Jolley v Construction Occupations Registrar
[2025] ACTSC 55
•26 February 2025
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Jolley v Construction Occupations Registrar |
Citation: | [2025] ACTSC 55 |
Hearing Dates: | 14-16 October 2024 |
Decision Date: | 26 February 2025 |
Before: | Mossop J |
Decision: | See [214] |
Catchwords: | BUILDING, ENGINEERING AND RELATED CONTRACTS – BUILDING AND CONSTRUCTION – Rectification orders issued to licensees under Construction Occupations (Licensing) Act 2004 (ACT) – whether rectification order can be issued to nominee of corporate licensee – it can BUILDING, ENGINEERING AND RELATED CONTRACTS – BUILDING AND CONSTRUCTION – Rectification orders – limitation period – order must be issued within 10 years of act that caused contravention – Construction Occupations Registrar issues order within limitation period – application for review – limitation period expires while application for review on foot – whether ACAT precluded from confirming, varying or setting aside and making a new order – it is not |
Legislation Cited: | ACT Civil and Administrative Tribunal Act 2008 (ACT), ss 68, 69, 79, 82, 83(2) Administrative Appeals Tribunal Act 1975 (Cth), s 43(6) Administrative Appeals Tribunal Act 1989 (ACT), s 44(11) Building (General) Regulation 2008 (ACT), ss 31, 32 Building Act 2004 (ACT), ss 42, 51 Building and Construction Legislation Amendment Act 2019 (ACT) Construction Occupations (Licensing) Act 2004 (ACT), ss 6, 7, 8, 16, 17, 27, 28, 29, 30, 31, 33A, 34, 35, 36, 37, 38, 40, 41, 84, 85, 123A, 123C Construction Occupations (Licensing) Regulation 2004 (ACT), ss 19, 42A, Sch 4 item 13 Legislation Act 2001 (ACT), s 139 |
Cases Cited: | Frugtniet v Australian Securities and Investments Commission [2019] HCA 16; 266 CLR 250 House v The King (1936) 55 CLR 499 Jolley v Construction Occupations Registrar & Anor (Administrative Review) [2022] ACAT 47 Jolley v Construction Occupations Registrar & Anor (Administrative Review) [2023] ACAT 65 Jolley v Construction Occupations Registrar & The Owners – Units Plan 3941 (Administrative Review) [2021] ACAT 112 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 R v His Honour Judge Miller and Builder’s Registration Board, ex parte Graham Evans and Co (Qld) Pty Ltd [1987] 2 Qd R 446 Wallaby Grip v QBE Insurance (Australia) Ltd [2010] HCA 9; 240 CLR 444 |
Texts Cited: | Explanatory Statement, Building and Construction Legislation Amendment Bill 2019 (ACT) Explanatory Statement, Construction Occupations (Licensing) Bill 2003 (ACT) The Allen Consulting Group, Occupational Licensing in the ACT Building and Construction Industry: A National Competition Policy Review of the Building Act 1982, the Electricity Act 1971, and the Plumbers, Drainers and Gasfitters Board Act 1982 (Final Report, August 2000) |
Parties: | Andrew Jolley ( Appellant) Construction Occupations Registrar ( First Respondent) Owners – Units Plan No 3941 (Second Respondent) |
Representation: | Counsel S Robertson SC with A Greinke and O Bellhouse-Smith ( Appellant) N Oram ( First Respondent) P A Walker SC with J N Bird (Second Respondent) |
| Solicitors Mills Oakley ( Appellant) ACT Government Solicitor ( First Respondent) Clayton Utz (Second Respondent) | |
File Numbers: | SCA 7 of 2024 SCA 8 of 2024 |
Decision Under Appeal: | Tribunal: ACT Civil and Administrative Tribunal Before: Senior Member Orlov and Senior Member Professor Foley Date of Decision: 1 December 2023 Case Title: Jolley v Construction Occupations Registrar Court File Number: AT 21/2021 |
MOSSOP J:
Introduction
1․These proceedings involve two separate appeals from an order of the ACT Civil and Administrative Tribunal (ACAT) made on 1 December 2023. The order required Mr Andrew Jolley to comply with a “rectification order” in relation to several building defects associated with a residential apartment building known as “Manhattan on the Park”. The order was made by the Construction Occupations Registrar (the Registrar) pursuant to s 38 of the Construction Occupations (Licensing) Act 2004 (ACT) (COLA).
2․After the ACAT made its decision, Mr Jolley filed an internal appeal pursuant to s 79 of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (ACAT Act) and that appeal, and an appeal by the Owners Corporation for the building, were removed into this court under s 83(2) of the ACAT Act.
Background
3․Between 2012 and 2013, Manhattan on the Park was built. It is a residential apartment complex on Bunda Street near Glebe Park in the centre of Canberra. According to the Certificate of Occupation and Use dated 13 August 2013, work commenced on the premises on 10 May 2012, and the date of certification indicates that it was ready for occupation and use on 13 August 2013. Chase Building Group Pty Ltd (Chase) “managed” the building work necessary to construct the building, but did not perform any building work itself, instead arranging subcontractors to do so. Chase did, however, hold a Class A builder’s licence under s 28 of the COLA during the building of Manhattan on the Park, as did Mr Jolley personally.
4․Chase’s Class A building licence expired on 1 July 2016 and was not renewed. The company was deregistered on 18 October 2017 following a members’ voluntary winding up, was reinstated on 22 April 2021, and was deregistered a second time in the early months of 2024.
5․On 5 December 2018, solicitors for the Owners Corporation of the units plan wrote to the Registrar noting Chase’s deregistration and urged the Registrar to issue a rectification order in relation to the building to Mr Jolley and to certain others.
6․On 19 March 2020, the Registrar gave a notice of intention to make a rectification order under s 34(2) of the COLA to Mr Jolley.
7․On 18 March 2021, the Registrar issued a rectification order to Mr Jolley pursuant to s 38 of the COLA, requiring him to rectify several defects associated with the Manhattan on the Park building, those defects being:
(a)Defect 1 – Balcony Slab Cracking Defects;
(b)Defect 2 – Balcony Tiling Defects;
(c)Defect 4 – Delamination of Balustrade Glass Panels;
(d)Defect 5 – Loose Balustrade Cap Railings;
(e)Defect 6 – Basement Cracking Defects;
(f)Defect 7 – Water Ingress into Internal Spaces; and
(g)Compliance and Fire Safety Concerns.
8․Mr Jolley applied to the Tribunal for review of the Registrar’s decision on 14 April 2021.
9․Three separate substantive oral hearings were held by the Tribunal in relation to Mr Jolley’s review application. The first was a hearing in response to an application made on 15 June 2021 for a preliminary determination of whether the rectification order issued to Mr Jolley was invalid. The basis for this alleged invalidity advanced by Mr Jolley was that the notice of intention to make a rectification order did not identify any failure of supervision on the part of Mr Jolley in relation to construction services alleged to have been provided otherwise than in accordance with the COLA or an operational Act, and that the notice of intention referred to the 2013 edition of the Building Code of Australia instead of the 2010 edition. The application was heard on 26 August 2021. On 19 November 2021, Senior Member Prof Foley of the Tribunal determined that the rectification order was not invalidated on either of those grounds: Jolley v Construction Occupations Registrar & The Owners – Units Plan 3941 (Administrative Review) [2021] ACAT 112.
10․The second Tribunal hearing arose from a further application by Mr Jolley dated 29 March 2022 seeking to determine whether the Registrar had power to issue a rectification order to a nominee of a corporate licensee, acting in that capacity, in respect of construction work carried out or supervised by the licensee prior to the commencement of the Building and Construction Legislation Amendment Act 2019 (ACT). Those amendments, inter alia, gave the Registrar power to make a rectification order concerning directors of corporate licensees, including where, before or after a rectification order is made, the licensee becomes the subject of a winding up order, or has a controller or administrator appointed, or is deregistered. This was heard on 11 May 2022. On 8 June 2022, Presidential Member McCarthy determined that a rectification order can be issued to a nominee of a corporate licensee, including under the COLA as in force prior to the 2019 legislative amendments: Jolley v Construction Occupations Registrar & Anor (Administrative Review) [2022] ACAT 47.
11․The third Tribunal hearing consisted of a merits review of the Registrar’s decision and whether it should be confirmed, varied, or set aside. The Tribunal agreed with Presidential Member McCarthy’s earlier decision and adopted it as the basis for its decision: Jolley v Construction Occupations Registrar & Anor (Administrative Review) [2023] ACAT 65 (at [17]). It identified (at [78]) the issues that it needed to determine:
(a)whether the construction service provided by Chase – doing or supervising building work – contravened section 42 of the Building Act 2004 (ACT);
(b)if so, whether the construction service provided by Mr Jolley – supervision of the construction service provided by Chase – contravened section 31(2) of the COLA;
(c)if so, whether it is appropriate to make a rectification order in relation to Mr Jolley considering:
(i) any injury, loss or damage caused, or that could have been caused, by Mr Jolley’s contravention;
(ii) how the proposed rectification order may affect people affected [sic] by the contravention(s): and
(iii) anything else that is relevant.
12․The ACAT gave its decision and reasons on 26 October 2023. The reasons comprise 350 paragraphs and are detailed and clearly structured. The order made was that the decision of the Registrar be varied by requiring Mr Jolley to arrange and pay for an appropriately licensed entity to rectify Defect 2 (Waterproofing and Tiling of Balconies), Defect 4 (Delamination of Glass Balustrade Panels) and Defect 6 (Basement Slab Cracking). Defect 1 had not been pursued by the Owners Corporation as a defect separate to Defect 2. The ACAT decided that rectification of Defect 5 (Loose Balustrade Cap Railings) and Defect 7 (Water Ingress Into Internal Spaces) should not be required as part of the rectification order. It then ordered that the parties were to confer and attempt to agree on the terms of a rectification order in accordance with its reasons.
