LC Lawyers

On 3 October 2023, Lovegrove and Cotton’s Kim Lovegrove presented at the annual FireNZ conference on the important topic of “What an International Best Practice Building Act Looks Like – Key Learnings From 30 Years Experience in Law Reform”.

The conference is the annual forum for fire protection and fire engineering professionals, and provides information for fire protection contractors, fire consultants, fire engineers, architects, building surveyors and other industry professionals.

Please see below the slides used in Kim’s presentation:

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On 4 October 2023, Lovegrove and Cotton’s Kim Lovegrove presented to conference attendees at the FireNZ conference in Auckland on the important topic of “How to Inoculate the Design of Building Regulation From Failure”.

Please see below the slides used in Kim’s presentation:

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The Court of Appeal in New South Wales has ruled recently that:

  • a failure by a Builder to obtain a certified Alternative Solution to allow combustible cladding to be installed on a building;
  • prior to the issue of the Construction Certificate;
  • is a substantive breach of the Building Code and statutory building warranties implied into the construction contract. 

It is not merely a ‘de minimis’ or technical breach.

Further, the Court of Appeal ruled that the onus to prove that an Alternative Solution could have been formulated and approved prior to the issue of the Construction Certificate was on the Builder. The onus to show this was not on the subsequent building owners.

If there is no Alternative Solution, then the performance requirements of the Building Code will not have been met and the Builder, and potentially other construction practitioners are likely to be liable for the full replacement costs of the combustible cladding.

The case decision is Owners SP 92450 v JKN Para 1 Pty Ltd [2023] NSWCA 114. 

The Owners Corporation of an apartment building known as “The Rise” in Parramatta were initially unsuccessful in their claim for full reinstatement costs (ie replacement of combustible cladding) at a lower court.

On appeal, the Builder / Developer was unsuccessful, with the decision in the lower court overturned. The was at the New South Wales Court of Appeal.

The Deemed to Satisfy provisions of the Building Code mandated the building’s external walls to be non-combustible, in accordance with the Australian Standards test of combustibility. 

Another pathway to compliance would be to satisfy the performance requirements of the Building Code with an Alternative Solution to allow acceptance of the external cladding product. 

Here, there was no evidence of the formulation, assessment and certification of an Alternative Solution either prior to the issue of the original building approval (the Construction Certificate) or prior to completion.

The building did not satisfy the performance requirements of the Building Code on fire resistance because:

  • the external cladding did not comply with the “Deemed to Satisfy” provisions; and
  • no Alternative Solution was prepared and approved prior to the issue of the Construction Certificate as a secondary pathway to compliance. 

Consequently, the building work involving the installation of this cladding was in breach of the statutory building warranty in section 18(1)(c) of the Home Building Act 1989.

A key question in the case to be determined was in relation to the correct measure of damages for breach of a statutory building warranty. 

During the appeal, the Builder conceded there had been a technical breach of the warranty as to fitness of materials (section 18(1)(c)) but maintained that this was not a substantive breach that would justify full replacement or reinstatement compensation.

In the key case decision of Bellgrove v Eldridge [1954] HCA 36, the High Court held that the measure of damages for compensating an owner for defective building works is the cost of rectifying the defects, subject to the rectification being necessary to produce conformity with the contract, and it is a reasonable course to adopt.

The test is whether the scope of rectification and the cost is what is “necessary” and “reasonable” to place the owner in the position they should have been in if the contract had been properly performed.

The Builder argued that a rectification involving full replacement and reinstatement of the cladding was unreasonable because “the as-built building, without modification, was capable of being certified at the relevant time by way of an alternative solution.”

Also, the Builder argued that the Owners Corporation bore the onus of proof to demonstrate that an Alternative Solution could not have been prepared and accepted prior to the issue of the Construction Certificate, or now (after the event).

Finally, it was argued that the breach of warranty was merely a formal or technical non-compliance (given the possibility of an Alternative Solution) and not a substantive breach leading to significant loss and damage.

However, the Court of Appeal rejected the Builder’s arguments.  It was held that the Builder had not shown that an Alternative Solution would have been available prior to the issue of the Construction Certificate or was now available. 

The Court also said it was the Builder’s onus to demonstrate this, not the Owners Corporation’s. 

It was found that the Builder’s failure to prepare an Alternative Solution in respect of the cladding was not merely a formal or technical breach.  Therefore, reinstatement damages were available to the Owners. 

In fact, the breach by the Builder was a substantive one that meant the building did not meet minimum standards of fire safety, thus placing owners and occupants at risk.

Some key findings of the Court of Appeal were, citing from the Reasons:

“Having established that the Respondents did not comply with the Building Code of Australia, the Owners Corporation were not required to go further by proving that the Respondents could not have complied by acting differently with respect to an alternative solution.”  [Paragraph 81].

