Argyrou v Victorian Building Authority
[2019] VSC 721
•30 October 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2019 04740
| MICHAEL ARGYROU | Plaintiff |
| v | |
| VICTORIAN BUILDING AUTHORITY | Defendant |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 29 October 2019 |
DATE OF RULING: | 30 October 2019 |
CASE MAY BE CITED AS: | Argyrou v Victorian Building Authority |
MEDIUM NEUTRAL CITATION: | [2019] VSC 721 |
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INJUNCTION – Application for interlocutory injunction to restrain defendant conducting disciplinary proceedings – Serious issue to be tried as to whether defendant has jurisdiction to undertake disciplinary proceeding – Application brought at early stage of disciplinary proceeding – Plaintiff entitled to exercise rights of internal review and appeal to Victorian Civil and Administrative Tribunal if dissatisfied with outcome of disciplinary proceeding – Application for injunction refused – Building Industry Act 1993 (Vic) ss 179, 182B, 182E, 185, 186, 187 sch 8 cls 3, 4 – Interpretation of Legislation Act 1984 (Vic) s 14(2) – Victorian Civil and Administrative Tribunal Act 1998 ss 51, 148, 187 – Supreme Court (General Civil Procedure) Rules 2015 o 56.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J D Pizer QC and Mr R A Minson | Pinsent Masons |
| For the Defendant | Mr L T Brown and Ms E Smith | Victorian Government Solicitor |
HIS HONOUR:
By summons filed on 28 October 2019, the plaintiff applies for an interlocutory injunction:
(a) To restrain the defendant (‘the Authority’) until further order from:
(i) deciding that a ground exists to take disciplinary action against the plaintiff pursuant to s 182B of the Building Act1993 (Vic) (‘Act’); or
(ii) taking disciplinary action against the plaintiff pursuant to s 182E of the Act in reliance upon a show cause notice PDU/7/3097 dated 31 July 2019 (‘the notice’); or
(b) Alternatively to require the Authority to extend the show cause period for the notice until a date after the final determination of this proceeding.
The factual background of the proceeding is conveniently summarised in the plaintiff’s outline of submissions:
The Plaintiff is a building practitioner registered in the category of builder and class of commercial builder (unlimited) under Part 11 of the Act. He has been a registered building practitioner since 5 May 1995 and has never had disciplinary action taken against him by the Defendant or its predecessor, the Building Practitioners Board (the former Board).
From 18 January 2000 to 1 March 2017, Mr Argyrou was a director of Hickory Developments Pty Ltd, one of the companies in the Hickory Group (Hickory).
Hickory, which the Plaintiff and his brother established in 1991, is a leading builder and developer of commercial retail and residential buildings in Melbourne and Sydney with approximately 1000 employees.
Since 2009, Hickory has completed over 50 major construction projects. One of those was the construction of the Anstey Apartments at 597-605 Sydney Rd, Brunswick, which was completed on 27 September 2010.
In March 2017, a fire occurred on the balcony of an apartment on an upper storey of the Anstey Apartments. The cause of the fire was allegedly an electrical fault in the apartment’s external air conditioning unit. The fire is alleged to have spread vertically via external combustible cladding to the apartment above and to the roof, but was suppressed by the sprinkler system installed at the building. The fire resulted in damage to the façade of the originating apartment’s balcony and the balcony above.
On 10 May 2018, the Defendant notified the Plaintiff that it was conducting an investigation into the building work carried out on the Anstey Apartments and alleged that the Plaintiff, as builder of the Anstey Apartments, had failed to comply with the Act and/or the former Building Regulations 2006 (Vic) (the Regulations).
Between May and June 2018, correspondence was exchanged between the parties as to the Defendant’s power to take disciplinary action against the Plaintiff given, amongst other things, the provisions of Part 11 of the Act on which the Defendant was proposing to rely commenced operation on 1 September 2016, almost six years after building work on the Anstey Apartments was completed.
Nevertheless, on 1 August 2019, the Defendant issued the Plaintiff with the Notice, inviting him to show cause by 23 September 2019 why certain proposed disciplinary action should not be taken against him on the grounds he has, in relation to building work carried out on the Anstey Apartments:
a. contravened reg 1502(a) of the Regulations for the purposes of s 179(1)(a)(i) of the Act;
b. contravened s 16(2) of the Act for the purposes of s 179(1)(a)(i) of the Act;
c. engaged in unprofessional conduct for the purposes of s 179(1)(b) of the Act; and
d. engaged in conduct in relation to his practice as a building practitioner that is negligent in a particular manner for the purposes of s 179(1)(f)(ii) of the Act.
