Ktori v The Building Practitioners Board
[2009] VSC 404
•11 September 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 9013 of 2008
| EKTORAS KTORI | Plaintiff |
| v | |
| THE BUILDING PRACTITIONERS BOARD | Defendant |
No. 9248 of 2008
| ANDREAS KTORI | Plaintiff |
| v | |
| THE BUILDING PRACTITIONERS BOARD | Defendant |
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JUDGE: | BEACH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3 & 8 September 2009 | |
DATE OF JUDGMENT: | 11 September 2009 | |
CASE MAY BE CITED AS: | Ktori v The Building Practitioners Board | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 404 | |
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ADMINISTRATIVE LAW - Judicial review – Natural justice – Adequacy of reasons – Ostensible bias – Prerogative relief – Discretion to refuse – Alternative appeal remedy – Judicial review not precluded by availability of alternative remedy.
ADMINISTRATIVE LAW – Tribunals – Supervisory jurisdiction of Supreme Court – Building Practitioners Board – Building Act 1993, ss 3, 16, 143, 176(2A), 176(4) and 179 – Building Regulations 1994, r 15.2(a).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff Ektoras Ktori | Mr R. Andrew | Noble Lawyers |
| For the Plaintiff Andreas Ktori | Mr R.G. Craig | Plum Solicitors |
| For the Defendant | Mr P.J. Hanks QC with Mr J.D. Pizer | Maddocks |
HIS HONOUR:
Introduction
Mr Ektoras (Hector) Ktori is the son of Mr Andreas Ktori. For the sake of convenience, and without meaning them any disrespect, in this judgment I propose to refer to them as Hector and Andreas. On 9 September 2008, after having conducted inquiries in respect of their conduct as registered building practitioners under the Building Act 1993, the Building Practitioners Board:
(a) reprimanded Hector, fined him $5,671 (expressed in the orders as being “the maximum fine”) and ordered him to pay 50% of the costs of or incidental to the inquiry in the sum of $33,341.89; and
(b) cancelled Andreas’ registration and imposed the same fine and order for costs on him.
The orders made by the Building Practitioners Board, the defendant in these proceedings, were consequent upon findings of guilt in relation to ten allegations made against each of Hector and Andreas. The allegations arose from the construction of three units at 275 Nott Street, Port Melbourne. While the allegations made against Andreas and Hector were not in precisely the same terms, the allegations in effect mirrored each other.
On 17 September 2008, both Hector and Andreas appealed to the Building Appeals Board. However, each now seeks to quash the decisions of the Building Practitioners Board on the basis that they were denied fair hearings and/or the decisions are infected by jurisdictional error and/or errors of law on the face of the record. The decisions sought to be impugned are decisions as to liability (described by the Board as findings of guilt) and decisions as to penalty (including decisions on costs). The appeals to the Building Appeals Board have been stayed pending the hearing and determination of these proceedings.
For the reasons given below, I am of the view that the decisions and orders of the Building Practitioners Board the subject of these proceedings should be quashed.
The allegations/charges
Before turning to the plaintiffs’ complaints concerning the inquiries conducted by the Building Practitioners Board and the outcomes of those inquiries, it is necessary to describe the charges that Hector and Andreas faced. The inquiries were commenced by notices given under s 178 of the Building Act. Each notice contained ten allegations (sometimes described in the material as “charges”). Each charge alleged a contravention of s 179(1)(b) of the Building Act. Section 179(1)(b) provides that, on an inquiry into the conduct of a registered building practitioner, the Board may make any one or more of the decisions mentioned in s 179(2) if it finds that the registered building practitioner “has failed to comply with this Act or the regulations”.
Each charge contended that the relevant plaintiff failed to comply with r 15.2 of the Building Regulations 1994 (“the Regulations”). Regulation 15.2 relevantly provided:
“15.2 Professional standards
A registered building practitioner must –
(a) perform his or her work as a building practitioner in a competent manner and to a professional standard …”
The building work the subject of the notices[1] was the construction of the Port Melbourne units. This building work was carried out by a company, Tremaine Developments Pty Ltd – and not by Hector or Andreas. As a consequence, each charge alleged that the plaintiffs contravened r 15.2(a) by allowing Tremaine, being a company in respect of which they had control (about which I will say more below), to engage in certain conduct, namely:
[1]Subsequently the subject of the amended notices upon which the inquiries proceeded.
(a) erecting hoardings along a footpath adjacent to the site without the consent and report of the relevant Council (allegation 1);
(b) carrying out building work that did not comply with s 16(1) of the Building Act in that it either did not comply with the Building Code of Australia or did not comply with the building permit in respect of the work (allegations 2 to 9); and
(c) carrying out building work during a period when none of its directors was a registered building practitioner (allegation 10).
Section 16(1) of the Building Act provides:
“A person must not carry out building work unless a building permit in respect of the work has been issued and is in force under this Act and the work is carried out in accordance with this Act, the building regulations and the permit.
Penalty: 100 penalty units, in the case of a natural person.
500 penalty units, in the case of a body corporate.”
