Jolley v Construction Occupations Registrar & Anor (Administrative Review)
[2022] ACAT 47
•8 June 2022
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
JOLLEY v CONSTRUCTION OCCUPATIONS REGISTRAR & ANOR (Administrative Review) [2022] ACAT 47
AT 21/2021
Catchwords: ADMINISTRATIVE REVIEW – review of rectification order made under Construction Occupations (Licensing) Act 2004, Part 4 – preliminary question as to whether a licensee for the purposes of section 34 of the Act can include a nominee appointed under section 28 – validity of rectification order directed to a nominee: order valid – licensee includes a nominee
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 84
Building Act 2004 s 42
Building and Construction Legislation Amendment Act 2019 (ACT)
Construction Occupations (Licensing) Act 2004 ss 6, 28, 31, 34, 35, 38, 47, 55, 39A, 39B
Legislation Act ss 75B, 140, 142
Subordinate
Legislation cited: Construction Occupations (Licensing) Regulation 2004 s 19
Cases cited:Coleman v Shell Co of Australia (1943) 45 SR (NSW) 27
Jolley v Construction Occupations Registrar & The Owners– Units Plan 3941 [2021] ACAT 112
Hill v Construction Occupations Registrar; Jones v Construction Occupations Registrar [2021] ACAT 21
La Macchia v Minister for Primary Industry [1986] FCA 452; (1986) 72 ALR 23
Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261
R v Miller [2001] NSWCCA 209; 127 A Crim R 344
Robertson v City of Nunawading [1973] VR 819
SZTAL v Minister for Immigration and Border Protection [2017] HCA 34
Waugh v Kippen [1986] HCA 12; (1986) 160 CLR 156
Yarra City Council v Metropolitan Fire and Emergency Services Board and Ors [2017] VSCA 194
Text/Papers cited: Dennis Pearce, Statutory Interpretation in Australia (LexisNexis Butterworths, 9th edition, 2019)
Explanatory Statement to the Construction Occupations (Licensing) Bill 2003
Final Report of the National Competition Policy Review of the Building Act 1982, the Electricity Act 1971, and the Plumbers, Drainers and Gasfitters Board Act 1982 dated August 2000
Revised Explanatory Statement to the Building and Construction Legislation Amendment Bill 2019
Tribunal:Presidential Member G McCarthy
Date of Orders: 8 June 2022
Date of Reasons for Decision: 8 June 2022
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AT 21/2021
BETWEEN:
ANDREW JOLLEY
Applicant
AND:
CONSTRUCTION OCCUPATIONS REGISTRAR
Respondent
AND:
THE OWNERS – UNITS PLAN 3941
Party Joined
TRIBUNAL:Presidential Member G McCarthy
DATE:8 June 2022
ORDER
The Tribunal orders that:
The order of the Tribunal stating the validity of the rectification order issued to the applicant on 18 March 2021 is confirmed.
The matter is listed for further directions (including as to the filing of evidence) on 17 June 2022 at 10.00am by Webex, with liberty to apply on three days’ notice regarding an alternative date and/or time.
………………………………..
Presidential Member G McCarthy
REASONS FOR DECISION
This proceeding concerns alleged rectification work needed to correct alleged defects at a development now known as Manhattan on the Park or the Manhattan Apartments (the Manhattan Apartments) on Block 1 Section 52 Canberra City (the Land). It is appropriate to commence with a short factual background to the current dispute.
The applicant, Mr Andrew Jolley, (the applicant) is a director of 113 134 964 Pty Ltd which was formerly Chase Building Group Pty Ltd (Chase).
On 10 May 2012, a certifier issued a building commencement notice for building work to occur. The notice identified the builder as Chase and the nominee as the applicant.[1]
[1] T documents, page 202
On 9 and 13 August 2013,[2] the construction occupations registrar (the Registrar) issued certificates of occupancy and use for the building work on the Land.[3]
[2] T documents, page 206, supplementary T documents, page 1182
[3] T documents, page 206, supplementary T documents, page 1182
The Owners - Units Plan 3941 became the owners corporation for the owners of units in the Manhattan Apartments. It is a party to this proceeding (the party joined).
In 2014, 2015 and 2016, a building consultancy firm known as Peak Consulting prepared defect reports concerning the building work at Manhattan Apartments. As I understand it, those reports were forwarded to Chase which carried out work for the purpose of addressing the defects. The party joined disputes that the defects have been rectified.
On 18 October 2017, Chase was deregistered as a company.[4]
[4] T documents, page 207
On 5 December 2018, the solicitors for the party joined wrote to the Registrar contending that a rectification order ought to be issued against the applicant, among others.
On 18 December 2018, a building consultancy firm, Diagnostech Pty Ltd (Diagnostech) provided a building defects report in the form of a “Preliminary Building Defects Report”.[5] A copy of that report was forwarded to the Registrar in support of the party joined’s contention that a rectification order should issue.
[5] T documents, page 246
On 19 March 2020, the Registrar issued a notice of intention to make a rectification order to the applicant pursuant to section 34 of the Construction Occupations (Licensing) Act 2004 (the COLA).[6] The Registrar attached defect reports prepared by Peak Consulting and Diagnostech, among other documents.
[6] T documents, page 185
By letter dated 29 June 2020, the applicant responded to the Registrar’s notice of intention and the alleged defects stated in the notice. By letter dated 22 February 2021, the applicant sent further correspondence to the Registrar regarding the alleged defects.[7]
[7] T documents, page 167
On 18 March 2021, the Registrar made a rectification order pursuant to section 38 of the COLA directing the applicant to carry out the rectification work specified in the order.[8]
[8] T documents, page 150
By application dated 14 April 2021, the applicant applied to the Tribunal for review of the rectification order.
On 15 June 2021, the applicant applied to the Tribunal for a preliminary hearing to determine whether the rectification order was invalid on two grounds (as later articulated): (i) that the order did not expressly identify any failure of supervision (as defined in the COLA) on the applicant’s part in relation to the construction services that are alleged to have been provided otherwise than in accordance with the COLA or an operational Act; and (ii) that the order referred to the National Construction Code 2013.[9]
[9] Jolley v Construction Occupations Registrar & The Owners-Units Plan 3941 [2021] ACAT 112 at [12]
On 26 August 2021, the Tribunal conducted an interlocutory hearing for the purpose of determining whether the rectification order was invalid on the grounds alleged. On 19 November 2021, the Tribunal made an order stating that the rectification order is valid and published reasons for its decision.[10]
[10] Jolley v Construction Occupations Registrar & The Owners-Units Plan 3941 [2021] ACAT 112
On 3 December 2021, the Tribunal made procedural orders to progress preparation of the applicant’s application for review of the rectification order.
On 29 March 2022, the applicant applied for some of the procedural orders to be set aside on the grounds that a further preliminary question first needed to be decided. The applicant applied for referral of the question to the Supreme Court. In its application for referral, the applicant stated the proposed question as follows:
Does the Construction Occupations Registrar have power to issue a rectification order pursuant to Part 4 of the Construction Occupations Licensing Act 2004 (ACT) [sic] to a nominee of a licensee, acting in that capacity, in respect of construction work carried out or supervised by that licensee prior to the commencement of the Building and Construction Legislation Amendment Act 2019 (ACT)?
