| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : VOCATIONAL REGULATION ACT : BUILDERS' REGISTRATION ACT 1939 (WA) CITATION : BUILDING SERVICES BOARD OF WESTERN AUSTRALIA and DE COPPI [2011] WASAT 182 MEMBER : MR C RAYMOND (SENIOR MEMBER) MR P FAIGEN (SENIOR SESSIONAL MEMBER)
MR R MACHELL (SESSIONAL MEMBER)
HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 14 NOVEMBER 2011 FILE NO/S : VR 78 of 2011 BETWEEN : BUILDING SERVICES BOARD OF WESTERN AUSTRALIA Applicant
AND
TONY LINO DE COPPI
First Respondent
TINA ANN DE COPPI
Second Respondent
Catchwords: Building Services (Registration) Act 2011 Effect of transitional provisions on disciplinary proceedings commenced under Builders' Registration Act 1939 (WA) Whether a disciplinary matter exists Allegations of negligent conduct based on demand for deposits under building work contracts Appropriate disposition
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Legislation: Builders' Registration Act 1939 (WA), s 9(7), s 10(2)(b)(ii), s 12D, s 13, s 13(1), s 13(1)(a), s 13(1)(c)
Building Services (Registration) Act 2011 (WA), s 12D, s 17, s 18, s 23, s 53, s 53(1), s 53(1)(e), s 58, s 59(1), s 114, s 114(1), s 114(2), s 116
Building Services (Registration) Regulations 2011 (WA), reg 38
Home Building Contracts Act 1991 (WA), s 2B, s 3, s 25A, s 25C, s 25C(1), s 25C(2), s 25D, Pt 3A, Div 2
Interpretation Act 1984 (WA), s 37 Result: Application granted Category: B
Representation:
Counsel:
Applicant : Ms C Bray
First Respondent : N/A
Second Respondent : N/A
Solicitors:
Applicant : Mr Marc Mannes
First Respondent : N/A
Second Respondent : N/A
Case(s) referred to in decision(s):
Briginshaw v Briginshaw (1938) 60 CLR 336
Builders' Registration Board of Western Australia and Carlino [2007] WASAT 298
Hawk Construction Services Pty Ltd & Anor v Builders' Registration Board of Western Australia [2001] WADC 262
Legal Practitioners' Complaints Committee and Segler [2009] WASAT 205
Paridis v Settlement Agents' Supervisory Board [2007] WASCA 97
Re Maraj (a legal practitioner) (1995) 15 WAR 12
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REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision 1 The Builders' Registration Board of Western Australia applied to the Tribunal alleging that proper cause for disciplinary action exists against both respondents. It was alleged that the respondents, trading in partnership, were negligent in demanding deposits payable and residential building work contracts from two clients totalling approximately $60,000 prior to having in place the compulsory housing indemnity insurance. 2 Subsequent to the commencement of the proceedings, the Building Services (Registration) Act 2011 (WA) came into force and the Builders' Registration Act 1939 (WA) was repealed. The matter accordingly fell to be dealt with under the transitional provisions which require that the matter be dealt with as if the proceeding had been commenced by an allegation made under the new legislation. However, the Tribunal concluded that it was limited to granting remedies as provided for under the repealed Act having regard to s 37 of the Interpretation Act 1984 (WA) and the principles discussed in Legal Practitioners' Complaints Committee and Segler [2009] WASAT 205. The Tribunal rejected submissions made on behalf of the Board that it had any power to grant remedies other than those expressly provided under the relevant legislation. The Tribunal also found that the allegations made by the Board had been too broadly stated and had been based upon a conflation of s 25C(1) and s 25C(2) of the Home Building Contracts Act 1991 (WA). Consequently, the duty upon which the Board's case was dependent had been too broadly stated but the Tribunal concluded that a narrower duty, which it found had been breached, was encompassed within that broader duty. It was held that there was a duty not to demand payment deposits prior to providing a certificate that the requisite insurance was in place and that the respondents had acted negligently in doing so. 3 Having regard to the undisputed facts and the degree of culpability involved in the breach, the Tribunal concluded that both the registration of the partnership and the registration of the male respondent should be suspended for a period of effectively three months and further, that fines should be imposed as sought by the Board of $10,000 against the partnership and $2,500 against the male respondent. (Page 4)
