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

Impact DBDRV has had on the VCAT Building and Property List:

  1. Overall, VCAT has seen a reduction in building and property matters due to the introduction of the mandatory conciliation service offered by DBSRV although this seems to be levelling out as the certificates catch up the VCAT applications.
  2. DBDRV service commenced in April 2017 and the following has been observed of the impact on the number of VCAT Building and Property Hearings:
    1. 2017: 1,746.
    2. 2018: 1,856.
    3. 2019: 1,739 -6%.
  3. VCAT Building and Property Compulsory Conference/Mediation:
    1. 2017: 611.
    2. 2018: 892.
    3. 2019: 744 -17%.
  4. Applications to VCAT under the Domestic Building Contracts Act decreased by 30 per cent in 2018 – 19, reflected across small, standard and complex claims.
    1. There was an initial reduction in domestic building cases, steadily increasing with about 50 per cent more applications lodged in May and June than for the same period in 2018–19.
    2. This later influx of cases contributed to the eight per cent increase in matters yet to be finalised (pending) at the end of the financial year, while increased case complexity was also a factor in the lower number of finalisations.
    3. Interestingly there was a 30 per cent decrease in applications made under the Domestic Building Contracts Act however Australian Consumer Law applications were up 113 per cent with many related to building disputes, including commercial building.
    4. There was an increase in domestic building applications that do not have to go to DBDRV such as applications for review of decisions of warranty insurers rose nine per cent, and applications for an exemption from the requirement for an owner-builder to provide warranty insurance when selling their property increased 21 per cent.
  5. The drop has not been more dramatic because only disputes where the owner is a party must go to the DBDRV service before an application can be made to VCAT.
    1. While parties to a domestic building work dispute can only apply directly to VCAT if they are seeking an injunction and disputes between a sub-contractor and a builder, are not required to go to DBDRV.
    2. Similarly, disputes between a homeowner and tradesperson they have engaged directly to do a specific, single type of work under the Australian Consumer Law are not eligible for the DBDRV process.
  6. VCAT’s jurisdiction under the DBDRV process Part 5 of the old DBC Act has been amended – with new headings and new terminology;
    1. Part 5 – Functions of Tribunal Part 5 – VCAT jurisdiction Division 2 – What can the tribunal do? Division 2 – Proceedings before VCAT Applications to VCAT from DBDRV once a certificate is given.
    2. Review of a decision to issue a DR Order Review of a decision to order money to be paid from Trust Fund.
    3. Review of decision to issue breach of DR Order notice Application by owner for order following ending of contract Application by builder for order following ending of contract.
    4. Sections 53 – 55 are unaltered, other than a change in name from the Tribunal to VCAT.
    5. Section 56 has been inserted (there was previously none) and this provides that a certificate of conciliation is required to bring proceedings in VCAT, except for proceedings for an order in the nature of an injunction.
    6. The new section 57A mirrors s.56 in part but in relation to proceedings in a court. It provides that either a certificate of conciliation or leave of the court is required to bring proceedings, except for proceedings for an order in the nature of an injunction.
    7. New sections 63-67A have been inserted under the heading Subdivision 3 Matters relating to dispute resolution orders. These are as follows:
      1. A person who is required to comply with a dispute resolution order may apply to VCAT for review of the decision to issue or amend the dispute resolution order (s.63).
    8. The application must be made within 20 business days after the later of –
      1. The day on which the applicant was given a copy of the DR Order; or
      2. If under the VCAT Act the applicant requests a statement of reasons, the day on which the applicant receives that statement of reasons or the applicant is informed that a statement of reasons will not be given.
    9. An application to VCAT must be made on the ground (ss.3) that –
      1. The description in the DR Order of the domestic building work that is defective or incomplete is incorrect; or
      2. The period specified in the DR Order for carrying out the rectification or completion work is not reasonable; or
