Dispute resolution and conciliation

To assist in managing these situations, HIA’s South Australian building contracts include a structured dispute resolution process to help manage these situations. Below is a guide to the dispute resolution and conciliation provisions set out in HIA’s domestic building contracts.

Step 1 – Negotiation

If a dispute arises between the builder and the homeowner, the first step is attempting to negotiate a mutually acceptable resolution to the dispute. This is not a formal process under the contract – rather, this is both parties attempting to work together to resolve the issue. Both the builder and the homeowner should act fairly and reasonably, including:

• communicating with the other party in a respectful and timely manner;
• providing reasonable access for the builder to inspect and fix defective work;
• rectifying genuine defects within a reasonable timeframe; and
• paying progress claims on time and not unfairly withholding payment. 

In some cases, it may be helpful to provide the other party with a written notice of dispute. This can assist in identifying the matters to be resolved. A notice of dispute should include:

• details of the parties, contract and project;
• a brief history of the matter;
• the issues in dispute; and
• the proposed actions to resolve the dispute.

It is strongly recommended that any agreement to resolve the dispute is made in writing and signed by each party. 

Depending on the complexity of the dispute, it may be appropriate to seek assistance from a lawyer in preparing correspondence such as a notice of dispute or a formal record of the agreement between the parties, particularly where a deed is required.

Step 2 – Conciliation

If the dispute cannot be settled through negotiation because the parties are unable to reach an agreement, HIA building contracts provide for an alternative dispute resolution process. The first part of this process is conciliation.

Conciliation is a process in which the parties to the dispute - with the assistance of an impartial third party (the conciliator) - identify the dispute issues, develop options, consider alternatives, and endeavour to reach an agreement.

Check your contract is eligible

Please read your HIA contract and familiarise yourself with the alternative dispute resolution clauses including any notice requirements.

HIA conciliation will not be available in certain circumstances, including:

• if you are not using a HIA building contract that includes a conciliation clause; and
• if the builder was not a HIA member on the date the contract was signed.

If HIA conciliation is not available to you, the following options may assist:

• CBS conciliation for disputes between a business and a consumer
• SA Small Business Commissioner dispute resolution for matters between businesses

Commence conciliation

The process for conciliation is set out in the General Conditions of the relevant contract. However, to commence:

• state that you intend to commence conciliation under the HIA building contract; and
• outline the nature of the dispute.

Both parties should attempt to appoint a mutually agreed upon conciliator to assist in the resolution of the dispute.

If parties are unable to agree on a conciliator, HIA will appoint a conciliator at its sole discretion.

For assistance finding a conciliator, consider this list on the SA Courts Administration Authority website.

• Write a letter marked attention to HIA Contracts and Compliance containing the contact details of the parties, nature of the dispute, and that you seek to commence the conciliation process. Please also include with the letter all documents relevant to the dispute, such as:
• a copy of your notice advising the other party that you intend to commence conciliation;
• a copy of your signed contract; and
• any other relevant documentation such as drawings, photographs, correspondence, and notices.  

The letter and supporting documentation can be sent by email.

Appointment fee

HIA’s current policy on conciliation fees applies as follows:

Once HIA has assessed your application, the applicant (the person who has initiated the conciliation process) is required to pay a non-refundable appointment fee of $200. This fee covers HIA’s administrative role in appointing the conciliator only.

The invoice must be paid for the appointment process to continue.

Conciliation fees

The conciliator will determine their fees based on the matters in dispute and their complexity. Typically, these fees will be shared equally by the parties and are payable directly to the conciliator. HIA does not hold funds in contribution to the conciliator’s fees.

HIA’s role

HIA’s role is to appoint the conciliator. We do not participate in the dispute resolution process.

Once HIA has received your documentation and payment, we will:

• contact the conciliation panel and determine a conciliator that is available to facilitate the conciliation;
• seek agreement from the applicant for the appointment of the suggested conciliator; and
• once we have received confirmation from the applicant that both parties agree to the conciliator, we will appoint the conciliator and notify all parties in writing. 

Once a conciliator has been appointed, HIA’s role is complete. Any further correspondence regarding the matter should be directed to the conciliator and copied to the other party.

During conciliation

The conciliator will arrange for a suitable time and location for the conciliation to be held. If both parties agree, this may be at the HIA offices.

The conciliator may:

• guide or assist in determining the process for the conciliation;
• have an advisory role on the matters in dispute;
• suggest options for resolving the dispute; and
• provide advice on settlement terms. 

The conciliator also has powers to inspect or copy any documents relevant to the dispute and take any samples or tests.

It is important to understand that the conciliator’s role is to assist the parties in reaching a mutual agreement to resolve the dispute. The conciliator cannot make a determination for the parties.

Upon completion of the conciliation

The conciliator will request that both parties sign a written agreement which sets out the terms, evidence and any agreement reached during the conciliation.

Step 3 – Dispute reference

Dispute reference applies if the parties have not been able to reach an agreement through the conciliation process.  Dispute reference takes the form of an arbitration, which is a process that occurs outside of legal court proceedings but is a more formal process in which the parties present their evidence and respective cases to the arbitrator who makes a binding determination. Alternatively, the parties may refer the matter to Court.

The process for dispute reference is largely the same as the conciliation process above, however, there are some key differences such as:

• the referee can hire consultants to assist them;
• a decision will be made based on justice and fairness;
• the referee can require monies paid towards costs be apportioned differently if there are special reasons; and
• the referee will decide on the dispute (as opposed to the parties making this decision) and the decision of the referee will be binding on the parties.

Legal representation

Throughout the conciliation or dispute reference process, the builder and the owner are entitled to engage legal representation to advise and assist them throughout the process. However, legal representation cannot be present at hearings or conferences unless both parties agree.

To find out more, contact HIA's Contracts and Compliance team

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The above is intended to provide general information in summary form. The content does not constitute specific advice and should not be relied upon as such. Formal advice should be sought by members and customers with respect to particular matters before taking action.