B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and the Owners - Units Plan 3324

[2013] ACTSC 219

B & T CONSTRUCTIONS (ACT) PTY LTD v CONSTRUCTION OCCUPATIONS REGISTRAR AND THE OWNERS – UNITS PLAN 3324
 [2013] ACTSC 219 (6 November 2013)

APPEAL – ADMINISTRATIVE LAW – judicial review of ACAT decision – rectification order: Pt 4 Construction Occupations (Licensing) Act 2004 (ACT) – whether appropriate for Construction Occupations Registrar to have made order: s 35(1)(b)(ii) – whether failure to consider relevant consideration – where Act does not require registrar to take into account certain matters allegedly not taken into account – matters considered or implicit on a fair reading – even if ACAT in error, factor so insignificant Court should not intervene

APPEAL – ADMINISTRATIVE LAW – Interpretation – judicial review of ACAT decision – rectification order: Pt 4 Construction Occupations (Licensing) Act 2004 (ACT) – whether ACAT has jurisdiction to order unspecified rectification work under s 38(1)(a) – registrar has power to make ancillary orders to give efficacy to rectification order – order must be of requisite precision – order in terms “where necessary” open to ambiguity or debate, not an order under s 38(1)(a)

APPEAL – STATUTORY INTERPRETATION – judicial review of ACAT decision – rectification order: Pt 4 Construction Occupations (Licensing) Act 2004 (ACT) – registrar not precluded from making order due to issuance of Certificate of Compliance and Certificate of Occupancy: s 36(3) – policy behind legislature granting registrar power to make rectification order based on considerations of protection of the public, consumer protection and protection of integrity of public records – certifier not concerned with broader public interests, only degree of conformity with approved plans – not inconsistent for registrar to make rectification order with respect to certified works

APPEAL –

STATUTORY INTERPRETATION – judicial review of ACAT decision – rectification order: Pt 4 Construction Occupations (Licensing) Act 2004 (ACT) – “loss” in
s 36(1)(a) not confined to loss a sufficiently interested person could maintain at date order made – entity taking legal ownership of building containing existing non-compliant works can suffer loss – common sense approach: comparison between what was built and what is shown in approved plans

ACT Civil and Administrative Tribunal Act2008 (ACT), ss 79, 82, 83
Construction Occupations (Licensing) Act2004 (ACT), ss 16, 33A, 35, 36, 38, 40, 103; Pt 4
Building Act2004 (ACT), ss 18, 19, 25B, 25C, 26, 28, 28A, 31, 32, 33, 42(1)(b), 42(1)(d)(i), 48, 69, 145; Div 3.3,
Unit Titles Act2001 (ACT), ss 15, 33

Explanatory Statement, Constructions Occupations (Licensing) Bill 2003 (ACT)

ACT Construction Occupations Registrar v Tokich [2006] ACTSC 89
Connelly v Allan [2011] ACTSC 170
Federow v Federow [2011] ACTCA 10
Fox v Percy (2003) 214 CLR 118
Lukatela v Birch [2008] ACTSC 99
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-1986) 162 CLR 24
The Appellants v Council of the Law Society of the ACT and Anor [2011] ACTSC 133
The Legal Practitioner v The Council of the Law Society of the ACT [2011] ACTSC 207

APPEAL REMOVED TO THE SUPREME COURT FROM THE AUSTRALIAN CAPITAL TERRITORY CIVIL AND ADMINISTRATIVE TRIBUNAL

No. SCA 13 of 2013

Judge: Burns J             
Supreme Court of the ACT

Date: 6 November 2013         

IN THE SUPREME COURT OF THE     )
  )          No. SCA 13 of 2013
AUSTRALIAN CAPITAL TERRITORY           )          

APPEAL REMOVED TO THE SUPREME COURT FROM THE AUSTRALIAN CAPITAL TERRITORY CIVIL AND ADMINISTRATIVE TRIBUNAL

BETWEEN:  B & T CONSTRUCTIONS   (ACT) PTY LTD

(ACN: 105 858 825)

Appellant

AND:  CONSTRUCTION   OCCUPATIONS   REGISTRAR

First Respondent

AND:THE OWNERS – UNITS    PLAN 3324

Second Respondent

ORDER

Judge:  Burns J
Date:  6 November 2013
Place:  Canberra

THE COURT ORDERS THAT:

1. The appellant has leave to amend the Notice of Appeal and the appeal is allowed to the extent that paragraph 8(B)(iii) of the rectification order is set aside.  Otherwise, the appeal is dismissed.

1. The appellant is to pay the respondents’ costs of the appeal.

1. This is an appeal that has been removed into this Court by order of the ACT Civil and Administrative Tribunal (the ACAT) dated 7 February 2013 pursuant to s 83 of the ACT Civil and Administrative Tribunal Act2008 (ACT) (the ACAT Act). The appeal is against an ACAT decision dated 6 August 2012, as amended on 5 September and 7 November 2012. This decision as amended affirmed a decision of the first respondent to issue a rectification order to the appellant under Pt 4 of the Construction Occupations (Licensing) Act2004 (ACT) (the COLA).

