THE CONSTRUCTION OCCUPATIONS REGISTRAR AND MARK RAWSON (AT 09/20) & RAWSON HOMES PTY LTD (AT 09/22) (Occupational Discipline)
[2010] ACAT 86
•6 December 2010
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
THE CONSTRUCTION OCCUPATIONS REGISTRAR AND
MARK RAWSON (AT 09/20) & RAWSON HOMES PTY LTD (AT 09/22) (Occupational Discipline) [2010] ACAT 86
AT 09/20
AT 09/22
Catchwords: OCCUPATIONAL DISCIPLINE – CONSTRUCTION OCCUPATION – variation to building contract – breach of s 31 of the Construction Occupation (Licensing) Act 2004 – floor constructed lower than the level in the Approved Plans – tolerances in the building industry – building work not carried out in a proper and skilful way – building not in accordance with approved plans – building above dampcourse level – factors considered before making occupational discipline order under the s 57 of the Construction Occupation (Licensing) Act 2004 – factors considered before making order for occupational discipline under s 65 of the ACAT Act – impact of contravention – mitigation of the effect of contravention
List of legislation: ACT Civil and Administrative Tribunal Act 2008, ss.65 and 66
Building Act 2004, ss. 28, 42, 43 and 44
Construction Occupation (Licensing) Act 2004, ss.31, 16, 56, and 57 and Division 3.2
Queensland Building Services Authority Act 1991 (Qld), s.43
List of Regulations: ACT Civil and Administrative Tribunal Regulation 2009, Reg.4
List of cases: Builders’ Registration Board of Western Australia v Elliot [2009] WASAT 44
Building Professional Board v Cotten [2008] NSWADT 118
Harb & Anor v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 175
Qbsa v Underwood [2000] QB T 37
Queensland Building Services Authority v Bryan Graham Stanley [1997] QBT 16
Queensland Building Services Authority v Verney
[1996] QBT 182
List of Texts/Papers: Nasseri Associates, Flood Study for Block 14 Section 2 Chifley, 8 October 20
Tribunal: Professor P. Spender, Presidential Member
Mr P. Conway, Member
Date of Orders: 6 December 2010
Date of Reasons for Decision: 6 December 2010
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AT 09/20 & AT 09/22
BETWEEN:
THE CONSTRUCTION OCCUPATIONS
REGISTRARApplicant
AND:
MARK RAWSON
AT 09/20
Respondent
RAWSON HOMES PTY LTD
AT 09/22
Respondent
TRIBUNAL: Ms P. Spender, Presidential Member
Mr P. Conway, Member
DATE: 6 December 2010
ORDER
The Tribunal Orders that:
1.The respondents be reprimanded.
2.The respondent in AT 09/20, Mark Rawson, pay the amount of $500 to the Territory within 28 days.
3.The respondent in AT 09/22, Rawson Homes Pty Ltd, pay the amount of $2500 to the Territory within 28 days.
………………………………..
Professor P. Spender
Presidential Member
REASONS FOR DECISION
This is an application by the Construction Occupations Registrar (‘the Applicant’) for an occupational discipline order under section 56 of the Construction Occupation (Licensing) Act 2004 (‘the COL Act’). The respondent in application number AT09/22 is Rawson Homes Pty Ltd (‘Rawson Homes’ or 'the Licensee') and the respondent in application number AT09/20 is Mark Rawson (‘Mr Rawson’ or 'the Nominee'). Rawson Homes and Mr Rawson will also be referred to collectively hereafter as 'the Respondents’.
Rawson Homes is the holder of a Class B Builder's licence, which is valid until 24 January 2012. Mr Rawson is the nominee of Rawson Homes within the meaning of that term in Division 3.2 of the COL Act. Mr Rawson has held that position since approximately 1992. As nominee, Mr Rawson is responsible for the supervision of construction services by Rawson Homes and to ensure compliance with the COL Act and the Building Act 2004 ('the Building Act’).
