If you are a party to a domestic building work dispute, you can refer the dispute to the Domestic Building Dispute Resolution Victoria ('DBDRV') by filling out an online application form. A conciliation officer will then make an initial assessment to determine whether the dispute fits the preliminary requirements necessary for it to be accepted by the DBDRV.

These requirements include, but are not limited to:

• The requirement that the application be in relation to a domestic building work dispute; and
• The requirement that the application be made within the limitation period.

Once the application has undergone this initial assessment, the dispute will either be:

• accepted for conciliation, or
• the parties will be issued with a certificate of conciliation which will state that the dispute is not suitable for conciliation.

Circumstances in which the dispute will be assessed as not suitable for conciliation include:

• The referring party hasn’t provided information or documents requested by the conciliation officer during the initial assessment;
• The referring party has failed without reasonable excuse to take reasonable steps to resolve the dispute;
• There is no reasonable likelihood of the dispute being settled by conciliation;
• The referral is:

1. frivolous or otherwise lacking in substance,
2. vexatious, or
3. was not made in good faith, or

• The dispute has been resolved.

Conciliation

Prior to the conciliation conference, a conciliation officer will generally contact the parties involved to:

• discuss the issues in dispute,
• determine what additional steps might be necessary, and
• provide guidance as to the DBDRV process.

Commonly, a further step that’s taken is the appointment of an assessor who will assess the property and provide a report as to any defects or incomplete items.

Usually, any statements made during the conciliation are inadmissible in VCAT or other legal proceedings. This however is not the case for anything said or done by an assessor, including any report that is produced by an assessor for the conciliation.

How are conciliation conferences conducted?

When it comes time for the parties to undertake the conciliation conference itself, this may be done either:

• in person,
• by phone, or
• by other electronic communication.

The method of conciliation and venue is at the discretion of the conciliation officer. The conciliation conference itself is similar to a mediation, where the parties meet to discuss the issues and seek to settle the matter, with the assistance of the conciliation officer and, if permitted, the parties’ legal representatives.

There are three potential outcomes of the conciliation conference:

1. The dispute is unable to be resolved and a certificate of conciliation is issued which states that the dispute did not resolve;
2. The parties enter into a Record of Agreement; or
3. A Dispute Resolution Order is issued.

Where the parties are able to come to an agreement as to how to resolve the issues in dispute, they can either enter into a Record of Agreement or consent to the issue of a Dispute Resolution Order. The conciliation officer can also issue a Dispute Resolution Order without the consent of the parties.

The Dispute Resolution Order may provide more security than a Record of Agreement, particularly to owners, as a builder’s non-compliance with a Dispute Resolution Order must be reported to the Victorian Building Authority (‘VBA’) and VBA must take disciplinary action against the builder. As with assessor’s reports, information or documents disclosed in conciliation can be used for disciplinary proceedings against the builder.

Dispute Resolution Orders can order any of the following:

1. That the builder rectify defective works, rectify any damage to the owner’s property, or complete incomplete building works;
2. That the builder comply with any conditions deemed necessary while undertaking the building works; and/or
3. That the builder or the owner make payment either directly to the opposing party or into the DBDRV Trust Fund.

Non-compliance

Where one party does not comply with a Record of Agreement or Dispute Resolution Order, either party can notify the DBDRV of the non-compliance. A notice will then be issued to the other party. In circumstances where the owner is alleging that the builder has not complied, DBDRV will correspond with the builder to determine whether this is the case. If the builder makes a statement confirming that they have not complied, a certificate of conciliation may then be issued. If, however, the builder disputes that they have not complied, DBDRV will then send an assessor to determine whether or not there has been compliance. It is only after the assessor confirms that the builder has not complied that a certificate of conciliation will be issued.

How can Sharrock Pitman Legal assist?

In the event that you are involved in a domestic building work dispute, it may be helpful to seek legal advice prior to making an application to DBDRV, in order to ensure that you are properly prepare for what is likely to be a long and involved process.

If you require advice on DBDRV or a building dispute, please feel free to contact our litigation team on 1300 205 506 or by email at litigation@sharrockpitman.com.au. We have Accredited Specialists in Commercial Litigation and we are able to provide you with advice regarding your options, in addition to guiding you through the steps that are appropriate in your circumstances.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

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