1. The rectification order directed the appellant to undertake a range of rectification works related to a building constructed on Block 13 Section 27 Forrest in the ACT.  The present appeal is only concerned with the ACAT’s decision regarding three items on the rectification notice, being:

15.          Aluminium/stone facade cladding replaced with   fibre/cement board or render/painted finish;

25.          Translucent glass inserts not constructed; and

28.Canberra Avenue balustrades to units 14, 23 and 29 are not as designed.

For convenience, I will refer to these as the non-complying items.

BACKGROUND

1. The facts of this matter are not in dispute.  On 26 March 2007, B & T Developments (ACT) Pty Ltd (“B & T Developments”) became the registered proprietor of the land.  It contracted with the appellant for the appellant to construct a building on the land.  On 5 June 2006, the ACT Planning and Land Authority approved a development application to build a building on the land in accordance with identified plans (the approved plans).  A minor amendment to the approved plans was approved on 25 July 2007.

1. On 22 September 2007, B & T Developments appointed Certified Building Solutions as the building certifier in accordance with s 19 of the Building Act2004 (ACT) (the Building Act). On the same date the building certifier issued a building approval and a commencement notice to the appellant.

1. On 15 April 2009, the building certifier issued the appellant with a Certificate of Completion of Building Work under s 48 of the Building Act. On 17 April 2009, the first respondent issued the appellant with a Certificate of Occupancy and Use under

   
   

   s 69 of the Building Act.

1. The second respondent came into existence at the time of the registration of the units plan for the development: s 33 Unit Titles Act2001 (ACT). The units plan was registered in May 2009. Following upon the registration of the units plan, the property in those areas of the building relevant to the Non-complying Items became that of the second respondent as common property pursuant to s 15 of the Unit Titles Act 2001.

1. The appellant concedes that the approved plans provided for construction of a building incorporating the non-complying items.  It further concedes that the building as constructed did not incorporate those three items and accordingly it was not, to that extent, constructed in accordance with the approved plans.

1. On 18 October 2011, the first respondent issued a rectification order to the appellant, under s 38 of the COLA, requiring the appellant to rectify the works so that they complied with the approved plans. By an application for review dated 16 October 2011 [sic] the appellant, B & T Constructions and Cornelius Hank Van Roon applied to the ACAT for review of the decision to issue the rectification order, as well as other decisions not relevant to this appeal. On 8 December 2011, pursuant to leave granted by a Presidential Member of the ACAT in directions on 7 December 2013, the appellant lodged a further application in the ACAT confined to review of the first respondent’s decision to issue the rectification order. On 6 August 2012, a Senior Member of the ACAT confirmed the rectification order with respect to items 15 and 25. On 7 November 2012, a similar order was made with respect to item 28.

THE APPEAL

1. On 31 August 2012, the appellant lodged an appeal against the ACAT decisions confirming the rectification orders.  The appeal notice alleged the decisions were liable to be set aside for an error of law because the ACAT failed to take into account the following relevant considerations:

(a)There was no basis to amend the approved plans for the Non- complying Items because a Certificate of Compliance pursuant to section 48 of the Building Act2004 had been issued by the Certifier and a Certificate of Occupancy pursuant to section 69 of the Building Act 2004 had been issued by the Construction Occupancy [sic] Registrar;

(b)The Non-complying Items did not require planning approvals to be constructed as they were exempt;

(c)The Non-complying Items raised no issue of structural          insufficiency or that they were otherwise not fit for purpose;

(d)If plans were prepared to reflect what was constructed (being the Non-complying Items), no objection was advanced why         those plans would not have been capable of receiving approval;

(e)The Tribunal did not take into account how the proposed orders        may affect people affected by the contravention;

(f)The Tribunal did not take into account there was no loss, injury or damage;

(g)The current owner of the Non-complying Items did not exist prior to the conclusion of the construction or the issuing of the certificates under section 48 and section 69 of the Building Act2004;

(h)The Tribunal did not take into account that there were possible         criminal sanctions.

Failure to take into account a relevant consideration

1. As can be seen, all of the grounds of appeal allege that the ACAT failed to take into account relevant considerations.  In Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-1986) 162 CLR 24, Mason J (with whom Gibbs CJ and Dawson J agreed) said (at [15]) that “The failure of a decision-maker to take into account a relevant consideration in the making of an administrative decision is one instance of an abuse of discretion entitling a party with sufficient standing to seek judicial review of ultra vires administrative action.”. His Honour concluded that a number of propositions emerged from the decided cases on this issue. Relevantly, for present purposes, these may be summarised as:

a)the ground of failure to take into account a relevant consideration can only be made out if the decision-maker fails to take into account a consideration he or she is bound to take into account in making that decision;

b)the considerations that a decision-maker is bound to take into account in making the decision is determined by construction of the statute conferring the discretion.  In some cases such    consideration will be specified, but in other cases they must be determined by implication from the subject matter, scope and purpose of the Act;

c)not every consideration that a decision-maker is bound to take into account but fails to take into account will justify setting aside the impugned decision, for example, when the factor may be so insignificant that the failure to take it into account could not have materially affected the decision.

