What is the Status of a Construction Certificate Issued when Works have already Started?
By Justin Cotton, Partner, Construction and Practitioner Advocacy, Lovegrove Smith & Cotton, Construction and Commercial Lawyers
It is unfortunately not an uncommon phenomenon for a Principal Certifying Authority (PCA), or indeed an accredited certifier who is not the PCA, to consider they have been misled by representations from the Owner or Developer.
One such regular occurrence seems to be the problem of unauthorised works being started at the site, without reference to the accredited certifier who is briefed to issue the construction certificate and BEFORE the construction certificate is issued.
By reason of the section in the legislation that governs when a construction certificate can be approved, a construction certificate that is issued after works have started is tainted and cannot legitimise unauthorised works that may have already commenced. Where does this leave the unauthorised works, and what is the potential come back against the PCA or the accredited certifier who innocently approved the tainted certificate?
Section 109F of the Environmental Planning & Assessment Act 1979 (“the EP&A Act”) says relevantly:
- the requirements of the regulations referred to in section 81A (5) have been complied with, and….
(1A) A construction certificate has no effect if it is issued after the building work or subdivision work to which it relates is physically commenced on the land to which the development consent relates.” (Emphasis added)
Further, section 109E(3)(a) of the EP&A Act states that a Principal Certifying Authority (“PCA”) for building work to be conducted is required to be satisfied that a construction certificate or complying development certificate has been issued for such of the building work that requires development consent, before the work commences.
Based on the plain and ordinary meaning of the words in section 109F of the EP&A Act, a construction certificate will have no effect if it issued after the works to which it relates have physically commenced on site. By that it is argued that the construction certificate will be invalid, void and of no effect.
Therefore the works carried out already, prior to the approval of the construction certificate will be said to be illegal and the remedy would be for the developer to apply for and obtain a building certificate from the relevant Council. This would allow works to proceed with a view to obtaining an Occupation Certificate at the conclusion of the works.
A building certificate would ordinarily be preceded by an inspection to first ensure that there is structural adequacy, before the certificate is approved. All the building certificate will do is state that the Council agrees it will not take certain action in future, for example to have the building demolished, altered, added to or rebuilt, or to take proceedings in relation to encroachment by the building onto land under the control of the Council, for a period of 7 years.
In the recent Land & Environment Court decision in Burwood Council v Ralan Burwood Pty Ltd  NSWLEC 173 (16 October 2013), the issue of invalidity or otherwise of construction certificates was explored further.
Part of this case (“Burwood”) involved Council challenging the validity of 6 construction certificates issued by the first PCA and 2 later interim occupation certificates issued by another PCA, by way of declarations sought that the certificates were ‘void and of no effect’. This was therefore concerned partly with the validity of construction certificates that had been approved.
At paragraph 292 of this Burwood decision it is stated: “As can be seen from the terms of Part 4A, a finding that a certificate is invalid can sterilise a project completely, eg if a CC fails, an OC based on it fails as well.”
The Court drew a distinction between some sections in Part 4A of the EP&A Act that require a certifier to be ‘satisfied’ about something versus other sections ruling that a certificate “must not be issued…unless” certain circumstances exist.
In other words, some requirements in the Act may be conditions of ‘validity’, while conversely the satisfaction of the PCA might not be a condition that goes to validity. For example, section 109E regulates the certifier whilst other sections (say ss109H and 109J) regulate the certificate. It is possible for the certifier to have done the wrong thing, and to be punished for it, but meanwhile the Part 4A certificate that he or she issued as part of the wrongful conduct would be allowed to stand.
Therefore a deficiency in a certificate may or may not render the entire certificate invalid and of no effect. To find our way through this murky question, it is relevant to consider whether a legislative intent or purpose can be discerned to invalidate any act that fails to comply with a required condition.
At paragraph 308 of the Burwood decision it is stated:
“The challenge to any Part 4A certificate must confront the provisions in s109P, which creates an entitlement to assume validity, such that one does not “go behind” the certificate which, in the case of a CC, must predate the commencement of work if it is to have effect (ss 109E and 109F, amended to overturn the effect of Marvan Properties v Randwick City Council  NSWLEC 9).”
The accredited certifier or Principal Certifying Authority that issued the defective construction certificate can still be open to complaint and possible sanction by the Building Professionals Board, even if the construction certificate is allowed to stand.
However, where the construction certificate is approved only after the works have commenced, there is a sound basis to say that based on section 109F of the EP&A Act the construction certificate will be void and of no effect.
Another topical question is over the level of certifier culpability in circumstances where no inspection took place just prior to a construction certificate’s approval.
The critical stage inspections that must be carried out by the Principal Certifying Authority (PCA) are set out in clause 162A of the Environmental Planning and Assessment Regulation 2000.
It is specified in that clause that the critical stage inspections may be carried out by the PCA or, if the PCA agrees, by another certifying authority. The last critical stage inspection must be carried out by the PCA (see sub-clause 3).
In sub-clause (4) the mandatory inspections are set out for a class 1 or 10 building, and the earliest inspection listed is “after excavation for, and prior to the placement of, any footings”.
It is true that only an accredited certifier can issue a construction certificate but they need not be the actual PCA for the project. It is also correct that a pre-commencement inspection is not listed as a critical stage inspection in clause 162A. Nevertheless it is clearly best practice for a certifier to protect themselves (where practical) and therefore to actually inspect and ensure no works have started before the construction certificate is issued.
For further advice on your rights, responsibilities and risks in this area of practice, you should contact lawyers with expertise in construction and private certifier regulation.
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