; second, it must be carried on by persons in common; and, third, it must be conducted with a view to profit.
…
79	It was submitted by counsel for Howard Media that the effect of s 2(3) of the Partnership Act (as set out in paragraph [75] above) was that the sharing of profits derived from the publications by Howard Media and AM Marketing is prima facie evidence of a partnership, so that there is an evidentiary presumption that needs to be negatived or displaced. Reliance was placed on what was said at [30] of Momentum Productions Pty Ltd v Lewarne [2009] FCAFC 30; (2009) FCR 268 174.
18.	Mr Donald conceded that the presumption of partnership can be rebutted by contrary evidence. However, he submitted that in the present case, there are no circumstances present to rebut or negate that presumption.
19.	It is clear from the authorities referred to by Mr Donald that the presumption of partnership must be considered in context. So much is evident from the judgment of Barrett J in AM Marketing Pty Ltd v Howard Media Pty Ltd, where his Honour further observed: 
81	It is clear that the “presumption of partnership” referred to in Momentum Productions (above) arose not merely from the sharing of profits but also from a finding that there was nothing in the particular factual circumstances of the case to negative this conclusion.
82	The existence of a partnership must be determined by an examination of the terms of the parties’ contract and a course of dealing between them. Lindley LJ put the matter thus in Badeley v Consolidated Bank (1888) 38 Ch D 238 at 258:
“I take it that it is quite plain now, ever since Cox v Hickman, that what we have to get at is the real agreement between the parties. It is no longer right to infer either partnership or agency from the mere fact that one person shares the profits of another. It may be, and probably it is true, that is all that is known is that one person carries on a business and shares the profits of that business with another, prima facie those two are partners, or prima facie the person carrying on the business is carrying it on as the agent of the person with whom he shares his profits. That may be true, and I think is true even now; but when you have a great deal more to consider it appears to me to be a fallacy to say that you are to proceed upon the idea that sharing profits prima facie creates a partnership or an agency, and that prima facie presumption has to be rebutted by something else. I cannot help thinking that Sir Montague Smith was quite correct when he dealt with that mode of reasoning in the case of Mollwo, March, & Co v The Court of Wards. He says this: “It was contended at the Bar, that whatever may have been the intention, a participation in the net profits of the business was, in contemplation of law, such cogent evidence of partnership that a presumption arose sufficient to establish, as regards third parties, that relation, unless rebutted by other circumstances. It appears to their Lordships but the rule of construction involved in this contention is too artificial; for it takes one term only of the contract and it once raises a presumption upon it. Whereas the whole scope of the agreement, and all its terms, ought to be looked at before any presumption of intention can properly be made at all.  
20.	Turning then to the evidence, Ms Smith said that the circumstances which led to Mr Lancaster having access to the CBA bank account arose because Mr Lancaster was unable to obtain a bank facility in his own name because of certain personal circumstances. 
21.	Ms Smith gave evidence that she had held the CBA bank account since her 20s and well before she met Mr Lancaster in 2014. She recounted that in 2017, Mr Lancaster started working for his father undertaking renovations and also for himself as a painter and decorator. Ms Smith said that Mr Lancaster did not have a bank account and was unable to obtain one due to personal circumstances (which I consider unnecessary to repeat). At that point, she gave Mr Lancaster her access card to the CBA bank account for his use. She said that after 2017 she did not use the CBA bank account as her primary bank account and arranged for her wages to be deposited into an alternate Bendigo bank account.
22.	I accept Mr Donald’s submission that there is no corroborating evidence to verify that Mr Lancaster was unable to obtain a bank facility in his own name. However, that is not the point. The evidence of Ms Smith is still relevant because it goes to her state of mind – her belief at the time, which underpinned her decision to hand over her access card for the CBA bank account. Specifically, her evidence was that she believed that Mr Lancaster was unable to obtain a bank facility in his own name because of his personal circumstances. It was this belief, whether factually correct or not, that played a part in motivating Ms Smith to hand over her CBA bank account access card.