The nature of the appeal

1. The hearing of an appeal from a decision of the ACAT removed into this Court by virtue of s 83 of the ACAT Act involves the exercise of the Court’s original jurisdiction in place of the internal appeal process of the ACAT: see The Appellants v Council of the Law Society of the ACT and Anor [2011] ACTSC 133. To determine the nature of the appeal it is necessary to refer to some provisions of the ACAT Act:

79.Appeals within Tribunal

(1)This section applies if –

(a)the tribunal has decided an application (the original application); and

(b)the original application was not an appeal from a decision by the tribunal.

...

(3)A party to the original application may, by application, appeal the decision to the tribunal on a question of fact or law.

82.      Handling Appeals

An appeal tribunal, may, as the tribunal considers appropriate, deal with an appeal –

(a)as a new application; or

(b)as a review of all or part of the original decision          on the application by the tribunal.

1. As Refshauge J pointed out in The Legal Practitioner v The Council of the Law Society of the ACT [2011] ACTSC 207, the effect of s 79 is to give a party to any original application (except those specified in s 79(2), not presently relevant) a full right of appeal within the ACAT. The ACAT is then empowered by s 82 effectively to elect to deal with the appeal as a hearing de novo (s 82(a)) or as a rehearing

   
   

   (s 82(b)). As what is removed into this Court is the appeal in the ACAT, this Court must exercise the jurisdiction that would otherwise have been exercised by the ACAT appeals tribunal, including determining the nature of the appeal pursuant to s 82.

1. In my opinion, this appeal should be dealt with as a review of the original decision of the ACAT confirming the rectification orders with respect to the non-complying items: s 82(b). I base this decision on the fact that all of the relevant evidence was received by the ACAT, and no question of the credibility of the witnesses called in the ACAT arises. The present appeal largely concerns issues of statutory interpretation.

   
   

   I add that the parties to this appeal approached it as a rehearing, rather than a hearing de novo.

1. The nature of such an appeal is well known.  In Fox v Percy (2003) 214 CLR 118 the majority (Gleeson CJ, Gummow and Kirby JJ) said (at [22]–[23]) in relation to such appeals:

The “rehearing” does not involve a completely fresh hearing by the appellate court of all the evidence.  That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits.  No such fresh evidence was admitted in the present appeal.

The foregoing procedure shapes the requirements, and limitations, of such an appeal.  On the one hand, the appellate court is obliged to “give the judgment which in its opinion ought to have been given in the first instance”.  On the other, it must, of necessity, observe the “natural limitations” that exist in the case of any appellate court proceeding wholly or substantially on the record.  These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses’ credibility and of the “feeling” of a case which an appellate court, reading the transcript, cannot always fully share.  Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial.  Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole. (Citations omitted) 

1. These principles were reiterated in the Court of Appeal in Federow v Federow [2011] ACTCA 10 (Gray P, Penfold J, Nield AJ at [7]–[9]).

1. In Connelly v Allan [2011] ACTSC 170, Refshauge J, in the context of an appeal to this court from a conviction imposed in the Magistrates Court, said (at [12]–[13]) concerning appeals by way of rehearing:

So far the appeal against conviction is concerned, it is a rehearing.  That is, the appeal court must determine whether the decision of the Magistrates Court is wrong, by that court falling into error of law, making a finding of fact that is clearly wrong or exercising a discretion on a wrong principle or in a way that is clearly wrong.  This court, as the appellate court, will give proper allowance to the advantage of the Learned Magistrate who has seen and heard the witnesses, so that, ordinarily, facts found based on the assessment of witnesses will not lightly be overturned.

The appellate court is obliged to conduct a real review of the trial and the Learned Magistrate’s reasons’ ...

1. In Lukatela v Birch [2008] ACTSC 99, Rares J said (at [18]) with respect to such an appeal:

[I]n Allesch v Maunz (2000) 203 CLR 172 at 180-181 [23] per Gaudron, McHugh, Gummow and Hayne JJ, and 187 [44] per Kirby, the High Court reiterated the critical difference between an appeal by way of rehearing and a hearing de novo. Generally (in the absence of a wider statutory power) in an appeal by way of rehearing, the appellate court can only exercise its powers where, having regard to all the evidence before it, the appellant demonstrates that the order appealed from is the result of some legal, factual or discretionary error. In a hearing de novo, those powers can be exercised regardless of any such error. But, in an appeal by way of rehearing, once error below has been found, the appellate court can substitute its own decision based on the facts and the law as they now stand: Allesch 203 CLR at 180-181 [23], 187 [44].

1. Later, in the same judgment, Rares J went on to say (at [21]–[22]):

And, although the appeal is by way of rehearing, the appellate [sic] does not have a free hand.  Only if, after making proper allowance for the advantages of the trial judge, it concludes that an error has been shown, then, the appellate court is authorised and obliged to exercise its appellate duties in accordance with the statute: Fox 214 CLR at 127-128 [27] per Gleeson CJ, Gummow and Kirby JJ.

Ordinarily, if there has been no further evidence admitted and no relevant change in the law, a court entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on part of the court below: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203 [14] per Gleeson CJ, 203 CLR 194 at 203 [14] per Gleeson CJ, Gaudron and Hayne JJ.

