Introduction

This article is relevant to homeowners who have previously been through the Domestic Building Dispute Resolution Victoria (DBDRV) process, or homeowners whose dispute meets the exceptions requirements. For more information on the DBDRV process and exceptions see Guide to taking legal action for Domestic Building Defects Disputes – Part 1.

Knowing your options can help you navigate the process effectively and ensure you take the necessary steps to protect your property and investment.

The following must not be construed as legal advice, as each case is different. Marchesin & Co. Lawyers is happy to hear about your grievances – feel free to give a call on 03 9111 5677 to speak with a lawyer.

First Steps

Gather the following documentation for your application:

  • The domestic building contract;
  • If applicable, changes to the contract, details about these changes;
  • Where a company is a party – a copy of a Current Company Extract, which can be purchased through the Australian Securities & Investments Commission (ASIC);
  • An itemised list of incomplete and/or defective works: details of your claim for each item;
  • A ‘Points of Claim’ document that sets out the details of the claim;
  • If applicable, a copy of the Certificate of Conciliation issued by the DBDRV;
  • If the DBDRV ordered a Dispute Resolution Order (DRO), you must provide a copy;
  • If a DBDRV Trust Fund exists, you must provide a copy of the agreement; and
  • Any other supporting documentation, such as:
  • Expert reports
  • Quotations
  • Invoices
  • Photographs.

The Victorian Civil and Administration Tribunal (VCAT)

The VCAT can resolve building and construction disputes only when the DBDRV mediation process has failed to resolve your dispute, and a Certificate of Conciliation has been issued indeed VCAT cannot hear a dispute without the Certificate of Conciliation.

Why the VCAT?

Section 57 of the Domestic Building Contracts Act 1995 (Vic) states that the VCAT is chiefly responsible for resolving domestic building disputes. If a person starts any action in the Supreme Court, the County Court or the Magistrates’ Court, the Court could postpone the dispute so that it can be heard by the VCAT.

The VCAT’s Jurisdiction

VCAT’s Building and Property List has exclusive jurisdiction to hear and determine all domestic building disputes, in Victoria and can make any order it considers fair, including:

  • Varying a term of a domestic building contract;
  • Declaring a term of a domestic building contract is or is not void, or varying a contract to avoid injustice (s 14 of the Domestic Building Contracts Act 1995 states that arbitration clauses in domestic building contracts are void);
  • Ordering the refund of money paid under a domestic building contract or the payment of damages or restitution;
  • Ordering rectification of defective building work or completion of incomplete work;
  • Award costs (s 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic)); and
  • Refer questions of law to the Trial Division of the Supreme Court or the Court of Appeal (s 148 of the Victorian Civil and Administrative Tribunal Act 1998).

What can I claim at the VCAT?

Incomplete Building Works

If your builder failed to complete the contracted and paid works or unlawfully fails to complete the contracted works by wrongfully terminating the contract without a valid right, you can seek damages for the cost required to hire another builder to finish the building works.

If you are still bound by a domestic building contract, we strongly recommend seeking legal advice before taking legal action or terminating the contract.

Defective Building Works

If your dispute against the builder is for defective building works, your damages will be the cost of repairing the defects and any resulting consequential damage.

Further Loss from Incomplete/Defective Building Works

In addition to claiming the cost of fixing or completing the works, you can claim other losses resulting from the dispute. These may include expert fees, the cost of obtaining reports or paying an expert to testify on your behalf at the VCAT. Other potential claims include loss of amenity, i.e. being without a bathroom for weeks, or loss of rental income if defective or incomplete work prevented you from renting out the property or forced you to lower the rent. You can claim rental costs if you had to move into a rental property or storage costs due to delays or ongoing repairs.

How do I prepare my claim?

At the minimum you must have quotations for rectification/repairs or receipts showing money spent.

Independent Expert Evidence

You should seek to obtain an expert report written by an independent and objective professional who is recognised as an expert witness at the VCAT.

An independent expert is duty bound to the Tribunal will address technical issues and assist in explaining what is wrong/how to rectify as required. Their professional opinion in the report can only be used as evidence.

Before you engage any expert, please contact us at Marchesin and Co. Lawyers, to be sure that you have identified the right type of expert witness, because not all experts can be regarded as expert witnesses as far as the VCAT is concerned. Ask us why.