“By installing cladding which did not comply with the performance requirements of the Building Code of Australia, the Respondents provided the Owners Corporation with a building which did not meet the minimum standards for public safety.” [Paragraph 107].

This decision is relevant to Certifiers because they could be drawn into the liability net for full replacement costs of cladding if a Builder is found at fault, and the relevant compliance check has not been done at the Occupation Certificate stage.

Code of Conduct

Registered Certifiers are included within the definition of “public official” in the ICAC Act 1988 and a “public authority” in the Ombudsman Act 1974. 

Public officials occupy positions of public trust and there is a public right to be assured that they will function in an open and honest way and based on high ethical standards.

There are 13 requirement headings in the Code of Conduct and some of the key ones are as follows:

1. Acting in the public interest: a Registered Certifier shall carry out their functions and duties, and exercise any discretionary powers, in ways that promote or preserve the public interest.

4.   Treatment of others: a Registered Certifier shall act with honesty, good faith and equity, and without discrimination, towards any person in the community.

5.  Duty of Care: a Registered Certifier shall exercise reasonable care and attention in carrying out his or her duties, and in the exercise of his or her powers.

6. Making decisions and taking actions: a Registered Certifier shall take all reasonable steps to obtain all relevant facts when making decisions and carrying out certification and other statutory functions.

7. A Registered Certifier shall ensure that his or her decisions and actions are reasonable; fair and appropriate to the circumstances; based on consideration of all the relevant facts he or she has obtained; and supported by adequate documentation.

9. Acting within his or her competence: notwithstanding the category(ies) of registration that a Registered Certifier has been registered in, they shall only carry out certification functions that are within his or her competence.

11. Gifts and benefits: a Registered Certifier shall not seek or accept a gift or benefit that is intended to, likely to, or could be perceived by an impartial observer as likely to, cause him or her to act in a biased or unfair manner in the course of their duties.

13. Bias: where a Registered Certifier has an affiliation, disposition, or any material, pecuniary or other interest that would lead to a reasonable apprehension that the Registered Certifier may be biased in carrying out an aspect of his or her professional role, he or she shall not carry out the conduct of that aspect.

[The receiving of a fee for carrying out certification functions paid by the applicant / owner of the land does not count as a conflict of interest].

Conflict of Interest

The Building and Development Certifiers Act 2018 came into force in NSW on 1 July 2020, and it superseded the previous conflict of interest provisions in the Building Professionals Act 2005 (“the BP Act”).

Under the earlier BP Act, section 68 provided that having an “employment relationship” with another person involved in the design of a project or having any pecuniary interest in the outcome could lead to a conflict of interest for the Certifier.

This was already quite prohibitive, but under the B&DC Act the ambit of what is meant by “employment relationship” has broadened simply because this new Act does not narrow down or specify the scope of that term, or its related concepts.

New key terms in the B&DC Act 2018 include “private interest” and also “business relationship”, while the old term “employment relationship” also appeared in the BP Act.

Section 29 of the new Act sets out the definition and relevant elements of “conflict of interest”, and Registered Certifiers should be familiar with it.

Section 29(1) of the Act says that a Registered Certifier has a conflict of interest in certification work if a “reasonable person” would conclude that:

  • The Registered Certifier has a “private interest” with respect to the certification work; and
  • The private interest comes into conflict with, and may affect, the duty of a Registered Certifier to act in the public interest when undertaking the certification work.

As well, the would be a conflict of interest “in any other circumstances prescribed by the regulations” (section 29(1)(b)).

Note that the test is what a “reasonable person” would conclude if that third party observer was dispassionately examining all circumstances and that party had knowledge of the duties of a private certifier.

Clearly, the Certifier acting in the “public interest” must involve dispassionately upholding compliance with building regulations (including the Building Code) and the Certifier acting in an impartial manner unswayed by private imperatives from the developer who pays the accounts.

Section 29(2) defines “private interest” and states that a Registered Certifier has a private interest with respect to certification work if the Registered Certifier is any of the following:

  • A person who is obtaining the benefit of the certification work;
  • A person who has a pecuniary interest in the development or building to which the certification relates;
  • A person who has supplied professional services (other than services that are certification work) in relation to the construction or design of the development or building to which the certification works relates;
  • A person who has supplied professional services (other than services that are certification work) for a development application for the development or building to which the certification work relates);
  • If the certification work is to be carried out in the area of a local Council other than on behalf of the local Council, a person who is a councillor or employee of the local Council;
  • A person who has a relationship (whether family, personal, employment or business) with a person referred to in any of the above criteria; and
  • Any person prescribed by the regulations.

The legislation does not clearly define what a “business relationship” actually is.  This begs the question of whether this means something more extensive than “employment relationship” as covered by “conflict of interest” in the earlier BP Act 2005.

Section 68 of the BP Act already prohibited having an employment relationship with someone else involved in the design or construction of the project.