23.	Mr Donald further submitted that Ms Smith’s evidence did not negate the presumption that a partnership exists. He pointed to various entries in the bank statements of the CBA bank account, produced during the course of this proceeding, which clearly showed that Mr Lancaster was not the only beneficiary of monies paid into the CBA bank account. In his written submissions, Mr Donald pointed to the following factors:
18.	… The evidence also established that the First Respondent also bought groceries and cooked meals. Annexure 1 to this submission identifies 117 entries which are or appear to be household purchases or expenses which directly have benefited the Second Respondent, such as loan repayments, instalment payments of an insurance policy or a holiday in far North Queensland. The Tribunal should find that allegation that the account was used by the first Respondent as his own account and the payments were applied for his own benefit and not that of the second respondent is untrue. The fact is that the account was significantly used for the benefit of the Second Respondent as revealed by her evidence during cross-examination.
19.	… Prior to the payment into the account of the sum of $33,000.00 the account was $391.39 in credit. Prior to the payment into the account of the sum of $12,000, the account was $739.84 in credit. An analysis of the bank statements establish a clear connection between the crediting of each of the payments on the expenditure for the benefit of the Second Respondent of the money constituted by each payment.
24.	Mr Donald also referred to the invoice dated 24 June 2019, which Mr Lancaster had prepared and given to the applicants, and which the applicants contended formed part of the Contract. That document also included the following handwritten text under the invoice amount of $33,000: 
Com bank 
BSB 	063-533
ACC	10…[number omitted]
Marlene Smith
25.	Mr Donald submitted that the reference to Marlene Smith was a further indication that she was in partnership with Mr Lancaster. 
26.	In contrast, Mr Ritchie submitted that there is no evidence that there was a receipt by Ms Smith of a “share of profits” of any business with Mr Lancaster. He pointed to Ms Smith’s evidence that:
(a)	the relevant bank account in which the payments were made were controlled by Mr Lancaster and used for both his personal and business purposes; and
(b)	there were a number of automatic payments debited from the CBA bank account prior to Mr Lancaster being given access to that account, which included monthly mortgage repayments for Ms Smith’s home and payments to Colonial Mutual. Those automated payments merely continued after Mr Lancaster was given exclusive access to the CBA bank account.
27.	Mr Ritchie further submitted that the payment of utility bills, council rates and home groceries are common expenses associated with the matrimonial home which Mr Lancaster and Ms Smith occupied at the relevant time. He argued that those payments were not evidence of a share of profits, notwithstanding that Ms Smith may have indirectly benefited by the payment of those expenses. Mr Ritchie pointed to other evidence which he argued militated against the finding that there was a partnership between Ms Smith and Mr Lancaster. In his written submission, he stated: 
17	Even in the event Tribunal finds that these matters amount to a receipt of the profits of a business it is submitted that, alone and without support, that cannot lead to finding that Ms Smith was in partnership with Mr Lancaster. The other evidence does not support a finding that there was a partnership and the following evidence of Ms Smith militates against the finding that there was a contract of partnership between her and Mr Lancaster: 
(a)	she did not do the books for Mr Lancaster’s building business and she never saw an invoice book for the business; 
(b) 	the handwritten invoice at page 8 of the Tribunal Book is Mr Lancaster’s handwriting; 
(c) 	she used her Bendigo Bank account and her wages from her job at Target went into that account; 
(d) 	Mr Lancaster did not discuss his business with her and that if she “stuck (her) nose in” she would  “get in trouble”; 
(e)	she didn’t know about the contract with the Applicants (although she did know, because he mentioned it, that Mr Lancaster was “doing a job in Simpson”);
(f)	she had no knowledge of either the July 2019 payment of $33,000 or the August 2019 payment of $12,000 until six months after they were made;
(g)	other than the payments referred to in paragraph 15 above, she did not receive payments from the account and she did not know what the payments out of the account were for because they were made by Mr Lancaster.
28.	I note that the applicants each gave evidence of a conversation that they had with Mr Lancaster at the time when he directed that the first payment be made into the account held by Ms Smith. They recounted that Mr Lancaster had told them that Ms Smith was responsible for “doing the books”. In my view, it is difficult to attribute any material weight to that statement in circumstances where Ms Smith gave direct evidence to the contrary. 