The Registrar and the party joined opposed the referral. They submitted that the question could and should be determined by the Tribunal in the course of it hearing and determining the application for review. On 8 April 2022, I heard the application for referral.
The Tribunal may refer “a question of law that arises in considering an application”, in this case the application for review of the rectification order, if the Tribunal considers the question “raises an issue of public importance”.[11] The power to refer is a discretionary power.
[11] ACT Civil and Administrative Tribunal Act 2008, section 84(1)
In this case, the question was one of statutory interpretation which is a question of law. I also accept that the question raised an issue of public importance, but so too do most questions of statutory interpretation. Correctly applying the law is, by definition, a matter of public importance.
I was not persuaded that the question posed should be referred. Statutory interpretation is a task routinely conducted by the Tribunal, especially when hearing applications for review of a decision made under an enactment – as this is. Also, there was no suggestion of any impasse between prior inconsistent Tribunal decisions concerning the question posed. The question was no more than a further preliminary issue raised by the applicant. I could see no legitimate reason why the Tribunal should not itself decide the question in the ordinary discharge of its statutory function. Accordingly, on 14 April 2022, I dismissed the application for referral.
However, I concluded that the question posed by the applicant should be determined prior to the parties embarking on a review of the decision on its merits. Significant time, cost and preparation yet to be expended by all the parties for the purpose of reviewing the merits of the rectification order would all be wasted if it is invalid.
On 11 May 2022, I heard submissions directed to the preliminary issue. Having considered the submissions of the parties, written and oral, I am satisfied that a rectification order can be issued to a nominee. The Tribunal’s order made on 19 November 2021 stating the validity of the rectification order is therefore confirmed. My reasons follow.
Applicant’s submissions
The applicant contended that Part 4 of the COLA does not authorise the Registrar to issue a rectification order to a nominee of a licensee, acting in that capacity, at least prior to the enactment of the Building and Construction Legislation Amendment Act 2019 (ACT) (the BCLAA) which made amendments to the COLA. The applicant made four primary submissions in support of his contention.
(a) As a matter of statutory construction, when the legislature made provision for a rectification order to be made against a licensee, it did not intend that such an order could be made against a nominee of the licensee. ‘Nominee’ and ‘licensee’ are, he said, “separate and distinguishable”[12] concepts (the nominee-licensee issue).
(b) Whether ‘licensee’ in section 34(1) includes a ‘nominee’ is, at least, ambiguous. A rectification order is akin to a penalty. The ambiguity should therefore be determined in favour of the applicant, meaning a licensee should not be construed as including a nominee (the presumption against penalty issue).
(c) To resolve the alleged ambiguity as to whether a licensee includes a nominee, resort may be had to extrinsic materials but only the materials that were available before the COLA was passed in 2004. Regard may not be had to the amendments to the COLA in 2019, per the BCLAA, that were made after completion of the Manhattan Apartments in 2013. The materials available in 2004 before the COLA was passed do not evince any intention to issue a rectification order to a nominee (the extrinsic materials issue).
(d) The BCLAA introduced, expressly, Provision for a rectification order to be made against a director or partner of a licensee corporation or partnership, respectively. To resolve the alleged ambiguity, if the legislature had intended (in 2004) that a licensee for the purposes of section 34(1) includes a nominee, one would expect similarly express language to have been used, but such language is “entirely absent”[13] (the 2019 amendments issue).
The licensee-nominee issue
[12] Applicant’s outline of submissions, paragraphs 14-27
[13] Applicant’s outline of submissions, paragraph 54
The applicant submitted (and I agree) that the key provision is section 34(1) of the COLA. Section 34(1) as currently in force,[14] and as in force on 18 March 2021 when the Registrar made the rectification order directed to the applicant,[15] provides:
[14] See Republication No 57, effective 23 June 2021
[15] The applicant submitted the Tribunal should apply section 34 as in force at the time the nominee performed his functions (i.e. up to completion of the development in 2013), not as at 18 March 2021 when the rectification order was issued. I return to this issue in these reasons
34Intention to make rectification order
(1)This section applies if the registrar believes on reasonable grounds that—
(a)a licensee or former licensee (the entity) has provided a construction service otherwise than in accordance with this Act or an operational Act;[16] and
[16] The operational acts are the Acts listed in section 16 of the Construction Occupations (Licensing) Act 2004
(b)it may be appropriate to make a rectification order.
Examples of licensee or former licensee
1a licensed builder does building work
2a drainer who was licensed, does sanitary drainage work while unlicensed
3a licensed gasfitter does gasfitting work and then becomes unlicensed
4a licensed plumber, who is the nominee of a licensee that is a corporation, does or supervises plumbing work as the nominee of the licensee
NoteIf deciding under this section whether it may be appropriate to make a rectification order, the registrar must consider the considerations mentioned in s 36.
(2)The registrar may give the entity, and the land owner in relation to whose land the construction service was provided, a written notice that—
(a)gives details of the rectification order that may be made; and
(b)explains why the registrar intends to make the order; and
(c)invites submissions about the making of the order within the time stated in the notice that is not less than 5 working days after the day the entity or land owner receives the notice; and
(d)states that—
(i)the registrar will not make a rectification order if—
(A)the registrar is not satisfied it is appropriate to make a rectification order in relation to the entity; or
(B)if the registrar accepts a rectification undertaking from the entity—the entity complies with, and does not withdraw, the undertaking; and
(ii)if the registrar does not make a rectification order the Territory may authorise someone else to do the things stated in this notice, and the entity will have to pay for the things to be done.
Referring to section 34(1), the applicant noted that a notice under section 34(2) may be given to “the entity”, defined in section 34(1) to mean “a licensee or former licensee”. The applicant relied on the absence of ‘nominee’ from the definition of ‘the entity’ to contend that if the legislature had intended a nominee also to be the subject of a rectification order it could and (implicitly) would have included “nominee or former nominee” in the definition of entity. The applicant described the omission of ‘nominee’ from the definition of ‘entity’ as “striking”.[17]
[17] Applicant’s outline of submissions, paragraph 18
The applicant also drew upon what he described as the “contradistinction”[18] between a licensee and a nominee in Part 3 of COLA, which is “split” into separate provisions for licensees (in Part 3, Division 3.1) and for nominees (in Part 3, Division 3.2) as indicative of the distinction between the two roles.
[18] Applicant’s outline of submissions, paragraph 19
The applicant noted, per sections 28(1)-(3) of the COLA, that for a corporation or partnership to be eligible “to be licensed” it must have a nominee. The applicant then referred to section 28(7),[19] which states the requirements for a person to be eligible for appointment as a nominee. Sections 28(5)-(7) state:
(5)A corporation or partnership may, in writing, appoint an eligible individual to be a nominee.
(6)If the nominee is to be responsible for the adequate supervision of only some of the construction services to be provided by the corporation or partnership, the appointment must state the services for which the nominee is responsible.
