Jolley v Construction Occupations Registrar & the Owners - Units Plan 3941 (Administrative Review)
[2021] ACAT 112
•19 November 2021
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
JOLLEY v CONSTRUCTION OCCUPATIONS REGISTRAR & THE OWNERS – UNITS PLAN 3941 (Administrative Review) [2021] ACAT 112
AT 21/2021
Catchwords: ADMINISTRATIVE REVIEW – rectification order – preliminary questions as to validity – validity of notice of intention – role and functions of nominee
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 9, 68
Building Act 2004 ss 42, 49, 136
Construction Occupations (Licensing) Act 2004 ss 6, 28, 31, 34, 35, 38, 123, 123C
Migration Act 1958 (Cth) ss 116, 119, 124
Subordinate
Legislation cited: National Construction Code’s Building Code of Australia
Cases cited:Australian Securities and Investments Commission v Donald [2003] FCAFC 318
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21
Commonwealth v Introvigne [1982] HCA 40
Deputy Commissioner of Taxation v Woodhams [2000] HCA 10
Florida Hotels Pty Limited v Mayo [1965] HCA 26
Jurox Pty Ltd v Fullick [2016] NSWCA 180
Koundouris v Construction Occupations Registrar & Ors [2015] ACAT 92
Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed [2005] FCAFC 58
Mousa and Anor v Vukobratich Enterprises Pty Ltd and Anor [2019] QSC 49
Plaintiff M174/2016 v Minister for Immigration and Border Protection [2018] HCA 16
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28Sheldon v McBeath (1993) Aust Torts Reports 81-209
Yilmaz v Minister for Immigration and Multicultural Affairs [2000] FCA 906
Tribunal:Senior Member Prof T Foley
Date of Orders: 19 November 2021
Date of Reasons for Decision: 19 November 2021
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:Senior Member Prof T Foley
DATE:19 November 2021
ORDER
The Tribunal orders that:
The Rectification Order issued to the applicant on 18 March 2021 is valid.
The matter be listed for further directions as to the filing of evidence.
………………………………..
Senior Member Prof T Foley
REASONS FOR DECISION
Andrew Jolley (the applicant) has sought review of a decision dated 18 March 2021 of the Construction Occupations Registrar (the respondent) to issue him with a rectification order pursuant to section 38 of the Construction Occupations (Licensing) Act 2004 (the COLA) to carry out rectification work as specified at Block 1 Section 52 Canberra City, known as the Manhattan Apartments. By order dated 10 May 2021 the Owners – Units Plan 3941 were joined as a party (the party joined).
Jurisdiction to review the respondent’s decision is conferred on the Tribunal by section 123C of the COLA which is an authorising law for the purposes of section 9 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act). The review is an application for review by the ACT Civil and Administrative Tribunal pursuant to section 68 of the ACAT Act.
The matter was set down for interlocutory hearing on two preliminary questions.
In the reasons below, a reference to ‘ACAT’ or ‘tribunal’ refers to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ refers to the member who heard the application.
The hearing
The matter was listed for interlocutory hearing on 26 August 2021. The Tribunal had before it the documents provided by the respondent on which its decision was based (the T Documents), the Submissions and Submissions in Reply of the parties. The applicant was represented by Mr C Erskine SC of counsel instructed by Meyer Vandenberg Lawyers. The respondent was represented by Mr N Oram of counsel instructed by the ACT Government Solicitor. The Party Joined was represented by Mr J Bird of counsel instructed by Minter Ellison Lawyers.
At the conclusion of the interlocutory hearing the Tribunal reserved its decision and indicated it would provide written reasons on two preliminary questions. These are those reasons.
Background
The proceedings relate to a development known as ‘Manhattan on the Park’ being Block 1 Section 52 Canberra City (the premises). The development comprises a 16-storey residential tower block containing 330 units. Building approval for shoring and excavation work at the site was issued on 18 April 2011.[1] Building approval for the construction of the development based on approved plans was issued on 26 April 2012.[2] A Commencement Notice for the construction of the development was issued on 10 May 2012.[3] That notice specifies under the heading “Builders Details”, Chase Building Group Pty Limited as licence holder and the applicant as nominee.[4] A Certificate of Occupancy and Use was issued for the building works on 8 August 2013.[5]
[1] T Documents page 199
[2] T Documents page 200
[3] T Documents page 202
[4] T Documents page 202
[5] T Documents page 205
Peak Consulting prepared a series of reports detailing alleged defects in the building works. Their final report of 1 June 2016 detailed significant defects to balcony waterproofing at various elevations.[6] The party joined commissioned a report by Diagnostech (Diagnostech) dated 18 December 2018 which identified and explained a lengthy series of defects.[7] The defects were detailed as being non-compliant with the 2011 version of the Building Code of Australia (BCA 2011) in that report.
[6] T Documents pages 125-137
[7] T Documents pages 246-519
On 19 March 2020 the respondent issued a Notice of Intention to Issue a Rectification Order (Notice of Intention) to the applicant.[8] The Notice of Intention contained allegations of breaches in relation to the defects in the development based on the Peak Consulting and Diagnostech reports and detailed a rectification order proposed to address the breaches.[9] The Notice of Intention cited the 2013 version of the Building Code of Australia (BCA 2013). On 29 June 2020 the applicant responded to the allegations contained in the Notice of Intention.[10] On 18 March 2021 the respondent issued a Rectification Order to the applicant.[11] The Rectification Order stated that the “incorrect code” had been applied in the Notice of Intention and indicated the correct code was the BCA 2011.[12]
[8] T Documents page 185
[9] T Documents pages 185-210
[10] T Documents page 172
[11] T Documents pages 150-158
[12] T Documents pages 153-154
The applicant is the nominee of Chase Building Group Pty Limited which entered into liquidation on 18 October 2017.[13]
[13] T Documents page 207
On 15 June 2021 the applicant applied to ACT Civil and Administrative Tribunal (the ACAT) for various orders including, by way of preliminary hearing, whether the Rectification Order is valid.
The parties have agreed two preliminary questions for determination with respect to the validity of the rectification order:
(1)Was the Notice of Intention to make a rectification order in respect of Block 1 Section 52 Canberra City issued by the respondent to the applicant and dated 19 March 2020 (Notice of Intention) not a notice for the purposes of section 34(2) of the COLA as:
(a) the Notice of Intention did not expressly identify any failure of supervision (as defined in the COLA) on the part of the applicant 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/or
(b) the Notice of Intention referred to the National Construction Code 2013.[14]
(2)If the Notice of Intention was not a notice for the purposes of section 34(2) of the COLA, are the orders that the Tribunal may make on the application limited to:
(a) setting aside the rectification order made on 18 March 2021; and
(b) making no further order.
The relevant law
[14] The Building Code of Australia (BCA) is a standard under the National Construction Code (NCC) Series. The BCA expression is used in the pleading and is used in these reasons for decision. BCA and NCC are used interchangeably in some instances in the T Documents.
The COLA provides a framework for the licensing and regulation of construction occupations and services.
A relevant concept in the COLA is that of a ‘construction service’. Section 6(2) defines this as:
A construction service is the doing or supervision of work in a construction occupation.