It is common ground that on or around 21 September 2007, a certifier appointed under Division 3.2 of the Building Act approved plans for the erection of a brick residence ('the Building') at Block 14 Section 2 Chifley (‘the Premises’) pursuant to section 28 of the Building Act (‘the Approved Plans’).[1] The Approved Plans were drafted pursuant to a building contract made between Rawson Homes and a lessee of the Premises. It is not clear from the evidence whether there are one or more lessees of the Premises but nothing turns on that fact for the purposes of these proceedings, so they will be referred to as ‘the lessees’. The Approved Plans show a Finished Floor Level ('FFL') for the Building of 598.81.[2] On or after 21 September 2007, Rawson Homes commenced construction of the Building. The Building was constructed with an FFL at a height of 598.64. The application for occupation discipline arises out of these circumstances.
Background to the Proceedings
[1] Exhibit A2
[2] Exhibit A2, page 1
The lessees of the Premises entered into to a building contract with Rawson Homes during late 2006 and variations were made to the building contract up until August 2007.[3]
[3] Exhibit A6
During the construction of the Building in late 2007, it appears that an error was made during the cutting and filling of the site after the removal of the existing house. The supervisor of the construction at that stage, Mr Pateman, relied upon variation 53 of the building contract[4] which stated as follows:
Import fill to raise floor level of ground floor to RL598.7 (to be approx. 200mm above the kerb level[)].
[4] Exhibit A6
In fact, a subsequent variation (item 88) to the contract required the Respondents to:
Change lower FFL to 598.8.[5]
[5] Exhibit A6
Although Mr Pateman was satisfied that the level of the fill was 200 above the kerb,[6] this was only sufficient for variation 53 and not variation 88. However, according to the evidence of Mr Rawson and the affidavit of Mr Peter Rawson (which was tendered into evidence although Mr Peter Rawson was not available during the hearing for cross examination), [7] Mr Pateman was unconcerned about the slab level because historical custom and practice was that certification would be granted within reasonable tolerances.[8]
[6] Transcript, page 39
[7] Exhibit R3
[8] Exhibit R3 at [4]
A survey was conducted at the Premises by PJ Shaw & Associates[9] dated
11 December 2007 which indicated that the FFL was 598.64. This report was sent to Rawson Homes and to the certifier, Mr Mihaljevic. It is not clear when the report was received by Rawson Homes or by whom it was received in the company’s Canberra office.[10] However, the Respondents did not become aware of the problem until April 2008.[11] In the meantime, the lessees of the Premises had raised the problem with a business partner of the certifier in February 2008.[12] Various conversations took place between the lessees of the Premises and the certifier in March/April 2008[13] regarding the lodgement of amended plans, but the lessees were unwilling to adopt this course, and a Stop Work Notice was issued on 9 May 2008.
[9] Exhibit A3
[10] For example, Transcript pages 31 and 63
[11] Transcript, pages 28 to 29
[12] Transcript, page 59
[13] Transcript, page 62
During these events, the construction of the Building continued and by March/April 2008 the timber framing was on, the roof trusses were on and the brickwork was complete. Mr Mihaljevic gave evidence that once the timber trusses were up, it was necessary for the Colorbond to go onto the roof without delay because the particle board flooring and the timber frame are only allowed out in the weather from maximum of three months.[14]
Applicant's Contentions
[14] Transcript, page 63
The Applicant contends that the Respondents constructed the Building to a level above the damp proof course level without
a) a certifier having first received a plan signed by a registered surveyor stating the position of the building in relation to the boundaries of the parcel of land where the building is to be erected and stating the level that the floor or floors of the building will have in relation to a level stated in the Approved Plans;
and further without
b) the certifier being satisfied that the position of the building and the level of the floor or floors of the building were in accordance with the Approved Plans.
The Applicant further contends that the land upon which the Building has been constructed is subject to overland water flow in times of heavy rain.
The Applicant says that by constructing the Building at an FFL of 598.64 (i.e. 160 mm below the FFL stated in the Approved Plans), the Respondents have contravened sections 42(1)(c) and 42(1)(d)(i) of the Building Act. Likewise, by proceeding to construct the Building above dampcourse level without the certifier being satisfied that the position of the Building and the level of the floor or floors were in accordance with the Approved Plans, the Respondents contravened section 43(2) of the Building Act.