(7)For subsection (5), an individual is an eligible individual if the individual—
(a)is eligible under the regulations to be appointed as a nominee; and
(b)is licensed in the construction occupation and occupation class (if any) appropriate for each of the construction services for which the individual is to be responsible; and
(c)agrees in writing to the appointment.
[19] The Tribunal presumes that the applicant’s reference to section 28(6) is a slip, and that the applicant intended to refer to section 28(7)
With reference to section 28(7)(b), the applicant acknowledged that he is “strictly speaking”[20] a licensee “since he held (and still holds) a building licence” but characterised this qualification as only “another indirect connection” by reason of a particular choice made by the legislature as to an individual’s qualifications for appointment as a nominee.
[20] Applicant’s outline of submissions, paragraph 37
The applicant submitted that simply because the legislature required an individual to be a licensee, as a qualification to be a nominee, it did not thereby intend that a nominee could be the subject of a rectification order. Rather, the provisions regarding rectification orders are directed and were intended to be directed only against licensees or the licensee that carried out construction work or provided a construction service. To engage Part 4 regarding the making of a rectification order, it is not sufficient, he said, that the nominee is a licensee.[21]
[21] Applicant’s outline of submissions in reply, paragraph 2
In this regard, the applicant drew upon the role of a nominee as stated in section 31(1) of the COLA as follows:
31Role of nominees
(1)A nominee of a licensed corporation or partnership has the following functions:
(a)to supervise the construction services of the corporation or partnership for which the nominee is responsible (the relevant construction service);
(b)to ensure that the relevant construction services comply with this Act and the operational Acts.
The applicant drew upon the fact that a nominee is described as having “functions”, not providing a construction service, and that ‘the relevant construction service’ is defined to mean, he said, the construction services provided by the corporation or partnership for which the person is a/the nominee. The applicant characterised the corporation or partnership as “the” licensee[22] for the purpose of section 34(1). The applicant submitted that a nominee of the licensee is not ‘the entity’ to which section 34(1) is directed. Rather, it is directed to the corporation or partnership licensee for which the individual is the nominee – ie “the specific licensee who provided the construction service”.[23]
[22] Applicant’s outline of submissions, paragraph 23
[23] Applicant’s outline of submissions in reply, paragraph 2
In support of this distinction between licensee and nominee, the applicant drew upon section 47(1) of the COLA, which provides:
47Licensee to give evidence of insurance
(1)Before providing a construction service to a person (the client), a licensee must give the client evidence of what insurance the licensee holds in relation to the service the licensee is to provide.
The applicant contended that the corporation or partnership could not be the “client” of its nominee and that section 47(1) – directed to a licensee – is therefore not applicable to a nominee. This, the applicant said, is another indicator that licensee and nominee are different concepts.
The applicant also drew upon section 55(1)(a) of the COLA, which sets out the grounds for occupational discipline in relation to ‘a licensee’. Section 55 provides:
55Grounds for occupational discipline
(1)Each of the following is a ground for occupational discipline in relation to a licensee:
(a)the licensee, or a director, partner, nominee or employee of the licensee, contravened, or is contravening, this Act or an operational Act (including a direction given to the licensee under an operational Act);
Examples
1 contravening a rectification order
2 failing to complete a skill assessment required by the registrar under s 55A
(b)the licensee, knowingly or recklessly, gave someone information in relation to a construction service provided, or to be provided, by the licensee that was false or misleading in a material particular;
(c)the licensee or a director, partner or nominee of the licensee, has been found guilty, whether in the Territory or anywhere else, of an offence that—
(i) involves fraud, dishonesty or violence; and
(ii) is punishable by imprisonment for at least 1 year;
(d)if the licensee is an individual—the licensee executes a personal insolvency agreement;
(e)if the licensee is a corporation—
(i) the licensee enters into a scheme of arrangement; or
(ii) a receiver, manager, receiver and manager or administrator is appointed over the licensee or any of its assets;
(f)if the licensee is a corporation or partnership—the licensee has, or had, no nominee;
(g)the licensee’s licence has been automatically suspended under division 5.1 (Automatic licence suspension) and the cause of the suspension still exists;
(h)the licensee ceases to be eligible to hold a licence.
The applicant noted that section 55(1)(a) refers to the “licensee, or a director, partner, nominee or employee of the licensee”. The applicant noted that the legislature “took care” to identify the relevant roles as to which grounds for occupational discipline apply. The applicant relied on the difference between a licensee, on the one hand, and a director, partner, nominee or employee of the licensee, on the other, to contend that they are different roles and that if the legislature had intended the provisions regarding a rectification order to apply also to nominees, the same “care” to say so would have been taken.
The applicant also drew on section 38(1)(b) of the COLA which refers to “provide the construction service”. The applicant contended that section 38(1)(b) “parallels”[24] the “relevant construction service” in section 31.
[24] Applicant’s outline of submissions, paragraph 26
Section 38(1) of COLA provides:
38Rectification orders
(1)The registrar may make an order (a rectification order) in relation to an entity requiring the entity—
(a) to take stated action to rectify work done as part of a construction service; or
(b) to demolish a building or part of a building where a construction service has been provided and provide the construction service under this Act or an operational Act; or
(c)to start or finish stated work in relation to which a construction service has been, is being or was proposed to be provided.
Example—stated action
rectified work must comply with a stated performance requirement of the Building Code of Australia
The applicant submitted that in the case of a corporate or partnership licensee the power to order the licensee to “provide the construction service” pursuant to section 38(1)(b) is directed to the licensee who the nominee was required to supervise. Section 38(1)(b), he said, does not contemplate, that the nominee of that corporation or partnership could, themself, be ordered to provide the construction service.
The applicant contended by reference to these provisions of the COLA, and after “considering the Act as a whole”, as required under section 140 of the Legislation Act 2001 “in working out the meaning of an Act”, the concepts of ‘nominee’ and ‘licensee’ are separate and distinguishable.
The presumption against penalty issue
The submission began by noting that a rectification order could entail a very serious personal and financial impact on a nominee. The applicant submitted that bankruptcy could be a consequence for a nominee, depending on the cost of complying with the rectification order. He noted, for example, that a rectification order could require demolition and rebuilding of an entire building.[25]
[25] Construction Occupations (Licensing) Act 2004, sections 38(1)(b) and (c)
By reference to that factual background, the applicant submitted that a rectification order directed at a nominee should be characterised as a penalty. The applicant submitted that where it is ambiguous, he said, as to whether a licensee for the purposes of section 34 includes a nominee, a statutory presumption should be made against the imposition of that penalty on a nominee to resolve the ambiguity.[26]
[26] Applicant’s outline of submissions, paragraphs 28-42
The applicant relied on what he described as “an established principle of common law interpretation” that the legislature “does not intend to interfere with fundamental rights such as property rights, in the absence of clear and unambiguous language.”[27]
[27] Applicant’s outline of submissions, paragraph 29. The applicant relied upon Coco v R (1994) 179 CLR 427 at 437 in support
The applicant also relied on what he described as “a related principle of statutory interpretation … that ambiguity in a provision imposing a penalty should be resolved by adopting an interpretation favourable to the defendant.”[28] The applicant relied on R v Miller which cited Waugh v Kippen[29] as authority for the proposition that “ambiguity or doubt should be resolved in favour of the subject”[30] meaning him.[31]
[28] Applicant’s outline of submissions, paragraph 30. The applicant relied upon Jeffrey v DPP (1995) 121 FLR 16 at 19 in support
[29] Waugh v Kippen [1986] HCA 12; (1986) 160 CLR 156 at 164
[30] R v Miller [2001] NSWCCA 209 at [54]; 127 A Crim R 344
[31] The party joined also relied on Waugh v Kippen for contending that the alleged ambiguity should be construed in favour of it, as the person for whose benefit a rectification order is made
Drawing on these two principles, the applicant contended that the imposition of a rectification order is “akin to a penalty”,[32] and that Part 4 of the COLA should not be construed as imposing that penalty on a nominee in the absence (he said) of clear and unambiguous language.