Division 3.2 of the COLA deals with the position of nominees. Section 28 provides:
Nominees of corporations and partnerships
(1) A corporation or partnership is eligible to be licensed only if it complies with subsection (2) or (3).
(2) The corporation or partnership complies with this subsection if—
(a)it has a single nominee appointed by it; and
(b)the nominee is responsible for the supervision of the construction services provided by it; and
(c)the nominee can, at all times, adequately supervise the construction services provided by it; and
(d)the corporation or partnership has a written record of policies and procedures for effectively managing and supervising the nominee and the corporation’s or partnership’s obligations under the licence, including arrangements for communicating regularly with the nominee in relation to the construction services provided by the corporation or partnership.
…
Section 31 sets out the role or functions of a nominee:
Role 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.
…
Part 4 of the COLA provides for rectification orders. Section 34 provides:
Intention to make rectification order
(1) This section applies if the registrar believes on reasonable grounds that—
(a)a licensee or former licensee (the entity) has provided a construction service otherwise than in accordance with this Act or an operational Act; and
(b)it may be appropriate to make a rectification order.
…
(2) The registrar may give the entity, and the land owner in relation to whose land the construction service was provided, a written notice that—
(a)gives details of the rectification order that may be made; and
(b)explains why the registrar intends to make the order; and
(c)invites submissions about the making of the order within the time stated in the notice that is not less than 5 working days after the day the entity or land owner receives the notice; and
(d)states that—
(i)the registrar will not make a rectification order if—
(A)the registrar is not satisfied it is appropriate to make a rectification order in relation to the entity; or
(B)if the registrar accepts a rectification undertaking from the entity—the entity complies with, and does not withdraw, the undertaking; and
(ii)if the registrar does not make a rectification order the Territory may authorise someone else to do the things stated in this notice, and the entity will have to pay for the things to be done.
(3) A submission mentioned in subsection (2) (c) may include a rectification undertaking in relation to the construction service mentioned in the written notice.
Section 35 deals with when a Rectification Order can be made. Relevantly, it provides:
When rectification order may be made
(1) This section applies if—
(a)the registrar has given an entity notice under section 34; and
(b)the entity provided the construction service, or part of the construction service, to which the notice relates; and
(c)after considering any submissions made within the time mentioned in the notice, the registrar is satisfied—
(i)the entity is contravening, or has contravened, this Act or an operational Act; and
(ii)it is appropriate to make a rectification order in relation to the entity; and
(d)if the registrar has accepted a rectification undertaking from the entity in response to the notice—the entity has failed to comply with, or has withdrawn, the undertaking.
…
(2) The registrar may make an order under section 38 (Rectification orders) in relation to the entity.
(3) If the registrar makes an order under section 38 in relation to an entity, the registrar may also make an order under section 38 in relation to—
(a)if the entity is a corporation—a director of the entity; or
(b)if the entity is a partnership—
(i)a partner of the partnership; or
(ii)a director of a corporation that is a partner of the partnership.
(4) If the entity has failed to comply with, or has withdrawn, the rectification undertaking, the registrar may make an order under section 38 in relation to the entity without giving the entity another notice under section 34.
(5) However, the registrar may only make an order under section 38 in relation to the entity before the latest of the following:
(a)if the registrar first became aware of the act that caused the contravention within 6 months before the end of the 10-year period—1 year after the registrar became aware of the act; or
(b)if the registrar gave the entity a notice under section 34 before the end of the 10-year period—1 year after the entity was given the notice; or
(c)in any other case—the day the 10-year period ends.
…
Section 38 of the COLA deals with the form and content of a Rectification Order. Relevantly, it provides:
Rectification orders
(1) The registrar may make an order (a rectification order) in relation to an entity requiring the entity—
(a)to take stated action to rectify work done as part of a construction service; or
(b)to demolish a building or part of a building where a construction service has been provided and provide the construction service under this Act or an operational Act; or
(c)to start or finish stated work in relation to which a construction service has been, is being or was proposed to be provided.
Example—stated action
rectified work must comply with a stated performance requirement of the Building Code of Australia
(2) The rectification order may also require the entity to give the registrar written information about a thing required to be done under the order.
Examples
1a structural engineer’s report about whether rectified work complies with relevant structural standards
2certification from a building certifier that finished work complies with this Act
(3) However, a rectification order need not state how a thing required to be done under the order is to be done.
Example
A rectification order requires an entity to rectify a building so that it complies with a stated performance requirement of the building code. The rectification order need not include details of how the work is to be undertaken or how the building may need to be redesigned or altered to comply with the requirement.
…
Sections 34 and 35 of the COLA provide that a construction service must be provided in accordance with that Act or an operational Act. The Building Act 2004 (BA) is an operational Act for the purposes of the COLA.
Section 42 of the BA contains the requirements for carrying out building work. It provides:
Requirements for carrying out building work
(1) Building work must not be carried out except in accordance with the following requirements:
(a)the materials used in the building work must comply with the standards under the building code for the materials in buildings of the kind being built or altered;
(b)the way the materials are used in the building work must comply with their acceptable use under the building code for buildings of the kind being built or altered;
(c)the building work must be carried out in a proper and skilful way;
NoteThe considerations to be taken into account to decide when work is carried out in a proper and skilful way may be prescribed under the regulations (see s (2)).
(d)for building work that requires building approval under division 3.3, the building work—
(i)must be carried out in accordance with approved plans; or
(ii)if plans have not been approved for the building work—must not be carried out;
(e)for building work that involves handling asbestos or disturbing friable asbestos—the building work must be carried out in accordance with approved plans that comply with this Act in relation to the asbestos;
(f)for building work required to be done only by a licensed builder—
(i)the building work must be carried out by or under the supervision of the builder mentioned in the building commencement notice; and
(ii)the builder’s licence must authorise the doing of the building work;
(g)the building licensee in charge of the building work must take—
(i)all the safety precautions stated in or with the application for the building approval; and
(ii)any other safety precaution that a certifier or building inspector may require the building licensee to take under section 46.
(2) The regulations may prescribe considerations to be taken into account to decide whether building work is carried out in a proper and skilful way.
Subsections 42(1)(a) and (b) of the BA ‘picks up’ the provisions of the building code.
Section 136 provides the relevant meaning of the building code:
Building code
(1) In this Act:
building code means—
(a)the Building Code of Australia prepared and published by the Australian Building Codes Board as amended from time to time by—
(i)the Australian Building Codes Board; and
(ii)the Australian Capital Territory Appendix to the Building Code of Australia; and
(b)a document prescribed by regulation.
Note 1The date that each version of the BCA comes into effect in the ACT can be found in the ‘History of Amendments’ or ‘History of BCA Adoption’ parts in the BCA itself. However, a different date of effect may be prescribed by regulation or in an amendment of the BCA made by an Australian Capital Territory Appendix to the Building Code of Australia.
Note 2See also s 136A (Regulation under s 136 (1), def building code and Legislation Act, s 47).
(2) To remove any doubt, the Building Code of Australia includes the variations, additions and exclusions for the ACT contained in the code, including in an appendix to the code.
