What Is Commercial Dispute Resolution?
A contract falls over, a payment is withheld, a joint venture unravels, or a shareholder relationship becomes unworkable. At that point, the question is no longer whether there is a legal issue. It is what is commercial dispute resolution, and how do you use it to protect your position without creating unnecessary cost or delay.
Commercial dispute resolution is the process of resolving business-related disputes. That can happen through negotiation, mediation, expert determination, arbitration, formal court proceedings, or a combination of those methods. The right path depends on the nature of the dispute, the urgency of the problem, the value of the claim, the documents in place, and the commercial outcome the parties are actually trying to achieve.
For many NSW businesses, the phrase sounds broader than it is. In practice, commercial dispute resolution covers a wide range of disagreements arising from commercial relationships. These often include breaches of contract, unpaid debts, shareholder and partnership disputes, misleading or deceptive conduct claims, property and leasing disputes, construction payment issues, supply disputes, restraint of trade matters, and conflicts involving directors' duties or corporate governance.
What is commercial dispute resolution in practice?
In practical terms, commercial dispute resolution is not just about starting a case. It is about identifying the dispute, assessing legal risk, preserving evidence, understanding leverage, and choosing the forum most likely to produce a sound commercial result.
That result is not always a trial. In fact, many significant disputes resolve well before final hearing. Sometimes the strongest move is a carefully drafted letter of demand supported by the relevant contractual and statutory position. Sometimes a without prejudice negotiation achieves more than immediate litigation. In other matters, urgent interlocutory relief is necessary because assets are at risk, confidential information has been misused, or a party is about to take a step that will cause irreversible damage.
A disciplined dispute resolution strategy looks at more than legal rights. It also considers timing, enforcement, reputational impact, business continuity, and whether the other side has the means to satisfy any judgment or settlement.
The main ways commercial disputes are resolved
Negotiation is usually the first step, whether informal or conducted through lawyers. When handled properly, it can narrow issues quickly and avoid the expense of a contested process. That said, negotiation is only effective where both sides have a realistic understanding of their position. Empty threats and poorly framed correspondence often make settlement harder, not easier.
Mediation is one of the most common methods used in commercial matters in NSW. It involves an independent mediator helping the parties work towards a resolution. The mediator does not decide the case. The value of mediation lies in structure, timing, and candour. It gives parties a forum to test assumptions, explore settlement options, and reach outcomes that a court may not be able to order, such as revised commercial terms, staged payments, confidentiality arrangements, or future trading conditions.
Expert determination is often used where the dispute turns on a technical issue, such as valuation, accounting treatment, rent review, or a specialist construction question. This process can be efficient, but only if the scope of the expert's role is clearly defined. If the dispute includes broader legal issues, expert determination may only resolve part of the problem.
Arbitration is a private adjudicative process where an arbitrator determines the dispute. It is more formal than mediation and often resembles litigation, but usually in a confidential setting with more procedural flexibility. Arbitration can be particularly relevant in high-value commercial contracts, cross-border matters, and agreements that contain arbitration clauses.
Litigation remains necessary in many cases. Supreme Court or Federal Court proceedings may be appropriate where there are complex legal issues, disputed facts requiring cross-examination, multiple parties, urgent injunctive relief, or a need for authoritative determination. Court proceedings also provide compulsory powers that private processes do not, including discovery, subpoenas, and enforcement mechanisms.
Why the choice of process matters
The method used to resolve a dispute can influence cost, speed, confidentiality, and bargaining power. A private mediation may preserve a valuable commercial relationship. A court application may be essential to stop a breach before losses deepen. Arbitration may offer privacy, but it is not always cheaper. Expert determination may be efficient, but it can be risky if the real issue is legal interpretation rather than technical expertise.
This is why commercial dispute resolution should never be treated as a one-size-fits-all exercise. Two contract disputes can appear similar on paper and still require very different strategies.
For example, an unpaid invoice claim with clear contractual documentation may call for swift recovery action and a sharp focus on solvency risk. By contrast, a shareholder dispute in a private company often involves deadlock, access to records, governance concerns, oppression allegations, and questions about future control of the business. Those matters rarely resolve well through a simplistic demand-and-file approach.