[32] Applicant’s outline of submissions, paragraph 31
In support of his contention that whether the Registrar can issue a rectification order to a nominee is unclear and ambiguous, the applicant drew on the definition of “construction service” in section 6(2) of the COLA which states:
(2)A construction service is the doing or supervision of work in a construction occupation.
Note Supervise—see dict.
‘Supervise’ is defined in the Dictionary to the COLA as follows – “supervise includes direct.”
With reference to the definition of ‘supervise’, the applicant drew upon the first of a nominee’s functions, under section 31(1)(a) stated above, namely to supervise or direct the services provided by the licensee corporation or partnership. In this case, he said, Chase did not itself perform any construction work. Rather, the applicant said, Chase directed and supervised a range of sub-contractors to “carry out the physical construction work”.[33]
[33] Applicant’s outline of submissions, paragraph 35
The applicant contended, for these reasons, that the connection between supervision for the purposes of section 6(2) of the COLA and supervision for the purposes of section 31 of the COLA is “tenuous at best”.[34] He submitted it is also ambiguous in the sense that the supervision can be “equally referable to the direction and supervision of works by a licensed builder”,[35] meaning Chase supervising the work of the subcontractors. The applicant noted that this is consistent with section 42(1)(f)(ii)[36] of the Building Act 2004, which provides that for building work required to be done only by a licensed builder, the work must be “carried out by or under the supervision of the builder mentioned in the building commencement notice”, meaning in this case Chase.
[34] Applicant’s outline of submissions, paragraph 36
[35] Applicant’s outline of submissions, paragraph 36
[36] The Tribunal presumes that the applicant’s reference to section 42(1)(e)(ii) is a slip, and that the applicant intended to refer to section 42(1)(f)(ii)
With reference to section 28(7)(a) of the COLA, and as another indicator of ambiguity, the applicant noted that section 19(a) of the Construction Occupations (Licensing) Regulation 2004 (the Regulation) prescribes that an individual is eligible to be a nominee of a corporation if “the individual is a director or employee of the corporation”. The applicant contended that neither section 6(2) nor section 28(7)(b) of the COLA “provides a proper basis to find a legislative intention to issue rectification order to a nominee” which would expose the nominee to “an uncapped monetary penalty”.[37]
[37] Applicant’s outline of submissions, paragraph 39
With reference to an employee being eligible to be a nominee, the applicant contended that there is “no apparent public policy as to why employees of building companies should bear that legal risk”.[38]
[38] Applicant’s outline of submissions, paragraph 39
In support of the alleged ambiguity, the applicant also drew upon section 31(2) of the COLA, which provides:
(2)The nominee commits an offence if the nominee fails to—
(a)adequately supervise the relevant construction services; or
(b)ensure that the relevant construction services comply with this Act and the operational Acts.
Maximum penalty: 50 penalty units.[39]
[39] A penalty unit is presently $160, meaning the maximum penalty is $8000
The applicant contended that the inclusion of a specific penalty that can be imposed, expressly, against a nominee for a failure to supervise, but the absence of any express provision for making a rectification order against a nominee, is another indicator of the lack of a legislative intention that the Registrar may issue a rectification order against a nominee.
The extrinsic materials issue
The applicant’s second submission as to how to resolve the alleged ambiguity began with a submission that it is necessary to consider the COLA as in force at the time the applicant was performing his functions as a nominee (ie during construction of Manhattan Apartments up to their completion in 2013). At that time, the relevant provisions of the COLA had not been changed since it was passed in 2004. The applicant submitted therefore that only the extrinsic material that concern the COLA before it was passed in 2004 is relevant. Regard cannot be had, he said, to material that came into existence after 2013, meaning material relevant to the amendments to the COLA in 2019 per the BCLAA. In support, the applicant relied on section 142 of the Legislation Act 2001 which states:
142Non-legislative context—material that may be considered
(1)In working out the meaning of an Act, material mentioned in table 142, column 2 may be considered.
(2)In working out the meaning of a statutory instrument, material mentioned in table 142, column 3 may be considered.
(3)This section does not limit the material that may be considered in working out the meaning of an Act or statutory instrument.
Referring to section 142(1), the applicant relied on items 2, 3 and 4 in table 142 that describes three different kinds of extrinsic materials made or presented to the Legislative Assembly “before the Act was passed”. Item 4 refers to “any explanatory statement (however described) for the bill that became the Act”. The applicant submitted that that material is consistent with a legislative intention to make a rectification order against a licensee but not a nominee.
The applicant referred to two passages in the Explanatory Statement to the Construction Occupations (Licensing) Bill 2003 (the 2003 EM).
First, the applicant relied on the statement on page 6 of the 2003 EM regarding clause 31 of the Bill (now section 31 of the COLA), which states:
Clause 31 specifies that the nominee’s functions are to adequately direct and supervise the licensee’s construction services, and to ensure that the construction services done by the licensee complies [sic] with the Bill and the Operational Acts. [emphasis added by the applicant]
Second, the applicant relied on the statement on page 7 of the 2003 EM under the heading “rectification orders”, which states:
It is important that licensees take full responsibility for the construction services they provide. If that work is not done in accordance with this Act or an operational Act the registrar is able to make an order that requires the licensee to rectify the work.
The applicant also referred to recommendation 11 in the Final Report of the National Competition Policy Review of the Building Act 1982, the Electricity Act 1971, and the Plumbers, Drainers and Gasfitters Board Act 1982 dated August 2000. That report is entitled “Occupational Licensing in the ACT Building and Construction Industry” (the Final Report). Recommendation 11 states:
The new Act should empower the Department of Urban Services to issue an order to rectify work that is in breach of technical standards regardless of whether a certificate of occupancy has been granted. This would ensure that unacceptable work is rectified by the original tradesperson or, if he/she is unable and unwilling to comply, by another licensed party, with the cost being charged to the negligent tradesperson.
The applicant noted that on pages 7-9 of the Final Report there is no reference to nominees, only licensees, and that the role of nominees was not considered in the Final Report. The applicant submitted that these extrinsic materials are consistent with a “limited” legislative intention, being to impose rectification orders on licensees but not on nominees.
