New arrangements for domestic building disputes now in place
Domestic Building Dispute Resolution Victoria (DBDRV): for better or worse, this is a name that builders and consumers in Victoria will become very familiar with following recent changes to the Domestic Building Contracts Act 1995 (Vic).
DBDRV will now serve as a gatekeeper to the Victorian Civil and Administrative Tribunal (VCAT) for parties to a domestic building dispute. Parties in most cases will be unable to commence a domestic building proceeding in VCAT unless they have gone through DBDRV’s conciliation process first.
The conciliation process
Prior to referring a dispute to DBDRV, the referring party is expected to take reasonable steps to resolve their dispute with the other party or parties. A failure to do so can be taken into consideration by DBDRV in deciding that the dispute is not yet suitable for conciliation.
The following is a broad summary of the process adopted by DBDRV.
- A party lodges an application form with DBDRV to initiate the process.
- DBDRV will check it has jurisdiction to deal with the dispute. For example, it will check that the dispute relates to domestic building work.
- Assuming DBDRV has jurisdiction, a Dispute Resolution Officer will then assess whether the dispute is suitable for conciliation. Again, if the parties have failed to take reasonable steps to resolve their dispute prior to referral to DBDRV, the Officer may determine conciliation is not yet suitable. The Officer will also take into consideration the likelihood of conciliation resolving the dispute. If the Officer determines the dispute is not suitable for conciliation, they will issue a certificate to allow the parties to commence proceedings in VCAT. If the dispute is suitable for conciliation, the parties will be notified and arrangements for conciliation will be made.
- In some cases, DBDRV will arrange for one of its Assessors to inspect and report on building works prior to conciliation. This can be done to determine whether work is defective or incomplete. The Assessor can also make findings about the cause of a defect or steps to rectify. Importantly, the Assessor is required to report any breaches of building laws to the Victorian Building Authority, who may in turn refer any apparent contraventions to the local council.
- Conciliation will occur at DBDRV’s headquarters, on site, or by telephone/video link. Parties will put forward their positions and the Dispute Resolution Officer facilitating the conciliation will seek to broker an agreed resolution. In this way, conciliation is very similar to mediation. Importantly, the conciliation will be conducted on a without prejudice basis, meaning nothing said during the conciliation can be referred to at a subsequent hearing.
- Broadly, there are three possible outcomes from conciliation.
- The parties will come to an agreement to resolve the dispute which will be documented and signed.
- The parties will be unable to reach agreement. The Chief Dispute Resolution Officer will then issue a certificate to allow the parties to proceed to VCAT.
- The Chief Dispute Resolution Officer will issue a binding Dispute Resolution Order requiring certain things to happen (e.g. the building owner to pay money to the builder; the builder to perform certain works). Such orders can be challenged in VCAT.
What does this mean?
Domestic building disputes can be time-consuming and very costly for all parties involved. In many cases, each party’s legal fees will have exceeded $10,000 by the time a VCAT-ordered mediation occurs.
While the effectiveness of DBDRV remains to be seen, we are cautiously optimistic that it will facilitate the early resolution of many disputes, saving clients the time and cost of proceeding through the first phases of a VCAT proceeding.
We also hope that DBDRV’s Assessors will assist in weeding out applications which lack merit or are vexatious before they proceed to VCAT.
How can we help?
We have a long history of acting for both builders and owners in domestic building disputes.
As with many types of disputes, we can assist you to understand and frame issues in domestic building disputes, advise you on the strengths and weaknesses of your case, and ensure your interests are protected and advanced to the fullest extent.
Please contact us if you have any queries about DBDRV or would like to discuss a domestic building dispute you are having.
Author: James Remington