(b) prior to pouring an in situ reinforced concrete member nominated by the relevant building surveyor; and

(2) The relevant building surveyor may vary a stage set out in subregulation (1) in relation to building work if it is inappropriate to the building work.

(3) The mandatory notification stages for building work determined in accordance with subregulation (1) or (2) must be set out in the building permit for that building work.

1. In relation to the Mooroolbark Permit, the mandatory inspection stages were specified to be:
   • (a) Piers;
   • (b) Pre Slab;
   • (c) Slab Steel;
   • (d) Frame; and
   • (e) Final.
2. In addition, an Occupancy Permit was required to be issued by the Applicant in respect of the habitable buildings and a Certificate of Final Inspection was required to be issued in respect of the non-habitable buildings, such as the two carports.
3. Under reg 315 of the Regulations, the building work, the subject of the Mooroolbark Permit, was required to be completed within 24 months after the date of issue of that permit; namely, on 4 April 2009. Under sub-reg (3), the permit would automatically lapse if the building work was not completed within that 24 month period, unless the period to complete the building work had been extended by the Applicant under sub-reg (4).
4. On 5 July 2007, three separate Occupancy Permits were issued in respect of the building works the subject of the Mooroolbark Permit. However, no Certificate of Final Inspection was issued in respect of the non-habitable carports. Moreover, it is common ground that no final inspection was ever carried out in respect of those two carports.
5. On 6 December 2010, the Yarra Ranges Council received correspondence from an adjoining neighbour, in which he alleged that the carports had been dangerously constructed. An audit was subsequently carried out by the Yarra Ranges Council, which resulted in it writing to the Applicant by letter dated 27 July 2011. That letter states, in part:

Council records show that Building Permit 38978/0 was issued by Combined Building Consultants on 4 April 2007 for 3 dwellings, 3 garages and 2 carports to existing 2 units.

Council received copies of the occupancy permits for units 3, 4 and 5 on 9 July 2007, however it has come to my attention that Council has not received certificates of final inspection for the new carports to the existing units 1 and 2, which have been constructed, see attached aerial photo.

Can you please forward copies of the certificates of an inspection and inspection approval dates for the carports to Council within 7 days as required by regulation 1012.

The Building permit required the building work to be completed by 4 April 2009 and if a final inspection on the carports has not been approved would you please investigate this issue and take the necessary action to resolve this matter as the Relevant Building Surveyor for these works.

Please advise this office of any action taken within 30 days of this letter. If no advice or documentation is received, this matter will be forwarded onto the Building Practitioners Board for investigation.

1. The Applicant disputes having ever received the Yarra Ranges Council letter dated 27 July 2011. In any event, no action was ever taken by the Applicant after the Mooroolbark Permit lapsed on 4 April 2009. Indeed, the position taken by the Applicant is and remains that his role became functus officio after the Mooroolbark Permit lapsed on 4 April 2009.
2. An investigation was subsequently conducted by the BPB, which resulted in it issuing a Notice of Inquiry dated 18 January 2013. In respect of the Mooroolbark Permit, two allegations were raised against the Applicant. The second allegation was subsequently withdrawn and is not being pressed in the review hearing.[1] The remaining allegation concerning the Mooroolbark Permit was expressed as follows ('the Mooroolbark Allegation')[2]:

Allegation one - ground for inquiry - paragraph 179(1)(b)

On or around 4 April 2007 and in relation to building work, namely the construction of two carports adjacent to existing dwellings at ... Mooroolbark, you failed to carry out your work as a building practitioner in a competent manner and to a professional standard and therefore failed to comply with regulation 1502(a) of the Building Regulations 2006 - in issuing building permit number 38978/0, you failed to require that a certificate of final inspection be obtained in respect of the carports.

1. The BPB heard evidence from a number of witnesses, including investigators engaged by the BPB who interviewed the Applicant, and ultimately found the Mooroolbark Allegation to be proven.

