Show Cause Notices: What you need to know!

Show Cause Notices: What you need to know!

24 Jan 2017

By Emily Martins, Senior Associate of Lovegrove & Cotton Pty Ltd (Construction and Planning Lawyers)

Commencing from 1 September 2016, the Victorian Building Authority (VBA) can take disciplinary action against a registered building practitioner (RBP) if it has a belief on ‘reasonable grounds’ that one or more of the grounds under section 179 of the Victorian Building Act 1993 (the Act) have been contravened.

The VBA will commence the process of ‘disciplinary action’ by issuing a Show Cause Notice on the RBP.

A Show Cause Notice is an important document and not one to be taken lightly as the consequences can be dire, ranging from fines, suspension or cancellation of a RBP’s registration, a reprimand, or a direction to do/or not to do something.

What are the grounds for disciplinary sanction under section 179 of the Act?

Section 179(1) of the Act lists various grounds, about 15 or so, for which disciplinary action can be taken against a RBP and this includes but is not limited to:

• A practitioner that has failed to comply with an order or direction given to the practitioner;

• A practitioner that has failed to pay an adjudicated amount under the Building and Construction Industry Security of Payment Act 2002;

• A practitioner that has failed to comply with an undertaking given to the Authority (VBA) under the Act;

• A practitioner that has engaged in unprofessional conduct or has failed to comply with a code of conduct;

• A practitioner that has contravened the Domestic Building Contracts Act 1995, the Building Regulations 2006, or the Act .

What has taken place before the Show Cause Notice is issued?

Prior to the issuing of a Show Cause Notice the VBA will have conducted an investigation to determine whether or not it has ‘reasonable grounds’ to take disciplinary action against a RBP.

‘Reasonable grounds’ is not a defined term under the Act and may be assessed by the VBA on a case by case basis on the merits.

Investigations can be initiated in a variety of ways, namely by a complaint being made to the VBA regarding practitioner conduct from a consumer, or a complaint made by a member of another Authority.

However this stage is very rarely completely ‘behind the scenes’ as it were, as often the VBA whilst undertaking its investigations will write to the RBP and will ask them to respond to specific allegations in writing or to agree to undertake an interview. Often the VBA may even telephone the individual seeking their response to certain allegations.

It is imperative at this stage that care is taken by the RBP to take the matter seriously, as any statements made during this time or the conduct of the RBP, may impact heavily upon the investigation and whether or not the matter will proceed any further past this initial investigatory stage.

What does the Show Cause Notice include?

If the VBA is satisfied that it has ‘reasonable grounds’ that there are grounds for disciplinary action against the RBP, the Show Cause Notice will be issued against the RBP and the process of ‘disciplinary action’ has then commenced with the severity of the outcome for the RBP, to be determined.

Under section 182 of the Act, the Show Cause Notice must state as follows:

• That the VBA intends to take disciplinary action and the disciplinary action that is intended;

• The registration in relation to which the proposed action is undertaken;

• The ground(s) for the actions;

• The facts and circumstances giving rise to the proposed action;

• That the RBP is invited to respond within the show cause period as to why the proposed action should not be taken. The show cause period must be a period ending at least 14 days after the show cause notice is given to the registered building practitioner.

How can I respond to the Show Cause Notice?

An RBP can either make written or oral submissions to the VBA in response to the Show Cause Notice within the relevant time frame.

Legal Representation

Legal representation is most definitely allowed during this process and legal practitioners can assist the RBP with the drafting of any written submissions and/or the giving of oral submissions.

Decision about whether or not to take disciplinary action under the Show Cause Notice by the VBA.

Under section 182B of the Act, within 28 days after the show cause period ends, the VBA must decide whether a ground exists to take disciplinary action against the RBP.

Right of Review of the Show Cause decision.

The RBP if they dispute the decision of the VBA, may make an application to review the decision under section 185 of the Act to the VBA itself, through its internal review process. The time frame to do so is 28 days after the RBP receives the decision.

If an RBP is to consider reviewing the decision the time frame must be complied with or the RBP is at risk of having lost that opportunity and the only recourse is an application to the Victorian Civil and Administrative Tribunal (VCAT). It certainly pays for the RBP not to be lax about the relevant time frames. My October article in Sourceable on ‘The VBA’s Internal Review Process’ can give further light on point.

In summary, Show Cause Notices are serious documents that need to be treated as such and one would be well advised to seek legal advice on point if a Notice is received.

By Emily Martins, Senior Associate of Lovegrove & Cotton Lawyers.