The 2019 amendments issue
The applicant’s third submission as to how to resolve the alleged ambiguity relied upon the amendments to the COLA introduced in 2019, per the BCLAA, to make specific provision (per sections 35(3), 39A and 39B of the COLA) for the Registrar to make a rectification order against a director of a corporate licensee or a partner of a partnership licensee, as well as the licensee.
The provisions giving the Registrar that power, the applicant said, are clear and unambiguous. The applicant submitted that if the legislature had intended in 2004 that a rectification order could be made against a nominee as well as the licensee for which the person is a nominee, similarly clear and unambiguous language would have been used, yet such language is “entirely absent”.[40] It should therefore be inferred, he said, that the legislature did not intend a rectification order could be made against a nominee.
[40] Applicant’s outline of submissions, paragraph 54
The applicant added that the amendments in 2019 do not apply with any retrospective effect. The applicant cited Maxwell v Murphy[41] in support. The applicant also drew on section 75B of the Legislation Act which states:
A law must not be taken to provide for the law (or another law) to commence retrospectively unless the law clearly indicates that it is to commence retrospectively.
[41] [1957] HCA 7; (1957) 96 CLR 261 at 267
The amendments to the COLA in 2019, per the BCLAA, included the addition of “example 4” to section 34(1) as a further example of a “licensee or former licensee”. The applicant contended that if the further example had any “extending effect” on the operation of Part 4 to nominees (that being a question, he said, that need not be decided) it could not have any retrospective extending effect. Rather, he said, the COLA as in force when the applicant performed his functions up to completion of the development in 2013 must be applied.
The Registrar’s submissions
The Registrar submitted that by “applying ordinary rules of construction” the applicant is a licensee for the purpose of section 34(1). The Registrar contended that this is “necessitated” by the ordinary meaning of the text that best achieves the “purpose” of rectification orders, being to protect the public by requiring defective works to be rectified by those who are responsible for the defects.[42]
[42] Registrar’s submissions, second preliminary issue, paragraph 3(1)
The Registrar submitted that the COLA does not make a “contradistinction” between nominees and licensees. The Registrar submitted that, to the contrary, Divisions 3.1 and 3.2 of Part 3 provide “overlapping spheres of responsibility” for works and make a nominee “criminal[ly], professional[ly] and civilly responsible” for defective works. The Registrar contended that the COLA refers to a nominee, specifically, for the purpose of expanding “the responsibility of the corporate licensee” and that a nominee is not otherwise identified because it is not necessary to do so: the nominee is a licensee.[43]
[43] Registrar’s submissions, second preliminary issue, paragraph 3(2)
Regarding the licensee-nominee issue, the Registrar contended that no relevant statutory presumptions “apply to create ambiguity”,[44] which I inferred to mean no statutory presumptions need to be used to resolve an ambiguity, because there is no ambiguity to resolve. The term ‘licensee’ in section 34(1)(a) is, the Registrar said, unambiguous – meaning a person who holds a licence. There is (therefore) no basis to look to other sections of the COLA or extraneous materials to decide whether ‘licensee’ should be construed as not including a nominee.
[44] Registrar’s submissions, second preliminary issue, paragraph 3(3)
Regarding the presumption against penalty issue, the Registrar contended that the fact that a nominee is subject to a strict criminal liability under section 31 where construction services do not comply with the COLA or the operational Acts “only supports that the nominee is civilly liable where the construction services do not comply with the COLA and the operational Acts”.[45] The Registrar contended that the quantum of any penalty for an offence is not a proper basis for construing an intention that nominees are not civilly liable to a rectification order.
[45] Registrar’s submissions, second preliminary issue, paragraph 43
Regarding the extrinsic materials issue and the applicant’s preliminary submission about the need to confine consideration of such materials to a point in time, the Registrar submitted that the applicable law for the purpose of determining the validity of the rectification order is the law in force at the time the order was issued (in this case 18 March 2021), not the law in force at the time the Manhattan Apartments was under construction.
In this respect, the Registrar relied on a decision of the Court of Appeal of the Supreme Court of Victoria in Yarra City Council v Metropolitan Fire and Emergency Services Board and Ors (Yarra).[46] In Yarra, the Court considered two statutory provisions. The first empowered the regulator to issue a notice to a person who caused pollution to clean up the pollution (a clean-up notice). The second applied where the person failed to comply with the clean-up notice. It empowered the regulator to engage a third party to clean up the pollution and then recover the third party’s costs from the person who was the subject of the clean-up notice.
[46] [2017] VSCA 194
A question arose as to whether the polluter was not liable because the provisions (it was said) sought to impose liability with retrospective effect, meaning to impose a liability that the polluter did not have at the time it caused the pollution.
The Court of Appeal agreed with the trial judge’s conclusion that the provision was not retrospective and so was not subject to the presumption against retrospectivity. The clean-up notice did not have any retrospectivity because the obligation to comply with it only arose upon service of the notice, meaning the relevant law to consider is the law in force at the time the notice was issued. Likewise, the obligation to pay compensation only arose upon failure to comply with the clean-up notice, meaning the law to consider is the law in force at the time of the non-compliance.
The Court of Appeal in Yarra referred to earlier decisions of the High Court in Maxwell v Murphy and of the Federal Court in La Macchia v Minister for Primary Industry in which those Courts made the same statement of principle.
In La Macchia, French J (as he then was) said:
The fact that the power to cancel a licence … is conditioned upon a class of past events, does not mean that the inclusion in that class of events which predated the law, renders its operation retrospective.[47]
[47] [1986] FCA 452; (1986) 72 ALR 23 at 33
Regarding the 2019 amendments issue, the Registrar submitted that the applicant’s submissions fell away because the COLA must be applied as at the date that the rectification order was issued, 18 March 2021, meaning the COLA after the amendments to it were made, per the BCLAA, in 2019. In particular, the Registrar submitted that “example 4” puts it “beyond any doubt”[48] that a licensee for the purposes of section 34 includes a nominee.
The party joined’s submissions
[48] Registrar’s submissions, second preliminary issue, paragraph 64
The party joined submitted that the applicant’s submission regarding the distinction between a nominee and a licensee depends upon an incorrect presumption that a ‘licensee’ for the purposes of section 34(1) can only be a “corporate entity builder”.[49] The party joined contended that once that incorrect presumption is recognised, and that section 34(1) “simply refers to a person who holds a licence” is recognised, the alleged ambiguity falls away.
[49] Submissions of party joined on further preliminary issue, paragraphs 4 and 33
The party joined submitted that the legislature’s use of the word ‘licensee’ in section 34(1) was intended to ensure that both a nominee (as a licensee) and a corporate entity builder for which they are a nominee (as another licensee) are both accountable for non-compliant work. The party joined submitted that the legislature intended that there be “a licensed human”[50] (i.e. the nominee) responsible for building work where the licensee builder is a corporation.