29.	In any event, being responsible for “doing the books” is not determinative of a partnership. Moreover, the statement may be equally explicable as the means adopted by Mr Lancaster to mitigate any misgivings that the applicants may have had when being asked to pay an amount into an account that was not readily identifiable to him. 
30.	During cross-examination, Ms Smith conceded that there were a number of entries in the bank statements which evidenced payments for what might be categorised as common expenses. For example, the payment of utilities relating to the ‘matrimonial’ home or cash withdrawals that might have been used for purchasing food or other household items jointly used by them. Mrs Smith also conceded that she had shared a holiday with Mr Lancaster in Far North Queensland and that the holiday was paid for by Mr Lancaster, although she said that did not know where he obtained the funds to pay for that holiday.
31.	However, in his written submissions, Mr Ritchie submitted:
37.	The bank statements show that:
(a)	money evidently spent by Mr Lancaster on a shared holiday with Ms Smith in late July or early August was from sources other than the Applicants;
(b)	the $12,000 deposited on 7 August was almost entirely withdrawn by 18 August 2019;
(c)	many of the withdrawals appear to be for building materials and for small purchases at convenience stores at range of different towns around the Warrnambool area;
(d)	there was sufficient other funds in the account from sources other than the Applicants to cover the $355 of withdrawals that Ms Smith acknowledges were made for her direct benefit from 7 August and 18 August; namely:
(i)	her automatic loan repayments of $100 each of 7 August and 14 August;
(ii)	a direct debit of $25 to Colonial Mutual on 8 August;
(iii)	a payment to Wannon Water of $130 on 10 August.
38.	Otherwise, the effect of Ms Smith’s evidence was that:
(a)	she did not make any of the withdrawals in the period between 7 and 18 August;
(b)	they were made by Mr Lancaster.
Findings 
32.	In my view, there are several factors which militate against a finding that Ms Smith and Mr Lancaster were in a business partnership or that Ms Smith was receiving a share of the profits of that business (assuming that there were any profits). 
33.	First it is not clear whether the business made any profit capable of being shared. There have been no financial documents produced, other than the CBA bank account statements. Although the statements showed the deposits made by the applicants of $33,000 and $12,000, they provide no definitive insight as to how Ms Smith may have profited by those deposits. In fact, the CBA bank account statements disclosed that the deposits were transitory as the amounts deposited were withdrawn from the CBA bank account not long after being deposited. Where those funds went is unknown.
34.	Further, I accept Mr Ritchie’s submission that there were sufficient funds in the CBA bank account to pay for most if not all of the automated and other withdrawals relating to the mortgage loan, insurance premiums and general utilities for the matrimonial home, without having regard to the deposits made by the applicants. This finding is supported by an examination of the entries in the CBA bank account statements, which reveal:
(a)	$33,000 was deposited on 4 July 2019. Prior to that deposit, the account balance was $391.39. On the same day, there were multiple withdrawals totalling $24,811.31. By the end of 9 July 2019, there were further withdrawals totalling $7,610.37, leaving a balance of $969.71 (before a deposit of $2,500 was made on that day).
(b)	$12,000 was deposited on 7 August 2019. Prior to that deposit the account balance was $739.84. By 18 August 2019, that whole amount had been withdrawn leaving a balance of $675.04.
35.	Ms Smith gave sworn evidence consistent with the entries in the CBA bank account statements that from 4 July 2019 until 10 July 2019, the only withdrawals made to her or on her behalf related to a transfer of $99 on 5 July 2019, a payment to Colonial Mutual of $25 on 8 July 2019 and a loan repayment of $77 on 10 July 2019. She gave further sworn evidence, again consistent with the entries in the CBA bank account statements, that after 7 August 2019 until 22 August 2019 she made no withdrawals from the CBA bank account, apart from two automated withdrawals towards her loan repayment totalling $200. In light of that evidence, and importantly, without any contradictory evidence, it is difficult to conclude that Ms Smith benefited from the deposits made by the applicants.
36.	Moreover, the fact that there are withdrawals which mutually benefited both Ms Smith and Mr Lancaster, does not, of itself, mean that Ms Smith was sharing in the profits of the business. Indeed, r (2) of the Partnership Rules set out under s 6 of the Partnership Act 1958 contemplates a scenario where the sharing of gross returns does not give rise to a presumption of partnership. It states: 
(2)	The sharing of gross returns does not of itself create a partnership whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived.