The Respondents’ Contentions
Importantly, the Respondents acknowledged that section 31 of the COL Act had been breached. This admission was made in the Respondents' statement of facts and contentions, which was admitted into evidence.[15] The Respondents further contended that the action was nevertheless in complete accord with custom and practice in the building and certification industries, arguing that such matters are normally resolved by the submission of an amended application and plans. However in this case the lessees of the Premises have refused to adopt this course. The Respondents further contended that the lessees’ refusal to submit amended plans is based on unfounded fears that the Respondents have done everything possible to allay.
The Hearing
[15] Exhibit A1
The Applicant was represented by Mr Walker of Counsel and the Respondents were represented by Mr Robens, solicitor. Evidence was given by Mr Johnson on behalf of the Applicant and by Mr Pateman, Mr Rawson, Mr Mihaljevic and Mr McNally on behalf of the Respondents. Certain documents were admitted into evidence as detailed hereunder. During the hearing the Tribunal attended the Premises with the parties in order to inspect the Building.
The Tribunal apologises to the parties for the delay in handing down its reserved decision.
The Applicable Law
The application to the Tribunal for an occupational discipline order is brought under section 66 of the ACT Civil and Administrative Tribunal Act 2008 (‘the ACAT Act'). The application is also made under section 56 of the COL Act. That provision provides as follows:
(1)If the registrar believes on reasonable grounds that a ground for occupational discipline exists in relation to a licensee, the registrar may—
(a) apply to the ACAT for an occupational discipline order in relation to the licensee.
The Tribunal notes in passing that the Construction Occupations Registrar has independent powers under section 56 of the COL Act to take various forms of disciplinary action such as reprimanding the licensee; requiring the licensee to complete a stated course of training or imposing a condition on the licence or amending an existing condition.
The grounds for occupational discipline are set out in section 55 of the COL Act. In these proceedings, the Applicant relies upon section 55(1)(a) – that the licensee or a nominee of the licensee contravened an operational Act. The term “operational Act” is defined by section 16 of the COL Act to include the Building Act. The contraventions of the Building Act that had been alleged are:
a)section 42(1)(c) – the building work must be carried out in a proper and skilful way;
b)section 42(1)(d)(i) – the building work must be carried out in accordance with approved plans; and
c)section 43(2).
The relevant portion of section 43(2) of the Building Act states as follows:
A building licensee in charge of building work must not do building work above dampcourse level … unless—
(a) the certifier has received—
(i) a plan (a survey plan) signed by a registered surveyor stating the position of the building in relation to the boundaries of the parcel of land where the building is to be erected and stating the level that the floor or floors of the building will have in relation to a level stated in the approved plans; … and
(b) the certifier is satisfied that the position of the building and the level of the floor or floors are in accordance with—
(i) the approved plans; ...
Maximum penalty: 50 penalty units.
In addition, as stated above, Mr Rawson is a nominee of Rawson Homes for the purposes of division 3.2 of the COL Act. Section 31 of the COL Act states the following:
(1)A nominee of a licensed corporation or partnership has the following functions:
(a)to supervise the construction services of the corporation or partnership for which the nominee is responsible (the relevant construction service);
(b)to ensure that the relevant construction services comply with this Act and the operational Acts.
(2) The nominee commits an offence if the nominee fails to—
(a) adequately supervise the relevant construction services; or
(b)ensure that the relevant construction services comply with this Act and the operational Acts.
Maximum penalty: 50 penalty units.
As noted above, both Respondents have admitted to breaching section 31 of the COL Act.
Consideration of the Issues
In relation to the alleged contraventions of the Building Act, the Approved Plans[16] and a copy of the survey report issued by PJ Shaw and Associates Pty Ltd dated 11 December 2007[17] were tendered into evidence. These documents indicate that the FFL on the Approved Plans is 598.81, whereas the FFL on the survey report is 598.64. This evidence clearly demonstrates that the floor was built 160 mm lower than the level in the Approved Plans therefore was not constructed in accordance with the Approved Plans.
