Director, Murray Thornhill, and Associate, Patrick Beilby, in our Dispute Resolution team have highlighted that parties wishing to resolve complex building disputes now face projected 4-year delays before they can obtain outcomes.
Building service and home building work contract complaints
With the high volume of building work complaints being lodged with the Department of Mines, Industry, Regulation and Safety (DMIRS), parties wishing to resolve complex disputes now face projected 4-year delays before they can obtain outcomes. It is now more important than ever to act quickly when served with a Notice of Proposed Complaint.
It is the nature of building defect complaints that over the passage of time, the defect or building work issue deteriorates and becomes more expensive to resolve. Further to this, as a party to a claim, you may find yourself in the SAT, and potentially facing a risk of insolvency if subject to an adverse judgment debt.
Who can make a complaint?
A complaint under the Building Services (Complaint Resolution and Administration) Act 2011 can be made by any person who is adversely affected by the carrying out of regulated building services.
A complaint may be made to the Building Commissioner by:
- A person whose interests are being or have been adversely affected by the carrying out of a regulated building service (i.e. the owner of the work or an affected third party); or
- An owner or builder under a contract for home building work valued between $7,500 and $500,000.
What should you do if you receive notice of proposed complaint?
A notice of proposed complaint is a necessary step taken by an aggrieved party prior to the service of a formal Notice of Complaint. It is something you should take seriously, and not ignore.
A notice of proposed complaint must:
- Formally outline and address the issues subject to the complaint – the complaint may be by email, and a claimant may use the prescribed form on the DMIRS website,
- Set out that the claimant intends to make a complaint to DMIRS,
- Include details of the remedy that they will seek, and
- Include details of the evidence on which they will rely
Following service of the notice of proposed complaint, the complainant must allow 14 days before filing a formal complaint to DMIRS.
If you receive a notice of proposed complaint you should respond quickly as this window is an opportunity to hopefully resolve the issue without it escalating to DMIRS (or potentially the SAT).
We recommend that you seek legal advice as soon as practicable after receiving a notice of proposed complaint, as a lawyer can provide advice regarding the building complaint resolution process, and assist with resolution of the dispute.
Why it is important to crystalise the issues at this early stage?
Any significant delay in resolving disputes can cause a plethora of issues, both with your relationship with the claimant (who may still be your client) and the issues that are the subject of the claim itself. Managing client relationships and protection of your professional reputation are fundamental aspects of business. Professional reputation is particularly important in the building industry, and building defect claims and breakdown of client relationships can have a significant material impact on your business and its reputation.
Further to this, crystalising, isolating and documenting the issues at an early stage can mitigate liability and prevent further claims from arising or being made.
Any failure to come to an agreement with the claimant may result in a formal Notice of Complaint being filed with the DMIRS.
Notice of Complaint
When a Notice of Complaint is filed with DMIRS, the Building Commissioner may make a preliminary decision to refuse or accept the complaint.
For the Building Commissioner to accept and investigate the compliant it must:
- Be made in the approved form;
- Be accompanied by the prescribed fee;
- Be made within the prescribed time;
- Contain proof that the claimant provided notice and made a reasonable attempt to resolve the matter before lodging a formal complaint;
- Not be considered vexatious, misconceived, frivolous, or without substance ;
- Not be the subject of an existing complaint under the Act;
- Not be subject to an order, judgment or other finding about the matter of the complaint;
- Not be the subject of a previous complaint to the Building Commissioner that has been refused or dismissed; and
- Contain sufficient detail and evidence to support the complaint.
Once a claim has been accepted by the Building Commissioner, they will appoint an authorised person to investigate the claim. It important that you are prepared to cooperate with the investigator and ensure you have copies of all relevant documents that will assist you in disputing the claim or mitigating your liability.
It should be noted that during the investigation period, the Building Commissioner may refer certain matters to the relevant permit authority for work under the Building Act 2011, or to a regulatory body or board for disciplinary action.
We strongly recommend that you seek legal advice as early as possible if a Notice of Complaint has been filed against you.
Your matter has been referred to transferred to the SAT
At any point, a complaint may be transferred to the SAT. This is usually done in circumstances where the issues the subject of the complaint are complex and/or expensive, to a value of greater than the Building Commissioner’s jurisdictional limit, being $100,000. You should be aware that a complaint can be referred SAT upon the Building Commissioner accepting the complaint, without an investigation.
The procedure for building defect disputes is different to other jurisdictions. Each party files their relevant supporting documents to be collated into a hearing book. Where there is an extensive list of issues or building defects the SAT may also order that the parties file a Scott Schedule, which helps clarify the issues in dispute and assists in streamlining disputes.
If you are not legally represented, we strongly recommend that you seek legal advice or obtain legal representation in SAT proceedings. There are often complex procedures or nuances to the SAT dispute resolution process that require legal advice or recommendations from a legal practitioner.
The following orders can be made or reviewed or ordered by the SAT
- Interim Order.
- Building Remedy Order.
- Home Building Work Contract Order.
- An order for costs.
If an order has been made, there is a separate process that needs to be followed to enforce both monetary and non-monetary orders.
A decision has been made by the Building Commissioner and you do not agree
If a decision has been made against you that you do not agree with, you can apply to the SAT to review the decision.
A review application to the SAT must be made within 28 days from the Building Commissioner’s order or decision. The SAT has discretion to accept an application for an extension of time, if the 28-day time frame has expired.
Key Takeaways – If you are served with a Notice of Proposed Complaint
- If you are served with a notice of proposed complaint, act fast and within the timeframes set out above.
- Seek legal advice as soon as practicable, ideally once you are served with a notice of proposed complaint, and certainly once a formal complaint has been lodged against you.
- Attempt to genuinely resolve the issue – the claimant may be your client, and you do not want the complaint or breakdown in the client relationship to affect your reputation.
- If the complaint is formalised ensure you cooperate with the investigator and provide all the relevant information when requested.
- If you dispute a decision made by the Building Commissioner, you have 28 days to apply to the SAT for a review of that decision.
- A dispute can be settled at any point (subject to the parties agreeing). A lawyer can assist in commercial negotiations with the drafting of any relevant settlement documents.
How HHG can help you
Here at HHG, we have a specialised construction and dispute resolution team and can provide timely and practical advice that can assist in dispute resolution, negotiations with complainants and/ or DMIRS personnel, preparation of responses or objections to applications, both in the DMIRS and/ or the SAT, as well as the preparation of any legal documents relevant or required throughout the course of the dispute.