1. On 8 September 2009, the Applicant issued a building permit in relation to domestic building work to a residential property located in Hampton ('the Hampton Permit'). The building work, the subject of the Hampton Permit, was described as the construction of a gazebo and carport. The application for the Hampton Permit identified that the building work was to be undertaken by an owner builder. In other words, a person who was not a registered building practitioner.
2. The application for the Hampton Permit further stated that the cost of the building work was estimated to be $11,000. In accordance with s 30 of the Act the Applicant lodged a copy of the Hampton Permit and associated documentation to the Bayside City Council on 10 September 2009.
3. Following a review of the Hampton Permit documentation, Mr Goddard, the then municipal building surveyor employed by Bayside City Council, formed the opinion that the estimated cost of construction was inadequate when compared to the proposed works. On 27 September 2010, Mr Goddard made a complaint to the Building Commission (now Victorian Building Authority) reflecting his concern over the declared value of the proposed works. That complaint was investigated by Ms Kammergruber, a qualified building surveyor and licensed investigator with the Building Commission, who also formed the opinion that the estimate of the cost of building work ($11,000) grossly undervalued the true cost of the building work, the subject of the Hampton Permit.
4. Consequently, the BPB issued a Notice of Inquiry, in which it alleged:

Allegation 1 - ground for enquiry - paragraph 179 (1) (b)

1. On or about 8 September 2009 you failed to comply with regulation 1502(a) of the Building Regulations 2006 in that, as the appointed relevant building surveyor to building work at ... Hampton, being the construction of a carport, Gazebo and front fence, you failed to carry out your work in a competent manner and to a professional standard as required by regulation 1502(a) of the Building Regulations 2006 in that you issued a building permit with a specified cost for the proposed work when the cost of the proposed building work was substantially higher than the amount specified in the building permit.
2. The allegation also formed part of the same Notice of Inquiry dated 18 January 2013, issued in respect to the Mooroolbark Permit, such that all three allegations were comprised within the one notice and one inquiry hearing. At the conclusion of that inquiry hearing, the BPB found the allegation concerning the Hampton Permit to be proven ('the Hampton Allegation')[3].
3. Having found both allegations proven, the BPB made the following decision:

After having considered the evidence put before it, the Board has decided in relation to the guilty verdict to the two (2) allegations to:

It is the decision of the Board having considered the submission put before it, that the building practitioner pays the total costs incidental to the inquiry in the sum of $3,117.

1. Before turning to examine each of the Allegations, it is necessary to first consider the application of reg 1502, which underpins each of the Allegations made against the Applicant. Reg 1502 states, in part:

(a) perform his or her work as a building practitioner in a competent manner and to a professional standard; and ...

1. There are two threshold questions raised by Ms Fitzgerald of counsel, who appeared on behalf of the Applicant, which affect the operation of reg 1502:
   • (a) First, Ms Fitzgerald submitted that reg 1502 is beyond the regulation making power contained in the Act and therefore ultra vires.
   • (b) Second, Ms Fitzgerald submitted that reg 1502 must be read down so that the standard of competency and professionalism imposed by that regulation was not inconsistent with any professional standard imposed by the Act. In that sense, Ms Fitzgerald argued that the words in a competent manner and to a professional standard in reg 1502 are to be construed as meaning unprofessional conduct, which she contended imposed a higher benchmark for a finding of breach than would otherwise be the case if the standard was gauged merely against competence.