13․Further submissions were made concerning the form of the order. The actual rectification order was made on 1 December 2023 and some further reasons were given in relation to the form of the order and the issue of costs. Both Mr Jolley and the Owners Corporation of the units plan applicable to the building appeal from that order.
14․In these reasons, references to the reasons given by the ACAT are to the reasons given on 26 October 2023 unless otherwise stated.
15․Because the grounds of appeal in Mr Jolley’s appeal are lengthy and detailed, and because there is also an appeal by the Owners Corporation and two notices of contention, it is useful first to describe the substance of those documents.
Mr Jolley’s appeal (SCA 8 of 2024)
16․Mr Jolley has appealed from the Tribunal’s orders on 11 separate grounds. Although the grounds are lengthy, most of the factual conclusions reached by the Tribunal about the nature of the defects and the manner in which Mr Jolley acted as a nominee of the builder were not challenged.
17․The grounds of appeal can be separated into two categories. Grounds 1, 2 and 2A argue that the Tribunal’s order was made without power, and that this court accordingly has no power to make an order in replacement of the Tribunal’s order. Grounds 3 to 10 argue that even if the Tribunal’s order was made with power to do so, the Tribunal’s finding that it was satisfied of the matters of which it was required to be satisfied by s 35(1)(c) of the COLA was infected with error.
18․Mr Jolley’s appeal was initially brought before the Tribunal pursuant to s 79(3) of the ACAT Act. However, in lieu of constituting an “appeal tribunal”, the Tribunal exercised its jurisdiction to remove the appeal to this court pursuant to s 83(2) of the Act on 25 January 2024.
19․Of the 11 grounds of appeal, Ground 6 was not pressed. The remaining 10 grounds are as follows:
Rectification orders unavailable against nominees in their capacity as such
1 The Tribunal erred in finding ([2022] ACAT 47 at [23]) that a rectification order under Part 4 of the Construction Occupations (Licensing) Act 2004 (ACT) (COLA) can validly be issued to a “nominee” in connection with a construction service provided by the nominee in his or her capacity as such. The Tribunal should have found that the power to make a rectification order under Part 4 of the COLA is only available to be exercised in connection with a “construction service” provided by a licensee or former licensee in his, her or its capacity as such (see COLA section 34(1)(a)).
No power to make substitute decision after 10-year limitation period
2 The Tribunal erred in finding ([2023] ACAT 65 at [72]) that s 68(3) of the ACT Civil and Administrative Tribunal Act 2008 (ACT) authorised the Tribunal to make a substitute decision for the decision under review that the original decision-maker was not, at the time of the making of the substitute decision by the Tribunal, empowered to make by reason of section 35(5) of the COLA (rectification orders generally to be made within 10 years of relevant act or certificate).
Mr Jolley did not provide the relevant construction service
2A The Tribunal erred in assuming or finding for the purposes of s 35(1)(b) of the COLA that Mr Jolley provided the construction service, or part of the construction service, to which the notice given to him under s 34 of the COLA (Notice of Intention) related. The Tribunal should have found that:
(a) the construction service to which the notice related was building work associated with “Manhattan on the Park”;
(b) Mr Jolley did not provide that service.
In the alternative, the Tribunal should have found that:
(c) the conduct of Mr Jolley alleged by the Notice of Intention did not constitute the “prov[ision]” of a construction service;
(d) in the premises, Mr Jolley did not provide the construction service, or part of the construction service, to which the notice relates for the purposes of s 35(1)(b) of the COLA.
“Supervis[ion]” does not require actual observance of work
3 The Tribunal erred in finding ([2023] ACAT 65 at [161]) that “supervis[ion]” of construction services for the purposes of section 31(2) of the COLA cannot be performed without the nominee observing the execution or performance of work (as distinct from, for example, putting in place adequate structures and procedures for management and supervision of construction work).
COLA does not impose a self-executing obligation to rectify non-compliant work
4 The Tribunal erred in finding ([2023] ACAT 65 at [168]) that a nominee’s function under section 31(1)(b) of the COLA to ensure that relevant construction services comply with the Building Act extends to taking “appropriate steps” to correct work that was not carried out in accordance with that Act (as opposed to ensuring that relevant construction services comply with the Building Act when those services are being performed with any failure to do so being subject to the potential criminal and civil consequences contemplated by the COLA).
Specific errors in relation to Waterproofing Work (Defect 2)
5 The Tribunal erred in finding ([2023] ACAT 65 at [112]) that the Waterproofing Specification (Exhibit PJ5) did not apply to external balconies (see Exhibit PJ5 at 6, second dash point, second line).
6 [Not pressed]
7 The Tribunal erred in finding ([2023] ACAT 65 at [153], [155]) that the fact that building work relating to waterproofing of external balconies (Waterproofing Work) was not carried out in accordance with the Bostik Specification, the Dampfix Gold Technical Data Sheet and AS 4654.2 supported (without more) a conclusion that the Waterproofing Work had not been carried out in a “proper and skilful way” for the purposes of s 42(1)(c) of the Building Act 2004 (ACT) (Building Act) in circumstances where:
(a) the Waterproofing Specification required the work relating to external balconies to be carried out in accordance with AS3740;
(b) AS3740 was a relevant rule or guideline published by Standards Australia for the purposes of cl 31(b) of the Building (General) Regulation 2008 (ACT) and therefore, by reason s 42(2) of the Building Act, was a consideration to be taken into account by the Tribunal in deciding whether the Waterproofing Work was carried out in a proper and skilful way for the purposes of s 42(1)(c) of the Building Act;
(c) the Tribunal did not take AS3740 into account in deciding whether the Waterproofing Work was carried out in a “proper and skilful way” and made no finding as to whether the Waterproofing Work was carried out in accordance with AS3740.
Errors in relation to delamination of glass balustrade panels (Defect 4)
8 Having correctly found ([2023] ACAT 65 at [246]) that:
(a) there was a latent defect in glazing materials used in construction; and
(b) supervision of the installation of those glazing materials would not have alerted anyone to the fact that the glass was defective,
the Tribunal erred in finding ([2023] ACAT 65 at [252]-[253]) that Mr Jolley contravened s 31(2) by failing to ensure that Chase corrected the defective glass after the defect in it became manifest. The Tribunal should have held that, on its findings ([2023] ACAT 65 at [246]), there was no failure of supervision as a causal factor in relation to any contravention of the Building Act and therefore no contravention by Mr Jolley of the COLA (see [2023] ACAT 65 at [245]).
Errors in concluding that it was “appropriate” to make a rectification order
9 The Tribunal erred in finding ([2023] ACAT 65 at [322]) that the fact that the building work the subject of the Tribunal’s decision was not carried out by Mr Jolley himself was “irrelevant” to the question of whether it is appropriate that a rectification order be made requiring Mr Jolley to take specified action.
10 The Tribunal erred in finding ([2023] ACAT 65 at [331]) that it was appropriate to make a rectification order and ought to have concluded, in the circumstances, that it was not appropriate to make a rectification order.
20․The ultimate question raised by ground 10 is not dealt with in these reasons as it addresses issues which require further directions.
Owners Corporation appeal (SCA 7 of 2024)
21․The Owners Corporation also appealed from the decision of ACAT. The grounds of appeal are:
Ground 1: Costs
The question of law involved is as follows:
Does the Tribunal have a discretion to make a costs order under section 48(1) of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (ACAT Act) otherwise than in accordance with the types of orders and circumstances specified in section 48(2)?”
…
[T]he Tribunal erred in determining that section 48(1) of the ACAT Act does not provide the Tribunal with a general discretion to award costs. The Tribunal’s reasoning for this determination is set out in the following paragraphs of written reasons provided in Proceeding AT21/2021 (Primary Proceeding):
·paragraphs [345] to [350] of the Tribunal’s reasons for decision dated 26 October 2023 (Final Decision); and
·paragraph [22] of the Tribunal’s reasons for orders dated 1 December 2023 (Final Orders).
Ground 2: Scope of orders
The question of fact involved is as follows:
Should the Tribunal have included each of Units 702, 803, 908, 1506 and 1511 in paragraph 7 of the Rectification Order on the basis that there was evidence before the Tribunal that the balconies to those units were also defective and required rectification?
…
[T]he Tribunal erred in fact in failing to include units 702, 803, 908, 1506 and 1511 (Affected Units) in paragraph 7 of the rectification order contained in the Final Orders (Rectification Order) concerning the rectification of balcony waterproofing and tiling defects.
(Footnote omitted.)
Registrar’s notice of contention (SCA 8 of 2024)
22․The Registrar filed a notice of contention which identified that the order should be confirmed on the following grounds:
The question as to whether s 35(5) of the Construction Occupations (Licensing) Act 2004 (ACT) was satisfied was required to be answered by the Tribunal as at the date that the decision under review was made.
Grounds
1. The Tribunal held, at [73], that the Tribunal’s power to make an order under s 68(3) of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (ACAT Act) was unaffected by the requirement that the Registrar may only make a rectification order within 10 years of the day on which a certificate of occupancy was issued under the Construction Occupations (Licensing) Act 2004 (ACT) (COLA), ss 35(5) and 35(6).
2. The Tribunal was correct in this regard.
3. In the alternative, if the Tribunal erred in this regard, on the proper construction of the COLA, when determining whether the proviso contained in s 35(5) applies to the power to make a rectification order under s 35(2) of the COLA, the Tribunal was required to consider the state of affairs as they existed as at the date the Registrar made a rectification order (being the decision under review), and not as at the date on which the Tribunal made an order under s 68(3) of the ACAT Act.
Owners Corporation’s notice of contention (SCA 8 of 2024)
23․The Owners Corporation was given leave to file a notice of contention. The grounds for which leave was given were:
The Second Respondent contends that the following question of fact or law was incorrectly decided by the Tribunal in the order appealed from:
1. Question of law
Does a nominee provide a construction service contrary to s31 of the Construction Occupations (Licensing) Act 2004 (ACT) (COLA) for the purposes of s35(1)(c) of the COLA simply because the building work for which the nominee is responsible contravenes s42 of the Building Act 2004 (Building Act)?
