Prosecutable Offences under the Building Act 1993 (VIC)

Prosecutable Offences under the Building Act 1993 (VIC)

24 Nov 2020

By Lovegrove & Cotton – Construction and Planning Lawyers

The Building Act 1993 (Vic) (‘the Building Act’) comprises a swathe of prescriptive and proscriptive regulatory provisions. Whilst noncompliance with some provisions attracts enforcement powers of statutory authorities, such as rectification and stop work orders, and potentially also gives rise to personal action in the form of civil claims, many instances of noncompliance under the Building Act attract criminal censure. Criminal offences attract general criminal law requirements including standard of proof – the renowned “beyond reasonable doubt” proof threshold – and other common law criminal law presumptions, such as those pertaining to actus reus (physical elements) and mens rea (fault elements).

The inclusion of offence provisions under the Building Act serves to deter practitioner malpractice and strongly encourage compliance with core provisions. Some of the pillars that underpin the use of the offence provisions in the Building Act 1993 include:

  • The fundamental importance of carrying out building work with a building permit and ensuring that any changes to building work in progress that is at odds with the permission afforded by the building permit likewise culminates in an amendment to the building permit;
  • The need to comply with building orders and emergency orders (Note that both private building surveyors and municipal building surveyors can issue building orders but only municipal building surveyors can issue emergency orders);
  • Due regard to the safety of occupants and users of a building;
  • To enable oversight and enforcement of building design and quality, and construction methods and processes, building use and practitioner conduct.

What is Building Work?

As so much revolves around building work for purposes of offences under the building act, it is very important that owners and building practitioners alike are familiar with the legislative definition of building work which is enunciated in Section 3. “Building work” means work for or in connection with the construction, demolition or removal of a building;

“Construct” is also a defined term as section 3 provides that construct includes:

  • Build, rebuild, erect or re-erect
  • Repair or alter
  • Enlarge or extend
  • Place or relocate

Some Key Exemptions from being required to have a Building Permit

Schedule 3 of the Building Regulations 2018 traverses the exemptions. These exemptions are extensive and require very, very careful scrutiny, cross referencing and professional advice, as there is a plethora of considerations that are factored into the question  of whether building work is exempt from the requirement to obtain a building permit. Some of these considerations are as follows:

  • whether there will be an adverse impact upon the public
  • whether there  are Heritage Act restrictions imposed upon the site
  • whether there will be any adverse impacts upon the structural integrity and soundness of the building or an increase to the size of the floor area
  • whether there will be any adverse impacts upon the essential safety measures of the works
  • whether the work will impact upon the underpinning or replacement of the footings or any element that provides support to the building
  • whether the work projects beyond the street alignment

There are also provisions that traverse temporary structures, fencing, relocatable swimming pools, wire fences, pergolas and the like.

The above list is far from exhaustive and this caveat cannot be stressed enough: before determining whether the building work exemptions apply, one would be well-advised to seek the counsel of a reputable construction lawyer.

Penalty Units

Penalties in legislation are defined by way of ‘penalty units’. A penalty unit’s monetary value varies according to inflation. The monetary value of a single penalty unit in Victoria can be found at the Victorian Department of Treasury and Finance’s website: CLICK HERE. Throughout this article, the maximum penalties under the offence provisions will be written in their penalty unit form and if a prison term applies, the maximum prison sentence will be provided.

The precise penalty imposed upon any actor that falls afoul of offence provisions will be a matter for enforcement and prosecutorial discretion, and lastly, sentencing discretion by a sentencing judge if offences are prosecuted.

Part 3 Building Permits

Section 16 of the Victorian Building Act 1993

Section 16 of the Victorian Building Act 1993 provides that it is illegal for an owner to carry out building work without a building permit unless a building practitioner or an architect has been engaged to carry out building work relating to the building work that comes within the scope of the building permit.

Section 16 provides that:

  • A person must not carry out building work unless a building permit in relation to the work has been issued and is in force under this Act.

The penalty for carrying out building work without a building permit is up to 500 penalty units, in the case of a natural person, or 2,500 penalty units, in the case of a corporate sole.

  • A person must not carry out building work unless the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work.

The penalty for carrying out building work that is not in accordance with this Act, the building regulations and the relevant permit is up to 500 penalty units, in the case of a natural person, or 2500 penalty units, in the case of a corporate sole.

An owner of land must not permit building work to be carried out on that land unless—

  1. a building permit in relation to the work has been issued and is in force under this Act; and
  2. the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work.

The penalty for an owner of land is up to 500 penalty units, in the case of a natural person, or 2500 penalty units, in the case of a corporate sole.