1. Section 261 of the Act sets out the regulation making powers of the executive. Subsection 261(j) states:

(1) The Governor in Council may make regulations for or with respect to -

(j) professional standards to be observed by registered building practitioners in the different categories or classes; [emphasis added]

1. Ms Fitzgerald submitted that s 261(j) of the Act empowers the executive to prescribe professional standards for each separate category or class of building practitioner. However, it does not empower the executive to prescribe a global professional standard to be applicable to all building practitioners. In other words, Ms Fitzgerald argued that the Act only permitted professional standards to be regulated in relation to each distinct class or category of building practitioner but it did not allow the executive to prescribe a single professional standard that would apply across the board.
2. I do not accept that submission. In my view, s 261(j) of the Act is to be interpreted to mean that the Governor in Council may make regulations concerning the professional standards to be observed by registered building practitioners comprising the different categories or classes identified in the regulations, rather than meaning that separate professional standards are to be prescribed for each distinct class or category of building practitioner. The former construction of the section allows the provision to be more general in its operation, which is consistent with the overall purpose of the Act to regulate building work and building standards;[4] and with its objectives to protect the safety and health of people who use buildings and places of public entertainment.[5]
3. Section 35 of the Interpretation of Legislation Act1984 states:

In the interpretation of the provision of an Act or subordinate instrument -

(a) a construction that would promote the purpose or object of an Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object; and ...

1. Accordingly, the former and more general interpretation of s 262(j) is to be preferred to the restrictive interpretation advanced by Ms Fitzgerald.
2. Moreover, as pointed out by Mr Mitchell of counsel, who appeared on behalf of the BPB, reg 1502(a) must be read in context. He drew my attention to s 262(a) of the Act which states:

(a) may be of general or limited application; and ...

1. Mr Mitchell submitted, correctly in my view, that s 262(a) of the Act permitted regulations to be general or of limited application. Accordingly, the fact that reg 1502(a) is expressed generally is of no consequence, having regard to s 262(a) of the Act.
2. Mr Mitchell further submitted that even if the Tribunal were to hold that the regulation was ultra vires, s 22(1) of the Interpretation of Legislation Act 1984 would require the regulation to be construed so that the professional standard imposed applied as if imposed on each class or category of practitioner individually. Section 22(1) of the Interpretation of Legislation Act 1984 states:
   1. Subordinate instruments to be construed subject to legislative power of the State and to empowering Act

(1) Every subordinate instrument shall be construed as operating to the full extent of, but so as not to exceed -

(a) the legislative power of the State of Victoria;

(b) the power to make the subordinate instrument conferred by the Act under or pursuant to which it is made -

to the intent that where a provision of a subordinate instrument, or the application of any such provision to any person, subject-matter or circumstance, would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid provision to the extent to which it is not in excess of that power and the remainder of the subordinate instrument and the application of that provision to other persons, subject-matters or circumstances shall not be affected.

1. Therefore, the regulation would be valid and the obligation imposed on the Applicant identical to that presently appearing in the regulation.
2. Accordingly, and for the reasons set out above, I find that the regulation is valid.

1. Subsection 179(1) provides that the BPB (and the Tribunal on review) may make certain decisions if it finds that the registered building practitioner:

(b) has failed to comply with the Act or the Regulations; or

(d) has been guilty of conduct in relation to his or her practice as a building practitioner which:

(i) is constituted by a pattern of conduct or by gross negligence or gross incompetence in a particular matter; and

(ii) shows that he or she is not a fit and proper person to practise as a building practitioner ...

1. Ms Fitzgerald submitted that reg 1502 imposed standards of competency and professionalism on registered building practitioners. However, she argued that those standards of competency and professionalism cannot exceed what may be prescribed by the Act or they will be invalid. She argued that where the legislature has disclosed an intention to deal with a subject matter, subordinate legislation may not deal with that subject matter in a manner that is inconsistent with the empowering Act. Ms Fitzgerald submitted that ss 179(1)(a) and (d) of the Act specifies certain conduct which the BPB or the Tribunal on review may find proven against a registered building practitioner. In that regard, she contended that the requirement in reg 1502 to perform work in a competent and to a professional standard can only operate in manner which does not offend s 179 of the Act. According to Ms Fitzgerald, this can only occur if the professional standard prescribed in reg 1502 is consistent with the findings which the Tribunal is empowered to make, as set out in the two paragraphs of s 179 that deal with the conduct of registered building practitioners. Accordingly, she argued that to the extent that reg 1502 requires building practitioners to perform the work in a competent manner and to a professional standard, means either:
   • (a) unprofessional conduct;
   • (b) gross negligence; or
   • (c) gross incompetence.
2. Of these categories of conduct, unprofessional conduct provides the lowest hurdle for the BPB to meet in proving the allegations made against the Applicant. However, the test for unprofessional conduct still constitutes a higher hurdle for the BPB to meet; than would be the case if it merely had to prove incompetent conduct_._
3. Ms Fitzgerald referred to a number of authorities providing guidance on the test for unprofessional conduct. In re R; a Practitioner of the Supreme Court,[6] the Full Court of the Supreme Court of South Australia described the test as follows:

