Articles

By Kim Lovegrove RML, FAIB, Senior Lawyer, Lovegrove & Cotton – Construction and Planning Lawyers

Early Nineties Australia was the Camelot of Cooperative Federalism

The early nineties heralded an unprecedented era of cooperative federalism under the auspices of the Special Premiers’ Conferences (‘SPC’) which in turn was one of the brain child’s of the late prime ministerial icon Bob Hawke.

The SPC which comprised the senior statesman for the nine Australian governments voluntarily corralled themselves into a coalition of like-minded leaders whom having identified the microeconomic inefficiencies that go with lack of cross-jurisdictional regulatory harmonization, embarked upon mission to generate uniform laws that had national application.

In the publication, The Model Building Act for Consideration by the States and Territories, the late former Prime Minister Bob Hawke’s vision for regulatory harmonization of the building industry was quoted:-

“At the Special Premiers Conference in March 1989… my colleagues the State Premiers and Northern Territory Chief Minister, endorsed a Commonwealth proposal to sponsor a national building regulation review program over three years.  The micro economic reform initiative has the objective of streamlining building requirements and processing more cost effective construction of housing and other buildings. At present, building requirements are controlled by eight Sates/Territories and administered by over 880 local Councils.”

The sentiment was reinforced at the Special Premiers Conference held in Brisbane the same year. In a communique released after the conference, the Premiers indicated that they would be giving “…high priority… to the rationalization of regulatory activities undertaken by the different levels of government, so as to remove inefficiencies brought about by varying regulatory regimes in the different jurisdictions”.[1]

Mr Simon Crean, who was then the federal Minister for Science and Technology at a keynote address titled ‘Microeconomic Reform: Planning and Building Controls Conference’ stated that in the years 1988/89 the building industry amounted to $45 Billion of the Australian Economy.[2] As of 2018, the Construction industry in Australia generates $350 billion worth of revenue, producing around 8% of Australia’s GDP.[3]

The Building Regulatory Review Taskforce

Mr. Hawke made good his undertaking and established the Building Regulatory Review Taskforce courtesy of Federal Government funding. The BRR also commissioned other consultancies and one such consultancy culminated in a report prepared by a Dr R.T. Graham who identified that delays that emanated from conflicting regulation had negative economic impacts, not the least of which being ‘the economic and social cost of having a less mobile workforce and a reduced capacity to act quickly to meet the demand of building construction’.[4] The BRR in addition to recommending the establishment of the Australian Building Codes Board recommended that there be an initiative that would culminate in model building regulations that could be used as a mechanism to facilitate regulatory harmonization. This was in keeping with the Prime Minister’s objective of streamlining building requirements to produce more cost-effective construction of housing and other buildings, and the SPC’s ‘high priority’ for the rationalizations of regulatory activities emanating from the different regulatory regimes in the different jurisdictions.

“Regulamania”

The writer, at the time, had noted a Herald Sun article coining the term ‘regulamania’, and it was considered that it encapsulated the zealousness for over regulation at the time.

“It is extraordinary that a country of 17 Million people essentially comprises eight different countries, evidenced by a plethora of constitutional and legislative barriers that carve up and isolate each State from the other. It may be in the interest of the ‘empire builders’ but it is certainly not in the interest of Australia, least of all members of the building industry that operate on an interstate basis.

The consumer, and for present purposes the consumer means the like of interstate government operations, interstate builders, tradesmen and architects, has to contend with eight different legislative labyrinths. Instead of engaging on lawyer and one consultant, eight separate sets of lawyers and eight separate sets of consultants are required to decipher the puzzle.

Furthermore, because some states are more renowned for legislative puzzles than others, there are different time periods for getting approval through and different degrees of success in relation to the dispute resolutions systems.

The overseas investor must be totally bemused when confronted with the legislative battery.

Australia has to become one market instead of eight micro-markets. Until the legislative red tape that isolates one State from another is dismantled, Australia will not be able to perform anywhere near optimum efficiency.

The legislative uniformity initiative will break down barriers, ease the burden and will provide much more user friendly tools.”[5]

Out of these concerns, the Model Building Act was born.

The Model Building Act

In 1990, the Australian Uniform Building Regulatory Coordinating Council (AUBRCC), the predecessor of the ABCB, invited Australian law firms to tender for a project that would culminate in the generation of a national Model Building Act. The NMBA was to be a best practice template for modern day building control in Australia. The writer headed up the team that was successful in winning the engagement.