Grounds
1. The Tribunal erred:
a) in finding at [39] that, “in most circumstances” proof that the construction service for which the nominee is responsible does not comply with s42 of the Building Act will be sufficient to establish that the nominee has provided a construction service contrary to s31(2)(b) of the COLA;
b) in finding at [245]-[246] that, it is necessary to identify some particular failure of supervision as a causal factor when determining whether the nominee has failed to comply with its obligation in s31(2)(b) of the COLA to ensure the building work is compliant with s42 of the Building Act; and
c) to the extent that it found, at [167], that a particular failure of supervision must be identified and shown to result in non-compliant building work in order for a contravention of s31(2)(b) of the COLA to be established.
2. The Tribunal should have found that:
a) Mr Jolley contravened s31(1)(b) in conjunction with s31(2)(b) of the COLA once the Tribunal was satisfied that the building work for which he was responsible did not comply with s42 of the Building Act;
b) it is not necessary for the Registrar or the Tribunal to identify any particular acts or omissions on the part of the nominee that caused, contributed, or resulted in the defective work (causative factors) when determining whether the nominee has contravened s31(2)(b) of the COLA;
c) any causative factors are matters which are relevant (along with other factors) to whether the discretion to issue a rectification order to a nominee should be exercised; and
d) the fact that Mr Jolley did not cause the defective work to be corrected when he had actual or constructive knowledge of the manifestation of the defective work are matters which make it appropriate to exercise the discretion to issue the order to him.
2. Alternate basis for confirming the order
The Second Respondent contends that the order of the Tribunal should be confirmed on the following ground.
The Tribunal should also have found that the discretion to issue a rectification order to Mr Jolley arose because he had provided a construction service contrary to s31(1)(a) in conjunction with s31(2)(a) of the COLA.
Grounds
4. The Tribunal found at [161] that
a) Mr Jolley did not personally supervise any of the work on a day to day basis or otherwise; and
b) the “adequacy of the supervision Mr Jolley provided…does not arise because he provided none”.
5. The Tribunal was correct in its finding in 4a) but it erred in its finding in 4b) to the extent that it found that the inadequacy of Mr Jolley’s supervision was not relevant to whether a rectification order could be issued to him.
6. In the light of its finding in 4a) the Tribunal should have found that:
a) Mr Jolley provided a construction service contrary to s31(2)(a) of the COLA;
b) That constituted a separate and additional ground that enlivened the power to issue a rectification order to him under s35(1)(c)(i) of the COLA; and
c) the inadequacy of Mr Jolley’s supervision was otherwise relevant to the exercise of the discretion because it meant that he did not cause defective work to be corrected when the effect of the defects manifested.
24․In relation to paragraphs 2(d) and 6(c), Mr Jolley contended that it was not appropriate to determine these grounds which related to the ultimate appropriateness of the making of a rectification order without further submissions from him. The court indicated that any determination of those issues would be the subject of further directions.
The nature of the appeals
25․Each appeal was removed from the ACAT into the Supreme Court in accordance with orders made by the ACAT on 25 January 2024 pursuant to s 83(2) of the ACAT Act. Pursuant to s 82, the Appeal Tribunal, and hence the court on a removed appeal, may deal with an appeal either as a new application or as a review. No party contended that the appeal should be dealt with as a new application. I consider it appropriate to deal with it as a review.
26․Appeals under s 79 extend to questions of fact and questions of law. For the most part, the notices of appeal are sufficient to identify matters falling into both of those categories. The written submissions filed on behalf of the Owners Corporation and Mr Jolley raised the adequacy of some of the grounds in the respective notices of appeal. In each case, the grounds were sufficient to disclose a question of fact or a question of law, or adequate to allow such a question to be derived.
27․It is not clear, however, in the absence of a House v The King (1936) 55 CLR 499 error, that the manner in which a discretion is exercised gives rise to a question of fact or a question of law on appeal. As consideration of ground 10 of Mr Jolley’s appeal and grounds 2(d) and 6(c) of the Owners Corporation’s notice of contention are to be the subject of further directions, that issue does not need to be addressed at this stage.
Introduction to grounds 1, 2 and 2A
28․These grounds raise legal issues which are fundamental to the capacity of the Registrar to make a rectification order or the capacity of the ACAT to make a rectification order in substitution of the order of the Registrar when it did. They do not require an examination of the factual findings of the Tribunal in any detail. If Mr Jolley succeeds on any of these grounds, then the rectification order made by the ACAT must be set aside and it will not be necessary to determine the balance of the grounds of appeal.
Statutory provisions
29․The Registrar made the decision on 18 March 2021. At that point, the relevant version of the COLA was republication 56 (effective 25 June 2020 – 22 June 2021). In the course of submissions, counsel for the appellant principally referred to republication 26, the version of the Act that was applicable at the time of the grant of the certificate of occupancy for the building, but noted that, except in certain minor respects, the issues in the present case did not turn upon which version of the Act was applied. The role and obligations of a nominee of Chase are best understood by reference to the terms of the COLA at the time of the grant of the certificate of occupancy, namely republication 26. The most relevant provisions of the COLA at that time were as follows.
Part 2Important concepts
6What is a construction practitioner?
(1)A construction practitioner is an entity that provides, has provided or proposes to provide a construction service.
(2)A construction service is the doing or supervision of work in a construction occupation.
Note Supervise—see dict.
(3)For this Act, the regulations may—
(a)prescribe work as work in a construction occupation; and
(b)exclude work from a construction occupation.
7What is a construction occupation?
Each of the following is a construction occupation:
(a)asbestos assessor;
(b)asbestos removalist;
(c)builder;
(d)building assessor;
(e)building surveyor;
(f)drainer;
(g)electrician;
(h)gasfitter;
(i)plumber;
(j)plumbing plan certifier;
(k)works assessor.
…
8What is a builder?
(1)A builder is an entity that provides, has provided or proposes to provide a building service.
(2)A building service is the doing or supervising of building work, other than building work that involves handling asbestos or disturbing friable asbestos.
Note Building work—see the Building Act 2004, section 6.
(3)In this section:
disturbs friable asbestos—see the Building Act 2004, section 10B.
friable asbestos—see the Building Act 2004, dictionary.
…
16What is an operational Act?
Each of the following is an operational Act:
· Building Act 2004
· Dangerous Substances Act 2004
· Electricity Safety Act 1971
· Gas Safety Act 2000
· Planning and Development Act 2007
· Unit Titles Act 2001
· Utilities Act 2000
· Water and Sewerage Act 2000.
Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act, s 104).
…
Division 3.1 General
17Licence applications
(1)An individual, corporation or partnership may apply to the registrar to be licensed in a construction occupation or, for a construction occupation that is divided into classes, in an occupation class.
Note 1 If a form is approved under s 128 for an application, the form must be used.
Note 2 A fee may be determined under s 127 for this section.
Note 3 An entity’s entitlement to apply for a licence may be affected by a disqualification (see s 98 (3)).
(2)However, a corporation or partnership may apply under subsection (1) in relation to a construction occupation or occupation class only if the regulations allow a corporation or partnership to be licensed in the occupation or class.
(3)The regulations may prescribe the requirements for applications.
(4)If this Act or the regulations prescribe requirements for applications, the registrar need not consider an application that does not comply with the requirements.
…
Division 3.2 Nominees
27Meaning of mandatory requirement for div 3.2
In this division:
mandatory requirement of the nominee means a written requirement by the nominee that the corporation or partnership do something, or not do something, in compliance with, or to achieve compliance with, this Act or an operational Act.
28Nominees of corporations and partnerships
(1)A corporation or partnership is eligible to be licensed only if it complies with subsection (2) or (3).
(2)The corporation or partnership complies with this subsection if—
(a)it has a single nominee appointed by it; and
(b)the nominee is responsible for the supervision of the construction services provided by it.
(3)The corporation or partnership complies with this subsection if—
(a)it has 2 or more nominees appointed by it; and
(b)each nominee is responsible for the supervision of particular construction services provided by it; and
(c)there is a written record of the construction services each nominee is responsible for supervising; and
(d)between them, the nominees are responsible for the adequate supervision of all the construction services to be provided by the corporation or partnership.
(4)A corporation or partnership may, in writing, appoint an eligible individual to be a nominee.
(5)If the nominee is to be responsible for the adequate supervision of only some of the construction services to be provided by the corporation or partnership, the appointment must state the services for which the nominee is responsible.
(6)For subsection (4), an individual is an eligible individual if the individual—
(a)is eligible under the regulations to be appointed as a nominee; and
(b)is licensed in the construction occupation and occupation class (if any) appropriate for each of the construction services for which the individual is to be responsible; and
(c)agrees in writing to the appointment.
(7)A nominee of a corporation or partnership automatically stops being a nominee if the nominee—
(a)ceases to be eligible under the regulations to be appointed as a nominee; or
(b)ceases to be licensed in a construction or occupation class (if any) appropriate for any of the construction services for which the nominee is responsible.
29Resignation of nominee
(1)A nominee of a corporation or partnership may resign his or her appointment only with the registrar’s approval.
(2)The registrar may approve the resignation of the nominee only if satisfied that—
(a)the corporation or partnership has refused to comply with a mandatory requirement of the nominee; or
(b)the nominee cannot exercise his or her functions because of mental or physical incapacity; or
(c)the nominee, or entity that appointed the nominee, has arranged for another nominee to take over the nominee’s functions; or
(d)it is otherwise appropriate to approve the resignation.
30Revocation of nominee’s appointment
(1)A corporation or partnership may revoke a nominee’s appointment only with the registrar’s approval.