In our view, unprofessional conduct is not necessarily limited to conduct which is disgraceful or dishonourable, in the ordinary sense of those terms. It includes, we think, conduct which may be reasonably be held to violate, or fall short of, to a substantial degree, the standard of professional conduct observed or approved by members of the profession of good repute and competency.[7]

1. In Campbell v Dental Board of Victoria,[8] Mandie J referred with approval to the test in Adamson v Queensland Law Society Incorporated,[9] which held:

The test to be applied is whether the conduct violates or falls short of, to a substantial degree, the standard of professional conduct observed or approved by members of the profession of good repute and competency.[10]

1. Ms Fitzgerald argued that the authorities referred to above requires that there be a substantial shortfall in the conduct of a building practitioner, compared with the ordinary standard of professional conduct observed by members of the profession of good repute and competency. This is a higher degree than mere incompetency.
2. I do not accept that there is conflict between reg 1502 and s 179 of the Act, even though the regulation speaks of mere incompetence as giving rise to a breach of the Regulations, whereas s 179 adopts different language when referring to the professional conduct of building practitioners.
3. In that respect, I accept the submission made by Mr Mitchell that s 179(1) is expressed more widely than simply being confined to conduct falling within ss (a) and (d). It also includes conduct falling within s 179(1)(b) of the Act; namely the failure to comply with the Act or the Regulations, in addition to a finding of unprofessional conduct. Although there may be overlap between conduct which contravenes reg 1502 and that which would satisfy the BPB of unprofessional conduct under s 179(1), that does not, in my view, render the regulation invalid or require the regulation to be read down. Clearly, s 179(1)(b) contemplates that the Regulations or another provision within the Act may provide a further avenue in which to make a decision under s 179(2) of Act.
4. As I have already indicated, the primary purpose of s 179(1) is to provide a mechanism by which the BPB or the Tribunal on review may make a decision under s 179(2). It refers to various matters and conduct, some of which are specific while others very general in nature. For example, any breach of the Domestic Building Contracts Act 1995 may give rise to a decision under s 179(2).[11] Adopting that example, I do not accept that only a breach of the Domestic Building Contracts Act 1995 constituting unprofessional conduct, gross negligence or gross incompetence could be the subject of decision under s 179(2). Section 179(1) is not expressed in a way where the matters set out thereunder are subject to subsections (a) or (d). Each of the subsections in s 179(1) are independent of each other, notwithstanding that they overlap. So much is clear by the use of the word 'or', which separates each of those subsections.
5. Therefore, I find that, by reason of subsection s 179(1)(b), reg 1502 stands independent of s 179(1)(a) and (d). It has the same status as if it were another matter specifically included within the matters set out under s 179(1). Consequently, I find that the test that I must apply is whether the Applicant performed his work as a building practitioner in a competent manner and to a professional standard. That does not require that the conduct of the Applicant to be measured against the test for unprofessional conduct referred to above. In my view, the threshold for finding that the Applicant breached reg 1502 is lower than that would otherwise be the case if the test for unprofessional conduct were applied. Further, I am of the opinion that this interpretation is entirely consistent with one of the primary objects of the Act; namely, to protect the safety and health of people who use buildings and places of public entertainment.

