L U Simon Builders Pty Ltd v Victorian Building Authority

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2017 03994

L U SIMON BUILDERS PTY LTD	First Plaintiff
JIM MOSCHOYIANNIS	Second Plaintiff
FRANK MATERIA	Third Plaintiff
v
VICTORIAN BUILDING AUTHORITY	Defendant

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JUDGE:	Cavanough J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 & 14 December 2017
DATE OF JUDGMENT:	22 December 2017
CASE MAY BE CITED AS:	L U Simon Builders Pty Ltd v Victorian Building Authority
MEDIUM NEUTRAL CITATION:	[2017] VSC 805 First Revision: 30 January 2018

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INTERPRETATION OF STATUTES – Whether State authorities have power to give notice to fix building work under s 37B of the Building Act 1993 after a certificate of final inspection or an occupancy permit has been issued – No such power – Declaration made accordingly – Building Act 1993, ss 1, 3, 4, 7, 9, 10, 16, 16B, 17, 19, 20, 21, 33, 34, 35, 36, 37, 37A, 37B, 37C, 37D, 37E, 37F, 37G, 37H, 37HA, 37I, 37J, 37K, 38, 39, 40, 41, 42, 43, 45, 46, 102, 103, 106, 108, 111, 118, 118A, 119, 129, 134, 138A, 146, 178, 179, 197, 198, 227A, 227B, 227C, 228, 229, 231E, 253, 273, Schedule 8.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P Murdoch QC with Mr N Wood	Giannakopoulos Solicitors
For the Defendant	Mr C Horan QC with Mr A Woods	Victorian Government Solicitor’s Office

HIS HONOUR:

Overview

The main question before the Court is whether the relevant State authorities have power, under s 37B of the Building Act 1993 (‘the Act’), to give a ‘direction to fix building work’ to a builder after a certificate of final inspection or an occupancy permit has been issued for a building. This is purely a question of statutory interpretation.

The case relates to six apartment buildings in Melbourne for each of which an occupancy permit was issued at some time or another in the past, up to nine years ago. The present controversy relates to suggestions that the cladding on the buildings may not be compliant with the requirements of the Act or of the building regulations or of the relevant building permits. However, s 37B is expressed to be potentially applicable to any kind of perceived failure of any building work to comply with such requirements.

The first plaintiff, L U Simon Builders Pty Ltd, was specified as the ‘builder’ in the building permits for the six buildings. The second and third plaintiffs were and remain directors of the first plaintiff. One or the other of them was named as the responsible ‘building practitioner’ in the relevant building permits.

The defendant, the Victorian Building Authority, is the body with principal responsibility for the administration of the Act.

The primary submission of the defendant is that there is power to give a builder a direction to fix under s 37B at any time at all, even 50 or 100 years after the building work in question was completed and an occupancy permit or a certificate of final inspection, as the case may be, was issued. During the hearing, counsel for the defendant added an alternative submission that the power is impliedly limited to a reasonable time. Counsel for the defendant also noted that administrative law principles would confine the exercise of the power. In this context, counsel mentioned in particular the emerging principle of legal unreasonableness.[1]
[1]See Minister for Immigration and Citizenship v Li (2013) 249 CLR 332.

However, as the plaintiffs submit, the indications in the text and context of s 37B that the power is unavailable after a certificate of final inspection or an occupancy permit has been issued are overwhelming. The relevant extrinsic materials point clearly in the same direction, merely confirming a conclusion which is quite evident from the text and context of s 37B itself.

This conclusion makes it unnecessary, in this case, to decide the related question whether Division 2 of Part 4 of the Act, which contains s 37B and which came into operation on 4 July 2016, does or does not apply to building work that was done, or committed to, before that date.

It was common ground that, if the Court reached the conclusion that a direction to fix building work under s 37B cannot be given after an occupancy permit has been issued, it would be appropriate to reflect that conclusion in a declaration that covered each of the six buildings. Such a declaration will be made accordingly.

The general scheme of the Act

The plaintiffs rely in part on the scheme of the Act and the order in which the provisions of the Act are arranged. Generally speaking, any Act of Parliament should be read in the ordinary way in which a document is read, that is, from the beginning onwards.[2] And I accept that reading the Act in this way further strengthens the plaintiffs’ case. The plaintiffs say, in effect, that the power to give a direction to fix to a builder is confined to a particular period or phase, which might be dubbed the building period or phase, being a period or phase to which, according to the plaintiffs, Part 4 as a whole is confined.
[2]Patman v Fletcher’s Fotographics Pty Ltd (1984) 6 IR 471, 474-5 (New South Wales Court of Appeal) (Priestly JA); Girardi v Commissioner of State Taxation (2013) 93 ATR 822, 825 [8] (Supreme Court of South Australia); Pearce and Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8^th ed, 2014) 149-50 [4.5].

Part 1 of the Act deals with preliminary matters, including purposes and objectives. It also sets out definitions. Some of the definitions are significant to a proper understanding of the language of Division 2 of Part 4, especially the definition of ‘building work’ and ‘relevant building surveyor’.[3]
[3]See further below.

Part 2 deals with building standards. It leaves wide scope for the making of regulations in that regard.

Part 3 prohibits, on pain of criminal penalties, the carrying out of building work without a building permit or an exemption. It provides for the issue of building permits.

Part 4 is central to the present case. It is entitled ‘Inspection of building work’. Division 1 is headed ‘Inspections’, Division 2 is headed ‘Directions to fix building work’ and Division 3 (which is comprised of only one section, s 38) is headed ‘Certificates of final inspection’.

Part 5 deals with occupancy permits and related matters.

Part 6 regulates private building surveyors.

Part 7 relates to the protection of adjoining property. It imposes obligations on owners, as distinct from builders.

Part 8 is entitled ‘Enforcement of safety and building standards’. It provides for the issuing of emergency orders, building notices and building orders. Once again, it provides for the imposition of relevant obligations on owners (and occupiers), as distinct from builders.

Part 9 deals with legal liability in relation to building matters. It includes s 134, which provides that a ‘building action’ cannot be brought more than 10 years after the date of issue of the occupancy permit or the certificate of final inspection, as the case may be.

Part 10 deals with the Building Appeals Board and its jurisdiction. It includes s 138A, under which a person may appeal to the Board against a written direction to fix building work under Division 2 of Part 4. It also includes s 146, which relates to stays pending appeals.

Part 11 relates to the registration of building practitioners.

Part 12 deals with general administrative matters, including the role of the Victorian Building Authority.

Part 12A deals with the regulation of plumbing work.

Part 13 contains, as its title indicates, general enforcement provisions. At the hearing, particular reference was made to Division 1A (Performance audits), Division 2 (Powers of Entry) and s 253 (Additional orders that may be made by the Court).

Part 14 deals with general matters. It includes transitional provisions relating to the amending Act which introduced Division 2 of Part 4.

The relevant provisions of the Act

I turn now to the individual provisions of the Act in greater detail.

Division 2 of Part 4 of the Act (which, as indicated above, came into operation on 4 July 2016 and includes s 37B) was inserted by the Building Legislation Amendment (Consumer Protection) Act 2016. The main Act has been amended in additional ways by subsequent amending Acts, principally by the Building Amendment (Enforcement and Other Measures) Act 2017. Some of the amendments made by the subsequent amending Acts are now in operation, but others are not. For the purposes of this case, the most relevant provisions of the main Act, as amended to date and as presently in operation, are as follows:[4]
[4]The Act includes provisions relating not only to building but also to plumbing, but most references to the latter are omitted here as being insufficiently relevant.

Part 1—Preliminary

1 Purposes

The main purposes of this Act are—

(a) to regulate building work and building standards; and

(b) to provide for the accreditation of building products, construction methods, building components and building systems; and

(c) to provide an efficient and effective system for issuing building and occupancy permits and administering and enforcing related building and safety matters and resolving building disputes; and

(d) to regulate building practitioners and plumbers; and

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(h) to limit the periods within which building actions and plumbing actions may be brought.

