Jolley v Construction Occupations Registrar & Anor (Administrative Review) - [2023] ACAT 65

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

JOLLEY v CONSTRUCTION OCCUPATIONS REGISTRAR & ANOR (Administrative Review) [2023] ACAT 65
AT 21/2021
Catchwords: ADMINSTRATIVE REVIEW – review of decision by Construction Occupations Registrar to make a rectification order in relation to the nominee of a corporate licensee that has ceased to exist – statutory interpretation – nominee’s statutory functions – whether nominee’s responsibility for supervision extends to giving directions to ensure that building work is carried out in compliance with the Building Act 2004, the building code and relevant Australian Standards – whether nominee is responsible to ensure that non-compliant work discovered after completion is rectified to make it compliant – decision under review varied to reduce the scope of the rectification order
Legislation cited: ACT Civil and Administrative Tribunal Act 2008, ss 68, 69
Building Act 2004 (R16), ss 37, 42, 49, 51, 88, 136, 142
Building and Construction Legislation Amendment Act 2016, ss 7, 8
Construction Occupations (Licensing) Act 2006 (R26), ss 6, 16, 28, 31, 34, 35, 36, 38, 123, 123A, 123B, 123C
Legislation Act 2001, ss 97, 104, 144
Unit Titles (Management) Act 2011, s 28

Subordinate
Legislation cited: Building (General) Regulation 2008 (R11), ss 6, 31, 32, 43A
Construction Occupations (Licensing) Regulation 2004 (R22), ss 19, 42A, 42B

Cases cited:B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar [2013] ACTSC 219
CIC Australia Pty Ltd v ACT Planning and Land Authority [2013] ACTSC 96
Hill v Construction Occupations Registrar [2021] ACAT 21
Jolley v Construction Occupations Registrar & Anor [2021] ACAT 112
Jolley v Construction Occupations Registrar & Anor [2022] ACAT 47
Koundouris v The Owners – Units Plan No 1917 [2017] ACTCA 36
Victory Homes Pty Ltd v Construction Occupations Registrar [2020] ACAT 53

Tribunal:Senior Member M. Orlov
Senior Member Prof T. Foley

Date of Orders:  26 October 2023
Date of Reasons for Decision:      26 October 2023
Date of Publication:  30 October 2023
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          AT 21/2021

BETWEEN:

ANDREW JOLLEY
Applicant
AND:

CONSTRUCTION OCCUPATIONS REGISTRAR
Respondent
AND:

THE OWNERS – UNITS PLAN NO 3941
Party Joined

TRIBUNAL:Senior Member M. Orlov (presiding)
Senior Member Prof T. Foley

DATE:26 October 2023

ORDER
The Tribunal orders that:

1.The decision of the respondent to issue a rectification order in relation to the applicant is varied by requiring the applicant to arrange and pay for an appropriately licensed entity to take stated action to rectify only defect 2 (waterproofing and tiling of balconies), defect 4 (delamination of glass balustrade panels) and defect 6 (basement slab cracking) in accordance with the Tribunal’s decision within 12 months of the date of these orders.
2.The parties are to confer and submit a draft rectification order giving effect to the Tribunal’s decision by 7 November 2023.
3.The parties have liberty to apply on 2 days’ notice.
………………………………..

Senior Member M. Orlov
for and on behalf of the Tribunal
Introduction
Background
The decision to issue a rectification order to Mr Jolley
Application for review of the decision to issue a rectification order
The statutory context
The COLA
The Building Act
The Registrar’s power to make a rectification order
The Tribunal’s functions and powers on review of the Registrar’s decision
The construction services provided by Chase and Mr Jolley
The real issues for determination
Expert evidence
Mr Jolley’s evidence
Defect 2 – balcony tiling and waterproofing
Background
The consensus of expert opinion
The administrative controversy that gave rise to the Registrar’s decision
Consideration – whether Chase provided a construction service in contravention of section 42 of the Building Act
Consideration – whether Mr Jolley provided a construction service in contravention of section 31(2) of the COLA
Defect 4 – delamination of glass balustrade panels
BCA – 2011 requirements applying to the glazed structural balustrades
Background
The divergence of expert opinion
Mr Jolley’s oral evidence
The administrative controversy that gave rise to the Registrar’s decision
Consideration – whether Chase provided a construction service in contravention of section 42 and/or section 49 of the Building Act
Consideration – whether Mr Jolley provided a construction service in contravention of section 31(2) of the COLA
Defect 5 – loose balustrade cap railings
Background
Consideration – whether Chase provided a construction service in contravention of section 42 of the Building Act
Consideration – whether Mr Jolley provided a construction service in contravention of section 31(2) of the COLA
Defect 6 – basement slab cracking
BCA – 2011 requirements applying to the basement level floor slabs
The consensus of expert opinion
Consideration – whether Chase provided a construction service in contravention of section 42 and/or section 49 of the Building Act
Consideration – whether Mr Jolley provided a construction service in contravention of section 31(2) of the COLA
Defect 7 – water ingress into internal spaces
The consensus of expert opinion
Consideration – whether Chase provided a construction service in contravention of section 42 and/or section 49 of the Building Act
Consideration – whether Mr Jolley provided a construction service in contravention of section 31(2) of the COLA
Unsealed façade joints
Consideration – whether it is appropriate to make a rectification order
Mandatory considerations under section 36(1)(a)
Mandatory considerations under section 36(1)(b)
Other relevant considerations
Considerations raised by Mr Jolley
Decision
The owners corporations’ costs
REASONS FOR DECISION

Introduction

1.This application is for review of a decision by the ACT Construction Occupations Registrar (Registrar) to make a rectification order in relation to the applicant, Andrew Jolley, requiring him to take stated action to rectify building work done by Chase Building Group Pty Ltd (Chase) in relation to a sixteen storey apartment complex in Bunda Street, Canberra City known as ‘Manhattan on the Park’ (Manhattan Apartments).
2.The Tribunal has decided there are grounds to make a rectification order in relation to Mr Jolley and that it is appropriate to do so in the circumstances, although not in the same terms as made by the Registrar. The following explains the reasons for our decision.

Background

3.Chase was licensed as a Class A builder in the ACT and carried on business as a construction company as part of the Chase Group. At material times, Mr Jolley was Chairman of the Chase Group and the sole director, secretary and shareholder of Chase. He held a class A builder’s licence and was appointed as the sole nominee of Chase. In that capacity, Mr Jolley was responsible for the supervision of the construction services provided by Chase in relation to the Manhattan Apartments.
4.The development was given building approval on 26 April 2012. Work commenced on 10 May 2012. A certificate of occupancy and use was issued on 8 August 2013. Over the next several years, Chase did a considerable amount of work to rectify defects in the Manhattan Apartments. Inspection reports prepared in 2014, 2015 and 2016 by Peak Consulting, a building consultant retained by the owners corporation, which is a party to the proceeding, documented the status of the rectification works and updated the list of defects. In an inspection report dated 4 April 2016, Peak Consulting noted a significant increase in the incidence of glass balustrade delamination and recommended further diagnosis should be undertaken of the cause due to a perceived risk that further delamination may compromise the structural integrity of the balustrade system. In a further report dated 1 June 2016, Peak Consulting detailed systemic issues relating to balcony tiling and waterproofing and recommended a full survey be undertaken of all balconies to enable a holistic solution to be developed. These and other defect issues remained unresolved by Chase.
5.Chase’s construction occupations licence expired on 1 July 2016 and was not renewed. On 5 July 2017, Chase resolved that it should be wound up voluntarily. The company was deregistered on 18 October 2017. The Chase Group continued to operate its construction business in the ACT through a different corporate entity and, to this day, lists Manhattan on the Park as one of its award winning projects.[1]
[1] Chase Group is now known as Chase Construction. Its website states that “Since 2003, Chase Construction has grown to be an experienced and dependable construction company, delivering projects of differing scale and facility. In this time, developers have trusted our team of professionals to deliver award winning and contemporary buildings known for superb finishes and attention to detail”. One of the projects mentioned is Manhattan on the Park, which won an MBA award in 2014 for ‘Best Apartment Building 3 Levels & 4 Storeys & above” – see Another Chase project for which Chase Construction claims credit is the Childers Square commercial office building completed in 2009.
6.The owners corporation seemingly was unaware Chase no longer existed and continued to communicate with Chase Group seeking resolution of outstanding defect issues. In significant respects, these remained unresolved.
7.In August 2018, the owners corporation commissioned Diagnostech Pty Ltd (Diagnostech) to inspect the common property and 330 individual lots in the Manhattan Apartments and prepare a report on all observable defects. Inspections were undertaken in October 2018. In its report dated 18 December 2018, Diagnostech identified extensive balcony deck waterproofing defects, balcony tiling defects, balcony slab cracking defects, delamination of glass balustrade panels, loose balustrade cap railings, planter box leaching defects, basement cracking defects, carpark level 2 water ingress defects, water ingress into internal spaces, unsealed façade joints, roof defects, corrosion of sole occupancy unit door frames and potential compliance and fire safety issues. Diagnostech concluded that the building work did not comply with the Building Code of Australia 2011 – Volume 1 (BCA – 2011), applicable Australian Standards that were current when the work was done, the NSW Fair Trading – Guide to Standards and Tolerances published in 2007 (Tolerances Guide) and the Building Act 2004 (Building Act).
8.On 5 December 2018, the owners corporation wrote to the Registrar noting that numerous attempts to engage with the Chase Group and reach a mutual resolution of the defect issues had been unsuccessful and applied to the Registrar to issue a rectification order pursuant to section 38 of the Construction Occupations (Licensing) Act 2004 (COLA).
9.On 27 March 2019, a copy of the Diagnostech report was delivered to the CEO of Chase Building Group Canberra Pty Ltd. On 18 April 2019, the CEO advised Access Canberra he was reviewing the report and anticipated a response would be given to the owners corporation by mid-May 2010. This did not happen. On 13 September 2019, Lexmerca Lawyers, acting on behalf of the Chase Group, wrote to Access Canberra advising that Chase was currently deregistered and denying liability for the alleged defects.
10.On 19 March 2020, the Registrar issued Mr Jolley with a notice of intention to make a rectification order (notice of intention) pursuant to section 6 of the COLA.
11.Mr Jolley provided submissions in response to the notice of intention on 29 June 2020. He provided further submissions on 22 February 2021.