The relevant legislation

(a)The Building Act2004 (ACT)       

1. The building work undertaken by the appellant on behalf of B & T Developments was subject to the provisions of the Building Act. Section 18 of that Act provides for the appointment of a licensed construction practitioner as certifier for nominated building works. Division 3.3 of that Act addresses building approvals. The following provisions of that Division are relevant:

25BWhy are building approvals necessary?

(1)A building approval is necessary because –

(a)section 42 (1) (d) requires building work to be carried out in accordance with approved plans (which may have to comply with this Act in relation to asbestos); and

(b)approved plans are plans that relate to building work for which a building approval is in effect.

(2)Section 42 provides that building work must not be carried out except in accordance with the requirements set out in the section.

(3)Not complying with section 42, for example –

(a)is an element of offences against section 42A (Contravention of requirements for building work involving asbestos) and section 51 (Carrying out building work in contravention of s 42); and

(b)is a ground for giving a notice to a building licensee under section 44 (2) (a) (Stage inspections); and

(c)is a ground for giving a notice to carry out building work under section 62 (see s 61 (b)).

25CBuilding approvals apply to building work

To remove any doubt –

(a)a building approval only relates to building work shown on the approved plans under the approval, other than building work –

(i)identified in the plans as not forming part of the approval; and

(ii)on a parcel of land other than a parcel to which the application for approval relates; and

(b)the issue of a building approval does not indicate that carrying out work other than building work identified in the plans is consistent with the law or lease provisions applying to carrying out the work.

26Building approval applications

(1)The owner of a parcel of land, may, in writing, apply to the certifier for a building approval for building work to be carried out on the land.

…

28Issue of building approvals

(1)This section applies if –

(a)an application for a building approval is made to the certifier under section 26; and

(b)the certifier may consider the application; and

(c)section 30 (When building approvals not to be issued – general) and section 30A (When building approvals not to be issued – advice on referral) do not prevent the issue of the approval; and

(d)if there is a written agreement between the certifier and the applicant for the payment of an amount for deciding the application and the agreement states that the amount is to be paid before the application is decided – the amount has been paid.

(2)As soon as practicable after receiving the application for building approval, the certifier must –

(a)take all reasonable steps to get the information the certifier reasonably needs to decide the application, and

(b)if satisfied on reasonable grounds that the plans meet each applicable approval requirement under section 29 and is not prevented from being issued under section 30 or section 30A –

(i)prepare a notice (the building approval certificate) certifying what approval requirements apply to the application and why the building approval is not prevented from being issued; and

(ii)issue the building approval and give the building approval certificate to the applicant.

1. The Building Act recognises that amendments may be made to approved plans after approval, and provides a mechanism for approval of amended plans. Section 31 of the Building Act provides that the owner of a parcel of land where approved building work is being undertaken may apply, in writing, to a certifier, for approval of amended plans. Section 32 then provides that the certifier must approve the amended plans and amend the building approval if, amongst other things, a building built to the amended plans would not be significantly different from a building built to the unamended plans.

1. The Building Act also provides that a certifier must mark an approved plan (s 28A) or amended approved plan (s 33). The certifier must give a copy of any building approval and a copy of the approved plans to the construction occupation registrar: s 28. Similar requirements attach to amend approved plans: s 33.

1. Section 42(1)(b) of the Building Act provide that building work must not be carried out except in accordance with approved plans.

1. Upon completion of the building work, the certifier must give to the construction occupations registrar, if satisfied of the fact on reasonable grounds, a certificate that the building work has been completed in accordance with the Building Act and in accordance with, or substantially in accordance with, the approved plans.

1. The requirement that copies of approved plans be submitted to the Construction Occupations Registrar means that they become part of what is effectively the public record of the building works, and may be perused by any person with the permission of the lessee or owner of the land upon which the building is situated: s 145 Building Act. The inspection of this material would commonly be expected to occur when the building, or in this case a unit within the building, is offered for sale.

(b)The Construction Occupations (Licensing) Act 2004 (ACT)      

1. The explanatory statement for the Constructions Occupations (Licensing) Bill 2003 (ACT) outlined the objects and intended effects of the Bill (which subsequently became the COLA):

This Bill introduces significant reforms to the regulation of building and construction industry trades.  The Bill implements the recommendations of the National Competition Policy Review of Occupational Licensing in the ACT, which reflected reform proposals that had been considered over a number of years.

The legislation introduces a single licensing and disciplinary regime for builders, electricians, plumbers, drainers, gasfitters, building surveyors (certifiers) and plumbing plan certifiers.  This replaces the multiple systems that currently exist, and will result in a consistent and transparent approach to the regulation of each trade.

The trades are referred to as construction occupations, and licensees are construction practitioners who provide construction services.