The application and orders sought 4 On 12 May 2011 the Builders' Registration Board of Western Australia (Board) made application to the Tribunal under s 13(1) of the Builders' Registration Act 1939 (WA) (BR Act), based upon an allegation pursuant to s 12D of the BR Act that proper cause for disciplinary action exists against Tony Lino De Coppi (Mr De Coppi) and Tina Anne De Coppi (Mrs De Coppi). 5 In the application it is alleged that Mr and Mrs De Coppi reside at No 29 Dablone Vista, Dalyellup, in the state of Western Australia. A certificate issued pursuant to s 9(7) of the BR Act by the Acting Registrar of the Board dated 15 June 2011, establishes that Mr and Mrs De Coppi are registered under the BR Act as a partnership trading as De Coppi Developments. Registration was effected on 25 July 2007 and relied upon the prior registration as a builder of Mr De Coppi, it being a prerequisite that one of the partners be so registered (s 10(2)(b)(ii) of the BR Act). Mr De Coppi became registered as a builder on 21 February 2007 as established by a certificate of the Acting Registrar issued pursuant to s 9(7) of the BR Act also dated 15 June 2011. 6 The Board alleges in the application that the partnership trading as De Coppi Developments demanded deposits from clients under two separate contracts, and that in doing so the partnership was negligent within the meaning of that phrase in s 13(1)(c) of the BR Act by reason that: 10.1 Pursuant to section 25C of the Home Building Contracts Act 1991 (HBCA) the Partnership was required to have in place a policy of insurance that complied with Division 2 of the HBCA in relation to the contracts referred to at paragraphs 4 and 7 prior to demanding a deposit; 10.2 The partnership did not have in place the requisite policies of insurance prior to demanding a deposit in relation to the contracts referred to at paragraphs 4 and 7; and 10.3 The partnership has failed to retrospectively obtain the requisite policies of insurance for the contracts referred to at paragraphs 4 and 7, or alternatively return the deposits to the owners 7 Section 13(1)(c) of the BR Act provides that there is cause for disciplinary action in relation to a registered builder who, relevantly, has been guilty of negligence in connection with the performance of any building work. (Page 5)
8 It is further alleged that as the registered partner of the partnership, Mr De Coppi was responsible for ensuring that the requisite policies of insurance were in place. 9 The orders sought by the Board are that: a) the partnership registration be suspended; b) that with respect to the allegations made against the partnership, Mr and Mrs De Coppi be fined $10,000; and c) that with respect to the allegations against Mr De Coppi, he be fined $2,500. 10 Mr and Mrs De Coppi have played no part in the proceedings. At a directions hearing on 2 June 2011, the presiding member being satisfied that the Board had taken reasonable steps to serve the application and that as a result thereof the application was likely to have come to the attention of Mr and Mrs De Coppi, ordered that the service effected be regarded as informal service and that any further notices of processes be served in the same manner and the Tribunal is satisfied that has occurred. 11 The matter was programmed to a hearing on 6 July 2011. Based on the material which had been filed with the Tribunal and information provided by counsel for the Board, the Tribunal queried why the Board sought the suspension of the partnership but not that of Mr De Coppi, who was alleged by the Board to be responsible for ensuring that the requisite policies of insurance were in place. 12 The Tribunal was also concerned that it did not have enough relevant information before it in order to properly determine any appropriate disciplinary consequences. Consequently, the Tribunal made further directions. Those directions granted the Board leave to file and serve an amended application in which an order was sought for the registration of Mr De Coppi to be suspended, and made provision for the filing of further witness statements as well as submissions relevant to any appropriate sanction. Leave was also granted for Mr De Coppi to file a witness statement, any relevant documents and an outline of submissions. It was also directed that subject to further order, the application be determined on the documents. The Board duly filed further witness statements and submissions but declined to amend the application, submitting that the Tribunal had power to suspend the registration of Mr De Coppi. That submission will be given further consideration below. (Page 6)