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3 Definitions

(1) In this Act—

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building includes structure, temporary building, temporary structure and any part of a building or structure;

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building work means work for or in connection with the construction, demolition or removal of a building;

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mandatory notification stage means a prescribed stage of building work;

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owner in relation to a building, means the owner of the land on which a building is situated;

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relevant building surveyor—

(a) in relation to an application to, or permit, approval, inspection, direction, notice or order issued or given by, a municipal building surveyor, means the municipal building surveyor; and

(b) in relation to an application to, or permit, approval, inspection, direction, notice or order issued or given by, a private building surveyor, means the private building surveyor; and

(c) in relation to the carrying out by the Authority of the functions of a municipal building surveyor or a function specified in section 205P, means the Authority; and

(d) in relation to the carrying out by a building surveyor authorised under section 191, 192 or 221 of the functions of a municipal building surveyor, means the authorised building surveyor;

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4 Objectives of Act

(1) The objectives of this Act are—

(a) to protect the safety and health of people who use buildings and places of public entertainment;

(b) to enhance the amenity of buildings;

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(d) to facilitate the adoption and efficient application of—

(i) national building standards; and

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(e) to facilitate the cost effective construction and maintenance of buildings and plumbing systems;

(f) to facilitate the construction of environmentally and energy efficient buildings;

(g) to aid the achievement of an efficient and competitive building and plumbing industry.

(2) It is the intention of Parliament that in the administration of this Act regard should be had to the objectives set out in subsection (1).

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Part 2—Building standards

7 Building regulations

(1) The Governor in Council may make regulations for or with respect to prohibiting or regulating—

(a) the construction, use, maintenance, demolition and removal of buildings;

(b) any matter relating to the safety of buildings and places of public entertainment;

(c) the use and maintenance of places of public entertainment.

(2) Without limiting the generality of subsection (1), regulations under this Part may—

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(c) require the carrying out of building work and maintenance on existing buildings and building work.

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(5) The regulations may apply to existing buildings, whether or not building work is being or is proposed to be carried out on those buildings.

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9 Incorporation by reference

(1) The building regulations may apply, adopt or incorporate, either wholly or in part and with or without any modification, any matter contained in the Building Code of Australia or any other document as in force or as issued or published at a particular time or as in force or as issued or published from time to time.

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10 Application of new building regulations to building work

(1) A building regulation or an amendment to a building regulation, does not apply to the carrying out of any building work in accordance with a building permit existing immediately before the building regulation or amendment commences.

(2) A building regulation, or an amendment to a building regulation, does not apply to the carrying out of building work if the relevant building surveyor is satisfied, and certifies in writing, that substantial progress was made on the design of the building before the building regulation or amendment commenced.

(3) Subject to any determination of the Building Appeals Board, building work referred to in subsection (1) or (2) must be carried out in accordance with the provisions of any regulations, by-laws, local laws or enactments in force at the material times as if the building regulation or amendment had not come into operation.

(4) Despite subsections (1) to (3), the relevant building surveyor and the owner of the building or land concerned may agree that a building regulation, or an amendment to a building regulation, is to apply to the carrying out of building work referred to in those subsections.

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Part 3—Building permits

Division 1—Building permit required

16 Offences relating to carrying out building work

(1) A person must not carry out building work unless a building permit in relation to the work has been issued and is in force under this Act.

Penalty: 500 penalty units, in the case of a natural person;

2500 penalty units, in the case of a body corporate.

(2) A person must not carry out building work unless the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work.

Penalty: 500 penalty units, in the case of a natural person;

2500 penalty units, in the case of a body corporate.

(3) An owner of land must not permit building work to be carried out on that land unless—

(a) a building permit in relation to the work has been issued and is in force under this Act; and

(b) the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work.

Penalty: 500 penalty units, in the case of a natural person;

2500 penalty units, in the case of a body corporate.

(4) A building practitioner or an architect who is engaged to carry out building work must ensure that—

(a) a building permit in relation to the work has been issued and is in force under this Act; and

(b) the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work.

Penalty: 500 penalty units, in the case of a natural person;

2500 penalty units, in the case of a body corporate.

(5) Subsection (3) does not apply to an owner if the owner has engaged a building practitioner or architect to carry out the building work on that land.

(6) Subsections (1), (2), (3) and (4) do not apply if the building work is exempted by or under this Act or the regulations.

16B Indictable offences relating to carrying out building work

(1) A person who is in the business of building must not carry out building work for which a building permit is required if the person knows that—

(a) a building permit is required to carry out that work; and

(b) a building permit to carry out that work is not in force.

Penalty: 600 penalty units or imprisonment for 5 years or both, in the case of a natural person;

3000 penalty units, in the case of a body corporate.

(2) An offence against subsection (1) is an indictable offence.

(3) A person who is in the business of building must not carry out building work if the person knows that the building work is not being carried out in accordance with—

(a) this Act; or

(b) the building regulations; or

(c) the building permit issued in relation to that work.

Penalty: 600 penalty units or imprisonment for 5 years or both, in the case of a natural person;

3000 penalty units, in the case of a body corporate.

(4) An offence against subsection (3) is an indictable offence.

(5) Subsections (1) and (3) do not apply if the building work is exempted by or under this Act or the regulations.

(6) In this section—

person in the business of building includes a person who is in the business of managing or arranging the carrying out of building work.

Division 2—Applications for building permits

17 Applications for building permits

An application for a building permit may be made to a municipal building surveyor or to a private building surveyor appointed under Part 6—

(a) by or on behalf of the owner of the building or the owner of the land, in or on which the building work is to be carried out; or

(b) if the land in or on which the building work is to be carried out is a lot of a kind referred to in section 9AA(1) of the Sale of Land Act 1962, by the purchaser under a contract for the sale of that lot.

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Division 3—Decisions on building permits

19 Decision on application for building permit

(1) The relevant building surveyor must decide an application for a building permit by—

(a) issuing the permit; or

(b) issuing the permit with conditions; or

(c) refusing the permit.

(2) The regulations may prescribe a time within which the relevant building surveyor must decide an application for a building permit.

(3) The relevant building surveyor is taken to have refused a building permit if the application is not decided within the prescribed time.

20 Types of permit

A building permit may be—

(a) a permit for the whole of the proposed building work; or

(b) a permit for a stage of proposed building work.

21 Requirement for occupancy permit

(1) The relevant building surveyor must specify in a building permit—

(a) whether an occupancy permit is required under subsection (2) in respect of the building work; and

(b) whether the occupancy permit is required for the whole or part of the building in respect of which the building work is carried out.

(2) An occupancy permit is required in respect of all building work except—

(a) building work which the relevant building surveyor considers to be minor; or

(b) building work which the relevant building surveyor considers does not compromise the suitability of the building for occupation; or

(c) prescribed building work.

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Part 4—Inspection of building work

Division 1—Inspections

33 Notification during building work

(1) A person who is in charge of the carrying out of building work for which a permit has been issued under Part 3, must notify the relevant building surveyor without delay after completion of each mandatory notification stage of that work.

Penalty: 120 penalty units.

(2) A person who is carrying out building work for which a permit has been issued under Part 3 must stop carrying out that work or any part of that work on completion of a mandatory notification stage if directed to do so by the relevant building surveyor.

Penalty: 120 penalty units.

34 Inspections at mandatory notification stages

On being notified that a mandatory notification stage has been completed, the relevant building surveyor must cause the building work concerned to be inspected.

35 Inspection of building work—general powers

The relevant building surveyor may cause building work for which a permit has been issued under Part 3 to be inspected at any time whether or not a mandatory notification stage has been completed.

36 Powers in relation to inspections

The relevant building surveyor may cause any building work to be demolished, opened or cut into or tested if this is reasonably required to facilitate the carrying out of an inspection for the purposes of this Act or the regulations.

Division 2—Directions to fix building work

37 Definitions

In this Division—

authorised person means—

(a) the Authority; or

(b) a person authorised by the Authority under section 228(2); or

(c) a performance auditor appointed under section 227A;

builder in relation to building work, means the person who is specified as the builder in the building permit issued in relation to that building work;

direction to fix building work means a direction to fix building work given under this Division;

relevant owner, in relation to building work, means the owner of the building or land in or on which the building work is being carried out;

relevant person means a person referred to in section 37C who can be, or has been, given a direction to fix building work.