37.	In my view, the 117 entries in the CBA Bank statements highlighted by Mr Donald, largely comprise common living expenses and are more likely to constitute the sharing of gross returns, rather than sharing of profits. By comparison to the many hundreds of other entries which indicate expenditure related to building activity, those 117 entries assume less significance.
38.	Second, the conflating of personal expenditure with business expenditure appears to be more consistent with an unsophisticated accounting process, rather than evidence of profit sharing. That unsophisticated accounting process is also consistent with the careless way in which Mr Lancaster contracted with the applicants. Specifically, there was no formal contract, there was no specification, nor was there any warranty insurance taken out in accordance with the relevant provisions of the Building Act 1993. It is not surprising that having regard to the way in which the building project was handled, that the accounting practices adopted by Mr Lancaster fell far short of what might be expected.
39.	Third, and notwithstanding the forceful submissions made by Mr Donald, I consider that the invoice dated 24 June 2019 prepared by Mr Lancaster and given to the applicants on or about that day indicates that Mr Lancaster was operating as a sole trader, rather than in partnership with Ms Smith. Specifically, I do not accept that the reference to ‘Marlene Smith’ appearing directly beneath the CBA bank account details indicates that Ms Smith was a party to the Contract. In my view, it is more likely that the reference to ‘Marlene Smith’ appears on the invoice because that is the name of the CBA bank account, details of which were given directly above the name of that account. Importantly, however, the invoice states that it is from ‘Doc Lancaster’. It does not state that it is also from Ms Smith. 
40.	Fourth, the email correspondence from Mr Lancaster to the applicants dated 23 January 2023, wherein he offers to repay the amounts paid by way of instalments is expressed in the singular. He does not make reference to Ms Smith in that correspondence. 
41.	Fifth, in the short period that Mr Lancaster appeared at the hearing on 14 December 2022, he said nothing which would implicate Ms Smith as a partner in the business or that she should share liability. In fact, he admitted the whole of the claim was payable by him. Again, this is another factor which militates against a finding that the respondents were operating within business partnership.
42.	In conclusion, I am not satisfied that there is sufficient evidence to establish that Ms Smith was in receipt of a share of the profits of the business to give rise to the presumption that she is a partner in that business. Further, even if there was sufficient evidence to establish that Ms Smith was in receipt of a share of the profits of the business, I find that the circumstances giving rise to that rebut or negate the presumption in this case. Moreover, I find there is insufficient evidence to otherwise establish that Ms Smith was a partner in the business operated by Mr Lancaster or that she received, in her personal capacity, the deposited amounts of $45,000, notwithstanding that they were paid into the CBA bank account held by her. In that regard, I accept Mr Smith’s evidence that she was unaware of the deposits made by the applicants until well after those deposits had been made and dispersed.
43.	I also accept Ms Smith’s evidence that from 2017, she authorised Mr Lancaster to use the CBA bank account at his discretion and that she did not personally use that account, other than maintaining automated withdrawals linked to her loan facility and insurance premiums. Consequently, I find that the applicant’s claim in contract as against Ms Smith is to be dismissed.
44.	It is regrettable that Ms Smith allowed her banking account to be used for a business over which she had no control. That situation has, to a large extent, led to this litigation as it has, no doubt, created an impression that she may have been involved in the business operated by Mr Lancaster. However, as I have already observed, the failure to observe the legislative requirements under the Building Act 1993 (Vic) and the Domestic Building Contracts Act 1995 (Vic) demonstrate a failure on the part of Mr Lancaster to adhere to the professional standards required of building practitioners. This failure of professionalism is then reflected in the unsophisticated way that Mr Lancaster accounted for receipts and expenditure. Specifically, conflating personal expenditure with business expenditure and using a bank account that was not readily identifiable to him or the business which he operated is reflective of that unsophisticated method of accounting.
