Building Dispute Resolution Victoria

Dispute resolution

The New DBDRV (Domestic Building Dispute Resolution Victoria) Is Now the First Port of Call

As announced as of 2 April 2017 a significant development occurred in the building dispute resolution space in Victoria.

An independent government agency was created which will assist with disputes resolution between owners and builders in regard to domestic building disputes. In some cases, other people such as architects and subcontractors can avail themselves of the free service.

Broadly speaking, the dispute can be about defective or incomplete work, building construction delays, issues concerning payment, and issues concerning the domestic building contract.

The dispute resolution method the service (Domestic Building Dispute Resolution Victoria, the DBDRV) uses is conciliation. Conciliation, while being very similar and sometimes being indistinguishable from mediation, is a method of dispute resolution where an impartial third party ‘conciliator’ facilitates the discussion and negotiation with a view to the disputing parties resolving it. A conciliator, as opposed to a mediator, is often someone with technical knowledge in the area of the dispute. The idea behind that obviously is being arguably more able to provide technical ‘advice’ and so lead to an increased chance of resolution.

Once the dispute has been through the conciliation process, there being eligibility criteria for being able to ‘enter’ the system, if the dispute remains unresolved, a ‘certificate’ is issued allowing the parties to then proceed to VCAT or to a court for  the dispute process to continue.

The DBDRV is obviously in its infancy so it will be interesting to see how its operation plays out in practice. One of its aims was to provide fast and fair dispute resolution services. As for the fast, reports have circulated that the service has been swamped with applications for assistance and so initially at least, and for perhaps for some period of time thereafter, that aim may not be achieved.

As is to be expected, the service hears applications to do with defective and or incomplete work, and applications are relatively easy to complete online. I have completed a couple of applications online for clients and found them pretty easy to navigate. A critical idea behind them is that the warring parties have attempted, among themselves, to settle the dispute and that fact is one thing that has to be ‘certified’ when the application is made.

If, once the application is lodged, the DBDRV deems the dispute to be unsuitable for conciliation (for example, if the dispute involves non-Victorian parties and/or is a dispute involving a commercial as opposed to a residential building and if it is clear that one of the parties will not be involved in the process) then the parties can receive something in writing which then allows them to go off to VCAT or a court to have the dispute resolved in the standard way.

As for cases which are already part of VCAT or a court process, the parties cannot now go to the DBDRV, and if the building work is more than 10 years old the dispute is ineligible.

Once the DBDRV is ‘seized of’ the dispute, the parties should or can turn up with the otherwise standard documentation, such as contract, plans and specifications, and any expert reports, and so on The types of work which can or which have to go to the DBDRV include construction, extensions and renovations, associated works such as garages, driveways, swimming pools and spas, demolition and some (only) types of repair type work. So there are exclusions, and these include where the work involved is done by a single trade such as a painter or plumber where such work is not part of more broader domestic building work.

The DBDRV has the power to issue orders which aim to compel parties in, for example, in a case where one or both parties do not honour the agreement they have reached to do so. They can also be  made to direct parties to, broadly, pay money, rectify or complete works, or arrange for others to complete work.

Parties can also be ordered to not do certain things, for example, to not prevent the other party from complying with their obligations. You will be able to go to VCAT if you do not agree with the order as made, for example an order that says the works are defective can be challenged.

If a builder does not comply with a dispute resolution order, again by way of example, the owner can notify the DBDRV who may then send an assessor out to assess the works against what the order required them to do. A breach notice can then be issued and the contract can be terminated and an application made thereafter to VCAT for appropriate orders to be made. The breach order can be challenged in VCAT and when or if challenged by the builder, the VCAT procedure ensues, after or at the end of which the owner can then end the contract. So in summary, when an order is made, it is then that the parties may validly choose to go to VCAT.

Assessors (who can be thought of as in-house building experts) are a part of the process and these assessors conduct building work assessments as part of the ‘machinery’ of the DBDRV to assist the parties with the process of dispute resolution. Other technical experts can also be brought in to assist where their particular expertise may be useful. Any contraventions of laws or regulations may still need to be reported.

The state government has obviously directed significant resources toward the new free service. It will be interesting to see how it all plays out in practice, and in particular, from a lawyer’s perspective. It will also be interesting to see how the creation of the service impacts on numbers of relevant disputes going to VCAT and also on the amount of domestic building disputes work lawyers continue to, or get retained in. legal representation will not be ‘as of right’ in the new DBDRV.

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