NoteThe BCA does not include the Guide to Volume One published by the Australian Building Codes Board.
(3) The Minister may make an Australian Capital Territory Appendix to the Building Code of Australia.
NotePower given under an Act to make a statutory instrument (including the Australian Capital Territory Appendix to the Building Code of Australia) includes power to amend or repeal the instrument (see Legislation Act, s 46 (1)).
(4) The Australian Capital Territory Appendix to the Building Code of Australia is a disallowable instrument.
Note 1A disallowable instrument must be notified, and presented to the Legislative Assembly, under the Legislation Act.
Note 2An amendment or repeal of the Australian Capital Territory Appendix to the Building Code of Australia is also a disallowable instrument (see Legislation Act, s 46 (2)).
(5) The regulations may make provision in relation to the application of the building code.
Examples
1prescribe an area to be a bushfire-prone area
2A new edition of the Building Code of Australia comes into effect on 1 May 2013. A regulation provides that stated provisions of the BCA come into effect in the ACT on 1 January 2014.
NoteThe Australian Capital Territory Appendix to the Building Code of Australia may also amend the date the BCA comes into effect in the ACT.
Section 49 of the BA creates an offence for carrying out building work which fails to comply with the Building Code. It provides:
Complying with building code
(1) A person commits an offence if the person—
(a)is a licensed builder; and
(b)carries out building work; and
(c)either—
(i)knows the building work does not, or will not, result in a building that complies with the building code; or
(ii)is reckless about whether the building work does or will result in a building that complies with the building code.
Maximum penalty: 500 penalty units, imprisonment for 5 years or both.
(2) A person commits an offence if—
(a)the person is a licensed builder; and
(b)the person carries out building work; and
(c)the building work does not, or will not, result in a building that complies with the building code.
Maximum penalty: 50 penalty units.
(3) An offence against subsection (2) is a strict liability offence.
(4) For an offence against subsection (2), building work is taken not to result in a building that complies with the building code if, for any provision of the building code with which the building must comply—
(a)the building does not, or will not, comply with the deemed‑to‑satisfy provision of the building code; and
(b)the approved plans for the building work do not state a performance solution under the building code.
…
(5) A person commits an offence if the person—
(a)carries out building work; and
(b)intends to carry out the building work in a way that will not result in a building that complies with the building code.
Maximum penalty: 300 penalty units, imprisonment for 3 years or both.
(6) For this section, building work is taken to result in a building that complies with the building code if—
(a)the building complies with the building code as in force at the time the approved plans for the building work were approved; or
(b)if there are no approved plans for the building work or approved plans are not required for the building work—the building complies with the building code as in force at the time the building work is carried out.
The matter at issue
The matter at issue for preliminary determination are as set out in the agreed questions.
Submissions on the first question
The first question is in two parts and it is convenient to deal with the parties’ submissions on each in sequence.
The nominee argument
The applicant firstly argues that the Notice of Intention did not expressly identify any failure of supervision on the part of the applicant, and as such it is not a notice for the purposes of section 34(2) of the COLA.
Applicant’s contentions
The applicant contends that the focus of the Rectification Order made against a nominee should be on supervision, not the building work itself.[15] The Notice of Intention does not make any allegation relating to that supervision. The supporting material provided in the reports from Diagnostech and Peak Consulting do not refer to the issue of supervision at all.[16]
[15] Applicant’s submissions filed 6 July 2021 at [14]
[16] Applicant’s submissions filed 6 July 2021 at [16]-[17]
The applicant contends that section 28(2) of the COLA makes clear a nominee is not assumed to carry out building work, the nominee’s role is supervision only.
Further, the applicant says subsections 35(1)(b) and (c) read together make clear that the precondition for issuing a Rectification Order against the applicant is that he has provided the construction service, or part of the construction service, to which the Notice of Intention relates and the respondent is satisfied that he has contravened the COLA or an operational Act.[17] Section 6(2) defines ‘construction service’ as including the supervision of work which is all the nominee can do. Given this, it is that supervision to which the Rectification Order must relate and it fails to do this.[18]
[17] Applicant’s submissions filed 6 July 2021 at [10]-[15]
[18] Applicant’s submissions filed 6 July 2021 at [25]
The applicant makes a number of submissions as to why the Rectification Order is invalid as a consequence of this reading of the COLA:
(a)At no point does the Notice of Intention, the Rectification Order or its reasons identify any failure of supervision by the nominee.[19]
(b)A nominee has a distinct role of supervision. This is a role different from that of a director of a company, if that is the entity (i.e. a company) carrying out the construction work. Section 35(3) allows the respondent to make an order against such a director for contravention by the company as it would against the corporation, without qualification – that is, for both the doing or the supervision of work. The nominee’s role is however qualified to supervision.[20]
(c)Similarly, poor building work that results in defects does not necessarily connote inadequate supervision. The applicant cites the decision of the NSW Court of Appeal in Jurox Pty Ltd v Fullick[21] (Jurox) with respect to an employer failing to provide a safe system of work on a factory site as an analogous example.[22] There a worker had been trained in a safe method but failed to use that method resulting in injury. The question going to supervision was whether the worker routinely performed the task incorrectly or whether its use on the day she was injured was an aberration. The court said “if it were the case that the [worker’s] performance of the task on 5 December was an aberration from her usual performance, it would be difficult to conclude that Jurox [the employer] failed properly to supervise”.[23] The applicant cites Commonwealth v Introvigne[24] (Introvigne) to the same effect that inadequate supervision is not proved by the fact of injury (or in the present case defective work) but requires some analysis and particularisation of the supervision actually provided.[25] In Introvigne a student was injured in the playground before school when he and others were swinging off a flagpole halyard. The question going to supervision was whether leaving only one teacher on that morning to supervise 900 students was adequate supervision. Mason J accepted that the teachers’ duty of care did not require 15 year olds to be under constant observation and supervision.[26] What the applicant draws from these cases is that if a Rectification Order is to be issued against the nominee, to be effective in terms of rectification it must give details of supervision failures not just details of alleged building defects.