However, in the B&DC Act 2018 the ambit of “employment relationship” has broadened, because the new provision does not narrow down or specify the scope of that relationship.  It has also introduced the term “business relationship”.

The plain and ordinary meaning of “business relationship” is much broader than “employment relationship” and encompasses “an association between individuals or companies entered into for commercial purposes and sometimes formalised with legal contracts or agreements.”

It is likely that the provision was included to prevent businesses in the design and construction or process of the development application from establishing relationships with certifiers or certification companies.

This could occur whether or not the two businesses were formally related by corporate structure or common directorship.

As with “business relationship”, there is also a prohibition on “family” or “personal” relationships.  In the previous BP Act, the term “family relationship” was outlined in section 68 and extended to “a spouse, de facto partner, sibling, parent or child”.

Because “family relationship” is not defined in the new Act, it could conceivably apply to extended family members rather than just immediate family.

Also, the term “personal relationship” would exclude relationships in the nature of friends, or romantic partners.  It would mean more than just mere acquaintances.

Limits on a certifier’s role

In a 2010 NSW case, the Administrative Decisions Tribunal (ADT) it was stated:

“We accept that it was, and remains, customary practice for certifiers to rely on credible, specialist certifications in specialist areas of building work”. (For instance, Geotech engineering or specialist electrical work).

The ADT also said, page 28: “In any case the certifier should always make an independent professional judgment as to the quality of specialist certificates.”

[For instance, check that the appropriate and current provisions of Australian Standards and the Building Code are referenced in the certificate].

Lewis v Threadwell [2004] VCAT 547

[139] “With respect to carrying out mandatory inspections and the issue of the Occupancy Permit, it is appropriate for an RBS to rely on the design practitioners  and the builder or owner/builder to ensure that the building is constructed in accordance with the BCA.”

“It is also reasonable and common practice to rely on Certificates of Compliance in order to issue an Occupancy Permit.”

In this case, the Tribunal also accepted the evidence of an expert building surveyor (Mr Du Chateau) that: “A Building Surveyor / Building Inspector is not engaged to design, construct, project manage, act as a site foreman, clerk of works, supervisor for any part, of any construction process.”

Design and Building Practitioners Act 2020

This Act imposes new duties on design and building practitioners, focussed in improving performance.  (The focus is on residential works, and in particular apartment buildings).

There is a duty of care imposed on parties carrying out construction work and designers, manufacturers and suppliers of building products, and supervisors and project managers of construction work.

The duty of care referred to above does not extend to Registered Certifiers.

The Principal Certifier must not issue an Occupation Certificate without receiving certain documents from the Builder at the OC application stage, including a statement that:

  • The building work complies with all applicable Regulations;
  • If non-compliant, the steps the Builder will take to ensure compliance;
  • Whether the Builder has performed works in accordance with each regulated design as prepared by a registered design practitioner;
  • Whether the Builder has obtained a design compliance declaration for each of the regulated designs;
  • Whether the Builder has obtained a principle compliance declaration from the principle design practitioner, in relation to the design compliance declaration.

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Mornington Peninsula Construction and Planning Lawyers


Lovegrove & Cotton: Experts in construction and planning law service the entire Mornington Peninsula.

It is a rapid growth part of Victoria and in recent times there has been an unprecedented volume of building.

Areas of building and planning law expertise

  • Residential and domestic building dispute resolution
  • Building dispute resolution
  • VCAT disputes
  • Water Act claims
  • Leaky building dispute resolution
  • Building Appeals Board applications and appeals
  • Advice on building contracts
  • Building permit regularisation
  • Building notice and building order infringements
  • Planning Appeals and objections
  • Pleas of mitigation in Building Act prosecutions

We take instructions with respect to matters throughout the Peninsula and for many years have had conduct of matters in the local Magistrate’s Court.

If you wish to retain the firm, please contact us on (03) 9600 4077 or enquiries@lclawyers.com.au.

Two of our construction and planning lawyers are domiciled in both the City and Mount Martha, so they are able to provide services local to the Peninsula.

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).

Lovegrove & Cotton Lawyers to the building industry

For thirty years, Lovegrove & Cotton have represented property owners, builders, building surveyors, and building practitioners in Melbourne, Canberra, Sydney and Queensland. Lovegrove & Cotton can help property owners and building practitioners resolve any type of building dispute. If you wish to engage the firm, feel free to contact us via our website, by emailing enquiries@lclawyers.com.au, or via phone at (03) 9600 4077.

By Lovegrove & Cotton – Construction and Planning Lawyers

This article was last reviewed on 30 May 2022 by Jordan Davies, Former Lawyer at Lovegrove & Cotton

Disclaimer

This article is not legal advice rather a discussion of the topic in only general terms. Should you be in need of legal advice, please contact a construction law firm. Lovegrove & Cotton Lawyers and our experienced lawyers will assist you based on the facts and circumstances of your case.

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