The decision to issue a rectification order to Mr Jolley

12.On 18 March 2021, the Registrar decided to issue a rectification order to Mr Jolley pursuant to section 38 of the COLA, requiring him to rectify the following defects.
(a)Defect 1 – Balcony Slab Cracking Defects: The Registrar noted that according to the Diagnostech report the cracking was caused by inadequate control of building movement, thermal expansion and/or failure to control dry shrinkage during the concrete curing process. The Registrar referenced examples in the Diagnostech report of efflorescence staining to balcony slab edges considered to be associated with the failure of the balcony deck membrane system and tile application and evidence of water penetration through cracks in the balcony slab soffit resulting in moisture staining and the formation of calcium carbonate deposits and stalactites on the soffit associated with the failure of the upper level deck waterproofing system. The Registrar considered the work did not meet the requirements under clauses BP1.1 and BP1.4 of BCA – 2011; AS 3600:2009 – Concrete Structures (AS 3600); and the Guide to Standards and Tolerances – Cracks in concrete slabs.
(b)Defect 2 – Balcony Tiling Defects: The Registrar noted that according to the Diagnostech report inadequate installation of balcony tiling has resulted in tiles cracking or debonding from the substrate due to inadequate application of tile adhesive and control of movement. The Registrar referenced examples in the Diagnostech report of debonded and drummy tiles due to inadequate control of building movement and tile expansion and efflorescence staining to balcony slab edges associated with the failure of the balcony deck membrane system and tile application. The Registrar considered the work did not meet the requirements under clause A2.1 Suitability of Materials, clauses BP1.1, BP 1.4, FP 1.3 and clause FP 1.4 of BCA – 2011; AS 4654.2.2009 – Waterproof membrane system for exterior use – Above ground level. Part 2: Design and installation (AS 4654); AS 3958.1.2007 – Ceramic Tiles; AS 3600; and section 42 of the Building Act.
(c)Defect 4 – Delamination of Balustrade Glass Panels: The Registrar noted that the Diagnostech report identified many glass balustrade panels with evidence of delamination and bubbling at corners and along panel edges. The underlying cause could not be determined at the time of inspection but the issue was considered to be widespread and potentially associated with a product failure. The Registrar noted that only some panels had been marked to confirm compliance with Australian Standard – AS1288, whereas others bore a mark confirming they were manufactured in Vietnam and a large number did not contain any identification codes. The Registrar considered the work did not meet the requirements under clause A2.1 Suitability of Materials, FP1.3 and FP-1.4 of BCA - 2011 and relevant Standards.
(d)Defect 5 – Loose Balustrade Cap Railings: The Registrar noted that according to the Diagnostech report a significant number of stainless steel cap rails on the top edge of glass balustrade infill panels were observed to be loose and at risk of detaching due to the application of an incompatible adhesive product. The Registrar considered the work did not meet relevant standards under section 42 of the Building Act and the relevant requirements under clause DF1 of BCA – 2011, AS 1288:2006 – Glass in buildings and AS 2208:1996 Safety glazing materials in buildings.
(e)Defect 6 – Basement cracking defects: The Registrar noted that according to the Diagnostech report, basement carpark levels B1 and B2 revealed widespread and significant cracking in the floor slabs and transverse beams. The Registrar considered the work did not meet relevant standards under section 42 of the Building Act and the relevant requirements under clause B1.4 of BCA – 2011 and AS 3600:2009 – Concrete Structures.
(f)Defect 7 – Water Ingress into Internal Spaces: The Registrar noted that according to the Diagnostech report a number of potential water ingress defects were identified within the internal common corridors and sole occupancy units, considered to be associated with defective construction detailing of the façade – including windows and doors – and the roof. The Registrar considered the work did not meet relevant standards under section 42 of the Building Act and the relevant requirements under clauses FF1.3, FP1.3, FP1.4 and A2.1 of BCA – 2011.
(g)Compliance and Fire Safety Concerns: The Registrar noted that according to the Diagnostech report a number of concerns were raised that may constitute compliance and fire safety issues. The Registrar required that a Fire Engineer be engaged to undertake a fire safety audit of the entire building to advise and rectify if necessary and provide a report to the owners corporation once the work was finalised.

Application for review of the decision to issue a rectification order

13.On 14 April 2021, Mr Jolley filed an application in the Tribunal for review of the decision to issue the rectification order, seeking an order pursuant to section 68(3) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) that the decision be set aside and substituted by a decision not to issue a rectification order.
14.On application by the owners corporation, the Tribunal made orders joining the owners corporation as a party to the proceeding.
15.On 15 June 2021, Mr Jolley applied to the Tribunal for a preliminary hearing to determine whether the rectification order was invalid on either of two grounds: first, that the notice of intention 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 second, that the notice of intention referred to the 2013 edition of the BCA instead of the 2010 edition.[2] The application was heard on 26 August 2021. On 19 November 2021, the tribunal, constituted by Senior Member T. Foley, determined that the rectification order was not invalidated on either of those grounds and published written reasons for its decision.[3]
[2] In fact, the correct edition is BCA-2011, which is referenced in the rectification order.
[3] Jolley v Construction Occupations Registrar & Anor [2021] ACAT 112
16.On 29 March 2022, Mr Jolley made a further application to the Tribunal for a preliminary hearing to determine whether the Registrar has 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. Among other things, the amendments to COLA gave the Registrar power to make a rectification order in relation to a person who was a director of a corporate licensee, 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. The application was heard on 11 May 2022. On 8 June 2022, the tribunal, constituted by Presidential Member G. McCarthy, determined that a rectification order can be issued to a nominee of a corporate licensee and published written reasons for its decision.[4] Relevantly, the tribunal said:[5]
The words “a licensee or former licensee” in section 34(1) are unambiguous and should be given their ordinary meaning, namely a person (whether they be an individual, a corporation or partnership) that is (or was) a licensee for the purposes of the COLA irrespective of what role the licensee might perform.
The applicant is a licensee. He is the holder of a Class A builder’s licence, licence number 200428485. Being a licensee, he is an ‘entity’ for the purpose of section 34(1). The Registrar therefore had jurisdiction to make a rectification order against him.
In my view, the question posed by the applicant…deflects and obscures the considerations that are relevant to the answer. To ask whether a nominee of a licensee can be the subject of a rectification order ignores the central question: is the person who is the subject of a rectification order ‘a licensee or former licensee’? In this case, the answer to that question is plainly “yes”. The applicant admits he is a licensee.

…
Whether a licensee is or was a nominee for another licensee might have a bearing on whether it is “appropriate” to make a rectification order against the nominee or on the content of the order but it has no bearing on whether the nominee is (or was) a licensee and so, at law, can be the subject of a rectification order.
[4] Jolley v Construction Occupations Registrar & Anor [2022] ACAT 47
[5] [2022] ACAT 47 at [92]-[96]

17.We respectfully agree and have adopted this as the basis for our decision.
18.The evidence was heard over 4 days in the first week of May 2023. Subsequently, the parties filed detailed written submissions in chief and in reply. The Tribunal heard oral submissions on 15 June 2023 and reserved its decision.

The statutory context

19.The versions of the Building Act and the COLA in force on 26 April 2012, when relevant building approval was given, were respectively Republication 16 and Republication 26. The versions of the Building (General) Regulation 2008 (Building Regulation) and Construction Occupation (Licensing) Regulation 2004 (COL Regulation) in force then were respectively Republication 11 and Republication 22. In these reasons, all references to the acts and regulations relate to these versions unless stated otherwise.