37A Direction by relevant building surveyor to fix building work

(1) This section applies if, after the inspection of building work, the relevant building surveyor believes on reasonable grounds that the building work fails to comply with this Act, the building regulations or the building permit issued in relation to the building work.

(2) The relevant building surveyor must give a direction to fix the building work to a relevant person in accordance with this Division.

(3) The relevant building surveyor may authorise a building surveyor or a building inspector whose registration under Part 11 authorises the inspection of that building work to give an oral direction to fix the building work to the relevant person on behalf of the relevant building surveyor in accordance with this Division.

37B Direction by authorised person to fix building work

(1) This section applies if, after the inspection of building work, an authorised person believes on reasonable grounds that the building work fails to comply with this Act, the building regulations or the building permit issued in relation to the building work.

(2) The authorised person may give a direction to fix the building work to a relevant person in accordance with this Division.

(3) If, under this section, an authorised person gives a person a direction to fix building work, any direction to fix that work given by or on behalf of a relevant building surveyor under section 37A ceases to have effect.

37C Method of giving directions

A direction to fix building work may be given as—

(a) an oral direction to either or both of the following persons—

(i) the builder;

(ii) the person who is apparently in charge of the site on which the building work is being carried out; or

(b) a written direction to the builder.

37D Written direction if oral direction not complied with

(1) This section applies if an oral direction to fix building work has been given under this Division.

(2) The relevant building surveyor or authorised person must give the builder a written direction to fix building work if the relevant building surveyor or authorised person is not satisfied at the end of the prescribed period after the oral direction was given that the building work complies with this Act, the building regulations or the building permit issued in relation to the building work.

(3) In this section—

prescribed period means—

(a) the period prescribed by the regulations (if any); or

(b) if a period is not prescribed, 7 days.

37E Requirements of directions to fix building work

A direction to fix building work may require the relevant person to do all or any of the following—

(a) carry out work so that the building work complies wholly or substantially with this Act, the building regulations and the building permit issued in relation to the building work;

(b) stop any further building work that may prevent the building work to which the direction applies from being adequately inspected, until the relevant building surveyor or authorised person is satisfied that a requirement under paragraph (a) has been complied with.

37F Written directions to fix building work

(1) A written direction to fix building work must be given in a form (if any) approved by the Authority.

(2) A written direction to fix building work must specify a period within which the direction must be complied with.

(3) A written direction to fix building work must state the following—

(a) that the builder has a right to appeal the decision to give the direction to the Building Appeals Board within a prescribed period; and

(b) that the builder may ask the relevant building surveyor or authorised person to extend the period within which the direction must be complied with.

37G Extension of time to comply with direction

(1) A builder who is subject to a written direction to fix building work may ask the relevant building surveyor or authorised person to extend the period for compliance with the direction.

(2) A request under subsection (1) must be made before the end of the specified period for compliance with the direction.

(3) On a request under subsection (1), the relevant building surveyor or authorised person may grant an extension of the period for compliance with the direction to fix building work if the relevant building surveyor or authorised person considers it appropriate to do so in the circumstances.

(4) The relevant building surveyor or authorised person must give written notice of the extension to the builder.

37H Offences relating to compliance with direction

(1) A builder must comply with a written direction to fix building work within the period for compliance specified in the direction.

Penalty: 500 penalty units.

(1A) A builder, to whom a written direction to fix building work has been given, must ensure that any other person engaged or employed by the builder who is carrying out the building work—

(a) carries out the building work in accordance with the direction; and

(b) if required by the direction, stops carrying out the building work in accordance with the direction.

Penalty: 500 penalty units, in the case of a natural person;

2500 penalty units, in the case of a body corporate.

(2) A builder to whom a direction to fix building work is given must not request or receive from the person for whom the building work was originally carried out (or any agent of that person) any payment for or in respect of any costs arising from anything done for the purpose of complying with the direction.

Penalty: 50 penalty units, in the case of a natural person;

250 penalty units, in the case of a body corporate.

37HA Operation of direction may be stayed

The relevant building surveyor or the authorised person may stay the operation of a direction to fix building work if—

(a) the building work is the subject of a domestic building work dispute; and

(b) the domestic building work dispute has been accepted for conciliation under Part 4 of the Domestic Building Contracts Act 1995.

37I Direction may be revoked

(1) The relevant building surveyor or authorised person may revoke a direction to fix building work given to the relevant person if—

(a) the relevant building surveyor or authorised person considers that the relevant person is not able to comply with the direction; or

(b) the building work is the subject of a domestic building work dispute and—

(i) a dispute resolution order has been issued in relation to the building work; or

(ii) the dispute has been resolved by conciliation under Part 4 of the Domestic Building Contracts Act 1995; or

(iii) the dispute has been determined by VCAT under the Domestic Building Contracts Act 1995.

(2) The relevant building surveyor or authorised person must give written notice of the revocation of a written direction to fix building work to the relevant person.

37J Relevant building surveyor or authorised person must give copies of directions and other notices to owner

The relevant building surveyor or authorised person must give the following documents to the relevant owner and any other prescribed person in relation to a written direction to fix building work—

(a) a copy of the direction;

(b) a written notice of any extension of the period for compliance granted under section 37G;

(c) a written notice of the stay of the direction under section 37HA or of the revocation of the direction under section 37I.

37K Notice to owner and Authority of non-compliance with direction

(1) If a builder fails to comply with a written direction to fix building work within the required period for compliance, the relevant building surveyor or authorised person must give written notice of that failure to the Authority and the relevant owner.

(2) The relevant building surveyor or authorised person must comply with subsection (1) within 7 days after the end of the required period for compliance.

Division 3—Certificates of final inspection

38 Certificate of final inspection

(1) The relevant building surveyor must issue a certificate of final inspection on completion of the inspection following the final mandatory notification stage of building work if—

(a) an occupancy permit is not required for the building work; and

(b) all directions given under this Part in respect of the building work have been complied with.

(2) A certificate of final inspection is not evidence that the building or building work concerned complies with this Act or the building regulations.

Part 5—Occupation of buildings and places of public entertainment

Division 1—Occupancy permits (building work)

39 Occupancy permit must be obtained

(1) If a building permit states that an occupancy permit is required for the whole of a building, a person must not occupy that building unless the occupancy permit has been issued under this Division for the building.

Penalty: 120 penalty units, in the case of a natural person.

600 penalty units, in the case of a body corporate.

(2) If a building permit states that an occupancy permit is required for part of a building, a person must not occupy that part of the building unless the occupancy permit has been issued under this Division for that part of the building.

Penalty: 120 penalty units, in the case of a natural person.

600 penalty units, in the case of a body corporate.

40 Occupation must be in accordance with permit

(1) A person must not occupy a building in contravention of the current occupancy permit or permits issued under this Division for the building.

Penalty: 120 penalty units, in the case of a natural person.

600 penalty units, in the case of a body corporate.

(2) Subsection (1) does not apply to a person who occupies a building in accordance with an approval given under Division 3.

41 Applications for occupancy permits

An application for an occupancy permit required by a building permit must be made to the relevant building surveyor—

(a) by or on behalf of the owner of the building or the owner of the land, in or on which the building work has been carried out; or

(b) if the land in or on which the building work has been carried out is a lot of a kind referred to in section 9AA(1) of the Sale of Land Act 1962, by the purchaser under a contract for the sale of that lot.

42 Schedule 2 to apply

Schedule 2 applies in relation to an application for an occupancy permit under this Division.

43 Decision on application for occupancy permit

(1) The relevant building surveyor must decide an application for an occupancy permit under this Division by—

(a) issuing the permit; or

(b) issuing the permit with conditions; or

(c) refusing the permit.

(2) The regulations may prescribe a time within which the relevant building surveyor must decide an application for an occupancy permit.

(3) The relevant building surveyor is taken to have refused an occupancy permit if the application is not decided within the prescribed time.

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45 Form of occupancy permit

An occupancy permit under this Division must specify—

(a) the prescribed classification of the building or part of a building to which it applies; and

(b) the proposed use of the building or part of a building; and

(c) the maximum permissible live load within the building or part of a building, if applicable; and

(d) the maximum number of people to be accommodated within the building or part of a building, as determined in accordance with the regulations; and

(e) any conditions to which it is subject.