(2)The registrar may approve the revocation of the nominee’s appointment only if satisfied that—
(a)the nominee cannot exercise his or her functions because of mental or physical incapacity; or
(b)the nominee, or entity that appointed the nominee, has arranged for another nominee to take over the nominee’s functions; or
(c)it is otherwise appropriate to approve the resignation.
31Role of nominees
(1)A nominee of a licensed corporation or partnership has the following functions:
(a)to supervise the construction services of the corporation or partnership for which the nominee is responsible (the relevant construction service);
(b)to ensure that the relevant construction services comply with this Act and the operational Acts.
(2)The nominee commits an offence if the nominee fails to—
(a)adequately supervise the relevant construction services; or
(b)ensure that the relevant construction services comply with this Act and the operational Acts.
Maximum penalty: 50 penalty units.
(3)Subsection (2) does not apply to a failure of a nominee of a corporation or partnership (the nominee’s firm) if—
(a)the nominee had given the nominee’s firm a mandatory requirement in relation to the matter that made up the failure; and
(b)the nominee had given the registrar a copy of the mandatory requirement; and
(c)the failure would not have happened if the mandatory requirement had been complied with.
(4)The licensed corporation or partnership commits an offence if the nominee fails to—
(a)adequately supervise the relevant construction services; or
(b)ensure that the relevant construction services comply with this Act and the operational Acts.
Maximum penalty: 50 penalty units.
(5)An offence against this section is a strict liability offence.
…
84Certain entities not to provide construction services
(1)A person commits an offence if the person—
(a)provides a service (whether as an employee or otherwise) in a construction occupation or occupation class; and
(b)either—
(i) is not licensed in the occupation or class; or
(ii) if an endorsement on the licence is required for the person to be authorised to provide the service provided and the licence does not have that endorsement.
Maximum penalty: 50 penalty units.
(2)Each partner in a partnership commits an offence if the partnership—
(a)provides a service in a construction occupation or occupation class; and
(b)either—
(i) is not licensed in the occupation or class; or
(ii) if an endorsement on the licence is required for the partnership to be authorised to provide the service provided and the licence does not have that endorsement.
Maximum penalty: 50 penalty units.
(3)This section does not apply if—
(a)an individual provides the service, whether directly or for an entity; and
(b)the individual is working under the supervision of a licensee whose licence authorises the provision of the service; and
(c)the licensee is not required by a condition or endorsement on the licence to provide the service as an employee or under supervision; and
(d)a regulation allows the service to be provided by an individual without a licence if provided under the supervision of a licensee.
(4)It is a defence to a prosecution for an offence against subsection (2) if the partner proves that—
(a)the partner did not know about the contravention of the subsection involved in the offence; and
(b)either—
(i) the partner took reasonable precautions and exercised appropriate diligence to avoid the contravention; or
(ii) the partner was not in a position to influence the partnership in relation to the conduct involved in the contravention.
(5)An offence against this section is a strict liability offence.
85Allowing unlicensed people to provide construction service
(1)A person commits an offence if—
(a)the person engages someone else (the worker), or allows an employee (also the worker), to provide a construction service for the person; and
(b)the worker is not licensed to provide the service; and
(c)the person is reckless about whether the worker is licensed to provide the service.
Maximum penalty: 50 penalty units.
(2)Each member of a partnership commits an offence if—
(a)a partner engages someone else (the worker), or allows an employee of the partnership (also the worker), to provide a construction service for the partnership; and
(b)the worker is not licensed to provide the service; and
(c)the partner is reckless about whether the worker is licensed to provide the service.
Maximum penalty: 50 penalty units.
(3)This section does not apply to an entity that provides a service if—
(a)the service is provided under the supervision of a licensee; and
(b)the licensee is not required by a condition or endorsement on the licence to provide the service as an employee or under supervision; and
(c)a regulation allows the service to be provided by an individual without a licence if provided under the supervision of a licensee.
(4)It is a defence to a prosecution for an offence against subsection (2) if the partner proves that—
(a)the partner did not know about the contravention of the subsection involved in the offence; and
(b)either—
(i) the partner took reasonable precautions and exercised appropriate diligence to avoid the contravention; or
(ii) the partner was not in a position to influence the partnership in relation to the conduct involved in the contravention.
30․The provisions of the COLA most relevant to the making of a rectification order are those in republication 56, the version of the COLA in force at the time the Registrar made the rectification order. These are as follows. It should be noted that there was a difference between the parties about the applicability of example 4 to s 34 in the present circumstances.
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 Act 2007 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.
34Intention to make rectification order
(1)This section applies if the registrar believes on reasonable grounds that—
(a)a licensee or former licensee (the entity) has provided a construction service otherwise than in accordance with this Act or an operational Act; and
(b)it may be appropriate to make a rectification order.
Examples of licensee or former licensee
1a licensed builder does building work
2a drainer who was licensed, does sanitary drainage work while unlicensed
3a licensed gasfitter does gasfitting work and then becomes unlicensed
4a licensed plumber, who is the nominee of a licensee that is a corporation, does or supervises plumbing work as the nominee of the licensee
Note If deciding under this section whether it may be appropriate to make a rectification order, the registrar must consider the considerations mentioned in s 36.
(2)The registrar may give the entity, and the land owner in relation to whose land the construction service was provided, a written notice that—
(a)gives details of the rectification order that may be made; and
(b)explains why the registrar intends to make the order; and
(c)invites submissions about the making of the order within the time stated in the notice that is not less than 5 working days after the day the entity or land owner receives the notice; and
(d)states that—
(i) the registrar will not make a rectification order if—
(A)the registrar is not satisfied it is appropriate to make a rectification order in relation to the entity; or
(B)if the registrar accepts a rectification undertaking from the entity—the entity complies with, and does not withdraw, the undertaking; and
(ii) if the registrar does not make a rectification order the Territory may authorise someone else to do the things stated in this notice, and the entity will have to pay for the things to be done.
(3)A submission mentioned in subsection (2) (c) may include a rectification undertaking in relation to the construction service mentioned in the written notice.
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; and
(d)if the registrar has accepted a rectification undertaking from the entity in response to the notice—the entity has failed to comply with, or has withdrawn, the undertaking.
Note 1 If deciding under this section whether it is appropriate to make a rectification order, the registrar must consider the considerations mentioned in s 36.
Note 2 A 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)If the registrar makes an order under section 38 in relation to an entity, the registrar may also make an order under section 38 in relation to—
(a)if the entity is a corporation—a director of the entity; or
(b)if the entity is a partnership—
(i) a partner of the partnership; or
(ii) a director of a corporation that is a partner of the partnership.
(4)If the entity has failed to comply with, or has withdrawn, the rectification undertaking, the registrar may make an order under section 38 in relation to the entity without giving the entity another notice under section 34.
(5)However, the registrar may only make an order under section 38 in relation to the entity before the latest of the following:
(a)if the registrar first became aware of the act that caused the contravention within 6 months before the end of the 10-year period—1 year after the registrar became aware of the act; or
(b)if the registrar gave the entity a notice under section 34 before the end of the 10-year period—1 year after the entity was given the notice; or
(c)in any other case—the day the 10-year period ends.
(6)In this section:
10-year period means the period starting on the later of the following days:
(a)the day the act that caused the contravention happened or ended;
(b)the day any certificate was issued by the registrar under any of the following provisions of the Building Act 2004 in relation to the building the subject of the construction service:
(i) section 69 (Certificates of occupancy);
(ii) section 71 (2) (Certificate for building work involving demolition);
(iii) section 72 (2) (Certificate for building work involving erection of structure);
(iv) section 73 (Certificates of occupancy and use for owner‑builders).
36Considerations for deciding when rectification order appropriate
(1)In deciding whether it is, or may be, appropriate to make a rectification order in relation to an 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
1reduction 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
(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 Act 2007 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.
37Rectification order inappropriate
(1)This section applies if the registrar—
(a)has given an entity (other than the land owner) notice under section 34 (Intention to make rectification order); and
(b)after considering any submissions made within the time mentioned in the notice, is satisfied that the entity is contravening or has contravened this Act or an operational Act; and
(c)is not satisfied that it is appropriate to make a rectification order in relation to the entity, because—
(i) the registrar is satisfied on reasonable grounds that the entity is not able to do a thing in the way that would be required by the order; or
(ii) of the relationship between the entity and the land owner; and
(d)is satisfied that the act that caused the contravention happened, or ended, less than 10 years before the day the Territory proposes to authorise someone under this section.
(2)The Territory may, in writing, authorise a licensee to enter the land where the work to which the notice under section 34 related was to be done and—
(a)take the action stated in the notice; or
(b)start or finish the work stated in the notice.
(3)The authorised licensee must—
(a)give the owner of the land written notice that the licensee intends to enter the land at least 24 hours before the licensee enters the land; and
(b)give a copy of the notice to the entity before entering the land.
(4)However, the Territory must not authorise someone until—
(a)if the entity applied for review of the decision to authorise a licensee under this section within the period for review (the review period) of the decision allowed under the ACT Civil and Administrative Tribunal Act 2008—the review is finally disposed of; or
(b)the review period has ended.
(5)The entity is liable for the reasonable cost incurred in doing anything under subsection (2) and the cost is taken to be a debt owing to the Territory.
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.
Example—stated action
rectified work must comply with a stated performance requirement of the Building Code of Australia
(2)The rectification order may also require the entity to give the registrar written information about a thing required to be done under the order.
Examples
1a structural engineer’s report about whether rectified work complies with relevant structural standards
2certification from a building certifier that finished work complies with this Act
(3)However, a rectification order need not state how a thing required to be done under the order is to be done.
Example
A rectification order requires an entity to rectify a building so that it complies with a stated performance requirement of the building code. The rectification order need not include details of how the work is to be undertaken or how the building may need to be redesigned or altered to comply with the requirement.