The issues that shape strategy early
The first stage of any commercial dispute is usually the most important. Early decisions tend to affect settlement posture, evidence quality, procedural options, and cost exposure.
One key issue is the contract itself. Dispute resolution clauses, notice provisions, jurisdiction clauses, limitation periods, security arrangements, default rights, and termination mechanisms all matter. A party with a strong factual grievance can still undermine its position by failing to comply with contractual procedure.
Another issue is evidence. Emails, meeting notes, draft agreements, payment records, text messages, company minutes, expert reports, and internal communications may all become relevant. Delay often creates evidentiary problems. Documents are lost, recollections harden, and parties start rewriting the history of what occurred.
Urgency also matters. If property is about to be sold, funds are being dissipated, a caveat is required, or confidential material is at risk of disclosure, immediate legal action may be needed. In those circumstances, the objective is not simply resolution. It is preservation.
Then there is commercial leverage. Some disputes are legally strong but commercially weak because the other party is insolvent or structurally difficult to pursue. Others may be arguable on liability but highly settleable because the operational pressure on one side is substantial. Good dispute resolution advice looks at both dimensions.
What commercial dispute resolution often involves in NSW
In NSW, commercial disputes commonly engage the Supreme Court, District Court, Local Court, NCAT in certain statutory or specialist contexts, and private processes such as mediation and arbitration. The appropriate venue depends on the claim type, value, statutory framework, and relief sought.
Procedure matters. Pre-action steps, pleadings, interlocutory applications, security for costs, evidence, privilege, and settlement offers can all influence outcome. Even where a matter is likely to settle, preparing it properly for litigation often improves the prospects of a favourable resolution.
That is especially true in disputes involving property development, construction, strata, leasing, or corporate control, where commercial pressure and technical legal issues often intersect. A party may need advice not only on the merits of the claim but on directors' obligations, project timelines, financing impact, insurer involvement, or parallel regulatory exposure.
Common misconceptions about commercial dispute resolution
One common misconception is that dispute resolution means going to court. It does not. Court is one pathway, not the definition of the field.
Another is that early compromise signals weakness. Often the opposite is true. A commercially intelligent settlement reached early can preserve value that would otherwise be spent on legal fees, management time, and operational distraction. The question is whether the compromise is informed and strategic, not whether it occurs before trial.
It is also wrong to assume that an aggressive approach is always the effective one. Some matters require firm immediate action. Others benefit from measured positioning, especially where relationships, reputation, or future projects are in play. Pressure without strategy is rarely persuasive for long.
When legal advice becomes critical
Not every disagreement needs external lawyers on day one. But where the dispute concerns significant money, business continuity, insolvency risk, property rights, serious allegations, governance issues, or urgent relief, early legal advice is usually decisive.
An experienced commercial disputes lawyer can assess the real legal position, identify immediate risks, and help shape a process that serves the client's broader objectives. That may mean pressing hard for early settlement, preparing a matter for mediation, resisting an unmeritorious claim, or commencing proceedings with a clear interim and final strategy.
For businesses and stakeholders dealing with high-value or technically demanding disputes, the benefit is not just procedural guidance. It is judgment. At Papallo Kouchoo Lawyers, that means advising with a clear view of both the legal merits and the commercial realities that determine whether a result is truly successful.
The most effective dispute resolution is rarely the loudest or the longest. It is the approach that protects leverage, keeps options open, and moves the matter towards an outcome you can live with commercially as well as legally.
A Practical Guide to Design Practitioner Registration in NSW
The NSW Design and Building Practitioners (DBP) scheme sets out who must be registered when preparing designs for certain types of buildings and what responsibilities come with that registration. Only the person who signs off and declares that a design meets legal requirements must be registered. While a team may contribute to preparing drawings or documents, the supervising designer (the person lodging the formal declaration) is the one who must hold registration, ensuring a clear line of accountability.
Registration is required when working on certain “regulated buildings,” including class 2 apartment buildings, class 3 hotels and boarding houses, and class 9c aged care buildings. This includes mixed-use buildings that contain any of these classes. You must register if you prepare regulated designs and sign the design compliance declaration, if you coordinate designs as a principal design practitioner, or if you are an architect or engineer from interstate working under mutual recognition.