In doing so, the Defendant rejected the argument advanced by the Plaintiff in the correspondence referred to in paragraph 10 above that the Defendant has no power to take disciplinary action against him under Part 11 of the Act as presently in force.
The disciplinary action proposed in the Notice comprises:
a. reprimands under s 178(a) of the Act;
b. directions under s 178(b) of the Act to identify and satisfactorily complete certain training courses;
c. penalties under s 178(d) of the Act; and
d. suspension of registration as a building practitioner.
On 22 August 2019, the Defendant extended the show cause period to 21 October 2019.
On 14 October 2019, the Plaintiff commenced these proceedings for judicial review under Order 56 of the Supreme Court (General Civil Procedure) Rules 2015, seeking an order in the nature of prohibition or, alternatively, declaratory relief.
Since that date, the parties have exchanged correspondence as to the regulation of their relationship pending the final hearing and determination of these proceedings. In particular, on 17 October 2019, 18 October 2019 and 23 October 2019, the Plaintiff, by his solicitors, requested that the Defendant stay or extend the show cause period for the Notice until the final hearing and determination of the proceedings. In response, on 21 October 2019 and 24 October 2019, the Defendant agreed to extend the show cause period to 4.00pm on 28 October 2019 but refused to extend it further.[1]
[1]Plaintiff, ‘Outline of submissions in support of application for an urgent interlocutory injunction’, 28 October 2019, [4]–[16] (citations omitted).
The principles governing the exercise of the Court’s power to grant an interlocutory injunction are well established. As set out in the plaintiff’s submissions:
To obtain the injunctive relief it seeks, the Plaintiff must demonstrate that:
a. there is a serious question to be tried as to his entitlement to final relief or, in other words, he has a prima facie case; and
b. the balance of convenience favours the grant of an injunction.
In relation to the former requirement, it is not necessary for the Plaintiff to establish that it is more probable than not that he will succeed at trial. Rather, ‘it is sufficient that the [P]laintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial’.
In relation to the latter requirement, the question is ‘whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted’.[2]
[2] Ibid [20]–[22] (citations omitted).
Mr Pizer QC, who appeared with Mr Minson for the plaintiff, submitted that the plaintiff has a strong prima facie case that the Authority would be acting without jurisdiction if, acting in reliance upon the notice, and in accordance with current provisions of the Act it:
(a) makes a decision that a ground exists to take disciplinary action against the plaintiff; or
(b) takes the foreshadowed disciplinary action against the plaintiff.
Shortly stated, Mr Pizer submitted that div 3 of pt 11 of the Act has no application in respect of conduct engaged in by the plaintiff prior to 1 September 2016, being the date on which div 3 of pt 11 was introduced into the Act by s 25 of the Building Legislation Amendment (Consumer Protection) Act 2016 (Vic) (‘Amendment Act’).
Mr Pizer submitted that if the Authority wishes to take disciplinary action against the plaintiff, it can only lawfully do so in accordance with div 3 of pt 11 of the Act as it was prior to 1 September 2016 (‘the old Act’).