1. The COLA provides for the appointment of a public servant as the Construction Occupations Registrar: s 103. The functions of the registrar are set out in s 104, and include the administration of “operational Acts”, which is defined in s 16 as including the Building Act. The powers granted to the registrar include the power to make a rectification order. The relevant sections are set out below as they appeared in October 2011:

35When rectification order may be made

(1)This section applies if –

(a)the registrar has given an entity notice under section 34; and

(b)the entity provided the construction service, or part of the construction service, to which the notice relates; and

(c)after considering any submissions made within          the time mentioned in the notice, the registrar is satisfied–

(i)the entity is contravening, or has contravened, this Act or an operational         Act; and

(ii)it is appropriate to make a rectification order in relation to the entity.

Note 1If deciding under this section whether it is appropriate to make a rectification order, the registrar must consider the considerations mentioned in s 36.

Note 2A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including any regulation (see Legislation Act, s 104).

(2)The registrar may make an order under section 38 (Rectification orders) in relation to the entity.

(3)However, the registrar may not make an order under section 38 in relation to the entity if a submission is made that satisfies the registrar that the act that caused the contravention happened, or ended, more than 10 years before the day the registrar proposes to make the order.

38Rectification orders

(1)The registrar may make an order (a rectification order)        in relation to an entity requiring the entity –

(a)to take stated action to rectify work done as part         of a construction service; or

(b)to demolish a building or part of a building where a construction service has been provided and provide the construction service under this Act or an operational Act; or

(c)to start or finish stated work in relation to which a construction service has been, is being or was proposed to be provided.

(2) If the entity is not licensed to do something required to be done under the order, the entity must arrange, and pay for, the thing to be done.

(3)The rectification order must state a period within which what is required to be done must be done.

(4)The stated period for a rectification order other than an emergency rectification order must not be less than 1 month after the day the rectification order is given to the entity.

NoteDetails of the rectification order must be included in the register (see s 108).

(5)A copy of the rectification order must be given to the land owner.

1. The COLA also has provisions relevant to the exercise of the power to make a rectification order:

33ARectification orders – exercise of registrar’s powers

To remove any doubt, the registrar is not prevented from having a belief on reasonable grounds, or being satisfied, about a matter mentioned in this part in relation to a construction service only because the registrar, the planning and land authority, a certifier or another entity has –

(a)given a certificate, or approval under –

(i)this Act or an operational Act in relation to the construction service; or

(ii)the Planning and Development Act2007 in relation to the place where, or the territory lease under which, the construction service was provided; or

(b)otherwise endorsed the construction service under this Act or an operational Act.

36Considerations for deciding under s 34 and s 35

(1)In deciding whether it is, or may be, appropriate to make a rectification order in relation to any entity that is contravening, or has or may have contravened, this Act, the registrar must consider the following:

(a)any injury, loss or damage caused, or that could         have been caused, by the contravention;

(b)if a rectification order is proposed – how the proposed order may affect people affected by the contravention.

Examples of effect of contravention, including injury, loss and damage

1.reduction in safety, reliability, durability, soundness, functionality, accessibility, serviceability, service life, usability, usefulness, amenity, aesthetic quality, value or efficiency of thing affected by contravention.

2.adverse affect on health of user of thing affected by contravention.

NoteAn example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

(2)The registrar may consider anything else that is relevant.

(3)However, the registrar need not consider whether the registrar, planning and land authority, a certifier or other entity has –

(a)given a certificate, or approval under –

(i)this Act or an operational Act in relation to the construction service; or

(ii)the Planning and Development Act2007 in relation to the place where, or the territory lease under which, the construction service was provided; or

(b)otherwise endorsed the construction service under this Act or an operational Act.

The ACAT decision

1. In its decision of 6 August 2012, the ACAT identified that the building in question had not been constructed in accordance with the approved plans with respect to the non-complying items. That proposition appears to have been accepted by the appellant in the proceedings in the ACAT, as it is in this appeal.  The ACAT noted (at [21]):

The nature of the non-compliance is said to be that it was not built in accordance with the approved plans... This leads to non-conformance with section 42(1)(d)(i) of the Building Act and as a consequence of increasing maintenance costs, creates likelihood of deterioration and having a reduced value effect on the apartments.

1. The ACAT concluded (at [32]–[34]):

The Tribunal is of the view that pursuant to the legislation and its intent the duties of the respondent are principally regulatory.  The fact that they may have the ancillary effect of assisting the party joined is of no relevance. Any controlled activity order or rectification order is usually bound to have some ancillary benefit to the owner of the property being built.

The Tribunal is also of the view that notwithstanding that the external finishes (cited in items 15 and 25) are not structural defects but more in the nature of cosmetic defects, nonetheless, they meet the test of being described as substantial for the reasons set out by the respondents in the orders made by them. They are, in the opinion of the Tribunal, so substantial as to justify the orders made by the respondents.

The Tribunal confirms the orders in relation to items 15 and 25 and notes that all the remaining defect items referred to in the decisions under review have been the subject of other orders or do not need any further orders made.

1. It appears that reference to item 28 was accidently omitted by the ACAT in these reasons.  This was rectified by further order of the ACAT on 7 November 2012.

THE GROUNDS OF APPEAL

1. There is no dispute that the requirements for making a rectification order in s 35(1) (a), (b) and (c)(i) of the COLA were satisfied before the registrar made the order. The only matter in dispute is whether the requirements of s 35(1)(c)(ii) have been met, being that it is appropriate to make the order.