Regulated designs relate to key building elements such as structure, waterproofing, fire safety, or drainage, or any design that relies on a performance solution. The registered design practitioner must ensure their design complies with the Building Code of Australia and integrates with the other designs on the project. The practitioner must only work within the limits of their registration class.
Before Construction Begins
Before building work can start, a registered design practitioner must prepare the construction-issued regulated designs for any part of the work involving a building element or performance solution. Once the design is ready for use on site, they must complete a design compliance declaration confirming the design complies with the BCA and fits properly with other relevant designs. A certifier cannot issue a construction certificate or complying development certificate without these documents.
These designs and declarations must be lodged on the NSW Planning Portal by the building practitioner or an “appropriate practitioner,” such as a registered design practitioner or principal design practitioner. Lodgement must occur before construction begins. On larger or more complex projects, a principal design practitioner may be appointed to coordinate all designs and declarations. After everything is lodged, the building work may start. The Building Commission NSW may inspect the site or review the lodged designs, and any issues must be rectified before work can proceed.
During Construction
If the building practitioner makes a change that affects a building element or a performance solution after construction has started, a registered design practitioner must prepare a new regulated design and complete a new compliance declaration. These must be lodged within one day. Work may need to pause while updated documents are prepared. Variations that do not affect a building element or performance solution do not require a design declaration but must be recorded by the building practitioner.
Before completion
As the project nears completion, and before an occupation certificate can be applied for, the applicant must give the building practitioner at least 14 days’ notice. If a principal design practitioner is involved, they must also receive 14 days’ notice to complete their principal compliance declaration. The building practitioner must then lodge a building compliance declaration confirming the work has been carried out according to the lodged designs. Only a registered building practitioner can make this final declaration.
This scheme helps ensure that building work is carried out safely and in line with properly checked, compliant designs. Knowing who must be registered, when declarations are required, and how documents must be lodged helps prevent delays and protects the integrity of the construction process. If there is any uncertainty about whether your role falls under the scheme, it is advisable to seek guidance early to avoid issues later in the project.
Papallo Kouchoo Lawyers are here to assist you and guide you through your construction project.
Photo by Daniel McCullough on Unsplash
Stay Fully Covered: How HBCF Works and What Homeowners Must Do to Comply
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The Home Building Compensation Fund (HBCF) protects NSW homeowners if their builder cannot finish the work or fix defects because they have become insolvent, died, disappeared, or had their licence suspended for failing to comply with a Tribunal or Court money order. When one of these events occurs (called a trigger event), you may be able to claim under the HBCF policy issued for your project.
Any residential building work over $20,000 must be covered by HBCF insurance before the builder starts work or takes any payment, including a deposit. After the builder is assessed, they receive a Certificate of Eligibility and then a Certificate of Insurance must be issued specifically for your property.
As a homeowner, you must receive this Certificate of Insurance before work starts. It must show your name, the builder’s exact legal name, your site address, the contract price, and a description of the work. You can check the certificate and the builder’s licence online. HBCF applies to most homes, including strata buildings up to three storeys.
If a trigger event occurs, HBCF may help with losses such as:
- Failure to start the work (loss of deposit)
- Failure to finish the work (up to 20% of the contract price)
- Major defects (covered for six years from completion)
- Non-major defects (covered for two years from completion)
If defects are discovered in the last six months of these periods, you have an extra six months to make your claim. The maximum cover is $340,000 for most current policies, and the protection also benefits future owners of your home unless a previous claim has used up the cover.
To comply with the policy and protect your right to claim, you must notify icare HBCF as soon as you become aware of any defect, loss, or problem—usually by lodging a Loss Notification Form. This must be done within the required timeframes, generally within six months of becoming aware of the issue. Even after notifying HBCF, you must still take reasonable steps to pursue the builder until a trigger event occurs.
By making sure your builder provides the correct insurance, keeping copies of your documents, notifying HBCF promptly, and continuing to follow the required process, you can ensure you remain protected under the HBCF scheme.
Be on time: Expert Evidence and the Danger of Personal Costs Orders
Delay in serving and filing evidence can be a dangerous thing sometimes. The case of The Owners – Strata Plan No. 94784 v Mirvac Projects Pty Ltd (No 3) [2024] NSWSC 936 is informative in this regard.