The COLA

20.The COLA provides for the licensing and regulation of persons in a construction occupation.
21.The COLA defines a ‘construction practitioner’ as an entity that provides, has provided or proposes to provide a ‘construction service’.[6]
[6] COLA, section 6(1)
22.A ‘construction service’ is the doing or supervision of work in a ‘construction occupation’.[7] A note[8] directs attention to the definition of ‘supervise’ in the dictionary for the Act, which provides that “supervise includes direct”.
[7] COLA, section 6(2)
[8] COLA, note to subsection 6(2)
23.‘Builder’ is a ‘construction occupation’[9] and a ‘builder’ is an entity that provides, has provided or proposes to provide a ‘building service’.[10] A ‘building service’ is the doing or supervision of ‘building work’, other than building work that involves handling asbestos or disturbing friable asbestos.[11]
[9] COLA, section 7(c)
[10] COLA, section 8(1)
[11] COLA, section 8(2)
24.‘Building work’ is defined in section 6 of the Building Act. Relevantly it includes work in relation to the erection of a building. The Building Regulation provides exemptions, none of which are presently material.[12]
[12] Building Regulation, section 6 and schedule 1
25.It follows that supervising work in relation to the erection of a building includes directing the work and is a ‘construction service’ within the meaning of the COLA.
26.A corporation is eligible to be licensed in a construction occupation only if it has at least one nominee appointed by it and the nominee is responsible for the supervision of the construction services provided by it.[13] A nominee must be an ‘eligible individual’.[14] An individual is eligible to be the nominee of a corporation or partnership if, among other things, the individual is a director or employee of the corporation[15] and is licensed in a construction occupation that the corporation is licensed in.[16] For a construction occupation divided into classes, the individual must be licensed in the same class, or a class that allows the nominee to exercise the same functions as the class the corporation is licensed in.[17] Critically, the individual must be able to exercise the functions of a nominee on a daily basis.[18]
[13] COLA, section 28
[14] COLA, subsections 28(4) and (6)
[15] COL Regulation, section 19(a)
[16] COLA, section 28(6)(b); COL Regulation, section 19(c)
[17] COL Regulation, section 19(e)
[18] COL Regulation, section 19(d)
27.A nominee of a licensed corporation has two statutory functions. First, the nominee must supervise the construction services of the corporation for which the nominee is responsible (relevant construction services).[19] Second, the nominee must ensure that the relevant construction services comply with the COLA and the operational Acts.[20]
[19] COLA, section 31(a)
[20] COLA, section 31(b)
28.The nominee commits an offence if the nominee fails to adequately supervise the relevant construction services. [21] The nominee commits a separate offence if the nominee fails to ensure that the relevant construction services comply with the COLA and the operational Acts.[22] However, section 31(3) provides that a failure of either kind does not result in the nominee committing an offence under subsection 31(2) if the nominee has given the licensed corporation a ‘mandatory requirement’ in relation to the matter that made up the failure and has given a copy to the Registrar, and the failure would not have happened if the mandatory requirement had been complied with.[23] A ‘mandatory requirement’ is a written requirement by the nominee that the corporation do something, or not do something, in compliance with, or to achieve compliance with, the COLA or an operational Act.
[21] COLA, section 31(2)(a)
[22] COLA, section 31(2)(b)
[23] COLA, section 31(3)
29.The licensed corporation also commits an offence if the nominee fails to adequately supervise the relevant constructions services or fails to ensure that they comply with the COLA and the operational Acts.[24]
[24] COLA, section 31(4)
30.The requirement to ‘ensure’ the relevant construction services comply with the COLA and the operational Acts involves applying the ordinary meaning of the word ‘ensure’, which is to guarantee, secure or make certain that the required outcome is achieved. The limited exception provided by section 31(3) means there is a heavy onus on the nominee to make sure the relevant construction services are provided in a way that complies with the COLA and the operational Acts.
31.Mr Jolley denied that a nominee’s functions include to direct how work should be done. He submitted that the COLA makes specific provision for the nominee to be able to issue a mandatory requirement to the licensee because “a nominee does not have legal authority to direct the licensee to do or not do anything” and “can only make recommendations”.[25] Otherwise, if a nominee had power to direct how work should be done, the nominee could simply issue a direction to the licensee. Mr Jolley submitted that a ‘mandatory requirement “carries no legal force under the legislation” [26] – in the sense that it does not require the licensee to obey the requirement – and simply operates as a defence to a criminal charge that may be brought against the nominee.
[25] Transcript of proceedings, page 447 lines 16-17
[26] Transcript of proceedings, page 447 lines 43-45
32.Mr Jolley founded this submission on the proposition that ‘supervise’ has a different meaning in division 3.2 of the COLA than it has elsewhere in the Act. He accepted that a ‘construction service’ is the doing or supervision of work in a construction occupation as provided by section 6(2) and that a nominee provides a construction service – namely, supervision. He submitted that although the dictionary for the COLA provides that “supervise includes direct”, the definition is inclusive and therefore whether ‘direct’ is imported into the meaning of ‘supervise’ in a specific instance depends on the context. The context in which ‘supervise’ (or ‘supervision’) describes the functions of a nominee is such that it would be inappropriate to construe the nominee’s functions to extend to directing, as well as supervising, the construction services provided by the corporate licensee. Mr Jolley gave, as an example, section 28(2)(b) of the COLA, which provides that a corporate licensee complies with the subsection if the nominee is responsible for the supervision of the construction services provided by it. He submitted that if the nominee’s function is to direct as well as supervise the construction services provided by the licensee, a corporate licensee could comply with the section only if it vested in the nominee “power to dictate all aspects of the construction work carried out by the licensee” [27] irrespective of the wishes of the board of directors or chief executive officer.
[27] Transcript of proceedings, page 451 lines 16-20
33.We do not accept Mr Jolley’s submissions, which would result in the statutory functions of a nominee being reduced to that of a mere observer. We see nothing in the text, context or purpose of the nominee provisions in division 3.2 of the COLA to support giving ‘supervise’ and ‘supervision’ the restricted meaning for which Mr Jolley contends.
34.Where the evident purpose of the statutory scheme established by division 3.2 of the COLA includes to ensure that construction services provided by a corporate licensee comply with the COLA and to make the nominee personally responsible to ensure this happens, it is clear, in our view, that Mr Jolley’s submission that a nominee “does not have legal authority to direct the licensee to do or not do anything” and “can only make recommendations” [28] cannot be accepted.
[28] Transcript of proceedings, page 447 lines 16-17
35.The ordinary meaning of ‘supervise’ and ‘supervision’, as defined in the Macquarie Dictionary (8^th Ed.), is as follows:
supervise…to oversee (a process, work, workers etc.) during execution or performance; superintend; have the oversight and direction of.
supervision…the act or function of supervising; oversight; superintendence.

36.Also relevant are the Macquarie Dictionary definitions of ‘oversee’, ‘oversight’ and ‘superintend’ – words whose meaning overlaps with ‘supervise’ and ‘supervision’:
oversee…1. to direct (work or workers); supervise; manage. 2. to see or observe without being seen…
oversight…1. supervision; watchful care…2. to supervise; watch with attention.
superintend…1.a. to oversee and direct (work, progress, affairs, etc.). b. exercise supervision over (an institution, place, etc.). 2. to exercise supervision

37.In our view, the meaning of ‘supervise’ given by dictionary for the COLA is consistent with its normal meaning in common usage – namely, to oversee the execution or performance of a task or activity to ensure that it is done correctly. Giving direction in relation to the performance or execution of a task is integral to the act of supervision.
38.The statutory functions of a nominee – to supervise the construction services of the corporate licensee and to ensure that the relevant construction services comply with the COLA and the operational Acts – require the nominee to have oversight of the relevant construction services and to direct their performance to ensure the services comply with the COLA and the operational Acts. The construction service the nominee provides in performing each function is the same – supervision of the relevant construction services for which the nominee is responsible.
39.Section 31(2) establishes the standard to which the construction service provided by the nominee must be performed. Supervision must be adequate and it must ensure that the relevant construction services for which the nominee is responsible comply with the COLA and the operational Acts. A nominee contravenes section 31(2)(a) of the COLA where it is established that the nominee has failed to adequately supervise the relevant constructions services. Supervision may be inadequate even if it does not result in the relevant construction services contravening the COLA or an operational Act. A nominee contravenes section 31(2)(b) of the COLA where it is established that the nominee has failed to ensure that the relevant construction services comply with the COLA or an operational Act. In most circumstances, proof that a relevant construction service for which a nominee is responsible does not comply with section 42 of the Building Act (discussed below) will be sufficient to establish that the nominee has contravened section 31(2)(b). In either case the nominee has provided a construction service – i.e. supervision – otherwise than in accordance with the COLA.
40.Mr Jolley sought to characterise the Registrar’s and owners corporation’s submissions in relation to the functions and responsibilities of a nominee as absurd, drawing upon the following quotation from Lewis Carroll’s book, ‘Through the Looking Glass’ to set the tone of the debate:
Alice laughed. “There’s no use trying,” she said. “One can’t believe impossible things.”
“I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”[29]
[29] Applicant’s Outline in Reply, dated 8 June 2023

41.Mr Jolley submitted:
Both the Registrar and the Owners submit in effect that nominees personally guarantee that construction works strictly complied with all aspects of the Building Code of Australia, comply with all Australian Standards, are free from any design errors in the approved plans and have no latent defects, for more than 10 years.
This personal guarantee is broader than the statutory warranties in s 88 of the Building Act 2004 (ACT) and runs for years longer than those warranties.
The COLA does not contain a section expressly stating that rectification orders can be issued to nominees. To reach that result requires an exercise in statutory interpretation involving the collocation of multiple statutory provisions and the drawing of inferences about legislative intention.
The submission that nominees should be strictly liable to rectify defects or be required to meet an impossible standard should be rejected. It could not be the legislative intention to impose that potentially catastrophic and uninsurable risk. (Original emphasis)[30]
[30] Applicant’s Outline in Reply, dated 8 June 2023, [1]-[4]

42.Several answers can be made to this.
43.First, any individual or corporate holder of a Class A builder’s licence who does or supervises building work must ensure the work complies with the Building Act and the version of the BCA applicable to the work, including relevant Australian Standards referenced in the BCA. This includes ensuring that work involving the use of products or systems – which applies to virtually every aspect of building work – is carried out in a proper and skilful way. Failure to do so is an offence and may result in civil liability and regulatory or disciplinary action, including the making of a rectification order against the individual licensee.
44.Second, the evident purpose of part 3.2 of the COLA is to place a corporate licensee on the same footing as an individual licensee by making an individual – the nominee – personally responsible for supervision of the work to ensure that the corporate licensee’s statutory obligations in relation to compliance with the Building Act, including the BCA and relevant Australian Standards, are met.
45.Third, as the complexity of products or systems used in building work increases, the level of supervision that must be provided to ensure that building work complies with the Building Act, including the BCA and relevant Australian Standards, necessarily must also increase. That this may require persons who are responsible for supervising building work – whether as an individual licensed builder or as the nominee of a corporate licensee – to have a level of understanding of the current requirements of the BCA, relevant Australian Standards and manufacturer’s and supplier’s instructions applicable to the work that some may think is practically unattainable, is a matter for the legislature. A nominee must hold a licence in the same occupation class as the corporate licensee. To be eligible to be licensed the nominee must have the skill and knowledge reasonably necessary to satisfactorily exercise the functions of the occupations class.[31] If, as Mr Jolley submits, this requires supervision by a nominee to an ‘impossible standard’, it is the same standard that an individual holder of a Class A builder’s licence who does building work is required to meet. As the legislation currently stands, both are required to have the skills and knowledge reasonably necessary to ensure that building work done under their supervision complies with the Building Act, including the BCA and relevant Australian Standards and are responsible to achieve that outcome.
[31] COL Regulation, section 13(2)(b)
46.Fourth, the question whether a licensed builder, including the nominee of a corporate licensee, may in some circumstances be responsible to ensure that the approved drawings are free from design errors, does not arise in this application.
47.Fifth, Mr Jolley’s submission that the submissions of the Registrar and the owners corporation would require a nominee to ‘personally guarantee’ that building work is free from latent defects – in effect making the nominee strictly liable to rectify defects – for a period of ten years, being years longer than the statutory warranties provided by section 88 of the Building Act, is incorrect on several levels.
48.A nominee is responsible to supervise the building work done by the corporate licensee to ensure that it complies with the Building Act, including the BCA and relevant Australian Standards. In that respect, the nominee is in a similar position as the corporate licensee and an individual licensed builder who does or supervises building work. Where a corporate licensee has carried out non-compliant building work, regardless of whether it manifests only long after the work is done, the nominee may be subject to a rectification order, as the Tribunal decided previously. Whether an order should be made in all the circumstances involves discretionary considerations which we discuss later. Exposure to the risk of regulatory action involving the making of a rectification order is not equivalent to having a civil liability for breach of a statutory warranty.
49.Statutory warranties did not apply to the erection of the Manhattan Apartments. Prior to the amendments by the Building and Construction Legislation Amendment Act 2016, which commenced on 19 August 2017, the erection of a building intended mainly for private residential use of more than 3 storeys, excluding a storey used exclusively for parking, was not considered residential building work and was not subject to the statutory warranties provided by section 88 of the Building Act.
50.Where statutory warranties apply to residential building work, an action may be brought against the builder for breach of statutory warranty up to ten years after a certificate of completion is issued for the work.[32] In Koundouris v The Owners – Units Plan No 1917 (Koundouris)[33] the Court of Appeal decided that a person who purchases a unit during the relevant warranty period – relevantly 6 years after the completion day for work in relation to a structural element of a building and 2 years after the completion day for work in relation to a non-structural element – obtains the benefit of a new warranty by the builder and succeeds to the warranty rights of their predecessor in title, provided those rights have not expired already. The Court of Appeal decided that a new cause of action accrues on the date of completion of each contract for sale but left open the possibility that rights may accrue earlier upon entry into the contract.[34] The limitation period for an action for breach of statutory warranty is 6 years after the date of accrual of the cause of action, subject to an overall 10-year limit provided by section 142 of the Building Act.[35]
[32] Building Act, section 142
[33] [2017] ACTCA 36
[34] [2017] ACTCA 36 at [84]
[35] [2017] ACTCA 36 at [58]-[60], [64], [83]
51.A rectification order may be made within the 10-year period mentioned in section 35(6) of the COLA – for most purposes this will be a period ending ten years from the day a certificate of occupancy is issued, subject to limited exceptions that are not presently material. It may be accepted that regulatory and enforcement action may be taken at a time when civil remedies for breach of statutory warranty are no longer available, or as in the case of the Manhattan Apartments, were never available. In that respect, the nominee is, and always has been, in the same position and subject to the same risks as an individual holding a Class A licence who does or supervises building work.

