By Lovegrove & Cotton – Construction and Planning Lawyers

The unprecedented high-rise residential boom has punctuated Australian city skylines with cranes for some years now. As noted by the ABC, in 2016 Australia’s eastern coast was host to more cranes than the entirety of North America [1]. Cranes are integral apparatus for high-rise construction yet they can pose dangers to site personnel and adjoining properties. Legal cases pertaining to airspace rights and crane oversail have been increasingly subject to media coverage and scrutiny. It is profoundly clear that in this era of prolific crane use, crane safety must be of paramount importance.

In August 2016, the Canberra Times reported the death of a 62 year old man caused by a mobile crane that toppled over at a Canberra hospital work site [2]. Between 2007 and 2013 Cranes accounted for three deaths in Western Australia, and crane deaths apparently account for eight percent of deaths on building sites in America.

Cranes have also been known to damage adjoining property. In February 2016 the arm of a crane crashed on to a road in St Kilda damaging cars [3].

Again, in 2017, there were two high-profile catastrophic crane failures in Sydney. As reported by the ABC, on the 7th of August, a tower crane operating on a high-rise apartment block at Wolli Creek collapsed due to a mechanical/engineering fault [4]. Worryingly, the crane fell onto an adjoining high-rise residential building. Similarly, in late August, a crane in Sydney Harbour toppled, flinging a section of wire hundreds of meters onto the famous Luna Park entrance [5]. Given incidents such as these, it is evident that crane failures have a very real possibility of damaging adjoining property and the potential to harm residents and the public.

In light of the dangers that cranes can pose, Australian standard 2550 is dedicated to inspection protocols for cranes.

Little wonder then that there has emerged an astute practice where adjoining or neighbouring property owners negotiate and execute crane over sail agreements with developers and or contractors whom are intent on using cranes. Cranes can cause a degree of danger and the use of cranes requires a fair measure of safety dexterity and rigor.

As cranes can have a deleterious impact upon adjoining property, it is very important that neighbours satisfy themselves that risks of crane-inspired surprises are removed. As neighbouring property owners by law own air rights proximate to and above their land holdings, they can leverage of those rights by ensuring that licence agreements are fashioned to document crane handling procedures that minimise the threat of adverse impacts to surrounding properties. It follows that crane over sail licences are paramount legal instruments that can be utilised to minimise said risks.

Air Rights and trespass

The law of trespass dictates that property owners are entitled to enjoy exclusive dominion over their properties and are likewise entitled to determine who may set foot on their properties. There is an assumption in that prerogative that the permission of the property owner must be forthcoming before a visitor sets foot or intrudes into the owner’s realm. Those who choose to venture into an owners’ property absent requisite permission commit an act of trespass, regardless of whether the intrusion occurs on the land, the building above the land or the air above the building or the land.

It follows that developers and builders must have regard to the property rights of neighbours and consistent with this regard is an understanding that they must obtain the permission of the neighbours to operate a crane in circumstances where crane apparatus such as the those where a jib is likely to aerially rotate or manoeuvre above neighbouring property.

The requirement to obtain permission to enter another’s domain is a well-established common law doctrine, known as the Cujus Est Solum Doctrine. Some acts of Parliament have, in more recent times, promulgated regulations that enshrine that right.

His Lordship, Scott J in Anchor Brewhouse Developments v Berkeley House (Docklands Development) Ltd (1987) 284 EG 625 had this to say about such rights: “if an adjoining owner places a structure on his (the adjoining owner’s) land, he thereby takes into his possession air space to which his neighbour is entitled”.

Graham v KD Morris & Sons Pty Ltd [1974] Qd R 1 further amplifies the application of the Cujus Est Solum Doctrine. In this case, a crane jib on a number of occasions intruded into a neighbouring property’s airspace. His Honour WB Campbell determined that trespass was evident and his Honour found that the defendant had interfered with that part of the airspace above her land and this impacted upon her use, enjoyment and value of that land.

The case law thus establishes that if a developer fails to obtain the permission of neighbours to operate a crane in circumstances that will involve aerial trespass, the neighbour(s) can seek injunctive relief from a court of law to compel the developer to refrain from operating the crane until permission is forthcoming. However, the success of such injunctions is contingent upon ‘reasonableness’.

In Woolerton and Wilson Ltd v. Richard Costain Ltd [1970] 1 WLR 411, trespass was claimed as a result of the crane in the adjoining property oversailing the plaintiff’s property. Despite the defendant admitting trespass and offering substantial compensation, the plaintiff refused to grant an over sail licence. The plaintiffs sought and obtained an injunction that was subsequently suspended by the court. A consideration as part of the suspension was whether contractor had acted reasonably in offering payment.

It follows that developers and neighbours alike should at the earliest opportunity parley with the view to documenting the basis of an agreement which will take the form of an over sail license.

Key matters to consider and incorporate into an over sail licence

Safety is the primary concern; hence, neighbours would be well advised to engage the services of a suitable safety consultant to examine the crane machinery, safety integrity, over sail radius drawings and so forth.

The consultant will also need to be satisfied that severe winds will not generate any deleterious impact upon adjoining property on account of jib movement or rotation.

Equally, regard must be had to the matter of how the crane is maintained and whether the crane has been regularly inspected in accordance with AS 2550. The lawyers negotiating a crane over sail agreement should as, part of their due diligence, obtain assurances that the crane is in ‘tip-top’ condition as it were.

The developers and the contractor should also sign indemnities that indemnify the adjoining property holders for any liabilities or damage that may emanate from crane use. Insurance too must
be obtained, and the lawyer should consult with an insurance broker to ensure that the developer obtains the right amount of cover and the appropriate scope of cover.