Ground (a)

1. The appellant contends that there was no need for the approved plans to be amended, as a Certificate of Compliance had been issued by the building certifier, and a Certificate of Occupancy had been issued by the appropriate authority. It accepts that the effect of s 36(3) of the COLA is that the Registrar and subsequently the ACAT, was not precluded from making a rectification order because a certifier has issued a Certificate of Compliance, or that a relevant authority has issued a Certificate of Occupancy. This provision was inserted into the COLA in response to the decision of Higgins CJ in ACT Construction Occupations Registrar v Tokich [2006] ACTSC 89, where his Honour held that the registrar was estopped from asserting that there had been a breach of the Building Act so long as the Certificate of Compliance under that Act remained valid.

1. It is accepted by the respondents that amended plans setting out the proposed changes to the Non-Complying Items could have been approved.  However, they submit that the appellant’s reasons for not applying for approval of amended plans to reflect the proposed changes are irrelevant.  I agree with that submission.

1. In my opinion, the policy behind the legislature granting the registrar power to make a rectification order is based on considerations of protection of the public, consumer protection and protection of the integrity of public records.  Doubtless, there are areas of overlap between these three considerations.  For example, protection of the integrity of public records will often, in this field, involve a strong element of consumer protection.  As such, the reason for a builder not applying for approval of amended plans (where that reason is not relevant for some other purposes, such as estoppel) is irrelevant to the decision of the registrar to issue a rectification order.

1. In the present case, B & T Developments sold many of the apartments in the building “off the plan”, meaning they were sold prior to construction of the building, based on the approved plans of the building.  It appears that in the contracts for sale of the apartments sold “off the plan” there was a term allowing B & T Developments to vary the plans and specifications within quite broad parameters, and providing that the purchaser could not rescind or terminate the contract in respect of any such variation.  Thus, it was argued, those purchasers received what they contracted to buy, and subsequent prospective purchasers could inspect the property before deciding to purchase.  However, it is not suggested that all of the purchasers of those apartments purchased “off the plan”.  In addition, I see no reason why protection of the public and consumer protection should be restricted to the original purchasers of the apartments.  The original purchasers may be placed on notice that the building has not been, or may not be, constructed in accordance with the approved plan by conditions in the contract for sale.  It is highly unlikely that subsequent purchasers, or those supplying finance for subsequent purchasers, will be similarly put on notice.  The appellant says with regard to such purchasers, caveat emptor.  But it is for precisely this reason that the integrity of the public record is so important.  A subsequent purchaser may or may not appreciate the difference between aluminium cladding and fibre/cement board.  They may or may not be able to identify such a variation from the approved plans based on a visual inspection of the building.  A subsequent purchaser, such as an overseas purchaser, may not even visually inspect the building.  All such purchasers should be entitled to expect that the public record, consisting of the approved plans, depicts what was constructed.  Based on the approved plans they should be entitled to form judgments on the value of the property they are proposing to purchase, the likelihood of deterioration of the materials used in the construction and the likely cost of maintenance.

1. In truth, there is no inconsistency in a certifier issuing a Certificate of Compliance with respect to building works, and the registrar determining to make a rectification order with respect to the same works.  The certifier is required to make a judgment about the degree of conformity between the approved plans and what was built.  Minds may differ on that question, and the registrar may form a different judgment to that of the certifier.  But, more importantly, a certifier, in making that judgment, is not subject to the same considerations that are relevant to the determination of the registrar to make a rectification order.  The certifier is not concerned with broader public interests, such as consumer protection.  The certifier is only required to make a judgment as to the degree of conformity of the works to the prescribed plans.

1. It must be accepted that the ACAT made no reference to the fact that a Certificate of Occupancy, and a Certificate of Compliance, had been issued in determining whether to confirm the making of the rectification order. It is, however, a complete answer to any complaint about that failure that s 36(3) of the COLA specifically says that the ACAT is not required to consider these facts. As such, no error of law is demonstrated, and this ground of appeal must fail.

Ground (b)

1. This ground alleges that the ACAT failed to take into account a relevant consideration, namely that the Non-Complying Items did not require planning approvals.  I am satisfied that there is no merit in this ground. 

1. As the first respondent points out, the rectification order was issued on the basis that the work did not comply with s 42(1)(d)(i) of the Building Act, and there is no contest that the work did not comply. The fact that the non-compliant works would not have required planning approval is irrelevant.

1. In any event, the ACAT was not bound to consider that the non-compliant building work did not require planning approval.  There is nothing in the COLA that required the ACAT to take that circumstance into account, nor can I discern anything from the subject matter or purpose of that Act that implies that it must be taken into account.  As such, the ACAT did not err in law by not considering, if that be the case, that the non-complying works did not require planning approval when confirming the rectification order.

Ground (c)

1. The appellant submits the ACAT failed to take into account that the Non-Complying Items raised no issue of structural insufficiency or that they were otherwise not fit for purpose. In fact, the ACAT did acknowledge that the Non-Complying Items did not raise any issue of structural insufficiency: ACAT reasons at [33]. Nevertheless, the ACAT determined that the non-compliance was such as to justify a rectification order. No error of fact or law is demonstrated with regard to this ground.