52.Finally, Mr Jolley’s submission to the effect that the COLA does not provide expressly for a rectification order to be made against a nominee appears to be an attempt to reagitate issues decided by Presidential Member G. McCarthy in Jolley v Construction Occupations Registrar & Anor.[36] Despite the extensive and elaborate submissions advanced by Mr Jolley, in our view the text, context and purpose of part 3.2 of the COLA leaves no room for doubt that a rectification order may be made against a nominee. Whether an order should be made is another matter entirely and depends on the circumstances of the case.

The Building Act
[36] [2022] ACAT 47

53.The Building Act is an operational Act.[37] Sections 42, 49 and 51 are important provisions that govern how building work must, or must not, be carried out.
[37] COLA, section 16
54.Section 42 prohibits building work from being carried out except in accordance with stated requirements. Carrying out building work in contravention of section 42 is a strict liability offence under section 51. Relevantly:
(a)the materials used in the building work must comply with the standards under the BCA[38] for the materials in buildings of the kind being built or altered;[39]
(b)the way the materials are used must comply with their acceptable use under the BCA;[40]
(c)the building work must be carried out in a proper and skilful way;[41]
(d)the building work must be carried out in accordance with the approved plans;[42] and
(e)the building work required to be done only by a licensed builder must be carried out by or under the supervision of the builder mentioned in the building commencement notice and the builder’s licence must authorise the doing of the work.[43]
[38] Definition of ‘building code’ in the Building Act, section 136(1); see also Building Regulation, section 43A
[39] Building Act, section 42(1)(a)
[40] Building Act, section 42(1)(b)
[41] Building Act, section 42(1)(c)
[42] Building Act, section 42(1)(d)(i)
[43] Building Act, section 42(1)(e)

55.Mandatory considerations for deciding whether work is carried out in a proper and skilful way are prescribed under the Building Regulation.[44] These include:
(a)whether the work uses a product or system in accordance with any accessible instructions, directions, guidelines or suggestions of the maker or seller of the product or system;[45]
(b)whether the work is in accordance with any relevant rules or guidelines published by Standards Australia;[46]
(c)whether, as part of the work, a product or system is being, or has been, used in a way that a reasonable person would expect is contrary to the intended use of the product or system;[47]
(d)whether, as part of the work, a product or system is being, or has been, used in a way that the maker has given written notice will void the maker’s warranty;[48]
(e)whether a reasonable person doing the work would know or suspect on reasonable grounds that the use of a product or system in a particular way would cause more instability, or affect the durability or soundness of the product or system or of the building work than if the product or system were used appropriately;[49]
(f)how reasonable it is in all the circumstances for the user of a product or system to rely on the maker’s statement that the product or system complies with a stated standard;[50]
(g)whether the building work contravenes “the Act or another territory law”.[51] Building work that contravenes the BCA “contravenes the Act or another territory law”.[52]
[44] Building Act, section 42(2) and Building Regulation, section 31 (material and work standards) and section 32 (construction tolerances)
[45] Building Regulation, section 31(a)
[46] Building Regulation, section 31(b)
[47] Building Regulation, section 31(c)
[48] Building Regulation, section 31(d)
[49] Building Regulation, section 31(e)
[50] Building Regulation, section 31(f)
[51] Building Regulation, section 31(g)
[52] Legislation Act 2001, sections 97, 104

56.Additionally, consideration must be given to whether the work has been carried out to meet or exceed the standards stated in the approved plans, or if the approved plans do not vary reasonable minimum industry standards, to meet or exceed ‘reasonable minimum industry standards’. A mattercovered by the Tolerances Guide meets ‘reasonable minimum industry standards’ if the matter is not a defect under the guide.[53]
[53] Building Regulation, section 32 and schedule 3, part 3.1
57.The BCA is a statutory instrument in force under the Building Act.[54] A person must carry out building work only in a way that will, or is likely to, result in a building that complies with the BCA.[55] Failure to do so is a strict liability offence.[56] Building work is taken to result in a building that complies with the BCA if it complies with the BCA as in force at the time the approved plans for the building work were approved.[57] Building work is taken not to result in a building that complies with the BCA if, for each provision of the BCA with which the building must comply, the building will not comply with the deemed-to-satisfy provision of the BCA and the approved plans do not state an alternative solution under the BCA.

The Registrar’s power to make a rectification order
[54] Building Act, section 136(1); see also Building Regulation, section 43A
[55] Building Act section 49(1)
[56] Building Act, section 51(2) and (3)
[57] Building Act section 49(4)

58.Part 4 of the COLA confers power on the Registrar to make a rectification order in relation to an ‘entity’ that is a licensee or former licensee. [58]
[58] COLA, section 34(1)
59.For an individual to be eligible to be appointed the nominee of a corporate licensee, it has always been a requirement that the individual must be licensed in the construction occupation and occupation class for each of the construction services for which the individual is to be responsible. At all times since the COLA commenced on 1 September 2004, a nominee had to be an individual who is a ‘licensee’ and therefore, an ‘entity’ for the purposes of Part 4 of the COLA.[59] The power to make a rectification order against a nominee has existed since the Act commenced, although this may be the first time the power has been used. Submissions on behalf of Mr Jolley at times stressed this, suggesting he has been treated unfairly because, in assuming the role of nominee, he understood he could be prosecuted for an offence under the COLA – a risk he was willing to accept – but did not realise that a rectification order might be made against him. However, this is immaterial to any issue the Tribunal must decide.
[59] Jolley v Construction Occupations Registrar & Anor [2022] ACAT 47 at [92]-[96]; Hill v Construction Occupations Registrar [2021] ACAT 21 at [55]
60.The Registrar must exercise the power under Part 4 in accordance with the provisions of the legislation as in force when the decision is made. In this case, the Registrar’s decision was made on 18 March 2021 and accordingly is governed by Republication 56 of the COLA. Although the Registrar’s powers had been extended by then to permit a rectification order to be made in certain circumstances against the director of a corporate licensee that has been wound up or deregistered, those powers are not available in this case.[60]
[60] See the discussion of section 39A of the COLA in Hill v Construction Occupations Registrar [2021] ACAT 21
61.There are certain pre-conditions that must be satisfied before the Registrar’s power to make a rectification order is enlivened.
62.If the Registrar believes on reasonable grounds that the entity – in this case, Mr Jolley in his capacity as nominee of Chase – has provided a construction service otherwise than in accordance with the COLA or an operational Act, the Registrar may give the entity a notice of intention to make a rectification order.[61] The notice must invite submissions about the making of the order within the time stated in the notice.[62]
[61] COLA, section 34
[62] COLA, section 34(2) – the minimum time the Registrar must allow for submissions is 5 working days after the entity receives the notice. In this case, Mr Jolley was given 10 days initially. This was extended by several months.
63.To be clear, the question whether Mr Jolley provided a construction service otherwise than in accordance with the COLA or an operational Act must be decided considering the versions of the COLA and the Building Act that applied when the relevant construction services were provided. These are identified earlier in paragraph 19.
64.The Registrar may make a rectification order in relation to the entity under section 38 of the COLA if the conditions in section 35(1) are met – relevantly for present purposes, that:
(a)the Registrar has given the entity a notice of intention to make a rectification order;
(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 the entity has contravened[63] the COLA or an operational Act and it is appropriate to make a rectification order in relation to the entity.
[63] The dictionary, part 1 in the Legislation Act 2001 provides that “contravene includes fail to comply with”. Pursuant to section 144 of the Act, the definition applies to all Acts and statutory instruments. Thus, an entity contravenes the COLA or an operational Act when it fails to comply with it.

65.Pursuant to section 36 of the COLA, in deciding whether it is, or may be, appropriate to make a rectification order in relation to the entity, the Registrar must consider:
(a)any injury, loss or damage caused, or that could have been caused, by the entity’s contravention of the COLA or an operational Act;
(b)if a rectification order is proposed – how the proposed order may affect people affected by the contravention.