13 Mr De Coppi did not take up further opportunity to participate in the proceedings.
The relevant statutory provisions and principles to be applied 14 The BR Act was repealed on 29 August 2011 upon the Building Services (Registration) Act 2011 (WA) (BS(R) Act) coming into effect. A proceeding commenced by an allegation under s 12D of the repealed Act, before commencement day, is to be continued and dealt with as if it were a proceeding commenced by an allegation made by the Board under the BS(R) Act (s 116). 15 The Tribunal will accordingly order that the Building Services Board be substituted as the applicant and hereafter references to the Board are references to the Building Services Board. The Builders' Registration Board will hereafter be referred to as the former Board. 16 Section 58 of the BS(R) Act provides as follows: (1) If, in a proceeding commenced by an allegation under this Act, the State Administrative Tribunal is satisfied that a disciplinary matter exists in respect of a registered building service provider, the Tribunal may do one or more of the following (a) decline to make an order under this section; (b) order the Board to amend the registration of the provider; (c) caution or reprimand the provider; (d) impose a condition on the registration of the provider, or amend an existing condition; (e) where the provider is a building service practitioner, order that the provider undertake and complete a specified further course of training or education; (f) where the provider is a building service contractor, order that a nominated supervisor of the provider undertake and complete a specified further course of training or education; (g) order that the registration of the provider be suspended for a period, not exceeding 2 years, specified in the order; (h) order that the provider’s registration be cancelled and name be removed from the register; (Page 7)
(i) if the Tribunal makes its finding on a ground referred to in section 53(1)(c) to (m), order that the provider pay to the Building Commissioner a penalty of a fine not exceeding $25 000. 17 A registered building service provider is defined to mean either a building service practitioner or a building service contractor. Those categories of building service providers are in turn defined by reference to the requirements for registration under each category set out in s 17 and s 18 of the BS(R) Act. The effect of one of the transitional provisions set out under s 114 thereof is that an individual, who immediately before the commencement day (29 August 2011) was registered as a registered builder, is to be taken to be registered as both a building service practitioner and a building service contractor until 1 February 2012 (s 114(1)). Further, a partnership, company or other body corporate, which was a registered builder immediately before the commencement day, is to be taken to be registered as a building service contractor until 1 February 2012 (s 114(2)). 18 Pursuant to reg 38 of the Building Services (Registration) Regulations 2011 (WA), the Building Commissioner may extend the period for which a person is taken to be registered under s 114 of the BS(R) Act to be registered as a building practitioner or building contractor for a period of up to three months. 19 The conduct which constitutes a disciplinary matter is set out in s 53 of the BS(R) Act and, in all relevant respects, mirrors with necessary changes in terminology, the grounds for disciplinary action previously prescribed under s 13 of the BR Act. 20 As a consequence, the issues in substance to be determined by the Tribunal under the BS(R) Act are not different to those which previously would have had to have been determined under the BR Act. In this instance the allegation is that Mr and Mrs De Coppi as a registered partnership were negligent as contemplated in s 13(1)(c) of the BR Act, which is now mirrored by s 53(1)(e). That allegation is made to support the basis upon which the matter had been referred to the Tribunal under s 12D of the BR Act, namely that it is alleged that proper cause for disciplinary action exists against Mr and Mrs De Coppi 'as mentioned in section 13(1)(c)' of the BR Act. The matter is now to be taken as being before the Tribunal on the basis of an allegation by the Board that a disciplinary matter exists as described in s 53(1) of the BS(R) Act. Based thereon, the Board seeks that the Tribunal take disciplinary action against both Mr and Mrs De Coppi. (Page 8)
21 The sanctions sought by the Board, as already stated, are the suspension of registration of Mr and Mrs De Coppi as the partners of De Coppi Developments, the imposition of a fine of $10,000 against Mr and Mrs De Coppi as partners in the partnership (which they would accordingly be jointly and severally liable to pay) and a separate fine against Mr De Coppi of $2,500 on the basis that as the registered partner of the partnership Mr De Coppi was responsible for ensuring that the requisite policies of insurance, which are central to the factual allegations made, were in place. 22 In the event that the Tribunal finds that a disciplinary matter exists within the meaning of s 58 of the BS(R) Act, any disciplinary action is to be shaped by what is necessary for the protection of the public and the maintenance of industry standards. The appropriate disciplinary consequences must necessarily depend on what is required to ensure industry standards are maintained, must demonstrate the seriousness with which the offending conduct is viewed, must deter others from acting in the same way and must protect the public. Punishment is not one of the objects of disciplinary proceedings, nor is the exacting of retribution. These principles are as expressed in Paridis v Settlement Agents' Supervisory Board [2007] WASCA 97 (Paradis) at [25]; Re Maraj (a legal practitioner) (1995) 15 WAR 12 at [25] and Builders' Registration Board of Western Australia and Carlino [2007] WASAT 298 at [38].