(4)Subsection (5) applies if—
(a)the order requires the entity to do a thing; and
(b)the entity—
(i) is not licensed, authorised or qualified to do the thing; or
(ii) if a licence, authorisation or qualification is not required to do the thing—does not have appropriate experience and skill to do the thing.
(5)The entity must arrange, and pay for, the thing to be done by someone who—
(a)is licensed, authorised or qualified to do the thing; or
(b)if a licence, authorisation or qualification is not required to do the thing—has appropriate experience and skill to do the thing.
Examples
1 A rectification order requires Freddie to take stated action to rectify work he has done. The action includes having to provide written information about whether the rectified work complies with relevant structural standards. Freddie is not a structural engineer so he must arrange, and pay for, a structural engineer to prepare a report about the rectified work.
2 A rectification order requires Jo to finish building a dwelling. Jo is no longer a licensed builder, and she is not able to get a new licence. Jo must arrange, and pay for, a licensed builder to finish building the dwelling.
3 Alex is a licensed plumber who did non-compliant work on a building that caused extensive water leakage. A rectification order requires him to fix the damage caused by the leakage, including replacing render on the building’s exterior, replacing wall linings and insulation in the wall cavity, and repainting walls and replacing carpet in the interior. None of this work requires a licence or other authorisation under ACT law. Alex is able to paint the interior walls to an acceptable standard, but he has never done any of the other kind of work. He must arrange, and pay for, people with appropriate experience and skill to do the rest of the work.
(6)The rectification order must state a period within which what is required to be done must be done.
(7)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.
Note Details of the rectification order must be included in the register (see s 108).
(8)A copy of the rectification order must be given to the land owner.
…
40Rectification order offence
(1)A person commits an offence if the person intentionally fails to comply with a rectification order given to the person.
Maximum penalty: 2000 penalty units.
(2)Each partner commits an offence if—
(a)the partnership is given a rectification order; and
(b)the partners, or some of them, intentionally fail to comply with the rectification order.
Maximum penalty: 2000 penalty units.
(3)It is a defence to a prosecution for an offence against subsection (2) if the partner proves—
(a)that—
(i) the partner did not know about the failure to comply; and
(ii) reasonable precautions were taken and appropriate diligence was exercised to avoid the contravention; or
(b)that the partner was not in a position to influence the other partners in relation to the failure to comply.
41Failure to comply with order
(1)This section applies if an entity (the ordered entity) in relation to whom a rectification order is made contravenes the rectification order.
(2)The Territory may, in writing, authorise a licensee to enter the land where the work to which the rectification order relates is to be done and—
(a)take the action stated in the rectification order; or
(b)start or finish the work stated in the rectification order.
(3)The authorised licensee must—
(a)give the owner of the land written notice that the licensee intends to enter the land at least 24 hours before the licensee enters the land; and
(b)give a copy of the notice to the ordered entity before entering the land.
(4)However, the Territory must not authorise someone until—
(a)if the ordered entity applied for review of the decision within the period for review (the review period) of the decision to make the rectification order allowed under the ACT Civil and Administrative Tribunal Act 2008—the review is finally disposed of; or
(b)the review period has ended.
(5)The ordered entity is liable for the reasonable cost incurred in doing anything under subsection (2) and the cost is taken to be a debt owing to the Territory.
Ground 1
The ground
31․Ground 1 contends that rectification orders are not available against nominees in their capacity as such. That was a contention which had been rejected in the ACAT’s second decision: Jolley v Construction Occupations Registrar & Anor (Administrative Review) [2022] ACAT 47.
Mr Jolley’s submissions
32․The submissions on behalf of Mr Jolley were that the Act respected corporate form in some ways and not in others. It did not wholly discard the corporate form of a licensed builder and thereby create a dual form of liability covering both the corporate entity and the nominee. Rather, the obligations upon the nominee were enforced by way of the criminal sanction provided in s 31(2). To interpret the Act so as to allow rectification orders against nominees “would have the extraordinary result that a nominee of a licensee – who could be an employee who neither owns nor is an officer of a licensed company – could face financial ruin by being required, at his or her own cost, to rectify a building built by his or her employer and, in the event of non-compliance, be exposed to criminal sanctions and bankruptcy”.
33․A rectification order under s 38(1)(a) is something that is directed to “work done”. “Work” means physical work, and “supervising” work is not in and of itself “work”. This interpretation means that “work done as part of a construction service” in s 38(1)(a) must be read as referring to work done as part of a construction service provided by the recipient of the rectification order. It would be absurd to read the phrase “work done as part of a construction service” as extending to work done by someone else. It would empower the making of a rectification order directed to the builder of a building in Civic that required work on a building someone else constructed in Tuggeranong. Counsel for Mr Jolley submitted:
We say in short that's an absurd construction because taken to the logical conclusion it would mean that if a licensee did work in Civic, for example, at the level of power, that licensee could be required to rectify other work that they had no connection with in say Tuggeranong and it was left simply to a matter of discretion.
34․That interpretation is also supported by the references to “provided” in s 34(1)(a) (“has provided a construction service”) and s 35(1)(b) (“provided the construction service”), and by s 35(5)(a) referring to an “act” (“act that caused the contravention”). Mr Jolley submitted that an omission to supervise could not be a service “provided” or an “act”.
35․All of the examples given under s 34 (as in force at the time of the construction, which did not include Example 4) are examples where the licensees have done “work”. The insertion of a new example (Example 4) in 2019 did not have the effect of expanding the class of persons against whom a rectification order could be made.
36․So far as extrinsic materials were concerned, the Explanatory Statement for the bill which became the COLA indicated an intention to implement the recommendations of the National Competition Policy Review of Occupational Licensing in the ACT Building and Construction Industry, and the relevant recommendation referred to unacceptable work being “rectified by the original tradesperson”, consistent with an interpretation that limits rectification orders to those who performed the construction work.
37․Although acknowledging the fact that the COLA has a clear public purpose, no legislation pursues its purposes at all costs. The Act reflects legislative choices which involve recognising corporate form in some instances but not casting it aside in relation to rectification orders.
Decision
38․The text, structure and context of the Act indicate that the submissions made on behalf of Mr Jolley cannot be accepted.
39․The scheme of the Act places individual and corporate licensees on the same footing by ensuring that there is a natural person responsible for supervision of building work. In the case of a corporate licensee, that is done by the requirement that there be a nominee who is responsible for the supervision of the construction services provided by the company, or that there be multiple nominees, each responsible for documented categories of construction services provided by the company.
40․A nominee must be licensed in the construction occupation for each of the construction services (or occupation classes) for which the individual is to be responsible: s 28(6). The person must consent in writing to being a nominee: s 28(6)(c).
41․For a builder (and indeed each of the construction occupations that involves construction work as distinct from certification or assessment work), a “construction service” includes “supervision of work”. That arises from the fact that s 6(2) provides that a construction service is the “doing or supervision of work in a construction occupation” and that the definition of builder in s 8 relies upon the concept of a “building service” which is “the doing or supervising of building work”.
42․Because a “construction service” includes the supervising of work, a person who is a nominee can have provided a construction service otherwise than in accordance with the COLA or an operational Act, and a rectification order may be made against that person. The references in ss 34, 35 and 38, which empower and regulate the making of rectification orders, cover situations in which a licensee who has undertaken supervision has “contravened, this Act or an operational Act”: s 35(1)(c)(i). Because of the offence provision in s 31(2) of the COLA, a nominee would fail to comply with the COLA if the nominee failed to “adequately supervise the relevant construction services” or “ensure that the relevant construction services comply with … [the COLA] and the operational Acts”.
43․The textual features of the legislation pointed to by Mr Jolley are inadequate to indicate that the correct interpretation of its provisions is to exclude nominees from liability. The use of the word “provided” (in ss 34(1)(a), 35(1)(b)) and “act” (in s 35(5)(a)) are not inconsistent with the application of those provisions to nominees. The nominee “provides” a service when the nominee takes on and performs the role of supervising the relevant building work. As pointed out earlier, that arises directly from the definitions of “construction service” and “building service”. The reference to “the act that caused the contravention” in s 35(5) is not so clearly confined to positive physical acts involving construction so as to influence the scope of the Act in its application to nominees. In its context, the use of the word “act” is designed to fix time by reference to something done or not done that caused the contravention. It is not designed to refer only to positive physical acts and to exclude omissions. Such an interpretation is inconsistent with the role that it performs in s 35(5), defining the start of the period during which the 10‑year limitation runs.
44․The submissions made on behalf of Mr Jolley that the language of the Act would lead to “extraordinary” or “absurd” results cannot be accepted. The “extraordinary” submission was directed to the proposition that a nominee, who could be a mere employee, may be subject to criminal sanctions and bankruptcy. The “absurd” submission was directed to the proposition that if a rectification order was not confined to the entity that physically undertook the relevant work, it would be possible under the Act to make a rectification order addressed to a person who was a licensee but who had nothing to do with the relevant building project.
45․The aspect of the legislation which both of these submissions ignore is the fact that the making of a rectification order is discretionary. The exercise of discretion is regulated by the terms of ss 34-38 and by the scope and purpose of the Act as a whole. It is therefore not persuasive to point to a possible extreme and unreasonable application of the provisions as a reason for giving the language of the Act a more confined operation than its text and structure would naturally bear.