66.The Registrar may consider anything else that is relevant.[64]
[64] COLA, section 36(2)
67.If the Registrar decides it is appropriate to make a rectification order in relation to the entity, the Registrar may make an order requiring the entity to take stated action to rectify work done as part of a construction service, among other things.[65] If the entity is not licensed to do something required to be done under the order, the entity must arrange, and pay for, the thing to be done.[66] The rectification order must state a period within which what is required to be done must be done.[67]

The Tribunal’s functions and powers on review of the Registrar’s decision
[65] COLA, section 38(1)
[66] COLA, section 38(2)
[67] COLA, section 38(4). Except in the case of an emergency rectification order, the stated period for rectification must be not less than 1 month after the day the rectification order is given to the entity – COLA, section 38(4)

68.A decision to make a rectification order in relation to an entity is a reviewable decision.[68] The entity against whom the order is made may apply to the ACAT for a review of the decision.[69] Any other person whose interests are affected by the decision also may apply also .[70]
[68] COLA, section 123A; COL Regulation, section 42A and schedule 4
[69] COLA, sections 123B, 123C(a); COL Regulation, section 42B and schedule 4
[70] COLA, section 123C(b)
69.The Tribunal’s jurisdiction on review is governed by section 68 of the ACAT Act, which provides:
(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.
(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.

70.Section 69 provides:
(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.

71.The following summary of the principles that apply on review is taken from the Registrar’s opening submissions, which we accept as correct.[71]
(a)The Tribunal must determine for itself the correct or preferable decision by conducting its own independent assessment of the matters necessary to be addressed.
(b)The review must be conducted based upon the facts and circumstances as they exist at the date of the hearing, considering any new, fresh, additional or different evidence relevant to the decision.
(c)The Tribunal may exercise any function given by the COLA to the Registrar for making the decision.
(d)The jurisdiction of the Tribunal is not defined by the specific terms of the decision that was made but rather by the boundaries of the administrative controversy or questions that gave rise to the decision under review. The boundary of the controversy or the questions that gave rise to the decision must be determined based upon the facts of the case and the nature of the decision the Registrar was required to make, judged in its proper context.
(e)The Tribunal’s jurisdiction on review is not affected by whether the original decision is legally effective or valid. The review is of the decision in fact made. The validity of the decision is a matter for a court and not the Tribunal.
(f)The Tribunal’s power on review is not affected by procedural requirements that bound the Registrar. The Tribunal has its own procedures for the purposes of conducting the review.
[71] Respondent’s Opening Submissions dated 30 April 2023, [6]

72.The review of an administrative decision is often said to involve the Tribunal ‘standing in the shoes’ of the decision-maker. This is true only in the sense that the Tribunal may exercise any function given the decision-maker by the enabling legislation – in this case, the COLA. Although in this application the Tribunal is required to exercise the functions of the Registrar in deciding whether a rectification order should be made against Mr Jolley, the power the Tribunal is exercising in making its decision comes from section 68(3) of the ACAT Act, not section 35 of the COLA.
73.This is important because the Registrar may make a rectification order only within 10 years of the day on which a certificate of occupancy was issued (with certain limited exception that are not relevant here).[72] In this case, the certificate of occupancy was issued on 8 August 2013. The rectification order was made on 18 March 2021, within the 10-year period. Although, the Tribunal’s decision post-dates the expiry of that period, the Tribunal’s power to make an order under section 68(3) of the ACAT Act is unaffected.

The construction services provided by Chase and Mr Jolley
[72] COLA, sections 35(5) and 35(6)

74.Chase was the builder mentioned in the building commencement notice for the Manhattan Apartments issued on 10 May 2012. A commencement notice is required where, under the COLA, any of the work must be done by a licensed builder and a licensed builder has been engaged to do the work.[73] Section 42(1)(e) of the Building Act provides that for building work required to be done only by a licensed builder the building work must be carried out by or under the supervision of the builder mentioned in the building commencement notice.
[73] Building Act, section 37(1)
75.The Construction Management Agreement (CMA) between Chase and the developer, Manhattan Development Pty Ltd, provided for Chase to carry out and complete the ‘Works’ on the terms and conditions of the CMA.
(a)Clause 2 provided for Chase to provide ‘Construction Management Services’ for the completion of the Works in accordance with the Project Brief and the Drawings and Specifications.
(b)Clause 5.9 provided for Chase to administer, supervise, inspect, co-ordinate and control the work of all Trade Contractors and ensure the execution and completion of the Trade Contracts in a proper and workmanlike manner according to the Drawings and Specifications and the obligations of the respective Trade Contractors.
(c)Clause 9(m) provided for Chase to monitor the work of Trade Contractors in order to assess their performance and likely future performance and be reasonably satisfied that the work is being performed in accordance with the requirements of the Trade Contract.
(d)Clause 9(aa) provided for Chase to monitor each Trade Contractor’s defects liability period and procuring the Trade Contractors to remedy any defects in the Works in accordance with the relevant defects liability period.

76.Chase was engaged to provide a ‘building service’ – namely, the doing or supervising of building work. Most if not all of the building work was done by trade contractors under Chase’s supervision. Whether Chase did the building work itself or it supervised others doing the work, as the licensed builder engaged to do the work Chase was the person that did the work for the purposes of the Building Act. As such Chase was responsible to ensure that building work was not carried out except in accordance with the requirements of section 42 of the Building Act.
77.Mr Jolley, in his capacity as nominee of Chase was responsible for the supervision of the building service provided by Chase. In doing so he was required to provide adequate supervision and ensure that the building service complied with the COLA and the Building Act. Relevantly the supervision he provided had to ensure that building work for which Chase was responsible was not carried out except in accordance with the requirements of section 42 of the Building Act.

The real issues for determination

78.Three issues have to be determined.
(a)whether the construction service provided by Chase – doing or supervising building work – contravened section 42 of the Building Act;
(b)if so, whether the construction service provided by Mr Jolley – supervision of the constructions 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 by the contravention(s): and
(iii)anything else that is relevant.

Expert evidence

79.The Registrar’s evidence was entirely documentary and included copies of the Diagnostech report dated 18 December 2018 and Peak Consulting reports dated 4 April 2016 and 1 June 2016 on which the Registrar relied in deciding to issue the rectification order. The authors of those reports did not give evidence.
80.Mr Jolley served expert reports by:
(a)Nicholas Joannides, an experienced forensic engineering consultant specialising in remedial works for multi-storey residential buildings, providing an assessment of alleged building defects and recommended remedial works;
(b)Aaron Hazelton, an experienced structural engineer, providing an assessment whether the structural design of the balconies caused or contributed to observed balcony slab cracking;
(c)Mark Thomas, a NATA[74] accredited materials testing specialist, providing the results of testing conducted on two glass balustrade panels;

(c)Peter Karsai, an experienced structural engineer specialising in the design and remediation of building façades, providing an assessment of the glass balustrades;
(d)Philip Serio, a waterproofing consultant, providing suggestions for overcoating aged Bostik Dampfix Gold waterproofing membrane used on the project.
[74] National Association of Testing Authorities, Australia

81.The owners corporation served expert reports by:
(a)Dennis Stephenson, an experienced remedial building consultant who is the Managing Director of Diagnostech, providing an updated assessment of alleged building defects and recommended remedial works considered in the original Diagnostech report;
(b)Chris Buchanan, an experienced structural engineer who is a director of Sellick Consultants Pty Ltd, providing an assessment of balcony slab cracking and its relationship with balcony waterproofing failures;
(c)Dr Leon Jacob, an experienced engineer specialising in the design of curtain wall and glass systems, providing an assessment of the glass balustrades.

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.
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.
85.As to defect 4 (delamination of balustrade glass panels) Messrs Stephenson, Joannides and Dr Jacob agreed balustrade glazing defects exist and that rectification work is required. Mr Stephenson and Dr Jacob considered wholesale replacement of all balustrade glazing is required. Mr Joannides considered replacement is required only where delamination is occurring at spigots and along the full side edges of glass panels. Mr Karsai’s report came later and he did not participate in the conclave. As we discuss later, Mr Karsai and Dr Jacob disagreed on most issues of importance.
86.As to defect 5 (loose balustrade cap railings) Messrs Stephenson, Joannides and Dr Jacob agreed the balustrade top rail defects exist. Mr Stephenson and Dr Jacob considered that wholesale replacement is necessary, requiring the top rails to be resecured to the balustrade glazing with structural silicone and appropriate primer concurrently with the rectification works for defect 4. Mr Joannides agreed with the proposed method of repair but considered this was a maintenance issue for which the owners corporation was responsible.
87.As to defect 6 (basement cracking defects) Messrs Stephenson, Joannides, Hazelton and Buchanan agreed that the basement cracking defects exist and have to be rectified by epoxy injection sealing. All agreed that areas where vertical displacement or ‘stepping’ has occurred requires honing of the concrete sufficient to remove the stepping. Messrs Stephenson and Buchanan considered the cracks should be ground out before epoxy sealing. Mr Joannides considered this is unnecessary. Mr Hazelton did not offer an opinion.
88.As to defect 7 (water ingress into internal spaces) Mr Joannides confirmed he observed the water staining identified in the original Diagnostech report but could not determine if water ingress was still occurring. He and Mr Stephenson agreed further investigation is needed to diagnose if water ingress is still occurring and, if so, the cause or causes of the leaks before designing any remedial work.
89.Messrs Stephenson and Joannides also discussed two other issues considered in the original Diagnostech report but which the Registrar omitted to include in the rectification order – namely, planter box leaching on the Level 3 Podium level and unsealed joints and uncoated precast concrete walls on the rear western façade. At the hearing, the owners corporation decided not to pursue the planter box issue but pressed the unsealed façade joints issue.
90.The possible fire safety issues mentioned in the rectification order were not the subject of the conclave. At the hearing, the owners corporation decided not to press the issue for reasons that need not be discussed here.
91.At the hearing, Messrs Hazelton, Joannides, Stephenson and Buchanan gave evidence concurrently and were questioned by the parties’ counsel and the Tribunal. Messrs Joannides and Stephenson were recalled the next day and directed to confer with a view to agreeing a methodology to assess the extent of remediation required for balcony tiling and waterproofing defects. They provided a joint document setting out two options – one for localised repairs where possible and the other for full replacement where found to be necessary.
92.Dr Jacob and Mr Karsai gave evidence concurrently in relation to balustrade glazing defects and were questioned by the parties’ counsel and the Tribunal. Counsel for Mr Jolley sought to impugn Dr Jacob’s credit, inappropriately in the Tribunal’s assessment. Ultimately, credit has played no part in the Tribunal’s findings in relation to the balustrade glazing issue.
93.Mr Thomas was the last witness to give evidence and be cross-examined. The Tribunal was informed late in the afternoon on Wednesday, 3 May 2023, that Mr Thomas was unavailable to give evidence on Thursday, so the hearing was adjourned to Friday morning. At the resumption of the hearing on Friday it emerged that Mr Thomas had used Thursday to undertake further testing of the glass panels on instructions from Mr Jolley’s solicitors. The Tribunal was not informed of this on Wednesday when it acceded to Mr Jolley’s request to adjourn the hearing to Friday. In light of this, the Tribunal refused leave to tender the results of the further testing. Ultimately, this has no bearing on the Tribunal’s findings in relation to the balustrade glazing issue.

