Construction FAQs
Q: What should I look out for when reviewing a building contract?
When reviewing a building contract, you should:
- Look for anything that appears abnormal or inconsistent.
- Check that the builder is properly registered.
- Review the number and content of any special conditions.
- Ensure the schedule is properly completed.
- Insert a reasonable defects liability period.
- Include sufficient liquidated damages (LD) for late completion.
- Avoid excessive prime cost (PC) or provisional sum (PS)
- Be cautious if the numbers in the contract seem unrealistic—this can be a warning sign.
Constructing a dwelling is a lengthy process, and the building contract operates on a daily basis for several months. We strongly recommend clients carefully read through their contract and become familiar with it, so that they know when to seek legal advice if issues arise.
Q: What are Prime Cost (PC) and Provisional Sum (PS) items?
These are items whose exact costs cannot be determined at the time of signing the building contract.
Although they are usually included in the contract price, the final amount may vary depending on actual costs—this means the total contract price can increase or decrease.
In most single residential dwelling contracts we’ve seen, PC and PS items are usually minimal or absent.
Because they can change the final contract price, it is advisable to avoid them where possible.
Q: What should I do if my builder delays completion?
Under standard HIA contracts, if the works are not completed within the agreed building period, the owner is entitled to claim liquidated damages as specified in the contract.
The appropriate steps depend on the client’s preference, the cause of the delay, how much work remains, and how long it will take to complete.
Practically speaking, many clients worry that claiming liquidated damages before taking possession may cause further conflict or delay. Legal advice should be sought before taking this step.
Q: Can I terminate the building contract if there are defects?
Not usually. Possession is generally handed over only after the construction is complete. During the final inspection, the owner should provide a list of defects for rectification.
A right to terminate typically arises only when:
- The builder suspends work without a valid reason;
- The builder is in substantial breach of the contract; and
- A 14-day written notice has been given.
Q: What if defects appear during construction?
If the owner is obtaining finance, the financier may conduct inspections for valuation purposes—but these do not guarantee that the building is free from defects.
We recommend owners engage an independent project manager or superintendent, supported by contract clauses allowing them to determine progress and approve claims.
This helps ensure the works are carried out according to the plans, drawings, and required workmanship standards.
Q: What is a subcontractor?
Builders often do not perform all the work themselves—they engage subcontractors for specific tasks.
For example, a concreter might be hired to supply and pour concrete.
Legally, the owner’s contract is with the builder, not the subcontractor.
The builder remains responsible for ensuring the subcontractor’s work quality and payment.
Q: Should I go to VCAT or Court for a building dispute?
If the dispute is a domestic building dispute, it must first go through the Domestic Building Dispute Resolution Victoria (DBDRV) before proceeding to VCAT.
If the dispute is not covered by the Domestic Building Contracts Act 1995 (Vic), it can go to Court—depending on the amount claimed.
Under section 54 of the DBC Act, a domestic building dispute is one between an owner and a builder, subcontractor, architect, or engineer, relating to:
- The construction, renovation, or alteration of a home;
- Landscaping, paving, or fixtures associated with a home;
- Provision of utilities (lighting, heating, ventilation, water, etc.); or
- Demolition or removal of a home.
For more information on procedures and costs, see Litigation FAQs.
Q: What is the SOP Act and how does it relate to me?
The Building and Construction Industry Security of Payment Act 2002 (Vic) (SOP Act) ensures that those carrying out construction work or supplying goods and services under a construction contract are paid promptly.
It mainly applies to commercial building contracts and agreements between builders, subcontractors, and suppliers.
To invoke the SOP Act:
- The contract should be properly prepared;
- Invoices must clearly state:
“This is a payment claim made under the Building and Construction Industry Security of Payment Act 2002 (Vic).”
If correctly handled, the SOP Act can lead to a binding adjudication determination, enforceable by the Court—usually faster and less expensive than traditional court proceedings.
Pricing (for reference)
- HIA or MBA standard contract review
(excluding plans, drawings, and specifications):- Verbal advice: ~$990.00
- Written advice: ~$2,200.00
(based on minimal special conditions — typically no more than two pages)
- VCAT application or defence:
Assessed case by case.
Employment FAQs
Q: What is unfair dismissal?