So far as the issue of the control of Tremaine is concerned, it was alleged that Andreas was a director and had direct control of Tremaine. While the allegations against Hector were initially the same (i.e. that he was a director and had control of Tremaine), upon the Board being informed that at no relevant time was Hector a director of Tremaine, the notice in respect of him was amended to allege only control. The basis for this allegation was not further particularised – save that in allegation 10 against Hector it was alleged that he was a person “with control over the actions of Tremaine”.
The plaintiffs’ complaints
The grounds upon which each plaintiff seeks to quash the decisions applicable to him are expressed differently in the originating motions. However, the actual points argued are, and the argument for each plaintiff is, substantially similar (if not identical in respect of some of the arguments). While the various complaints made by the plaintiffs have been described in different terms in the extensive written submissions filed by the parties, at the hearing of these proceedings the complaints were grouped as follows:
(a) “The work as a ‘building practitioner’ point”: This argument contended that neither of the plaintiffs were building practitioners within the meaning of paragraph (a) of r 15.2 and therefore the Board’s decisions involved jurisdictional error and/or error on the face of the record.
(b) “The Browning and Irwin reports”: This was a natural justice issue. The question was whether these reports (about which I will say more below) were in evidence as proof of the truth of their contents and/or whether the Board misled the plaintiffs into believing that the reports would not be used as proof of the truth of their contents.
(c) “Errors of law – adopting a strict liability approach and confusing the plaintiffs’ separate legal personalities with the company’s [Tremaine]”: In short, this was an argument that whatever was done was done by Tremaine and the Board improperly sheeted such liabilities Tremaine had home to Hector and Andreas.
(d) “Error of law – the test of control as being determinative of a breach of r 15.2”: This was related to the previous point.
(e) “Denial of natural justice – failure to identify and rectify defective building work”: This was a reference to findings made by the Board that the plaintiffs had “failed to identify and rectify … [particular defects] during the construction process”. It was contended by the plaintiffs that these findings were never the subject of charges and that this involved a denial of natural justice.
(f) “Inadequate reasons”: This argument concerned the adequacy of the Board’s reasons for its various decisions and whether the inadequacies identified entitled the plaintiffs to prerogative relief.
(g) “Reasonable apprehension of bias”: This was an argument which relied on 20 discrete matters which were cumulatively said to create a reasonable apprehension of bias.
While these are the major arguments, there were additional arguments relied upon by the plaintiffs. Specifically, there are natural justice issues and inadequacy of reasons issues between the parties in relation to other aspects of the liability decisions and in relation to the decisions on the questions of penalty and costs.[2] Additionally, Andreas sought at the hearing of these proceedings to amend his originating motion to add as a further ground:
“With respect to the allegations numbered 1 – 10, the Board acted in jurisdictional error in that it did not have the power to charge and find the plaintiff guilty in relation to conduct between 22 August 2004 and 30 November 2004, as the plaintiff was not a registered building practitioner under Part 11 of the Building Act 1993 during that period.”
[2]See for further reference the paragraphs under the heading “Grounds for judicial review” in each originating motion.
Andreas’ application to amend was opposed by the defendant. At the commencement of the hearing, I heard limited argument from Andreas and the defendant on the amendment issue. In the end, and with the concurrence of the parties, I determined that it was appropriate to allow Andreas to advance all of his arguments on this ground, on the basis that I would determine the amendment application in the course of this judgment.
The work as a “building practitioner” point
The expression “building practitioner” is defined in s 3 of the Building Act by reference to eight categories, two exceptions and an exception to one of the exceptions. Relevantly, “building practitioner” is defined to mean a builder[3] - but does not include - :
“(j) a person (other than a domestic builder) who does not carry on the business of building …”
[3]Paragraph (f) of the definition.
Hector and Andreas contend that they come within the exception contained in paragraph (j) of the definition of “building practitioner”. They argue that neither of them was a person who carried on business as a builder.[4] Further, they argue that the exception in paragraph (j) in relation to a domestic builder is of no relevance in this case.
[4]See paragraph 31 of the plaintiffs’ joint reply submissions.
“Domestic builder” is defined in s 3 of the Building Act to mean “a builder within the meaning of the Domestic Building Contracts Act 1995”. “Builder” is defined in the Domestic Building Contracts Act to mean:
“A person who, or a partnership which –
(a) carries out domestic building work; or
(b) manages or arranges the carrying out of domestic building work; or
(c) intends to carry out, or to manage or arrange the carrying out of, domestic building work;”
Hector and Andreas submit that neither of them was a person who carried on business as a builder because in this case Tremaine was carrying on the business of building the relevant units. Similarly, they submit that the exception in paragraph (j) of the definition of “building practitioner” has no application to them because it was Tremaine who was the “builder” within the meaning of the Domestic Building Contracts Act. The plaintiffs then built upon these submissions by contending that they were not building practitioners within the meaning of paragraph (a) of r 15.2; alternatively the Board had no jurisdiction over them because whatever work each of them performed was not work performed “as a building practitioner” within the meaning of paragraph (a) of r 15.2. Implicit in the plaintiff’s submissions is that s 23 of the Interpretation of Legislation Act 1984 applies to give the same meaning to the expression “building practitioner” in r 15.2(a) as that provided for in the Building Act.[5]
[5]Section 23 of the Interpretation of Legislation Act provides:
“Where an Act confers power to make a subordinate instrument, expressions used in a subordinate instrument made in the exercise of that power shall, unless the contrary intention appears, have the same respective meanings as they have in the Act conferring the power as amended and in force for the time being.”