Mr Jolley’s evidence

94.Mr Jolley’s case was founded on the proposition that he adequately supervised the construction services provided by Chase and could not be held liable for failing to ensure that the relevant services complied with the Building Act if such non-compliance is proved.
95.Mr Jolley provided a witness statement in which he described his role in supervising the construction of the Manhattan Apartments. He said Chase provided supervision and some general labour while the building work was done by about 150 to 200 subcontractors. As nominee and director of Chase, Mr Jolley put in place a structure and procedures for the management and supervision of the project, “including to ensure that the work carried out by subcontractors was compliant with Australian standards and to identify and rectify defective work”.[75]
[75] Exhibit A1, paragraph 8 (Tribunal Book, page 1166)
96.At the head of the structure was the project director, Tom Simonds, who reported directly to Mr Jolley. Working directly under Mr Simonds was a senior engineer and a site manager. Working directly under the senior engineer was a team of three engineers. Working directly under the site manager were four site foremen and associated general labour.
97.Mr Jolley said each of those roles had responsibilities for directing and supervising the works, including by ‘exception reporting’ – i.e. “identifying construction works that were not being provided to the right time, cost, quality or safety standards”.[76] Where an exception was identified, it would be reported up the structure to Mr Simonds and Mr Jolley, who “would ensure that the appropriate response occurred”.[77]
[76] Exhibit A1, paragraph 15 (Tribunal Book, page 1166)
[77] Exhibit A1, paragraph 16 (Tribunal Book, page 1166)
98.Mr Jolley held monthly project control group meetings with the developer and Chase staff to review progress and quality issues and their effect on the programme for completion. He held fortnightly meetings with Mr Simonds to “generally discuss the project status”.[78] Mr Jolley also “had regular communication with [Mr Simonds] where there was an issue with time, cost, quality or safety on an ad-hoc basis”.[79] In such cases, Mr Simonds would report to Mr Jolley “on how the issue occurred, what was being done to address that issue, how that issue would be prevented in the future, and an expected time for resolution of the issue”.[80]
[78] Exhibit A1, paragraph 17 (Tribunal Book, page 1166)
[79] Exhibit A1, paragraph 17 (Tribunal Book, page 1166)
[80] Exhibit A1, paragraph 19 (Tribunal Book, page 1167)
99.Mr Jolley said further details of the management plan he implemented as nominee are set out in the Chase Project Management Plan – Manhattan (PMP) which states it was “designed to address the contractual and legislative requirements of the project”.[81]
[81] Exhibit A1, Tab 4, paragraph 1.6 (Tribunal Book, page 1239)
100.Section 4.1.2 of the PMP deals with quality inspection and testing and provides for Inspection and Test Plans (ITP or ITPs as the context requires) to be prepared. The purpose of an ITP is to document “what verification needs to be undertaken for a particular work activity and the resulting product to be able to certify that it conforms to specified requirements”.[82] The PMP states that an ITP “should clearly define the following key aspects”:[83]
[82] Exhibit A1, Tab 4, paragraph 4.1.2 (Tribunal Book, page 1308)
[83] Exhibit A1, Tab 4, paragraph 4.1.2 (Tribunal Book, page 1308)
·The sequence of performing the work process split into its separate activities of preliminary, off-site manufacture, on-site construction and final handover;
·Company, subcontractor, client and Authority inspections or tests, “Hold” and “Witness” points and records which ensure specified requirements are met; and
·Applicable acceptance criteria such as client specifications or Authority requirements.
·A typical ITP format is included as Annexure L Inspection & Test Plan. Refer 4.2.2 – Project Inspection & Test Plan.
·Test Reports
This refers to specific tests performed, usually by NATA registered laboratories to test specified measurable criteria associated with product conformance, e.g. earthworks compaction, concrete compressive strength, etc.
·Inspection Checklists
Inspection checklists are used to verify those activities where usually visual inspection can be carried out to verify conformance of the process up to that particular point. Form 49, Quality Inspection Checklist, is to be completed by the Site Engineer or other nominated competent person as required.
·Other Documents
Verification can also be provided by other documents such as survey reports, suppliers’ product conformance documents, etc. Also “Hold” points need to be documented so as their release by the client (or other party) can be authorised. Form 50 Hold Point Record, is to be used.

101.Responsibility to develop the ITPs to identify witness points, hold points, sign off points, samples or prototypes, tests, submissions, calibration records and the like was allocated to the Project Manager and/or the Site Engineer “or a nominee (maybe a subcontractor)”.[84] The Project Manager, Site Engineer or subcontractor was required to complete the relevant ITP as the job progressed. As will appear, responsibility to develop an ITP for waterproofing and tiling works – one of the major areas of work in contention in this case – was delegated to the subcontractor.
[84] Exhibit A1, Tab 4, paragraph 4.2 (Tribunal Book, page 1309)
102.Mr Jolley claimed that ITPs were followed for all works including slab pours, waterproofing and tiling works in accordance with the procedures set out in the PMP. The inspection and test plans were “intended primarily to ensure that the subcontract works are in accordance with the design and compliant with relevant Australian Standards and the BCA”.[85] Mr Jolley provided some limited examples of ITPs relating to slabs, waterproofing and tiling works. These shed little if any useful light on the adequacy of the systems Mr Jolley implemented and the degree to which they were enforced by Chase.
[85] Exhibit A1, paragraphs 20, 29, 30 (Tribunal Book, page 1168)
103.To prevent and manage defects, Chase and the architects workshopped a Defect Prevention Strategy. In the case of waterproofing of balconies, two hold points were specified – one for design and one for construction. The construction hold point was specified as “Water test every balcony & shower and 10% of wet areas for a minimum of 24 hrs”.[86] As will appear, the subcontractor was required to water test only 10% of the balconies and there is no evidence that such testing was done.
[86] Exhibit A1, Tab 7 (Tribunal Book, page 1357)
104.Mr Jolley said subcontractors were required to enter into a standard form ‘Chase Major Works Trade Contractor Agreement’ which required subcontractors to comply with the BCA. It is difficult to see what, if anything, this has to do with the performance of a nominee’s day-to-day supervisory functions.
105.Mr Jolley said his supervisory structures included putting in place detailed design and construction programmes, implementing occupational health and safety, environment, quality, rehabilitation and drug and alcohol policies. Any connection between such measures and a nominee’s day-to-day supervisory functions is obscure, to say the least.
106.Mr Jolley said he visited the site regularly, which “almost invariably incorporated a site walk to review progress and to discuss any issues that had arisen, including the identification and rectification of any defective building work”.[87]
[87] Exhibit A1, paragraph 32 (Tribunal Book, page 1168)
107.For a person to be eligible for appointment as a nominee, the person must be able to exercise the functions of a nominee on a daily basis.[88] That means the nominee must be able to adequately supervise the relevant construction services for which the nominee is responsible on a daily basis. Mr Jolley’s evidence did not grapple with this. Nor did his evidence address the question whether inadequate day-to-day supervision by Chase caused or contributed to the non-compliant work done by trade contractors and, if so, whether this was consistent with him having adequately supervised the construction services provided by Chase on a daily basis or otherwise.
[88] COL Regulation, section 19(d)
108.Mr Jolley was cross-examined about these matters and made significant concessions. Where relevant, they are discussed in the following sections of these reasons.

Defect 2 – balcony tiling and waterproofing

Background

109.Chase subcontracted the supply and installation of all waterproofing and tiling to Saba Bros Tiling (ACT) Pty Ltd (Saba). The contract was based on the standard form ‘Chase Major Works Trade Contractor Agreement’ with special conditions applicable to the waterproofing and tiling works (trade contract).
110.The trade contract required Saba to:
(a)waterproof all slab edges and extension of balcony membrane under all balcony glazing;
(b)provide experienced and competent supervisory personnel empowered to take instructions on behalf of Saba during the performance of the works;
(c)warrant the waterproofing membrane for a period of 10 years;
(d)install the balcony tile ‘T-angle’ to all exposed slab edges – the plans given building approval on 30 April 2012 provided for a powder-coated aluminium T-section to be installed to all straight and curved balcony edges to serve as a backing plate to allow for vertical termination of the waterproofing membrane;
(e)provide expansion joints to tiling as required;
(f)provide Chase with certification of all waterproofing at completion of the works;
(g)design, document, implement and maintain a suitable quality assurance system in accordance with relevant codes and standards and to the satisfaction of Chase;
(h)be responsible for the engineering checking of all specified systems to ensure suitability of equipment and materials to meet the design criteria prior to procurement;
(i)provide shop drawings detailing key elements, including detailing around each different type of service/penetration, movement joint details where applicable, precast/concrete upstand details and vertical turn-ups and location of bond breakers;
(j)incorporate the following hold points for waterproofing, including ITP submittal, including but not limited to –
(i)hold point – approval of system and contractor,
(ii)hold point – substrate preparation,
(iii)hold point – completion of each coat,
(iv)witness point – completed membrane system,
(v)hold point – flood test upon completion of membranes for a minimum of 24 hours;

(k)issue a ‘Request to Inspect’ to Chase when any works the subject of an ITP hold or witness point are ready for inspection.