[50] Submissions of party joined on further preliminary issue, paragraph 37
The party joined submitted that there is nothing “striking” about the absence of ‘nominee’ in the definition of ‘entity’ in section 34(1) because a nominee is a “subset of a licensee”.[51]
[51] Submissions of party joined on further preliminary issue, paragraph 39
In reply to the applicant’s submissions to address the alleged ambiguity, the party joined contended that if the Tribunal were persuaded that there was an ambiguity it should reject the applicant’s submission as to why the alleged ambiguity should be resolved in favour the applicant.
In reply to the presumption against penalty issue, the party joined submitted that Part 4, Division 4, and the provisions for making a rectification order in particular, are remedial (not penal) in character. They are for the purpose of enabling landowners (in this case, the party joined) who own property that is the subject of defective works to have the defects corrected by a licensee who is in some way responsible for the defects. The party joined submitted that a rectification order is designed to hold a licensee “accountable for their failures”[52] through a rectification order. To the extent that there is any ambiguity, it should be resolved in favour of the landowners.
[52] Submissions of party joined on further preliminary issue, paragraph 5
In this respect, the party joined relied on the High Court’s decision in Waugh v Kippen in which the High Court considered legislation governing an employer’s obligation to provide a safe place of work for an employee. The Court noted that the “character” of the legislation was concerned with furthering industrial safety and so should be construed “so as to give the fullest relief which the fair meaning of its language will allow”.[53] The Court noted that if a conflict were to arise between two principles of statutory interpretation, a court:
must proceed with its primary task of extracting the intention of the legislature from the fair meaning of words by which it has expressed that intention, remembering that it is a remedial measure passed for the protection of the worker. It should not be construed so strictly as to deprive the worker of the protection which Parliament intended that he should have.[54]
[53] [1986] HCA 12, (1986) 160 CLR 156 at 164
[54] [1986] HCA 12, (1986) 160 CLR 156 at 164
The party joined submitted that the same approach should be taken in this case.
In reply to the extrinsic materials issue, the party joined submitted that the applicant’s submissions about retrospectivity are misconceived. Like the Registrar, the party joined relied on the distinction between a statute that has a prior effect on past events and a statute that governs future action by reference to past events.[55] In this case, therefore, the applicant’s obligation to conduct future action (i.e. comply with the rectification order) must be assessed by reference to the law in force at the time the rectification order was made (i.e. 18 March 2021) meaning the COLA as in force at that time which includes example 4 added at the foot of section 34(1) as a further example of a licensee or formal licensee.
[55] See Coleman v Shell Co of Australia (1943) 45 SR (NSW) 27 at 31
The party joined also submitted that the insertion of example 4 did not, in any event, change the law. It merely clarified or confirmed what the law is and always was.
The party joined submitted that even if the correct point in time is the period up to completion of the works in 2013, table 142 to section 142 of the Legislation Act does not limit the extrinsic materials that may be considered to materials (of the kinds described) that were made or presented to the Legislature “before the Act was passed”. The party joined relied on section 142(3) quoted above.
The party joined referred to the second paragraph of the comment in the Revised Explanatory Statement to the BCLAA (the 2019 EM) regarding new “example 4” to section 34(1). The comment, in full, states:
Clause 34Intention to make rectification order
Section 34 (1), new example
This clause inserts a new example of a plumber doing or supervising work as a nominee of a licensed corporation.
A rectification order can be made with respect to a licensee. All nominees are licensees and have obligations in relation to ensuring the construction services they supervise comply with relevant laws.[56]
[56] Building and Construction Legislation Amendment Bill 2019, Revised Explanatory Statement, page 46. The passage upon which the party joined relied is unchanged from the passage in the initial explanatory statement.
The party joined submitted that nothing should be drawn from the absence of any reference to “nominee” in the Final Report. It noted that “nominee” was (and remains) an important feature of the COLA at the time the COLA commenced in 2004. The party joined submitted that much work took place in the several years between when the Final Report was published (in August 2000) and when the operative provisions of the COLA commenced (on 1 September 2004).
In response to the 2019 amendments issue, the applicant’s submissions regarding the introduction of a director’s personal liability per the BCLAA, and the absence of any reference to a nominee’s liability in 2004 or otherwise, the party joined submitted that the inference is misplaced. A director of a corporate licensee might not be a licensee, hence the introduction of the amending legislation to hold a director or partner liable irrespective of whether they are a licensee. By contrast, the party joined said, such a provision is not and never has been necessary in relation to a nominee because a nominee must be a licensee[57] in order to be a nominee. In other words, express provision for a nominee was not necessary because the COLA already permitted a rectification order to be made against a nominee by reason of their being a licensee.
Consideration
[57] Construction Occupations (Licensing) Act 2004, section 28(7)(b)
“The present basis for interpreting legislation”[58] is stated by the High Court in SZTAL v Minister for Immigration and Border Protection[59] (SZTAL). In that case, Kiefel CJ, Nettle and Gordon JJ said:
The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose.[60]
[58] Dennis Pearce, Statutory Interpretation in Australia (LexisNexis Butterworths, 9th edition, 2019)
paragraph 2.1
[59] [2017] HCA 34
[60] SZTAL at [14]
In SZTAL, Gageler J added:
…. The task of construction begins, as it ends, with the statutory text. But the statutory text from beginning to end is construed in context, and an understanding of context has utility “if, insofar as, it assists in fixing the meaning of the statutory text”.[61]
[61] SZTAL at [37] - [39]; Dennis Pearce, Statutory Interpretation in Australia (LexisNexis Butterworths, 9th edition, 2019), paragraph 2.1
In my view, once that principle is applied, the “text” speaks for itself. Indeed, to accept the carve out of ‘nominee’ from ‘licensee or former licensee’ would be to ignore the most basic principle of statutory interpretation: apply the text.
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.[62] 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.
[62] T documents, pages 150 and 202
In my view, the question posed by the applicant for referral to the Supreme Court 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.
In my view, the applicant’s further preliminary issue is answered at that point: the rectification order is valid.
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.
My conclusion is consistent with the statement in obiter of Senior Member Orlov, said without the benefit of argument, in Hill v Construction Occupations Registrar; Jones v Construction Occupations Registrar[63]:
I accept, as the Registrar submits, that section 34 relates to the making of a rectification order in relation to an entity ... A person who is a director of a corporate entity is not, by reason of that fact alone, an entity. Of course, as in the case of Mr Hill, if the person is licensed and the nominee of the corporate entity, the person is an entity in their own right and the registrar may proceed against them in that capacity in the ordinary way under sections 34, 35 and 38.[64]
[63] [2021] ACAT 21
[64] Hill v Construction Occupations Registrar; Jones v Construction Occupations Registrar [2021] ACAT 21 at [55]
I have been on the labyrinth-like journey that the applicant submitted I must go, but nothing on the journey persuaded me to read down the meaning of the word ‘licensee’ to exclude a licensee who is a nominee for another licensee. Indeed, the journey only confirmed to me that the applicant is a licensee for the purposes of section 34. In my view, the statement of the tribunal in Hill is correct.