The material evidence and findings 23 There is no reason to doubt the veracity of any of the information provided to the Tribunal through witness statements and other documentation, none of which has been challenged by Mr and Mrs De Coppi. The Tribunal therefore finds the facts, and where necessary draws the inferences based thereon, as set out below. 24 As already stated, Mr De Coppi obtained registration as a builder in accordance with the BR Act on 21 February 2007. Mr and Mrs De Coppi achieved registration of their partnership under the style De Coppi Developments on 25 July 2007. 25 On 25 July 2010, De Coppi Developments entered into a home building work contract with Ms Joan Margaret Bevin, Ms Ashley Jane Bevin and Mr Murray Bryce Bevin (Bevins) for the construction of an addition to the existing dwelling at No 42 Lofthouse Drive, Leschenault, Western Australia, in consideration for $297,762. On or about 24 July 2010, Mr Murray Bryce Bevin received an invoice from De Coppi (Page 9)
Developments dated 24 July 2010 for $19,354. The invoice was headed 'Progress Draw Invoice' and further stated immediately opposite the invoiced amount 'this draw 6.5% deposit upon signing contracts'. As the contract was signed the following day the invoice asserted an entitlement to payment of $19,354 on that date. 26 On 26 July 2010, Ms Ashley Jane Bevin transferred $19,354 to De Coppi Developments by electronic funds transfer. 27 Ms Ashley Jane Bevin sent Mr De Coppi an email on 26 July 2010 confirming that payment of the deposit had been made and requesting confirmation that it had been received. On 27 July 2010, Mr De Coppi replied by email acknowledging that the payment had been received. 28 The Bevins were not provided with a certificate evidencing that De Coppi Developments had taken out the required compulsory home indemnity insurance in respect of the works as required by Pt 3A of the Home Building Contracts Act 1991 (WA) (HBC Act). De Coppi Developments further did not proceed with the building works and has not refunded the deposit. 29 On 3 November 2010, De Coppi Developments entered into a residential building work contract with Mr Paul Cross and Ms Alison Maree Cross for the construction of a single storey dwelling at Lot 119, Eckersley Way, Australind, Western Australia, in consideration for $620,767. When the contract was signed, Mr De Coppi handed Ms Alison Maree Cross an invoice in an amount of $40,350, which was on the stationery of De Coppi Developments. The invoice was headed 'Progress Draw Invoice' and within the body of the invoice, immediately opposite the amount invoiced stated 'this draw 6.5% deposit upon signing of contract'. The invoice further states 'please note this invoice is due and payable upon signing of contracts'. On 3 November 2010, Mr Paul Cross and Ms Alison Maree Cross paid the invoice by electronic funds transfer. 30 Mr Paul Cross and Ms Alison Maree Cross were not provided with a certificate of insurance as required under the HBC Act. De Coppi Developments did not proceed with the building work and the deposit has not been refunded. 31 We infer from the above facts and find that Mr De Coppi, at the very least, played a significant role in arranging and receiving payment of the deposits in respect of both of the above contracts. That can be found as a fact in relation to the Cross contract, because it was Mr De Coppi who handed the invoice over at the time of signing of the contract. While there (Page 10)