111.The contract incorporated Revision B of a ceramic tiling and associated waterproofing specification prepared by the architects (Waterproofing Specification) which provided for:
(a)waterproofing membrane to be installed to all residential unit balconies;
(b)installation of tiling to comply with all applicable requirements of AS 3958[89] and the BCA;
(c)flood testing of 10% of balconies under direction from the Construction Manager to verify waterproofing adequacy;
(d)the subcontractor to provide written and photographic evidence that the installations are in accordance with the waterproofing manufacturer's recommended construction methods and as detailed;
(e)control joints to be installed through the tile and bedding in accordance with clause 5.4.5 of AS 3958.1 with a sealant width of 6 – 25 mm;
(f)ASA Dampfix Gold or approved equal to be used as the waterproofing membrane.
[89] AS 3958.1 – 2007 Ceramic Tiles, Part 1: Guide to installation of ceramic tiles

112.The Waterproofing Specification included a section dealing with the requirements for waterproofing wet areas. This did not apply to external balconies. Bostik, the manufacturer of Dampfix Gold, prepared a project specific specification for waterproofing external balconies for Saba, dated 27 July 2012 (Bostik Specification), which specified that:
(a)the specification “MUST” (original emphasis) be read in conjunction with relevant Australian Standards – namely AS 3958.1 and AS 4564.2 – and the referenced Technical Data Sheets for all referenced products, including relevantly the Technical Data sheet for Dampfix Gold;
(b)surface preparation required removal of all materials, including screed or coatings, back to the primary concrete substrate;
(c)Dampfix Gold is to be applied over the asaphonic (acoustic) mat in accordance with the attached Technical Data Sheet;
(d)a 6mm wide gap is to be left between the screed and any penetrations and perimeter areas with the gap to be filled with Bostik Seal’N’Flex FC applied in accordance with the attached Technical Data Sheet;

300.Under section 36(1)(a) of the COLA, the Tribunal must consider any injury, loss or damage caused, or that could have been caused, by Mr Jolley’s contraventions. Examples given in the section include reduction in safety, reliability, durability, soundness, functionality, accessibility, serviceability, service life, usability, usefulness, amenity, aesthetic quality, value or efficiency of a thing affected by the contravention. Adverse effect on the health of the user is another.
301.The respondent submitted, correctly in our view, that in light of the public purpose of a rectification order the injury, loss or damage that must be considered should not be narrowly construed and need not have been suffered by a person with a proprietary right in the building at the time the contravention occurred, or otherwise by anyone with a legal relationship with the person who undertook the building work.
302.Defect 2 – The balcony waterproofing and tiling defects have resulted in a significant reduction in the durability, soundness, functionality and serviceability of the component parts of the system and potentially may compromise the durability and structural integrity of the balcony slabs if not remedied. The efflorescence and calcite leaching visible at balcony edges and soffits has degraded the aesthetic quality of the building and individual units. The owners corporation has a statutory responsibility to repair and maintain the common property and other specified parts of the building, including the balconies, the cost of which is likely to be substantial and must be borne by the owners unless a rectification order is made. This points to it being appropriate to make an order.
303.Defect 4 – The delamination in the Vietnamese sourced glass balustrade panels has reduced the structural capacity of the balustrade system in places where the delamination has extended along the edge and around stress points in the glass panels. In other places, delamination has occurred that may not affect the structural integrity of the system but may create a situation where the risk of injury from falling shards of glass in the event of a panel being impacted with sufficient force to cause breakage is both foreseeable and not negligible. Delamination generally, particularly where it is widely distributed through the balconies of a building as found here, detracts significantly from the aesthetic quality of the building and individual units. While it may be debatable whether the owners corporation would be required to replace glass balustrade panels where the only consideration calling for their replacement is the aesthetic quality of the glass, the replacement of delaminated glass that may affect the structural integrity of the balustrade system and that may create a foreseeable and avoidable risk of injury in the event of breakage is in a different category. Again, the cost of replacement is likely to be substantial and must be borne by the owners unless a rectification order is made. This points to it being appropriate to make an order.
304.Defect 5 – The loose balustrade capping appears to be a relatively minor issue in the overall scheme of things. If a rectification order is made requiring the replacement of the Vietnamese sourced glass panels, the balustrade capping to affected panels will have to be removed and reinstalled in any event. The evidence shows that the majority of instances where the capping has detached or become loose have been repaired for safety reasons. While there are still some that have not been repaired, the reason for this has not been explained to the Tribunal, particularly where the owners corporation has recognised previously that there is a safety risk and where the expert evidence the owners corporation tendered at the hearing emphasised the existence of that risk. We consider that the owners corporation was under a statutory duty to repair the balustrade capping as and when the defects were reported. Where it is not suggested that carrying out the repairs is onerous or expensive, unlike other defect issues the Tribunal has been asked to consider, we see no justification for the owners corporation continuing to delay performance of its statutory duty in the hope that a rectification order may be made at some future time. This points to it being inappropriate to make an order.
305.Defect 6 – The cracking to the Basement Level B1 and B2 slabs, whilst not presenting as a structural issue, by allowing ongoing water penetration into the slabs and transverse beams will reduce their durability and serviceability. Repair is essential as the experts agreed unanimously. The cost will have to be borne by owners unless a rectification order is made. This points to it being appropriate to make an order.
306.Defect 7 – The water penetration issue is problematic. Clearly the original work was non-compliant. Evidence of water penetration in the past has been presented to the Tribunal. However, there is no evidence to show whether the problem remains and, if so, what stated action should be taken to rectify the non-compliant work. The effects of past water penetration – localised water staining and water damage – presumably could be addressed by repainting the affected areas if water is no longer penetrating into the affected area. On the other hand, if water penetration is continuing it might require windows and external doors to be removed and reinstalled with appropriate flashing or potentially even extensive roof works. The Diagnostech report was prepare some 5 years ago. While Mr Joannides confirmed he observed the evidence of water penetration Diagnostech had reported, he was unable to determine whether water penetration was continuing. His report was served in mid-2022. The conclave of experts was held in April 2023 and the hearing took place in May 2023. In that time, the owners corporation did not produce any evidence to show that there was ongoing water penetration in the locations identified in the Diagnostech report. While the joint opinion of Mr Joannides and Mr Stephenson that further investigation was required before deciding what, if anything, needed to be done is understandable, Diagnostech made a similar recommendation five years earlier. Yet it appears nothing was done about this. The lack of evidence in relation to the present status of the water penetration issue and the open-ended nature of any investigation that may be necessary to determine whether the problem persists points to it being inappropriate to make a rectification order.

Mandatory considerations under section 36(1)(b)

307.Under section 36(1)(b) of the COLA, if a rectification order is proposed the Tribunal must consider how the proposed order may affect people affected by Mr Jolley’s contraventions.
308.We consider that rectification of Defects 2, 4 and 6 is essential, whether the work is done under a rectification order or by the owners corporation in discharging its statutory maintenance and repair obligations.
309.The persons affected by the contraventions and who will be affected by a rectification order are the individual unit owners and occupiers. In B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar, [166] Burns J accepted that increased maintenance costs, the likelihood of deterioration of the building and reduced value of the apartments were relevant considerations under both subsections 36(1)(a) and (b).[167] We have dealt with this already.
[166] [2013] ACTSC 219
[167] [2013] ACTSC 219 at [44], [46]
310.The rectification of balconies, involving removal and replacement of tiling and waterproofing and, in some cases, glass balustrades, will require extensive scaffolding, blocking access to and outlook from balconies. The remedial work will involve substantial inconvenience and disruption to the use and enjoyment of units and parts of the common property. This is inevitable whether the work is done under a rectification order or by the owners corporation.
311.The same may be said about rectification to the basement level slabs, although it may be easier to manage the works to minimise disruptions to access and parking during the progress of the works. Again, inconvenience and disruption is inevitable, whoever does the work.
312.None of these considerations point to it being inappropriate to make a rectification order.

Other relevant considerations

313.Subject to any other considerations that may be relevant, the matters required to be considered by section 36(1)(a) and (b) point to it being appropriate to make a rectification order in relation to defect 2 (waterproofing and tiling of balconies), defect 4 (delamination of glass balustrade panels) and defect 6 (basement slab cracking) but not defect 5 (loose balustrade capping) – beyond what has to be done in any event as part of the rectification of defect 4 – and defect 7 (water ingress into internal spaces).
314.While we are conscious of the public interest considerations in making a rectification order mentioned earlier, we are not persuaded that these make it appropriate to make a rectification order in relation to defect 5 or defect 7.
315.In the case of defect 5, we have said that the owners corporation was not justified to delay rectifying all loose balustrade capping as part of its normal maintenance of the building as and when the defects were reported, notwithstanding the underlying cause was non-compliant work by the builder. That remains the position. Mr Jolley has made it clear often that he intends to appeal. The determination of any appeals may take considerable time. In our view, it would be unacceptable for the owners corporation to sit on its hands while awaiting the final outcome of the proceedings, where there is an identified safety risk and the repairs appear to be relatively straightforward and inexpensive.
316.In the case of defect 7, the lack of certainty whether water penetration is continuing and the failure to act on the recommendations made by Diagnostech nearly five years ago to carry out appropriate inspection and testing, makes it problematic to identify what the problem is, much less the stated action that should be taken to fix it. While a degree of investigation is inevitable and appropriate where it is necessary to open up building work as part of the rectification process, the Tribunal is of the view that an open-ended direction to open up and inspect the works – which might require removal of windows and doors and lifting parts of the roof – to try to identify whether the problem still exists and, if it does, to develop a solution is not justified by the facts.