46․So far as the potential exposure of a nominee to criminal sanctions and bankruptcy (the “extraordinary” submission) is concerned, that is something which is within the scope of the Act. It is the situation faced by an individual builder against whom a rectification order is made. The scheme of the Act, which makes it obligatory for a corporate builder to have a nominee, means that, like an individual builder, there is a natural person who is responsible for the building work and who may be subject to the range of measures available under the Act to ensure that the Act and operational Acts are complied with. The Act confronts the reality that the exposure of individuals to statutory remedies is more likely to advance the goals of the legislation than merely giving that exposure to corporate entities whose liability is limited and who may more easily cease to exist. The Act itself (as distinct from the Construction Occupations (Licensing) Regulation 2004 (ACT), s 19) does not specify what the relationship between the nominee and the corporate licensee must be. It therefore does not require that the nominee be a person whose financial interests are closely aligned with those of the corporate licensee, such as a director or senior employee. However, being a nominee is a role to which the prospective nominee must consent: s 28(6)(c). In those circumstances, it cannot be assumed that imposition of liability as a result of a failure to comply with a rectification order, which in turn arises from a failure to comply with statutory obligations, is necessarily “extraordinary”. It certainly cannot be said to be “extraordinary” in circumstances where the decision to make a rectification order is a discretionary decision made for clear statutory purposes and where the person potentially the subject of a rectification order has had the opportunity to make any submissions that the person wishes to, including submissions as to their relationship with the corporate licensee, about why a rectification order should not be made.
47․The position is even clearer in relation to the submission that allowing rectification orders to be made against entities other than those which performed the actual construction would be “absurd”. First, the possibility that, under s 38(1)(a), a rectification order might be made requiring rectification of work with which the entity had no connection is precluded by the terms of the Act. Section 35(1)(b) requires that the entity the subject of the order provided the construction service (or part of the construction service) to which the s 34 notice related. A notice cannot be given to, and hence, an order cannot be made against, an entity that had nothing to do with the alleged non-compliance with the Act or an operational Act. Second, the power in s 38 requires the exercise of discretion that has regard to the circumstances of the case and the scope and purpose of the Act. “Absurd” possible applications of the Act would be constrained by the need to exercise the statutory discretion in a manner consistent with the scope and purpose of the legislation. As a result, “absurd” applications of the Act that have been formulated without regard to the existence of that discretion or the scope and purpose of the Act are not persuasive reasons to read it in a manner inconsistent with its language.
48․Insofar as Mr Jolley relied upon the terms of the recommendation in the National Competition Policy Review of Occupational Licensing in the ACT Building and Construction Industry, that review and the relevant recommendation are at such a level of generality that they are of no significance for the interpretation of the Act, notwithstanding that the legislative intention as set out in the Explanatory Statement was to give effect to the regulatory changes recommended in that report. No mention of nominees under the Building Act is made anywhere in the National Competition Policy Review Report. The relevant recommendation was not addressing the proposed new legislative framework at a level of detail which involved consideration of the differentiation between a licensee who was a nominee and a licensee that was “the original tradesperson”. The fact that the report made reference to “the original tradesperson” is of no weight when interpreting the COLA.
49․For these reasons, rectification orders are available against nominees in their capacity as such. Ground 1 of Mr Jolley’s notice of appeal is not made out.
Ground 2A
50․This ground is closely related to the first and so will be dealt with now. It asserts that the Tribunal ought to have found that the notice of intention given under s 34 of the COLA identified that the construction service was building work on “Manhattan on the Park”. It then asserts that Mr Jolley did not provide that service or that the conduct of Mr Jolley did not involve the “provision” of a construction service.
Submissions of Mr Jolley
51․Mr Jolley submitted that the only “construction service” that was specifically referred to in the s 34 notice was a construction service provided by Chase. He therefore contended that the only “construction service” was the building work associated with Manhattan on the Park and that was a construction service which Mr Jolley did not provide. He submitted that the power of the Registrar to make a rectification order was conditioned upon notice having been given under s 34 (as a consequence of s 35(1)(a)) and that the hearing before the ACAT did not cure the failure to comply with this procedural requirement.
52․Further, he submitted that the ACAT in fact found (at [161]) that Mr Jolley provided no supervision and, hence, “supervision” could not be the construction service provided. In light of the finding of the ACAT, he submitted that a construction service could not be provided by omission, saying that to “provide” (within the meaning of the COLA) a construction service required a positive act.
Decision
53․The notice under s 34 made substantial reference to building work carried out by Chase. It also identified that under s 28(2), the nominee of a corporation is responsible for supervision of the construction services provided by the corporation, and that under s 31, the nominee of the corporation has the responsibility to supervise the construction services provided by the corporation and ensure the relevant construction services comply with the COLA and operational Acts. The notice identified a range of defects in the construction. The notice was addressed to Mr Jolley and it identified an intention to “issue a Rectification Order to the Nominees [sic] of Chase Building Group Pty Limited”. The notice was sufficient to indicate that it was given to Mr Jolley as a result of his role as nominee and arising out of his obligations under ss 28 and 31 of the Act. Necessarily, it asserted a failure to adequately supervise Chase’s building works in a manner consistent with s 31.
54․The proposition advanced by Mr Jolley that supervision of building work is not a construction service that is “provided” has been rejected earlier.
55․Insofar as Mr Jolley submitted that the ACAT had found that he provided no supervision and as a result provided no construction service to which the notice related, the argument seemed to be that:
(a)the notice asserted that he provided a service;
(b)he did not provide that service;
(c)therefore, the notice was invalid;
(d)therefore, no rectification order could be made.
56․For the reasons given in relation to ground 3 below, the ACAT did not conclude that Mr Jolley did not provide any construction service. Even if it had made such a finding, there is a distinction between what is asserted in the notice and what is ultimately required to be established. It is possible that the notice may have asserted that he provided a construction service but that either the Registrar or ACAT was not ultimately satisfied of that fact. That the fact was not ultimately established would not invalidate the earlier notice. It would simply make it inappropriate to make a rectification order. Therefore, even if the factual point was a good one, it would not invalidate the notice.
57․Finally, insofar as it was asserted that a construction service could not be provided by omission, that argument has been rejected earlier. In circumstances where there is a positive obligation to supervise and ensure compliance, the distinction between a positive act and an omission is not a useful one. In either case, the conduct of the nominee, whether it be characterised as an act or an omission, involves the nominee acting in a manner which fails to meet the statutory requirements.
Ground 2: Limitation period
Introduction
58․This ground of appeal asserted that it was not possible for the ACAT to make a substitute decision for the decision under review because s 35(5) of the COLA required that an order could only be made within 10 years of the act that caused the contravention, and that period had expired.
59․For the purposes of this ground of appeal, it is necessary to have regard to the terms of ss 68 and 69 of the ACAT Act as in force at the time of the ACAT’s decision. Those provisions were as follows:
68Review of decisions
(1)This section applies if the tribunal reviews a decision by an entity.
(2)The tribunal may exercise any function given by an Act to the entity for making the decision.
Note A reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act, s 104).
(3)The tribunal must, by order—
(a)confirm the decision; or
(b)vary the decision; or
(c)set aside the decision and—
(i) make a substitute decision; or
(ii) remit the matter that is the subject of the decision for reconsideration by the decision-maker in accordance with any direction or recommendation of the tribunal.
69Effect of orders for administrative review
(1)This section applies if the tribunal makes an order under section 68 (3) in relation to a decision.
(2)The order—
(a)is taken to be the decision of the decision-maker; and
(b)takes effect from the day the tribunal makes the order, unless the tribunal orders otherwise.
Appellant’s submissions
60․The essential argument presented by Mr Jolley was that, although the original decision was made within the time required by s 35(5), by the time of the ACAT decision in December 2023, that period had expired. The appellant identified that any contravention occurred no later than August 2013, when Chase’s work was completed and certificates of occupancy and use had been issued. Given that the ACAT made its order in December 2023, just outside the 10-year period, the appellant argued that it was not open to the ACAT, standing in the shoes of the Registrar, to do what it did, namely substitute a different decision for that made by the Registrar.
61․The submission relied upon the fact that s 69(2) of the ACAT Act provided that the decision of the ACAT took effect on the date it was made unless the ACAT “orders otherwise”. The appellant noted that this was a different default position from that which applied under the Administrative Appeals Tribunal Act 1975 (Cth). Section 43(6) provided a default rule that the decision of the Administrative Appeals Tribunal took effect on the date of the original decision. Mr Jolley pointed out that there had been a change from the Bill for the ACAT Act as originally presented, in which the default position was that decisions of the ACAT took effect from the time of the original decision, to a default position that they took effect when they were made. Mr Jolley placed emphasis upon what was described as “current looking language or future looking language” in s 69, namely “takes effect”. He therefore contended that, having regard to the language of s 69(2), the power of the ACAT to “order otherwise” was limited to ordering that its decision took effect at a date later than when the Tribunal made an order and did not permit the ACAT to order that its decision took effect at a date earlier than when it made its decision. That interpretation necessarily precluded the possibility that the ACAT decision would take effect from when the original decision was made. He submitted that it would also be unusual to permit any retrospectivity, as would be the case if the ACAT decision could take effect earlier than the date upon which it was made.
62․Insofar as such an interpretation may have the effect that, through the lodgement of an ACAT appeal, the potential for the power to make a rectification order could expire by the effluxion of time, he submitted that it would be wrong to construe the general provisions of the ACAT Act by reference to the consequences of the application of those provisions under a specific Act, which is only one of many that gives jurisdiction to the ACAT.
63․In developing the argument on this ground of appeal, the appellant was compelled to confront each of the different dispositions available under s 68(3), confirming the decision, varying the decision, or setting aside the decision and either making a substitute decision or remitting the matter to the decision-maker. The appellant appeared to accept that, if the Tribunal simply confirmed the Registrar’s decision (s 68(3)(a)) or varied it (s 68(3)(b)), then the expiry of the 10-year period would not necessarily be fatal. Counsel submitted that whether or not the Registrar’s decision was being “varied” or “set aside” would be determined as a matter of substance rather than of form.
64․Mr Jolley submitted that the approach adopted by the ACAT, which asserted that the 10‑year period did not apply because the source of power being exercised was under the ACAT Act, was wrong because the power is to “stand in the shoes” of the original decision-maker and hence is subject to the same limitations that apply to the original decision-maker. The 10-year limitation period applies whether or not republication 26 or republication 56 applies. If republication 56 applies, then the Legislative Assembly has addressed the issue of the expiry of the limitation period by accommodating circumstances where the Registrar only discovered the issue close to the expiry of the 10-year period. He submitted that it was significant that the legislature had addressed the issue but done so in a way which did not assist the Registrar in the circumstances of this case.