is no evidence of who provided the invoice in relation to the Bevins' contract, the evidence of Ms Ashley Jane Bevin shows that it was Mr De Coppi with whom she communicated to advise that the deposit had been paid by electronic transfer. Further, Mr De Coppi responded to acknowledge that the payment had been received. It is to be noted that the partnership is a small family partnership, the registration of which was dependent upon the prior registration of Mr De Coppi. The partnership relies on the expertise of Mr De Coppi as a builder and in the absence of any evidence from either Mr or Mrs De Coppi, it can be inferred also that he played a significant role in all aspects of the business connected with the carrying out of building work. 32 As will be observed later in these reasons, the carrying out of building works includes steps preparatory to the actual carrying out of building work including steps necessary to ensure that the requisite compulsory home building insurance is in place prior to requiring clients to pay deposits. 33 The requisite compulsory home indemnity insurance must be issued by or on behalf of an insurer who is approved in writing by the Minister responsible for the HBC Act. A letter provided by Mr Peter Gow, the Executive Director of the Department of Commerce, dated 6 July 2011, establishes that the approved insurers during 2010 were QBE Insurance (Australia) Ltd, Calliden Insurance Ltd and Vero Insurance Ltd. 34 The witness statement of Mr Robert Malcolm Loney establishes that Calliden Insurance Ltd did not issue De Coppi Developments with a policy of home indemnity insurance in relation to any building sites in Western Australia during 2010; to similar effect is the witness statement of Ms Wendy Morris in relation to Vero Insurance Ltd. 35 The former Board's representatives had some difficulty in obtaining a witness statement, or indeed any comprehensive response from QBE Insurance (Australia) Ltd, but the material provided to the Tribunal is nevertheless sufficient to establish that this insurer also did not provide any home indemnity insurance in respect of the above two contracts. A response was received from QBE Insurance (Australia) Ltd, in relation to a specific email from the former Board's Compliance Officer, Mr Colin Hatfield, relating to whether there existed a policy of insurance in relation to Lot 119 Eckersley Way, Australind. An email dated 7 January 2011 from Marcel Pablov of QBE Insurance (Australia) Ltd, responded advising: (Page 11)
This facility is currently suspended, ie we are not allowing further registration of jobs, pending a full review of this builder and have sought updated details (financial statements, work and progress reports from the broker). 36 The broker referred to is evidently an organisation known as HIA Insurance Services. Mr John Jardine of that organisation, who is described as Home Owners' Warranty WA State Manager, provided Mr Hatfield with an email dated 18 January 2011 setting out relevant information relating to insurance arrangements between De Coppi Developments and QBE Insurance Ltd. That email relevantly states as follows: | 21/12/09 | | QBE informs us by email that a review of De Coppi's eligibility was required. | | 08/01/10 | | We sent the review request by letter to the De Coppis together with details of the documents/information required for the review. | | 28/07/10 | | QBE informs us by email that De Coppi's eligibility is restricted pending a review and a project application was on hold. | | 18/08/10 | | We advised the De Coppis by email that the project application is on hold pending the review. | | 19/08/10 | | We provide a copy of the 8/01/10 letter to the De Coppis by email. | | 23/09/10 | | We cut and paste an extract of the 8/01/10 letter and send by email to the De Coppis requesting the review documentation. | | 27/10/10 | | We send another request by email to the De Coppis requesting the review documents/information. | (Page 12)
37 In drawing the above inferences, we are mindful that in accordance with the Briginshaw standard, it is necessary to feel an actual persuasion of the occurrence or the existence of the relevant facts: Briginshaw v Briginshaw (1938) 60 CLR 336 at [361] [362]. In the absence of any evidence from either Mr or Mrs De Coppi, we feel that necessary degree of persuasion given the nature of the partnership, the direct evidence concerning Mr De Coppi's involvement in requiring payment in accordance with the invoice presented in relation to the Cross transaction, and Mr De Coppi's involvement in both being the recipient of the request for confirmation of payment in relation to the Bevins' transaction and his response thereto.