A building practitioner or an architect who is engaged to carry out building work must ensure that—

  • a building permit in relation to the work has been issued and is in force under this Act; and
  • the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work.

The relevant penalty for building practitioners or architects that breach subsection (4) is up to 500 penalty units, in the case of a natural person, or 2500 penalty units, in the case of a corporate sole.

  • Subsection (3) does not apply to an owner if the owner has engaged a building practitioner or architect to carry out the building work on that land.
  • Subsections (1), (2), (3) and (4) do not apply if the building work is exempted by or under this Act or the regulations.

Prior to the 2016 amendments, the onus of obtaining the building permit lay with the building owner. The September 2016 amendments, however, place that onus to the building practitioners and the architect, and this was a game changer. Building practitioners and architects engaged to attend to matters pertaining to the building work will need to satisfy themselves that there is indeed a building permit in place before they venture into any domain associated with carrying out of building work.

Indictable Offence – Section 16B

Part 3 also includes an even more onerous indictable offence provision in Section 16B, breach of which can culminate in jail time if a sentencing judge considers that appropriate. Importantly, unlike the other offences listed above which involve stricter liability, the Section 16B indictable offence requires knowledge for the offence to be made out (this is what is often referred to as the mens rea, or fault, component of a criminal offence, which can also be intent, recklessness, strict or absolute liability).

Accordingly, if a person who is in the business of carrying out building work carries out building work without a building permit and knows that a building permit should be in force, then they may be liable to 5 years Jail or 600 penalty units in the case of a natural person, or 3000 penalty units in the case of a body corporate. This is substantially greater criminal censure than the stricter liability offences under Section 16.

Protection Works Offences

The protection works regime under the Building Act ensures that the amenity and safety of adjoining properties to building work sites is preserved, and in the event of any damage or loss to adjoining property, the owner carrying out building work is appropriately insured to compensate for that loss or damage.

Accordingly, the Building Act provides that an owner who is required by the building regulations to carry out protection work in respect of an adjoining property must not carry out any building work giving rise to that requirement until:

  • the adjoining owner agrees or is taken to agree to the protection work; or
  • the matter is determined by the relevant building surveyor under this Part; or
  • in the case of an appeal to the Building Appeals Board in relation to the matter, the matter is determined by the Building Appeals Board; and
  • Appropriate protection works insurance is taken out.

In either case, the penalty for failing to comply with protection works requirements is 500 penalty units, in the case of a natural person and 2500 penalty units, in the case of a body corporate. The balance of offences pertaining to protection works are set out in Part 7 of the Building Act 1993.

Inspections

Inspections are a fundamental feature of any good practice building regulatory scheme, and form an integral component of quality assurance for building work in Victoria.

Builders are required to notify Building Surveyors of the completion of each mandatory notification stage of the building work pursuant to Section 33. Notification of the reaching key building work notification stages is integral to the effective operation of the Victorian mandatory building inspection regime, and inspections carried out by the Relevant Building Surveyor. Builders also commit an offence under Section 33 if they do not comply with directions by the Relevant Building Surveyor to cease work at the completion of a mandatory notification stage. Contravention of Section 33 attracts a penalty of 120 penalty units for a natural person and 600 penalty units for a body corporate.

Under Section 37H(1), if the builder receives a written notice to fix building work form a relevant authority, then the builder must comply with that notice to fix within the prescribed period in that notice for compliance. Pursuant to subsection (1A), the builder must ensure that the work is carried out in accordance with the written notice. Contravention of either of these provisions is an offence culminating in a penalty of 500 penalty units for a natural person, or 2500 penalty units for a body corporate. The builder is not allowed to seek extra payment from the owner in respect of meeting the requirements of a notice to fix.

Building Order Offences

Failure to comply with a building order or an emergency order

Section 118(1) of the Building Act provides that it is an offence to fail to comply with an emergency order or a building order. Private building surveyors can issue building orders but cannot issue emergency orders. Regardless failure to comply with the issue of either type of order is a serious offence under the legislation. In the case of a natural person, the maximum penalty is 500 penalty units. In the case of a corporate entity, the maximum fine is 2500 penalty units.

Carrying out building work without the required insurance

It is a very serious offence for a person purporting to be a building practitioner to carry out building work in their chosen profession be it an engineer, building surveyor, builder as the case may be unless the practitioner has the required insurance cover.

Section 136 is the offence provision on point and it provides that:

  • A building practitioner (other than a builder carrying out or managing or arranging the carrying out of domestic building work) must not carry out work as a building practitioner unless the building practitioner is covered by the required insurance.  The penalty is up to 500 penalty units for a natural person; 2500 penalty units, in the case of a corporate sole.
  • A builder must not carry out or manage or arrange the carrying out of domestic building work under a major domestic building contract unless the builder is covered by the required insurance. The relevant penalty is up to 500 penalty units, in the case of a natural person, or 2500 penalty units, in the case of a corporate sole.