Key Case Law on Point – Janney & Ors v Steller Works Pty Ltd

Janney & Ors v Steller Works Pty Ltd [2017] VSC 363 is a reasonably recent Victorian case that sets a significant common law precedent for the rights of adjoining property owners to obtain an injunction in circumstances where crane oversail breaches the ‘Cujus est Solum Doctrine’.

To summarise the facts of Janney & Ors v Steller Works Pty Ltd, the Developer (defendant) served a Form 3 Protection Work Notice noting that an overhead crane would be used for the development. Immediately after receiving this notice, the plaintiffs voiced their concerns regarding the crane’s safety. After repeated discussions with the Developer, the plaintiffs wrote to the Developer requesting that they pay compensation costs for relocation due to safety concerns and the loss of amenity. Otherwise, the crane was not to be installed. The relevant section of the letter dated 20th April 2017 is as follows:

“Our preference is not to live under a crane boom so we believe that it is fair and reasonable that Steller compensate us to relocate our family to a similar home within Elwood for the duration of the build to ensure our safety and not negatively impact our amenity and our quality of life. The alternative would be that a tower crane is not erected on the site; other large developments in Elwood have been built without the need for a tower crane.”

The Developer initially responded by rejecting the payment of any such compensation. However, the Developer later offered to pay for a licence fee for $3,000, and subsequently offered to pay a fixed sum of $20,000 to cover “reasonable rental and reasonable removal costs and legal costs”.

His Honour, Judge Riordan did not make a determination of an amount of compensation, leaving this as a matter for the parties to negotiate themselves. However, on the question of the monetary value of a licence arrangement, it was seen plausible that the sum of $106,500 suggested by the plaintiffs during the proceeding was a reasonable sum. His Honour at paragraph 34 of the decision stated:

“Neither in money terms is the encroachment insignificant. As Lord Selbourne pointed out in Goodson v Richarson (1874) 9 LR Ch App 221, 224, an interest in land may have ‘precisely the value which that power of veto upon its use creates’.”

It is also important to note that His Honour, in considering the ‘good working rule’ principle established in Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287, 322, stated: “the prospects of the defendant resisting the plaintiffs’ claim for an injunction on this basis are negligible”. Reflecting on the aforementioned case, His Honour, Judge Riordan did not consider that:

the infringement of the plaintiffs’ legal rights to be small;
the plaintiffs’ safety concerns could be adequately compensated by a small money payment; or
the granting of an injunction would be oppressive for the Developer.
In paragraph 33 of the determination, His Honour made a topical statement regarding the risk of a crane collapse: “Collapses of cranes are not unknown… …Owners of property should not have to live with the fear that at any time the boom of a crane may be above their home and the risk (however small) that it may crash.”

Thus, developers that intend to use cranes that oversail adjoining properties must enter into an arrangement with an adjoining owner prior to starting the Building Works. Suitable and reasonable compensation must be provided for access to adjoining owners’ airspace. In circumstances where no agreement is established, entry may be refused and the adjoining owner will have the ability to obtain an injunction.

Operation of cranes close to airports

Worthy of mention is the fact that it is an offence under the Airports Act 1996 to operate a crane proximate to an airport and legal advice should be sought by crane operators to ensure that they do not offend the provisions of said legislation.

As cranes can, in certain circumstances, pose dangers to not only operators, but also those who come within their radius or aerial ambit, if you will. It is very important that adjoining property owners have input into crane risk management and risk minimisation. The deployment of lawyers to negotiate and finalise crane over sail agreements is an integral part of that risk minimisation process along with the input of an experienced safety consultant who can work in cohorts with the lawyer to deliver an optimum risk mitigation outcome.

 

Works Cited

[1] Letts, S 2016, Apartment glut warning: More cranes on Australian east coast than in North America, ABC, accessed at <http://www.abc.net.au/news/2016-10-21/real-estate-warning-more-cranes-in-australia-than-us/7954108>

[2] Clare Sibthorpe, Construction worker’s death at University of Canberra hospital worksite sparks safety calls, The Canberra Times, accessed at <http://www.canberratimes.com.au/act-news/construction-workers-death-at-university-of-canberra-hospital-worksite-sparks-safety-calls-20160804-gqlkif.html>

[3] Craig Butt, Crane catches fire, collapses on St Kilda Road worksite, The Age, accessed at http://www.theage.com.au/victoria/crane-catches-fire-collapses-on-st-kilda-road-worksite-20160223-gn1iz0.html

[4] ABC, 2017, Crane collapses onto apartment block at Wolli Creek; residents unable to return home, accessed at <http://www.abc.net.au/news/2017-08-06/crane-falls-onto-unit-block-at-wolli-creek-sydney/8779014>

[5] Stuart, R 2017, Crane topples into Sydney Harbour after wire rope snaps and lands in Luna Park, accessed at <http://www.abc.net.au/news/2017-08-29/crane-topples-into-sydney-harbour/8852658>

Adrian J Bradbrook, 1988, The Relevance Of The Cujus Est Solum Doctrine to the Surface Landowner’s Claims to Natural Resources Located Above and Beneath the Land, p. 476.

Janney & Ors v Steller Works Pty Ltd [2017] VSC 363, accessed at <http://aucc.sirsidynix.net.au//Judgments/VSC/2017/T0363.pdf>

By Justin Cotton, Director, Lovegrove & Cotton – Construction and Planning Lawyers

Recent building law reform changes to the provisions in the Building Act 1993 have marked a strengthening of enforcement tools and powers to ensure compliant construction in Victoria.  It is hoped that this will lead to better constructed buildings with improved quality and less risk to health and safety.

 

This is of key importance in this era of increased high rise apartment living, risky aluminium composite cladding, and problems posed by water entry and suspect water-proofing (for example, with apartment balconies).

