Mutual Recognition Registrations and the Relevance of “Good Character”
By Justin Cotton, Director, Lovegrove & Cotton – Construction and Planning Lawyers
The High Court of Australia has delivered a boost to the rights of building practitioners seeking registration in more than one State jurisdiction under the Mutual Recognition scheme for transfer of skills and occupations across Australia.
In a recent decision the High Court agreed with the Federal Court that local State registration authorities may not take into account whether or not a practitioner is of “good character”, in order to refuse registration in a “second State” under the Mutual Recognition Act 1992 (Cth).
The decision concerned is Victorian Building Authority v Andriotis  HCA 22 (7 August 2019). In this case of Andriotis the local registration authority in Victoria (the VBA) appealed a finding of the Federal Court that had placed a restriction on the ability of the VBA to take the character of an applicant into account to refuse registration.
Critical to this outcome was the finding of the Federal Court that the test of “good character” was within the umbrella descriptions of “qualification” or “experience”, and as such could not be part of the assessment when a building practitioner applies for registration in a second State under mutual recognition.
Mr Andriotis was registered as a waterproofing contractor (a waterproofer) in New South Wales and later applied for registration as a waterproofer in Victoria under the Mutual Recognition scheme. The principle of the scheme is to allow applications by registered members of certain occupations in one State (or Territory) of Australia to be registered to carry on an equivalent occupation in another State.
In short, the test of whether two occupations in the same broad field (for example, building surveying or certification) in two separate Australian jurisdictions attract the benefit of mutual recognition registrations, is whether or not the occupations are “equivalent”. The test of occupational equivalence is whether or not the roles and responsibilities, and functions involved in the two occupations are “substantially the same” or not.
Originally Mr Andriotis’ application for registration as a waterproofer in Victoria had been refused, based on the VBA applying section 170(1)(c) of the Building Act 1993 (Vic) when assessing his application, and finding that Mr Andriotis was not in their view of “good character”. This in turn allowed the Authority to decline registration on that ground under the local Act in the same way they could have done so if it had been a conventional registration application from a local practitioner.
The practitioner then ‘lawyered up’ and challenged this decision, arguing that the Mutual Recognition Act 1992 (Cth) (“the MRA”) did not permit the VBA to consider whether or not Mr Andriotis was of “good character”. It was argued that this was placing an unnecessary hurdle before the practitioner that they would need to jump over to gain registration, contrary to the intent and purpose of the Mutual Recognition scheme. The objective of the scheme is to effectively allow for automatic registration if the test of occupational equivalence is satisfied between the two State occupations.
Section 17(1) of the MRA permits a person registered in one State for a particular occupation to also be registered in the equivalent occupation in a second State, after the person lodges written notice with the local registration authority of the second State.
Section 20(1) of the MRA provides that registration in the first State (or Territory) is a sufficient ground of entitlement to allow registration in the second State. Meanwhile, section 20(2) states that the local registration authority of that second State “may” grant registration on that ground, allowing for a degree of discretion for that local authority.
Also highly relevant though is section 17(2) of the MRA that places a fetter on the discretion of the local authority when deciding whether there is any basis to refuse an application under mutual recognition. That section says that the Mutual Recognition principle is subject to the qualification that:
- the principle does not affect the operation of laws that regulate the manner of conducting the occupation in the second State, provided that:
- those local laws are not based on the attainment or possession of some “qualification” or “experience” relating to fitness to carry on that occupation.
In Victoria there is always a test of whether a practitioner is a “fit and proper person” when an application is made for registration via the conventional route, rather than pursuant to mutual recognition. This test is found in section 170(1)(c) of the Building Act 1993 (Vic).
Evidence that a person does not meet this benchmark can be for example if they have a history of disciplinary findings against them, or if they have been a director of a company in the relevant industry that has gone into external administration. There is no doubt that such factors can be relevant with applications that are not made pursuant to the Mutual Recognition scheme.
This consideration of whether or not a practitioner is a fit and proper person to carry on a trade relates to whether or not an applicant is of “good character”, and it was successfully argued by Mr Andriotis at the Federal Court that this test was not relevant due to the provisions of the MRA. This was appealed by the VBA to the High Court.
In a nutshell, the question for the High Court was whether or not the “good character” test is based on a “qualification” relating to the fitness to carry on an occupation. In other words, could the character restriction found in section 170(1)(c) of the Victorian Building Act come within some exception to the Mutual Recognition principle?
Section 17(2) of the MRA provides that the local laws of the second State that have any bearing on an application under mutual recognition must not be “based on the attainment or possession of some qualification or experience relating to fitness to carry on the occupation.” The VBA argued for a narrow interpretation and argued that the word “qualification” is intended by parliament to be construed in its confined sense to mean only academic qualifications or a level of achievement acquired after an examination, and did not include matters relating to “good character”.
However, as the High Court considered (amongst other factors):
- This interpretation is inconsistent with the broad interpretation given to “qualification” in the definition of “occupation” in section 4(1) of the MRA, which refers to “character or being fit or proper” as well as more traditional elements such as “training”, “education”, “examination” and “experience”; and
- The narrow interpretation is inconsistent with the purpose expressed in section 3 of the MRA being that of “promoting the goal of freedom of movement of goods and service providers in a national market in Australia”.
It was held that the broader interpretation of the term “qualification” to also include matters going to “good character” or fitness and propriety, as argued for by Mr Andriotis and favoured by the Federal Court, would give best effect to the intent of the Federal Parliament when the Mutual Recognition Scheme was established.
The Court also considered that the practitioner once registered in the second State would still be subject to the same laws and potential disciplinary constraints as other local practitioners in the second State. In other words the upholding of the Mutual Recognition principle and restricting the second State’s ability to factor in “good character” considerations, would not remove the autonomy of the second State in applying disciplinary processes against a new practitioner should these circumstances arise in the future.
Part of the rationale appears to be that if the practitioner has a current and valid registration in the first State, and is therefore regarded as “fit and proper” enough to practice there, it should not be open to the second State when confronted with a mutual recognition application to apply some different or higher standard to decline registration.
For legal advice and assistance in regard to building practitioner registration whether involving mutual recognition or conventional applications, do not hesitate to seek advice from construction law practitioners versed in this area of law.
Lovegrove & Cotton Lawyers to the Building Industry
For over thirty years, Lovegrove & Cotton have represented builders, building surveyors and building practitioners in Victoria, the ACT, New South Wales and Queensland. Justin Cotton is a leading Australian construction lawyer and widely respected in the building fraternity. Likewise, Doyles Guide ranks Kim Lovegrove as one of the leading construction lawyers in Australia. Lovegrove & Cotton can help practitioners resolve any type of building dispute and are preeminent in the area of building practitioner advocacy. If you wish to engage the firm, feel free to contact us via our website or by emailing email@example.com.