There is no substance in the plaintiffs’ first argument. Clearly, each of them is a building practitioner within the meaning of the Building Act and the Regulations. One cannot be a registered building practitioner without being a building practitioner. Further, construed in its context, the expression “building practitioner” in paragraph (a) of r 15.2 is no more than a reference to the registered building practitioner referred to in the first line (and the subject of) the regulation.
Before dealing with the plaintiffs’ alternative submission (that whatever work each of them was performing was not performed “as a building practitioner”, it is necessary to say something about the operation of the Building Act. In particular, it is necessary to say more about Part 11 (containing ss 169 to 187) – which deals with the registration of building practitioners.
Section 169(1) of the Building Act provides that a natural person may apply to the Building Practitioners Board to be registered as a building practitioner. Section 176(1) makes it an offence for a person who is not registered in an appropriate category or class under Part 11 of the Building Act:
(a) to “take or use” any of a number of titles (for example, “building practitioner” or “registered building practitioner”);
(b) to practice as a building inspector;
(c) to hold himself or herself out as being registered; or
(d) to hold himself or herself out as being qualified to practice as a building practitioner.
Section 176(2A) provides:
“A builder must not carry out domestic building work under a major domestic building contract unless the builder is registered under this Part in the appropriate class of domestic builder.
Penalty: 100 penalty units.”
While there is no provision under the Building Act permitting companies to apply to be registered as building practitioners (cf s 169(1)), s 176(4) provides that ss 176(1) and (2A):
“… do not apply to the use by a corporation of a title that can only be used by a person registered under this Part or the carrying out by a corporation of work that can only be carried out by a person so registered if at least one of the directors of the corporation is registered in the appropriate category or class under this Part.”
The Building Act permits corporations to hold themselves out as, and to perform the work of, builders who as individuals would require registration. However, in order for this to occur, at least one of the directors of the corporation must be registered in the appropriate category or class. When one looks at the purpose and objects of the Building Act and the objectives of the Regulations as they were at the time of the conduct inquired into by the Board, it is clear that those registered building practitioners who operated (or performed their work) through a company were intended to be held to the same level of competence and to the same professional standard as those who practised as individuals. This is borne out by one of the objects of the Building Act being “to establish, maintain and improve standards for the construction and maintenance of buildings”.[6] While I have not needed to rely upon the expanded purposes and objectives of the Building Act enacted by the Building (Amendment) Act 2007, these amendments, if anything, underscore the purpose and intention to which I have referred.
[6]See s 4(a) of the Building Act.
As was said by Kirby P in Pillai v Messiter (No. 2),[7] the purpose of provisions such as those under consideration here (standards and discipline provisions)[8] is the protection of the public. Without saying anything about the plaintiffs in this case, the public needs to be protected from delinquents and wrongdoers within professions. Construing r 15.2(a) and s 179 of the Act, within the context of the Building Act and the Regulations, discloses that there is no intention to limit inquiries into the conduct of registered building practitioners to cases where they are the person actually engaged in the commercial business or to cases limited by reference to the category or class under which they are registered. The inquiry is into the conduct of a registered building practitioner as a building practitioner who requires, or required, registration.
[7](1989) 16 NSWLR 197 at 201.
[8]Regulation 15.2 and s 179 of the Building Act.
It follows from what I have said that there was no jurisdictional error, or error of law on the face of the record, in the Board inquiring into the conduct of the plaintiffs as registered building practitioners who controlled Tremaine – a company involved in building operations. It was no defence for either of the plaintiffs to say that r 15.2 has no application to them because they were not performing the building work or carrying on the business of building the units the subject of the Board’s inquiries. There was no jurisdictional error (or error of law on the face of the record) in the Board inquiring into the conduct of the plaintiffs in relation to a company, over which they had control, performing building work that was not performed to an adequate or appropriate standard. While issues of control fell to be determined during the course of the Board’s inquiries and issues of work performed by the plaintiffs to a particular standard fell to be determined by the Board, the mere existence of a company through which the work was actually performed could not deprive the Board of its jurisdiction to inquire into the conduct of the plaintiffs as building practitioners – which they undoubtedly were.
I should say for the sake of completeness that, in advancing its submissions on this issue, the Board noted that the exception in paragraph (j) of the definition of “building practitioner” is the subject of an explanatory note. The note appears after the word ”building” at the end of paragraph (j) and is in the following terms:
“Section 3(1) definition of ‘building practitioner’ paragraph (j): see s 137B for responsibilities of owner/builders.”
Section 137B of the Building Act deals with the impermissibility of owner/builders selling buildings in certain circumstances.
