Introduction
This article is relevant to builders who have previously been through the Domestic Building Dispute Resolution Victoria (DBDRV) process, and have been served with a VCAT application. (For more information on the DBDRV process and exceptions see Guide to taking legal action for Domestic Building Defects Disputes – Part 1.)
The following must not be construed as legal advice, as each case is different. Marchesin & Co. Lawyers is happy to hear about your matter – feel free to give us a call on 03 9111 5677 to speak with a lawyer.
I’ve been Served, what should I expect?
You can either defend the claim against you or negotiate a settlement, such as returning to undertake rectification of domestic building defects.
You may decide if the most practical or cost-effective option is to return to the site and carry out the necessary rectification works yourself. Or alternatively, you might consider offering a financial settlement to resolve the matter.
Obtaining legal advice or guidance from a Solicitor with domestic building knowledge can help you weigh up these options and decide on the most effective course of action.
(a) Directions Hearing
A Directions Hearing is not necessary for all cases, however it is usual for the Building and Property List, it is a short preliminary hearing that:
• Clarifies issues and explores resolutions;
• Decides if parties should attend mediation, and/or a compulsory conference;
• Sets the date and time of the final hearing, this will include an estimate of the number of days the hearing will take;
• Orders expert inspections of the Property; and
• Can make final orders if an agreement has been reached or a legal issues needs to resolved.
The VCAT can schedule a Directions Hearing or any party can request one.
(b) Domestic Building Defects
An independent expert may be required to give an independent costing to base your settlement on, that expert will change depending on what the claim is based on i.e. is it a water claim – water expert, building movement or cracking – an engineer.
(c) Choosing an Expert
Your view on what rectification work should be undertaken should be independently assessed by a building expert, rather than yourself (due to a presumption of bias).
The role of the Expert Witness in building disputes can be crucial; when deciding on your choice of Expert it is very important to look for:
• Honesty, courage and integrity – you don’t want someone who just tells you what you want to hear, you need someone who will give you the truth, even if it doesn’t support your case
• An expert who is properly qualified to give expert opinion
• Good communication skills – they may need to explain their opinions clearly and persuasively in the VCAT or court
• Prior experience giving evidence in court – the courtroom is not the place to test out someone new, as that could put your case at risk
(d) Scope of Works
The Scope of Works that an expert can provide will play an important role in negotiating. Further, it helps obtain quotes.
The Scope of Works will outline what alleged defects need to be rectified, so you can choose whether to return and perform the rectification, pay a settlement sum or a combination of returning and financial settlement.
When deciding on the most practical or cost-effective option you should consider factors such as:
• The severity and complexity of the alleged defects
• Whether rectifying the defects would be more economical than defending the claim
• The likelihood of the other party accepting your return
• The impact of returning on your future liability
• The time and cost involved in rectifying the work versus reaching a negotiated settlement
(e) Making an Offer to Settle
Your offer must remain open for acceptance for a minimum period of 14 days and during this time, the offer cannot be withdrawn without the permission of the Tribunal, s 114 of the Victorian Civil and Administrative Tribunal Act 1995 (Vic) (the Act. To validly accept the offer, a party must provide the offering party with acceptance in writing i.e. not verbal.
(f) Negotiating a Settlement
It is essential after receiving acceptance in writing to draft proper Terms of Settlement, once drawn up and executed, the Terms of Settlement become a binding agreement that the parties must adhere to. Marchesin & Co. Lawyers can assist in drafting a settlement agreement document.
The VCAT has created a “Terms of Settlement” form that parties may use to resolve and settle a dispute. Whilst the form provides a useful starting point, it is good practice to include specific terms tailored to the circumstances of your matter. This may include clear timelines for performance of the Scope of Works.
To maintain the required standard, it may be necessary to include Critical Points in the Terms of Settlement which may require the inspection by an independent Expert that confirms the rectification processes are being performed correctly. For example, inspection of waterproof membranes before tiles are laid.
If I want to defend against the claim made against me at the VCAT?
You may require assistance in drafting a response, such as a Points of Defence. It may also be appropriate to consider filing a counterclaim, particularly if the contract ended on poor terms and there are outstanding invoices. If the domestic building contract is still on foot, please give us a call on 03 9111 5677 to speak with a Solicitor.
Under s 60 of the Act, the VCAT may order that a person be joined as a party to the proceeding, if the person is thought to be bound by or have the benefit of an order made by the Tribunal, the person’s interests are affected by the proceeding, or for another reason it is desirable that the person be joined as a party.
Being joined as a party allows the joinder to “adduce evidence, to join in argument and to appeal”, and exposes the joinder to the possibility that they will be ordered to pay the costs of another party.
Note: PNBP1 deals with the joinder of parties to a proceeding in the Building and Property List for a domestic building dispute.
Evidence
The VCAT is not bound by the rules of evidence, s 98 (1)(b) of the Act. Meaning the VCAT doesn’t have to follow the strict rules of evidence that apply in formal court proceedings (like those in the Evidence Act 2008 (Vic)).
However, parties are not allowed to “adduce evidence without regard to relevance”, there must still be relevance to the evidence being presented.
Timeframes
The VCAT will provide both parties with the same directions notice that outlines what tasks are required and the timeframe that they must be submitted to the Tribunal by. Failure to submit to the Tribunal has consequences and may result in your claim being delayed.
Experts
Expert evidence is used at the VCAT when the Tribunal needs help understanding a technical or specialised issue. This could include reports from building consultants, engineers or other professionals. The expert provides an independent opinion to help the VCAT make a fair decision.
In building cases, the report should state what rectification work is needed, the cost of the rectification and whether there are any alternatives.
What is Concurrent Evidence?
In some VCAT matters an order will be made for the parties to present concurrent evidence, instead of having each expert witness give their own evidence, the experts are sworn to give evidence together.
Scott Schedule
A Scott Schedule is a chart that describes the alleged defect, with each expert’s view, whether there is an agreement on the defect between the experts and the agreed cost of the defect. Where there is no agreement, the schedule will have the cost differences.
The Scott’s Schedule is often Ordered by VCAT members to be provided as it provides knowledge of the technical problems and the dispute, together with costings, in the one document. This allows the VCAT Member to efficiently conduct the Compulsory Conference (Mediation by a VCAT Member).
N.B. the above is an oversimplified outline and not legal advice.
Wait, there’s more! Our next article, Part 4, will discuss the VMIA process.
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