The basis upon which Mr Pizer advanced these contentions is set out in paragraph 27 of the plaintiff’s outline of submission:
a.by the Notice, the Defendant proposes to take disciplinary action against the Plaintiff on specified grounds, relying upon ss 178, 179 and 179A of the Act in their current form (the Current Provisions);
b.each of the Current Provisions commenced operation on 1 September 2016, when the Building Legislation Amendment (Consumer Protection) Act 2016 (Vic) (the Amending Act) relevantly came into force;
c.the Notice relevantly alleges that certain acts or omissions occurred in 2010, when a materially different regulatory regime was in force;
d.if in fact the Plaintiff did or failed to do what is alleged in the Notice:
i. disciplinary action could have been taken against him under s 179 of the Act as in force prior to 1 September 2016 (the old s 179); and
ii. as a consequence, the Plaintiff would have had an accrued liability to disciplinary action under the old s 179;
e.alternatively, if in fact Hickory did or failed to do what is alleged in the Notice to have been done or not done by the Plaintiff:
i. any failure on Hickory’s part to comply with the Act or the Regulations would have been taken, by s 179B of the Act as in force prior to 1 September 2016 (the old s 179B), to have been a failure by the Plaintiff to comply with the Act or the Regulations for the purposes of the old s 179; and
ii. as a consequence, the Plaintiff would have had an accrued liability to disciplinary action under the old s 179;
f.thus, if the Plaintiff or Hickory had engaged in the conduct set out in the Notice, the Plaintiff would have had an accrued liability to disciplinary action under the old s 179;
g.by reason of s 14(2) of the Interpretation of Legislation Act 1984 (Vic) (the Interpretation Act), the substitution of the Current Provisions for the old provisions cannot, in the absence of an express contrary intention (of which there is none), affect any liability of the Plaintiff acquired, accrued or incurred under the old s 179;
h.similarly, in the absence of a contrary intention (of which there is none), the Current Provisions are, by the common law presumption against the retrospective operation of legislation, not ‘to be understood as applying to facts or events that have already occurred in such a way as to … impose or otherwise affect … liabilities which the law had defined by reference to past events’;
i.accordingly, the Current Provisions cannot apply to the matters alleged in the Notice if to do so would affect any accrued liability of the Plaintiff under the old s 179;
j.that is precisely the effect the Current Provisions would have if they applied to the matters alleged in the Notice because, critically, the Amending Act did not simply repeal and re-enact the old provisions in a form that enlarged their scope. None of the Current Provisions involves ‘mere repetition’ or the ‘adopt[ion] without any material variation’ of the language of the old ss 179 or 179B. Nor do the Current Provisions simply involve ‘the addition of particular words to an earlier section, which otherwise remains unaffected’;
k.rather, although the old and the new provisions share a ‘common subject matter’, ‘the scheme of the new legislation is materially different, not only in form, but in its operation’. In that sense, the Amending Act ‘has produced an entirely new creature’. By way of example only:
i. whereas the old s 179 provided that disciplinary action could be taken against a registered building practitioner who had been guilty of conduct constituted by ‘gross negligence or gross incompetence in a particular matter’ and which showed that he or she was not a fit and proper person to practise as a building practitioner, s 179 as now in force and proposed to be relied upon by the Defendant provides that disciplinary action may be taken against a registered building practitioner who has merely engaged in conduct that is ‘negligent in a particular matter’;
ii. whereas the old s 179(2)(b) permitted the former Board to require a registered building practitioner to pay the costs of or incidental to an inquiry into their conduct, but did not permit the former Board to disqualify a person practitioner from being a nominee director of a registered body corporate, the inverse is now the case for the Defendant; and
iii. whereas the old s 179(2)(d) permitted the former Board to impose a fine of not more than 100 penalty units, the Defendant may now impose a penalty of up to 150 penalty units, in the case of a natural person, or 750 penalty units, in the case of a body corporate.[3]
[3] Ibid [27] (citations omitted).
Mr Brown, who appeared with Ms Smith for the Authority, accepted that there is a serious issue to be tried but submitted that the plaintiff’s case is weak. He submitted that div 3 of pt 11 of the Act applies retrospectively in respect of conduct engaged in by the plaintiff prior to 1 September 2016.
In response to Mr Pizer’s reliance upon s 14(2)(e) of the Interpretation of Legislation Act 1984 (Vic) (‘Interpretation of Legislation Act’), Mr Brown submitted that the Act, as amended on 1 September 2016, discloses an express contrary intention to affect any liability accrued under the Act prior to its amendment.
In support of this submission, he pointed to the following matters. First, prior to 1 September 2016, the power to undertake inquiries into the conduct of a registered practitioner and impose sanctions was conferred upon the Building Practitioners Board by s 179 of the old Act. Schedule 8 of the Act contains transitional and savings provisions relating to the Amendment Act.
Clause 3(1) of sch 8 provides:
(1) On the relevant commencement day—
(a)the Building Practitioners Board is abolished and its members go out of office; and
(b) any subcommittee of the Building Practitioners Board is abolished and its members go out of office.
Clauses 4(1) and (2) of sch 8 provide:
(1) If, before the relevant commencement day, the Building Practitioners Board had commenced an inquiry into the conduct of a building practitioner but the Board had not determined the inquiry, the Board may continue and determine the inquiry in accordance with the old provisions.