The explanatory note in relation to paragraph (j) of the definition of “building practitioner” does not form part of the Building Act.[9] However, it is capable of being considered pursuant to s 35(b) of the Interpretation of Legislation Act 1984.[10] Having said that, in my view the explanatory note sheds no relevant light on the definition of “building practitioner” so far as the issues in these proceedings are concerned. The conclusions I have reached (as set out above) do not rely upon this aspect of the defendant’s submissions.
[9]See s 36(3) of the Interpretation of Legislation Act 1984.
[10]See s 36(4) of the Interpretation of Legislation Act 1984.
The Browning and Irwin reports
During the course of the inquiries, the Board was provided with technical reports concerning the particulars of allegations 2 to 9 in each case (the Browning report and the Irwin report). Ultimately, the Board relied upon these reports as providing evidence against the plaintiffs in respect of a number of the allegations. The plaintiffs’ submissions on this issue are encapsulated in paragraph 44 of their joint reply submissions:
“In this case, the Board failed to make it clear that it intended to rely on the reports as evidence. The Board had advised the parties that the inquiry would be conducted as an oral hearing and provided a list of witnesses. Then, on the first day of the hearing, Mr Hoare [the chairman of the panel] at T32.16 – T33.18 gave the very clear impression that the report would only be relied on if it is presented as evidence. It never was presented as evidence, and the solicitor for Hector certainly proceeded on this basis. The solicitor for Andreas did refer to the report as being in evidence, but that only related to the Browning report, and not the Irwin report, and cannot constitute any admission on the part of Hector.”
There were a number of communications between the parties prior to the hearing concerning the matters the subject of the Browning and Irwin reports. In a letter dated 18 October 2007, the solicitors for the Board sent to the solicitors for the plaintiffs the final version of the Browning report. In this letter, the solicitors for the plaintiffs advised that Mr Irwin would also be called as a witness at the inquiries. In a subsequent letter (dated 18 December 2007), the solicitors for the Board advised that the timetable for the hearing had been set “with the expectation that expert evidence will be given by way of written report only”.
On the first day of the hearing there was an exchange between the solicitor for Hector (Mr Noble) and the chairman of the panel. The discussion appears to have been limited to the Browning report. At p 33 of the transcript the following was said:
“MR NOBLE: But is that the sole purpose of the Browning report, simply to provide particulars?
CHAIRMAN: It’s evidence that’s been presented to this Board, in backing those particulars up with the allegations.
MR NOBLE: So the Board proposes to rely upon Mr Browning’s report as evidence?
CHAIRMAN: If it’s presented to us as evidence, yes.
MR NOBLE: This is contrary to the advice given to me by Maddocks, in the letter dated 28 March, where Maddocks said the Board would rely on its own observations.
CHAIRMAN: The Board has made its own observations as well, it can rely on both, can it not?
MR NOBLE: We don’t know what those observations are.”
The letter of 28 March referred to by Mr Noble was a letter from Maddocks to Mr Noble responding to a request for copies of drawings which related to allegations 2 and 8. In the letter, Maddocks stated, amongst other things, that “In considering whether or not the alleged defects referred to in allegations 2 to 9 exist, the Board … [would] have regard to its own observations made during the site visit on 13 February 2008”. Nothing in the letter supports the proposition that the Board would not rely on tendered technical or expert reports.
Taken out of context, there is an ambiguity in the statement made by the chairman of the panel that the Board would rely upon Mr Browning’s report if it was presented to the Board as evidence. On the one hand, it might be thought that the chairman was saying that if Mr Browning’s report was tendered as evidence, then it would be relied upon – and that it would not otherwise be relied upon unless it was subsequently tendered as evidence. On the other hand, the statement could have meant that the report was already in evidence and would be relied upon. This would be all the more so if the chairman’s statement was said with some impatience. Much depends upon the way in which the chairman said “If it’s presented to us as evidence, yes”.
However, it seems tolerably clear that Mr Noble understood the chairman in the second of the two senses I have described. Mr Noble’s immediate reaction is that the chairman’s statement is contrary to advice that has previously been given by the solicitors for the Board. Further, the matter was put beyond doubt when the chairman responded that the Board could rely upon both its own observations and the Browning report. Mr Noble then took issue with what the Board’s observations might have been and did not pursue the topic of the use to which the Browning report could be put.
Having examined the letters which bear on this issue and the affidavits which express the deponents’ beliefs as to what occurred, I see no basis for concluding that the Browning and Irwin reports were used impermissibly by the Board. It was open to the plaintiffs to seek to cross-examine the authors of these reports. They chose not to do so. The transcript makes it clear that the reports were before the Board and capable of being acted upon as truth of their contents. There was no denial of natural justice in relation to the use of these reports. While it would obviously be better if reports that were to be relied upon by tribunals were formally tendered and given exhibit numbers so that there could be no misunderstanding between the parties, the failure to take such a step does not constitute any relevant error or procedural unfairness. In the present case, the plaintiffs have not established a denial of natural justice in respect of this ground.