In the matter the plaintiff sought the leave of the Court to rely on expert reports served very late in breach of a “Guillotine order”. The plaintiff’s had effectively bought a motion to rely on further late expert evidence. The plaintiff solicitor was ordered to ‘show cause’ why he should not personally meet the costs of the motion and why he should not charge, his client, the plaintiff, for those costs. A more junior solicitor for the plaintiff had initially attempted to explain the delays in serving the reports as being due to ‘competing commitments and other general reasons’. However, for various reasons including the timing of the retainment of the experts the Court did not accept that initial explanation and so, it was left with the supervising lawyers to show cause. Fortunately, the further evidence showed that the delay was not caused by solicitors and the Court (Stevenson J) did not find grounds for personal costs orders.
It should always be remembered that evidence especially in the form of expert reports, should be lodged on time and every effort should be made to ensure that the case management timetable imposed by the courts and tribunals is met and abided by, especially where ‘guillotine orders’ are in place (these orders mandate the lodgement of material by a certain date – if there is a breach, the party responsible needs to provide an explanation to the court in order to have that evidence permitted).
Our solicitors at Papallo Kouchoo are experts in ensuring that your matter is conducted with efficiency and you receive the right advice, at the right time.
If you have any questions, please do not hesitate to contact us for a professional free consultation.
Understanding What Is a “Major Defect” Under the Home Building Act
When someone makes a building defect claim after the two-year warranty period for non-major (minor) defects has already passed, one of the first and most important questions is whether the issue qualifies as a “major defect” under the Home Building Act 1989 (NSW) (the Act). This is critical because major defects have a six-year warranty period, while all other defects only have two years. If a defect is not correctly classified as a major defect, the claim may fail simply because it is out of time for a minor defect.
A major defect is defined in section 18E of the Act. In simple terms, it is a defect in a major element of the building that arises from things like faulty workmanship, bad materials, defective design or failure to meet the structural requirements of the National Construction Code. To be considered “major”, the defect must either make the building (or part of it) unable to be lived in or used properly, or be likely to cause serious damage, destruction, or even a threat of collapse. The law also includes certain safety-related defects, such as combustible external cladding on high-rise buildings, or the use of banned building products as major defects.
A major defect must also involve a “major element” of the building. These include structural components such as foundations, walls, floors, beams and roofs, as well as fire safety systems and waterproofing. The Tribunal (or NCAT) has repeatedly confirmed that waterproofing is a major element, and it should be understood in a broad, practical sense, not a narrow technical one.
A common misunderstanding is that a defect must already be severe or close to causing significant damage before it can be classed as major. That is not the case. The Supreme Court in, Stevenson v Ashton [2019] NSWSC 1689, has confirmed that a major defect does not need to be “imminent”, “dire”, or already causing major harm. It is enough if the defect is likely to cause one of the serious outcomes listed in the Act.
In deciding whether a defect is a major defect usually involves a two-step process: first, determining whether the defect affects a major element of the building, and second, deciding whether it has caused or is likely to cause serious consequences.
It is also important to consider how long the defect has existed, whether it has already caused any damage, and the expected lifespan of the materials involved. Water ingress, even if only during heavy rain, is often taken seriously because of the risk of future damage, mould or structural problems.
Understanding what counts as a major defect is important because of the strict time limits in the Act. The definition is broader than many people expect, especially when it comes to waterproofing and defects that may worsen over time. Knowing these principles can help homeowners and owners corporations protect their rights and take action within the required timeframes.
If you’re concerned about possible defects or uncertain about your rights, reach out to us for a free professional consultation – we’re here to help.
Checklist: Could This Be a Major Defect?
A simple guide for homeowners and strata committees
Use this checklist to help work out whether a building problem may qualify as a major defect. This does not replace expert advice, but it helps you recognise the signs early.
1. Does the problem affect a major part of the building?
Tick any that apply:
☐ Structural parts (foundations, walls, floors, beams, columns, roof)
☐ Waterproofing (bathrooms, balconies, roofs, planter boxes, basement walls, etc.)
