BUILDING SERVICES BOARD and M3 BUILDING AND CONSTRUCTION PTY LTD
[2021] WASAT 104
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES REGISTRATION ACT 2011 (WA)
CITATION: BUILDING SERVICES BOARD and M3 BUILDING AND CONSTRUCTION PTY LTD [2021] WASAT 104
MEMBER: MS P LE MIERE, MEMBER
HEARD: DETERMINED ON THE PAPERS
DELIVERED : 6 AUGUST 2021
FILE NO/S: CC 49 of 2021
BETWEEN: BUILDING SERVICES BOARD
Applicant
AND
M3 BUILDING AND CONSTRUCTION PTY LTD
First Respondent
STEWART MARTINCIC
Third Respondent
Catchwords:
Building Services Registration Act 2011 (WA) - Failing to manage building services - Failing to appoint a nominated supervisor - Fine of director instead of service provider
Legislation:
Building Services Registration Act 2011 (WA), s 53(1)(d), s 53(1)(f), s 53(1)(i), s 59(3)
Result:
Finding made and fine imposed
Category: B
Representation:
Counsel:
| Applicant | : | Mr J Caspersz |
| First Respondent | : | Non-Appearance |
| Third Respondent | : | Non-Appearance |
Solicitors:
| Applicant | : | Department of Mines, Industry Regulation and Safety - Consumer Protection Division (In House Legal Counsel) |
| First Respondent | : | N/A |
| Third Respondent | : | N/A |
Case(s) referred to in decision(s):
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
The applicant, the Building Services Board (Board) alleges the first respondent M3 Building and Construction Pty Ltd (M3) and the third respondent Mr Stewart Martincic (Mr Martincic) in his capacity as a director of M3, committed one or more disciplinary matters.
The Board alleges, M3:
•in about June 2014 engaged in misleading or deceptive conduct in connection with a contract for the carrying out of a building service in that it, by the actions of Mr Marco Marusco, represented to two people JC and BV that it had built a number of houses that it had not built, which representation was material to the decision by JC and BV to enter into a contract with M3 for the carrying out of a building service;
•between May 2013 and May 2017 failed to ensure that its building services were properly managed and supervised in that it did not ensure that the building services were carried out under the management and supervision of a nominated supervisor and in accordance with the applicable building standards and the approved plans and specifications; and
•in the alternative to the allegation above between 16 January 2015 and 18 May 2015 was negligent in connection with the carrying out of building services in that it continued to carry out its building services during a period in which it did not have a nominated building supervisor.
The Board alleges, Mr Martincic as a director of M3:
•between 16 January 2015 and 18 May 2015 permitted M3 to carry out building work without having a nominated building supervisor contrary to the requirements of the Building Services Registration Act 2011 (WA) (BSR Act); and
•did not ensure that the building services carried out by M3 were carried out in accordance with applicable building standards and the approved plans and specifications.
The Tribunal in an order dated 23 February 2021 noted:
(a)by order of the Federal Court of Australia dated 15 December 2020, the applicant was granted leave to commence disciplinary proceedings against the first respondent in the State Administrative Tribunal.
(b)the first respondent does not intend to take part in the proceedings.
Mr Martincic has not communicated with the Tribunal or taken part in these proceedings and has not at any time responded to the Board in relation to these matters.
I am satisfied these proceedings have been served on Mr Martincic and that he is aware of the Board's application and allegations having had regard to:
•a declaration of service dated 11 March 2021;
•a report of Ms Harrison dated 15 March 2021;
•email dated 2 March 2021 Mr Caspersz to Mr Streeton;
•email dated 3 March 2021 Mr Caspersz to Ms Harrison;
•email dated 4 March 2021 Ms Harrison to Mr Caspersz;
•email dated 9 March Ms Harrison to Mr Caspersz;
•email dated 9 March 2021 Mr Caspersz to Ms Harrison;
•email dated 9 March 2021 Mr Caspersz to Mr Streeton;
•Australia Post tracking details; and
•email dated 11 March 2021 Ms Harrison to Mr Caspersz.
Facts
By consent orders dated 30 March 2021 the Tribunal among other things found Mr Marcuso on behalf of M3 engaged in misleading or deceptive conduct in connection with a contract for the carrying out of a building service.
The Board submitted a Book of Documents filed on 14 May 2021 containing relevant documents supporting their allegations. I have had regard to the material in the Board's Book of Documents (BBD) and the consent orders.
The following facts were uncontested, and I find:
On 18 February 2013, M3 was incorporated.
Also, on 18 February 2013, Mr Marusco and Mr Martincic were appointed directors of M3 and on 20 March 2013 Mr Marusco was appointed the secretary of M3.
On 20 March 2013 Mr Kerry Edwin Donovan was appointed a director of M3.
On 4 April 2013 Mr Marusco on behalf of M3 applied for and obtained registration for M3 as a building service contractor.
Between May 2013 and May 2017, M3 carried out building services at various sites including 10 sites referred to in the BBD.
In about June 2014 on behalf of M3, Mr Marusco engaged in misleading or deceptive conduct in connection with a contract for the carrying out of a building service.
Registration as a building service contractor required M3 to nominate a building service practitioner to act in the role of M3's nominated supervisor.
During the period of its registration as a building service contractor, M3 engaged several nominated supervisors.
Mr Donovan, a registered building service provider was submitted as M3's first nominated supervisor.
On 20 June 2014 Mr Donovan ceased to be the nominated supervisor and a director of M3.