Alleged errors of law – “Adopting a strict liability approach and confusing the plaintiffs’ separate legal personalities with Tremaine’s” and “The test of control as being determinative of a breach of regulation 15.2”
The plaintiffs assert that the Board made errors of law in:
(a) adopting a strict liability approach;
(b) confusing the plaintiffs’ separate legal personalities with Tremaine’s; and
(c) applying a test of control as being determinative of a breach of regulation 15.2.
A difficulty with these complaints of the plaintiffs concerns the lack of detailed reasons given by the Board in these cases. That is not necessarily a criticism of the Board. The Board was not required to provide reasons. Further, no attempt was made by the plaintiffs to apply for reasons pursuant to s 8 of the Administrative Law Act 1978.[11] While the liability decisions of the Board contain some reasons for the Board’s decisions,[12] it is to be remembered that they are the reasons of a statutory tribunal – set up under a statute (the Building Act) which imposes no obligation on the part of the tribunal to give reasons. The reasons must be viewed from that perspective, and over-zealous judicial review is to be eschewed. Further, the Board’s reasons are standalone documents. No colour or content can be given to them by any submission made by those representing the Board.
[11]Cf cl 16(5) of Schedule 3 of the Building Act.
[12]Cf Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 675 at 680.
An examination of the Board’s reasons does not disclose any error of law on the face of the record in either adopting a strict liability approach in respect of any aspect of any of the allegations or in relation to issues of control. That is not to say that such findings the Board made which were critical of the plaintiffs were all necessarily correctly made. The reasons simply do not allow this Court to make any conclusion one way or the other.
The inquiries conducted by the Board were inquiries into the conduct of the plaintiffs. Specifically, the inquiries were into the question of whether or not the plaintiffs had failed to comply with regulation 15.2(a). Those inquiries required the Board to examine the question of whether or not the plaintiffs performed their work as building practitioners in a competent manner and to a professional standard. In such inquiries, it would be open to an expert tribunal like the Board to determine that in respect of some matters (for example, a defect in a building for which the practitioner had responsibility) that the mere proof of the existence of the matter (defect) constituted a breach of regulation 15.2(a) so far as the responsible practitioner was concerned. Each matter (or allegation) would be dependent upon its own facts and circumstances.
Similarly, the question of whether a relevant registered building practitioner had sufficient control over the activities of a company to justify a finding of a breach of regulation 15.2 against that practitioner in respect of defective work performed by the company, is heavily dependent upon the facts and circumstances of the relevant matters. While the plaintiffs made extensive submissions concerning common law tests of control, impermissible attempts to pierce the corporate veil and provisions of the building act relating to reliance upon certificates, offences by bodies corporate and offences for agents to act without authority,[13] these submissions were beside the point. The ability of the Board to inquire into the conduct of registered building practitioners and to make findings of the kind referred to in s 179(1) of the Building Act is not dependent upon common law or tortious notions of control or an ability to attribute the liability of a company to an individual. What ss 178 and 179 of the Building Act permit is an inquiry into the conduct of a registered building practitioner to see whether, amongst other things, he or she has failed to comply with the Building Act or the regulations. When one turns to regulation 15.2, the inquiry is whether the registered building practitioner performed his or her work as a building practitioner in a competent manner and to a professional standard. Depending upon the facts of the case, it is possible for a registered building practitioner to be held to be in breach of regulation 15.2 because he or she has a responsibility as a building practitioner in relation to building work being performed by another person or entity. The issue is, of course, heavily dependent upon the individual facts and circumstances of each case. All that can be said in this case is that the record does not disclose an error of law – whatever might be the outcome of an appeal in the nature of a re-hearing.[14]
[13]See generally ss 238, 243 and 248 of the Building Act.
[14]Cf s 148 of the Building Act.
So far as the question of whether the Board confused the plaintiffs’ separate legal personalities with Tremaine’s, reliance was placed by the plaintiffs on a paragraph of the Board’s reasons in respect of its findings in relation to allegation 2 against Andreas. The reasons in relation to allegation 2 against Andreas provided:
“The Board found that as the registered domestic builder Andreas Ktori was responsible for ensuring that his employees and his sub-contractors construct the works in accordance with the building regulations and the building permit and that this responsibility is strictly his own and thus cannot be delegated.” (Emphasis mine).
I am not prepared to conclude that the Board confused the plaintiffs’ separate legal personalities with Tremaine’s. When one examines the whole of the reasons, there does not appear to me to be any real confusion between the plaintiffs on the one hand and Tremaine on the other hand. The vast bulk of the reasons differentiate between the plaintiffs and Tremaine – with a significant portion of the reasons being devoted to issues of control. In the circumstances, the plaintiffs have not persuaded me that references to employees and sub-contractors of Andreas discloses any error of law on the face of the record.
It follows from what I have said above that the plaintiffs have not established any error of law under this heading. It may be that an appeal in the nature of a re-hearing which produces a decision with reasons[15] will disclose some error in the circumstances of this case concerning issues of control or questions of strict liability. However, much would depend upon the findings of fact made on appeal and the reasons given for any conclusions adverse to the plaintiffs. It is sufficient to say at present that no error of law on the face of the record has yet been identified. I turn now to consider the plaintiffs’ allegation of a denial of natural justice in relation to the findings of the Board that they (the plaintiffs) failed to identify and rectify defective building work.