Regarding the nominee-licensee issue, the applicant’s submission that section 34(1) does not apply to him because he did not himself provide a construction service, and only supervised “the licensee [i.e. Chase] who provided the construction service”,[65] seeks to construe the words in section 34(1) in a manner that is not consistent with the words. The same flaw is in the applicant’s submission that there is a “statutory connection between the construction work and the licensee”[66] and/or that this connection is “an essential part of the statutory framework in which the entity is a defined term.”[67] In my view, there is no connection.
[65] Applicant’s outline of submissions in reply, paragraph 2
[66] Applicant’s outline of submissions in reply, paragraph 3
[67] Applicant’s outline of submissions in reply, paragraph 3
Nothing in section 34(1) introduces the gloss or concept that the section (or Part 4 generally) is directed only at a (or the) specific licensee who provided the construction work that is the subject of the rectification order. In particular, nothing in the words excludes a nominee because the nominee only supervised another licensee who carried out construction work or provided a construction service. In any event, the nominee has another function: to ensure that the relevant construction services comply with the COLA and the operational Acts. To discharge that function is to provide a construction service, namely the supervision of work in a construction occupation.
The applicant makes much of the fact that section 34 is directed to a licensee, not a nominee. He describes the “omission” of any reference to a ‘nominee’ as “striking”. But why? To be a nominee, a person must be a licensee[68] – meaning there is no scope for an individual to be a nominee who is not a licensee. It follows that for the legislature to have added “nominee” as a person to whom section 34(1) applies would be superfluous because the nominee’s necessary qualification as a licensee causes them already to be a person of a kind described in section 34(1).
[68] Construction Occupations (Licensing) Act 2004, section 28(7)(b)
The applicant’s submission was in substance asking me to read into section 34(1) the words “except a nominee” where those words do not appear. I was not persuaded that I should do so. If the legislature had intended such an exclusion, it would have added such words. Nothing persuades me that they should be inferred.
I considered the many statutory ‘indicators’ that the applicant relied upon for why the exclusion should be inferred. None of them persuaded me.
Referring to section 47 of the COLA, the applicant submitted that a licensee for the purpose of that section could not include a nominee because the corporation or partnership is not the nominee’s “client”. The Registrar submitted to the contrary. He submitted that where section 47 concerns provision of a construction service to a person rather than the provision of a construction service per se, it becomes clear that section 47 applies also to a nominee.
The question was not fully debated and need not be decided in circumstances where (in my view) there is no ambiguity that “licensee” for the purposes of section 34 includes a nominee, but the Registrar’s submission is intuitively more persuasive.
In circumstances where a nominee is charged, personally, with a statutory responsibility to supervise the construction services of the corporation or partnership for which it is a nominee and to ensure that the relevant construction services (as defined) comply with the COLA and the operational Acts, it is difficult to envisage that a nominee would discharge those roles otherwise than for a fee. The provision of a supervisory service for a fee has the essential hallmarks of a relationship between a service provider and a client. I saw no reason, therefore, to construe licensee for the purposes of section 47 as not including a nominee and reason to include it.
Also, there are sound reasons for why the corporation or partnership would wish to know what insurance the nominee holds in relation to the supervisory service they are to provide before deciding whether to appoint them under section 28(5) of the COLA. Faced with a claim for defective work, the corporation or partnership might well look to the nominee to take at least some responsibility for the claim especially where the nominee has (in conjunction with the corporation or partnership)[69] a statutory responsibility to ensure[70] that the relevant construction services comply with the COLA and the operational Acts which include the Building Act. Appropriate insurance held by the nominee would seem a prudent, if not essential, aspect of their capacity to discharge that responsibility.
[69] Jolley v Construction Occupations Registrar & The Owners-Units Plan 3941 [2021] ACAT 112 at [70]
[70] Construction Occupations (Licensing) Act 2004, section 31(1)(b)
Referring to section 55 of the COLA on which the applicant relied as another contextual indicator, sections 55(1)(a) and (c) of the COLA recognise that a licence can be held by a natural person, a corporation or a partnership. The intervening words in section 55(1)(a) “or a director, partner, nominee or employee of the licensee” create a ground for occupational discipline against the licensee where one of the natural persons described contravenes the COLA or an operational Act. The fact that a nominee is, themself, a licensee is not to the point. All that can be said is that the additional words are superfluous if occupational discipline is brought against a nominee, personally, rather than a corporation or partnership for which the individual is a nominee.
The absence of these intervening words in section 55(1)(b) makes clear that the ground for occupational discipline in section 55(1)(b) only applies if the licensee itself “knowingly or recklessly” gave false or misleading information – even if it acted through the conduct of a natural person such as a director, partner, nominee or employee.
Of importance for present purposes is that a licensee for the purposes of section 55(1)(b) must include a nominee. It would be a nonsense to contend that section 55(1)(b) does not apply to a licensee who is a nominee in circumstances where a nominee has a statutory responsibility to supervise the construction services of the corporation or partnership for which it is a/the nominee. Giving information, with care to ensure it is not false or misleading, is a core aspect of supervision. In other words, that a licensee includes a nominee for the purposes of section 55(1)(b) is consistent with a licensee including a nominee for the purposes of section 34(1). There is no ‘indicator’ to the contrary.
The applicant’s reliance on section 38(1) was, in substance, a repeat of its overarching submission that Part 4, Division 4.2, contemplates that the licensee who can be directed to perform the stated rectification work, per the rectification order, is the licensee who performed the work that needs to be rectified. As stated, I disagree. Sections 38(1)(a), (b) and (c) each refer to “a” construction service. Nothing in the language requires a connection between the construction service provided by the licensee who or which is the subject of the order and the work to be done as described in the order. Whether it is ‘appropriate’ to order a licensee to do the required work will depend on the facts and circumstances in each case.
The applicant’s submission that a licensee for the purposes of section 34(1) should not be understood as including a nominee after “considering the Act as a whole” is also unpersuasive. A nominee’s functions are to supervise the construction services provided by the corporation or partnership for which the nominee is responsible and to ensure those services comply with the COLA and the operational Acts.[71] The person with greatest material interest in the nominee’s discharge of its statutory functions is “the landowner in relation to his land the construction service was provided”.[72] Taking the COLA as a whole, the primary purpose of having a nominee would fail if a nominee was not accountable to the landowner for a failure to discharge their statutory functions.
[71] Jolley v Construction Occupations Registrar & The Owners-Units Plan 3941 [2021] ACAT 112 at [70]
[72] Construction Occupations (Licensing) Act 2004, section 34(2)
This is not to say that another licensee or other licensees, including the corporate or partnership licensee for which the person is the appointed nominee, is not or might not also be accountable wholly or in part. Which licensee or licensees should be responsible for rectifying defective work will depend on the facts and circumstances in each case.
The applicant’s three submissions about how to resolve the alleged ambiguity as to whether a licensee for the purpose of section 34(1) includes a nominee need not be considered because I am not persuaded that there is an ambiguity. However, even if there were, the submissions were unpersuasive.
Regarding the presumption against penalty issue, I do not accept that a rectification order should be characterised as a penalty. It is an order to ‘make good’ defective works. To make good will likely entail a cost, but that money is payable to whomever provides materials or performs work to rectify the defects. The money is not a penalty payable to the Registrar, to general revenue or to anyone else: it is a payment in return for goods or services provided.