A dismissal is considered unfair if it is:
- Harsh, unjust, or unreasonable;
- Inconsistent with the Small Business Fair Dismissal Code (if applicable); and
- Not a genuine redundancy.
Q: My employer says my dismissal was a redundancy, but that’s not true. Can I take legal action?
Redundancy is a legal defence for employers in an unfair dismissal claim.
As an employee, your first step is to demonstrate that the dismissal itself was unfair.
Q: When does a dismissal become unfair?
A dismissal may be considered unfair if the employee was not given notice or an opportunity to respond or improve.
Good employment practice includes:
- Providing verbal and written warnings about unsatisfactory performance or conduct;
- Giving the employee an opportunity to respond and allowing a support person to attend;
- Allowing a reasonable timeframe for improvement.
Q: What should I do if I think I was unfairly dismissed?
You should apply to the Fair Work Commission (FWC) within 21 days after your dismissal takes effect.
Q: What can I get if I am successful with my unfair dismissal application?
The FWC may order either:
- Reinstatement of your position, or
- Monetary compensation.
The median compensation is typically around 5 to 7 weeks’ wages.
Q: What happens after I submit my unfair dismissal (UD) application to the FWC?
Once your application is submitted:
- The FWC will notify your employer, who must respond within the required timeframe.
- In most cases, the matter will be listed for a conciliation conference.
- If the matter doesn’t settle, it will proceed to a determinative conference or hearing, where a Commission Member will make a decision.
Q: What is “general protections”?
You may be protected under general protections if you are dismissed, demoted, or overlooked for promotion because of:
- Exercising your workplace rights (e.g. taking leave);
- Your age, sex, disability, or another discriminatory reason; or
- Being away from work due to illness or injury.
Other grounds include coercion, undue influence or pressure, or misrepresentation affecting workplace rights.
Q: How long do I have to make a general protections application to the FWC?
- If involving dismissal: within 21 days after the dismissal takes effect.
- If not involving dismissal: within 6 years.
Q: What happens after I submit a general protections (GP) application to the FWC?
For both dismissal and non-dismissal matters:
- The FWC will notify your employer, who must respond within the given timeframe.
- If the employer agrees to proceed, the Commission will hold a conference.
- If the matter does not settle, the FWC will issue a certificate, and either party may then take the case to court.
Q: What is the difference between an employee and a contractor?
An employee works directly for an employer and receives entitlements such as annual leave and sick leave.
A contractor operates independently, often for multiple clients, and does not receive such entitlements.
Factors that help determine whether someone is an employee or contractor include:
- The level of control the business has over how work is performed;
- Who carries financial risk and responsibility;
- Who provides tools and equipment;
- Whether the worker can delegate or subcontract work;
- How work hours are set;
- Whether there is an expectation of ongoing work.
Q: I think I’m underpaid — what should I do?
If you believe you’ve been underpaid:
- Check the relevant Award or enterprise agreement to calculate how much you’re owed.
- You can contact the Fair Work Ombudsman for assistance.
In general, underpayment claims cannot relate to periods more than 6 years before court proceedings are commenced.
Q: Can my employer monitor my social media?
It depends.
While employees have a right to privacy, they also have responsibilities — for example, avoiding posts that could damage the employer’s reputation or breach the employment contract.
The extent of monitoring may depend on:
- The content of the social media post;
- The device used (work or personal); and
- The terms of your employment contract or workplace policy.
Both privacy and employment laws apply in assessing whether monitoring is lawful or reasonable.
Litigation FAQs
Q: How long does a proceeding take?
The duration depends on which court or tribunal the case is heard in:
- Magistrates’ Court (MCV): approximately 6–9 months
- County Court (CCV): usually 9–12 months
- Supreme Court (SCV): around 9–12 months
- VCAT (goods & services or residential tenancy): approximately 3 months
- VCAT (retail or building & construction): around 12 months
Q: What factors can affect when the trial will be held?
- Which jurisdiction the matter is in
- The location of the Court or Tribunal
- The Court’s or Tribunal’s workload
- The complexity of the case and the pre-trial work required
- Any interlocutory (interim) applications made during the process
Q: How many days will the trial take?
This depends on the number of witnesses.
- The more witnesses, the longer the trial.
- Time is required for examination and cross-examination.
- Witnesses may include clients, the other party, experts, and subpoenaed individuals.