[15]If reasons are requested pursuant to cl 16(5) of Schedule 3 of the Building Act.
Denial of natural justice – failure to identify and rectify defective building work
On a number of occasions during the course of their various reasons in relation to both plaintiffs, the Board found and relied upon a conclusion that each plaintiff failed to identify and rectify defects during the construction process. The plaintiffs contend that these findings were never the subject of charges, and that the making of them (and reliance upon them) involved a denial of natural justice.
The Board accepts that the plaintiffs were not charged with failing to identify and rectify the defects the subject of the notices upon which the inquiries were heard. It also accepts that the plaintiffs “were not given a reasonable opportunity to be heard in relation to that question”.[16] However, the Board’s position is that this was of no consequence because if the plaintiffs had been heard on the issue, it could have had no bearing on the outcome of the case. Reference is then made by the Board to Stead v State Government Insurance Commission.[17] While the plaintiffs cavil with the defendant’s description of “no reasonable opportunity” and say that they were in fact given no opportunity to be heard on the question, little turns on this. No reasonable opportunity was given to the plaintiffs to be heard on this issue. The question is whether anything the plaintiffs would have said, if they had been given a reasonable opportunity to be heard, could possibly have changed the outcome of the Board’s findings. If there was something which the plaintiffs might have said which could possibly have changed the outcome, then the question becomes whether the denial of a reasonable opportunity to be heard was sufficiently serious in the circumstances so that the fact of the plaintiffs’ rights of appeal under the Building Act to the Building Appeals Board should not be held to deprive them of a favourable exercise of discretion quashing the decisions and orders of the defendant.
[16]See paragraph 89 of the defendants’ outline of submissions.
[17](1986) 161 CLR 141.
The Board’s argument that nothing either plaintiff could have said on this issue would have changed the findings made by the Board in relation to allegations 2 to 9 rests upon the following analysis:
(a) “The [plaintiffs] were relevantly charged with allowing Tremaine to carry on building work that did not comply with s 16(1) of the [Building] Act in that the work either did not comply with the Building Code of Australia or did not comply with the building permit (allegations 2 to 9).”
(b) “Critical to each allegation was a finding that the relevant defect existed, and the Board made that finding in each case.”
(c) “By contrast, whether that defect had been identified and rectified was irrelevant to each allegation. It necessarily assumed that the defect existed, which (leaving aside other elements that are not relevant here) was all that was required to establish the [plaintiffs’] guilt.”
(d) “That being the case, there is nothing that the [plaintiffs] could have said on the question that would have altered the Board’s conclusion that they were both guilty of allegations 2 to 9.”[18]
[18]See paragraphs 89.1 – 89.4 of the defendant’s outline of submissions.
In essence, I was asked by the Board to disregard those parts of the reasons referring to the plaintiffs’ failures to identify and rectify defects. The Board submitted that in respect of each allegation where this finding was made, the finding could be excised from the reasons – leaving reasons which mandated the Board’s findings of guilt in any event.
I am not persuaded by these submissions. There is a considerable difference between a case which involves the mere proof of the existence of defects and a case which alleges that the person the subject of the inquiry should have identified and rectified the same defect. While, in some circumstances, detailed and cogent reasons provided by the tribunal (in this case, the Board) might persuade a Court that the mere existence of a defect was sufficient to show that the practitioner had not performed his work in a competent manner or to a professional standard, that is not this case. The reasons in this case, and the circumstances of the case, do not enable me to conclude that the fact that the plaintiffs were not heard on the question of identification and rectification of defects could have had no bearing on the outcome of the Board’s inquiries.
It is one thing to be charged with failing to perform one’s work in a competent manner and to a professional standard[19] on the basis of an asserted defect in work performed by a company over which (that is, the company) that person had control. It is another thing to have such charge[20] proved on the basis that such person failed to identify and rectify the defect. Further, while the findings of failures to identify and rectify defects may have been made (as was submitted by the defendant) in response to submissions by the plaintiffs that the existence of particular defects had not been established because the works were incomplete and such “defects” could have been rectified as the work progressed, in the end this is mere speculation. The reasons are so exiguous that no conclusion as contended for by the defendant can be made.
[19]Or to have such an allegation made.
[20]Or allegation.
One of the complaints made by the plaintiffs in these proceedings concerns the inadequacy of the Board’s reasons. While the reasons might survive a challenge as to their adequacy on the basis that they are the reasons of a tribunal set up under a statute which does not require the provision of reasons, the brevity of the reasons and the absence of detail prevents the Board from successfully contending that the findings of failures to identify and rectify defects (in respect of which the plaintiffs were not given a reasonable hearing) had no bearing upon the Board’s conclusions to find each of the relevant allegations[21] proved.[22]
[21]Allegations 2-7 and 9 (if not allegations 2-9).
[22]See generally Stead v State Government Insurance Commission (1986) 161 CLR 141 and Re Refugee Review Tribunal & Anor; ex parte AALA (2000) 204 CLR 82.