☐ Fire safety system (alarms, sprinklers, hydrants, smoke control systems)
☐ Combustible external cladding (especially on high-rise buildings)
☐ Major structural supports in garages, basements or retaining walls
If you ticked any of these, continue to step 2.
2. What caused the problem?
Tick any of the following you suspect or have been told:
☐ Poor or faulty workmanship
☐ Bad or unsuitable materials
☐ Defective design
☐ Not meeting the National Construction Code
☐ Use of unsafe or banned building products
If you ticked any of these, continue to step 3.
3. Could this defect cause serious consequences?
Tick any that apply:
☐ The area is hard or unsafe to use
☐ Water is entering the building
☐ Cracking or movement appears to be getting worse
☐ Parts of the building feel unstable
☐ There is mould, dampness or water staining
☐ You are worried about collapse or major damage
☐ The issue could spread or worsen over time
☐ The defect might stop the building being used normally in the future
If you ticked one or more, the defect may be a major defect.
4. What should you do next?
If you ticked items in all three sections (1, 2 and 3), your issue could be a major defect, and you may have six years from the building’s completion date to make a claim.
You should consider:
- Getting an expert report (engineer, building consultant, or waterproofing specialist)
- Seeking legal advice if the claim period may be running out
- Acting promptly to avoid losing your rights
Important Reminder
A defect does not have to be severe right now to be a major defect.
It only needs to be likely to cause serious problems in the future if not fixed.
If you’re concerned about possible defects or uncertain about your rights, reach out to us for a free professional consultation – we’re here to help.
Protecting your licence at the Tribunal
Our lawyers have significant experience in applying for, or defending license matters in NSW before various bodies, including building licenses at Fair Trading.
Applying for a licence or trying to defend your licence is not an uncomplicated matter and can become very involved.
Careless mistakes or overlooking various questions, or not including relevant material and documents, can cause you a lot of headache when applying for your trade or other licence.
For example, sometimes you may forget to declare various matters, or make the wrong declarations; sometimes you forget to give proper reasons for why something has happened or you may give reasons which don’t really explain your position properly (e.g. you forgot to declare that you were a director of a company which was liquidated, and/or give proper reasons which lead to its insolvency). Overlooking important matters like that can sometime make or break your licence, and your career.
Sometimes the authority will write to you and ask you to explain and ‘show cause’ why you should be given a licence, or why your licence shouldn’t be taken away.
It is crucial that you have experienced lawyers who can support you in that process and make sure that ‘no stone is left unturned’ to try and preserve your most precious resource and the thing on which puts bread on your table: your licence!
Our lawyers can help and guide you, both when you’re applying for a licence (say a builder’s licence) or when you’re asked to ‘show cause’ why your licence shouldn’t be taken away.
We have extensive experience dealing with many licensing problems, including when a licence is danger because of a criminal conviction or some other matter which an authority can use to deem you to be unfit to hold the licence.
At Papallo Kouchoo Lawyers, we do our utmost to uphold your rights and to ensure that your career runs smoothly and that your licence is protected.
If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.
Upholding your rights in courts and tribunals
Our lawyers will not hesitate to uphold your rights with fear or favour. We’ve done this continually for 60 years – the length of time that our firm has been in existence.
It is important that lawyers pay careful attention at every stage of the litigation including in what are known as ‘interlocutory’ steps (or the in the intermediate hearings before the final hearing). Some of these ‘intermediate’ hearings can for example make or break your case. The example of the interesting and controversial case of R v Kahtan ABDUL-WAHAB No 3 [2025] NSWLC is informative.
The case was conducted in the Local Court of NSW, and one of the main issues arose at an interlocutory stage, where the constitutionality (or legality) of a certain provision of the Crimes Act 1900 NSW was essentially a question which needed to be answered.
The Local Court may have effectively had no choice but to determine that ‘constitutionality’ (perhaps it could have referred (or ‘removed’) the matter to a court of inherent jurisdiction or a higher court, of its own motion but it did not — it did not refer or remove the matter to the High Court or to the Supreme Court of NSW).
The Court used the doctrine of ‘necessity to do justice as between the parties’ (Lambert v Weichelt (1954) 28 ALJ 282) to decide the constitutionality of a provision of a legislative instrument.
