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

Assessor for the DBDRV, Dispute Resolution at the DBDRV and Confidentiality:

 

  1. Division 5 – an assessor may be appointed to assess whether the work is defective or incomplete. An assessor has the following functions (s.48A):
    1. To assess whether domestic building work is defective or incomplete.
    2. To carry out any other function conferred on him/her.
    3. By s.48B, the CDRO may in writing direct an assessor to inquire into a domestic building work dispute, to examine the work performed by the builder in order to determine whether it is defective or incomplete, and to provide an estimate of the number of business days required to rectify or complete the work.
    4. It seems that normally there will be no cost for a report or any tests (e.g. s.48J(3)) but the cost may be ordered to be paid by a party if that party failed to participate in a conciliation conference and a dispute resolution order is issued against them (s.48K).
    5. By s.48C, a party to a dispute may ask the CDRO to appoint an assessor even if the original referral was rejected or it was not resolved by conciliation. In such cases, the assessor may carry out tests or obtain expert advice (s.48L) with the permission of the requesting party. A fee may be payable for an assessment under this section (s.48C and s.48M).
  2. An assessor has wide powers, including to:
    1. Enter the site (s.48D).
    2. Demolish or open up any work (s.48E).
    3. Require a person to give information or produce documents (s.48F).
    4. Carry out tests (s.48J).
    5. Obtain expert advice (s.48J).
    6. It is an offence to refuse or fail to comply with a requirement of an assessor or to hinder or obstruct an assessor – penalty of 60 penalty units.
  3. Section 48O subsection 1 requires an assessor to give a report to each party to the dispute and the CDRO. Subsection 2 requires the report to be in writing.
    1. However by ss.3, the assessor is not required to give a report if the examination was for the purposes of a conciliation conference and an agreement was reached at the conference.
    2. The content of the report is set out at s.48P – 48Q. It must:
      1. Specify the building work that is defective or incomplete, including any defects that may adversely affect the health or safety of people or the amenity of the building;
      2. Specify any other defects in the building work that are incidental to, but not the subject of, the dispute;
  • If required by the CDRO, include an estimate of the number of business days required to rectify or complete the building work.
  1. It may specify the cause of the defective or incomplete building work;
  2. Recommend a preferred method by which the defective or incomplete work may be rectified or completed;
  3. Include a statement that the assessor is of the opinion that the building work is so defective that it would not be appropriate to allow the builder to rectify or complete the work.
  1. If the assessor thinks that there has been a breach of the Building Act or Regulations, then he/she must provide a written report to the VBA (s.48R). The VBA may then notify the relevant building surveyor or Council.
  2. An assessor’s report under s.48O is admissible in VCAT or other legal proceedings (s.48T).
  1. The CDRO may issue a dispute resolution order (“DR Order”) to a builder or owner (s.49) if the dispute has been referred to DBDRV and it has not been resolved and the dispute relates to one or more of the following:
    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;
    3. An alleged failure to complete the domestic building work required by a domestic building contract;
    4. An alleged failure to complete the domestic building work required by a domestic building contract within the times specified in the contract;
    5. An alleged failure to pay money for domestic building work performed under the contract;
    6. Then the CDRO may issue a DR Order to either a builder or an owner.
  2. There are matters specified which the CDRO must/may consider before issuing a DR Order (s.49A), including:
    1. Any change in the nature of the dispute or the circumstances of the parties since the copy of the assessor’s report was given, including the extent of any partial performance of an action specified in a record of agreement;
    2. The conduct of the parties during the conciliation (if applicable);
    3. Any direction to fix building work given under Division 2 of Part 4 of the Building Act;
    4. Whether the issuing of a dispute resolution order to a person would be unfair or unreasonable in the circumstances.
    5. If an assessor’s report has been received, then a DR Order must not be issued any earlier than 10 business days after the report is given to the parties (s.49(2)).
    6. Once issued, an Order takes effect immediately (s.49(4)).
    7. Note that there is no power to issue a DR Order to an architect or sub-contractor, even though DBDRV may conciliate disputes between these.
    8. There are wide powers in respect of a dispute resolution order (s.49B – 49X). By s.49B, a DR Order may require a builder to whom it is issued to:
      1. Rectify any defective work;
      2. Rectify any damage caused; or
  • Complete the work.
  1. It may require an owner to comply with any specified conditions in the order, including to:
    1. Refrain from doing anything which may prevent or restrict the builder from carrying out its work;
    2. Pay money into the trust fund set up for this purpose, called the DBDRV Trust Fund.
  2. By s.49C, a DR Order may require:
    1. An owner to pay an amount to the builder.
    2. An owner to pay an amount into the Trust Fund which will be paid to the builder upon completion.
  • The builder to pay the reasonable cost of another builder employed by the owner in circumstances where the Order has included a finding that the work of the original builder is so defective that it would not be appropriate to allow it to rectify or complete the work.
  1. A DR Order may include findings by the CDRO which then are evidence in any proceedings by the builder for the recovery of money and may be taken into account in any proceedings in VCAT or a court in determining costs or damages (s.49D).
  2. A DR Order may include a finding by the CDRO that:
    1. The building work is not incomplete or defective; or
    2. The work is so defective that it would not be appropriate to allow the builder to rectify or complete the work.
  3. In those circumstances, the finding is evidence in any proceedings by the builder for the recovery of money; and may be taken into account in any proceedings in VCAT or a court in determining costs or damages.
  1. Amendment or cancellation of dispute resolution order (s.49H – s.49O) a party can ask the CDRO to consider amending or cancelling a dispute resolution order (s.49J) if it does so within 10 business days of receiving the order and there has been a substantial change in the nature of the dispute or the circumstances of the parties since the assessors report was prepared. The CDRO has 5 days to consider the request (s.49L) and may make further inquiries or obtain further information.
  2. The CDRO can also amend or cancel an order at any time on her own volition, including if the Order has not been complied with (s.49H, 49I). Breach of a DR Order (s.49P – 49T).
  3. Once a builder gives notice that it has completed the works in the DR Order (s.49P), an owner may dispute that the work has been done (s.49R) and the CDRO may check by appointing an assessor (s.49S). If the assessor finds that works are outstanding, then the CDRO may give the builder further time, if she is satisfied that the failure to comply was due to factors outside the control of the builder (s.49T).
    1. Alternatively, (s.49U), the CDRO must issue a “breach of dispute resolution order notice” if she receives an assessor’s report that states that the builder has failed to comply with a DR Order. This Notice then gives an owner the right to end the building contract (s.49W) (subject to any appeal by the builder).
  4. A builder has the right to end the building contract (s.49X), if:
    1. The owner is in breach of a DR Order directed to them;
    2. They have not appealed or have failed in an appeal;
    3. The builder has complied with anything in the Order directed to it; and
    4. The DR Order included a finding that the building work was not defective or incomplete.
  5. Confidentiality (s.52I) a DRO or an assessor must not disclose to any person any information obtained in the course of carrying out any function – penalty of 60 units.
    1. However a DRO may disclose information if the disclosure is made for the purpose of carrying out a function under the Act; or
      1. To the Director of Consumer Affairs; or
      2. To the Victorian Building Authority; or
  • To the Victorian Managed Insurance Authority; or
  1. With the written consent of each person to whom the information relates.

 

 

Daniel Epstein of Counsel

 

 

By Daniel Epstein

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