It follows from what I have said, that in determining that the plaintiffs failed to identify and rectify defects in the building work which was the subject of these inquiries, the Board denied the plaintiffs natural justice. It is now necessary to look at what effect the plaintiffs’ appeal rights under the Building Act have on the plaintiffs’ application to quash the Board’s decisions.
The plaintiffs’ rights of appeal under the Building Act
Section 143(1) permits the plaintiffs to appeal against the decisions of the defendant to the Building Appeals Board. As I have noted above, the plaintiffs have in fact appealed and their appeals have been stayed pending the outcome of the present proceedings. The plaintiffs’ appeals are appeals “in the nature of a rehearing”.[23] Further, on the appeals the Building Appeals Board “may consider matters not raised before the decision under appeal was made”.[24] Schedule 3 of the Building Act contains detailed provisions (applicable by the operation of s 166(6) of the Building Act) concerning proceedings before the Building Appeals Board. These provisions provide that the Building Appeals Board, amongst other things:
[23]See s 148(1) of the Building Act.
[24]Section 148(2).
(a) may proceed by accepting written submissions or by conducting a hearing;
(b) may inform itself in any manner it thinks fit;
(c) is bound by the rules of natural justice; and
(d) is not bound by any rule or practice as to evidence.[25]
Unlike an inquiry before the Building Practitioners Board, the Building Act provides for requests of reasons from the Building Appeals Board.[26]
[25]Clause 15 of Schedule 3 of the Building Act.
[26]Clause 16(5) of Schedule 3.
Section 149 of the Building Act sets out the determinations that can be made on appeal. Sections 149(1) and (2) provide:
“(1) The Building Appeals Board must consider and determine an appeal and by its determination may –
(a) affirm the decision under appeal; or
(b) quash the decision under appeal; or
(c) vary the decision under appeal; or
(d) set the decision under appeal aside and –
(i) substitute its own decision; or
(ii) remit the decision to the decision-maker for reconsideration in accordance with any directions or recommendations that it considers appropriate.
(2) In considering and determining an appeal, the Building Appeals Board has in addition to its other powers all the powers of the decision-maker in relation to the decision under appeal”.
The Board contends that if either of the plaintiffs makes out any of their grounds of the complaint, then relief should be refused on the basis that an alternative remedy exists. The Board describes the alternative remedy as “an appeal to the Building Appeals Board, which conducts a review of the Board’s decisions on the merits, and may have regard to matters not raised before the Board”. The existence of the remedy may be accepted. However, in my view the failure to give the plaintiffs a reasonable opportunity to be heard in relation to the question of whether they should have identified and rectified the various defects in respect of which those findings were made constituted serious departures from the rules of natural justice.
These findings in respect of which the plaintiffs were not given a reasonable opportunity to be heard were of a significantly more serious kind than those foreshadowed in the notices of inquiry. As I have said above, it is one thing to be charged with failing to perform one’s work in a competent manner and to a professional standard on the basis of an asserted defect in work performed by a company over which that person is said to have control – it is another thing to have that charge proved on the basis that the person failed to identify and rectify the asserted defect. Further, while issues of professional standing and livelihood were at stake on the basis of the terms of the notices of inquiry, the findings of failing to identify and rectify defects raised professional standing and livelihood issues of a significantly more serious kind than those raised by the notices. In my view, the departures from the rules of natural justice that I have identified were of the same level of seriousness as those identified in Garde-Wilson v Legal Services Board.[27] While the issue of the Court’s interest in the fitness and propriety of those who practice before the Courts is not present in this case,[28] the departures I have identified are of such seriousness (involving as they do serious issues of professional standing and livelihood) that the plaintiffs should not be held to be disentitled to relief merely because of the existence of their rights of appeal.[29]
[27](2008) 19 VR 398.
[28]Cf Garde-Wilson, supra at paragraph [11] per Nettle JA.
[29]Garde-Wilson supra, per Buchanan JA at paragraph [2], per Nettle JA at paragraph [10] and per Dodds-Streeton JA at paragraph [113].
In the course of its submissions, the Board attempted to rely upon s 146(1) of the Building Act for the purpose of attempting to establish that the decisions of the Board did not necessarily (or at all) give rise to professional standing and livelihood issues. Section 146(1) provides:
“Subject to sub-sections (2) and (3), a decision in respect of which there is a right of appeal under Division 1 does not take effect until –
(a) the end of the appropriate prescribed appeal period, if there is no appeal; or
(b) the decision is affirmed on appeal.”
It was submitted that professional standing and livelihood issues of the kind referred to in Garde-Wilson v Legal Services Board[30] were not present here because until the determination of the currently stayed appeals, the decisions of the Board have no operative effect. However, this overlooks the fact that the very existence of the decisions the subject of these proceedings (and the publicity associated with them[31]) has the very real capacity to impact on both the professional standing and the livelihood of each plaintiff. Indeed, there was affidavit evidence to that effect – although, in the circumstances of these proceedings, it is not necessary to either rely on or refer to this material. In my view, nothing in s 146 of the Building Act cuts across the conclusions I have reached as set out above.