Claim in restitution
45.	As indicated above, the applicants also claim against Ms Smith by way of a restitutionary claim derived from money had and received. In that regard, Mr Donald submitted:
28.	Further it is clear from the decision of Croft J in JD No 6 (dava) v P Battley Holdings Pty Ltd [2011] VSC 353 that even if the Tribunal found that the Second Respondent was not a party to any contract, that a claim in restitution for failure of consideration can be made against the person who received the money in reliance on a promise to perform the obligations the subject of a contract.
46.	I accept the proposition that a failure of consideration, giving rise to a claim in restitution, is not limited to situations where consideration is illusory or where the contract is void but also includes situations where performance of the terms of the contract have failed. In Roxborough v Rothmans of Pall Mall Australia Ltd, Gummow J explained:
101	The term ‘failure of consideration’ is used in the law to mean several things. The point was made as follows by Stoljar: 
‘First, a consideration fails because the defendant’s promise is insufficient or illusory or formally void, the failure thus being an initial invalidity preventing a contract from being formed. Secondly, we say that the consideration fails where a promisor fails to perform; the failure is now simply a breach of contract, though usually a substantial or important breach. But, thirdly, failure of consideration has also a much older and specialised sense, one that describes a specific remedy when, upon the collapse of a bargain, the promisee seeks to recover money had and received by the promisor. Thus failure of consideration specifies not only a claim, but also the particular basis for that claim”. (footnotes omitted)
47.	Mr Ritchie submitted that the Tribunal did not have jurisdiction to determine the restitutionary claim. Reference was made to Tucci v Victorian Civil and Administrative Tribunal & Anor, where Cavanough J stated: 
41	I turn the plaintiff’s arguments concerning equitable defences and remedies. I am not persuaded by them. It is true that VCAT, being a creature of statute and not being an ordinary court (much less a superior court), does not have a general equitable jurisdiction. However it is open to Parliament to clothe VCAT, to such extent as Parliament sees fit, with the power, or indeed the duty, to recognise and apply equitable doctrines, defences and remedies or to proceed in accordance with, or by analogy with, equitable principles. Parliament might do this expressly or by application…
48.	Mr Donald submitted, and I accept, that it is open for the Tribunal to exercise equitable jurisdiction in order to resolve a domestic building dispute, including ordering the payment of money by way of restitution. However, the Tribunal’s powers are not unfettered and are limited by the enabling legislation from which they are derived. 
49.	In this case, Mr Donald submitted that the dispute between the parties is to be categorised as a domestic building dispute, within the meaning of that term as defined in s 54 of the Domestic Building Contracts Act 1995 (the DBC Act). Section 53 of that Act bestows jurisdiction on the Tribunal to make an order for payment by way of restitution. 
50.	However, s 54 of the DBC Act specifically lists the category of persons or entities falling within the definition of a domestic building dispute. For example, a dispute or claim arising between a building owner and a builder is capable of giving rise to a domestic building dispute. However, the categories of persons listed in s 54 do not extend to the domestic partner or spouse of a builder. Consequently, and having regard to my findings set out above, I do not accept that a dispute between the applicants and Ms Smith falls within the definition of a domestic building dispute, within the meaning of that phrase as defined in s 54 of the DBC Act.
51.	Nevertheless, Mr Donald submitted:
9.	By operation of s.54 of the Act, a domestic building dispute include the dispute or claim arising between a building owner and a builder in relation to domestic building contract or the carrying out of domestic building work. The Second Respondent is a builder within the meaning of s.54. Even if the Tribunal finds that she is not a builder, the jurisdiction of the Tribunal is enlivened with respect to the claim for an order by way of restitution. In that regard, the word “arising” must have work to do as s.54 can be effective without it viz. “a domestic building dispute includes a dispute or claim between a building owner and a builder in relation to domestic building contract for the carrying out of domestic building work.”
10.	The word “arising” means “originating from or occur as a result of”. Its meaning is informed by other areas of the law where it has been given a broad meaning, for example, in motor traffic law in the interpretation of the expression “arising out of the use of a motor vehicle” and the like expressions. In State Government Insurance Commission v Stevens, in relation to the phrase “arising out of or caused by” a vehicle, the High Court said that “expression ‘arising out of’ must be taken to require a less approximate relationship of the injury to the relevant use of the vehicle than is required to satisfy the words ‘caused by’”. 
