Professional misconduct complaints – can building practitioners obtain a full release as part of a VCAT settlement?
By Michelle Janczarski, Lovegrove & Cotton – Construction and Planning Lawyers
Building disputes commonly involve multiple issues, and can also result in the making of a misconduct complaint to the Victorian Building Aithority (VBA), in addition to VCAT proceedings over contractual claims.
If the VCAT proceeding nears settlement, the building practitioner involved may wish to resolve both these issues in one settlement agreement – in other words, by obtaining a full release from the VBA complaint as well as from the claims made in VCAT. However, the other party to the VCAT proceeding cannot grant this full release, and any partial release is likely to be ineffective.
Scope of standard VCAT settlement agreements
VCAT settlement agreements usually include a standard release clause, where the parties mutually release each other from all further claims arising from or connected with the subject matter of the dispute and the proceedings.
However, while this standard clause might seem comprehensive, it relates only to the claims under the building contract dispute heard in VCAT and in regard to the known breaches of the warranties implied by section 8 of the Domestic Building Contract Act 1995. It does not include a release from any existing or future professional complaints to the Building Practitioners Board (“the BPB”), as these complaints are governed by the Building Act 1993 rather than the building contract, and are consequently determined in a separate forum.
Is it possible to obtain a full release from a misconduct complaint through a settlement agreement?
Building practitioners may seek to work around these standard terms by including an additional clause in the settlement agreement, requiring the other party to withdraw any complaint made to the VBA. However, even if the complaint is withdrawn in accordance with this clause, it will not protect the building practitioner from all disciplinary consequences.
Under section 178 of the Building Act 1993, the BPB may conduct an inquiry into a building practitioner’s conduct or ability to practice on a number of bases, including:
- On its own initiative;
- On the recommendation of a person appointed by the BPB; or
- At the request of any other person.
Consequently, even if the person who requested the investigation withdraws their complaint, the BPB can continue the inquiry on their own initiative. The BPB will have a statutory duty to investigate potential breaches of the Building Act 1993 or the Building Regulations 2006.
In addition, if the BPB appoints a person to make recommendations on whether it should investigate the conduct of a building practitioner, then that person must investigate the matter and make those recommendations to the BPB, even if their appointment was due to a complaint that was subsequently withdrawn.
Moreover, under section 180A of the Building Act 1993, a person who lodges a complaint with the BPB is not liable for any loss suffered by another person that was caused solely by the lodging of the complaint. In other words, the maker of the complaint will not be liable at all if they withdraw the complaint, but the BPB decides to continue the investigation and makes a finding against the building practitioner.
If the complainant (after making a complaint) subsequently advises that they do not wish to proceed with a complaint, at best it may have some bearing on whether the Board elects to proceed with the investigation. Also, they will be faced with a less helpful witness.
Accordingly, it is generally inadvisable for a building practitioner to agree to less favourable terms of settlement in exchange for the withdrawal of a Building Commission complaint, as this withdrawal may make little difference to the BPB’s investigation. It is usually preferable to settle any VCAT proceeding on as favourable civil terms as possible, then defend any Building Commission complaint as strongly as possible.