Since 2020, builders and homeowners have faced the significant challenges of delays and rising supply costs in the construction industry. As these issues persist, many find themselves considering legal action to resolve their building project disputes.
Here’s a straightforward guide to help you understand the Victorian Civil and Administrative Tribunal’s (VCAT) jurisdiction, potential delays and how to avoid them, the role of different Courts in building disputes, and practical solutions for achieving a resolution.
Understanding the Domestic Building Contracts Act
In Victoria, all domestic building contracts are governed by the Domestic Building Contracts Act 1995 (DBCA). This Act covers essential aspects like:
- Implied warranties in building contracts
- Maximum deposit limits a builder can charge
- Methods for resolving disputes
Section 57 of the DBCA is a key part of the Act. The section states that if a dispute related to domestic building work arises in the Supreme, County, or Magistrates Court, and VCAT has the jurisdiction to hear the case, it must be transferred to VCAT, provided no oral evidence has been heard by the Court. Before filing an application with VCAT, you need to submit an application to Domestic Building Disputes Resolution Victoria (DBDRV) and attach the certificate they issue to your VCAT application.
Unlike other Courts, VCAT doesn’t automatically have the ability to hear matters. Rather, it is limited to areas explicitly defined by the Victorian Parliament. Under the DBCA, VCAT has exclusive jurisdiction to hear domestic building disputes.
This is important information to consider before commencing a proceeding.
What Counts as a Domestic Building Dispute?
According to the DBCA, a domestic building dispute involves disagreements between property owners and various building contractors (e.g., builders, subcontractors, architects) over:
- Alleged breaches of statutory warranties (e.g., work quality, compliance with regulations);
- Failure to maintain specified work standards;
- Incomplete building work;
- Delays in project completion; and,
- Unpaid work performed under the contract.
Steps to Submitting a Dispute to VCAT and Minimizing Delays
DBDRV aims to resolve disputes through conciliation conferences, avoiding the need for litigation. If conciliation fails or the matter is deemed unsuitable for it, a certificate will be issued, allowing you to apply to VCAT.
Given the current delays at VCAT, it’s crucial to seek advice on the appropriate forum for your claim to avoid unnecessary delays and costs.
When to Consult a Building Dispute Lawyer
Even seemingly simple disputes, such as issues with defective bathroom work, can become complex. For instance, if you are a homeowner and claim against a builder for defective works, and a builder blames a subcontractor (like the tiler or plumber), the situation might involve claims under the Wrongs Act 1958. The Victorian Parliament recently passed an amendment to the VCAT Act that allows it to hear these sorts of claims, but they are complex because VCAT has to determine who is responsible for what percentage of the damages claimed. Because of this, expert evidence is often required to tease out the components of liability. A lawyer can help navigate these complexities and advise you on the best course of action.
Navigating VCAT’s Limitations and Court Transfers
As any builder or homeowner who has made a claim knows, VCAT is under-resourced and the lead-time on dates for final hearings and decisions are upwards of 12 to 18 months. You will have to forgive me for referring to some cases, but they neatly illustrate some key points about how to avoid undue delays in VCAT for certain domestic building matters. I’ve read them so you don’t have to!
Recent decisions, such as Uber Builders and Developers Pty Ltd v MIFA Lty Ltd and Impresa Construction Pty Ltd v Oxford Building Group Pty Ltd suggest that due to VCAT’s ongoing delays, the County Court may handle certain domestic building disputes.
This more practical approach to VCAT’s ability to hear complex matters was recently considered and applied by VCAT itself in the case of Plunkett v Portier Pacific Pty. Ltd. (Civil Claims). VCAT set out new principles for when a case that VCAT would normally hear may be transferred to another Court.
Justice Woodward noted that while VCAT has exclusive jurisdiction to hear domestic building matters, that doesn’t mean the Victorian Parliament intended VCAT to hear claims involving complex questions of law such as multi-million-dollar residential development disputes with multiple parties and many expert witnesses. Woodward J gave a clear example of why this approach was necessary in his decision by noting the next available dates VCAT was allocating for multi-day hearings were in March 2025! This case is extremely important because it means that you should seek legal advice about whether your claim is complex enough to justify a move to a Court that can hear it and have your dispute resolved sooner, which benefits everyone involved.
Another factor to consider is the kinds of cases VCAT can hear. For example, in Thurin v Krongold Constructions , the Court ruled that VCAT cannot hear matters involving claims that are based on federal legislation, such as the Competition and Consumer Act 2010 – you and I know the most important part of this law: the Australian Consumer Law, or ACL. This again highlights the importance of getting legal advice to determine the right venue for your claim to avoid wasted time and costs.
Get Advice on Your Building Dispute
If all this seems confusing, consulting an experienced building dispute lawyer can provide clarity. They can offer specific advice tailored to your situation, helping you achieve faster resolutions for your building project issues.
For more detailed assistance and advice, contact MST Lawyers’ Dispute Resolution and Litigation Associate, Tom Adamson. He is an experienced practitioner in this area, and he can help you get your project completed or your invoices paid promptly.
Dated: 30 July 2024
Author: Tom Adamson
1 [2021] VCC 1677
2 [2021] VCC 1146
3 [2024] VCAT 205
4 [2022] VSCA 226
