Builders and the Perils of Mutual Recognition Scheme Registrations
By Justin Cotton, Director, Construction and Practitioner Advocacy, Lovegrove & Cotton.
It is a familiar adage that often in life, if a few individuals within a class of persons do not do the right thing, then this can spoil the situation for the rest of that group who “do the right thing” and follow the correct conventions.
The Mutual Recognition Scheme operating in Australia allows practitioners with registration or licensing in one State or Territory to also become registered or licensed in another State or Territory if there is equivalence between the two occupations. There seems to be more acceptance that the Scheme applies for Builders, rather than with Building Surveyors.
It has long been the case that appropriately qualified contractors can obtain registration as domestic builders in Victoria if they utilize the provisions of the Mutual Recognition Act 1992 (“the MR Act”), having first obtained licensing in an equivalent domestic or residential building category in another State. Commonly builders are first obtaining a license in either Queensland or Tasmania before using this as a pathway for registration in Victoria.
Lately we are seeing as construction lawyers an uptick in cases involving builders that lose their registration in Victoria, as a consequence of the Queensland Building & Construction Commission (“the QBCC”) cancelling the license of that builder in Queensland. Once the first license in an interstate jurisdiction has been cancelled, section 33 of the MR Act allows the Victorian Building Authority to then if it sees fit cancel the equivalent Victorian registration.
Uniformly the matters coming to our attention do not seem to involve any dishonesty or fraud whatsoever, but are merely the result of inadvertent errors in the work records submitted for Victorian building projects.
These errors are discovered based on a comparison between Building Permit and Occupancy Permit records and the information in the work record, noting that the work record has to be confirmed by a statutory declaration from the applicant. The mistakes relate to wrong dates for when work was carried out by the individual on projects, the wrong builder referred to when compared to the Building Permit, incorrect descriptions of projects, and addresses that are out by a few numbers.
Whilst the errors do not appear to be capable of affording any unfair advantage to the applicant and on balance seem inadvertent, too much reliance is often being placed on others (eg external building companies the applicant worked for, or agents assisting with the application). The applicants are then signing a sworn statutory declaration that all information is true and correct when in fact it is not and the applicant has relied on others and not done their own independent verification.
Some of the errors in the work records are not as significant as the QBCC is assuming, and other so called “errors” may be the result of incorrect assumptions by the QBCC. Nevertheless if there are any mistakes at all in the work record then the die can be cast and the applicant can find themselves in the spotlight as potentially not being “a fit and proper person” and in danger of license cancellation. The QBCC then has the discretion under section 48 of the QBCC Act 1991 to potentially suspend or cancel the building license.
Therefore in the great majority of cases, the practitioners are finding their previous work records on Victorian sites questioned, rather than their educational qualifications. This is because the applicants are Victorian based and therefore Victorian projects are forming their work record for their first applications to Queensland.
However there is also a police investigation underway by Victoria Police, in regard to another group of practitioners entirely where it is their educational qualifications that have been found to be “suspect”.
To start from the beginning, in July 2015 the Queensland registration body (QBCC) began an audit after becoming aware of an uncommonly large number of license applications from individuals residing in Victoria. The audit involved checks of educational qualifications, such as inquiries with the Australian Skills Quality Authority (ASQA), and also checking of Building Permit and Occupancy Permit documentation alongside project work records.
A recent case decision on a Stay application at the QCAT involved the cancellation of a Queensland residential building license belonging to a Victorian building contractor. The contractor had gained a Mutual Recognition registration as a builder in Victoria, based on his Queensland license. The cancellation decision was made for two reasons namely:
- the practitioner’s Certificate IV in Building and Construction purportedly issued by an educational company Thoan Pty Ltd appeared not to have been legitimately issued at all; and
- the details on the practitioner’s work experience record on some 8 Victorian sites were in some places inaccurate, in terms of dates when worked, the identity of “the builder” and other details when compared with Building Permit documentation.