[16] Exhibit A2
[17] Exhibit A3
In this regard, the Tribunal also notes the admission made by the Respondents acknowledging that section 31 of the COL Act had been breached.[18] As stated above, this admission was also tendered into evidence.
[18] Exhibit A1
The Respondents relied upon evidence of some tolerances that are permitted as a result of industry custom and practice. This was referred to in the affidavit of Peter Rawson and extensive evidence was given by Mr Mihaljevic on the issue. Mr Mihaljevic considered that it was not a problem where the house was lower than the approved plans if it still fits within the building envelope. Mr Mihaljevic gave evidence that when the lessees expressed concern about the floor level not being in accordance with the Approved Plans he told them: “Well, we need an amended plan”. [19] Mr Mihaljevic testified that it was all within the construction tolerances that operated within the industry. Whilst nothing was legislated, there was a “sort of ... in-house type of tolerance that we would work with.”[20] The witness conceded that it was an acceptable though informal process that was not covered by the legislation and indicated that a large percentage of residential building jobs had had similar types of amendment.[21] Nevertheless, Mr Mihaljevic conceded that ultimately an amendment to the plans has to occur with the concurrence of the lessees under the Building Act.
[19] Transcript, page 54
[20] Transcript, page 54
[21] Transcript, page 55
Importantly, Mr Mihaljevic indicated that he did not give an expression of satisfaction regarding the Building in accordance with section 43(2)(b) of the Building Act because it had been learned around late January or early February 2008 that the floor level had been constructed too low. However, he did not issue a notice in accordance with section 44(2) of the Building Act (which is required if the certifier is satisfied that the building work does not comply with section 42 of the Building Act) because he took a "bit of a gamble" that it would be fixed up if the plans were subsequently amended.[22]
[22] Transcript at pages 58, 59
The lessees refused to amend the plans because they were concerned that the lowered floor level would increase the possibility of both overland water flow and flooding. A flood study was commissioned by the Respondents and provided by Nasseri Associates on 8 October 2008. The report was attached to the affidavits of Mr Peter Rawson and Mr Rawson.[23] This report indicated that the Premises are situated at the low point of the street and the floor level was 330 mm above the 1:100 year flood.[24] The Nasseri report indicated that options were available through the construction of overland flow paths and/or box culverts to divert a 1:100 year flood to the rear of the property. However, the report emphasised that although careful construction of pathways or box culverts could provide the free passage of overland flow, inappropriate placement of garden beds, garages or buildings etc could impede surface flows. The report therefore states "it is very important not to place any permanent structures within the overland flow paths on both sides of the building.”[25]
[23] Exhibits R1 and R3
[24] Exhibit R1 Attachment A page 8
[25] Exhibit R1 Attachment A page 8
In taking the "bit of a gamble" that the lessees would agree to amend the plans, Mr Mihaljevic indicated that he had taken into account the potential flooding of the property, however the Tribunal finds that he did not have sufficient expertise to draw this conclusion at the relevant time.[26]
[26] Transcript, pages 61 - 62
Mr Johnson gave evidence for the Applicant. Mr Johnson is employed as a Principal Officer in the Construction Policy and Regulation Section of the Development Services Branch of the ACT Planning and Land Authority. His duties include performing the functions of Deputy Registrar under the COL Act. He has had over 35 years experience in the building industry and has worked as a government building inspector since 1985. Mr Johnson was questioned about the procedure that was adopted when the lessees of the Premises lodged a complaint with his department. He indicated that he had looked at the variation of the slab height and concluded that there had been a breach of the legislation. When asked about an acceptable variance which applies in these situations,
Mr Johnson answered that there is no variance within the Building Act itself as such.[27]
[27] Transcript, page 16
Under cross-examination, Mr Johnson indicated that in some cases plans may be approved for an amended floor height by the lessees making an application to the certifier for an amendment to the plans but in this case the lessees of the Premises were reticent to do that. Mr Johnson further commented that the lessees were “reluctant to actually put forward an amended plan to have that discrepancy regularised.”[28]
[28] Transcript, page 17
Mr Johnson gave both oral and written evidence[29] of the dissemination of information through the building industry through building notes, newsletters (directed to the building industry generally and to private certifiers in particular) and emails about the procedures regarding survey certificates. In particular, the Tribunal has viewed the newsletters attached to Mr Johnson’s witness statement[30] which clearly point out to builders and certifiers that it is unlawful to proceed above dampcourse level unless a certifier has received the survey and given the builder permission to proceed.