I accept that in some situations the costs that may be incurred to comply with a rectification order may be very significant, but that does not change the character of the cost. A significant cost is no more than a statement about the extent of the rectification work to be done.
I am also not persuaded by the submission that the specific penalty provisions in Part 3, Division 3.2, section 31(2), directed to a nominee who fails to perform their statutory functions under section 31(1) are an ‘indicator’ that a licensee for the purposes of making a rectification order under Part 4, Division 4.2, section 34(1) does not include a nominee. They are separate provisions in separate Parts of the COLA that serve different purposes. Also, as the party joined pointed out, all nominees must be licensees but not all licensees are nominees.
The applicant’s submission about there being no “apparent public policy” reason for why “employees of building companies should bear the legal risk” of an “uncapped monetary penalty”[73] if they were nominees of the company is unpersuasive. Not any employee can be appointed as a nominee. Per section 28(7)(b) of the COLA, the employee must be “licensed in the construction occupation and occupation class (if any) appropriate for each of the construction services for which the individual is to be responsible”. Per section 28(5), the corporation or partnership decides who it wishes to appoint as a/the nominee. If it chooses an appropriately licensed employee, so be it. Per section 28(7)(c), it is for the employee to decide whether to agree “in writing to the appointment”.
[73] Applicant’s outline of submissions, paragraph 39
When deciding whether to agree to a proposed appointment, it is for the employee (as a/the proposed nominee) to know the construction service he or she will be required to provide and the regulatory actions that may be taken against them, if appropriate, if the construction service they provide is “otherwise than in accordance with” the COLA or an operational Act.
Nothing compels an employee to accept the role. I cannot see any public policy reason as to why an employee who accepts the role should be excused from the responsibilities of the role or from being held accountable for the discharge of their statutory functions.
The option for a licensee corporation or partnership to appoint an employee, instead of a director or partner, caters for the prospect there is not a director or partner with the requisite licence (per section 28(7)(b) of the COLA) who is eligible and willing to accept the role.
The applicant’s submission concerning the time-limited use of extrinsic materials issue to resolve the ambiguity if there were one, was also unpersuasive.
The applicant acknowledges that the insertion of ‘example 4’ in 2019 per the BCLAA, as another example of a licensee or former licensee, “might … have extended”[74] the application of Part 4 of the COLA to nominees, but contends that prior to the commencement of the BCLAA a licensee should not be construed as including a nominee. The difficulty with the submission is that the words in section 34(1) have never changed.
[74] Applicant’s outline of submissions, paragraph 56
Statements or decisions made at different points in time might differ as to what a constant legislative provision means, but a determination about the meaning at any point in time must draw on all material that is available at the time it is made.
To give a simple example, the most recent statement or determination made by a superior court about the meaning of a provision must be taken into account (and in most cases applied), even if there were different statements in earlier decisions about its meaning.
In this case, where the words of section 34(1) are unchanged, their meaning (including the meaning of ‘licensee or former licensee’) should be determined by reference to all material that is available at the time the determination is made. In the case of the rectification order, that time was 18 March 2021 when the order was made.
The material presently available (and that was available when the rectification order was made) includes the 2019 EM which, as the party joined pointed out, states:
A rectification order can be made with respect to a licensee. All nominees are licensees ...
Example 4 confirms that to be so.
Even if there were a different opinion in years past (for example in 2012 - 2013 when the Manhattan Apartments were under construction) about the meaning of the words in section 34(1), including the words ‘licensee or former licensee’, the material that now exists about the meaning of the words should be taken into account in circumstances where the words have never changed.
Such is made clear by section 142(3) of the Legislation Act.
The applicant’s submission, made with reliance on table 142, section 142(2), that explanatory statements in the 2019 EM “cannot be considered” in working out the “pre-2019 meaning” of the COLA is misconceived in circumstances where the words to be interpreted have not changed. In any event, table 142, section 142(2) merely mandates that extrinsic material that was presented or provided “before the Act was passed” may be considered. Section 142(3) makes clear that section 142(2) does not limit the material that may be considered.
The applicant’s submission that the BCLAA “cannot operate retrospectively”[75] is also misconceived. Questions of retrospectivity do not arise. The BCLAA did not ‘extend’ the operation of section 34 to impose liability for rectification orders on nominees where previously that liability did not exist. If that were the legislature’s intention, much more would have been done than insert an additional example. At its highest, the addition of example 4 merely removed ambiguity, if there were any, about the meaning of the unchanged words in section 34(1).
[75] Applicant’s submissions in reply, paragraph 28
The applicant’s reliance on section 75B of the Legislation Act is also therefore misconceived. Nothing has commenced retrospectively: the law has not changed.
For the same reasons, I did not find decisions such as Yarra, La Macchia or Robertson to be relevant. Indeed, they tended to confuse. Those decisions stand for the general principle that a legislative provision does not have retrospective effect if it “merely takes account of antecedent facts and circumstances as a basis for what it prescribes for the future, and it does no more than that”.[76]
[76] Robertson v City of Nunawading [1973] VR 819 at 824
That is not this case. The applicant is, and always was, a licensee. By reason of that qualification, and where section 34(1) existed in its current form prior to the applicant accepting appointment as nominee for Chase, at all material times the Registrar was able to issue a rectification order against him if the requirements under Part 4 Division 4.2 are met. The complexities about retrospectivity dealt with in Yarra, La Macchia and Robertson do not arise.
The applicant’s submission about the 2019 amendments that introduced a power to issue a rectification order to a director or partner of a licensed corporation or partnership, respectively,[77] was also unpersuasive. These provisions addressed a circumstance where a director or partner who is (or was) not a licensee could not be the subject of a rectification order.
[77] See Construction Occupations (Licensing) Act 2004, sections 39A and 39B
In my view, the better explanation for why the legislature did not similarly make provision for a rectification order to be made against a nominee – whether in 2004 or 2019 – is that it was unnecessary to do so. To be a nominee, per section 28(5)) of the COLA, an individual must be an “eligible individual”. One of the requirements, to be an “eligible individual”, is that the individual is licensed. It follows that a lawfully appointed nominee is a licensee.
It follows that it was never necessary for the legislature to make express provision for a nominee to be the subject of a rectification order. To do so would have been superfluous. Indeed, for the legislature to have made such an express provision in the BCLAA would have risked uncertainty as to whether nominees (being licensees) were licensees for the purposes of section 34 before the amendments were made.
………………………………..
Presidential Member G McCarthy
| Date of hearing: | 11 May 2022 |
| Counsel for the Applicant: | Dr A Greinke |
| Solicitors for the Applicant: | Ms B Ellis, Mills Oakley |
| Counsel for the Registrar: | Mr N Oram |
| Solicitors for the Registrar: | Ms G Junakovic, ACT Government Solicitor |
| Counsel for the Party Joined: | Mr J Bird |
| Solicitors for the Party Joined: | Mr G Shaw, Minter Ellison |
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