 

There are new provisions now in the Building Act 1993 which better specify the use of ” directions to fix building work “, that can be given verbally or in writing by the relevant building surveyor (“the RBS”).  These directions are given to the Builder, or to the person apparently in charge of building work at the site.

 

This marks an improvement and more clarity to the previous section 37 (prior to the amendments), which was a brief stand-alone provision that allowed for directions made by an RBS to the person apparently in charge of the building work at a site. If the directions were given verbally, they had to be confirmed in writing promptly thereafter.  If the directions were not complied with, there could be an escalation to a Building Notice.

 

In practice, directions to fix building work were probably under-utilised by building surveyors and it was more common to have Building Notices or Building Orders issued by either Council or private building surveyors.

 

It is obviously hoped by the regulators that the addition of more sections (ie sections 37A to 37E) and the introduction of the Victorian Building Authority (“the VBA”) into the mix as an entity that can give such directions, will lead to an increased use of building directions rather than just relying on Building Notices or Orders.

 

The advantage of the directions process is that the Owner of the land, who can often be disinterested or non-involved in the construction process, is bypassed and the directions are served in a straight line on the Builder or a person “who is apparently in charge of the site on which the building work is being carried out”.

 

On the other hand, Building Notices and Building Orders are generally required to be served on the Owner of the land where the works are performed.  That person then has to approach their Builder and seek rectification, when often the Builder can be the real entity at fault, with matters complicated if the Builder and Owner are in some form of contractual dispute at the time.

 

Fitness for occupation and regulatory compliance are linked inextricably to health and safety. These concepts should not be clouded by contractual disputes between Owner and Builder, or other construction practitioners.

 

Section 37B of the Act was introduced as part of Division 2 of Part 4, which was introduced by the Building Legislation Amendment (Consumer Protection) Act 2016.  The section reads, in its first two sub-sections:

 

“(1)   This section applies if, after the inspection of building work, an authorised person believes on reasonable grounds that the building work fails to comply with this Act, the building regulations or the building permit issued in relation to the building work.

 

(2)    The authorised person may give a direction to fix the building work to a relevant person in accordance with this division.”

 

Pursuant to section 37 of the Act, “authorised person” is defined to mean “the Authority” (meaning the VBA), or a VBA inspector. Whereas the definition of “relevant person” means “a person referred to in section 37C who can be, or has been, given a direction to fix building work.”

 

Under section 37C of the Act it is said that a direction to fix building work can be given as an oral direction to either or both of “the builder” or “the person who is apparently in charge of the site on which the building work is being carried out”, or it can be given as a written direction to the Builder.

 

Note also that a recent decision of the Supreme Court accepted the main submissions from the Builder to the effect that the legal power to issue the direction to fix under s37B is confined to a specific period or phase.

 

This finite phase is the actual building period commencing from when the Building Permit is approved and up until the issue of an Occupancy Permit or Certificate of Final Inspection.

 

In that case, the Builder successfully argued that a direction to fix given by the Victorian Building Authority could not be served at a time that was several years after the works had been completed and an Occupancy Permit approved.  Therefore the direction was not upheld by the Court, in what was a positive outcome for the Builder.

 

I offer this quick precis of the main provisions that have been introduced to ‘beef up’ the directions process as an enforcement tool.

 

Section 37A says that, if after the inspection of building work the RBS believes “on reasonable grounds” that the work fails to comply with the Act, the building regulations (including the Building Code) or the Building Permit, then the RBS must give a direction to fix the work to a “relevant person”.

 

In addition, the RBS may authorise a building surveyor or a building inspector whose registration under Part 11 authorises the inspection of that building work to give an oral (ie verbal) direction to fix the building work.  That oral direction is to be given to the “relevant person” on behalf of the RBS.

 

As described above, the definitions of “relevant person” and “authorised person” are set out in the new section 37.  The umbrella of “relevant person” is as expected and consistent with the original section 37, but “authorised person” which includes the VBA or a VBA inspector is a marked shift that now allows the VBA to give such directions, rather than just the RBS for the site.

 

Section 37B refers to directions “by authorised person to fix building work” and is described more fully above.  Note that if such a direction is given by the VBA, then this new direction will supersede any earlier direction given by or on behalf of an RBS under section 37A.

 

What does “the enforcer” do if an oral direction is not complied with?  Pursuant to section 37D, the RBS or the “authorised person” (ie the VBA or its inspector) must then give the Builder a written direction to fix the building work, IF the RBS or the authorised person is not satisfied at the end of the prescribed period after the oral direction was given that that the work is now compliant.  Based on subsection (3) the “prescribed period” means any period prescribed by the regulations, or in the absence of such prescription 7 days.

 

Finally, section 37E specifies what directions to fix building work can require the recipient to do.  The section says that the directions may compel the relevant person to:

 

• carry out work so that the building work then complies wholly or substantially with the Building Act, the Regulations and the Building Permit (“rectification”); and/or
• stop any further work that may prevent the building work the subjection of the direction from being properly inspected, until the RBS or authorised person is satisfied that the rectification has been adequately conducted.

 

For further advice or assistance in relation to building law matters including construction disputes and building regulation, do not hesitate to contact a legal team with expertise in this area.

 

Lovegrove & Cotton Lawyers to the building industry

For thirty years, Lovegrove & Cotton have represented builders, building surveyors and building practitioners in Melbourne, Canberra, Sydney and Queensland. Justin Cotton is a leading Australian construction lawyer and widely respected in the building fraternity as evidenced by his appointment as Chairperson of the HIA Industrial Relations and Legal Services Committee, and member of the Regional Executive Committee, for HIA Victorian Chapter. Lovegrove & Cotton can help practitioners resolve any type of building dispute and are preeminent in the area of building practitioner

By Justin Cotton, Director, Lovegrove & Cotton – Construction and Planning Lawyers

Numerous councils in Victoria are issuing building notices and building orders on buildings adorned with ACPs and or ostensibly non-compliant cladding.

