Disputes

 

Quarrels with builders are counterproductive and litigation should be a last resort. The Building Advice and Conciliation Service Victoria can help with complaints about builders. The Domestic building List of VCAT hears disputes and may require compulsory conferences. VCAT may award costs.

Avoiding disputes

Avoid disputes by being actively involved in your project. Take independent advice where necessary and always seek a second opinion from a qualified professional. Stay informed, ask questions and maintain good communications with your builder.

The building process is inherently difficult and things will go wrong; do not escalate disputes and be prepared to compromise. Keep a realistic perspective on issues as they arise. Quarrelling with the builder over minor items is counterproductive. Remember you and the builder are committed to each other until the end of the project and disputes may sour the relationship. Even if you have a good relationship with your builder, do not get complacent and do not stray from the requirements of the contract.

Building disputes can be time-consuming and very costly. Often consumers find that the money they have spent on legal proceedings would have been better spent repairing defects.

Resolving disputes

First, attempt to resolve your dispute with the builder. If this does not bring satisfaction, refer your complaint to the Domestic Building Dispute Resolution Victoria (DBDRV) (seeWhere to get help”. Litigation should be seen as a last resort. If litigation is necessary, ensure that your lawyer provides you with an estimate of likely legal costs so that you can decide whether to proceed with the dispute or simply repair the defects yourself.

The Building and Property List of VCAT has jurisdiction to hear disputes arising from domestic building works (seeVCAT’s Building and Property List”). The Victorian Government’s May 2013 reform strategy proposes to increase the powers of a VBA inspector who is appointed either through the VBA conciliation service, or through a party to a dispute. An inspector will have the power to issue a Rectification Order (RO) that will be binding for both consumers and builders. A RO may require, for example, a consumer to make outstanding payments to a builder where an allegation of defective work is not upheld; or require a builder to rectify defects. A party may have a RO reviewed by VCAT. At the time of writing (June 2015), these proposed changes had not been introduced.

VCAT’s Building and Property List

The Building and Property List of VCAT has exclusive and monetary jurisdiction to hear and determine all domestic building disputes, including home warranty insurance claims. Before a dispute can be heard by VCAT, an application must be filed with the Registrar, together with the appropriate fee. For information about fees and other enquiries, consult VCAT’s website (at www.vcat.vic.gov.au).

The applicant should provide three additional copies of the application to VCAT so that copies can be sent to all the other parties to the dispute.

Further information about application and hearing procedures is available on VCAT’s website (at www.vcat.vic.gov.au). For further contact details, seeWhere to get help”.

Compulsory conferences and mediation

The VCAT Registrar may first refer a matter to mediation where qualified, independent mediators will try to help the parties resolve the dispute. If mediation is successful, the mediator notifies VCAT. If mediation is unsuccessful in smaller matters (where the dispute is for no more that $10,000), the hearing proceeds immediately.

Where mediation is unsuccessful in matters involving more than $10,000, a directions hearing is held (on the same day as the mediation, if possible). More complex disputes will be referred to a directions hearing. At a directions hearing a VCAT member will set out the steps that parties must take before a dispute is heard by VCAT.

VCAT, or the Principal Registrar, may also require the parties to attend one or more compulsory conferences before the proceeding is heard by VCAT. The aim of a compulsory conference is to:

identify and clarify the issues in dispute;

promote settlement;

identify questions of fact and law; and

allow directions to be given concerning the conduct of the proceeding.

Consumers are encouraged to be properly prepared for mediation and compulsory conferences. You should know what is wrong with your building, how it is to be repaired and the repair costs. All of this information should be supported with written reports and quotations.

VCAT’s powers

VCAT can make any order it considers fair, including:

ordering the payment of money, including money owing, damages or restitution;

varying a term of a domestic building contract;

declaring a term of a domestic building contract is or is not void, or varying a contract to avoid injustice (note, s 14 DBCA states that arbitration clauses in domestic building contracts are void);

ordering the refund of money paid under a domestic building contract; and

ordering rectification of defective building work or completion of incomplete work.

VCAT can award costs (s 109 Victorian Civil and Administrative Tribunal Act 1998 (Vic)), to refer questions of law to the Trial Division of the Supreme Court or the Court of Appeal (s 148) and to grant leave to parties to be legally represented.