Q&A with Harriet Warlow‑Shill: Navigating Forum Selection in Construction Disputes

Why is forum selection such a common source of confusion in construction disputes, particularly in Victoria?

In recent years, several court decisions have changed the way building disputes are handled. What used to be a fairly clear process is now less predictable. For example, in  Krongold v Thurin [2023] VSCA 191 (Krongold), the Victorian Supreme Court of Appeal had the effect of directing many domestic building disputes into the County Court due to federal jurisdiction requirements. Only a few years ago, this was uncommon. As a result, lawyers and parties need to think much more carefully about which forum is actually available and appropriate. 

In your opinion, when are statutory and tribunal pathways such as VCAT or the BPC the right choice - and when are they not?

It is sometimes unclear whether a domestic building dispute should be heard in a tribunal or a court. There is no single answer - it depends on the nature of the claim and the parties involved. For example, disputes involving the Water Act 1989 (Vic) or an Owners Corporation are usually heard in VCAT, whereas matters involving federal legislation may need to be brought in a court.

What factors should prompt practitioners to commence proceedings in the Magistrates’, County or Supreme Court rather than a tribunal or statutory forum?

Practitioners should consider jurisdictional limits, the value and complexity of the claim, cost, and how easily the outcome can be enforced. The Magistrates’ Court may suit lower-value matters where a quick, cost-effective result is preferred, whereas the County Court offers greater procedural depth and authority, which can be important for complex disputes or where enforceability and precedent matter. This may make court proceedings preferable to relying only on specialist tribunals or interim processes like Security of Payment adjudications.

In your opinion, how effective are private dispute resolution avenues such as adjudication under the Security of Payment Act (Vic), arbitration, and mediation or conciliation?

 Private dispute resolution processes can be very effective, but each works best in different situations. Adjudication under the Building and Construction Industry Security of Payment Act 2002 (Vic) (Security of Payment Act (Vic)) is helpful for getting money flowing quickly, although the decision is more interm. Arbitration can provide a binding outcome, making it more suitable for more complex or higher-value matters, whilst mediation and conciliation are often quicker and less expensive, and better for cooperating parties. In the end, the key is choosing the right process for the client’s needs, and should be assessed on a case-by-case basis. 

Which jurisdictional overlaps or limitations most commonly catch practitioners out, particularly around monetary thresholds and subject-matter restrictions?

At present, one of the biggest challenges for practitioners is uncertainty around whether a matter should proceed in the County Court or VCAT. This becomes particularly difficult where, for example, a client is defending a counterclaim that may be more appropriate for VCAT, whilst the primary claim has been issued in the County Court - or the situation is reversed.

Can you share any recent cases that illustrate the real consequences of choosing the wrong forum for a construction dispute?

Choosing the wrong forum in a construction dispute can create serious risks. In Krongold, for example, it was later found that some claims involved federal issues that VCAT had no power to decide. The matter had to be struck out and moved to the Supreme Court, by which time some claims were invalid under their limitation periods. This issue occurred in Lloyd’s v Shangri-La Construction [2024] VSC 556 as well. Although Krongold introduced a discretionary relief for such cases where limitation periods become difficult, the case demonstrated that choosing the wrong forum can cause delay, extra cost and real limitation risk. 

How does enforceability differ across tribunals, courts and private processes, and why should this be a key consideration?

 In construction disputes, an important distinction arises in relation to enforcement options. While Security of Payment adjudication determinations are enforceable as judgment debts, the decision of whether they can properly form the basis of a statutory demand is murky. In some circumstances they may support a statutory demand, but the position is not straightforward and carries risk. By contrast, a court judgment provides a clear and reliable foundation for issuing a statutory demand. This distinction can be crucial where recovery or insolvency pressure forms part of the client’s broader strategy.

How should practitioners balance speed, cost and procedural complexity when advising clients on forum choice?

Different clients prioritise different things - some value speed and cashflow, while others are more concerned with a thorough process. Practitioners should regularly check in with clients to ensure the chosen forum continues to align with their budget, appetite for risk, and tolerance for delay.

What practical criteria would you recommend practitioners prioritise when selecting the most effective forum?

I would recommend first taking the time to really understand what an ideal outcome looks like for the client, and then building the strategy - including the choice of forum - around achieving that result.