46 Effect of occupancy permit

(1) An occupancy permit under this Division is evidence that the building or part of a building to which it applies is suitable for occupation.

(2) An occupancy permit under this Division is not evidence that the building or part of a building to which it applies complies with this Act or the building regulations.

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Part 8—Enforcement of safety and building standards

Division 1— Emergency orders

102 Emergency orders

A municipal building surveyor may make an emergency order under this Division if the municipal building surveyor is of the opinion that the order is necessary because of a danger to life or property arising out of the condition or use or proposed use of—

(a) a building; or

(b) the land on which building work is being or is proposed to be carried out; or

(c) a place of public entertainment.

103 Orders to vacate

(1) An emergency order may—

(a) direct an owner or occupier to evacuate a building or land or a place of public entertainment within a specified time or times; and

(b) if an order under paragraph (a) is given, direct any person to vacate a building or land or a place of public entertainment within a specified time or times.

(2) An emergency order may also prohibit any person from entering, using or occupying a building, land or a place of public entertainment for the period determined in accordance with section 105A unless permitted by the municipal building surveyor.

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Division 2—Building notices and building orders

106 Building notices

Subject to section 107, a municipal building surveyor or a private building surveyor may cause a building notice to be served on an owner of a building, land on which building work is being or is proposed to be carried out or a place of public entertainment if the building surveyor is of the opinion that any one of the following circumstances exists—

(a) building work has been carried out on the building, land or place without a building permit required by this Act, or in contravention of a building permit or this Act or the building regulations;

(b) the use of the building or place contravenes this Act or the building regulations;

(ba) safety or emergency services, installations or equipment have not been maintained in accordance with the occupancy permit and the regulations;

(c) the building or place is unfit for occupation or for use as a place of public entertainment;

(d) the building, land or place or building work on the building, land or place is a danger to the life, safety or health of any member of the public or of any person using the building, land or place or to any property.

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108 Contents and form of building notice

(1) A building notice may require the owner of a building, land or place of public entertainment to show cause within a specified period—

(a) why entry to, or the use or occupation of the building, land or place should not be prohibited; or

(b) why the owner should not evacuate the building.

(1A) A building notice may require the owner of a building, land or place of public entertainment to show cause within a specified period why the owner should not carry out building work, protection work or work required by the regulations in relation to the building, land or place.

(2) A building notice must be in writing and must contain any matters required by the regulations.

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111 Building orders—general

(1) Subject to section 107, a municipal building surveyor or a private building surveyor may make a building order under this section after the end of the time allowed by the building notice for making representations.

(2) Before making an order, the relevant building surveyor must consider any representations made by the owner concerned.

(3) A building order under this section may—

(a) direct an owner or occupier to evacuate a building or land or a place of public entertainment within a specified time or times; and

(b) if an order under paragraph (a) is given, direct any person to vacate a building or land or a place of public entertainment within a specified time or times.

(4) A building order under this section may prohibit any person from entering, using or occupying a building, land or a place of public entertainment for a specified period unless permitted by the municipal building surveyor.

(5) A building order under this section may direct the owner of a building, land or a place of public entertainment to carry out building work, protection work or other work required by the regulations in relation to the building, land or place.

(6) A building order may require the owner of a building or land or a place of public entertainment to cause an inspection of that building, land or place to be conducted by a specified person within a specified time.

(7) A building order may require the owner of a building or a place of public entertainment or a builder to cause specified material used in that building or place to be tested by a specified person within a specified time.

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Division 3—General

118 Contravention of emergency order or building order

(1) A person to whom an emergency order or building order is directed must comply with that order.

Penalty: 500 penalty units, in the case of a natural person.

2500 penalty units, in the case of a body corporate.

(2) A person must not occupy a building, land or place in contravention of an emergency order or building order.

Penalty: 500 penalty units, in the case of a natural person.

2500 penalty units, in the case of a body corporate.

(3) It is a sufficient defence to a prosecution under this section in relation to a public entertainment if the accused satisfies the court that he or she was unaware and ought not reasonably to have been aware of the fact that the public entertainment was the subject of an emergency order under this Part.

118A Building notices and building orders to be last resort

A municipal building surveyor or private building surveyor must not cause a building notice to be served on an owner or make a building order in relation to the carrying out of building work unless—

(a) a direction to fix the building work was given under Division 2 of Part 4 and it is clear that the direction will not be complied with; or

(b) the municipal building surveyor or private building surveyor is satisfied that it is either not possible or not appropriate to give a direction to fix the building work under that Division.

119 Building permit not required

Despite anything to the contrary in this Act or the building regulations, a person who carries out work in accordance with an emergency order or building order in force under this Part is not required to obtain a building permit or comply with the building regulations unless the relevant building surveyor so directs.

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Part 9—Liability

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Division 2—Limitation of actions

129 Definitions

In this Division—

building action means an action (including a counter-claim) for damages for loss or damage arising out of or concerning defective building work;

building work includes the design, inspection and issuing of a permit in respect of building work.

134 Limitation on time when building action may be brought

Despite any thing to the contrary in the Limitation of Actions Act 1958 or in any other Act or law, a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work.

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Part 10—The Building Appeals Board and its jurisdiction

Division 1—Rights of appeal

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138A Directions to fix building work

A person may appeal to the Building Appeals Board against a decision to give that person a written direction to fix building work under Division 2 of Part 4.

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Division 2—Appeals

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146 Effect of decisions under appeal

(1) Subject to subsections (2), (2A) 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.

(2) Unless the Building Appeals Board otherwise directs, an appeal under section 138, 138A or 139, does not stay the operation of the decision under appeal.

(2A) Unless the Building Appeals Board otherwise directs, an appeal under section 142(2)(a) against the making of a building order prohibiting the occupation of a building or place does not stay the operation of the decision under appeal if the order was made following the making of an emergency order in respect of the same matter.

(3) An appeal under section 142(3) does not stay the operation of the emergency order to which the appeal relates.

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Part 11—Registration of building practitioners

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Division 3—Disciplinary proceedings and action

Subdivision 1—Preliminary

178 Meaning of disciplinary action

In this Division, disciplinary action in relation to a registered building practitioner means one or more of the following—

…

(b) direct the practitioner—

(i) to do a specified thing, including to rectify or complete specified building work; or

(ii) not to do a specified thing;

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Subdivision 2—Grounds for disciplinary action

179 Grounds for disciplinary action

(1) Each of the following is a ground for which disciplinary action may be taken against a registered building practitioner—

…

(c) the practitioner has failed to comply with an order or direction (other than an oral direction to fix building work under Division 2 of Part 4) given to the practitioner—

(i) by the relevant building surveyor under this Act; or

(ii) an authorised person under Division 2 of Part 4;

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Part 13—General enforcement provisions

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Division 1A—Performance audits

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227A Performance auditors

(1) The Authority may appoint performance auditors for the purposes of this Division from staff appointed or engaged under section 204.

(2) The Authority must give every person that it appoints as a performance auditor an identity card that displays a photograph of the person and states the person's name and the fact that he or she is authorised to conduct performance audits for the Authority.

(3) A performance auditor to whom an identity card has been issued must when on duty produce that card on demand.

Penalty: 1 penalty unit.

227B Functions of performance auditor

(1) The function of a performance auditor is to examine work carried out by registered building practitioners or owner-builders—

(a) to ensure that the work has been competently carried out and does not pose any risk of injury or damage to any person; and

(b) to ensure that this Act and the building regulations have been complied with.

(2) The Authority is to determine in its absolute discretion which work is to be examined by a performance auditor.

227C Powers of performance auditors

(1) In carrying out his or her functions under this Division, a performance auditor may—

(a) enter any residence or the land on which a residence is situated between the hours of 8 am and 6 pm; and

(b) enter any other building or land at any reasonable time.

(2) A performance auditor must give the occupier (if any) of a building or land not less than 24 hours notice, or such other notice as may be agreed with the occupier, before the performance auditor enters the building or land under subsection (1).

(3) In carrying out his or her functions under this Division, a performance auditor may—

(a) require a person who is, or was, a registered building practitioner or an owner-builder to produce any document that relates to any work that the auditor is examining; and

(b) make copies of any document that relates to any work that the auditor is examining; and

(c) require a person who is, or was, a registered building practitioner or an owner-builder to supply any other information or document that relates to any work that the auditor is examining; and

(d) report to the Authority, or a person authorised by the Authority, the results of any examination he or she conducts.