- If an interpreter is required, expect the hearing time to roughly double.
Q: Is legal representation compulsory?
VCAT:
- Representation rules vary depending on the list.
- Usually allowed: Building & Property, Residential Tenancy, Planning
- Leave required: Goods and Services
- See: VCAT – Legal and Professional Representation
Courts (MCV, CCV & SCV):
- Individuals can self-represent.
- Companies are required to have legal representation.
- It is strongly recommended to engage a lawyer, as laypersons usually lack experience with court procedures and document requirements.
Q: What are the usual steps in a proceeding?
This varies depending on the court or tribunal, the type of case, and the relevant list.
However, common steps in a civil or commercial litigation include:
- Pleadings: Statement of Claim, Defence/Counterclaim, Reply, Further and Better Particulars
- First Administrative Mention: Timetable orders are set
- Discovery: Exchange of documents and Affidavits of Documents
- Mediation
- Expert Reports
- Witness Statements or Outlines
- Subpoenas
- Trial Preparation: Chronology, List of Issues, Court Book Index, etc.
- Pre-Trial Conference
- Trial
Interpreter needs should be considered throughout.
The sequence may vary depending on the court’s directions or practice notes.
Q: How much does it cost to run a case?
Costs vary significantly depending on:
- The jurisdiction and court level
- The case type and complexity
- The volume of documents
- Whether expert evidence is required
General cost estimates:
- VCAT: $30,000 – $150,000
- MCV: $30,000 – $80,000
- CCV: $60,000 – $150,000
- SCV: $100,000 – $250,000
Q: When is an expert report required?
Expert reports are necessary when there is uncertainty regarding the quantum (amount) claimed — for example:
- The scope or cost of repair work (e.g. water ingress, mould remediation, make-good works)
- Tenancy “make good” obligations
- Calculation of unpaid rent or audit of payments
Experts provide professional opinions that help quantify damages or clarify technical issues.
Q: What are the costs consequences of litigation?
- VCAT: Under section 109 of the VCAT Act, each party generally bears its own costs (unless contract terms state otherwise).
- Courts (MCV, CCV, SCV): The losing party usually pays the winning party’s costs, assessed per the court’s Scale of Costs.
Estimated recoverable costs:
- MCV: < 50% of total costs
- CCV: < 60%
- SCV: < 70%
Recoverable costs also depend on the handling solicitor’s hourly rate.
Q: What documents should I prepare before seeing a lawyer?
- Any existing Court or Tribunal documents
- A concise summary of the key facts (who, what, when, where, and how)
- Relevant supporting evidence
- A list of questions you wish to ask
Q: What are the risks of going to trial compared to settling early?
Risks of going to trial:
- Legal costs (your own and the other side’s if you lose)
- The uncertainty of judgment
- Enforcement risks and costs
Formula:
Total Risk = Own Legal Costs + Opponent’s Costs + Claimed Amount
Pros of settlement:
- Avoid litigation risks
- Save costs
- End the dispute early
Cons of settlement:
- Pre-litigation settlements may lack clarity about the full scope of the dispute
- Cannot enforce “summary judgment” if the other side defaults later
Late settlements:
- Legal costs will still factor into settlement terms
- The later the settlement, the more costs have already been incurred
Q: What is mediation, conciliation, arbitration, directions hearing, and trial?
Mediation / Conciliation / Conference
- These terms are used interchangeably in different jurisdictions (MCV, CCV, SCV, FWC, DBDRV, VSBC, etc.)
- Confidential and without prejudice discussions
- Aimed at early resolution, often compulsory before trial
- Settlement is voluntary and not guaranteed
Arbitration
- Similar to a trial but held privately, outside the court system
- The arbitrator’s decision is binding and enforceable
- Governed by specific arbitration rules (usually defined in the contract)
- Common in international contracts
Trial
- Formal court or tribunal hearing
- A judge (or member) makes a final, binding decision
- Each party must present and argue their case
Q: Why do I need to brief a barrister?
Barristers specialise in courtroom advocacy. Their role includes:
- Representing clients in open court
- Preparing legal arguments and cross-examining witnesses
- Providing expert advice on evidence and case strategy
Barristers’ experience often brings valuable insight both before and during proceedings.
Solicitors, by contrast, focus more on drafting documents, liaising with clients, and instructing counsel.