Consideration of the Boards' submissions 38 The Board submits that suspension of the partnership registration is appropriate as a remedy to ensure that the partnership does not engage in residential building work or contract for such work until it has met the insurers' requirements for the provision of home indemnity insurance and has taken out policies of home indemnity insurance (or alternatively returned the deposits) for the properties in question. This submission is at variance to the orders sought which make no provision for such conditions, but we consider it would be permissible to give consideration to such relief as the effect would be to limit what would otherwise be an unqualified period of suspension. 39 While a remedy such as that sought by the Board above might be sufficient in one sense to protect the public interest, it overlooks and does not take into account the maintenance of industry standards which in itself is conducive to the protection of the public: see Paradis above. If any period of suspension were to be imposed on this basis, it might have no real operation at all if the partnership were able to meet the conditions suggested. 40 In our view, it is also appropriate to consider whether Mr De Coppi's registration as a builder should be suspended. Having regard to the directions made on 6 July 2011 and the Board's submission that it is open to the Tribunal to suspend Mr De Coppi, he has been put on sufficient (Page 13)
notice that there is a possibility of a disciplinary sanction being imposed of that nature.7 41 The Board has taken into account in its submissions, the need to demonstrate the degree of seriousness of the offence, but it has done so only in relation to its submissions to support the fines sought by it. As previously stated, the Board seeks that penalties be imposed against the partnership by way of a fine of $10,000, in addition to suspension, and against Mr De Coppi by way of a fine of $2,500. 42 The Board's submissions explain that the suspension of Mr De Coppi's registration is not sought because: (a) the conduct of the respondent (the partnership) and Mr De Coppi, while serious does not necessarily amount to conduct warranting suspension; (b) Mr De Coppi has the capacity to use his registration in a manner which would not require him to have personal finances sufficient to support his building activities (ie nominated supervisor); (c) Mr De Coppi is not the building licence holder for the residential building works at the properties in question; and (d) there is no evidence that Mr De Coppi in his personal capacity would not be granted home indemnity insurance. 43 It is then submitted that the Tribunal has power to suspend the registration of Mr De Coppi on its own motion, if satisfied, having regard to all the circumstances that is warranted. The Board relies on s 13(1)(a) of the BR Act to support this submission which is now mirrored by s 59(1) of the BS(R) Act. 44 It appears that the Board's approach to the suspension of both the registration of the partnership and Mr De Coppi respectively, is based upon a view that it is open to the Tribunal to impose remedies other than those expressed in the repealed s 13 of the BR Act, and it would therefore follow, as now expressed under s 58 of the BS(R) Act. 45 It is submitted for the Board that the suspension of a builder's registration can be imposed in either of two ways: the first is as a disciplinary penalty against the 'builder' to ensure that appropriate standards are upheld within the industry; the second, it is submitted, is as a mechanism in a specific case to ensure that the 'builder' in question is restricted from continuing the conduct of which the complaint has been made. It is submitted that the Tribunal does not necessarily need to be (Page 14)
satisfied that the conduct complained of is so serious as to amount to the suspension of the respondent's registration as a penalty. 46 We are unable to accept the second limb of this submission. It is trite that a Tribunal has no inherent jurisdiction (although it has an inherent power in relation to the procedures which it may adopt in giving effect to its jurisdiction). In this instance, under the repealed legislation and that which is now in force, we can only grant those remedies for which there is express provision. Further, in our view, the effect of s 37 of the Interpretation Act 1984 (WA), there being no contrary intention which we can find in the BS(R) Act, is such that the penalties to be imposed in relation to conduct which is the subject of a complaint, as here, which commenced prior to the BR Act being repealed, should be limited to the penalties which could have been imposed prior to the repeal: see Legal Practitioners' Complaints Committee and Segler [2009] WASAT 205 at [37] and following. 47 In any event it is the Board's contention that the registered partnership of Mr and Mrs De Coppi had been negligent in connection with the performance of any building work (s 13(1)(c)) of the BR Act, which in practical terms is to the same effect as the disciplinary matter now described in s 53(1)(e), that the registered building service provider has been negligent in connection with carrying out a building service. 48 It is contended that negligence is established by reason that: a) section 25C of the HBC Act required the partnership to have in place a policy of insurance that complied with Div 2 of the HBC Act in relation to the contracts in question prior to demanding a deposit; b) the partnership did not have in place the requisite policies of insurance prior to demanding a deposit in relation to the contracts; and c) the partnership had failed to retrospectively obtain the requisite policies of insurance for the contracts or, alternatively, return the deposits to the owners; and further d) that Mr De Coppi, as the registered builder of the partnership, was responsible for ensuring that the requisite polices of insurance were in place. (Page 15)