(2) A determination of the Building Practitioners Board referred to in subclause (1) is taken—
(a) in the case of a decision under section 179 of the old provisions, to be a decision of the Authority under section 182E of the new provisions; or
(b) in the case of a decision under section 180 of the old provisions, to be a decision of the Authority under section 181 of the new provisions.
Mr Brown submitted that cls 4(1) and (2) of sch 8 prescribe the only circumstances in which the provisions of div 3 of pt 11 of the old Act continue beyond 1 September 2016. In other words, those provisions only have application to conduct engaged in prior to 1 September 2016 in circumstances where the Building Practitioners Board had commenced an enquiry prior to 1 September 2016 but had not determined the inquiry as at 1 September 2016.
Clauses 4(3) and (4) of sch 8 are also relevant to the question of whether the Amendment Act manifest an express contrary intention within the meaning of s 14(2) of the Interpretation of Legislation Act. Clauses 4(3) and (4) provide:
(3) An application for a review that has been made under section 182A of the old provisions but not determined before the relevant commencement day may be continued and completed in accordance with the old provisions.
(4) If the time within which an application for review could be made under section 182A of the old provisions had not expired before the relevant commencement day, the application may be made and dealt with in accordance with the old provisions.
Section 182A of the old Act provided:
(1) A person to whom a decision of the Building Practitioners Board under Division 1 or 2 applies may apply to the Victorian Civil and Administrative Tribunal for a review of—
(a) that decision; or
(b) a failure of the Board to make that decision within a reasonable time.
(2) If the Authority referred a matter to the Building Practitioners Board for inquiry under Division 2, the Authority may apply to the Victorian Civil and Administrative Tribunal for a review of—
(a) a failure by the Board to conduct an inquiry, within a reasonable time, into the matter referred to it; or
(b) a refusal by the Board to conduct the inquiry; or
(c) a decision by the Board on the inquiry.
(3) A person who requested the Building Practitioners Board to conduct an inquiry under Division 2 may apply to the Victorian Civil and Administrative Tribunal for a review of—
(a) a failure by the Board to conduct the inquiry within a reasonable time; or
(b) a refusal by the Board to conduct the inquiry; or
(c) a decision by the Board on the inquiry.
Sections 51(1) to (3) of the Victorian Civil and Administrative Tribunal Act 1998 (‘the VCAT Act’) provide:
(1) In exercising its review jurisdiction in respect of a decision, the Tribunal—
(a) has all the functions of the decision-maker; and
(b) has any other functions conferred on the Tribunal by or under the enabling enactment; and
(c) has any functions conferred on the Tribunal by or under this Act, the regulations and the rules.
(2) In determining a proceeding for review of a decision the Tribunal may, by order—
(a) affirm the decision under review; or
(b) vary the decision under review; or
(c) set aside the decision under review and make another decision in substitution for it; or
(d) set aside the decision under review and remit the matter for re-consideration by the decision-maker in accordance with any directions or recommendations of the Tribunal.
(3) Subject to subsection (4), a decision of a decision-maker as affirmed or varied by the Tribunal, or a decision made by the Tribunal in substitution for the decision of a decision-maker—
(a) is deemed to be a decision of that decision-maker; and
(b) subject to any contrary order by the Tribunal, has, or is deemed to have had, effect from the time at which the decision under review has or had effect.
The effect of ss 51(1) to (3) of the VCAT Act is that the Tribunal stands in the shoes of the original decision maker. The effect of cls 4(3) and (4) of sch 8 is that where an application for review of a decision of the Building Practitioners Board had been made pursuant to s 182A of the old Act, but had not been determined prior to 1 September 2016, when conducting a review, VCAT was required to apply the provisions of the old Act.
Section 186 of the new Act confers jurisdiction on VCAT to conduct a review of an internal review decision made pursuant to the provisions of div 4 of pt 11. In circumstances where the internal review decision relates to conduct which pre-dates 1 September 2016, the transitional provisions do not contain any provision corresponding with cls 4(3) and (4) of sch 8 which would require VCAT to determine an application for review in accordance with the provisions of the old Act.
On the material presently before the Court, I do not consider that it is clear that the Authority would be acting beyond jurisdiction if, in reliance upon the notice, it decides that a ground exists to take disciplinary action against the plaintiff pursuant to s 182B of the Act or takes disciplinary action against the plaintiff pursuant to s 182E of the Act.