From May 2013 to 16 January 2015 there were three nominated supervisors, Mr Donovan, Mr Gordon Morton, and Mr James Hudson who were building service practitioners.
Between 16 January 2015 and 18 May 2015 there was no building service practitioner acting in the role of M3's nominated supervisor.
Mr Martincic was aware M3 had no building service practitioner acting as a nominated supervisor during this period.
On 18 May 2015 M3 submitted a Notice (Notice) to the Board to advise of the change of nominated supervisor. Mr Martincic on behalf of M3 signed the Notice including completing the section 'Declaration by Applicant' that was preceded by the words, 'sincerely declare that the notice is true and correct'.
Relevantly the Notice stated that Mr Morton ceased as the nominated supervisor on 18 May 2015 which Mr Martincic knew to be false.
Between May 2013 and May 2017, M3 carried out building services at building sites where the construction of new homes took place.
During the period that M3 did not have a nominated supervisor it continued to work as a building service contractor on the following sites:
a)site one - demolition of a wall, the pouring of footings and rebuilding of pillars;
b)site four - commencement of brickwork and roof framing; and
c)site three - commencement of brickwork.
During the times that Mr Morton and Mr Hudson were each the nominated supervisor for M3, 29 inspections over 10 sites were carried out by various independent registered builders, engineers and inspectors associated with the Board.
A significant number, and in some instances, serious defects were found on all 10 sites. In broad terms the defects were, the installation of incorrect materials, unapproved variations from approved plans, work which did not comply with plans, specifications and standards and poor workmanship.
Findings - M3
I find M3 failed to ensure its building services were properly managed and supervised for the following reasons:
a)Between 16 January 2015 and 18 May 2015 M3 did not have a nominated supervisor.
b)M3 failed to ensure or enable its nominated supervisors carried out their statutory obligations to properly manage and supervise M3's building services as evident from transcripts of interviews obtained from Mr Morton,[1] Mr Hudson[2] and the statements of Mr Andrew Shue[3] and Mr Jamie MacPherson.[4]
c)By not detecting and rectifying defects in M3 building services in a timely manner or at all as evident from inspection reports of various builds.[5] The defects broadly described were the installation of incorrect materials, unapproved variations from approved plans, work which did not comply with plans, specifications, and standards, and poor workmanship.
[1] BBD at page 1583.
[2] BBD at page 1482.
[3] BBD at page 1679 and 1687.
[4] BBD at page 1282.
[5] BBD at pages (the following are just some examples) 253-269, 383-420, 434-445, 551-561, 703-709 and 890-910.
I further find that a disciplinary matter exists in respect of M3 by:
•its contravention of its registration in not having a nominated building supervisor between 16 January 2015 and 18 May 2015 (s 53(1)(d) of the BSR Act);
•its failure to properly manage and supervise several of its building services (s 53(1)(f) of the BSR Act); and
•engaged in misleading conduct by its director Mr Marusco in connection with a contract for the carrying out of a building service (s 53(1)(i) of the BSR Act).
Findings - Mr Martincic
I find that between 16 January 2015 and 18 May 2015 Mr Martincic sanctioned M3 continuing to carry out building services in the knowledge that M3 did not have a nominated supervisor and further that this was contrary to M3's registration requirements as a building service contractor.
I find that Mr Martincic, one of only two directors of M3, did not take any steps to ensure M3 had systems or arrangements in place to ensure that all building services carried out by M3 were carried out in accordance with applicable building standards.
I find that Mr Martincic was aware that the regulated building service provided by M3 to the 10 sites referred to in the BBD was not carried out in a proper or proficient manner or was faulty or unsatisfactory.
I find that Mr Martincic did not take any or any sufficient steps to cause M3 to remedy the faulty or unsatisfactory work or to prevent further unsatisfactory work being carried out.
Conclusion
Pursuant to s 59(3) of the BSR Act, I have determined not to cancel or suspend the registration of M3[6] and instead impose a fine on Mr Martincic.
[6] M3 is no longer operating and does not hold registration as a building service contractor.
The maximum fine that can be imposed under the BSR Act is $25,000.
A fine of $8,000 was imposed on Mr Marusco.
In respect of the penalty imposed on Mr Marusco, the matters in mitigation[7] included:
a)his main role in M3 was design and sales with minor involvement in other aspects of M3's business;
b)Mr Martincic actively excluded Mr Marusco from matters relating to construction and administration by:
i)keeping most construction related issues or problems from him and not involving him in issues that were known and that required attention;
ii)bullying him when he attempted to involve himself in issues or the construction and administrative aspects of the business; and
iii)denying Mr Marusco access to the company's accounting system and documents.
[7] Facts agreed in Consent Orders made 30 March 2021 at [14]-[17].
Taking all those matters into account I agree with the Board that an appropriate fine is $15,000.
Costs
The Board seeks costs in the sum of $3,000.
Whilst the starting position in relation to costs in the Tribunal is that each party bear their own costs, in this situation, Mr Martincic has not cooperated with the Board and has put it to unnecessary costs by causing it to prove facts that he did not seek to challenge.
I consider in the interests of justice that Mr Martincic contribute to the Board's costs.
Orders
The Tribunal orders:
1.Mr Martincic is to pay a fine of $15,000 to the Board together with costs of $3,000 being a total of $18,000 within 28 days of the date of this order.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS P LE MIERE, MEMBER
6 AUGUST 2021
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