(d)The applicant argues that the directly analogous decision of the Supreme Court of Queensland in Mousa and Anor v Vukobratich Enterprises Pty Ltd and Anor[27] (Mousa) is distinguishable. This was a case under Queensland legislation very similar to the COLA and in proceedings against a nominee. The Court noted there was very little evidence of what supervision had or had not taken place. Nonetheless, His Honour concluded that the existence of “extensive and significant defective work compels the inference that such supervision of the building work as did occur must have been inadequate”.[28] The applicant says this finding does not go against its basic proposition that the nominee’s role is confined to supervision and a Rectification Order must therefore focus on findings in relation to supervision, and not merely the existence of defects.[29]
(e)The Rectification Order and its reasons in this case do not even address supervision by inference. It merely lists defects. The applicant contends the assumption is that if there is a defect as identified, then a Rectification Order may be made, and it may be made against a nominee. The applicant says there is simply no attempt to engage with the statutory requirements of contravention of the nominee’s supervision obligations.[30]
[19] Applicant’s submissions filed 6 July 2021 at [26]
[20] Applicant’s submissions filed 6 July 2021 at [29]-[32]
[21] [2016] NSWCA 180
[22] Applicant’s submissions filed 6 July 2021 at [33]
[23] Jurox at [54]
[24] [1982] HCA 40; (1982) 150 CLR 258
[25] Applicant’s submissions filed 6 July 2021 at [34]
[26] Introvigne at [265]
[27] [2019] QSC 49
[28] Mousa at [335]
[29] Applicant’s submissions filed 6 July 2021 at [35]-[40]
[30] Applicant’s submissions filed 6 July 2021 at [44]
As to the nature of ‘supervision’ and what would constitute failure to adequately supervise, the applicant refers to the following cases to show, (1) its complexity and (2) to emphasise the crucial importance of separately particularising supervision failures where these are alleged:
(a)In Sheldon v McBeath[31] the NSW Court of Appeal held that an architect had failed in his obligation to supervise in relation to construction of a house because he had neglected to be present when footings which proved to be defective were poured. The court held that while the duty of supervision is not required to be constant so as to cover every step on the way, it is a continuing duty and does not cease simple because the architect had let “the best times [to inspect] slip away”.[32]
(b)In Florida Hotels Pty Limited v Mayo[33] the High Court held an architect had failed in his duty of supervision by not being present at the time of preparation of formwork and the placement of reinforcement for a concrete slab to support a hotel swimming pool which subsequently collapsed causing injury. The applicant draws from this decision the contention that a defect of supervision is not the same as a defect of building, and that such a defect does not necessarily mean a failure of supervision.
[31] (1993) Aust Torts Reports 81-209 (Sheldon v McBeath)
[32] Sheldon v McBeath at 62,072
[33] [1965] HCA 26; (1965) 113 CLR 588 (Mayo)
The applicant says, given this complexity, the Notice of Intention was required to give chapter and verse of the alleged supervision failure (e.g. the nominee did not supervise periodically as required; the nominee did not properly or adequately delegate supervision; the nominee did not meet its continuing duty to supervise etc). It was not required to give chapter and verse of the alleged building failures in the case of a Notice of Intention issued against a nominee.
The applicant says additionally that the process of issuing the Rectification Order is flawed because the Notice of Intention is not sufficiently connected with the Rectification Order so as to meet the overall requirements of fairness set out in the COLA. If that sufficient connection is absent, it is the Rectification Order that is invalid.[34]
Respondent’s contentions
[34] Applicant’s submissions in reply filed 28 July 2021 at [4]-[5]
The respondent urges an interpretation of that part of the COLA dealing with nominees that sees a nominee as responsible for the building works provided by a corporation and not simply for the supervision of those works.[35] The respondent says section 28 of the COLA defines the obligations of a corporate licensee. It is not concerned with the obligations of a nominee. It is section 31 that defines the functions or role of the nominee. These functions are to supervise the construction services of the corporation, and to ensure the construction services comply with the COLA and operational Acts.[36] The effect is that the nominee is responsible, in the same way as the corporation, for providing the construction services, being both the doing and the supervision of the building work.[37] The respondent says it is not appropriate, nor necessary to split up the construction service into two component parts. What is required under sections 34 and 35 of the COLA is to provide details of the rectification required to building works to remedy faulty building work. The Rectification Order must identify the alleged defective building works, not the supervision of those works. The meaning of supervision in this context is not its general meaning drawn from other Acts or other roles but its meaning as limited in the COLA provisions.
[35] Respondent’s submissions filed 20 July 2021 at [39]
[36] Respondent’s submissions filed 20 July 2021 at [34]-[36]
[37] Respondent’s submissions filed 20 July 2021 at [37]-[38]
On this interpretation the respondent says it is of no consequence that the Notice of Intention or the Rectification Order do not particularise supervision defects. The applicant’s responsibility extends to the alleged building defects.
The respondent further contends that, even if the Notice of Intention was deemed to be invalid, section 35 of the COLA does not set preconditions for the issue of a Rectification Order but simply a set of procedural matters. The respondent cites in this regard Australian Securities and Investments Commission v Donald[38] to the effect that where the original decision maker has failed to comply with a mandatory notice requirement this does not mean that a review body (such as the Tribunal) must necessarily set aside the decision made and remit the matter.[39]
[38] [2003] FCAFC 318
[39] [2003] FCAFC 318 at [25]
The respondent draws some assistance from a number of visa decisions in the Federal Court which considered pre-conditions to the issue or cancellation of various visa categories. In Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed[40] the Migration Act 1958 (Cth) gave power to the Minister under section 116 to cancel a visa on being satisfied as to certain matters. Section 119 provided procedural steps to be followed by the delegate if the Minister was so satisfied, including issuing a pre-notice somewhat analogous to the Notice of Intention – one giving particular of the grounds for cancellation and inviting submissions. Section 124 provides the Minister is not to cancel the visa until consideration of those submissions has been given, or the requisite time has passed. The Federal Court held if the section 119 notice has not been given the cancellation power itself under section 116 is not affected. As regards the review powers, the ‘jurisdictional error’ of the delegate in failing to issue the pre-notice neither destroys the power under section 116, nor the tribunal’s power to review it.[41] In that matter it was held that while the tribunal accedes to the powers and discretions conferred on the Minister, the procedural requirements do not bind the Minister.[42]
[40] [2005] FCAFC 58; (2005) 143 FCR 314 (Ahmed)
[41] Ahmed at [38]
[42] Ahmed at [41]
In a similar light in Yilmaz v Minister for Immigration and Multicultural Affairs[43] the Federal Court held that once the jurisdiction of the review body is enlivened, the decision it makes supersedes the original decision, and the invalidity of the original decision in procedural respects is irrelevant.[44]
[43] [2000] FCA 906; (2000) 100 FCR 495 (Yilmaz)
[44] Yilmaz at [92]
The respondent also cites more generally the ‘Brian Lawlor construction’ of the review jurisdiction of the Federal AAT.[45] That construction makes clear that invalid administrative decisions are not to be excluded from review as that would most likely exclude those most in need of review.[46] That construction was applied in Plaintiff M174/2016 v Minister for Immigration and Border Protection[47] to the effect that a refugee decision of a delegate which had been conceded to be invalid at hearing was still jurisdictionally reviewable by the relevant tribunal.[48]
Party joined’s contentions
[45] Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21
[46] Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21
[47] [2018] HCA 16 (Plaintiff M174/2016)
[48] Plaintiff M174/2016 at [40]
The party joined contends there is no doubt that a rectification order can be issued against a nominee where the statutory preconditions are met.[49] The COLA legislation is protective in function and achieves this purpose by making both nominees and corporate entities accountable for non-compliant work. The legislation ensures there is a licenced natural person responsible for the supervision of building work to ensure it complies with the legislative requirements.[50]
[49] Party joined’s submissions dated 19 July 2021 at [51]
[50] Party joined’s submissions dated 19 July 2021 at [52]
The party joined says the contents of the section 34 Notice of Intention do not have to be strictly pleaded to achieve this purpose but merely that certain conditions are met.