Ground (d)

1. The appellant submits that the ACAT failed to take into account that if amended plans had been prepared, they could have been approved.  For the reasons I gave concerning Ground (a), this ground of appeal must fail.

Ground (e)

1. Section 36(1)(b) of the COLA requires the registrar, in deciding whether to make a rectification order, to consider how the proposed order may affect people affected by the contravention. The appellant claims the ACAT did not consider this issue.

1. It is clear from the terms of s 36(1) that the ACAT was bound to consider the effect of the proposed order on those who may be affected by it. In fact, the ACAT did consider this issue. At [21] the ACAT referred to the increased maintenance costs, the likelihood of deterioration and the reduced value of the apartments. The second respondent in these proceedings, the owner’s corporation of the apartment complex under the Unit Titles (Management) Act2011, was joined as a party to the ACAT proceedings. It supported the confirmation of the rectification orders.  It has also refused to consent to the lodging of amended plans, which would have removed the basis for the making of the rectification order.  The ACAT was entitled to proceed on the basis that the second respondent spoke on behalf of those most likely to be presently, adversely affected by the rectification orders.  It is implicit in the reasons of the ACAT that it had regard to this matter.

1. In any event, even if the ACAT did not have regard to how the proposed rectification order may affect the owners or residents of the apartments, it was made clear in the course of this appeal that the second respondent supports the making of the rectification order.  Even if the ACAT was in error as alleged in this ground, this court should not intervene, applying the principles enunciated by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend (see above at [10]).  If anything, the ACAT failed to take into account a fact which supported the decision it made.

Ground (f)

1. This ground of appeal alleges that the ACAT failed to take into account the fact that the deviation from the approved plans caused no loss, injury or damage. For convenience, I will simply refer to this as “loss”. This was a matter the ACAT was bound to take into consideration: s 36(1) of the COLA. Again, a fair reading of the ACAT reasons for decision reveals that it did consider the question of loss. At [21] to [24] the ACAT referred to issues of maintenance costs, deterioration, reduction in value and reduction in the quality of the building by reason of the deviation from the approved plans. It is incorrect to assert that the ACAT failed to take this issue into account.

1. The submissions filed by the appellant suggest that the appellant really seeks to agitate the proposition that the ACAT made an error of fact or law by determining that loss was caused, or may have been caused, by the deviation from the approved plans.  It submits that no loss was caused to the second respondent or to individual unit owners who purchased units from B & T Developments.  Whilst they may prefer the building had been constructed in accordance with the approved plans, the building has, the appellant argues, been constructed soundly and properly.  In addition, the appellant argues that at all times before the registration of the units plan no person had a propriety interest in any unit title leases created by the registration of the units plan, with those who purchased off the plan only having personal rights in contract.  The appellant also notes that the second respondent did not exist at the time the building was constructed.  It argues that in the light of these facts, the fact that the building was not constructed in accordance with the approved plans caused no loss to either B & T Development’s successors in title to the individual units or to the second respondent.

1. The appellant then goes on to argue:

Approved plans are not an end in themselves. They are a means of assuring that buildings will be constructed in accordance with the requirements of the Act. If a building is not built in accordance with approved plans but in all other respects complies with the Act and is capable of approval, there is no loss sustained to successors in title because the approve plans were not followed unless those successors had a contractual entitlement to have the plans followed. This is because absent a contractual obligation, it is always open for a current owner to alter a design and to apply for and receive an amendment to approved plans. Absent a contractual entitlement, there is nothing that successors in title can do to stop this.

The building approval system is not a means of delivering upon contractual expectations. There is no basis in the statute for a successor in title to assume that because a plan is approved in one form at a point in time there is some assurance that the building will definitely be built as it is depicted in those plans at that time.

If, by contrast, a building is non-compliant with approved plans and cannot get approval, successors in title may sustain a loss. That is not the case here.

1. In my opinion, the loss encompassed by s 36(1)(a) is not confined to loss upon which a sufficiently interested person could maintain an action at law as at the date that the registrar determines to make a rectification order. To interpret s 36(1)(a) in that way would seriously reduce the efficacy of the provision, and would be contrary to the legislative purpose underpinning the power to make rectification orders. The policy considerations behind the legislature granting the registrar power to make rectification orders include protection of the public and consumer protection, making it highly unlikely that the legislature intended to restrict the meaning of the words “injury, loss or damage” in this way.

1. There is no reason apparent from the text of the COLA, or from consideration of its objects and purposes, to suppose that the legislature intended to restrict the registrar’s considerations under s 36(1)(a) to those persons or entities who may have suffered such a loss by virtue of having a propriety right in the building at the time the contravention occurred.

1. The determination for the purposes of s 36(1)(a) of whether any loss has been caused requires a simple comparison between what was constructed and what was depicted in the approved plans. To require the registrar to enquire into, and reach a conclusion on, the contractual or other legal or equitable interests of those who have contracted to purchase units off the plan, or who subsequently derive a proprietary interest in the building, would be an impossible task. The legislature could not have intended

   
   

   s 36(1)(a) to be approached in this way. In my view, what the section demands is a common sense approach to the question of loss: on a comparison between what was built and what is shown in the approved plans, has any loss been caused because, for example, the building is now less valuable, or more costly to maintain?

