With the various challenges associated with the construction industry at the moment, domestic building disputes are on the rise. These disputes generally involve a combination of property owners, builders, sub-contractors (eg plumber), architects, and engineers.
If you find yourself involved in a domestic building dispute, it’s important to understand the appropriate steps to take to find a resolution.
When taking action, many people think you go straight to the Victorian Civil Administrative Tribunal (VCAT). However, before you can apply to VCAT you are required to apply to DBDRV to try and resolve the dispute without the cost often associated with VCAT.
How does it work?
- When a dispute application is lodged at the DBDRV, a dispute resolution officer will determine whether the dispute is suitable for conciliation. As the applicant, you will be required to prepare a List of Matters in the Dispute document which identifies to the DBDRV the issues that are in dispute. This document is then provided to the party who you are in dispute with, who are then given the opportunity to provide their response to that List of Matters in Dispute document and add any further disputed items. Based on the application, a dispute resolution officer will notify both parties and discuss next steps, generally it will involve you having to prepare for conciliation.
- Sometimes, before the conciliation, the DBDRV will appoint an independent assessor to inspect the property to investigate the items in dispute and prepare a report which is then provided to the dispute resolution officer and the parties. This assessor is at no cost to the parties. The report prepared by the assessor is a very helpful document as it identifies each individual item in dispute, whether the assessor believes the items are defective, and if so, whether the defect is caused by the other party.
- A conciliation will then take place where your allocated conciliator will assist you and the other party to assess and understand the dispute and determine the best way to resolve the matter moving forward. The dispute resolution office may request the parties provide additional documents before the conciliation.
- On the day of the conciliation, the conciliator will facilitate the conference and listen to each party to help the parties resolve the dispute. If a party does not participate in the conciliation, the DBDRV may issue a dispute resolution order, or issue a certificate stating that a party has failed to participate in the conference.
- The process of the conciliation is the applicant will go first to have an opportunity to summarise their case and what they would like the outcome to be:If the applicant is an owner, they may be seeking the other party fix the work or the other party pay money to compensate for the defective work; or
- If the applicant is a builder, then they may be seeking the owner pay outstanding monies or rectify the breach of the contract so works can continue.
- Then the second party will have an opportunity to summarise their case and what the would like the outcome to be. The conciliator will then assist the parties reach a resolution.
- At the end of your conciliation one of the following outcomes may be achieved:
- An agreement of resolution is reached and documented in a formal record of agreement; or
- If there is a partial resolution or you are unable to resolve the dispute, a binding dispute resolution order may be issued in which the DBDRV determine the resolution; or
- If you are unable to resolve the dispute at the conciliation conference, DBDRV may issue the parties with a certificate of conciliation (dispute not resolved). This is when you will then be entitled to make an application to VCAT if you wish.
- The success of DBDRV is determinative on both parties listening to each other and communicating to ensure the best possible
outcome is reached. If the parties do not negotiate in good faith, then the process is likely to fail.
- If you are not successful at the DBDRV and a certificate of conciliation (dispute not resolved) is issued, it is only then you can proceed and take this further to VCAT. But it is important to remember that currently VCAT is experiencing significant delays, so whilst many parties believe that the DBDRV cannot assist them and they need their dispute to be referred to VCAT quickly (which in some cases is true), all parties should give DBDRV a fair opportunity to resolve the dispute as otherwise you could be in the VCAT system for 1-2 years before you obtain an outcome. At the moment, to even have your VCAT Application referred to a directions hearing is several months and if your matter involves a trial for 5 or more days, you may even be looking at a hearing date in 2024!
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