  • A requirement in the DR Order to take a specific action or to refrain from taking action is not necessary or is not reasonable.
  1. Despite the narrowness of ss.3, VCAT is given wider powers at ss.4 and 5:
    1. In determining an application for review of a dispute resolution order, VCAT may also make any order it considers fair in relation to the domestic building contract to which the dispute relates.
  2. And further, VCAT may vary any term of the domestic building contract (including the completion date, the contract price, a provisional sum or the amount to be paid for a prime cost item), declare that a term of the contract is, or is not, void under section 132, declare void any unjust term of the domestic building contract, or otherwise vary the domestic building contract to avoid injustice.
  3. Application for review of decision to pay money out of Domestic Building Dispute Resolution Victoria Trust Fund (s.65).
  4. A party may apply to VCAT for review of a decision by the Director under section 49G to pay money out of the Domestic Building Dispute Resolution Victoria Trust Fund. An application must be made within 10 business days after the party received written notice of the Director’s decision.
  5. Application for review of decision to issue breach of DR Order notice (s.66) A builder may apply to VCAT for review of a decision to issue a breach of dispute resolution order notice under Part 4.
  6. The application must be made within 20 business days after the later of –
    1. The day on which the applicant was given a copy of the notice; or
    2. If under the VCAT Act the applicant requests a statement of reasons, the day on which the applicant receives that statement of reasons or the applicant is informed that a statement of reasons will not be given.
  7. An application to VCAT must be made on the ground (ss.3) that the assessment made in the assessor’s report on which the notice was based
    1. Was not correct; or
    2. Is no longer correct because the DR Order has since been complied with.
  8. By subsection 4, in addition to DBDRV and the builder, the building owner may make submissions to the proceedings at VCAT in relation to –
    1. Whether there has been a failure to comply with the DR Order; and
    2. The nature of the failure to comply with the DR Order.
  9. Application by owner for order following ending of contract (s.67)
  10. If an owner ends a contract following a failure to comply with a DR Order, they may apply to VCAT for an order against the builder. VCAT must consider:
    1. The contract, including any plans and specifications set out in it; and
    2. Any assessor’s report; and
  • May make any order it considers fair in the circumstances.
  1. VCAT may order the builder to pay a sum of money to the owner:
    1. If the money is found to be owing to the owner by the builder;
    2. By way of damages;
  • By way of restitution;
  1. To refund money paid under the contract, including any money paid by the owner in excess of the requirements of the contract.
  1. An order must provide for a builder to receive a reasonable price for work carried out under the contract, not being more than the builder would be entitled to recover under the contract.
  2. Application by builder for order following ending of contract (s.67A) if a builder ends a contract following a failure to comply with a DR Order, they may apply to VCAT for an order against the owner. VCAT may make any order it considers fair in the circumstances, including to pay a sum of money to the builder:
    1. For work performed under the contract; and
    2. By way of damages for loss of work as a result of the ending of the contract.
  3. VCAT’S jurisdiction apart from DBDRV and VCAT still has jurisdiction in many areas, including:
    1. An application for an injunction to VCAT or a court does not require a certificate to first be issued s.56(3) and 57A(2).
    2. Where the works are not domestic building works (as defined in the DBC Act) – i.e. only one of the following:
      1. Attaching external fixtures;
      2. Electrical work;
  • Glazing;
  1. Installing floor coverings;
  2. Insulating;
  3. Painting or plastering;
  • Tiling (wall and floor);
  • Gas fitting, draining work or any other plumbing work listed in section 221C of the Building Act 1993;
  1. Erecting a chain wire fence to enclose a tennis court;
  2. Erecting a mast, pole, antenna, aerial or similar structure.
  1. Where the owner is not involved
    1. An insurance appeal;
    2. Where the parties have already been to BACV;
  • An application for exemption by an Owner-builder under s.68;
  1. Once a DBDRV Certificate has been granted.

 

 

 

Daniel Epstein of Counsel

 

By Daniel Epstein

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