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Division 2—Powers of entry

228 Authorised persons

(1) In this Division—

authorised person means—

(a) a municipal building surveyor; or

(b) a private building surveyor appointed under Part 6; or

(c) the Authority; or

(d) a Minister, public authority or person who is authorised or required by this Act or the regulations to carry out any work or inspection or any other function; or

(da) a plumbing inspector appointed under Part 12A; or

(db) a compliance auditor appointed under Part 12A; or

(e) a person authorised under subsection (2).

(2) A person or body referred to in paragraphs (a) to (d) of the definition of "authorised person" may authorise in writing any person to exercise a power under this Division on its behalf.

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229 Power of entry—inspections of buildings, places of public entertainment etc.

(1) Subject to subsection (2), an authorised person may enter any building or land for the purpose of carrying out any inspection, authorised or required by this Act or the regulations, of—

(a) the building; or

(b) a place of public entertainment; or

(c) any equipment, installation, service, records or reports relating to the building or to the place of public entertainment; or

(d) building work or plumbing work.

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231E Powers of authorised persons on entry

(1) An authorised person who exercises a power of entry of a building or land under section 231 or 231B may if the thing searched for is found during the search—

(a) inspect and take photographs (including video recordings), or make sketches, of the building or land or the thing; and

(b) inspect, and make copies of, or take extracts from, the thing if it is a document.

(2) An authorised person who exercises a power of entry of a building or land under section 229 may inspect and take photographs (including video recordings), or make sketches of the building or land or the building work or plumbing work concerned.

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Division 4—Offences and penalties

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253 Additional orders that may be made by the court

(1) The Authority or a municipal building surveyor or any other prescribed body or person may bring proceedings in any court of competent jurisdiction for an order under this section in the event of a breach, or threatened or apprehended breach, of this Act or the regulations or a notice, permit, order or determination issued or made under this Act (including a notice or order or determination of the Building Appeals Board).

(2) The court, if it is satisfied that a breach, or threatened or apprehended breach, has been or will be committed or is likely to be committed, may make any one or more of the following orders—

(a) an order to restrain the breach or other conduct by the person by whom the breach is committed or by whom the threatened or apprehended breach is likely to be committed;

(b) an order requiring building work or protection work to be carried out;

(c) an order requiring the payment of money into court in respect of any building work carried out by, or to be carried out by, the municipal building surveyor;

(d) any necessary ancillary orders.

(3) An application for an order under this section may be made during proceedings for an offence under this Act or the regulations and an order may be made instead of or in addition to any penalty imposed in those or any other proceedings.

(4) An application may not be made under this section as to a notice or order or other matter that is subject to a proceeding before the Building Appeals Board that has not been finally disposed of.

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Part 14—General

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273 Transitional and savings provisions—Building Legislation Amendment (Consumer Protection) Act 2016

Schedule 8 has effect.

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Schedule 8—Transitional and savings provisions relating to the Building Legislation Amendment (Consumer Protection) Act 2016

Part 1—Preliminary

1 Definitions

In this Schedule—

amending Act means the Building Legislation Amendment (Consumer Protection) Act 2016;

new provision means a provision of this Act as in force on or after the relevant commencement day;

old provision means a provision of this Act as in force before the relevant commencement day;

relevant commencement day means—

(a) in relation to Part 2, the day on which Division 2 of Part 3 of the Building Legislation Amendment (Consumer Protection) Act 2016 comes into operation; and

(b) in relation to Part 3, the day on which section 22 of the Building Legislation Amendment (Consumer Protection) Act 2016 comes into operation.

2 General transitional provisions

(1) This Schedule does not affect or take away from the Interpretation of Legislation Act 1984.

(2) If this Part provides that an old provision continues to apply to any matter or thing, then any regulation or other instrument having effect for the purposes of that provision also continues to apply to that matter or thing.

(3) This Schedule applies despite anything to the contrary in this Act.

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Part 4—Building surveyors

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15 Directions under section 37

Section 37 as in force immediately before the commencement of section 49 of the amending Act continues to apply in relation to any direction given before the commencement of that section 49.

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Part 6—General

17 Regulations dealing with transitional matters

(1) The Governor in Council may make regulations containing provisions of a transitional nature, including matters of an application or savings nature, arising as a result of the enactment of the amending Act, including any repeals and amendments made as a result of the enactment of that Act.

(2) Regulations made under this clause may have a retrospective effect to a day on or from a date not earlier than the date on which the amending Act receives the Royal Assent.

(3) Regulations made under this clause have effect despite anything to the contrary in any Act (other than this Act or the Charter of Human Rights and Responsibilities) or in any subordinate instrument.

(4) Sections 6 and 7 of the Subordinate Legislation Act 1994 do not apply to regulations made under this clause that expire on or before 1 July 2017.

(5) This clause is repealed on 1 July 2019.

Principles of statutory interpretation

The defendant appears to take no issue[5] with the plaintiffs’ written submissions insofar as those submissions identify relevant general principles of statutory interpretation. In this regard, the plaintiffs’ written submissions include the following statements:[6]
[5]Defendant’s written submissions dated 4 December 2017, [40].
[6]Plaintiffs’ written submissions dated 20 November 2017, [44]-[46] (footnotes renumbered and quotations and citations corrected, restyled or reordered where required).

In construing the Act, the Court must give the statutory text the meaning that Parliament is taken to have intended it to have. In particular, the [Court] is required by section 35 of the Interpretation of Legislation Act 1984 to seek to identify the purpose of the relevant provisions, as revealed by the text in its context, and to prefer the interpretation that would best achieve that purpose.

Of course, the task of statutory construction must begin with a consideration of the text itself, which is the surest guide to legislative intention.[7] And the process of construction of a provision begins with a consideration of the ordinary and grammatical meaning of its words, having regard to their context.[8] As the Court of Appeal has stated, there are “powerful reasons for giving primacy to the statutory text”: in particular, “[c]lose adherence to the text, and to the natural and ordinary meaning of the words used, avoids the twin dangers of a court ‘constructing its own idea of desirable policy’, or making ‘some a priori assumption about its purpose’”.[9]

An “important corollary” to the duty to give primacy to the text of a provision is that the construction must be determined by reference to the language of the instrument viewed as a whole.[10] “Thus, the process of construction must always begin with the context of the provision that is being construed. … A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.”[11]

[7]See, e.g., Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, 46-7 [47]. See also Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 519 [39]; Thiess v Collector of Customs (2014) 250 CLR 664, 671 [22].

[8]See, e.g., Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1, 13 [26].

[9]The Treasurer of Victoria v Tabcorp Holdings [2014] VSCA 143, [101]-[102]; DPP v Walters (2015) 49 VR 356, 358 [3].

[10]DPP v Walters (2015) 49 VR 356, 359 [4].

[11]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381-2 [69]-[70], cited in Victorian WorkCover Authority v BSA Ltd [2017] VSCA 276, [18].

I accept these statements of general principle. They are consistent with the relatively recent judgment of the High Court in Independent Commission Against Corruption v Cunneen.[12] In Cunneen,[13] in turn, the High Court cited the following well known passage from Project Blue Sky Inc v Australian Broadcasting Authority,[14] emphasising certain words which I would likewise emphasise for the purposes of this case:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’ …

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.

[12](2015) 256 CLR 1.

[13](2015) 256 CLR 1, 20-1 [31].

[14](1998) 194 CLR 355, 381-2 [69]-[70].

Appropriately, in my view, the plaintiffs also invoke[15] the principle that a construction that would produce inconvenient, improbable or irrational consequences should be avoided if there is a competing construction that is reasonably open and would not produce such consequences.[16]
[15]Plaintiffs’ written submissions dated 20 November 2017, [62], citing CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408. See further below.
[16]See also Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297, 305, 320-1 and the other cases cited for this proposition by the Court of Appeal in Victorian WorkCover Authority v BSA Ltd [2017] VSCA 276, [19].