The party joined contends that the first requirement of section 34(1)(a) – that the respondent must believe on reasonable grounds that an entity has provided a construction service otherwise than in accordance with the COLA or other operational Act – is met. A construction service includes supervision which is a function of the nominee under section 31(1)(a) of the COLA. The nominee’s responsibility is to adequately supervise as per section 28(2)(c). The party joined contends adequate supervision will not have occurred where building work fails to comply with the requirements of the COLA.[51]
[51] Party joined’s submissions dated 19 July 2021 at [55]
The party joined contends that where building work is systematically flawed then supervision is necessarily inadequate. The party joined also cites Mousa[52] to the effect that “Adequate supervision is inherently part of the broader process of achieving proper construction of a building” and “if there had been adequate supervision there would not have been such defective work”.[53]
[52] Mousa at [347], [355]
[53] Party joined’s submissions dated 19 July 2021 at [56]
The party joined contends that the details of the expert reports the respondent relied upon when issuing the Notice of Intention showed systematic and fundamental building defects that provided the respondent with reasonable grounds to believe the applicant’s supervision was not adequate.[54] The party joined says that the magnitude of the defects (citing examples of poor workmanship such as a ‘dot and dab’ method of affixing tiles;[55] systematic waterproofing membrane failure;[56] balustrade slab cracking[57] etc) were such that had there been adequate supervision such defects would not have occurred. The party joined says this provided an objective basis for the respondent to issue a Notice of Intention to the applicant as nominee.[58]
[54] Party joined’s submissions dated 19 July 2021 at [58]-[59]
[55] T Documents page 267
[56] T Documents page 257
[57] T Documents page 272
[58] Party joined’s submissions dated 19 July 2021 at [59]
The party joined contends that the Notice of Intention also meets the second requirement of section 34(2), namely that it ensures the licensee knows the case it has to meet about their accountability for asserted problems. The party joined cites Koundouris v Construction Occupations Registrar & Ors[59] to the effect that a “confined and legalistic” approach to meeting this requirement is not warranted.[60] The party joined says the Notice of Intention did not have to plead instances of particular supervision failures.[61] Nor did it have to plead any, or any particular, failures to meet the performance requirements under the BCA.[62]
The BCA argument
[59] [2015] ACAT 92 at [49] (Koundouris)
[60] Party joined’s submissions dated 19 July 2021 at [60]
[61] Party joined’s submissions dated 19 July 2021 at [62]
[62] Party joined’s submissions dated 19 July 2021 at [65]
The applicant’s second argument is that the Notice of Intention incorrectly referred to the 2013 version of the BCA and as such it is not a notice for the purposes of section 34(2) of the COLA. Section 42(1)(b) of the BA provides the way materials are used in building work must comply with their acceptable use under the building code. Section 136 says ‘building code’ means the BCA. In the ACT the BCA is taken to be updated as and from 1 May each year.[63]
Applicant’s contentions
[63] So BCA 2010, for instance, would run from 1 May 2010 to 30 April 2011.
The applicant contends section 34 of the COLA requires the respondent to believe on reasonable grounds that “the entity” (which includes a nominee such as the applicant) has provided a construction service otherwise than in accordance with this Act or an operational Act. In the Notice of Intention the applicant identifies that lack of accord as any breach of the BCA in the version applicable to the construction work. The Notice of Intention must therefore, on the applicant’s view, identify breaches of the correct and relevant BCA.
The applicant says this concurrency is not merely procedural given section 49 of the BA creates a series of criminal offences (potentially subject to imprisonment) for carrying out building work that does not comply with the BCA. Subsection 49(6) provides the builder with statutory protection for building work that complies with the BCA in force at the time the plans were approved. Getting the accord between alleged breach and the correct version of the BCA is therefore essential.
The applicant says the correct version of the BCA is BCA 2010 that being the version applicable at the time of issue of the first building commencement notice on 18 April 2011.[64] The Notice of Intention and Rectification Order incorrectly refer to breaches of the BCA in its 2013 and 2011 versions, respectively. The supporting material from Diagnostech and Peak Consulting incorporated by reference into the Rectification Order to identify each defect and assert details of code breaches similarly also does not refer to the correct version of the BCA.[65] Diagnostech refers to BCA 2011; Peak Consulting does not refer to any version. As a consequence, the applicant says the Notice of Intention fails to make the necessary concurrency and is therefore invalid.
[64] Applicant’s submissions filed 6 July 2021 at [63]
[65] Applicant’s submissions filed 6 July 2021 at [65]
The applicant says while ever this fault remains, one of the preconditions under section 35 of the COLA for issuing a Rectification Order (namely, a valid Notice of Intention under section 34) is not met.[66] Section 35 sets pre-conditions on the basis of which the respondent can move from its ‘belief on reasonable grounds’ under section 34 to being ‘satisfied’ under section 35 that a contravention has occurred, and that it is appropriate to make a Rectification Order. The applicant says the requirement to meet this pre-conditional formulation for validity is borne out in Project Blue Sky Inc v Australian Broadcasting Authority (Project Blue Sky).[67]
[66] Applicant’s submissions filed 6 July 2021 at [66]-[67]
[67] [1998] HCA 28; (1998) 194 CLR 355, 390-391
The applicant contends that the failure to correctly identify each alleged defect and assert details of its correct BCA code breach puts in doubt that the respondent had the necessary belief on reasonable grounds for issuing a Rectification Order. Additionally, the failure puts unreasonable onus on the applicant to search through two inapplicable versions of the BCA (2011 and 2013) to see if they are in identical terms as to the applicable version (2010). The applicant says the tribunal in Koundouris noted the emphasis in meeting such requirements should be on fairness to the entity, and says placing the onus on the nominee to review different versions of the BCA robs the Rectification Order of this quality.[68]
[68] Applicant’s submissions filed 6 July 2021 at [71]
The applicant contends that it is basic to any allegation of a defect made in a Rectification Order that the respondent refers to a breach of the construction standard applicable by section 42 of the BA to each such defect. That applicable construction standard should be set out in the correct version of the BCA applicable to that construction work.[69]
[69] Applicant’s submissions filed 6 July 2021 at [69]
Given the BCA defect the applicant says it is not open to the Tribunal on reconsideration to make a ‘corrected’ Rectification Order matching the alleged defects with the applicable BCA construction standard. The Notice of Intention remains defective in a fundamental respect and as such it is invalid. Correcting the pre-conditional Notice of Intention is not open to the Tribunal. The only option open to the respondent is to reissue a valid Notice of Intention and begin the process anew.[70]
Respondent’s contentions
[70] Applicant’s submissions filed 6 July 2021 at [74]
The respondent contends the relevant version of the BCA is the one settled on in the Rectification Order, namely BCA 2011.[71] The building approval granted on 18 April 2011 was for shoring and excavation works only. BCA 2010 would be applicable to those works as it ran from 1 May 2010 to 30 April 2011. Building approval was given for the substantive works the subject of the Rectification Order on 26 April 2012. BCA 2011 would be applicable to those works as it was the applicable building code to 30 April 2012.[72]
[71] Respondent’s submissions filed 20 July 2021 at [46]
[72] Respondent’s submissions filed 20 July 2021 at [59]
The Notice of Intention references BCA 2013. The respondent made submissions as to the consequences of referring to the wrong building code, if this is the case. The respondent contends the Tribunal should be guided by the approach set down by the High Court in Project Blue Sky[73] to the effect that the validity of the Notice of Intention is to be determined by the proper construction of the COLA having regard to the language of the relevant provision, and the scope and purpose of the Act as a whole.[74] The legislative purpose to be served by giving the notice will determine the nature and extent of the information required to be included in the notice.[75]