The word ‘expressly’, where it appears in s 14(2) of the Interpretation of Legislation Act, means ‘“plainly”, “clearly” or “by necessary implication”’.[4]
[4] Mitchell v Latrobe Regional Hospital (2016) 51 VR 581, 596 [64] (Osborn JA, Beach JA, J Forrest AJA).
The transitional provisions in cl 4 of sch 8 support the conclusion that by necessary implication the only circumstances in which the provisions of div 3 of pt 11 of the old Act apply to conduct engaged in prior to 1 September 2016 are:
(a) Where the Building Practitioners Board had commenced but not completed an inquiry prior to 1 September 2016; and
(b) Where:
(iii) an application for a review of a decision of the Building Practitioners Board by VCAT pursuant to s 182A of the old Act had been made but not determined prior to 1 September 2016; or
(iv)the time within which an application for a review by VCAT had not expired as at 1 September 2016, and the application was made post 1 September 2016 but within the prescribed time for lodging an application for review.
Given the interlocutory nature of the proceeding, it is neither necessary or appropriate that I express any concluded views as to the likely outcome of the parties’ competing contentions at final hearing.
It is sufficient that I record my conclusion that there is merit in the competing contentions of the parties as to whether the Authority can lawfully apply the provisions of div 3 of pt 11 of the Act to conduct engaged in by the plaintiff prior to 1 September 2016.
Nevertheless, in assessing the strength of the plaintiff’s prima facie case, I have had regard to authorities which have considered applications for judicial review at an early stage of proceedings.
The proceeding in aid of which the plaintiff seeks injunctive relief is an application for judicial review pursuant to Order 56 of the Supreme Court (General Civil Procedure) Rules 2015. The originating motion was filed on 14 October 2019. The application for an injunction has been made at an early stage of the disciplinary proceedings. A show cause notice has been served but no decision has been made by the Authority that grounds exist to take disciplinary action against the plaintiff.
Where relief in the nature of prerogative relief is sought in respect of a decision made at an early stage of proceedings, intervention by a court exercising powers of judicial review may be appropriate if it can be clearly established that the Tribunal below purported to exercise a power which it does not have. However, where the challenge to a Tribunal’s exercise of power is contestable, a court should exercise restraint before interfering with the proceeding, absent reasons sufficient to outweigh the undesirability of fragmentation and delay in the processes of the law.[5]
[5]AB v Victims Crime Assistance Tribunal & Ors [2015] VSC 245, [9] (McDonald J); See also Jae Kyung Lee v Bob Chae-Sang Cha and Ors [2008] NSWCA 13, [35]–[36] (Basten JA, Bell JA agreeing); W O v Director of Public Prosecutions (NSW) [2009] NSWCA 370, [19] (Basten JA for the Court); Makucha v Sydney Water Corporation [2011] NSWCA 234, [10] (Basten JA); Director of Public Prosecutions v Kaba (2014) 44 VR 526, 532 [11] (Bell J).
In Judicial Review of Administrative Action, the authors address the topic of ‘premature prohibition’.[6] The authors note that prohibition can issue to prevent further action being taken which would be based on a nullity.[7] It can also be used to prevent the decision-maker committing the nullity.[8]
[6] Mark Aranson and Matthew Groves, Judicial Review of Administrative Action (Lawbook, 5th ed, 2013) 781–783 [12.6].
[7] Ibid 781 [12.6].
[8] Ibid.
The authors state:
Having stated the power of early intervention, it is now necessary to consider the court’s discretion to refuse or delay early relief. The courts are increasingly reluctant to grant judicial review (including prohibition) against inferior courts, courts of limited jurisdiction or tribunals, until the matter has been finally determined. Not only do they prefer the impugned court or tribunal to come to its own decision, but they also prefer litigants to use their appeal rights (whether to a tribunal or to a lower court) before resorting to judicial review. This is all discretionary, but there are excellent reasons for this approach. A wait-and-see policy can save superior court time. The impugned body, for example, might well decide the jurisdictional point correctly. Or it might decline on the merits to decide in a certain way, thereby making the jurisdictional point irrelevant. Further, pre-emptive intervention by way of judicial review can impair the integrity of and respect for the impugned body. In addition, the judicial review court can be greatly assisted if it has before it a reasoned opinion on the law and the evidence from the impugned body. This is particularly so where that body has special knowledge or skills.[9]
[9] Ibid 782–783 [12.6] (citations omitted).