[29] Exhibit A5
[30] Exhibit A5
Annexure G of Mr Johnson’s witness statement[31] indicates that Mr Mihaljevic received such an email on 7 April 2009. This email states in part:
Do not be misle[d] by the recent changes to the Planning and Development Regulations that now provide some tolerance for floor levels for the Development Approval … process. No such tolerances exist in the Building Regulations so you must ensure that floor levels comply with those stated in the building approval.
[31] Exhibit A5
The Tribunal concludes that whilst there may have been some latitude shown where minor deviations from the approved floor levels are detected which allowed certifiers to nevertheless conclude that the building work had been carried out in a proper and skilful way under section 42(1)(c) of the Building Act. However, the building licensee could not rely upon this latitude in circumstances where the lessee of the parcel of land (where the relevant construction is occurring) has not applied to a certifier to approve amended plans.
The Tribunal therefore finds that Rawson Homes has breached several provisions of the Building Act i.e. section 42(1)(c) because the building work was not carried out in a proper and skilful way; section 42(1)(d)(i) because the building work was not carried out in accordance with approved plans; and section 43(2) because building work was done above dampcourse level when the certifier was not satisfied that the position of the level of the floors was in accordance with the approved plans.
As regards Mr Rawson, as nominee, he is responsible for the construction work undertaken by the licensee pursuant to section 31 of the COL Act. The Tribunal also finds that this provision has been breached by Mr Rawson and reiterates that the breach was admitted prior to the hearing.
Factors to be considered before making a disciplinary order
When a party has applied for an occupational discipline order, the Tribunal is obliged to consider the factors under section 57 of the COL Act and section 65 of the ACAT Act before making such an order. These provisions are set out in full below.
Firstly, section 57 of the COL Act:
57 Considerations before making occupational discipline orders
(1) This section applies if the ACAT is considering an application for an occupational discipline order in relation to a licensee.
(2) Without limiting the matters the ACAT must consider in relation to a licensee, the ACAT must consider the following:
(a) the degree of responsibility of the licensee for the act or omission that made up the ground for occupational discipline;
(b) the number of people detrimentally affected by the doing of something, or not doing something, that made up the ground for occupational discipline;
(c) the extent to which it is necessary to discourage the licensee and others from doing something, or not doing something, that made up the ground for occupational discipline;
(d) whether, and the extent to which, it is necessary to protect the public from the licensee;
(e) the desirability of making the licensee responsible for the consequences of the licensee’s acts or omissions;
(f) the desirability of maintaining public confidence in the regulatory system set up by this Act;
(g) the licensee’s regard, or disregard, for public safety and protection of the environment when doing something, or not doing something, that made up the ground for occupational discipline.
Secondly, section 65 of the ACAT Act:
65 Considerations before making orders on application for occupational discipline
(1) This section applies if the tribunal is considering an application for occupational discipline against a person (the subject person).
(2) The tribunal may make an order for occupational discipline in relation to the subject person if satisfied that a ground for occupational discipline exists against the person.
(3) In considering what occupational discipline to use against the subject person, the tribunal must consider the following:
(a) whether the person took reasonable steps to avoid the action (the contravention) that is the ground for occupational discipline;
(b) whether occupational discipline has previously been used against the person for a similar act;
(c) whether the person has taken steps to mitigate the effect of the contravention;
(d) the impact of the contravention on any other person;
(e) the likelihood that the person will act in a way that is a ground for occupational discipline in the future;
(f) whether the entity bringing the application has applied for particular occupational discipline to be used and, if so, the kind of occupational discipline applied for.