[73] [1998] HCA 28 at [93]; (1998) 194 CLR 355, 390-391
[74] Respondent’s submissions filed 20 July 2021 at [61]
[75] Respondent’s submissions filed 20 July 2021 at [61] citing Woodhams at [33]
On this reasoning the respondent says section 34 of the COLA requires the notice to give details of the Rectification Order that may be made; explain why the registrar intends to make the order; and invite submissions about the making of an order. The respondent contends section 34 does not impose an express requirement for the notice to state the contravention, let alone recite the relevant operative provisions of the COLA, the BA or the building code.[76] It must simply identify the alleged problems requiring rectification, the proposed Rectification Order and invite the builder to make submissions.[77]
[76] Respondent’s submissions filed 20 July 2021 at [63] citing Woodhams at [38]
[77] Respondent’s submissions filed 20 July 2021 at [73]
The respondent contends such a purpose was identified by the tribunal in Koundouris.[78] However, the respondent contends whether the precise requirements of the Notice of Intention were met in the matter need not be determined, because that incorporated by reference and attached to the Notice was the Diagnostech report.[79] That report identified in great detail each of the problems alleged to require rectification. It went further by also identifying the resultant loss caused by the defect, and the precise non-compliance with the BCA.[80] The contents of the report (and that of Peak Consulting) explain why the registrar intended to make a Rectification Order[81] and invited submissions, which the applicant made before the order was issued.[82]
[78] Respondent’s submissions filed 20 July 2021 at [72] citing Koundouris at [49]
[79] Respondent’s submissions filed 20 July 2021 at [76(1)]
[80] Respondent’s submissions filed 20 July 2021 at [76(2)]
[81] Respondent’s submissions filed 20 July 2021 at [76(3)]
[82] Respondent’s submissions filed 20 July 2021 at [76(4)]; T Documents pages 167-183
The respondent contends the applicant has been left in no doubt what are the alleged breaches and why they are said to be breaches.[83] The respondent in its submissions provided a schedule comparing the 2010, 2011 and 2013 BCA and says there is no material difference between them.[84]
Party joined’s contentions
[83] Respondent’s submissions filed 20 July 2021 at [ 76(5)]
[84] Respondent’s submissions filed 20 July 2021 at [76(4)], Attachment A
The party joined says the applicant has not established that the correct version of the BCA is BCA 2010, other than to assert that the first building commencement notice for shoring and excavation work was issued on 18 April 2011.[85]
[85] Party joined’s submissions dated 19 July 2021 at [73]
The party joined says section 42(1)(b) of the BA contemplates that building work is to comply with the BCA in force at the time the particular building work is undertaken. It is the applicant as nominee who is better placed to know at what date, or during which period the alleged defective work was performed.[86] The party joined says it is not necessarily incorrect for the respondent to have referenced BCA 2013 in the Notice of Intention given that it applied to building work performed from 1 May 2013 to the issue of the Certificate of Occupancy and Use in August 2013.[87] The party joined contends that given the BCA simply sets performance requirements (which do not change in any material degree across the various versions), it is does not matter if an incorrect version has been cited.
[86] Party joined’s submissions dated 19 July 2021 at [75]
[87] Party joined’s submissions dated 19 July 2021 at [76]
The party joined argues that while section 49 of the BA creates offences for non-compliance with the BCA (and subsection 49(6) provides a builder with a defence if the building work undertaken is compliant with the current BCA), that nexus is of no relevance to a decision to issue a Rectification Order.[88]
[88] Party joined’s submissions dated 19 July 2021 at [77]-[78]
The party joined says the applicant’s assumption that the deeming compliance provision under subsection 49(6) also applies to determining which version of the BCA applies for the purposes of the Rectification Order provisions of the COLA is incorrect.[89]
[89] Party joined’s submissions dated 19 July 2021 at [79]-[80]
The party joined says that even if the Notice of Intention and the Rectification Order referenced incorrect versions of the BCA that does not invalidate the Notice of Intention given under section 34 of the COLA.[90] The power to issue a Notice of Intention under section 34 is enlivened if the respondent “believes on reasonable grounds” that there has been a contravention. The party joined says those reasonable grounds existed regardless of which version of the BCA applied. The party joined says this is because the BCA variants set key performance requirements and a comparison of the requirements across BCA 2010, 2011 and 2012 show no material differences.[91] The respondent relied upon the Diagnostech Report when deciding to issue the Notice of Intention. That report assessed the building work against BCA 2011 and found systemic defects. The party joined says it follows that there were the necessary reasonable grounds for the respondent to believe there had been a contravention under section 34.[92]
[90] Party joined’s submissions dated 19 July 2021 at [86]
[91] Party joined’s submissions dated 19 July 2021 at [89] and Annexure A
[92] Party joined’s submissions dated 19 July 2021 at [90]
The party joined further contends that to be valid the Notice of Intention did not need to specify that building work was contrary to a particular provision of the BCA. The party joined cites Koundouris to the effect that the section 34 process embodies a flexible approach designed to allow a licensee an opportunity to comment and make submissions on alleged defects. The party joined makes two contentions with regard to Koundouris. Firstly, the form of the Notice of Intention does not constrain the terms of the Rectification Order that could be made. The test is whether adequate warning of the defects alleged to constitute breaches has been given.[93] There may well be variation as a result of submissions made by the applicant which results in the registrar altering its position.[94] Secondly, the Notice of Intention is required to give notice of the breach, it is not necessary to have strictly pleaded the statutory basis for that breach.[95] What is important is that “areas of alleged defect” or a description of the “nature of the problem are sufficiently identified”.[96] The Notice did not need to specific any section of the BCA, and the fact that it does is of no moment. The party joined says it follows from this reasoning that any incorrect particular given in the Notice of Intention as to the version of the BCA applicable to the work said to be defective is not fatal to the nominee being able to identify and respond to the alleged defects.[97] The party joined contends that the Notice of Intention gave the applicant adequate and proper opportunity to meet each allegation of defect.[98]
[93] Koundouris at [31]
[94] Koundouris at [49]
[95] Koundouris at [132], [162]
[96] Party joined’s submissions dated 19 July 2021 at [92]
[97] Party joined’s submissions dated 19 July 2021 at [93]
[98] Party joined’s submissions dated 19 July 2021 at [95]
The party joined disputes that the applicant has to “search through inapplicable versions of the BCA” to respond to the claims made against him. He simply has had the opportunity to say that the defective work referred to in the notice was compliant.[99]
Tribunal’s consideration
[99] Party joined’s submissions dated 19 July 2021 at [100]
The parties have referred the Tribunal to its usual safe harbour for determining questions of validity in a statutory notice, namely the approach approved by the High Court in Project Blue Sky. The High Court’s approach was to determine validity by looking to the purpose of the legislation, and to determine that purpose by having regard to the language of the relevant provision and the scope and object of the whole statute.[100] A useful restatement of this approach as submitted is its application by the Court in Deputy Commissioner of Taxation v Woodhams (Woodhams).[101] There the court restated it is the legislative purpose to be served by issuing the notice that determines the nature and extent of the information that is required to be included in that notice.[102]
[100] Project Blue Sky [1998] HCA 28; (1998) 194 CLR 355, 390-391
[101] [2000] HCA 10; (2000) 199 CLR 370
[102] Woodhams at [33]
Applying that approach in this case, what is the legislative purpose to be served by issuing a Notice of Intention under the COLA? It is a step the registrar may take if it has certain belief on reasonable grounds (namely, that (1) an entity has provided a construction service otherwise than in accordance with the Act or an operational Act, and (2) it may be appropriate to make a rectification order, section 34(1)). Further, it is a pre-conditional step to making a Rectification Order – section 35(1)(a).