The expert will need to be supplied with a detailed letter of instruction, that identifies the scope of the report and assumptions. The scope is identified by asking the expert to respond to your questions, your questions cannot have your opinion or bias, the letter will be evidence. Assumptions refers to providing your expert will all background materials and information, pursuant to Practice note – PNVCAT2 – Expert evidence (PNVCAT2).

How do I calculate the costs of my claim?

Your expert witness should be instructed to include a costing of rectifications to the building works in dispute. The costs must not only include labour and materials but any other preliminaries, such as permits, inspections, cranage/scaffolding, waste removal and so on.

Costs

The VCAT has the power to award costs but it is discretionary – it is usual for each party to bear their own costs in the proceeding, pursuant to s 109(1) of the Act “each party is to bear their own costs in the proceeding”. In other words, keep in mind that the VCAT does not operate like the Courts, where generally the losing party in a dispute pays the successful party’s costs.

How do I commence proceedings?

Step One: Lodge an Application

Use the “APPLICATION TO THE BUILDING AND PROPERTY LIST” form provided by the VCAT. The VCAT charges a fee when you lodge an application in the Building and Property List, under s 68 of the Act, this amount will depend on the value of your claim.

Points of Claim

  1. States the facts of your case and the outcome that you are seeking.
  1. It’s important to provide clarity on how you intend to prove your case at a hearing, without proper details and evidence, i.e. invoices and photos, your claim may be considered vague, making it difficult for the VCAT and other party to understand your claim and the solution you seek, refer to your evidence.
  1. Failing to add sufficient details can result in the other party requesting those details which may prolong the time it will take to solve your case.

Step Two: Notification

Generally, the VCAT will send your application with 28 days of filing to the other parties in the proceeding, however it is good practice (s 72 of the Act) to send your application to the other parties preferably by registered mail.

If your claim is against a corporate entity, e.g. “ABC Builders Pty Ltd” you must provide a copy of the ASIC extract showing the company is currently trading. The ASIC extract will show the registered address of the corporate entity, usual mail not registered mail will suffice.

When serving the other party, with your VCAT application include a copy of your Points of Claim and any other supporting documentation (Practice Note – PNCCL 1 Civil Claims List General Procedures). You can serve a party by handing these documents to them in person, sending it by registered mail, fax, or email to their last known address.

What if Parties Come to an Agreement before the Hearing?

Settlement can occur at any time during the dispute, either the Applicant or the Respondent can contact the other side and try to come to an agreement (settle) before the VCAT makes a decision.

If you do reach a settlement, all parties involved in the case should sign Terms of Settlement. This document outlines the specific terms of the agreement, i.e. the amount of any damages, when payment is due and where the funds are to be paid, and the steps to be taken if a party fails to comply with the agreed terms.

It is considered best practice not to formally close your case with VCAT until the agreement has been fully carried out, in the event of non-compliance, you can proceed to a hearing without needing to submit a new application. Marchesin & Co. Lawyers can help with Terms of Settlement.

N.B.: Change is on the Way!
The Building Legislation Amendment (Buyer Protections) Bill 2025

There is currently a bill before Parliament which may expand these powers, The Building Legislation Amendment (Buyer Protections) Bill 2025 (Amendment Bill) seeks to amend the Building Act 1993 and the Domestic Building Contracts Act 1995.

  • Administering a new statutory insurance scheme: a proposed amendment is for the VBA to become the sole provider of domestic building insurance, the VBA will have oversight of practitioner registration, building permit applications and hypothetically domestic building insurance. The VMIA will hand over all existing contracts of insurance to the VBA. Importantly, the VBA will have the ability to seek alternative builders to be engaged to carry out or complete building work for owners have an entitlement under the new scheme.
  • Issuing rectification orders: currently the VBA can issue directions to fix building work during the building phase, proposed amendments will extend the powers of the VBA, allowing the VBA to issue rectification orders of incomplete, non-compliant or defective buildings for up to 10 years after the work was completed.
  • Administering domestic building disputes: the proposed amendments if approved will mean that the VBA will take over from Consumer Affairs Victoria (CAV) administration of domestic building work disputes, including the DBDRV process.

Note: As of the publication of this article, the above powers are proposed amendments under The Building Legislation Amendment (Buyer Protections) Bill 2025. This means they are not currently available for resolving domestic building work disputes. However, they may be worth considering before you commence your application at the VCAT.

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