Australia: New domestic building work dispute resolution reforms for the Victorian building industry

Overview

From 26 April 2017 Victoria's new reforms for domestic building work dispute resolution will "go live". These reforms are a key element of the Victorian Government's consumer protection building reform package, as set out in the Building Legislation Amendment (Consumer Protection) Act 2016 (Vic). Many of the reforms in that Act commenced operation in 2016. The reforms starting on 26 April 2017 provide for a new regime for domestic building dispute resolution.

In this briefing note, we outline some key aspects of the new domestic building work dispute resolution reforms. Developers and major contractors in the domestic building industry will need to become familiar with the new reforms, to ensure they protect their financial position and building practitioner registration in the event of a domestic building work dispute.

The conciliation framework

There will be a new conciliation framework for domestic building disputes, to be administered by a new body to be known as Domestic Building Disputes Resolution Victoria. This framework will replace the conciliation of disputes and inspectors provisions in the Domestic Building Contracts Act 1995 (Vic), which are currently administered by Building Advice and Conciliation Victoria (BACV).

From 26 April, in most cases parties will have to participate in a conciliation process before they can apply to VCAT or commence court action in relation to a domestic building work dispute. Parties will have to provide a certificate of conciliation from the chief dispute resolution officer with their application to VCAT. The reforms do contemplate that conciliation may not be appropriate for every dispute, but a party wishing to proceed to VCAT will still need a certificate of conciliation assessing the matter as not suitable for conciliation. Similar requirements apply before commencing court action, but parties also have the option of seeking leave of the court to bring the proceedings without a certificate of conciliation. There is an exception for proceedings for injunctions, which can still be brought without a certificate of conciliation.

Parties will also need to participate in the conciliation conference in good faith. If they do not, this may be noted in the certificate of conciliation. VCAT will usually be required to make an award of costs against an unsuccessful party in VCAT proceedings who refused to participate, or did not participate in good faith, in the conciliation conference.

A party wishing to refer a dispute to conciliation should first take reasonable steps to resolve the dispute. A dispute may be rejected as not suitable for conciliation if this has not been done.

The conciliation process will usually start with a conciliation conference, which may take place at the building site. If the conciliation successfully resolves the dispute, the conciliation officer will prepare a record of agreement. If not, a certificate of conciliation will be issued.

As part of the conciliation process, the chief conciliation officer can issue a stop work notice requiring the builder to stop work for up to 30 days (with the potential to extend for up to a further 30 days) where appropriate (for example to preserve evidence relevant to the dispute). The period during which the stop work notice is in effect is not to be counted in the period for completion of the work under the domestic building contract and an extension of time will need to be granted accordingly.

The chief conciliation officer can also direct an assessor to inquire into a domestic building work dispute and report on whether domestic building work is defective, incomplete or non-compliant. Assessors will have powers to enter building sites, examine building work (including demolishing and cutting if reasonably required) and to require persons at the site to provide information, documents and assistance. A party can be required to pay the assessor's costs of inquiring and reporting, if they failed to participate in the conciliation conference and the building work is found to be defective or incomplete. If assessors identify any contraventions of the Building Act 1993 (Vic) or any regulations under that Act they must also provide a copy of their report to the Victorian Building Authority (VBA), and may also notify the relevant council and relevant building surveyor. An assessor's report is admissible in evidence in any subsequent VCAT or other legal proceeding, and also in any disciplinary proceeding against a building practitioner.

Dispute resolution orders

The chief conciliation officer may also issue a dispute resolution order to a builder or building owner in relation to some types of disputes. This may require the builder to rectify defective work, rectify damage caused, or complete defective work, or require the building owner to pay money to the builder. Helpfully for builders, the dispute resolution order may also contain conditions, for example that a building owner must not prevent or restrict the builder from carrying out the work, or that a building owner must pay money into a new fund, to be known as the Domestic Building Dispute Resolution Victoria Trust Fund.

If a party fails to comply with a dispute resolution order, the chief conciliation officer may issue a "breach of dispute resolution order notice".

Parties can apply to VCAT for review of decisions to issue dispute resolution orders and breach of dispute resolution order notices.

Builders and building owners will be entitled to end their domestic building contracts in some circumstances, for example where a builder has failed to comply with a dispute resolution order and a breach of dispute resolution order has been served and not challenged by the builder. Parties can then apply to VCAT for consequential orders.

If a building practitioner has failed to comply with a dispute resolution order, this can be grounds for disciplinary action against the practitioner under the Building Act 1993 (Vic). As mentioned above, assessors are required to notify the VBA directly of any non-compliance with the Building Act 1993 (Vic) or regulations, and this could also be grounds for disciplinary action against the practitioner.

Impact of reforms

Consistent with the consumer protection focus of the reforms, the conciliation process will be available to subsequent building owners, even though they were not the party who entered into the domestic building contract with the builder.

The new conciliation process will play a much larger role in domestic building dispute resolution in Victoria then the current BACV process. The new powers of the chief conciliation officer will improve the ability of regulatory authorities to intervene on behalf of consumers and ensure that defective and incomplete building work is fixed. We recommend that forms of domestic building contract also be updated to address the new grounds for extensions to the program and grounds of termination in particular (including to address the cost consequences of each occurrence).

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.