Section 34(2) sets out three purposes the Notice is to serve. The first purpose is to inform the recipient of the details of the subsequent rectification order that may follow, see section 34(2)(a). The notice does this at T Documents pages 190 to 192. The second purpose is to explain to the recipient why the registrar intends to make that order, see section 34(2)(b). The notice does this at T Documents pages 185 to 190. The third purpose is to encourage the recipient to make submissions about the making of the order, see section 34(2)(c), including a means to avoid it by giving a rectification undertaking instead, see section 34(3). The notice does this at T Documents 193 to 194. Asking the question the High Court posits in Woodhams,[103] does the notice in the present case contain all the information that was necessary to fulfil that statutory purpose to be served by the notice? It informs the recipient, in detail, of the rectification order that may follow. It provides an explanation of why the order is being considered by serving copies of the Peak Consulting and Diagnostech reports. It informs him he can make submissions to avoid, alter or instead provide an undertaking to the rectification order. So, the answer to the question posited in Woodhams is yes. It does not fail a test of validity if it neglects to do more. There are details that are not required by the words of the provision to be included in the notice. Again as Woodhams[104] states, “fulfilment of the purpose to be served by the notice before action did not necessitate informing the recipient” of certain other extraneous matters. Pertinently, the validity of the notice does not impose a statutory requirement to inform the recipient of the operative provisions of the COLA, the Building Act, the BCA or any applicable standards.
[103] At [38]
[104] At [38]
Is there a different or an additional set of statutory requirements which must be contained in a valid Notice of Intention where the recipient is not the corporation, but the nominee? A nominee has a statutory role or function under the COLA. That function, as section 31 provides, is twofold – to supervise the construction services of the corporation, and to ensure that the construction services comply with the COLA and the operational Acts. This would seem to potentially add to, rather than subtract from, the statutory purpose requirements of the Notice of Intention when applying the Project Blue Sky approach. But, at most, this would only extend the ambit of the first purpose of the Notice of Intention, namely to inform the recipient of the details of the subsequent rectification order that may be made. The registrar would have scope to add details of supervision failures that require rectification. Given that the construction service is long finished this would seem at best of educational value, but regardless is not necessary. The second function of the nominee (to ensure that the construction services comply with the COLA and operational Acts) is identical to that of the corporation. A notice directed to a nominee does not need to detail supervision failures. Additionally, in the same way as for the corporation there is no statutory requirement to inform the nominee of the operative provisions of the COLA, the Building Act, the BCA or any applicable standards.
A further question arises in this instance given the BCA argument. Namely, what is the effect of mistakes or inconsistencies in the Notice of Intention with respect to matters which are contained there but which are in fact not statutory purpose requirements? As part of meeting the second purpose (to explain to the recipient why it intends to make the Rectification Order) the registrar explained that one of its grounds is that the building work was not undertaken in accordance with BCA 2013. Citing this version was inconsistent with that used in the attached Diagnostech Report which used BCA 2011, and was admitted as incorrect. When the registrar issued the Rectification Order it said the Notice of Intention had applied the incorrect code and that BCA 2011 was the correct version. It is not an issue for preliminary determination, but if it is accepted that building approval for the substantial component of the works was given on 26 April 2012 the applicable code would be that in place until 30 April 2012, namely BCA 2011. The applicant of course disputes this is the correct version.
As Koundouris makes clear, issues of fairness [to the recipient] are prominent and where there are inconsistencies the notice must be sufficiently related to the eventual Rectification Order such that a person reasonably understands what the registrar intends to do and why.[105] But the tribunal’s decision there makes the point that aligned to this fairness is “the evident motivation of the legislature in ensuring disclosure of the problems alleged to be requiring rectification”. There is ample disclosure of those problems in the Notice and Rectification Order in this case in spite of the BCA inconsistency.
[105] Koundouris at [49]
The Tribunal now turns to addressing the two questions set for preliminary decision.
The first question
As we have said the section 34 notice is about the intention to issue a Rectification Order. It requires belief by the respondent on reasonable grounds that an entity has provided a construction service relevantly otherwise than in accordance with the COLA, the BA and the building code. A reference to the building code in the BA clearly picks up the BCA as a measure of whether the construction service is compliant or defective. Once that reasonable belief is satisfied the statutory requirements of the Notice are discrete:
(a)To give details of the rectification order that may be made.
(b)To explain why the respondent intends to make the order.
(c)To invite submissions about the making of the order.
The focus of each of these requirements is building fault identification and rectification.
The first part of the first question is what we have referred to as the nominee argument. It asks:
Was the Notice of Intention to make a rectification order in respect of Block 1 Section 52 Canberra City issued by the respondent to the applicant and dated 19 March 2020 (Notice of Intention) not a notice for the purposes of s 34(2) of the Construction Occupations (Licensing) Act 2004 (ACT) (COLA) as:
(a) the Notice of Intention did not expressly identify any failure of supervision (as defined in the COLA) on the part of the applicant in relation to the construction services that are alleged to have been provided otherwise than in accordance with the COLA or an operational Act?
The nominee argument
The Notice of Intention makes scant reference to supervision, failures of supervision or otherwise. In its ‘Background’ section the Notice cites section 28(2) of the COLA to the effect that a nominee has a responsibility to supervise. It also cites section 31 to the effect of a nominee’s twin responsibility to supervise and to ensure the construction services comply with the COLA and operational Acts.[106]
[106] T Documents page 187
The applicant’s argument is that its role as a nominee entity is supervision full stop. Therefore, any building fault identification and rectification should go to supervision failure, not building work failure. On this argument the Notice of Intention should give details of the rectification order that may be made which will identify particulars of supervision failure during the construction service and which will require some stated action to rectify this supervision failure.
The applicant says if supervision failures are not expressly particularised then implied failures as a consequence of building defects must be clearly drawn.
The party joined’s response is that (provided the statutory requirements have been satisfied) the content of the Notice of Intention does not have to be strictly pleaded. The party joined contends adequate supervision will not have occurred where building work fails to comply with the requirements of the COLA to a significant degree. That is to say, where building work is systematically flawed then supervision is per se inadequate citing Mousa to the effect that “if there had been adequate supervision there would not have been such defective work”.[107] The party joined says the details in the expert reports the respondent relied upon show a magnitude of defects that had there been adequate supervision such defects would not have occurred. Failure to adequately supervise is evident from the magnitude of defects that have occurred. Particulars of that failure do not have to be strictly pleaded.
