Resolving Building Contract Disputes Quickly and Cheaply

Disputes over building contracts are now required to be resolved quickly and cheaply and ideally without litigation. The “paramount object” of the uniform Commercial Arbitration legislation (in force in most of Australia since 2010) is the resolution of commercial disputes without “unnecessary delay or expense” by “impartial arbitral tribunals”. Western Australia and Queensland are the latest States to embrace the uniform regime.

Most of the Commercial Arbitration Act 2012 (WA) came into operation on 7 August 2013, while the Commercial Arbitration Act 2013 (Qld) commenced in May 2013. The uniform legislation echoes a wider trend in dispute resolution and case management away from court-based adjudication, and advocating the just, timely, and cost-effective resolution of disputes. Provisions of the uniform legislation reflect this approach in various ways:

  • Courts must stay proceedings and refer a dispute to arbitration if a valid arbitration agreement is in place;
  • Parties in dispute can streamline arbitration processes; and
  • Arbitrators have powers to promote effective arbitration
  • Aside from arbitration, other forms of resolution of building contract disputes include reference, mediation, expert determination, and adjudication.

One way of preventing building contractual disputes escalating to litigation is to reduce the opportunities for disproportionately punitive responses by one contracting party to another’s failure to perform a particular contract stipulation. Speculation is that the High Court’s decision in Andrews v Australia & New Zealand Banking Group Ltd [2012] HCA 30 may result in courts striking out time bar clauses as penalties where builders fail to adhere to extension of time contractual provisions, such as a requirement that a notice of claim for an extension of time be submitted within a specified period.

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