Part 11 of the Building Act & Representation Offences 

Closely allied to the mandatory legislative requirement with respect to the mandatory insurance imperative is the legal requirement for all building practitioners, or those whom represent or hold out as being building practitioners, either generically or in respect to the particular vocational discipline, is the requirement to be registered in the appropriate category.

Pursuant to Part 11 of the Building Act, it is an offence for a person who is not registered  or to use one of the following titles unless he or she is registered in the below categories:-

  • Building practitioner or registered building practitioner
  • Building surveyor
  • Building inspector
  • Engineer, if the title relates to the building industry
  • Draftsperson if the title relates to the building industry
  • Quantity surveyor

The penalty for holding out is 500 penalty units in the case of a natural person, and 2500 penalty units in the case of a body corporate.

In circumstances where there is either a director (in the case of a company) or a partner (in the case of a partnership) and one of same is either a director or a partner who is a registered building practitioner in the prescribed category of work that comes within the gamut of that which is carried out by the company or the partnership, then the company or the partnership can use the title that is afforded to the prescribed category of practitioner.

Occupancy

Under the Building Act no person is permitted to occupy a building or part of a building unless that building has an occupancy permit or the relevant part of the building has an occupancy permit. A person who occupies a building (such as an owner or tenant) without a relevant occupancy permit or in breach of the conditions of an occupancy permit commits an offence with a penalty of 120 penalty units for a natural person or 600 penalty units for a body corporate.

Building Surveyors

Pursuant to Section 23A a building surveyor may only issue a building permit if the VBA has issued a building permit number for the building permit. The penalty for breach of same is 500 penalty units for a natural person and 2500 penalty units for a body corporate. This offence underscores the importance of ensuring that the VBA is alerted to building work and has on its records information related to building work requiring a building permit and to ensure that the building permit levy is paid.[1]

Pursuant to Section 30, Building Surveyors must provide Council with a copy of the building permit and relevant documentation within 7 days, or the prescribed period of time, respectively. Breach of same may culminate in 50 penalty units for a natural person or 250 penalty units for a body corporate. The Council remains to this day a very important statutory authority in respect of building control, as it is the statutory authority vested with the power to issue emergency orders. Councils are also tasked with oversight of building work – thus belies the importance in the Council being involved and placed on notice regarding the building work from the “get go”.

A similar offence exists in respect of the requirement for the relevant building surveyor providing Council with a copy of the occupancy permit and relevant documentation within 7 days, or the prescribed period of time for the documentation, respectively. Again, breach of same may culminate in 50 penalty units for a natural person or 250 penalty units for a body corporate.

Appointing Private Building Surveyors

Private building surveyors are proscribed for undertaking functions under Section 76 of the Building Act or being appointed as relevant building surveyor for building work in circumstances where they are not registered. Breach of same may culminate in up to 500 penalty units for a natural person, 2500 penalty units for a body corporate.

The appointment of private building surveyors is a strict process to ensure the impartiality of this important regulatory gatekeeper. If a private building surveyor is already appointed as relevant building surveyor for building work, an Owner or developer cannot appoint another private building surveyor to carry out private building surveyor functions. This offence provision is designed to prevent and deter owners and developers from “chopping and changing” private building surveyors. If an owner, developer or other person appoints a subsequent private building surveyor other than in the limited exceptional circumstances provided for under the Building Act (see article here regarding transfer of building surveyor functions), they may be liable for a penalty of 240 penalty units for a natural person or 1500 penalty units for a body corporate.

Conflict of Interest Offences

Under Section 79 of the Building Act, a Private Building Surveyor commits an offence if the building surveyor carries out functions under Section 76 in respect of building work and the building surveyor or related person has: been involved in the building work design; was employed by the designer within a prescribed period; has any direct or indirect pecuniary interest in the body who designed the building work; or has any direct or indirect pecuniary interest in the building work or body carrying out the building work. Breach of same may culminate in up to 500 penalty units for a natural person, 2500 penalty units for a body corporate. These kinds of conflict of interest offences are found across numerous Building statutes in Australia and are central to preserving the independence of private building surveyors.