1. The provisions of s 35(3) of the COLA make it clear that the registrar’s power to make a rectification order “runs with the land”, with the only restrictions upon the power to make the order being the act that caused the contravention must have happened no more than 10 years before the day the registrar proposes to make the order. It would be contrary to the objects of the COLA, and in particular those provisions dealing with the making of rectification orders, to construe s 36(1)(a) as meaning that a person or entity that took legal ownership of a building containing non-compliant works had suffered no loss because the non-compliant work existed at the time the entity took legal ownership.

1. I am satisfied that the ACAT did not make an error of fact or law in its consideration of this issue.

1. In any event, s 36(2) of the COLA permitted the ACAT to consider “anything else that is relevant”. This would clearly include any potential loss that may be sustained by successors in title to B & T Developments. By whatever route one approaches the question, the ACAT was entitled to consider the matters that it did concerning loss occasioned by the appellant’s failure to comply with the approved plans. No error of fact or law has been demonstrated.

1. Before leaving this point, I note that s 36 does not preclude the registrar making a rectification order if there is no evidence that the contravention has caused injury, loss or damage. It is simply a matter which the registrar must consider.

Ground (g)

1. The appellant argued the ACAT failed to consider the Second Respondent did not exist prior to the conclusion of construction and the issuing of certificates under the Building Act. For the reasons I have given with respect to the preceding ground, this ground must also fail.

Ground (h)

1. There is no suggestion of criminal sanctions arising from the appellant’s non-compliance with the approved plans.  Nor was the ACAT bound to consider this issue.  No error of fact or law has been demonstrated with respect to this ground.

Proposed Ground (i)

1. Paragraph 8(B)(iii) of the rectification order required the appellant, in doing the rectification work to, when necessary and at its cost, provide “services approved by and for the use of unit owners of block 13 section 27 Forrest, relating to but not limited to residential rental accommodation, equipment storage and equipment movement, until 21 days after completion of the certification work”.  The proposed ground of appeal would allege that the ACAT had no jurisdiction to make that order.

1. I grant the appellant leave to amend the Notice of Appeal, and I set aside paragraph 8(B)(iii) of the rectification order. I do not do so because I am satisfied that the registrar, or the ACAT, had no power to make ancillary orders of the nature that it purported to make in paragraph 8(B)(iii) of the rectification order. Indeed, I am perfectly satisfied that the registrar has the power, pursuant to s 38(1)(a) of the COLA to make ancillary orders, such as paying for the cost of relocation of persons or property affected by the rectification order, so as to give efficacy to the rectification order itself. But the power granted by s 38(1)(a) is to make an order requiring the appellant to take stated action to rectify building work. The order made by the registrar lacks the requisite precision to be an order to take stated action. It is important that rectification orders, including ancillary orders, be expressed with sufficient precision that no ambiguity, or opportunity for disagreement as to the effect of the order, arises. This requirement as to the form of the order arises principally from the fact that failure to comply with a rectification order may attract criminal sanctions: s 40 of the COLA.

1. The order made by the registrar is open to ambiguity and debate because it expresses the obligation of the appellant to provide the nominated services “where necessary”.  The order does not provide who is to determine when such services are necessary, nor does the COLA provide a mechanism for resolution of any dispute on this issue.

1. The order in the form in which it was made is not an order contemplated by

   
   

   s 38(1)(a).

Alleged erroneous finding of fact

1. The appellant urged the proposition that this court may, in accordance with the nature of the appeal, substitute its own opinion that it is inappropriate for a rectification order to be made, for the opinions of the registrar and the ACAT that it is appropriate for the order to be made.  Accepting, for present purposes, that I have the power on this appeal to substitute my opinion for that of the registrar or ACAT on the question whether it is appropriate to make a rectification order, I see no reason why I should do so.  With respect, I consider the decision of the registrar, as confirmed by the ACAT, on this issue to be correct.

CONCLUSION

1. The appellant could easily have avoided the possibility of the registrar making a rectification order by having the variations from the approved plans required by B & T Developments be the subject of formal amendments approved by the certifier.  Whilst this fact is irrelevant to determining the present appeal, all builders should be aware of the need to ensure that what they build complies with approved plans.

1. The appeal will be allowed to the extent that paragraph 8(B)(iii) of the rectification order is set aside.  Otherwise, the appeal is dismissed.  The appropriate costs order is that the appellant pay the respondents’ costs of the appeal.

   I certify that the preceding sixty four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Burns.

   Associate:

   Date:     6 November 2013

Counsel for the Appellant:  Mr P A Walker

Solicitor for the Appellant:  Trinity Law
Counsel for the First Respondent:                 Mr G C McCarthy
Solicitor for the First Respondent:                ACT Government Solicitors Office
Counsel for the Second Respondent:            Mr S Gavagna
Solicitor for the Second Respondent:            Goodman Law
Date of Hearing:  7 August 2013
Date of Judgment:  6 November 2013