Considerations raised by Mr Jolley

317.Mr Jolley submitted that it is not appropriate to make a rectification order for three primary reasons.
318.First, Mr Jolley did not carry out the defective building work.
319.Second, Mr Jolley implemented ‘supervision systems’ to ensure that Chase complied with the operational Act and that the building work complied with the BCA and relevant Australian Standards.
320.Third, the passage of time since the work was completed means that Mr Jolley must personally bear the entirety of the liability without being able to pursue any claims against the subtrades that carried out the defective work – whether for breach of statutory warranties or otherwise – or the architects, structural engineers or certifiers if any of those persons were also at fault. This, he submitted, would be an “unfair and disproportionate result, having regard to his degree of personal fault in all the circumstances”.[168]
[168] Applicant’s Outline of Closing Submissions, 25 May 2023, [146]
321.A further reason, according to Mr Jolley, is that when he accepted his appointment as nominee he was not aware of the risk that a rectification order could be made against him in that capacity. In particular, so it was submitted, he was not aware that he might be personally liable to rectify defects “without any personal fault or failure in supervision”.[169]
[169] Applicant’s Outline of Closing Submissions, dated 25 May 2023 at paragraph 147
322.As to the first reason, we are satisfied that in each case, Mr Jolley’s contravention was a contributing cause of the defects in question, whilst recognising that in a practical sense primary responsibility for the failure to carry out work in compliance with the requirement of section 42 of the Building Act and to ensure that the completed building met the relevant performance requirements of BCA – 2011 lay with Chase. Nevertheless, the statutory scheme provides for Mr Jolley to be personally responsible for the defects caused by the non-compliant work done by Chase. The fact that he did not do the work himself is irrelevant. He was responsible to supervise the work to ensure that it did comply.
323.As to the second reason, we have found that the ‘supervision systems’ Mr Jolley implemented failed to ensure that the work was carried out in accordance with the requirements of section 42 of the Building Act and did not result in a building that complied with relevant performance requirements of the BCA.
324.As to third reason, there are several answers.
325.First, the work was not subject to statutory warranties for reasons discussed earlier.
326.Second, most of the defects manifested at a time when Chase could have taken steps to enforce its contractual rights against trade contractors who did defective work. Indeed, in relation to the tiling and waterproofing done by Saba it threatened to do so but did not take the matter further.
327.Third, Chase resolved that it should be wound up voluntarily on 5 July 2017, less than four years after a certificate of occupancy was issued and long before the expiry of the ten-year period during which a rectification order could be made against Chase. No relevant limitation period barring action against a trade contractor had expired then. The decision to wind up the company was made by Mr Jolley alone, albeit not in his capacity as nominee. Regardless, this is not a case where a nominee has been left financially exposed by decisions made by other persons over whom the nominee has no control. Mr Jolley had access to professional advice when he decided to wind up the company. If he did not seek advice in relation to the company’s and his potential exposure to a rectification order where there were known defects in the Manhattan Apartments when he decided to wind up Chase, he has no one to blame but himself. If he was given incorrect advice, his remedies may lie elsewhere.
328.As to the last reason, the well-worn saying applies – ignorance of the law is no excuse. Again, if Mr Jolley failed to obtain appropriate advice before taking on the role of nominee, he has no one to blame but himself. If he was given incorrect advice, his remedies may lie elsewhere.
329.In our view, none of the considerations raised by Mr Jolley have any merit.
330.Mr Jolley has maintained throughout this proceeding that he has been unfairly and unreasonably targeted by the Registrar and that if a rectification order is made, the effect will be to make him personally liable to rectify defects where there has been no personal fault or failure of supervision on his part. The Tribunal has found otherwise.

Decision

331.For the reasons given, we are satisfied that it is appropriate to make a rectification order requiring stated action to rectify defect 2 (waterproofing and tiling of balconies), defect 4 (delamination of glass balustrade panels) and defect 6 (basement slab cracking).
332.We not persuaded that it is appropriate to make a rectification order in relation to defect 5 (loose balustrade capping), or defect 7 (water ingress into internal spaces).
333.We are not persuaded that the stated action to remedy defect 2 (waterproofing and tiling) should require wholesale removal or replacement of the waterproofing and tiling to each affected balcony – i.e. Option 2 developed by Mr Joannides and Mr Stephenson – unless it is apparent that there is no other way to make the works compliant. We consider the stated action should be as described by Mr Joannides and Mr Stephenson in Option 1. While generally we think it is preferable not to be unduly prescriptive in describing the ‘stated action’ to be taken in most cases, in this case the remediation of defective waterproofing otherwise than by complete replacement requires close supervision and enforcement of ‘hold points’ at critical stages as Option 1 provides. The only change we would make is at the last step (item 8). Where removed tiles extend beyond 1.0 metre with inadequate selvedge, instead of proceeding with full removal and replacement in accordance with Option 2, we consider Mr Jolley should have an opportunity to propose an alternative solution to the Registrar for approval. If there is no alternative solution, or the Registrar does not approve the alternative proposed by Mr Jolley, the default position should remain that Option 2 must be implemented.
334.The units where stated action is to be taken in relation to defect 2 should be listed in the order.
335.We consider that stated action to remedy defect 4 (delaminated glass balustrade panels) should be to replace all glass balustrade panels where any delamination is apparent. On the one hand, we consider removal and replacement of only some delaminated glass based on a subjective assessment of the location and extent of delamination in individual panels is not appropriate where the glass has been found not fit for purpose as a result of a defect in the manufacturing process. On the other, it is now more than 10 years since the project was finished. The unquantified risk that delamination may occur at some unspecified time in the future in glass panels that presently show no evidence of delamination in our view does not justify making an order for wholesale removal and replacement of all Vietnamese sourced glass. While recognising that the approach we favour will require replacement of some panels where the delamination is relatively minor, in our view this represents an appropriate balance between the competing interests and gives appropriate weight to the public interest considerations involved in deciding to make a rectification order.
336.The units where stated action is to be taken in relation to defect 4 should be listed in the order.
337.We consider that the stated action to remedy defect 6 (basement slab cracking) should involve epoxy injection as agreed by the experts. The work will have to be signed off by a structural engineer and the controversy whether it is necessary or preferable to grind the cracks beforehand is best left to the certifying engineer to decide.
338.The Tribunal considers the period within which the stated action must be completed should be 12 months from the date of the rectification order.
339.A check of the Access Canberra website indicates that Mr Jolley does not currently hold a Class A builder’s licence. This should be confirmed. If so, it will be necessary for Mr Jolley to arrange and pay for the work to be done by an appropriately licensed builder as section 38(2) of the COLA provides.
340.It must be kept in mind that this proceeding concerns regulatory action that the Registrar – and now the Tribunal – has decided should be taken in relation to Mr Jolley. The role of the owners corporation as an interested party and active participant in the review of the Registrar’s decision is now at an end. The owners corporation must be given advance notice of what work will be done and where and when it will be done, so that appropriate arrangements can be made for access to be given (if necessary, by the Executive Committee exercising its statutory power to authorise entry under section 28(3) of the Unit Titles (Management) Act 2011) and to minimise the inconvenience and disruption to owners and occupiers of the affected units. However, the owners corporation has no further role in deciding what work should be done, where and how it should be done, when it should be done and overseeing the performance of the work to ensure it is done satisfactorily.

341.Mr Jolley must arrange for the work to be done by an appropriately licensed builder at his cost. He is entitled to arrange for the work to be done in the most cost and time efficient way that suits the builder’s work methods and access requirements, subject to the work being completed within the period stated in the order.
342.The order should provide for Mr Jolley to give to the Registrar a programme of works specifying what work will be done, where it will be done, how and when it will be done and who will do it. The programme of works must be sufficiently detailed for the Registrar to be satisfied that the work, if done in accordance with the programme of works, will comply with the Building Act, the BCA and relevant Australian Standards and be completed within the period stated in the order.
343.The order should specify the written information Mr Jolley must provide to demonstrate to the Registrar’s satisfaction that the work done complies with the Building Act, the BCA and relevant Australian Standards.
344.Counsel for the parties should confer and provide a draft order giving effect the Tribunal’s decision within ten days. The Tribunal expects counsel to cooperate meaningfully in that regard. If necessary, the Tribunal will relist the matter at short notice if the parties are unable to resolve the terms of the final order by consent.

The owners corporations’ costs

345.Section 48(1) of the ACAT Act provides that the parties to an application must bear their own costs unless the Act or another territory law otherwise provides or the tribunal otherwise orders.
346.The Tribunal considers that this is an application where it would have been appropriate to make an order that Mr Jolley pay the costs of the owners corporation if the decision in CIC Australia Ltd v ACT Planning and Land Authority and Ors[170] (CIC) did not preclude it from doing so.
[170] [2013] ACTSC 96
347.In that case, Penfold J held that section 48(1) does not create a general discretion for the Tribunal to order costs. The decision is binding on the Tribunal. Although the costs aspect of the decision in CIC has been cited by the ACT Supreme Court[171] and the Court of Appeal[172] the correctness of the decision has never been reconsidered or tested.
[171] see e.g. Director-General Community Services Directorate v HJ [2018] ACTSC 6 at [93] per McWilliam AsJ (as she then was)
[172] GJ v AS (No 4) [2017] ACTCA 7 at [95]
348.Where the law as it currently stands precludes the Tribunal from making a costs order in cases of this kind, it appears to us that the question whether the COLA should be amended to provide for the Tribunal to be able to order costs in appropriate circumstances is a matter that should be given urgent consideration. A decision to make a rectification order involves a decision to take regulatory action in the public interest, including to protect the integrity of the scheme for the licensing of construction occupations and the regulation of building works. It is an essential part of the Registrar’s statutory function to take such action in appropriate cases and to support the decision where review is sought.
349.In this case, the decision-maker did not give evidence and the Registrar did not serve any fresh evidence to support the decision under review or to answer the lay and expert evidence on which Mr Jolley relied. The burden of preparing expert evidence fell by default on the owners corporation. During the hearing, counsel for the owners corporation did all of the heavy lifting in relation to disputed factual issues. The same is true in relation to the extensive written submissions dealing with the facts. Save for submissions on the law and the exercise of discretion, the Registrar’s participation in the proceeding was essentially passive.
350.Cases of this kind are expensive to run, which may explain the Registrar’s approach. However, it is inherently unfair for a party in the position of the owners corporation to have to bear the substantial cost of seeking to justify a decision of the Registrar to take regulatory action in the public interest without any ability to recover its costs from the licensee in the event of a successful outcome.
………………………………..

Senior Member M. Orlov

Dates of hearing: 1-3, 5 May, 15 June 2023

Counsel for the Applicant: Dr A. J. Greinke

Solicitors for the Applicant: Mills Oakley

Counsel for the Respondent: Mr N. Oram

Solicitors for the Respondent: ACT Government Solicitor

Counsel for the Party Joined: Mr J. Bird

Solicitors for the Party Joined: Minter Ellison

Dates of hearing:	1-3, 5 May, 15 June 2023
Counsel for the Applicant:	Dr A. J. Greinke
Solicitors for the Applicant:	Mills Oakley
Counsel for the Respondent:	Mr N. Oram
Solicitors for the Respondent:	ACT Government Solicitor
Counsel for the Party Joined:	Mr J. Bird
Solicitors for the Party Joined:	Minter Ellison