49 Section 25C of the HBC Act provides as follows: 50 'Builder' is defined by s 25A read with s 3 of the HBC Act to include a person registered under the BR Act or a building service contractor. 51 It is to be noted that no offence occurs under either of the above subsections (1) or (2) unless the builder performs residential building work without satisfying the various conditions stated. Under subsection (1) the requisite insurance must be in place before commencing work. No reference is made to any prohibition to the demanding of payment of a deposit. Nevertheless, subsection 25C(2) does establish that even if a builder has arranged the necessary policy of insurance, an offence will be committed if the builder carries out the work without the owner having been furnished with an approved form of certificate to evidence the taking out of that policy, and that certificate must be provided prior to demand from the builder for any payment in relation to the residential building work, including any deposit payable there under. 52 This requirement is, in our view, sufficient to establish that there is a duty on a builder not to demand any payment in relation to a residential (Page 16)
building contract prior to providing the owner with an approved form of certificate that the requisite policy of insurance has been taken out. 53 The allegations of the Board conflate the above provisions in asserting that a deposit is not to be demanded before the requisite insurance is in place. In truth, demand is not to be made before a certificate of insurance is provided to the owner but in substance the effect is much the same, particularly as the evidence shows no insurance was in place and no certificate could have existed. Although the Board expressed breach of a duty in too wide a form, we consider that a breach of the narrower actual duty is encompassed thereby. 54 We are also satisfied that the presentation of invoices to clients at or about the time of signing of contracts, which provide for payment upon signing of the contracts, constitutes the making of a demand for payment. The Shorter Australian Oxford Dictionary, (2nd ed, 2004), defines 'demand' to include 'an insistent and peremptory request, made as of right'. 55 We find on the facts outlined above, that Mr and Mrs De Coppi, trading in partnership, clearly breached that duty. Further, as acknowledged by the Board's submission that Mr De Coppi, as the registered builder, was responsible for ensuring that the requisite policies were in place, we find he is also in breach of that duty and is, in fact, more culpable based on our above findings. 56 Further, the breach of that duty, having regard to the legislative provisions to which we have referred, is clearly one which constitutes a departure from the conduct to be expected from a reasonably competent builder or building services contractor, and accordingly constitutes negligence. 57 It is, of course, necessary that such negligence be 'in connection with carrying out a building service'. The failure to apply for a building licence was held to be an omission in connection with the performance of building work inHawk Construction Services Pty Ltd & Anor v Builders' Registration Board of Western Australia [2001] WADC 262 (Hawk). As stated in Hawk at [39]: Clearly, acts necessary for the carrying out of building projects which are done before the actual performance of the contract can be caught by the section. The real question is whether obtaining the building licence is the type of act envisaged by the section is there a 'sufficient nexus' between the obtaining of a licence and the carrying out of completion of the building work in question. In my view there is. The essence of the building licence is the granting of permission for the work to be (Page 17)
commenced provided that the granting authority is satisfied that a number of preconditions have been complied with. These conditions and the permission sought form part of the essential framework for the carrying out of the work. 58 Having regard to the provisions of Pt 3A of the HBC Act, and in particular s 25C, building work is not to commence until the requisite policy of insurance is in place. Further, the work is not to commence unless the approved form of certificate that the policy of insurance is in place has been provided to the owner and that must occur before any demand is made for any payment under the contract. This is therefore something of which the registered builder, whose registration is necessary to permit the registration of a partnership or corporate entity under the repealed Act, or the nominated supervisor for a building service contractor, must be satisfied before commencing building work. It is, therefore, an essential condition to the starting of work which we consider has a sufficient nexus to the carrying out or completion of building work. 59 We accordingly conclude that Mr and Mrs De Coppi, trading in partnership under the style De Coppi Developments, have been negligent in connection with the carrying out of a building service in relation to both the Bevins and Cross contracts. Further, that as Mr De Coppi was at the relevant times the partner who was a registered builder with responsibility for ensuring compliance with Pt 3A of the HBC Act, we find that a disciplinary matter exists within the meaning of s 58 of the BS(R) Act, in respect of both the partnership and Mr De Coppi personally.