Section 212 of the Victorian Building Act 1993 dictates that councils are responsible for the safety of the local rate-paying constituent. So councils intent on discharging their obligations have recently embarked upon a compliance campaign.

Typically, body corporate managers or apartment owners will receive building notices. The cladding building notice will be served upon both the unit owners and the body corporate manager.

What to Do When Served with a Cladding Building Notice or Cladding Building Order

Regularisation

Firstly, do not assume that the body corporate manager will preside over or assume responsibility for that which falls within the legal jurisdiction of the apartment or unit owner, or, for that matter, the commercial strata owner.

In some instances unit owners may be liable for rectification, in others the body corporate, and in other instances both legal entities may be liable.

This being the case, the first task will be for an appointed lawyer to determine whether the liability to comply with the notice resides with the body corporate, the unit owners, or both.

Secondly, ensure that the notice is responded to in writing, within the time specified by the notice. It is prudent at this juncture to appoint a construction lawyer well versed with building regulations to prepare the response to ensure that the notice is addressed and dealt with within the time period for complying with the notice.

Thirdly, a fire engineer should be appointed simultaneously to inspect the building and assist with the drafting of the response to the cladding building notice.

Fourthly, the lawyers, fire engineer and the body corporate manager should make a point of cooperating with the municipal building surveyor to work through the compliance issues.

If the fire engineer is of the opinion that there are material matters of non-compliance, then he or she will no doubt have in mind a recommended course of action that can be brought to bear to regularise matters.

 

Do Not Shoot the Messenger

The councils in the main are sympathetic to the plight of the property owners, who through no fault of their own have purchased non-complying product. However, by the same token councils are still obliged to have regard to their statutory obligations under section 212 of the Building Act 1993. A fruitful negotiation will then ensure that the body corporate and thus affected property owners will be afforded time to rectify.

In circumstances where there is monetary shortfall, a body corporate manager will recommend a special levy be struck to raise the rectification funds to address any non-compliant cladding or the likes thereof. In other instances, a community of thus affected unit holders may choose to jointly fund a rectification kitty.

The MBS, once engaged with the property owners’ representatives, will likely liaise cooperatively with said representatives to extend the building notices and or may choose to amend the notices to include a realistic and timely method of rectification.

In circumstances where there is a palpable and imminent threat to life, the MBS can issue an emergency order. In such circumstances, the recipient must comply with the order or appeal the order within the period enunciated under the emergency order.

In circumstances where there is no imminent threat to life or limb the MBS will typically limit resort to the building notice.

 

Failure to comply with the Building notice 

If the recipient fails to comply with the building notice, the MBS or the relevant building surveyor will in all likelihood issue a building order.

The issue of a building order is the ‘upping of the ante’. Regardless of whether you are a commercial, residential property owner or a body corporate owner, you must immediately take cognisance of the contents and the demands within the building order. A response in writing canvassing the issues and demands within the order must be forthcoming within the time period enunciated within the order.

If the terms of the order are unreasonable and one cannot respond within the time period then the owner must appeal to the appeals board at the VCAT.

A failure to either respond to or appeal the order within the time period can culminate in prosecution. A multi-unit development comprising say 100 unit holders may result in the issue of 100 orders. One must not assume that the body corporate manager will respond the orders as the body corporate may not necessarily be construed as being the lawful owner of the property.

 

Some key considerations 

Be careful of your choice of consultants and lawyers. The best way to regularise matters of non-compliance is by way of a well-considered and cooperative approach with the council. It equally behooves the council officers to be reasonable and cooperative with the unit holders and their representatives.

The property owners are in an invidious position. They purchased product that was compromised. There is no recall button like a compromised car or faulty electrical product. There is no ‘return to sender’.

Rather, the owner, regardless of whether they are an investor or occupant, has to contend with rectification costs that were not envisaged at the time of purchase.

Further, the right type of expertise must be accessed. The deployment of fire engineers of good repute is critical as they will divine holistic solutions. The problem is that fire engineers are ‘flat out’ and in great demand, alas they are critical. This being the case, the municipal officials have to recognize the invidiousness of the property owners’ predicament.

So the issues have to be worked through and the correct technical solutions fathomed.

It follows that that the deployment of adversarial representatives, be they lawyers, be they technical experts, will be counterproductive. Counterproductive in that unless the MBS is satisfied that matters are regularised, they will not lift the notices and orders. Satisfaction will only be forthcoming if there is an accommodation or recognition that that which is compromised must be brought into compliance.

 

To Sue or Not to Sue?

That will, in the main, be the secondary question – for the first preoccupation must be the regularisation of matters.

The decision to sue will flow from cost benefit analyses. If the rectification cost can be borne by a non-financially crippling special levy, the community may prefer to bite the bullet, pay for the fix and close the chapter.

If the costs are higher, either a class action or a body corporate action may ensue.

Things to consider will be:-

• How many different professions are implicated
• Are they insured?
• Is the building ‘north’ of 3 stories with separate abodes demarcated by each floor? In which case, there will be no builders’ home warranty cover for high rise residential.
• Under proportionate liability, if the builder is insolvent or likely to become insolvent, will there be sufficient alternative insured respondents to satisfy the financial shortfall?

These are questions that will need to be canvassed with one’s lawyers and one’s technical advisers. They are also questions that will ordinarily be asked in parallel with or after regularisation has occurs.

Of course, there may be circumstances where an apartment ownership community may not have the financial resources to pay for rectification absent the endowment of pay out by respondents.

Every case will need to be grappled with according to its own merits.