At page 5 of the publication The Model Building Act for Consideration by the States and Territories: Dispute Resolution Systems and Options, it was stated that “AUBRCC has indicated that the model legislation should be prepared in a framework of least amount of government intervention, supervision and procedural arrangements necessary in the building regulatory process whilst maintaining adequate standards of public health, safety, amenity, consumer protection, accountability, equity and natural justice.”[6]

For a period of ten months, an intensive comparative analysis of global best practice building control regimes ensued, with the aim of generating a model statute that would showcase internationally best practice construction law regulation.

The Primary Building Acts of Australia: A Comparative Study

The first research report that was published by Federation Press Pty Ltd (Federation Press published all of the 6 books) was, as the above heading connotes, a comparative study of the primary building acts of Australia – all eight of them. At page 5 of the introduction, it is stated that “we have drawn from the summaries of an objective and clinical comparative analysis. It is not the domain of this report to investigate or address policy issues and historic factors that motivated the legislation”. In addition to generating a synopsis of the eight Australian apposite Acts of Parliament, a synopsis of the Hong Kong and Singapore was forthcoming. Thousands of these books were published and they were distributed to every local council in the country, along with every key stakeholder representative body, and this cost was underwritten by the Federal Government. Every one of the subsequent five publications was likewise distributed to the same constituents. The books became known as the ‘rainbow books’ in light of the vibrant colour scheme that adorned the front covers.

Primary Building Acts of Australia: Dispute Resolution Systems and Options

This publication, as the title connotes, provided a synopsis of “the current dispute resolution systems and structures in Australia, [identified] uniform themes and differences, gives commentaries on the systems in operation and concludes with a variety of options for systems that could well be adapted to a model act”[7]

Constitutional Options for Uniform Legislation

The Comparative Constitutional Law Centre of Melbourne University under the stewardship of Professor Cheryl Saunders wrote the above-named publication. The report canvassed the variety of ways by which one could achieve uniform legislation in Australia. The option that was adopted was the one where model regulation was drafted which then enabled the state and territories to adopt, through their own adoption and promulgation mechanisms, the model act.

Legislative Aims and Options

By the time we started to write this publication, the team had begun to determine what the regulatory pillars for enlightened building control going forward would be. This publication, as connoted by the title, provided an array of options for the national stead of constituents and stakeholders to consider. The publication traversed the following components of best practice regulation, not the least of which being:-

• The charter;
• Definitions;
• Administration regime;
• Approval procedures;
• Appeal structures;
• Liability regimes;
• Notices and Orders;
• The resolution of neighbour disputes;
• Fire protection and safety; and
• Qualification regimes.

The books were dispatched throughout the nation to all stakeholders, not the least of which being the very large body of local councils, along with a questionnaire. The questionnaire consisted of a list of questions and boxes to tick to enable the constituents to, having read the publication, tick the preferred option. The questionnaire was then returned by a designated submission date, somewhat like a referendum, and the reforming team then analysed every questionnaire to generate a substantial set of conclusions that had been forthcoming from the bodies that represented the good people of Australia. It is probably fair to say that there has never been, before then nor since, a democratic, extraordinarily consultative methodology to generate a similar law reform outcome. Once the synopsis was completed, the next phase of the law reform journey began.

The Drafting of the Model Building Act

The writer was tasked with the responsibility of writing to each one of the nine Ministers responsible for building control, seeking their permission and unanimous agreement that a National Model Building Act be drafted. The unanimous support for the initiative was forthcoming from all nine ministers.

The Support of the Standing Committee of Attorneys General (SCAG)

The writer then had to write to each one of the nine attorneys general to seek the unanimous agreement that the Chief Parliamentary Counsels Committee (comprising the nine chief parliamentary counsels from the legislature of all nine governments) be forthcoming with respect to garnering the resources of these venerated draftspersons to draft a national Model Building Act. Unanimous agreement was forthcoming and it was resolved by the CPCC that Mr Dennis Murphy QC, the then chief parliamentary counsel NSW, be afforded carriage of this important initiative. Mr. Dennis Murphy QC was chosen on account of, amongst other things, his high level of plain English drafting dexterity. In due course, the Model Building Act was completed and two publications were generated: one being called ‘The Model Building Legislation for Consideration by the States and Territories’ and the other publication of same name, albeit that pertaining to ‘Legislative Commentary’.

It was interesting to read the quotes from Ministers of the time when discussing the importance of the work of AUBRCC and the Model Building Act initiative.