The appropriate disciplinary consequences 60 It is evident that we take a more serious view of the conduct of Mr and Mrs De Coppi than does the Board. The Board's view might be supportable if the only conduct complained of related to the Bevins' transaction, because the negligence in relation to that transaction might be capable of being explicable by way of a mere administrative oversight. 61 In relation to the Bevins' transaction, the email from Mr Jardine of HIA Insurance Services dated 18 January 2011, to which reference has been made above, establishes that QBE Insurance Ltd informed HIA Insurance Services, the brokers for Mr and Mrs De Coppi, who were in turn then informed that their eligibility for home indemnity insurance was restricted pending a review and that a project application was on hold on 28 July 2010. The Bevins' contract was entered into on 25 July 2010. It is therefore possible that the project application to which reference was made was that relating to the Bevins' contract. There is therefore a (Page 18)
possibility that Mr and Mrs De Coppi thought that the obtaining of the requisite policy of insurance was a mere formality up to that point. We say a possibility rather than a probability, because there had been prior notice that a review of eligibility was required and therefore a reasonable and prudent view should have been that there was a risk that insurance would be declined. However, there is no information before the Tribunal on which any measured determination can be made concerning the degree of culpability for the omission in relation to the Bevins' transaction. If that were the only complaint, it would be necessary to take a far more lenient view of the matter than that which we do when considering the matter as a whole. 62 In relation to the Cross transaction, the degree of culpability is at the extreme end of the scale of negligent conduct. It is perhaps surprising that a more serious allegation was not made. Mr and Mrs De Coppi knew without any doubt as from 28 July 2010, that housing indemnity insurance was not being provided to them and would not be provided until they had furnished the financial information needed to enable a review to be conducted by the insurers. They never provided that information and, therefore, it was obvious that they would not be able to procure housing indemnity insurance. The Cross contract was entered into on 3 November 2010, and a payment of $40,350 was required of Mr and Mrs Cross in these circumstances. All of the indications, from the difficulty in ascertaining the actual residential address of Mr and Mrs De Coppi, thus requiring service to be effected by substituted service, their nonparticipation in the proceedings, the failure to refund the Bevins and Cross deposits totalling almost $60,000, the failure to provide financial particulars to insurers and the subsequent failure to be able to arrange insurance and commence the building works, suggest that the very circumstances exist which Pt 3A of the HBC Act is designed to protect against. The required policy of insurance, by virtue of s 25D of the HBC Act must insure against the risk of losing an amount paid by way of a deposit and the risk of loss resulting from noncompletion of the work, by reason of the insolvency or death of the builder, or by reason of the fact that after due search and enquiry, the builder cannot be found. 63 We consider that the circumstances are such that a clear message needs to be conveyed that negligent conduct of this nature in relation to the compulsory home indemnity insurance obligations will be regarded seriously. 64 The remedies which we can apply are limited to those that were available under the BR Act, namely suspension, cancellation and the (Page 19)
imposition of a fine. Given in particular the circumstances in which Mr and Mrs De Coppi neglected to obtain compulsory home indemnity insurance, particularly with regard to the Cross matter, we consider that a period of suspension is warranted in respect of both the registration of the partnership and of Mr De Coppi personally. In our view the appropriate period of suspension in both cases should be three months. Mr and Mrs De Coppi will need to apply after 1 February 2012 for a renewal of their registration. It will then be open to the Board to impose any conditions which they consider appropriate including conditions which preclude actively seeking or negotiating the entry into residential building contracts until proof has been provided that all necessary insurance eligibility requirements have been met, such that the Board is satisfied that compliance with the insurance obligations under Pt 3A of the HBC Act is achievable (s 23 of the BS(R) Act). As a period of suspension of three months will extend slightly beyond 1 February 2012, it is appropriate the suspension be expressed as being up to and including 1 February 2012. 65 We also consider that the fines as sought by the Board are appropriate.
Orders 66 In the circumstances we will cause orders to issue as follows: 1. The application is amended to substitute the Building Services Board as the applicant. 2. The registration of the partnership (De Coppi Developments) of Tony Lino and Tina Ann De Coppi as a registered builder (RB12351) and the deemed registration as a building service practitioner and building service contractor, pursuant to section 114 of the Building Services (Registration) Act 2011 (WA) is suspended from the date of this decision up to and including 1 February 2012. 3. The registration of Tony Lino De Coppi as a registered builder (RB12198) and the deemed continuation thereof as a building service practitioner and building service contractor, pursuant to section 114 of the Building Services (Registration) Act 2011 (WA) is suspended from the date of this decision up to and including 1 February 2012. (Page 20)
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