 

Lovegrove & Cotton Lawyers to the building industry

For thirty years, Lovegrove & Cotton have represented builders, building surveyors and building practitioners in Melbourne, Canberra, Sydney and Queensland. Justin Cotton is a leading Australian construction lawyer and widely respected in the building fraternity as evidenced by his recent elevation to Chairperson of the HIA Industrial Relations and Legal Services Committee, and member of the Regional Executive Committee, for HIA Victorian Chapter. 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 enquiries@lclawyers.com.au.

By Justin Cotton, Director, Lovegrove & Cotton – Construction and Planning Lawyers

 

With recent reform of the Building Act 1993, and possibly responding to publicly raised concerns such as the fire safety of aluminium composite cladding products, the Victorian Building Authority now has greater powers at its disposal to direct building practitioners to act or not to act in a certain way.

 

This includes enhanced ability to direct or seek undertakings from the Relevant Building Surveyor (“RBS”), both Council and private, given the RBS’ role as the “regulatory gatekeeper” in the construction industry.

 

Anecdotally, one hears of the pressures that can be brought to bear from both sides on the private RBS in the privatised building surveyor system.  It goes without saying that there can be a tension between the imperatives and motivations of the Developer who wants to ensure construction is completed as quickly and cheaply as possible, and the public interest aspect of ensuring safe and compliant construction.

 

The regulatory authority (in Victoria, the VBA) and local Councils will be in the role of watchdog for matters of compliance and “fitness for occupation”, and the latter are common sources of complaints against private Building Surveyors.  Meanwhile, the VBA has the task of administering the registration system for building practitioners and the disciplinary process for those practitioners (currently involving “Show Cause Notices” at first instance).

 

It may well be that a private RBS will come under scrutiny and pressure from the VBA either to act in a certain way or to refrain from acting.  This will be pressure from one side, while from the other camp the RBS has simultaneous angst from the Developer or their Builder who will want an approval to be afforded or steps to be taken in the other direction, and as soon as possible.

 

Reference is made to the power in section 205M of the Building Act 1993.  Subsection (1) reads:

 

“If it considers it necessary for the purposes of this Act or the regulations, the Authority may direct a municipal building surveyor or private building surveyor to carry out his or her functions under this Act or the regulations –

 

• in accordance with this Act or the regulations; or
• within a period specified in the direction.”

 

Also at subsection (3), it is said that the Authority (the VBA) may recommend to the person who appointed a municipal building surveyor or private building surveyor that the person take action specified by the Authority.  This can be done if the Authority considers it necessary “for the purposes of this Act or the regulations”.

 

This wide ranging power means that the Authority can give directions to both a private RBS and indeed a Council MBS to act or refrain from acting in a certain way, and at the same time could make recommendations to the person who appointed that Building Surveyor on steps that should be taken.  That person appointing the RBS would be the Owner of the land where the building works are proposed.

 

Notably, though, section 205M of the Act states that a notice of intention to give this direction must first be given by the Authority to the Building Surveyor.  This must be a written notice that advises the intention of the Authority to give the formal direction, and provide a period of not less than 14 days within which the Building Surveyor may make submissions to the Authority about the matter.

 

Private clients, however, always have recourse to the appeal process at the Building Appeals Board, for example to appeal a Building Order that has been issued by the RBS – whether or not that was following on from a direction from the VBA.

 

A potential avenue for a Building Surveyor who finds themselves “the meat in the sandwich”, caught between the line taken by the VBA and a potentially recalcitrant client, is to refer the matter on to the VBA after a Building Order has not been complied with.  If this occurs, the RBS must make this referral (after the 14 day period elapses) and then have nothing more to do with the matter (see section 115 of the Act).

 

In addition of course, if the question is about whether it is appropriate or not to approve an application for an Occupancy Permit, then the conservative and safer avenue would be for the RBS to await the outcome of any matters before the Building Appeals Board before making any determination of the application.

 

This is important for two reasons; firstly, the professional and prudent RBS would have public safety and building industry compliance as their number 1 driver, and the risk of later facing a disciplinary complaint and investigation from the VBA is not to be overlooked.

 

On top of this, if works down the track are suspected as being defective or non-compliant with the Regulations (which call up the Building Code), then the RBS could find themselves joined as co-respondents to a civil action for defective workmanship later brought by the owners for the time being of the land. This could involve of course residential apartment buildings where there could be a number of owner applicants, plus the Owners Corporation in respect of common property faults.

 

Notably, there are other powers at the VBA’s disposal.  Under section 234B of the Act, the Authority “may accept a written undertaking given by a person in connection with a matter in relation to which the Authority has a function under this Act”.

 

If such an undertaking is given, potentially by an RBS or a Builder to the VBA, then it can only be withdrawn or varied later on if that practitioner has the consent of the VBA.

 

Also, if the VBA considers at a future time that the person who gave the undertaking has failed to comply with any of its terms, the VBA can apply to a Court for an order. Should the VBA be successful in such an application, of which there would be a high risk, then the practitioner respondent to the application could well also face an order to pay legal costs.

 

This order could be one that compels the practitioner to comply with the terms of the undertaking.  It could also be an order by the Court directing a practitioner to carry out building work or protection work or an order to pay compensation.

 

Therefore, it could be possible that the RBS for a site where the VBA has significant concerns, could receive a letter of demand requiring an undertaking to be given that the RBS will act or not act in certain ways (consistent with an RBS’ functions). One example could be a demand for an undertaking that the RBS not issue an Occupancy Permit until certain steps have been taken or certain matters satisfied.

 

Naturally, each case scenario has to be looked at on its own merits, and it could be a fine line between the legitimate exercise of “higher” enforcement powers by the VBA and potentially too great an intervention into the professional discretion of an appointed RBS. In matters of building control, there will often be situations where reasonable minds can differ on the correct technical interpretation and outcome.