The relevant Queensland building license had been obtained in March 2015. However in March 2016 the training company Thoan Pty Ltd denied that it had ever issued qualification certificates for some 28 individuals identified by the QBCC, one of whom was the applicant.
An audit carried out by the CEO of Thoan Pty Ltd showed up irregularities in that the CEO advised that only he should be signing off on the qualifications certificates and further that:
- The “Administration Manager” who had apparently signed the certificates advised that she had never held that title;
- This person who purportedly had signed the certificates advised that she had not signed them at all and had been away at the relevant times the certificates were said to have been signed;
- There were also potential irregularities in certificate numbers on the certificates for the 28 individuals concerned.
As a consequence on 4 July 2016 the QBCC cancelled the building contractor’s license due to incorrect or fraudulent information in his work experience record and because he “may not be a fit and proper person” to practice as a builder in the relevant class, and because his qualification certificate may have been falsified.
The building contractor then applied for a review to QCAT and claimed that he did legitimately obtain the educational qualification (the Certificate IV), but QBCC said inadequate documentary proof of that had been submitted.
While this was underway, the building contractor had problems in Victoria in that his registration there was refused on the grounds of the character test under section 170 of the Building Act 1993 (Vic). So it was then in his interests to apply for a Stay or freezing order on the Queensland cancellation decision.
Although the contractor applied for a Stay on the Queensland license cancellation pending his full Review hearing at QCAT, this was refused. In coming to a decision to refuse the Stay, the Tribunal had to examine the “balance of convenience” which considers such aspects as the following:
- The seriousness of the conduct alleged against the applicant;
- The relative merits or strengths of his case for Review;
- The interests of the applicant if the Stay were not to be granted;
- The need to maintain the integrity of the building licensing regime in Queensland;
- Any submissions the QBCC may make on why a Stay should not be granted;
- The public interest and how this is affected by any potential decision.
The QBCC found that the maintenance of the builder’s licensing regime was very important, as was the seriousness of the alleged conduct and the need to protect consumers.
Whilst the need to protect consumers in Queensland could be seen as an inconsistent consideration, given that the Tribunal was also critical of the contractor’s apparent lack of interest in actually practicing in Queensland, the Tribunal was also keen to protect the reputational aspects of the Queensland licensing system.
The Tribunal made the following findings, quoting from the Decision:
“In circumstances where the applicant has never carried out building work in Queensland, resides and works in Victoria and has no apparent intention of moving to or working in Queensland, the application for a license here appears to be an attempt to undermine the builders-licensing system in both States.”
And further the Tribunal stated [at paragraph 41]:
“The institution from which the applicant claimed to have received a certificate denies having issued it. The validity of the certificate was the subject of an audit conducted at the registered office of that institution. The person responsible for conducting the audit concluded that the certificate had not been genuinely issued.”
Given that Victoria Police have since that audit commenced an investigation into these matters and how they came about, and as a result of these findings, there is a real risk that all applicants for Queensland building licenses as a pathway to Victorian registration could find themselves to an extent “tarred with the same brush”, if there are any irregularities in their work records.
This may well be unfair given that work records with innocent errors are a different matter compared with the more serious question about whether qualification certificates were legitimately issued.
That said, the best that applicants can do if they wish to follow this fraught path is to make absolutely sure that work records in the original application are entirely true and correct before signing the statutory declaration and submitting the application.
If in doubt about your rights and responsibilities in these matters, do not hesitate to engage expert advice and assistance from lawyers well versed in Victorian building regulation.
Lovegrove & Cotton: Leaders in building practitioner legal representation
Lovegrove & Cotton are experts in construction law and building practitioner legal representation in Melbourne, Sydney, the ACT and Queensland. Kim Lovegrove RML, FAIB is co-author of leading text, “Disciplinary Hearings and Advocacy”. Justin Cotton has represented building practitioners and building surveyors successfully for nearly fifteen years and has established leading precedence in a number of Australian tribunals. If the reader knows of anybody who needs legal representation in this complex and gravity-laden area, feel free to contact us via our website or by emailing firstname.lastname@example.org.