The Tribunal shall firstly address the criteria under section 57 of the COL Act. The criterion in section 57(2)(a) requires the Tribunal to consider the degree of responsibility of the licensee for the act or omission that made up the ground for occasional discipline. Consideration of this criterion raises the related considerations set out in section 57(2)(e) of the COL Act – the desirability of making the licensee responsible for the consequences of the licensee's acts or omissions. In this case, Rawson Homes accepted full responsibility for the acts and omissions which constitute breaches of the Building Act and COL Act. Similarly, Mr Rawson admitted liability to the breach of section 31 of the COL Act. In the language of section 57(2)(e) of the COL Act, it is desirable that the licensee be made responsible for these acts or omissions since there were clearly flaws in the management of statutory compliance in the company’s Canberra office. This incident has exposed these flaws and new procedures have been put in place as a consequence. These procedures will be discussed below. Moreover, it is desirable that the licensee and the nominee have overarching responsibility for the acts and omissions because they have the primary responsibility under the relevant statutes.
Pursuant to section 57(2)(b) of the COL Act, the number of people detrimentally affected by the ground of occupational discipline is confined, as the breaches have mainly detrimentally affected the lessees of the Premises. However, the effect upon the lessees of the Premises cannot be underestimated, as they have had to deal with a protracted dispute regarding the Building with the consequential worry. Moreover, the Nasseri report demonstrates that their concerns about the floor level are not unreasonable, given that the Premises is at the low point of the street and is subject to potential run-off. Although Rawson Homes made suggestions for ameliorating measures, the Nasseri report made the following comment about such measures:
While through careful construction of pathways or box culverts around the proposed development, maintenance of existing ground levels at the front and rear of the dwelling and suitable fencing (200 mm gap at the base of the rear fence), a free passage of overland flows can be provided to the site, this is not necessary the case of downstream properties. Inappropriate fencing, sheds, garden beds, garages, rainwater tanks and buildings in the overland flow paths can impede surface flows. Such restrictions to the flow can cause backwater effects that result in normal flow depths being exceeded. There are no hydraulic methods that can accurately predict these effects on a flow depths. It is very important not to place any permanent structures within the overland flow paths on both sides of the building. [32]
[32] Nasseri Associates, Flood Study for Block 14 Section 2 Chifley, 8 October 2008, at page 8,
The Tribunal must also consider the extent to which it is necessary to discourage the licensee and others from doing something that made up the ground for occasional discipline (under section 57(2)(c) of the COL Act). The Tribunal considers that this aspect of the proceedings is important because whilst there might be some flexibility in allowing lessees to amend approved plans as the construction progresses, it is critical that the legislative standards set under the Building Act and the COL Act are maintained and that lessees are not coerced into amending approved plans when they are reluctant to do so. This is closely related to the criterion in section 57(2)(f) of the COL Act i.e. the desirability of maintaining public confidence in the regulatory system set up by the COL Act, since lessees must have faith that all participants in the construction process are fully aware of and fulfil their statutory responsibilities and that these responsibilities are not negotiable. However, it is not necessary to protect the public from the licensee (applying the criterion in section 57(2)(d) of the COL Act) as the licensee is a reputable company who has conducted business for 30 years in New South Wales and 20 years in the ACT without any disciplinary action being taken against it. During this time, the company has built on average about 40 homes a year in the ACT. [33]
[33] Transcript, page 26
Finally, section 57(2)(g) of the COL Act requires the Tribunal to consider whether the licensee has disregarded public safety or protection of the environment in the ground for occasional discipline. The breaches in this case do not raise issues of public safety or environmental protection.
In relation to the factors which must be considered under section 65 of the ACAT Act, the first consideration under section 65(3)(a) is whether the person took reasonable steps to avoid the contravention. It could not be said that either Rawson Homes or Mr Mark Rawson took reasonable steps to avoid this contravention. The evidence given by Mr Pateman and Mr Rawson indicates that there was no clear structure within the Canberra office of Rawson Homes to handle the survey report or to check that the building work was being carried out in accordance with approved plans in compliance with the statutory requirements in 42(1)(d)(i) of the Building Act, nor any procedure to ensure that building work was not done above dampcourse level before the certifier’s satisfaction was established under the requirements of section 43(2) of the Building Act. In fact, there seemed to be considerable uncertainty about whose responsibility it was to even receive the survey reports and to liaise with certifiers. In the meantime, construction of the Building continued on as usual and then needed to continue to protect the materials from exposure to the weather. However, there is no doubt that the construction should not have proceeded once the survey report was received by Rawson Homes. Although it is unclear when the survey report was received by Rawson Homes, it is certain that there was a considerable lapse of time between the making of the survey report in 11 December 2007 and the conversations with the lessees of the Premises in April 2008.