The essential fact is that it seems that no objection was taken during the course of the hearing for the accused in relation to that course with the Court itself saying that the “constitutional issue was not removed to the High Court by any of the parties under s 40 of the Judiciary Act (Cth) 1939.”
It is very hard to envisage that the Court had the jurisdiction to decide these questions without reference.
Cases such as Lambert v Weichelt seem to imply that the ‘necessity to decide constitutional questions’ arises only when those questions are within their own purview (i.e. when the jurisdiction exists for these courts to decide such questions).
It seems to us that the accused should have perhaps objected.
The lawyers at Papallo Kouchoo do our utmost to uphold our clients’ rights under the law, without fear, or favour.
If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.
Malicious Prosecution
Some litigants at times commence proceedings in response to a ‘prosecution’ which they believe, should have never been brought against them, after the case against the client is dismissed.
This happens mainly in the criminal jurisdiction where the aggrieved client would like to institute proceedings against the police or the state, but it can also happen in civil proceedings where some clients are intent on bringing matters against former claimants for “maliciously prosecuting a case”.
Again, because of the exorbitant costs of these kinds of claims (‘counter-claims’ actually) we always urge caution and carefully examine every detail of the original case brought against our client, before we provide advice that a client can proceed on the basis of reasonable prospects.
For example, in the case A v NSW in the High Court (2007), the High Court held that when a “a plaintiff alleges that a prosecutor acted maliciously, that is, for an improper purpose, not for the purpose of carrying the law into effect, the circumstances of the prosecution may determine the nature of the case the plaintiff will seek to make.”
In other words, the various circumstances surrounding the original case will need to be very carefully examined and a decision is to be made that the case was brought maliciously in light of ‘all the circumstances,’ before we can say that the case will have good and reasonable prospects of success.
The ‘circumstances’ then are all important, this is because very simply, a claimant against the client in the original case (whether they be police or a civilian claimant) will not tell the client, that its original case against the client was a ‘malicious prosecution’. Hence the careful analysis of all the facts (and in detail) is an absolute must.
The moral of the story is (as is the usual case) that you need to meticulously examine each of the facts and ensure that you leave no stone unturned before commencing any proceedings.
At Papallo Kouchoo Lawyers, we do our utmost to ensure that there are good returns in relation to any case, and we do that before we commence proceedings, ensuring to uphold your rights to the maximum extent of the law.
If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.
Transfer of Building & Strata Claims between NCAT and Courts
Clients will need to be extremely careful as to where a building and construction claim is commenced.
NCAT (or the Tribunal) has primary jurisdiction in relation to many homebuilding matters.
At times, a client may commence a homebuilding claim in a court and then be ‘pulled’ into NCAT at great cost and expense.
We have had cases where there were multiple proceedings on foot (one in NCAT for example and one in a court, e.g. the Supreme Court).
Careful thought needs to be given as to whether or not a matter needs to be transferred from a court to NCAT or in more limited cases, vice versa. Sometimes respective questions in relation to one matter can stay in two jurisdictions if the court and NCAT have different jurisdictions. A transfer application can also be made when either a court or NCAT has the full jurisdiction to hear all matter related questions.
This is where things can at times end in disaster.
For example, when commencing proceedings, litigants need to be very careful to ensure that there are no claims commenced (by them or the other side) in another jurisdiction and, in the least, that different questions are before those forums with each having a separate and distinct jurisdiction to hear the separate questions before them.
In one case, The Owners – Strata Plan No 47035 v Athens [2025] NSWSC 1588, the parties had previously transferred the matter into the Supreme Court (from the Local Court), and had spent about five years there (since 2020). During the final hearing however, Justice Elkaim noted that the Supreme Court may not have had the requisite jurisdiction, because a similar case, on similar issues, was commenced in NCAT before the Supreme Court matter commenced. Justice Elkaim saw no other choice but to transfer the matter to NCAT.
It is in cases like this, that the enormous cost and time of the matter, costs which have been already spent in one jurisdiction, may all essentially be for nothing.
At Papallo Kouchoo Lawyers, we do our utmost to ensure that we do our detailed ‘due diligence’ before we commence proceedings, ensuring to uphold your rights to the maximum extent of the law.
If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.