[30](2008) 19 VR 398.
[31]For example, the media release from the Building Practitioners Board issued 9 September 2008.
The plaintiffs have established serious denials of natural justice in relation to (at least) allegations 2 to 7 and 9 as set out in each notice of inquiry. Further, I have not accepted the Board’s submissions that the plaintiffs’ rights of appeal should, in these cases, disentitle the plaintiffs to a favourable exercise of discretion. There are no other matters that would disentitle the plaintiffs to favourable exercises of discretion. The decisions of the Board on the issues of penalty and costs being predicated in each case upon findings of “guilt” in relation to all ten allegations, it follows that those decisions must be quashed.
Having reached these conclusions, it is not necessary for me to deal in any great detail with the plaintiffs’ complaints of inadequate reasons and reasonable apprehension of bias.[32] Having considered these complaints, I would have concluded that the plaintiffs were not entitled to prerogative relief in respect of them.[33]
[32]Or any of the other remaining complaints (particularly those dealing with specific issues as to penalty and costs).
[33]Some on the grounds that there was no denial of natural justice, jurisdictional error or error of law on the face of the record; and others on the basis that even if there was a denial of natural justice, a proper exercise of discretion would have been to refuse prerogative relief on the basis of the plaintiffs’ rights of appeal.
Reasons
The plaintiffs identified a number of inadequacies in respect of the Board’s reasons. Bearing in mind the Board was not required to provide reasons (and no attempt was made to request reasons), in my view, any inadequacies identified by the plaintiffs did not entitle them to prerogative relief. However, by providing the reasons it did, there is a real prospect that the Board did itself an injustice. It may be that there would have been force in the Board’s argument that nothing either plaintiff could have said on the issue of identification and rectification of defects would have changed the findings made by the Board, if the Board had provided reasons of sufficient detail explaining the precise path of reasoning that led to the various findings of guilt. In relation to the findings of failures to identify and rectify defects, the Board’s position may have been significantly enhanced if the Board (in its reasons) had explained why this finding was made and whether it was a necessary finding – or mere surplusage to other findings which fully justified the Board’s ultimate conclusions. If the Board had taken this course and explained why those other findings mandated the Board’s ultimate conclusions, then it is possible that the plaintiffs would have failed to establish any breach of natural justice. As was said by Nettle JA in Hunter v Transport Accident Commission[34] in the context of a Court’s reasons, “(t)he mere recitation of evidence followed by a statement of findings, without any commentary as to why the evidence is said to lead to the findings, is about as good as useless”.
[34][2005] VSCA 1 at paragraph [28].
Ostensible bias
In support of complaints of ostensible bias, the plaintiffs relied upon 19 discrete matters grouped into two classes described as “The apparent political motivation behind the inquiry” and “The demeanour of some of the Board members during the course of the hearing and the general conduct of the inquiry”. Additionally, the plaintiffs also made complaint that while the Board was entitled to participate in these proceedings to assist the Court, the Board had “adopted the role of partisan”.[35]
[35]See paragraph 48 of the plaintiffs’ joint reply submissions.
Without accepting the plaintiffs’ contentions in relation to this matter, the Board’s position was that many of the matters alleged were or must have been known to the plaintiffs at the time of the hearing and yet no application was made to the panel conducting the hearing. In answer to this, the plaintiffs contend that the reasonable apprehension of bias crystallised when the Board issued a media release on 9 September 2008 in which they were described as “reprehensible”.
It is sufficient for me to say that on the evidence presented to this Court, I am not satisfied that the plaintiffs were entitled to prerogative relief on the basis of ostensible bias. Because it is likely that there will be further inquiries in relation to the conduct of the plaintiffs (either pursuant to the current notices or fresh notices) and because the possibility exists that bias applications may be made at some point in the future on different (or additional) evidence from that presented to me, I do not propose to say anything further on the question of bias.
Andreas’ application to amend
Again, in light of the conclusions I have already reached, it is strictly speaking not necessary to consider Andreas’ application to amend. Andreas was not a registered building practitioner under Part 11 of the Building Act between 22 August 2004 and 30 November 2004. Accordingly, the Board had no power to inquire into his conduct in respect of that period. That is not to say that the Board could not receive evidence of his conduct during that period if it was relevant to an inquiry into conduct during a period when Andreas was a registered building practitioner. It is sufficient for me to say at this stage that I would expect that in any further inquiry (either in respect of the current notices or based upon any fresh notice) the allegations against Andreas will be confined to the period during which he was (or is) a registered building practitioner.
Conclusion
In not giving the plaintiffs a reasonable opportunity to be heard on the question of their failure to identify and rectify defects, the Board denied the plaintiffs natural justice. This was a serious departure from the rules of natural justice justifying the quashing of the Board’s decisions on the issues of penalty and costs. The findings and reasons (insofar as they were also decisions) that led to the decisions on penalty and costs must also be quashed.[36]
[36]This did not seem to be disputed by the Board, if I took the view I have taken in respect of the failure to identify and rectify defects point: see T122.14 – 123.8.
I will hear counsel on the precise form of the order and the question of costs.
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