1. Under s 78 of the Act, a land owner may appoint a private building surveyor to carry out functions under s 76 of the Act, including for the issue of a building permit. As highlighted in the recent judgment of Vickery J in Colonial Range Pty Ltd v Victorian Building Authority and Ors,[12] the obligations of a building surveyor are far reaching:
   1. The functions and obligations of building surveyors are prescribed in the building control legislation. Building surveyors play a critical role in achieving the objects of the legislation, particularly in maintaining public safety and protection in relation to the design and construction of buildings in Victoria.
   2. The building control legislative scheme in Victoria comprises the Act, the Building Regulations 2006 (the 'Regulations'), the Building Code of Australia 2007 (which forms part of the Regulations) and relevant Australian standards (as referenced in the Building Code of Australia).
   3. The public policy undermining this legislative scheme is to facilitate and promote the cost effective and safe construction of buildings, the construction of environmentally and energy efficient buildings, to enhance the amenity of buildings and to protect the safety and health of people who use buildings and the local environs.

1. Under the Act, the functions of building surveyors are performed by municipal building surveyors, who are building surveyors appointed by a municipal council as its municipal building surveyor for the purposes of the Act,[13] and private building surveyors, who are privately appointed.
2. The important functions assigned to a building surveyors under the Act may be summarised as follows:

(a) In Part 6, s 76 the prescribed functions of a relevant building surveyor are (a) the issuing of building permits; (b) the carrying out of inspections of buildings and building work under part 4; (c) the issuing of occupancy permits and temporary approvals under Part 5;

(b) In Part 7, s 87 the prescribed function of a relevant building surveyor is to determine protection works required to protect an adjoining property notwithstanding differing opinions expressed by an owner and an adjoining owner;

(c) Sections 106, 111, 112, 113 of Part 8 confer power on a relevant building surveyor to issue notices and orders including stop work orders with respect to building works to ensure the works are being carried out in accordance with the Act and the Regulations, including any protection work requirements.[14]

1. As I have already commented, the Act and the Regulations prescribe that mandatory inspections are required of building work, the subject of a building permit. In addition, under s 39 of the Act, Class 1 (habitable buildings) require a building surveyor to issue an occupancy permit before the building may be occupied. Similarly, under s 38 of the Act:

(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 would 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.

1. It is common ground that the two carports forming part of the building work comprising the Mooroolbark Permit, required the Applicant to issue a certificate of final inspection following the final mandatory notification stage. The final mandatory notification stage in this case was described in the Mooroolbark Permit as being FINAL.
2. It is also common ground that the Applicant did not conduct a final inspection, nor did he issue a certificate of final inspection prior to the building permit lapsing. However, the Applicant denies that his actions or lack of action amounts to unprofessional or incompetent conduct. In that regard, he raises two grounds by way of defence:
   • (a) First, he says that he was never notified by the relevant building practitioner to conduct a final inspection of the two carports during the currency of the building permit, notwithstanding the fact that final inspections were carried out for the associated dwellings and garages, with the result that three separate certificates of occupancy were issued for that aspect of the building works. He contends that there is no obligation to carry out a final inspection in circumstances where the relevant building practitioner or owner has not notified the building surveyor that the relevant stage has been completed.
   • (b) Second, he contends that, as the building permit lapsed prior to any request to inspect was made, his role as a private building surveyor expired.

Does a private building surveyor's role end when the building permit lapses?

1. Ms Fitzgerald submitted that once the building permit lapsed, the building surveyor was functus officio. Mr Mitchell submitted that the termination of a private building surveyor's retainer does not end merely by the expiration of the relevant building permit. He drew my attention to a number of provisions in the Act[15] concerning the termination of the appointment of a private building surveyor. In particular:

(1) Subject to subsection (3), the appointment of a private building surveyor under this Part cannot be terminated without the written consent of the Commission. [now Victorian Building Authority]

(2) If building work in respect of which a private building surveyor is appointed is terminated before commencement or completion, the owner of the land on which the building work was to be carried out must notify the Commission and the relevant municipal council of the termination of the building work.

