A Bob Each Way? The Evolving Concept of a PCA’s Reliance on Third Party Certification
By Justin Cotton, Partner and Head of Practitioner Advocacy, Lovegrove Smith & Cotton
There are two recent decisions of the ADT that have caused concern to the NSW private certification fraternity.
Dix v Building Professionals Board  NSWADT 160
Building Professionals Board v Cohen  NSWADT 62
An initial news report on the Dix decision inferred that Mr Dix did not carry out any inspections personally and just relied on certifications from the contractors that carried out the works.
In fact, Mr Dix did carry out the final inspection prior to issuing the Occupation Certificate. So the article was misleading.
Mr Dix’s defence in this case was along the following lines:
He carried out a proper and professional visual inspection, but he is not an electronics specialist in, for example, the operation of a back to base fire alarm system.
To that extent he was entitled to and did rely on a certificate from a specialist contractor/engineer. This is standard industry practice.
This defence was not dismissed out of hand by the ADT, at least in a theoretical sense.
In rejecting Mr Dix’s reliance on the installer’s certificate concerning tulip style door handles, the ADT said:
“This is not a case where it might reasonably be held that the ability and knowledge to be expected of a general building certifier meant that he or she must rely wholly on a provided certificate, as can occur with, for example, major electrical lay-outs or engineering installations….”
Obviously it would be preferable if the PCA was able to collect a Part 4A Compliance Certificate, in order to obtain the statutory immunity in section 109P of the EP&A Act 1979.
However, a Compliance Certificate has certain requirements. For example, it can only be issued by an accredited certifier, the Council or a consent authority. It must meet the requirements in clause 138 of the EP&A Regulation 2000.
It is not always possible to be issued with a Compliance Certificate. Therefore, industry practice has been that other certificates from appropriately qualified specialists are the “next best thing”, though without affording the statutory immunity.
Primary Allegations in Dix’s Case
The two most controversial charges in this case were arguably:
(i) failure to check that the building occupant warning system was connected to the sprinkler system pursuant to clause 8 of Specification E1.5 of the BCA
(ii) failure to check that the installed sprinkler system protecting the basement carparking area was connected to an approved NSWFB monitoring provider
In both cases Mr Dix relied on certificates from installers and carried out a visual check. It was not possible for him to see on a visual inspection, on a general building certification, whether the devices were in working order.
Mr Dix also said the systems may have been operational at the time of issuing the OC, but that there were two fires caused by vandals within several months after the OC.
The Board had found that the OC was issued without the building occupant warning system having been connected to the sprinkler system.
However, the ADT decided it did not have to make a material finding of fact on whether appropriate systems were in place at the time of the OC.
Instead, the ADT said it only had to decide whether Mr Dix relied on inadequate documentation and assurances in certifying the two systems were compliant.
Outcome of Case
In the end the ADT accepted the Investigator’s view that even though Mr Dix had relied on certificates from installers, such certificates did not go far enough in referencing specific systems or standards.
For example, Dr Wallace said that the fire protection plan by Viscona at the CC stage did not refer to the relevant standard AS1670.1. Also, she argued that the certificates relied on at OC stage did not refer to the building occupant warning system for the carpark or refer to the relevant standard.
She also criticized the PCA for not referring to the building occupant warning system in the fire safety schedule.
The expert called by Mr Dix (Brendan Bennett) said in his report that for such a development, identification of a building occupant warning system would not be standard industry practice.
This is because it is a ‘sub system’ of the required ‘automatic fire suppression system’ that had been correctly identified.
The ADT found as follows:
“At the least, the certifier should form a view as to what fire safety requirements would be expected to be referenced and identified. If there is an omission to reference a relevant requirement….the certifier should take steps to ascertain why it is not referenced.”
But the ADT said that even with “properly referenced certificates, that: “…the certifier should also engage in basic practical checks, wherever possible, to be satisfied that the required systems have been installed and are working.
Further, the ADT said that it would have been a simple matter for Mr Dix to test for the operability of a back to base alarm system but there was no evidence he did so.
However, this conflicts with the statements of the ADT in this case and elsewhere that the PCA is a general building certifier entitled to rely on certificates from appropriately qualified specialists.
Analysis of Outcome
While the Tribunal refers to making “any visual inspection that was possible”, we note that it would not always be “possible” or practical for the PCA to delve into this level of detail.
So the ADT’s very use of qualified language shows that there cannot be an absolutist position taken on this.
In the Cohen decision referred to, the ADT said (p 28):
“We accept that it was, and remains, customary practice for certifiers to rely on credible, specialist certifications in specialist areas of building work” (eg geotech engineering or specialist electrical work)
However the ADT also said (p 28): “In any case the certifier should always make an independent professional judgment as to the quality of specialist certificates.”
This is the conundrum. What does ‘reliance’ entail? Either reliance is appropriate or it is not. We do not have a clear statement on this from the ADT case law.
The ADT has even inferred that self certification from installing contractors is somehow unreliable. But such contractors assume a risk that by doing the work and self certifying they are stepping into the liability loop if the work is negligent.
Everyone knows that PCAs must carry out final inspections themselves, following the change to the law in 2004-2005.
If they are going to rely on certificates from appropriate practitioners, especially in large developments involving fire protection matters, they will need to be careful to ensure relevant standards are referenced on the certificate.
Even a planning director of a Sydney Council had this to say in a recent article in the Sydney Morning Herald:
“It is unreasonable to expect a private certifier or a council inspector to be a structural engineer, fire safety expert, electrician, plumber and a waterproofer.”
So the high bar set by the ADT is high indeed, even for Council certifiers (given they can now be disciplined for misconduct in much the same way as private certifiers).
Though note that section 731 of the Local Government Act still exempts Council certifiers from any “action, liability, claim or demand” if they have acted in “good faith”.
I leave you with comments from a Victorian case on building surveying. The principles apply to other States and the subject we are discussing today.
Lewis v Threadwell  VCAT 547:
“With respect to carrying out mandatory inspections and the issue of the Ocupancy Permit, it is appropriate for an RBS to rely on the design practitioners and the builder or owner/builder to ensure that the building is constructed in accordance with the BCA.”
“It is also reasonable and common practice to rely on Certificates of Compliance in order to issue an Occupancy Permit.”
In this case the Tribunal accepted the evidence of Mr Du Chateau that: “A Building Surveyor/Building Inspector is not engaged to design, construct, project manage, act as a site foreman, clerk of works, supervisor for any part, of any construction process.”