 

An additional capacity in the Building Act 1993 is found in section 234E (injunctions).  Therefore a letter of concern or demand from the VBA may include a threat to apply to a Court for an injunction to either prevent a building practitioner (including an RBS) from acting in a certain way or conversely to compel certain steps to be taken.

 

Section 234E of the Act states at subsection (1):

 

“A court may grant an injunction, in such terms as the court considers appropriate, if the court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute – (a) a contravention of a provision of this Act or of the regulations or of a notice, permit, direction, order or determination issued or made under this Act or the regulations (including a notice or order or determination of the Building Appeals Board)…”

 

The Court can grant the injunction on application by the Authority (ie the VBA), a Municipal Building Surveyor (ie an MBS), Energy Safe Victoria or “any other prescribed person”.

 

Again, the risk is there that if such an application were made, and if the Court (generally the Supreme Court) were minded to grant the injunction, then the practitioner could be up for the legal costs of the exercise, which could be significant.

 

For further advice or assistance from experts in building law and advice on regulations, do not hesitate to contact construction law experts well versed in all aspects of building control and dispute resolution.

 

Lovegrove & Cotton: Leaders in building practitioner legal representation

Lovegrove & Cotton are experts in construction law and building practitioner legal representation in Melbourne, Sydney, the ACT and Queensland. Justin Cotton has represented building practitioners and building surveyors successfully for nearly fifteen years and has established leading precedence in a number of Australian tribunals. If the reader knows of anybody who needs legal representation in this complex and gravity-laden area, feel free to contact us via our website or by emailing enquiries@lclawyers.com.au.

Presented at the Fire Safety & Cladding Summit 21-22 August 2018 at Melbourne Improving Standards  Before one can mandate standards, one has to ensure that the standard is highly evolved and fit for purpose. Standards and regulations have repeatedly been found wanting throughout the world in recent years, whether those standards and regulations  relate to fire retardant solutions or other scenarios like leaky buildings. Ironically, some of the biggest failures have been in the West. Grenfell occurred in the birthplace of modern day Western building control, London. Meanwhile, the “Leaky Building Syndrome” bludgeoned “the land of the long white cloud” where I hail from – New Zealand – and has cost well in excess of 11 billion dollars. Similarly, Canada had the “Leaky Condo Crisis” that cost that modern economy billions. These are just a few examples of system failure that was abetted by less than optimum standards. These are modern economies – they showcase modern building regulations and well-resourced legislatures and bureaucracies. Currently there is a flurry of belated regulatory rewrite in the fire codification space. Why so much rewriting, revisiting and recalibration? Because the rationale, the assumptions and expectations that underpinned many of the regulations in the first place did not deliver that which was intended. You see, law reform is like chess, every change in regulation is akin to a move on the chess board. Unless each move is carefully orchestrated, the consequences can underwhelm and can defeat. The metaphor, however, has serious limitations; for in the case of chess, the collateral is limited, i.e. one casualty, but misconceived building control can generate hundreds and thousands of casualties.  So the job of the law reformer is gargantuan in its challenges and must always be seen as such. The moves must be right and the consequences well thought through. Common Confounding Regulatory Considerations and Ideals Ideology in particular economic rationalism, ‘greenification’/energy efficiency, breaking down trade barriers and globalisation have all played their part in some of the current regulatory disconnects. To free up economies you have to break down barriers, and with this comes regulatory adjustment (or lack of regulatory adjustment) to ensure that new product comes to market. Hence, a tsunami of non-compliant ACPs has washed into many countries. Ironically, greenification and energy drivers culminated in a proliferation of energy-empathetic cladding. Insufficient regard was had to the impact that certain types of energy-saving products were conducive to rapid fire spread. One man’s meat is another man’s poison, as it were.  The aims were laudable, compelling and, from an environmental and future generational point of view, altruistic. But the impact upon the fire resilient capacities of the likes of energy efficient cladding were not sufficiently well thought through. There has, in recent years, been insufficient regard to regulatory ‘holistics’ and the challenging nature of the apposite sciences. The other day I was talking to Peter Johnson, a co-speaker and one of the most reputable engineers in the antipodes for many a decade. Peter assured me that fire engineering was incredibly complex.  Another well-known engineer once described fire engineering to me as a dark art. It is evolving but as an engineering science is still a work in progress as the challenges of fire maelstrom continue to surprise and confront. Some policy makers in certain parts of the world may not have understood how complex the area of fire code reform is and despite best of intentions may have misconceived and misunderstood the science and consequently the design of the regulations. The Material Impacts on Policy Little wonder the task has proved immense for well-meaning civil servants. They may well, in many jurisdictions, have done the level best but absent the law reform accoutrements of internationally benchmarked and best-practice fire regulatory science, there was bound to be risk of unintended consequences over the last couple of decades in the fashioning of new building regulations in the economic rationalist and modern free market economies. Alas, best intentions are not enough, hence the sceptics ode ‘the road to hell is paved with good intentions’. Politicians are obviously desperate to find the answers, with compellingly good reason as they don’t want to see fire related death or major economic loss. But crises-driven law reform often results in compromised outcome and in the fire regulation space that can be very problematic. Yes, one has to hasten, but the diviners of new regulations and standards, I submit, should hasten with restraint, for fear of compromising scientific rigor and international, rather than provincial, best practice law reform management should be brought to bear. The old adage “speed kills” is poignant in this discussion. The Challenge for Australia The challenge in Australia for the adoption of uniform standards is immense. Australia has eight different governments regulating the one industry, so it follows that it is all very well to generate an enlightened standard but whether every jurisdiction will choose to adopt that standard is another question. That is up to the state and territory building control regimes for they are the gatekeepers and home to the building regulatory Tsars. Currently there is no legislative mechanism for the adoption of uniform standards as each state and territory in its sovereign capacity determines what to adopt. Alas, not ideal in the fire regulation and leaky building space. In such a paradigm, federalism shows its limitations. But the sooner the naysayers accept that federalism is here to stay in perpetuity, the less time can be wasted in ‘pie in the sky’ or utopian debate. The discussion has to be about how one engineers accord in a federal scenario to facilitate the promulgation of uniform and enlightened building regulations and standards. The challenges confronting the nation in building control are immense, possibly greater now than ever. What, with the continued instability of the profession, the continued viability of private certification or lack thereof, non-compliant ACPs and the unfolding of a leaky building syndrome – from the viewpoint of protecting the interests of the Australian citizenry, there is a desperate need for  national solutions, rather than secular or provincial solutions. It follows that maybe it is time to reboot the concept of cooperative federalism that was a hallmark of early nineties law reform. Yes, maintain state and territory building regulatory sovereignty but equally through cooperative federalism adopt best practice standards and regulations that serve the common Australian good, the non-sectarian Australian citizens, consumers and building practitioners. What is ‘Best Standard’? In determining that which would be considered the best standard, that is in itself an interesting question. As a lawyer, I am loath to volunteer an opinion on point because in all honesty I am not qualified to proffer an opinion.  That is the remit of the fire engineer and there is a high concentration of fire engineering luminaries on display at this conference. What I am comfortable in saying is that it is very important that the best are available and the best standards need to be fashioned by the experts. How does one define best standards? This is axiomatic, they will be standards that:-

