Construction disputes in WA.

Construction disputes rarely become difficult because nobody knew there was a problem. They become difficult when early decisions are made without enough regard to the contract, the project record or the commercial objective.

The Housing Industry Association (HIA) has recently updated the dispute resolution provisions in its Western Australian contracts. Its public summary describes a more structured process, including written notice, an early meeting and, where agreed, mediation or expert appraisal. The updated clauses also address continuing performance while a dispute is being resolved.

The detail varies between contracts, including between contracts covered by the Home Building Contracts Act 1991 (WA) and those outside that regime. The executed contract therefore remains the starting point.

The practical point is however broader than the HIA changes: the way a party responds when an issue first appears can affect its legal and commercial position later. The objective is usually to preserve rights, evidence and commercial options while determining what outcome the business actually needs.

Before sending a formal notice or responding to a claim, check the executed contract, including any special conditions and amendments.

Identify:

• how a dispute must be notified;
• what information the notice must contain;
• who must receive it and how it must be served;
• any time limit for giving or responding to the notice;
• whether the contract requires a meeting, mediation, expert determination or arbitration to resolve a dispute;
• whether work must continue during the dispute; and
• any separate rights concerning payment, suspension or termination.

A valid concern can be weakened by a late notice, an incomplete claim or service on the wrong person.

The contract should also be considered alongside applicable legislation. Depending on the work and the nature of the dispute, separate statutory rights and short deadlines may apply, including under the Building and Construction Industry (Security of Payment) Act 2021 (WA), the Building Services (Complaint Resolution and Administration) Act 2011 (WA) or the Home Building Contracts Act 1991 (WA).

A contractual dispute procedure does not necessarily displace those rights.

A dispute notice should identify the issue clearly enough for the other party to understand the position and respond. Its form, content, recipient and method of service should comply with the contract.

Before sending it, check the relevant facts, supporting documents and deadlines. Avoid unnecessary admissions or allegations that may weaken the commercial or legal position.

Oral directions and discussions should be confirmed in writing. Record who said what, when and where the discussion occurred and any effect on scope, cost or program.

When a dispute emerges, preserve the available evidence before records are lost or people’s recollections fade.

This may include:

• the signed contract, amendments and special conditions;
• notices, directions, responses, variation and extension-of-time records;
• payment claims, payment schedules, programs and delay records;
• site diaries, photographs and videos;
• meeting minutes, requests for information and project communications; and
• records showing who had authority to give directions.

Prepare a chronology linking the significant events to the relevant documents. This allows the business and its advisers to determine what happened, what can be proved and which deadlines remain open.

Contractual notices, payment documents and directions should remain in open correspondence.

Genuine settlement negotiations may attract without prejudice privilege, but adding the words ‘without prejudice’ to an email does not of itself determine whether the communication is protected. Its purpose and context are key considerations and they matter.

Do not includea contractual notice within a without prejudice communication. Mixing the two can create uncertainty about whether the notice has been properly given and whether the communication can later be used as evidence.

Where a formal settlement offer may affect a later costs decision, obtain advice about its wording, supporting reasons and the period allowed for acceptance.

Families do not need every answer before they begin. A useful first step is to identify what has been decided, what decisions still need to be made and who should be involved in the next conversation. That may include the family’s accountant, financial adviser and lawyer, all working from the same understanding of the family’s objectives.

Good lawyers know the law. Excellent lawyers apply good judgement to the way legal, financial and family considerations meet in real life. For farming families, that means helping you consider the practical effect of a decision on the business you have built and the people you hope it will support.

A considered plan gives the next generation a clearer basis on which to contribute. It also gives every member of the family a better chance of understanding the path ahead, before a difficult event requires decisions to be made quickly.

When an issue first arises:

1. Find the contract
Locate the signed contract, amendments and special conditions.

2. Check deadlines
Review all notice, response and dispute resolution time limits.

3. Preserve records
Secure the project documents and relevant communications.

4. Build the chronology
Link the important events to the available evidence.

5. Control communications
Coordinate external project communications so instructions, notices and responses remain consistent.

6. Pause before material action
Obtain advice before suspending work, terminating the contract or sending a material admission or settlement offer.

Construction disputes are easier to manage while options remain open. Understanding the contract, preserving the project record and deciding on the commercial objectives should happen before positions harden, not after.