Further, the plaintiffs rely on the principle of legality, which requires (to use the language of the Court of Appeal in Victorian WorkCover Authority v BSA Ltd[17]) that statutes ‘be construed — in circumstances where constructional choices are open — so as to avoid or minimise encroachment upon rights or freedoms at common law’. I accept that there is room in this case for the application of this principle, too.[18]
[17][2017] VSCA 276, [16].
[18]See further below.

Applying the relevant principles of statutory interpretation

The plaintiffs’ construction of s 37B is consistent with the structure, language and apparent purpose of the relevant provisions of the Act, whereas the defendant’s construction is not.

The defendant advances two main points in support of its construction of s 37B. Its first and principal point is that s 37B itself does not contain any express time limit or cut-off point. Its second main point is that the 2016 amending Act by which s 37B was introduced declares, in s 1, that its purposes include to enhance consumer protection and to improve generally the operation and enforcement of the Act. Otherwise, the defendant’s arguments are largely confined to attempts to minimise the significance of the points made by the plaintiffs.

It is convenient to deal first with the defendant’s reliance on s 1 of the 2016 amending Act. The provisions of s 1 are of little or no avail to the defendant. There are two references in s 1 to enhancing consumer protection. The first reference is expressly confined to the changes made by the amending Act to the Domestic Building Contracts Act 1995, which include establishing a new regime for the handling of domestic building work disputes. The second reference is to the effect that the (Building) Act was being amended ‘to enhance consumer protection in relation to domestic building work by improving the regulation of building practitioners, particularly builders carrying out domestic building work and building surveyors’. This appears to be mainly a reference to the amendments made by Division 3 (‘Registration of building practitioners’) and Division 5 (‘Regulation of building surveyors’) of Part 3 of the amending Act, rather than to the amendments made by Division 6 (‘Regulation of building work’) of Part 3, whereas it was that latter Division which introduced into the (Building) Act the provisions presently in question. The subject matter of those provisions is quite distinct from that of the provisions relating to the regulation of building practitioners and of building surveyors that were introduced by Divisions 3 and 5 of the amending Act. Insofar as s 1 of the amending Act declares that the purpose of the amending Act is to improve generally the operation and enforcement of the (Building) Act, it is neutral. It does not tend to show that it was a purpose of the amending Act to introduce a wholly new power to require builders (and even former builders), alone, to rectify alleged defects of whatever kind, in buildings of whatever kind, years or decades after the buildings have been completed and certificates of final inspection or occupancy permits have been issued for them.

I note that, unsurprisingly, the defendant places no reliance on the provisions of s 1 (Purposes) of the (Building) Act.

Turning to the defendant’s principal point, it is true that s 37B of the (Building) Act does not by itself explicitly set out a time limit or cut-off point for the giving of a direction to fix. But that does not avail the defendant either. A cut-off point is inherent in the statutory scheme of which s 37B is a part.

Looking first at the general scheme of the Act as indicated above, it can be seen that the most directly relevant segments are arranged in a sequence that broadly matches the stages of a building project.

Thus, having dealt first with preliminary matters and building standards in Parts 1 and 2 respectively, the Act proceeds next, in Part 3, to impose a threshold requirement for a building permit.

Within Part 3, s 16(1) provides that a person must not carry out ‘building work’ unless a building permit in relation to the work has been issued and is ‘in force’ under the Act. Under s 16(2), the building work must be carried out in accordance with the Act, the regulations and the building permit. Any breach of s 16(1) or s 16(2) is a criminal offence punishable by large fines. Section 16 in its present form was substituted by the same amending Act that introduced Division 2 of Part 4 of the main Act. By a subsequent amending Act, s 16B was inserted into the main Act. Section 16B makes it an indictable offence, punishable by imprisonment as well as by large fines, for a person who is in the business of building to breach knowingly any of the requirements it imposes, being requirements corresponding to those imposed by s 16(1) and s 16(2). Notwithstanding that it was inserted later than Division 2 of Part 4, s 16B is relevant to the ascertainment of the current effect of the Act as a whole.

Notably, the obligation to hold a building permit does not apply if the building work is exempted ‘by or under this Act or the regulations’: see s 16(6) and s 16B(5). It is common ground that the attaching, the removing and the replacing of cladding all amount to ‘building work’ (as defined), and that, because at present there is no relevant exemption in the Act or in the regulations, such work could only be done lawfully if authorised by a building permit that has been issued and is in force under the Act. I will return to this.

A building permit may only be issued in response to an application made to a relevant building surveyor. Generally speaking, the application must be made by an owner of land.[19] Detailed compliance information must be supplied with an application. If the relevant building surveyor issues a building permit, he or she must specify in it whether an ‘occupancy permit’ is required in respect of the whole or part of the building. As the plaintiffs point out, an occupancy permit is required in respect of all building work subject to certain exceptions, such as building work which the relevant building surveyor considers to be minor.[20] As the plaintiffs also point out, the Court of Appeal observed in Moorabool Shire Council v Taitapanui[21] that the role of building surveyors under the Act in ensuring that buildings are well and safely constructed is ‘critical’.
[19]The Act, ss 17, 19, 20.
[20]The Act, s 21.
[21](2006) 14 VR 55, 77 [86], 79-80 [97], 82 [109].

After the obtaining of a building permit, the next relevant stage in the normal progress of a building project is the actual building stage; and the next Part of the Act, Part 4, seems to me to relate exclusively to that stage. As mentioned above, Part 4, which includes s 37B, is entitled ‘Inspection of building work’.[22] It comes between a Part dealing with building permits and a Part dealing with occupancy permits. In that context, it would not be surprising to find that the provisions of Part 4 related principally to inspections and related things falling to be done during the period of, and at the finish of, building work, where the building work was being carried out pursuant to a building permit and where an occupancy permit had not yet been issued for the intended building. And, in my view, this is precisely what one finds in Part 4.
[22]Headings to Parts form part of the Act: Interpretation of Legislation Act 1984, s 36(1)(a). As to the use that may be made of headings for the purposes of the interpretation of an Act, see Pearce and Geddes, above n 2, 30 [1.35], 198-9 [4.53].

As is shown above, Division 1 of Part 4 is headed ‘Inspections’ and is comprised of ss 33-36. Those sections all refer to ‘the relevant building surveyor’. Both sides appear to assume, correctly in my opinion, that these references are references to the self-same person who, under Part 3 of the Act, received and dealt with the application made under s 17 for a building permit and who thereupon became ‘the relevant building surveyor’ for all other relevant purposes of Part 3. Sections 33 and 35 (at least) of Part 4 seem to be premised on a link between the relevant building permit and ‘the relevant building surveyor’. There is nothing in Division 1 of Part 4, or in any other part of the Act, to suggest that someone else might be ‘the relevant building surveyor’.

Next, it is clear that the inspection powers of ‘the relevant building surveyor’ under s 33 and s 34 of Part 4 are confined to the ‘mandatory notification stages’ of building work. The inspection power under s 35 is exercisable ‘at any time whether or not a mandatory notification stage has been completed’, but this seems to envisage earlier, rather than later, inspections. In any event, the only thing that may be inspected under s 35 is ‘building work for which a permit has been issued’, as distinct from, say, a completed building. This accords with the contrasting definitions of ‘building work’ and ‘building’ in s 3 of the Act. Section 36 is entirely ancillary. Accordingly, the written submissions of the plaintiffs silently assumed that the inspections referred to in Division 1 of Part 4 could only be performed during the period when the building permit remained in force and no certificate of final inspection or occupancy permit had been issued. The defendant did not explicitly contest that assumption. I consider that the assumption is clearly correct.

Before leaving Division 1 of Part 4, I note that the inspection powers and duties of ‘the relevant building surveyor’ under that Division are powers and duties to ‘cause’ building work to be inspected. It would thus appear that the relevant building surveyor need not carry out the inspection personally.

Turning to Division 2 of Part 4, in my view it contains numerous clear indications that it is addressing the same phase of a building project as is addressed by Divisions 1 and 3, namely the phase occurring between the issue of a building permit and the issue of a certificate of final inspection or an occupancy permit (as the case may be).