• prevent loss of life in fire events;
• are holistic in that the fire retardant system is designed to achieve the fire safety outcome which will of course ensure that in the event of a fire:-
  • the fire is contained;
  • occupants can avail themselves of swift and safe egress; and
  • damage to property is minimal.

I do not think anyone would disagree with these objectives. But the science that needs to be incorporated into standard design is a far more exacting affair. Being an exponent of international best practice, when it comes to fire engineering standards design, in my personal view, entails that one must have regard to international best practice. The fire engineering domain and its consumer constituency should demand this. Why? Because so much of fire retardant product that finds its way into the construction ecology is imported and the same type of product i.e. ACPs are exported and utilized throughout the world. It follows that the advancement of fire engineering and fire regulation is not a local phenomenon, it is global and the problem of vertical fire spread is global. Hence, best global practice should be the benchmark. Once one has developed a best practice standard then there would be merit in the states and territories uniformly adopting it. Fires do not discriminate between states, territories, borders or hemispheres – they are inherently geographically and politically agnostic. It follows that the phenomena of vertical, or even horizontal fire spread for that matter, has no regard for conflicting acts of parliament. Fires do, however, respect the containment measures inherent in best practice fire-engineered fire retardant solutions. The simplest way to ensure that uniform standards are adopted is to generate an enlightened standard that finds its way into the NCC and then each state and territory calls it up without compromise. The mechanisms are there. How Can Regulations Evolve to Keep Up?   It’s all about R and D and the adoption of international best practice. Fire engineering and best practice holistic fire management is an evolving paradigm and a relatively new profession. The emergence of SHR’s (Super High Rises) has been a game changer. ‘Suburbs’ are increasingly vertical, pushing into the air rather than terrestrial. Higher and higher is the mantra. Building regulation has not kept abreast of this game-changing paradigm shift. SHR construction has unfolded, in a sense, organically and has indeed accelerated past the design of ‘modern’ building regulatory ecology. Modern building regulations have been found to be not so modern and in many parts of the world the culture of compliance and enforcement has been found wanting. The problem is that unless there is a crisis, regulation is slow to evolve and it is rarely proactive, generally reactive and in some jurisdictions atrophic, so by and large is off the pace. That’s just the nature of the beast pretty much across the globe. To change that approach, the regulators will need to persuade their masters to give them budget for the establishment of  internationally affiliated  R and D units whose sole mandate is to continually monitor best practice international building control and construction solutions. There will need to be coalition of R and D units that exchange R and D globally. Coalitions and information exchanges must be established, this is one area where one can leverage off globalisation. Annual reports will be published and dispatched to the heads of building control and they will be tabled with the responsible Ministers. Review of best practice regulation will occur annually in the quest to keep abreast of latest developments and technology and the identification of that which fails and that which works. The reports will capture consumer and industry feedback along with early warning detection research. When a major fire incident occurs abroad, diagnostic research courtesy of collaborations with offshore information collaborators will ensue. Lessons learnt will find their way into local thinking and reporting up the line along with law reform recommendations. Global problems require global solutions hence global cooperation and exchange of R and D. In the age of the net, email and instant and accessible knowledge transfer, such access should not be challenging. Yes this type of approach would be somewhat revolutionary, there would be no rear view mirror, policy on the run. But there would be a  utilitarian dividend in that the early warning detector systems abetted by up to date benchmarked R & D would identify the ominous, before the ‘that which does not bode well’ finds expression and becomes a regulated status quo  Accountability of Manufacturers  In an article that I wrote for the Australian last year, I opined that the way to keep non complying product from domestic shores is to establish a national accreditation body that is designed to ensure that non-conforming product is kept out if the country. Any offshore exporter to a domestic jurisdiction will be required to undergo vigorous onshore laboratory testing to obtain accreditation of product and access to market. The exporter will of course pay the accreditation body and testing regime for the tests. If the tests are successful, the federal accreditation body will formally accredit by way of stamp or code mark and the product will be incorporated into a product register. The accreditation body will be able to approve and accredit the testing authorities charged with the responsibility of testing and approving imported product. Local manufacturers will likewise be subjected to the same rigour. The states and territories will then generate consistent regulatory amendments to ensure that the building surveyors and officials only permit the use of the accredited product. The regime is designed to overcome the very real and logistically nigh-on-impossible difficulties in holding offshore manufacturers to account. The litigation involved in pursuing off shore manufacturers is labyrinthine and enforceability of judgement most difficult. Raising Accountability of Practitioners  Depending on which country/state or territory, within the sovereign context, one lives in, the accountabilities of practitioners differ profoundly. The Australian jurisdiction NSW’s Building Professionals’ Board only registers residential builders and building surveyors. The Victorian Building Authority registers builders, draftsmen, engineers, quantity surveyors, building surveyors and building inspectors. If one wants consistent cross-jurisdictional accountability, from a legislative oversight point of view, and compulsory insurance for all principal actors, one has to uniformly adopt broad church registration cross jurisdictionally. A key element of accountability is compulsory registration; insurance and practitioner conduct oversight regimes. Absent same there is little ability to mandate qualifications and ‘vocational egress’ criteria i.e. the cancelation of licensee for conduct unbecoming. Without compulsory insurance, there is no ability for consumers to be sure of indemnification. Insurance provides no utopian panacea, but is the best way, albeit with well-ventilated limitations, of guaranteeing legislatively aided financial redress. Absent compulsory insurance, there resides the spectre of men of straw defendants. An upping of the ante of further accountabilities of building surveyors will probably cause a market failure, particularly in the likes of NSW where, from an insurance indemnification point of view, too few are required to carry too much. The north of three-storey residential exclusion in respect of residential builders having to carry compulsory warranty cover has been a boon for the builders but profoundly deleterious for other insured  building practitioners, like surveyors who in light of the vacuum become very conspicuous co-defendants. The crisis of indemnification of private certifiers is playing out with the rapid ticking up in fire cladding and leaky building litigation as insurers are already, or about to:-