65․The appellant acknowledged that his submission led to a result that could be seen as unsatisfactory because it would mean that, where an ACAT review was not completed before the end of the 10-year period, ACAT would have no power to make a substitute rectification order where it concluded that the correct and preferable decision had not been made by the Registrar. However, he submitted that this is simply a product of the statutory regime, which confined the power to make rectification orders, and hence was a matter for the legislature to fix.
Owners Corporation notice of contention grounds 4-6 – failure to supervise
Introduction
168․These grounds contend that, because Mr Jolley did not personally supervise any of the work on a day-to-day basis or otherwise, the ACAT should have found that he provided a construction service contrary to s 31(2)(a) and that this provided an additional ground which enlivened the power to make a rectification order.
169․Ground 6(c), like 2(d) is a ground directed to the ultimate exercise of discretion and it will be subject of further directions in light of the conclusions reached in the balance of these reasons.
Submissions
170․The Owners Corporation submitted that the Tribunal was correct to find that Mr Jolley did not supervise the work personally, on a day-to-day basis or otherwise. He delegated the supervision to others. His evidence was that he knew nothing about the systemic defects and the balcony failures were not brought to his attention. He exercised no functions as nominee from June 2015 because he believed Chase’s licence had expired by then. The Owners Corporation submitted that the finding (at [161]) that the adequacy of Mr Jolley’s supervision “[did] not arise because he provided none” was in error. It submitted that the Tribunal should have found that he contravened s 31(2)(a) of the COLA as a separate and additional basis for enlivening the discretion. His failure of supervision meant that he did not detect the defective work when it was performed and also meant that he did not ensure that the defective work was corrected when the defects manifested themselves.
171․Mr Jolley relied upon the concession in the notice of contention that the Tribunal was in error in concluding that Mr Jolley had provided no supervision and reserved his submissions as to ground 6(c), which goes to the significance of the inadequacy of supervision for the ultimate exercise of discretion.
Decision
172․In relation to Ground 3 above, I have not accepted Mr Jolley’s submission that the Tribunal proceeded on the basis that only personal supervision was relevant and there was therefore no need to assess what he did: see [100] above.
173․Although the Tribunal referred to the absence of personal supervision of the construction works, it went on to consider the overall system of supervision that he put in place: see [97] above.
174․Ground 5 in the Owners Corporation’s notice of contention is qualified because it only is engaged “to the extent that [the Tribunal] found that the inadequacy of Mr Jolley’s supervision was not relevant to whether a rectification order could be issued to him”. I do not find that the Tribunal considered that the inadequacy of Mr Jolley’s supervision was not relevant to its exercise of discretion. As a consequence, the premise underlying the grounds in the notice of contention is not established and the question of law identified in the notice of contention does not arise.
Owners Corporation Appeal ground 1 – costs
175․This ground of appeal relates to a decision of the ACAT in relation to costs. It raises the question of whether there is a general discretion to award costs under s 48(1) of the ACAT Act. As any decision in relation to costs is dependent upon the outcome of the proceedings, the issue relating to costs will be deferred pending determination of the balance of the issues in the proceedings.
Owners Corporation Appeal ground 2 - scope of orders
Introduction
176․This ground of appeal asserts that the following units should also be included within the scope of the rectification order: 702, 803, 908, 1506, and 1511. It asserts that inclusion of these additional units would be consistent with the Tribunal’s findings and, hence, these units should be included.
Submissions
177․The Owners Corporation submissions addressed the different circumstances of the various units.
178․So far as unit 908 was concerned, this had been included in the draft rectification order that was provided to the parties by the ACAT. However, the Tribunal accepted the submission made by Mr Jolley that unit 908 should not be included, namely because it had not been accessed by the experts and no defect had been identified in that unit by expert or oral evidence.
179․The Owners Corporation submitted that unit 908 was inspected and that there was expert evidence concluding that it required rectification. That arose from paragraphs 96-97 of the Second Diagnostech Report. It submitted that the report indicated that unit 808 had been inspected and that the soffit above the balcony (that is, the balcony of unit 908) had cracks and a high moisture reading. As a consequence, Mr Stephenson said that the balcony above unit 808 had to be remediated. That balcony is the balcony for unit 908.
180․In relation to unit 1511, the position was the same insofar as Mr Jolley had successfully submitted to the ACAT that no defect was identified by any expert or oral evidence. The Owners Corporation contended that the balcony to this unit was inspected from unit 1411 below and it was by that means that the defects were recorded.
181․In relation to units 702, 803 and 1506, these were not included in the rectification order. The Owners Corporation accepted that these units were not identified in a non‑exhaustive list of balconies affected by waterproofing problems listed at paragraph 6.2.5 in the report of Mr Darren Sweetnam (the First Diagnostech Report). However, the “Defects Schedule”, from which the units identified in Mr Sweetnam’s report had been drawn, identified that each of the units had efflorescence staining, which meant that the balcony required rectification or re-waterproofing. The Tribunal had found that efflorescence staining is evidence of defective work requiring rectification: at [153]‑[155] and in its supplementary reasons of 1 December 2023 at [11]-[12].
182․Mr Jolley submitted that the ground of appeal does not raise a question of fact or a question of law.
183․He then submitted, in relation to units 908 and 1511, that none of the experts below said that those balconies required rectification for failed waterproofing. He submitted that, in circumstances where a claim based on slab cracking within the balconies had been abandoned (ACAT decision at [83]), the Diagnostech reports did not identify units 908 or 1511 as being relevantly defective. Those two units were not included in the list of units affected by defective tiling or waterproofing in the Diagnostech reports.
184․He submitted that there was no error in relation to units 702, 803 or 1506 because the Owners Corporation had not submitted that ACAT should include such units in the rectification order.
Decision
185․Although these grounds were not formulated as discrete questions of fact (or questions of law), they raised issues of fact which would be capable of being formulated as questions of fact and hence within the scope of s 79(3) of the ACAT Act.
186․In relation to units 908 and 1511, the ACAT said in its 1 December 2023 reasons at [10] that it had accepted Mr Jolley’s submissions that they should not be included. The units were impliedly referred to in the Second Diagnostech Report. The First Diagnostech Report did not involve inspection of units 908 and 1511 or the units below those units, 808 and 1411. When inspecting the building for the purposes of the Second Diagnostech Report, Mr Stephenson inspected units 808, 1411 and 1511: Second Diagnostech Report at 8‑9. In the Second Diagnostech Report, Mr Stephenson addressed what was described as Defect 1 (Balcony Slab Cracking Defects). These were defects which had been identified by Mr Joannides, an expert who prepared a report relied upon by Mr Jolley. The defects were apparent because cracking (and efflorescence) could be observed on the underside of balconies. Mr Joannides had described this cracking as “unusual”: Second Diagnostech Report at [80]. Neither Mr Stephenson nor Mr Joannides provided an opinion as to the cause of the cracking in the post-tensioned concrete which formed the balconies. However, Mr Stephenson considered that cracking was significant because it could cause corrosion to the post‑tensioning cables, causing the slab to lose significant strength: [102].
187․Mr Stephenson recorded that, in the 97 units he inspected, he looked for soffit cracks. He identified seven additional units going beyond those previously identified in the First Diagnostech Report which had cracked balcony soffits: Second Diagnostech Report at [71]. He said (at [73]):
From my review of the documentation, my observations, and my measurements of moisture content of the concrete balcony slabs, I have concluded that the stalactites that are extruding from the cracking are a symptom of the failure of the finishes and waterproofing on top of the balcony slabs, in that neither the tiles or the applied waterproofing are preventing water from penetrating into the concrete, and the widespread high to extreme moisture content of the concrete slabs indicates the reinforcement of the slabs are at high risk of corrosion.
188․In recording why the cracking of the soffits of the balcony slabs was non‑compliant with the Building Act, he said that the obligation to carry out work in a proper and skilful way was breached “in that the construction of the balconies has not been carried out in a proper and skilful way to ensure the slab did not crack and allow the water and efflorescence to extrude”: Second Diagnostech Report at [76]. In explaining his opinion that the cracking of the balcony slabs represented non-compliance with a performance requirement in the Building Code of Australia, he said (at [82]-[83]):
The high moisture content that I measured in the balcony slabs, as I explain below under this defect, and the demonstrable water and calcium leakage through the balcony slabs show that the external balcony waterproofing membrane to the balconies has failed and on all levels. The external balcony waterproofing failure, as shown by the high moisture readings I took during my 2023 Inspection, shows that the failure is not necessarily due to the visible cracking, but the cracks have provided a visible demonstration of the extent of failure of the external waterproofing membrane to the balconies.
The water penetration will cause deterioration of the reinforcement, including the post tensioning cables in the slab, which will in turn cause damage to the concrete disproportionate to the local failure of the waterproofing.
189․In describing that he did not measure the width of the cracks, he said that this would have required a “scrubbing brush to remove the hardened calcium”: at [91]. He said that he had formed the view that “the appearance of those cracks on the bottom surface of the balcony with the calcium stalactites indicated a serious issue” and continued:
I formed the view that the width of the cracks on the top of the slabs that was allowing water to breach the waterproofing membrane and seep into the concrete would be the more appropriate measure of the seriousness of the defect.
190․At [95], he listed the units that were identified as having this problem in the First Diagnostech Report. He then said (at [96]-[97]):
96. The following additional units were accessed during my 2023 Inspection and are, in my opinion impacted by the presence of cracks to the soffits above their balconies:
624, 710, 713, 808, 817, 917, 1109, 1411, 1509.
97. As I am of the opinion that the cracks and the high moisture readings of the balcony slabs demonstrate the failure of the waterproofing to the balcony decks of those slabs, the units above the listed units are also impacted in that they will have to be remediated to expose and repair the waterproofing under the tile and then ensure that the finish above falls to the drainage as required by the BCA and the available Australian standards.