One salient indication of that kind is discernible in the language of the title to Division 2 – ‘Directions to fix building work’. In this regard, the title largely reflects the similar language of many sections in Division 2, including s 37B. That section empowers an authorised person ‘to give a direction to fix the building work’. Even shorn of its context, as a matter of ordinary English, that expression connotes intervention in an ongoing process, more so than intervention after the fact. This impression is fortified by contrasting the ‘direction to fix’ language with the language used in the corresponding places in Part 8 (‘Enforcement of safety and building standards’) of the Act. Part 8 mainly provides for intervention after the fact, although not exclusively so. It speaks of ‘emergency orders’, ‘building notices’ and ‘building orders’. More pertinently, Part 8 provides for orders to be given to owners to ‘carry out building work’[23], not to ‘fix’ building work, although s 118A provides, in effect, that building notices and building orders are not to be served unless the problem cannot be solved by means of a ‘direction to fix’.[24] Likewise, s 253 (‘Additional orders that may be made by the court’), which appears in Part 13 and which would most commonly fall to be applied after the fact, provides, relevantly, for the making of an order ‘requiring building work to be carried out’,[25] not for the giving of a ‘direction to fix building work’.
[23]Section 111(5). For the corresponding form of notice to show cause, see s 108(1A).
[24]Section 118 was inserted by the 2016 amending Act that also inserted Division 2 of Part 4.
[25]Section 253(2)(b).

Further, s 37C provides that a direction to fix building work may be given as an oral direction. Such a direction would be wildly out of place in relation to an alleged defect emerging long after the builder had departed the former building site, leaving behind a completed building. There is no provision for oral notices or orders in Part 8 or Part 13. In my view, contrary to the defendant’s submissions, the fact that s 37C and s 37D provide for written directions to fix (as well as oral directions to fix) does little to diminish the impression created by the provision for oral directions.

More importantly, s 37C is, as I read it, drafted on the clear premise that, in every case, at the time the direction to fix is given, there will be, to use the language of s 37C(a)(ii) itself, a ‘person who is apparently in charge of the site on which the building work is being carried out’. Counsel for the defendant acknowledged that this is a reference to the building work that is alleged to need fixing, not to the building work done or to be done by way of rectification of the existing building work. However, counsel argued that s 37C does not reveal any premise of the kind suggested, because it also provides for directions to be given to ‘the builder’, simpliciter. I can only say that I do not agree.

More powerful still are the indications supplied by the definition of ‘relevant owner’ in s 37 and by the provisions of s 37J and s 37K in which that expression appears. It will be recalled that s 37 provides that, in Division 2 of Part 4, ‘relevant owner’, in relation to building work, means the owner of the building or land ‘in or on which the building work is being carried out’. Once again, the defendant accepts that this a reference to the allegedly defective existing building work, not to the rectification work. Once again, in my opinion, this language proclaims an underlying assumption that there is still building work being ‘carried out’, as to which a direction to fix might be given.

Section 37 J provides, in short, that the ‘relevant owner’ must be given certain specified documents in relation to any written direction to fix building work, including a copy of the direction. So, even in relation to a case where the direction to fix is written and has been given to ‘the builder’ rather than to ‘the person who is apparently in charge of the site on which the building work is being carried out’,[26] the Act still assumes that there will be, currently, an owner of a building or land in or on which the building work needing to be fixed ‘is being carried out’.[27] This circumstance is not only a very strong point in favour of the plaintiffs’ construction of s 37B, but it also provides a further rejoinder to the defendant’s argument downplaying the indications supplied by s 37C.
[26]See s 37C and see above.
[27]See s 37.

Section 37K requires that timely written notice be given to the ‘relevant owner’ if a builder fails to comply with a direction to fix building work. Again, this strongly supports the proposition that the Act assumes that, in relation to a direction to fix, it will always be the case that the building work needing to be fixed ‘is being carried out’.

Consistently with this, every provision in Division 2 of Part 4 of the Act which bears upon the construction issue is expressed in the present tense. Tellingly, there is no equivalent of s 106(a), which authorises the service on an owner of a building notice (preparatory to a building order) where building work ‘has been’ carried out without a building permit or in contravention of a building permit or the Act or the regulations.

Yet another point in favour of the plaintiffs’ construction is that ‘builder’ is defined in s 37, in relation to building work, to mean the person who is specified as the builder in the building permit in relation to that building work. Once again, I note the use of the present tense. The defendant submits that the definition would cover a person whose name appears in an existing document that in the past was a building permit that was in force. I regard this as a strained reading of the definition. There is little or nothing in the Act to suggest that such a strained reading of the definition should be adopted.

The plaintiffs would go further. They submit that, for additional reasons, the definition of ‘builder’ must be treated as relating to a person who is specified in a building permit that is currently in force and that covers unfinished building work that is sought to be made the subject of a direction to fix. In this regard, the plaintiffs rely heavily on s 16 and s 16B, to which I have already referred in some detail. The plaintiffs say that it is inconceivable that Parliament intended that a direction to fix might be given to a person who does not hold a relevant building permit that is currently in force. Generally speaking, it is a serious criminal offence to carry out ‘building work’ without a building permit or relevant exemption, and all the more so to do it knowingly. Further, the plaintiffs say, Parliament has by s 119 provided that a building permit is not required for building work done in accordance with an emergency order or a building order under Part 8, whereas the Act contains no equivalent provision applicable to building work done under a direction to fix.

I accept that there is merit in these further arguments of the plaintiffs. Their force is hardly diminished by the circumstance, relied on by the defendant, that a direction to fix might be revoked under s 37I in the event that the direction proves to be inconvenient or unenforceable. However, the force of these arguments of the plaintiffs may be diminished somewhat by two other considerations. First, as mentioned above, s 16(6) and s 16B(5) each provide, in effect, that the prohibitions contained in s 16 and s 16B respectively do not apply if the building work is exempted by or under the Act or the regulations. Conceivably, regulations could be made at any time exempting building work done under a direction to fix. The proper construction of the Act cannot depend on the terms of the regulations.[28] Second, as the defendant submitted, the Act itself contains no exemption from s 16 and s 16B for building work done in compliance with a disciplinary direction given under s 178(b)(i) of the Act, or for building work done pursuant to an order made by a court under s 253(2)(b). According to the defendant, s 178(b)(i) and s 253(2)(b), where they would ordinarily apply, should be read as implicitly overriding s 16 and s 16B, and the same reading should be given to Division 2 of Part 4 insofar as it authorises the giving of a direction to fix building work. On the other hand, this second consideration may possibly be countered by reference to the principle that a court will not order a person to commit a criminal offence.[29]
[28]Pearce and Geddes, above n 2, 133-136 [3.41].
[29]Rowell v Pratt [1938] AC 101, 106; State of Victoria v Intralot Australia Pty Ltd (ACN 114 435 531) [2015] VSCA 358, [54].

As indicated above, the plaintiffs also submit that other inconvenient, improbable and irrational consequences would follow from the defendant’s construction of Division 2 of Part 4. Among other things, the plaintiffs submit, correctly in my view, that, on the defendant’s construction, a direction to fix could be issued long after the event to a person who was no longer a builder or who bore absolutely no responsibility or blame for the alleged defect(s) or who answered both of those descriptions; or who, because of the passage of time, could no longer enforce any rights of contribution the person may have otherwise have had. Examples could be multiplied.

A related matter is the plaintiffs’ reliance on the principle of legality. They submit that, on the defendant’s construction, a builder given a direction to fix after the issue of an occupancy permit would be in an invidious position. Not only would the builder face the dilemmas thrown up by s 16 and s 16B, there would be serious practical difficulties in complying with the direction. By definition, the builder will have completed the contract with the builder’s client, departed the scene and relinquished any right to be on the premises. Apart from submitting (as mentioned above) that a direction to fix which proved to be problematic could be revoked, the defendant’s response to these plainly legitimate points was to say that appropriate requests could be made to the relevant owner. But the defendant had to acknowledge that no legal power was available to the builder, or even to the State authorities, to compel the owner to co-operate. As it presently stands, the legislation could not be interpreted or administered in such a way as to defeat the owner’s common law property rights.

It is not necessary to take these various consequences into account in order to determine the construction question. The textual and contextual matters to which I have previously referred are sufficient for that purpose. However, I accept that these and like consequences of the defendant’s construction fortify the plaintiffs’ case all the more.