‘It is essential that Australia does not lag behind the ability of many countries – like, for example, the European community – to establish uniform laws and regulations’ (The Hon. Andrew McCutcheon, Minister for Planning and Housing, Victoria)

‘The Model Building Act provides a perfect vehicle for building control legislative reform throughout Australia. Some of the benefits are – reduction in the cost of building, breaking down of barriers between State and Territories, freeing up of the Australian Building Industry Market, streamlining building approval processes, providing user friendly and philosophically sound legislation.’ (The Hon. Mr. Peter Patmore, Minister for Environment and Planning, Tasmania)

‘The development of a single, simplified Building Act to be used in all States and Territories has been identified as one of the most important steps in streamlining building regulations.’ (The Hon. Max Ortmann, Minister for Lands and Housing, NT)

‘The first advantage of having the Model Act must be stated in dollars… the Model Act will aim to encourage these savings by deregulating different elements in the system. One of the main reforms proposed by the Model Building Act will be to cap liability at a definite time – this will result in quantifiable risk, lower premiums and the return to favour of professional indemnity cover. It will also reduce local authority liability exposure.’ (The Hon. David Smith, Minister for Local Government, WA)

Going Forward 30 Years – The More Things Change, The More they stay the same

In 1991, there was a general consensus that a lack of cross-jurisdictional regulatory harmonization did not bode well for the national construction economy. Against this backdrop, the nine governments, showing tremendous cooperation, created an impetus for a National Model Building Act.

The NMBA became the legislative blueprint that underpinned the foundations of the Victorian Building Act 1993 and the Northern Territory Building Act 1993. The Northern Territory at the time made the pragmatic decision to heavily draw upon the NMBA as virtually a complete template. The Victorian Building Act, to reiterate, although not using the NMBA verbatim, essentially used the law reform template as a reform manifesto. Other Australian jurisdictions in the 1990s adopted concepts that were hatched in the NMBA, namely:-

• A privatised alternative approach to building approvals;
• Ten year liability capping;
• Proportionate liability;
• To varying degrees, the establishment of registration regimes for building practitioners;
• To varying degrees, a changed building control paradigm for local government;
• In the case of some jurisdictions, like Victoria & Northern Territory, mandatory professional indemnity cover for all building practitioners.

Just as the nineties heralded a decade of cooperative federalist momentum, the beginning of the 3^rd millennium witnessed a departure from cooperative federalism and increasing drift back towards state and territory inspired regulation. One could say that there has been some ‘de-federalisation’ to a degree.

Yet, if one looks closely at the ambitions and hopes of the ministers of the time, be they Labor or Liberal, their optimism belies rather compelling logic. The Honourable Andrew McCutcheon promoted critical imperative of ensuring that Australia did not fall behind other countries in terms of uniform harmonization of laws. Ironically, the status quo in the Northern Hemisphere has changed on account of Brexit.

The Honourable Peter Patmore identified the virtues of reducing the cost of building breaking down state and territory barriers as part and parcel to reducing the cost of building.

The Honourable David Smith, rather prophetically, predicted that the NMBA would culminate in the return to favour of professional indemnity cover, and would reduce local authority liability exposure; the latter being the bane of local government risk appraisal at the time.

The reader may well ask why is it that thirty years later the Australian consumer of building industry outputs is still having to contend with and navigate through the ‘border control’ demarcation of state and territory building control. The building industry now generates $350 Billion per annum in revenue, yet in population terms Australia is a tiny country. In fact, Australia has a smaller population than some of the large global metropolises such as Tokyo, Chongqing or Shanghai.

Although the writer is not advocating a diminished role of state and territory government, mindful of the fact that would be a rather naïve notion as the constitution has ordained that the state and territories are set in stone; this does not trivialise the notion of there being yet again compelling merit in the resuscitation of cooperative federalism and a move towards cross-jurisdictional regulatory harmonisation. A ‘Model Building Act Mk II’ commissioned by the Federal Government and the ABCB would be, as the titles of the ‘rainbow books’ state, ‘worthy of consideration’.

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. Doyles Guide ranks Kim Lovegrove as one of the leading construction lawyers in Australia. Justin Cotton, likewise, 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 Council, 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.

[1] The Model Building Act for Consideration by the States and Territories: Legislative Aims and Options, Page 9

[2] Ibid

[3] Australian Industry and Skills Committee, Industries: Construction, accessed at https://nationalindustryinsights.aisc.net.au/industries/construction

[4] Page 13 of ‘the Graham report’

[5] Kim Lovegrove, The Model Building Act for Consideration by the States and Territories: The 1991 Interstate May Seminar Series Presentation, page 30

[6] Lyle Dix, Director of Building Control (VIC), Project Supervisor and Deputy Chairman, AUBRCC Executive, cited in The Model Building Act for Consideration by the States and Territories: Dispute resolution systems and options, page 5

[7] The Model Building Act for Consideration by the States and Territories: Primary Building Acts of Australia: Dispute Resolution Systems and Options, page 11