191․These passages indicate that the existence of cracking with efflorescence was a symptom of water passing through the balcony. That was only possible if the waterproofing of the upper side of the balcony was inadequate to stop water penetration. As a consequence, the existence of the soffit cracking with efflorescence was evidence of inadequate waterproofing. It is in that context that the election by the Owners Corporation not to pursue Defect 1 must be understood. The position was made clear at [82]-[83] of the ACAT’s reasoning which was as follows:
82. A conclave of experts was held in advance of the hearing, attended by Messrs Stephenson, Buchanan, Hazelton, Joannides and Dr Jacob. They prepared a joint report dated 17 April 2023 in which they summarised the outcome of their conferral in relation to each of the numbered defects the subject of the rectification order. There was significant agreement on most issues and those that remained in dispute were narrow in scope and clearly identified.
83. As to defect 1 (balcony slab cracking defects) Messrs Stephenson, Joannides, Hazelton and Buchanan agreed the balcony slab cracking is not a structural defect. However, they considered balcony waterproofing defects must be rectified as part of defect 2. At the hearing, the owners corporation elected not to pursue defect 1.
192․The change of focus was referred to again at [142]-[143]:
142. Although initially it had been surmised that the cracking of the balcony slabs was a contributing factor to the failure of the waterproofing membrane, the consensus of expert opinion at the conclave was that the observed cracking was not structural but the waterproofing issues had to be addressed, among other reasons, because of the importance of keeping water out of pre-tensioned slabs. It was noted that Dampfix Gold was said to be capable of covering static cracks up to 4 mm wide, whereas the cracks observed on the soffit of the balconies were only approximately 0.5 mm wide.
143. The focus therefore shifted to the waterproofing and tiling defects.
193․So far as the existence of Defect 2 was concerned, the position of the experts was set out at [84]:
84. As to defect 2 (balcony tiling defects) Messrs Stephenson, Joannides, Hazelton and Buchanan agreed the tiling and associated waterproofing defects exist and must be rectified. Mr Stephenson considered wholesale replacement of balcony waterproofing and tiling is required. Mr Joannides considered the free edges require remediation, with strip repairs over cracks and localised repairs where necessary being sufficient. Messrs Hazelton and Buchanan did not offer an opinion on remediation.
194․The abandonment of a separate claim relating to balcony slab cracking did not affect the capacity to rely upon Mr Stephenson’s evidence in relation to the claim that the waterproofing of the balconies was defective.
195․Mr Stephenson then went on to address the evidence of Mr Joannides in what he referred to as the Partridge Report. He addressed Mr Joannides’s opinion that the cracks were likely to “self seal”. In the course of doing so, he said (at [103]):
The water that is causing the observed stalactites, staining on the soffits, and disfiguring the building is coming from above, not from below … If there is still water penetrating and precipitating calcium on the underside of the balcony slabs [it] is clear to me that these cracks are unlikely to self-heal.
196․He then referred to his finding that water penetration was currently occurring at the premises: [107]. He described his use of a moisture meter on the undersides of the balconies over the units that he inspected. He described the ranges of the results from that moisture meter, with readings above 170 to be considered at “risk” and above 200 to be “wet”. He took readings on the balcony soffits close to the glass doors leading to the apartment proper, and then at various positions out to the outside edge of the balcony soffit. He said that there were only four instances where the readings of the balcony slab moisture content at the outer edge (“outboard edge”) were less than 200. Of the readings close to the glazing (“inboard readings”), 60 of 91 recordings were above 200 “indicating a general elevated level of water penetration into the balcony slabs”.
197․He rejected the proposition that cracks had permanently self-sealed, saying at [12]:
Such cracks that appeared to be no longer dripping water were, as I detail below, in slabs that showed very high moisture content levels across the slabs. In any event, the ‘self‑sealing’ at the bottom of the cracks is, in my opinion, somewhat meaningless if the slabs are, as I have reported, suffering water penetration from above.
198․He then addressed the remediation technique proposed by Mr Joannides, which involved only removing tiles in the area immediately above the crack in the soffit below and then only on a small number of units. Mr Joannides proceeded on the basis that, in other units where there was cracking, water ingress was no longer a problem. Mr Stephenson illustrated that moisture penetration was unlikely to have ceased by setting out the moisture levels in those units that both he and Mr Joannides had inspected. He set out those results in a table at [120]. None of the units set out in that table were relevant to units 908 or 1511. However, that was just because Mr Stephenson was illustrating his opinion about continued water penetration by reference to those units that both he and Mr Joannides had inspected. He was not purporting to set out all of those units in which moisture levels had been found to be elevated. As a result, the content of the table at [120] could not be interpreted as a qualification of his opinion about elevated moisture levels expressed earlier in his report.
199․Having set out the results in the table, he said (at [121]-[122]):
121. From the above it can be seen that the moisture content in the balcony slabs has little relationship to the visible presence of water on the soffit (underside) of a balcony slab.
122. From my investigation of the moisture content in the slabs, I am of the opinion that all of the units identified in the Preliminary Diagnostech Report and those additional units that I identified should be rectified.
200․He then went on to set out his proposed method of rectification.
201․He subsequently, in section 7.3, addressed “Defect 2 – Balcony Tiling Defects” which included identification of defects in the waterproofing system on the balconies.
202․The ACAT found (at [153], set out above at [87]), as part of its general findings as to the inadequacy of the waterproofing that, amongst a variety of listed ways in which the defective workmanship manifested itself was in “calcification to balcony soffits”, thereby linking the observable cracking and associated calcification under balcony soffits to the defective workmanship on the balcony above.
203․The submission made by Mr Jolley to the ACAT was:
(a) Unit 908 was not accessed by the experts and no defect is identified in that unit or in any of the expert or oral evidence.
(b) Unit 1511 was only accessed by Mr Stephenson and no defect is identified in that unit in any of the expert or oral evidence.
204․Having regard to the content of the Second Diagnostech Report, those submissions were not correct and should not have been accepted by the ACAT. Units 908 and 1511 were identified as needing rectification of their failed waterproofing as a result of the identification of unit 808 and 1411 having cracks in the soffits above their balconies. The units above those units were 908 and 1511 respectively, and Mr Stephenson identified at [97] of the Second Diagnostech Report that those units above needed the waterproofing to be remediated.
205․Therefore, the ground of appeal is made out in relation to units 908 and 1511.
206․In relation to units 702, 803 and 1506, these units appear not to have been included because the units to be covered by the rectification order appear to have been drawn from the non-exclusive table of balconies affected by defects at 6.2.5 of the First Diagnostech Report rather than the comprehensive defects in Appendix A of that report. The report stated at [6.1] that the report identified “Defect occurrences as recorded in the Diagnostech Defects Schedule in Appendix A of this Report”. In relation to “balcony deck waterproofing defects”, the table at [6.2.5] identified balcony waterproofing defects that fell within that category but included at the end: “Note that the above list is not exhaustive but represents occurrences of typical defects of similar nature and propensity.” Each of units 702, 803 and 1506 were identified as defective in Appendix A, being items 211, 212 and 497 respectively. So far as units 803 and 1506 are concerned, they were identified by the need to re-waterproof the balconies above units 703 and 1406.
207․While the Owners Corporation did not make a submission that these units should be included in the rectification order, in the circumstances of this case the absence of such a submission is not fatal to this ground of appeal. It is clear having regard to the evidence in the First Diagnostech Report that these balconies required remediation in the same way that other balconies included in the rectification order did. It is also clear that, had the issue been drawn to the Tribunal’s attention, consistently with its approach to other units which had defective waterproofing on the balcony, it would have included those units. In those circumstances, it can be inferred that the decision of the ACAT was based upon an error of fact, namely that the balconies of the three units were not defective and in need of remediation. The failure to make such a submission was an oversight by all parties and the Tribunal rather than a forensic decision on the part of the Owners Corporation. In those circumstances and having regard to the administrative nature of the proceedings, the fact that the Owners Corporation made no submission to the Tribunal that the units had defects and should be included is not a reason to find that the ground of appeal fails to be established. Therefore, this ground of appeal is made out.
Conclusion and order
208․In summary, the position is as follows in relation to Mr Jolley’s appeal, the Owners Corporation appeal and the two notices of contention. The outcome is summarised by reference to the identified grounds of appeal or contention rather than by reference to answers to questions of fact or law.
209․Mr Jolley’s appeal:
(a)Ground 1 – not established.
(b)Ground 2A – not established.
(c)Ground 2 – not established.
(d)Ground 3 – not established.
(e)Ground 4 and 8 – established but subject to Owners Corporation notice of contention.
(f)Ground 5 – not established.
(g)Ground 6 – not pressed.
(h)Ground 7 – not established.
(i)Ground 9 – not established.
(j)Ground 10 – not yet determined.
210․Registrar’s notice of contention: Having regard to the outcome in relation to Mr Jolley’s ground 2, it is not necessary to determine that contention.
211․Owners Corporation notice of contention:
(a)Grounds 1 and 2: established except ground 2(d) is deferred.
(b)Grounds 4, 5 and 6: having regard to the findings in relation to Mr Jolley’s ground 3, these grounds do not arise.
212․Owners Corporation appeal:
(a)Ground 1: as this related to costs, it has been deferred.
(b)Ground 2: established.
213․In light of these decisions, it will be necessary to make directions as to the further conduct of the proceedings.
214․The order of the Court is:
(1)The proceedings are listed for directions at 9:30am on 5 March 2025 and the parties are to provide agreed or competing directions to the chambers of Mossop J by 3 March 2025 and, in the event that directions are not agreed, each party has liberty to provide written submissions of not more than three pages along with its proposed directions.
| I certify that the preceding two hundred and fourteen [214] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop. Associate: Date: 26 February 2025 |
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