Building Surveyor Companies must have a Registered Building Surveyor Carry out RBS Functions

Where a building surveyor company is appointed as relevant building surveyor for building work, the building surveyor company must ensure that the building surveyor functions under Section 76 are carried out by an employee or director who is a registered building surveyor and whose registration authorizes the building surveyor to carry out the relevant work. The building surveyor company is then required to notify the owner and relevant council of the registered building surveyor who will carry out functions. If a building surveyor company contravenes either of these requirements they may be liable for up to 1200 penalty units.[2]

Building Practitioner Insurance Offences

An interesting element of building regulation that has played out prominently over recent years has been the insurability of certain practitioners. One of the reasons this has been such a controversial issue is because Section 136 requires that practitioners are covered by the required insurance (which for Fire Engineers and Building Surveyors included professional indemnity cover for cladding claims, and then had to be exempted). If a practitioner fails to hold the appropriate cover, they commit an offence and are liable to a penalty of 500 penalty units, in the case of a natural person or 2500 penalty units, in the case of a body corporate.

It is also an additional offence for a building practitioner to hold out or misrepresent that they are covered by the required insurance. This separate offence under Section 137 attracts the same penalty as the offence under Section 136 (above) does.

Registration Offences

Under the Building Act, Section 169, it is an offence to hold out to be licensed and registered as a particular category of building practitioner when one is not in fact so registered. If a person holds themselves out as a registered practitioner and they are indeed not registered, they commit an offence.

Pursuant to Section 169A, it is also an offence for a person to hold out that they can carry out domestic building work in circumstances when they are not registered under the Building Act. Section 169F prohibits persons from carrying out domestic building work under a major domestic building contract unless they are a registered builder. It is also an offence for any person to engage an unregistered subcontractor to carry out domestic building work under a major domestic building contract (Section 169FA).

Likewise, under Section 169B, a person is proscribed from holding out they can undertake building surveyor functions in circumstances where they are not registered in a particular category or class of building surveyor required to undertake such functions. Building Surveyors are not allowed to carry out building surveyor functions unless they are registered in the relevant category of building surveyor (Section 169D).

Section 169C similarly proscribes an unregistered person from holding out as a building inspector, and Section 169E prohibits a person from working as a building inspector unless they are suitably registered.

If a person breaches any of these offence provisions, they are liable to a penalty of 500 penalty units, in the case of a natural person or 2500 penalty units, in the case of a body corporate.

Some registrations come with conditions, and accordingly if a practitioner fails to comply with those conditions on their registration, it is an offence, and they may be liable to up to 50 penalty units for a natural person or 250 penalty units for a body corporate.

Holding Out

In the above section in this article, the concept of “holding out” was referred to in respect of registration offences. To hold out is to represent or purport to be that which one is not.

Holding out is very much in the nature of misrepresentation. It invariably involves conduct that induces others to deal or engage ones services for reward. It is not considered to be a benevolent way of dealing with another and some would contend that it involves a large measure of deceit.

One could hold out in a number of ways. One could verbally state or verbally misrepresent that one is a building practitioner when one is not. One could in writing state or misrepresent that one is a building practitioner, such a builder or a building surveyor when one is not. This misrepresentation could be done by:-

  • Making such statement on a business card
  • By way of letter or email
  • An application
  • A banner on a building site
  • An advertisement

Holding out by one’s conduct

This is more opaque and would very much depend on the evidence, the factual matrix and that which a reasonable person would construe as being conduct that evinces holding out behaviour.

This may be conduct such as the carrying out of work that can only be done by a building practitioner. For instance if someone contracts to build a home for another without disclosing that he, she or it is not a builder, and instead uses some more generalist title like contractor or consultant, then that would in all likelihood be considered to be holding out by way of conduct as being something that one is not.

Regardless of whether one holds put as being a licensed lawyer, registered architect or domestic builder, the institutions that regulate these professions are very much guardians of the legal gravitas that attaches to the disciplines and the titles that adorn such fraternities.

It thus should come as little surprise that those whom are intent upon using prescribed and regulated titles to carry out work that is the exclusive domain of those whom are suitably registered will attract the ire of the disciplinary tribunals.

Conclusion

The offences canvassed in this piece are just a sample of the many offences provided for under the Building Act 1993. The offences range in severity from smaller penalties to the most severe kinds of indictable offences that potentially attract jail time. A wide net of actors are captured by the offence provisions – from lay owners to practitioners such as engineers and architects.

It is important that these actors are aware of their criminal liabilities under the Building Act, as to use the well-known adage, “ignorance is no defence”, and, in many cases, there will be strict liability applied under these Building Act regulatory offences.

Given the seriousness attached to consequences and penalties of committing breaches under the Building Act, it is essential that a respondent, regardless of whether it is the owner or a building practitioner, engages a lawyer well versed in the handling of Building Act offences.

 

Footnotes

[1] See VBA, Building Permit Numbers, accessed at https://www.vba.vic.gov.au/surveyors/building-permits .

[2] See Building Act 1993 (VIC), Section 80A(2) & (3).