These discretionary considerations are apposite in the present case. The injunctions sought will result in fragmentation and delay in the processes prescribed by the Act. Those processes include rights of internal review and external review by VCAT of any decision made which is adverse to the plaintiff’s interests.
Further, in the event the plaintiff exercises rights of review in VCAT, and is dissatisfied with the VCAT decision, he will have the right to seek leave to appeal to the Supreme Court on a question of law pursuant to s 148 of the VCAT Act. These are matters which, when weighing the balance of convenience, weigh against the grant of injunctive relief.[10]
[10]See R v Galvin; Ex parte Metal Trades Employers’ Association (1949) 77 CLR 432; R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100, 118–119 (Dixon CJ, Williams, Webb and Fullagar JJ).
As to the question of delay, prior to the commencement of the hearing on 29 October 2019, I made inquiries within the Court as to the prospects for an expedited hearing of the plaintiff’s application for judicial review. I was advised that as matters presently stand, no judge could be made available to hear the application before February 2020, and there is no certainty as to when the matter could be listed for hearing post-February 2020. Accordingly, if the plaintiff is granted an injunction, this will delay the disciplinary processes before the Authority by a period of at least approximately four months.
The plaintiff submits that the potential for reputational damage to him personally and companies in the Hickory Group is a matter which weighs in favour of the granting of an injunction to restrain the extant disciplinary proceedings.
George Abraham, the Managing Director of Hickory Group Holdings Ltd (‘Hickory Group’), swore an affidavit on 28 October 2019 in support of the application for an injunction. He refers in his affidavit to the fact that the plaintiff is currently on leave in a remote location in Indonesia and is unable to swear an affidavit in support of the injunction application.[11]
[11] Affidavit of George Abraham sworn 28 October 2019, [3].
Mr Abraham deposes:
If the VBA proceeds to make a decision under section 182B of the Act that there are grounds for disciplinary action against Mr Argyrou, I believe this will very shortly become public knowledge across the eastern part of Australia and is likely to cause potentially irreversible damage to Mr Argyrou’s reputation in the industry and also the reputation of Hickory.
In view of the currently well publicised issues of cladding on high rise residential buildings and defects in high rise residential buildings, the media has a heightened level of interest in these issues and will likely publish articles very soon after a VBA decision that are very adverse to the interests of Mr Argyrou and Hickory. As a consequence of media coverage and also knowledge of the VBA decision becoming available, it will undoubtedly be the subject of ‘market gossip’ and adverse inferences in property and development industry circles which will in turn impact on [Mr Argyou’s] and Hickory’s market reputation.[12]
[12] Ibid [17]–[18].
I accept that an unfavourable decision by the Authority is likely to have adverse consequences for the plaintiff’s reputation. However, there is no evidence from any third party deposing to the plaintiff’s current good reputation in the building industry.
Further, there is evidence of recent adverse publicity relating to the plaintiff’s involvement in the Anstey apartment complex in Brunswick. This evidence includes articles which appeared in the Sunday Herald Sun on 15 September 2019, including a front page article titled ‘Company link to cladding crisis’ and a two-page spread on pages 10 and 11 featuring a photograph and the name of the plaintiff. The front page article includes the following:
A FAMILY-run construction company can be identified as the builder of at least 25 apartment blocks around Melbourne clad in dangerous panels.
A Sunday Herald Sun investigation can today reveal the Victorian Building Authority has hit the Hickory Group run by brothers George and Michael Argyrou, with disciplinary action over its use of dodgy cladding.
At least 17 of the company’s non-compliant buildings have been rated at high risk or extreme risk of fire, including Anstey Square in Brunswick, which experienced a balcony blaze in 2017 that spread via cladding to the next floor.[13]
[13] Exhibit ELM-5 to the affidavit of Eleanor Morrison sworn 28 October 2019 (emphasis in original).
An article included in the two-page spread makes reference to Michael and George Argyrou’s ‘prolific use of federal “phoenix” laws—which allow companies to close down and their directors to start fresh business while avoiding any liabilities from the closed companies’.[14] That article also features a banner headline, ‘HOW HICKORY’S FINANCIAL WOES BEGAN’.[15]
[14] Ibid.
[15] Ibid (emphasis in original).