The Tribunal must consider whether occupational discipline has previously been used against the person under section 65(3)(b) of the ACAT Act. As stated above, it is noteworthy that the company has been in business for 30 years in New South Wales and 20 years in the ACT. During that time it has never had any disciplinary action taken against it. These are the only two jurisdictions in which the company operates.[34]
[34] Exhibit R3 at [17].
As to whether the person has taken steps to mitigate the effect of the contravention under section 65(3)(c), it is clear that once the problem came to its attention, Rawson Homes made considerable efforts to mitigate the effect of the contravention. It paid approximately $10,000 for an engineer to go to the site to determine the flood issues and have offered the lessees to pay for the remedial work suggested by the engineer’s report. [35] It obtained three valuations from real estate agents and offered to purchase the Premises as well as the adjoining premises where the lessees reside. [36] It also offered monetary compensation of $35,000-$40,000 to the lessees.[37] Mr Rawson gave evidence that if a rectification order is issued the company would need to demolish the majority of the Building and rebuild, which he estimated would cost somewhere between $180,000 and $200,000.[38]
[35] Exhibit R3 at [10] and [11]
[36] Exhibit R3 at [13]
[37] Exhibit R3 at [13]
[38] Transcript, page 25
The Tribunal finds that Licensee and the Nominee have taken all reasonable steps to attempt to mitigate the effects of the contravention short of demolishing the Building and rebuilding. The question about rectification of the building work might be the subject of other proceedings.
The impact of the contravention on any person must also be considered by the Tribunal under section 65(3)(d) of the ACAT Act. Clearly the contravention has had a considerable impact upon the lessees of the Premises and the Tribunal reiterates its reasoning in relation to its discussion of section 57(2)(b) of the COL Act stated above.
The Tribunal considers that there is little likelihood that the Respondents will act in a way that is ground for occupational discipline in the future. The Tribunal notes the evidence given by Mr Rawson, Mr Pateman and Mr McNally that the breach was to some extent due to a lack of proper supervision of the site, particularly during the transition from Mr Pateman to the subsequent supervisor.[39] Mr McNally, the current Canberra manager of Rawson Homes, gave evidence of the policies and procedure that are now in place to make sure that an issue like this will not arise again. He testified that the supervisor needs to attend the block of land to make sure the levels are done at the relevant stages of construction. As manager, Mr McNally controls the supervisors and gives directions to them regarding the critical stages that levels must be taken. There is additional monitoring of the surveyors’ reports about finished floor levels and procedures to ensure that construction work stops while the relevant inspections are taking place.[40]
[39] Transcript, page 40
[40] Transcript, pages 68 to 70
Mr Rawson is a director of Rawson Homes and although he is listed as the nominee for the purposes of the Building and COL Acts, his responsibilities in the company primarily concern its financial management. Whilst Mr Rawson gave evidence truthfully and frankly, the Tribunal noted that he did not have much first-hand experience of the issue and that he only visited Canberra about 2 to 3 times per year. [41] His brother and co-director, Mr Peter Rawson, appeared to have hands-on experience with the ACT operation. Considering the statutory responsibilities of the nominee, it may be worth revisiting this division of labour between the directors of the company.
[41] Transcript, page 26
The final consideration under section 65(3)(f) of the ACAT Act is not relevant to the current proceedings.
Order
For the reasons stated in the foregoing, the Tribunal considers that an order for occupational discipline should be made in relation to the Licensee and the Nominee. Such orders are made under section 66 of the ACAT Act. The Tribunal considers that in this case that a reprimand is appropriate under section 66(2)(a). In addition, the Tribunal shall require the Licensee to pay the Territory $2500 and the Nominee to pay the Territory $500.