• Double to triple insurance premiums in the case of many building surveyors
• Impose exclusions for non-compliant ACP buildings
• In some instances vacate the market in terms of underwriting private certifiers.

The maths doesn’t stack up for them; too little premium, too much risk. If further disproportionately higher risk allocation demands are brought to bear upon certifiers, absent the reintroduction of high rise warranty and multi-actor registration, private certification will fail. And this may occur very soon. That will mean by default, building enforcement will have to return to local government.  But here’s the thing: Does local government want it back? Can it resource it? Will it assume that liability reservoir and visit rate increases for resumption of local government building control on councils? Or is it beyond the point of no return? These are questions that must now be tackled as the viability of private certification is being tested like never before. A lack of preparedness on the part of insurers wiped private certification out in NZ in the early nineties – the same thing could well happen here. The catalyst will be a wave of fire cladding body corporate litigation and a proliferation of leaky building litigation. Consumer Protection Going Forward Broad church compulsory insurance of building practitioners is paramount. Were insurance to be jettisoned, the safety net would disappear. For fear of labouring the point insurance is an imperfect form of security but it’s a dam side better than the alternatives. Mandatory users pays annual auditing of key building practitioners should be introduced to ensure that problems are picked up at an early juncture in the construction critical path. The complaint based auditing approach is flawed as it requires construction failure or consumer disquiet as precursor to action. Trends have to be identified early so that the problem can be arrested. This is the best type of consumer protection going forward, this can only be achieved if the spectre of the enforcer looms large in the consciousness of practitioners. This more than anything else will drive cultural change. Building surveyors must be denied the ability to sanction and approve alternative solutions. Their powers must be limited to sanctioning deemed to satisfy provisions. The natural person discretion based power to approve alternative solutions needs to expire, sooner rather than later. Dispute resolution needs to be overhauled. Dedicated construction dispute resolution divisions need to be established in the dispute resolution theatres and the adversarial system needs to be challenged. Tribunals need to nominate accredited expert witnesses that will be remunerated by disputants on a 50/50 basis with the view to dispensing with the adversarial dynamic where plaintiff and respondent expert witnesses adopt contrary positions on the same construction subject matter. The independent expert, will inspect, diagnose, quantify and then appraise the tribunal of his or her findings. Those findings will be binding. Such an approach will cut the cost of dispute resolution in a profound sense. Conclusion In conclusion, an observation based on 30 years of construction and law reform lawyering is this: Best practice regulation and best practice fire regulation should not be ideologically driven, say, by economic rationalism. Nor should it be dominated by one prevailing current to the detriment of the public imperative of non-compromised safety of the citizen. When regulations are tipped too far in favour of the contemporary or fashionable ideologies and mantras, the prospect of achieving holistic responses to fire safety hazards is diminished. Best practice fire regulation is based on fire engineering principles that have been subjected to the furnace of robust debate and to the most enlightened science. For best practice regulations to bear the most utilitarian fruits within the Australian context, a cohesive cooperative federal approach is to be encouraged. It will also require international collaboration as fire regulation is ever-increasingly facing the tests of global free trade, where borders – at least in terms of the movement of product – are of lesser material significance. By deploying nuanced regulatory mechanisms to ensure suitable and proportionate accountability for manufacturers of building product and practitioners responsible for the use of said product, Australia will be in a stronger position to face off non-compliant product. By Adjunct Professor Kim Lovegrove MSE,RML, Adjunct Professor University Western Sydney Adjunct Professor Southern Cross University Adjunct Professor University Canberra   Past Ethiopian Honorary Consul to Victoria  Past Senior Law Reform Consultant to the World Bank  Chair of the International Building Quality Centre and he is admitted to practice as a lawyer in New Zealand.  Disclaimer This article is not legal advice rather a discussion of the topic in only general terms. The views expressed in this address are those of the writer and are not views of any origination he works for, chairs or represents.