Turning to another point, there was considerable discussion at the hearing about the import of the expression ‘after the inspection of building work’ in s 37B(1). The defendant acknowledged that, unless in a particular case there could still be ‘the inspection of building work’ within the meaning of s 37B(1), then there could no longer be any power in an authorised person to give a ‘direction to fix’ in the case. However, the defendant contended that it could never be too late for the performance of an ‘inspection’ by which the power conferred by s 37B might be triggered. In any event, said the defendant, the mere fact that a certificate of final inspection or an occupancy permit has been issued for the relevant building does not mean that it is too late for such an inspection. According to the defendant, s 37B(1) refers to an inspection performed under general powers conferred by Part 13 of the Act, not under s 37B(1) itself. Those general powers could be exercised at any time, the defendant argued. Alternatively, even if the only relevant power to inspect was a power impliedly conferred by s 37B(1) itself, such a power could still be exercised at any time, according to the defendant.

Asked to nominate which provisions of Part 13 of the Act empowered an ‘authorised person’ (within the meaning of s 37) to inspect ‘building work’ at any time (even after the issue of a certificate of final inspection or an occupancy permit), counsel for the defendant referred to Division 1A (‘Performance audits’) of Part 13, s 229 (‘Power of entry—inspections of buildings, places of public entertainment etc.’) and s 231E (‘Powers of authorised persons on entry’). He went on to mention s 197 (‘Function of the Authority’) and s 198 (‘General powers of the Authority’), which are in Part 12.

Division 1A of Part 13, which includes s 227A (‘Performance auditors’), serves to further identify those persons who are covered by paragraph (c) of the definition of ‘authorised person’ in s 37. However, nothing in Division 1A of Part 13 confers on performance auditors a general power or function of inspecting building work. Rather, performance auditors are given a function to ‘examine work’. This is not the same.

Section 229 does not assist the defendant either. It confers a power to enter any building or land for the purpose of carrying out an inspection of, among other things, building work, but only an inspection ‘authorised or required by this Act or the regulations’. No relevant power of inspection is conferred by s 229 itself. Such a power must be identified elsewhere in the Act or the regulations. Section 229 would then attach a power of entry to such a power of inspection.

As to s 231E, the defendant relied on subsection (2) only. However, that provision is of no assistance to the defendant because it applies only to an authorised person ‘who exercises a power of entry of a building or land under section 229’. As already stated, an authorised person may exercise a power of entry under s 229 only for the purpose of carrying out an inspection which is otherwise ‘authorised or required by this Act or the regulations’. The defendant falls at the same hurdle as it did in relation to s 229.

So far as potentially relevant, s 197 provides that the Authority has a function (under paragraph (a)) ‘to monitor and enforce compliance with this Act and the regulations’. Section 198 provides that the Authority may do all things necessary or convenient to enable it to carry out its functions. However, in my view, these standard-form provisions do not go so far as to confer a general power of inspection of building work, exercisable at any time, on the Authority. Among other things, to read those provisions in such a way would be to set at nought the restrictions carefully built into s 229, including the need to identify provisions authorising or requiring an inspection, being restrictions which apply to the Authority as an ‘authorised person’ (within the meaning of that term in s 228(1)) for the purposes of Division 2 of Part 13.

The result is that an ‘authorised person’ (within the meaning of s 37 of the Act) will probably only be able to carry out, or cause to be carried out, an inspection which might trigger the power in s 37B(1) to give a direction to fix if s 37B(1) itself impliedly empowers an authorised person to carry out, or cause to be carried out, such an inspection. I am prepared to assume, in the defendant’s favour, that s 37B(1) does impliedly confer such a power on an authorised person. However, it would follow that an inspection in the exercise of the power should be regarded as an inspection performed under and for the purposes of s 37B(1) only. Hence it should be regarded as an inspection that falls within the ‘four corners’ of Division 2 of Part 4. Further, in my opinion, it should be regarded as the equivalent of an inspection of the kind referred to in s 37A(1). In other words, the authorised person would adopt a role corresponding to that of the relevant building surveyor.[30] Hence an inspection by or on behalf of an authorised person could only be an inspection of a kind that a relevant building surveyor would be empowered to perform or cause to be performed. An inspection of that kind may only be done pursuant to Division 1 of Part 4. It may only be done during the phase or period covered by Division 1 of Part 4. As indicated above, it is clear that that phase or period cannot extend beyond the point at which a certificate of final inspection or an occupancy permit is issued. The only other available approach is to say that the reference to ‘the inspection of building work’ in s 37B(1) is a reference to the self-same ‘inspection’ mentioned in s 37A(1), i.e. an inspection performed, or caused to be performed, by the relevant building surveyor. That would, of course, lead to the same result.
[30]The similarities in the structure and language of s 37A and s 37B support this view.

Even if all of the analysis in the previous paragraph is wrong, the proper construction of s 37B would be unaffected. The plaintiffs’ construction would remain the correct one.

Extrinsic materials

Both parties sought to rely on extrinsic materials in the form of the explanatory memorandum and the Minister’s second reading speech for the 2016 amending Act.

In my view, there is nothing in these materials that assists the defendant.

The plaintiff’s construction of s 37B requires no more fortification. However, the following passages relating to Division 2 of Part 4 from the Minister’s second reading speech are worth noting:[31]
[31]Victoria, Parliamentary Debates, Legislative Assembly, 10 December 2015, 5543-4 (Richard Wynne, Minister for Planning).

The authority and building surveyors will also be given stronger powers to direct builders to fix defective work. Section 37 of the Building Act currently permits the relevant building surveyor, or person on their behalf, to direct a person in charge of building work to bring non-compliant work into compliance.

This is an important tool in early intervention and the prevention of defective, non-compliant work and will be strengthened by making it mandatory for the relevant building surveyor to issue a direction to fix work, to ensure that it is compliant with the requirements of the Building Act, building regulations and the building permit.

The builder will be responsible for ensuring the work is fixed and it will be an offence (as well as a ground for discipline) not to comply with a direction within the period for compliance, or if none is specified, within a reasonable time.

The aim is to achieve greater instances of rectification of non-compliant building work by builders, without the need for the relevant building surveyor to issue building notices or orders which can only be issued to owners.

Builders will have a right to seek review of directions to fix at the Building Appeals Board.

An authorised person or performance auditor from the authority will have the same power to issue directions under this section as a relevant building surveyor.

The amending Act did indeed ‘strengthen’ the previous provisions relating to directions to fix. A new concept of ‘authorised persons’ was introduced. The giving of a direction was made mandatory for the relevant building surveyor if satisfied of a breach. New criminal penalties were introduced. However, the Minister still saw this regime as a tool for ‘early intervention’ and the ‘prevention’ of defective, non-compliant work. Moreover, in the Minister’s view, an authorised person was to have ‘the same power’ to issue directions as the relevant building surveyor, i.e. not a greater or wider power.

Under the corresponding previous provisions of Part 4 (which were contained in the former s 37), only the relevant building surveyor could give a direction to fix building work, and then only to ‘the person who is in charge of carrying out the building work’. From this it was clear beyond argument that a direction to fix could not be given after the issue of a certificate of final inspection or an occupancy permit. There is nothing in the extrinsic material to suggest that it was intended to change this fundamental feature of the regime.

A ‘reasonable’ time?

The construction of Division 2 of Part 4 of the Act which I have accepted leaves no room for the defendant’s alternative proposition that the power to give a direction to fix is impliedly exercisable for a reasonable time.

Retrospectivity

On my view of the proper construction of Division 2 of Part 4, there must be very few, if any, cases in which it would still be necessary to determine whether the old or the new form of Part 4 applies to the building work in question. If such a case did arise, the determination of the issue would not be simple.[32] This is not such a case. Accordingly, I will not burden this judgment with any further consideration the issue.
[32]However some considerable assistance might be gained from Alexander v Mercouris [1979] 1 WLR 1270. For references to the leading Australian cases and helpful commentary see Pearce and Geddes, above n 2, 397-408 [10.1]-[10.12].

Conclusion

For these reasons, there will be a declaration to the effect that a direction to fix building work under s 37B of the Act cannot be given in relation to any of the six buildings in question.

I will hear the parties on the question of costs.

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22 December 2017