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Inform | Mediate | Advocate

Case Studies

Case Study 1  - Activation of the Building and Construction Industry Dispute Resolution Code 

The OSBC was approached by a small business that had engaged a contractor to do building work on its premises. It raised a number of issues in relation to the quality of workmanship and the fact that the  work had only been partly completed. It had attempted to resolve the matter directly with the contractor without success. 

The SBC contacted the contractor, who initially responded. However, communications deteriorated over time to the point that he was no longer engaging. The SBC elected to activate one of the six Industry Codes under the Fair Trading Act 1987 – in this case, the Building and Construction Industry Dispute Resolution Code. Under that Code, the SBC was able to mandate that the parties attend a formal mediation in an attempt to resolve the outstanding issues.

A mediation was conducted, and both parties attended in good faith. During the mediation, the parties discussed the matter in depth and the small business came to understand that the contractor had been experiencing issues within his personal life.

The parties were able to reach a settlement agreement at mediation. The contractor agreed to pay compensation for the quality of work, that would need to be repaired by an alternative company.

Overall, this was a great example of the SBC activating one of the Industry Codes, including the extra powers that go with that. It resulted in a successful outcome.

Case Study 2Failure to make payments to a supplier 

A small retail shop in regional South Australia found itself in quite substantial debt to one of its major suppliers, which was part of a large multi-national company that usually adopted a quite strict approach to late payment and outstanding debts.

The shop owner worked long hours and the running of the business was unsophisticated – particularly in relation to computers and emails. It ran on very tight margins, even before the discovery of the debt.

The supplier had allowed the debt to accumulate over more than two years without having pursued payment. That changed when its credit- controller demanded the shop pay around $100,000 within a week.

In the first instance, the SBC wrote urgently to the CEO of the supplier and asked it to place a hold on its debt recovery while the OSBC undertook initial investigations.

Those investigations revealed that the shop had two accounts with the supplier. It made payments on one account as required but was unaware of the others as the invoices were going into a “spam” folder of a second email address.

Further investigations revealed that the supplier’s representatives were not particularly proactive in communications with the shop. Put simply, the supplier could have done more to prevent the debts mounting up.

The SBC made a direct appeal to the CEO for some leniency to be exercised in the circumstances.

To the supplier’s credit, it recognised that both parties could have done better and offered the trader a long- term payment regime. The shop remains in business and is steadily repaying the debt.

Case Study 3 -  Small business issue with standard of work 

The OSBC was contacted by a small business that had engaged a specialist company to repair a roller door at its premises.

It reported that the cost for the work was substantially higher than it had been told prior to the work being undertaken, and that the repairs had not resolved the problems.

The OSBC facilitated good-faith negotiations between the parties and was able to help fashion an agreement that included a substantial reduction in the roller- door company’s invoice.

OSBC’s intervention, as well as the parties’ desire to reach a resolution, resulted in the parties being able to move on in their business dealings by way of a successful resolution.

Case Study 4 - Small business issue with a work vehicle

A small business owner had received a substantial quote from a vehicle dealer to address recurring issues with his work vehicle’s turbocharger, as well as oil leaks from the main seal. As the vehicle’s warranty period had only recently lapsed, the complainant was seeking to have the costs waived.

Discussions with the dealer confirmed that the warranty had lapsed and that negotiations between the parties had stalled. Through the SBC’s intervention, negotiations recommenced with both the dealer and the vehicle manufacturer.

The SBC highlighted sections of Australian Consumer Law relating to a product being fit for purpose past the warranty date. The manufacturer subsequently agreed to repair the main seal leak for free, to pay 50% of the labour costs and to provide a 75% discount for parts for repair of the turbocharger.

As a result, a successful resolution was reached via the negotiation process through the OSBC.

How can the Small Business Commissioner help with a dispute?

Click here to find out how the Office of the Small Business Commissioner can help with dispute resolution or phone 1800 072 722.

 

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