52.	I do not accept State Government Insurance Commission v Stevens Brothers Pty Ltd  materially assists in determining who qualifies as a party to a domestic building dispute, for the purposes of s 54 of the DBC Act. In that case, the High Court of Australia considered that a wide approach was to be taken when looking at the relationship between the claimant’s injury and the motor vehicle accident. The Court was not looking at the category of persons that may fall within the relevant legislation. In my view, applying State Government Insurance Commission v Stevens Brothers Pty Ltd to the interpretation of s 54 of the DBC Act simply means that a wide approach should be taken when looking at the relationship between the loss and damage suffered by a claimant, such as a building owner, and the domestic building work or the domestic building contract.
53.	However, I do not accept that State Government Insurance Commission v Stevens Brothers Pty Ltd supports an interpretation of s 54 of the DBC Act which would lead to a broadening of the categories of persons who qualify as parties to a domestic building dispute. The provision specifically lists the categories of persons which qualify as persons who may be a party to a domestic building dispute. To give the provision the wide meaning submitted by Mr Donald would result in the provision effectively giving the Tribunal accrued jurisdiction, as long as some aspect of the claim could be tied to domestic building work or the domestic building contract. 
54.	If that were intended, there would be no need to expressly list the categories of persons or entities that can fall within the definition of a domestic building dispute. The provision could simply state that a domestic building dispute is a dispute or claim arising in relation to a domestic building contract or the carrying out of domestic building work. It would be superfluous, even contradictory, for the legislation to list the categories of persons or entities that qualified as a party to a domestic building dispute. In my view, it was not the intention of the legislature to broaden the categories of persons that qualify as a party to a domestic building dispute, beyond what is listed under s 54 of the DBC Act.
55.	Consequently, I am of the view that the Tribunal does not have jurisdiction to order purely equitable relief in favour of the applicants against Ms Smith. This is because I have found that Ms Smith is not a party to the Contract. In other words, Ms Smith does not fall within any of the categories of persons or entities identified under s 54 of the DBC Act. 
56.	Even if the Tribunal’s jurisdiction to order purely equitable relief was enlivened once it was identified that there was a domestic building dispute between one or more of the parties in the proceeding, I would not exercise that power in the present case. This is because the claim in restitution fails on other grounds. 
57.	Specifically, I am not persuaded that Ms Smith was the recipient of the amounts paid by the applicants. As I have already found, the mere fact that the payments were paid into the CBA bank account in the name of Ms Smith was not definitive in establishing that she received those amounts. The account was at the relevant time controlled by Mr Lancaster and the amounts deposited disbursed not long after the were deposited. 
58.	I note that Mr Donald submitted Ms Smith benefited from the deposits made by the applicants. However, as I have already found, the amounts deposited by the applicants were not necessarily applied towards automated withdrawals as there were sufficient funds in the CBA bank account from other sources to pay for those amounts. Therefore, I do not accept that Ms Smith benefited from the deposits made by the applicants to the extent necessary to establish that she received those amounts. 
59.	Further, even if it were the case that Ms Smith received the amounts paid by the applicants, I am not persuaded that there has been a total failure of consideration.  In that regard, I accept that the work that Mr Lancaster undertook was, in all likelihood, defective and as a consequence, it may have been reasonable to demolish that work and rebuild it. However, that may not constitute a total failure of consideration if the materials brought onto site by Mr Lancaster at his expense were re-used.  In this case, it is unclear whether the concrete stumps and timber bearers supplied and installed by Mr Lancaster were reused.  It appears from the photographs produced during the course of the hearing that the timber bearers and at least some of the concrete stumps may have been reused in the reconstruction of the subfloor. 
60.	The evidence from Mr Hickey, the carpenter engaged by the applicants to undertake the remedial work, is that he charged $5,000 for that work. Mr Hickey’s invoice, tendered in evidence, does not state that new concrete stumps and bearers had to be purchased. 
61.	Therefore, I am not satisfied based on the evidence before me that there has been a total failure of consideration. 
62.	Consequently, and having regard to my findings above, I will order that the claim in restitution as against Ms Smith is also to be dismissed.

E Riegler
Deputy President