There’s never a good time for problems to arise in construction, whether you’re a new homeowner who is unsatisfied with the building’s quality of workmanship or are a builder who has not yet been paid for your work. These problems can lead to disagreements and disputes between various involved parties, such as the owner, builder/building company, architects, and subcontractors. If these problems(s) should require professional dispute resolution, the first port of call before reaching the Victorian Civil & Administrative Tribunal (VCAT) is the Domestic Building Dispute Resolution Victoria unit (DBDRV). For a comprehensive breakdown of the DBDRV’s purpose and the processes involved in engaging its services, refer to Boutique Lawyers’ previous blog on the matter. This blog will explore five key things to know about the conciliation process with the DBDRV, and while every case will be unique, this may be a useful guide for first-time litigants who don’t know what to expect.
1. Conciliation with the DBDRV is mandatory before engaging VCAT
The most common forum in which domestic building disputes are heard in VCAT. However, not only is appealing to VCAT a notoriously expensive and time-consuming process, but it is also not possible unless your dispute has first gone through the stages of conciliation with the DBDRV (the exception being when a party is seeking an injunction). These stages are designed to provide as much opportunity as possible for parties to resolve their disputes in a cost-effective and efficient manner while minimising the amount of cases appearing before VCAT.
2. Penalties exist for not taking conciliation seriously
VCAT can award costs against a party that:
- Refrains from participating in mandatory conciliation proceedings
- Does not participate in good faith (i.e. does not demonstrate an open mind and/or willingness to explore reasonable options to resolve the dispute)
- Submits an insubstantial or frivolous application; or
- Incurs costs to the DBDRV (such as obtaining an expert report) as a result of any of the above infringements
3. Conciliation conferences are confidential only in speaking
Everything that is said during conciliation is confidential and is inadmissible as evidence if the dispute proceeds to a hearing before VTAC unless all parties agree otherwise. Conversely, any written documentation from the chief dispute resolution officer (CDRO) or any reports provided by an appointed assessor of building work can be used in future evidence. Information that has been used to determine whether a dispute resolution order or some other proceeding is appropriate may also be used.
4. Outcomes of conciliation vary and may require further steps
- Agreement – if the parties resolve their dispute, a formal record of agreement documenting their agreement will be issued to all parties. This record is to be signed by all parties and contains the actions and/or payments agreed upon by the parties, as well as the timeline in which these actions and/or payments must be carried out.
- Partial resolution/breach of agreement – a CDRO can issue a certificate of conciliation or dispute resolution order against one or more parties based on the recommendation of a DRO. It is the responsibility of the parties to honour the terms listed in their order and there are significant consequences for those who do not comply, including financial penalties.
- Dispute not resolved (certificate of conciliation) –in situations where a dispute resolution order is not suitable, a CDRO can issue a certificate stating all parties made genuine attempts to settle their dispute but that it remains unresolved. From this point, all parties are entitled to apply to have their dispute heard by VCAT.
If you or someone you know needs legal assistance regarding conciliation with the DBDRV, Boutique Lawyers is here to help. Call 1300 556 140, visit our Melbourne CBD office on Collins Street, or contact us via our website.