The weight to be attributed to any potential reputational damage flowing from an unfavourable outcome in the disciplinary proceedings is significantly diminished by the recent and prominent adverse publicity directed at the plaintiff personally and the Hickory Group.
Mr Abraham also deposes to the potential adverse commercial impact of an unfavourable finding by the Authority in the disciplinary proceedings, particularly if the plaintiff’s registration as a building practitioner is suspended for five months as foreshadowed in the notice:
Under the Act, as it now applies, a corporation carrying out work as a builder (as companies in the Hickory Group do) must have a ‘nominee director’ who is also registered in the appropriate category and class of registration as a building practitioner. The nominee director and registered building practitioner is required to be named on any building permit for a building project.
I understand that section 25 AE of the Act that if the building practitioner named in the building permit as the builder has his or her registration suspended, then the building permit is suspended on and from the day that the building practitioner’s registration is suspended. If Mr Argyrou’s registration is suspended and he is the nominated director for a building permit, I understand it would be illegal for Hickory to carry out building work under those permits until the suspension is lifted.
Mr Argyrou is currently the registered building practitioner and nominee director for the building permits for the Victoriana Project. The Victoriana project is a $145 million 18-level residential and commercial tower currently being constructed at 20 Queens Road, Melbourne. If the VBA makes a decision that grounds exist to take disciplinary action against Michael Argyrou and proceeds to take the disciplinary action proposed, which I understand it could do as early as 4.01pm on Monday 28 October 2019, I understand all work will need to be suspended on the Victoriana Project. …[16]
[16] Affidavit of George Abraham sworn 28 October 2019, [24]–[26].
Mr Abraham also deposes that it is his understanding that if the plaintiff’s registration is suspended, it would be possible for the Hickory Group to arrange for a different nominee director who is also registered in the appropriate category and class of registration to be the nominated practitioner under relevant building permits.[17] Mr Abraham deposes that the process of identifying and appointing a new nominee director could take weeks to months during which time work on projects would be suspended.[18]
[17] Ibid [27].
[18] Ibid.
The plaintiff was served with the notice in early August this year and has been on notice of the potential for his registration to be suspended since that time. Further, if the Authority determines that the plaintiff’s registration should be suspended, that decision will automatically be stayed pursuant to s 185(6) of the Act if the plaintiff makes application for internal review.
Further, if any decision to suspend the plaintiff’s registration is confirmed on internal review, the plaintiff could seek a stay of that decision if he applied for a review by VCAT. Pursuant to s 187(2) of the Act, an application for a review by VCAT would stay any decision suspending the plaintiff’s registration.
In light of these matters, I do not consider that the risk of damage to the plaintiff’s reputation or damage to the commercial interests of the Hickory Group tips the balance of convenience in favour of the granting of the injunction sought by the plaintiff.
The plaintiff’s summons filed on 28 October 2019 will be dismissed. I note that Mr Brown stated that at the conclusion of yesterday’s hearing, that in the event that the application is dismissed, the plaintiff would be provided with a 14 day period within which to file a response to the notice.
After I delivered ex tempore reasons for dismissing the plaintiff’s application, I provided the parties with an opportunity to make submissions on costs. Mr Pizer submitted that the costs of the interlocutory application should be costs in the cause. Mr Brown submitted that the plaintiff should pay the Authority’s costs.
Subject to the discretion being exercised judicially, the Court’s discretion to award costs is unfettered. Each case turns upon its own facts. Mr Pizer submitted that as the Court has accepted that there is a serious question to be tried, the appropriate order is for costs to be in the cause. This matter is not determinative of the questions of costs. There are authorities for and against the proposition that the costs of an unsuccessful application for an interlocutory injunction should be reserved.[19]
[19]Dale v Clayton Utz (No 3) [2013] VSC 593, [18]–[19] (Hollingworth J); Cf Ausino International Pty Ltd v Apex Sports Pty Ltd [2006] NSWSC 1119, [55]–[56] (Campbell J); Russ Australia Pty Ltd v Benny [2006] NSWSC 1118, [71] (Campbell J).
Ultimately, I formed a clear view that the balance of convenience favoured the rejection of the plaintiff’s application. The resolution of the application was not finely balanced. I consider that it is appropriate in the particular circumstances of the present application, that the Authority, having been put to the expense of resisting a discrete application, should be indemnified for those costs.
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