The role of the Domestic Building Dispute Resolution Victoria (Part One)

Background Domestic Building Dispute Resolution Victoria:

  1. The Building Legislation Amendment (Consumer Protection) Act 2016 (the BLA(CP) Act) introduced significant changes to the Domestic Building Contracts Act 1995 (the Act), most notably the introduction of a new mandatory dispute resolution process for most domestic building disputes – called Domestic Building Dispute Resolution Victoria (DBDRV).
  2. DBDRV is a business unit of the Department of Justice and Regulation. It is established under Part 4 of the DBC Act. The old Part 4 provisions relating to the appointment of inspectors by the VBA (sections 44-50) have been repealed and replaced with the new sections 44 – 52.
  3. After the review conducted which looked at the increasing amount of building disputes, consumer affairs decided to implement a compulsory conciliation service in order to form a layer of protection for consumers of building services, and hence, the Domestic Building Dispute Resolution Victoria (DBDRV) was created.
  4. Domestic Building Dispute Resolution Victoria is a business unit of the Department of Justice and Regulation and has been established under the Domestic Building Contracts Act 1995.
  5. DBDRV is an independent government agency that provides free services to assist with the resolution of domestic building disputes.
    1. It is limited to residential disputes between owners and builders.
    2. Subcontractors and any other parties are generally excluded from this service unless they are a peripheral party to a dispute, and the main dispute is between the owner and builder.
  6. The DBDRV as a service like the compulsory conciliation would be perfect for resolving small scale disputes where the primary parties are subcontractors, it allows a greater focus on the issues surrounding disputes between builders and owners and what the main causes of a dispute may be. This includes causes such as defects, delays, non- payment etc.
  7. The services offered by the DBDRV are intended to be a very low cost and informal pre-cursor to courts and tribunals.
    1. The aim is to settle as many disputes as possible at conciliation, which happens in real time, often on site, so that they don’t have to progress to VCAT.
  8. The DBDRV also offer expert assessors who conduct building assessments which assist the resolution process. These are credible experts with years of building, engineering, surveying and other valuable experiences.
    1. In the event conciliation does not resolve the dispute, the Chief Dispute Resolution Officer has the power to issue binding dispute resolution orders and certificates which can then be used to progress to VCAT.
  9. There are a number of steps to file and resolve an application:
    1. Apply;
    2. Jurisdiction check and initial assessment by a dispute resolution officer;
    3. Prepare for conciliation (tailor conciliation to suit the nature of the dispute and the circumstances of the parties).
    4. Possible outcomes of conciliation to either agreement or a certificate of conciliation and then either party will then be entitled to make an application to VCAT.
  10. In summary (and leaving out many of the procedures and powers) the DBDRV is established (s.52) and consists of:
    1. The Chief Dispute Resolution Officer (CDRO) appointed under s.52C and ss 3, 6-13, 14(2), 15 and 59-68 of the BLA(CP) Act came into operation on 26 April 2017 and the Domestic Building Dispute Resolution Victoria (DBDRV) process was born.
    2. The assessors are appointed under s.48.
    3. A domestic building work dispute is defined at s.44 as a domestic building dispute arising between a building owner and
      1. A builder, or
      2. A building practitioner as defined in the Building Act, or
  • A sub-contractor, or
  1. An architect, or
  2. In relation to a domestic building work matter.
  1. A domestic building work matter is defined at s.44(2) as meaning any matter relating to a domestic building contract or the carrying out of domestic building work, including
    1. An alleged breach of a s.8 warranty;
    2. An alleged failure to maintain the standard or quality of building work specified in a domestic building contract;
  • An alleged failure to complete the works (at all or on time);
  1. An alleged failure to pay money for domestic building work performed under the contract.
  1. Initially there will be a conduct an initial assessment of the dispute (s.45A) and evaluate the following:
    1. The dispute is a domestic building dispute.
    2. If it was made within time.
  • At least one of the parties appears willing to participate in conciliation in good faith.
  1. Proceedings have not commenced elsewhere.
  2. They may contact either party to obtain further information.
  3. Then they will then decide whether to accept or dismiss the referral (s.45C) by assessing the referral against the list of suitability criteria found in section 45C(3).
  1. It will not be suitable for conciliation if:
    1. The referral does not comply with s.45(2) (i.e. uses the appropriate form and provides required information).
    2. The referral was not made within the required time.
  • The referring party has not provided any information, documents or evidence requested or required or has not provided them within the time required by the DRO.
  1. The referring party has failed without reasonable excuse to take reasonable steps to resolve the dispute before the referral;
  2. All issues arising out of the dispute have been or are the subject of proceedings before VCAT or a court.
  3. There is no reasonable likelihood of the dispute being settled by conciliation for any reason other than because no other party is willing to engage in the conciliation.
  • The referral is frivolous or otherwise lacking in substance; or is vexatious; or was not made in good faith; or the dispute has been resolved.
  1. The decision must be communicated within business 10 days of being made (s.45E).
  2. If the CDRO assesses the dispute as not suitable for conciliation, then a certificate (s.45F) is issued and must contain reasons.
  3. A party may apply to VCAT for review of a failure by the CDRO to issue a certificate under this section.
  4. A party may seek to withdraw a referral to DBDRV but requires leave of the CDRO (s.45G) and the CDRO may refuse leave if they consider the dispute has disclosed evidence of a contravention of the DBC Act or the Building Act or regulations.
  1. If accepted, a DRO will conciliate the dispute (s.46) in accordance with the procedures set out at ss.46A – 46H.
    1. If accepted for conciliation, a DRO will ask a party to provide further information, contract documents, emails and letters.
    2. Section 46A allows a DRO to conduct a conciliation conference by attendance on site or at a convenient location and/or by post or teleconference or other electronic communication.
    3. Section 46B provides that a conciliation must be conducted in accordance with the “conciliation rules”.
    4. If no agreement is reached following conciliation, the CDRO will issue a certificate (s.46D and s.46E); if the dispute is not resolved, s.46D requires the CDRO to notify each party that she intends to issue a certificate, the reasons why the dispute was not resolved and give them the opportunity to make submissions in relation to the content of the proposed certificate.
    5. Section 46E requires the CDRO to issue a certificate after considering any submissions received if they still considers the dispute is not resolved. The certificate must include a statement of the reasons why the dispute was not resolved, which may include that a party did not participate in good faith.
    6. A party may apply to VCAT for review of a failure by the CDRO to issue a certificate under this section if it is not issued within 20 days of the date for submissions.
    7. If an agreement is reached, this must be recorded (s.46F); the DRO must prepare a written record of agreement setting out its terms. Each party has the chance to correct any error or omission on the record. This record is then evidence of the terms of the agreement.
  2. If an agreement is breached, a party may notify the CDRO and the CDRO must take action (s.46G and s.46H).
    1. If the CDRO determines there was a breach, then the record of agreement ceases to have effect and she must give notice to each party.
  3. Division 4 allows the CDRO to require a builder to stop work (s.47, 47A-47D). At any time after a referral, the CDRO may by written notice require a builder to stop all or part of the work, if they consider that:
    1. There is a reasonable possibility of evidence being lost or impractical to obtain, or for any other reason.
    2. A stop work notice has effect for no more than 30 days, but may be extended for up to a further 30 days.
    3. A builder must comply with the order – penalty of 60 penalty units.

 

 

Daniel Epstein of Counsel

By Daniel Epstein

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