[107] At [335]
The respondent’s answer to the nominee argument goes much further. The respondent urges an interpretation that sees a nominee as responsible for the building works provided by a corporation, and not simply the supervision of those works.[108] On this interpretation section 28 of the COLA is not relevant to identifying the nominee’s functions, it simply defines the obligations of a corporate licensee to have nominated a nominee. Section 31 defines the functions of the nominee and these are twofold, to supervise the construction services of the corporation, and to ensure the construction services comply with the COLA and operational Acts. The respondent’s answer to the nominee argument is that it is not necessary to split the construction service into parts and plead particulars of supervision failures in the Notice of Intention. What is required to be in the Notice is to provide details of the work required to rectify the building work not the supervision of those works. The Notice does this and is valid.
[108] Respondent’s submissions filed 20 July 2021 at [39]
The Tribunal accepts the respondent’s answer to the nominee argument as persuasive. The Tribunal finds the nominee’s responsibility under the COLA goes beyond supervision to include its second function, namely to ensure the construction services comply with the COLA and operational Acts. The Notice of Intention did not need to particularise supervision failures.
If the nominee’s responsibility under the COLA was to be confined to supervision only the Tribunal remains satisfied that the Notice of Intention is valid with respect to the first part of the question. The applicant cited Jurox and Introvigne to the effect that inadequate supervision is not proved by the mere fact of defective work but requires some particularisation of the supervision actually provided. But the extent of defective work can imply such supervision failure. While Mason J accepted that supervision does not have to be constant he found that normal practice gives some measure of what was considered to be appropriate.[109] In Sheldon v McBeath that obligation in the case of supervision in relation to construction of a house while not seen as constant was held to be a continuing duty. Likewise, in Mayo Windeyer J makes the pertinent point that the “very purpose [of employing an architect to supervise] was to provide, so far as reasonable care can provide, against errors by the builders, whether such errors were probable or not.”[110] The extent of the errors alleged here clearly imply that purpose was not met because of supervision failures.
The BCA Argument
[109] Introvigne at [265]-[266]
[110] Mayo at [6]
The second part of the first question is what we have referred to as the BCA argument. It asks:
Was the Notice of Intention to make a rectification order in respect of Block 1 Section 52 Canberra City issued by the respondent to the applicant and dated 19 March 2020 (Notice of Intention) not a notice for the purposes of s 34(2) of the Construction Occupations (Licensing) Act 2004 (ACT) (COLA) as:
(b)the Notice of Intention referred to the National Construction Code 2013?
The Notice of Intention is replete with references to the BCA (NCC) 2013. The Diagnostech Report on which the respondent relied cites instead BCA 2011 as the relevant version of the code.[111] Following correspondence between the applicant and respondent, the respondent reverted to referencing the BCA 2011 as the applicable version, and it is that version that is cited in the Rectification Order.[112] The ‘Defects’ section of the Rectification Order refers repeatedly to, inter alia, BCA 2011 as being the relevant standard not met in the six defects enumerated.[113]
[111] T Documents page 256
[112] T Documents page 154
[113] T Documents pages 153-156, listing defects 1-2 and 4-7
If it is accepted that the relevant Building Approval is that granted for the construction of the development based on approved plans on 26 April 2012, the correct version appears to be BCA 2011 given that the BCA is taken to be updated as and from 1 May each year.[114] The assertion of the applicant that BCA 2010 is the correct version assumes that the earlier Building Approval granted on 18 April 2011 for shoring and excavation work was the applicable approval. However, that seems incorrect as the building work done under this approval does not appear to be under examination. Regardless, there is confusion. Does anything turn on this confusion as to render the Notice of Intention invalid?
[114] T Documents page 200
The applicant’s argument is that using the incorrect version invalidates the Notice of Intention. The applicant says the Notice of Intention must identify breaches of the relevant BCA and failure to do so means one of the preconditions under section 35 of the COLA for issuing a Rectification Order (namely, a valid Notice of Intention under section 34) is not met. The applicant says this puts in doubt that the respondent could have had the requisite belief on reasonable grounds for issuing a Rectification Order. Additionally, this failure puts unreasonable onus on the applicant to search through two inapplicable versions of the BCA to see if they are, or are not, in identical terms as the BCA 2010.
The respondent made submissions as to the consequences of referring to the wrong building code if that is the case. Citing the Project Blue Sky test of validity the respondent contends the language, scope and purpose of the COLA determine the nature and extent of the information required to be included in the notice.
The purpose of section 34 requires (1) details of the Rectification Order that may be made, (2) an explanation of why the registrar intends to make the order, and (3) an invitation to make submissions about it. There is no express requirement for the notice to state contraventions. There is no statutory requirement for the Notice of Intention to cite BCA performance standards.
The party joined said even if the Notice of Intention and the Rectification Order referenced incorrect versions of the BCA that does not invalidate the Notice of Intention. The power to issue a Notice of Intention under section 34 is enlivened if the respondent “believes on reasonable grounds” that there has been a contravention. The party joined says those reasonable grounds existed regardless of which version of the BCA applied. The respondent in issuing the notice relied on the Diagnostech Report. That report assessed the building work and found major systemic defects. The party joined says it follows that there were the necessary reasonable grounds for the respondent to believe there had been a contravention.
The party joined argued that the Notice did not need to specific any section of the BCA and the fact that it does is of no moment. The Notice of Intention gave the applicant opportunity to meet each allegation of defect.
The Tribunal accepts the respondent’s and the party joined’s answers to the nominee argument as persuasive. The Tribunal finds the Notice of Intention did not need to cite the BCA. If it cited an incorrect version that does not render the notice invalid.
The Tribunal finds the Notice of Intention is a valid notice for the purposes of section 34(2) of the COLA.
Tribunal’s consideration of the second question
The second question asks:
If the Notice of Intention was not a notice for the purposes of s 34(2) of the COLA, are the orders that the Tribunal may make on the application limited to: (a) setting aside the rectification order made on 18 March 2021; and (b) making no further order?
As the second question is conditional on the Tribunal finding the Notice of Intention was not a notice for the purposes of section 34(2) of the COLA, the question is redundant and does not need to be answered.
Decision
The Tribunal finds the rectification order issued to the applicant on 18 March 2021 is valid.
The matter be listed for further directions as to the filing of evidence.
………………………………..
Senior Member Prof T Foley
| Date(s) of hearing | 26 August 2021 |
| Counsel for the Applicant: Solicitors for the Applicant: | Mr C Erskine SC Ms K Phillips, Meyer Vandenberg Lawyers |
| Counsel for the Respondent: Solicitors for the Respondent: | Mr N Oram Ms G Junakovic and Mr A Chand, ACT Government Solicitor |
| Counsel for the Party Joined: Solicitor for the Party Joined: | Mr J Bird Mr G Shaw, Minter Ellison Lawyers |
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