The Tribunal notes that the application claimed that this money should be paid to the lessees of the Premises, presumably on the basis that section 66(2)(h) of the ACAT Act empowers the Tribunal to make an order to require a person subject to occupational discipline to pay “someone else” a stated amount. In the affidavits filed by Mr Peter Rawson and Mr Rawson, the Respondents argued that the Tribunal lacked jurisdiction to order that sums be paid to the lessees because such orders would be outside the provisions of the COL Act. However, neither of these submissions was pressed in the hearing and accordingly the Tribunal has concluded that the appropriate order is the payment of the sums to the Territory.
The amount that the Tribunal may require a person to pay under section 66(2)(h) of the ACAT Act is not more than the amount prescribed by regulation. Regulation 4 of the ACT Civil and Administrative Tribunal Regulation 2009 states that the maximum amounts that are prescribed under section 66(2)(h) are as follows:
(a) for an individual—$1 000;
(b) for a corporation—$5 000.
The Tribunal must therefore assess the monetary amount within this range set by the legislature and in doing so, take into account the factors set out above. The Tribunal has considered the case law of other jurisdictions where similar orders for occupational discipline have been made in the construction industry, and notes that certain factors in this case bring it within the middle range of orders made. These factors are as follows:
•the breach, whilst significant, did not lead to concerns about public safety;[42]
•the breach was due to negligent management rather than intentional misbehaviour;[43]
•significant efforts were made by the Licensee and the Nominee after the breach had been discovered to mitigate the effect of the contravention.[44]
[42] Compare the cases of Building Professional Board v Cotten [2008] NSWADT 118, where the breach related to a fire safety matter (see [28]) and Queensland Building Services Authority v Bryan Graham Stanley [1997] QBT 16, where the defect rendered the construction extremely susceptible to demolition in the event of a high wind (pages 2 to 3).
[43] Therefore distinguishable from Builders’ Registration Board of Western Australia v Elliot [2009] WASAT 44 and Queensland Building Services Authority v Verney [1996] QBT 182 at page 9.
[44] Compare Building Professional Board v Cotten [2008] NSWADT 118, where the tribunal stated at [35] that the respondent conducted himself "in a truculent and abusive way" and Builders’ Registration Board of Western Australia v Elliot [2009] WASAT 44.
A useful comparative case is Harb & Anor v Commissioner for Fair Trading, NSW Office of Fair Trading[45] where the contraventions were less serious than in the current proceedings[46] however the builders had had prior occupational discipline orders made against them. Similarly, Qbsa v Underwood[47] (‘Underwood’) involved a failure by a licensee to supervise building work carried out by individuals for which the licensee was found to be vicariously responsible.[48] In essence, the offences arose out of the same conduct and the Tribunal imposed a penalty of $2000 for the breach of section 43 of the Queensland Building Services Authority Act 1991 (Qld), and $10,000 for a breach of section 101 of the same legislation. A cumulative penalty of $12,000 was imposed in Underwood in the context of a regime which permits a higher maximum amount to be payable. In that circumstance, compensation was not payable due to the respondent's bankruptcy. This case supports the differential sums to be paid by the Licensee and the Nominee in the present case.
[45] [2007] NSWADT 175
[46] The tribunal described them at [43] as being "at the minor end of the scale of defective works and would have been rectified in the defects liability period had the Applicants been notified of the defects and access been allowed’.
[47] Qbsa v Underwood [2000] QB T 37
[48] Qbsa v Underwood [2000] QB T 37 at [37]
For the reasons stated above, the Tribunal makes the following orders that:
1 The respondents be reprimanded.
2.The respondent in AT 09/22 pay the amount of $2500 to the Territory within 28 days of the date of this order.
3.The respondent in AT 09/20 pay the amount of $500 to the Territory within 28 days of the date of this order.
………………………………..
Professor P. Spender
Presidential Member
Attachment A to Exhibits R1 and R3
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