(3) On receipt by the Commission of a notice under subsection (2), the appointment of the private building surveyor is deemed to be terminated.

(5) This section applies despite anything to the contrary in terms of the appointment or in any other Act or rule of law.

1. Mr Mitchell submitted that the appointment of a private building surveyor is both contractual and statutory. He argued that when one has regard to the objectives of the Act under s 4; namely, to protect the safety and health of people who use buildings and places of public entertainment, it is clear that the statutory functions bestowed upon a private building surveyor require an ongoing role even after the building permit has lapsed. He referred to s 35(a) of the Interpretation of Legislation Act 1984 (see above) in support of that submission.
2. Section 81 of the Act does not state that the role of a private building surveyor ceases upon the relevant building work having been completed. Indeed, subsection (2) specifically deals with a situation where the building work is terminated - for example where the proposed work never proceeds or where the relevant building practitioner's employment is terminated. In that situation, the Act prescribes a procedure to ensure that the regulatory body is aware that the private building surveyor's role has come to an end. In the absence of that procedure being followed, the private building surveyor's role continues, even if there is nothing to inspect or approve. Nevertheless, the legislation clearly intended that a private building surveyor appointed to carry out certain functions under the Act still retained the power bestowed upon him or her under the Act, until such time as the regulatory body or the municipal council had notice that his retainer was to be terminated.
3. In my view, that is entirely consistent with the purpose of the Act. For example, it would allow a private building surveyor to issue a building notice under s 106 of the Act if, after termination of the builder's employment, the works were progressed by a person who was not a registered building practitioner or in a manner otherwise contrary to Act or the Regulations. In my view, the evident purpose is to ensure that building work is not undertaken unchecked. My view is reinforced by reg 322 which provides:[16]

A relevant building surveyor must within seven days after the end of each month forward to the Commission in a form approved by the Commission -

(a) details of permits and certificates of final inspection issued by the relevant building surveyor during that month; and

(b) details to the knowledge of the relevant building surveyor of -

(i) any building work that is commenced, completed or abandoned during that month; or

(ii) any building permit that lapses during that month.

1. Clearly, reg 322(b) contemplates a role for the building surveyor after the lapsing of the building permit.
2. Having regard to the purpose of the Act and the fact that the Act expressly deals with the termination of a private building surveyor's retainer, I am of the view that the building surveyor's role does not cease upon the lapsing of a building permit. However, that does not necessarily provide an answer as to whether the Applicant has contravened reg 1502.

1. Ms Fitzgerald submitted that the obligation to inspect only crystallises after a building surveyor has been given notice by the registered building practitioner that the mandatory stage of the building work has been completed. Section 33 of the Act states:

(1) A person who is in charge of the carrying out of building work to 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 the work...

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.

1. Ms Fitzgerald argued that there was no continuing obligation on the Applicant to investigate why the building work had not been completed or why the building permit had not been renewed. Indeed, she pointed to the fact that in order for a building permit to be renewed, it must be done before it lapsed.[17] She submitted that there were practical difficulties enforcing unwanted or unrequested inspections upon potentially new owners, years after a building permit had lapsed and that it was not common practice for this to occur. Ms Fitzgerald contended that it was not unprofessional or incompetent for a building surveyor to refuse to force an inspection in relation to an expired permit, especially in circumstances where there was a question as to whether the building surveyor had power to do so. Importantly, she argued that the Act does not place an obligation on the Applicant to perform an inspection until he has been asked to do so.
2. The Applicant adduced evidence from Mr de Chataeu, a registered building surveyor, with many years experience. Mr de Chataeu said that it was the obligation of an owner or a builder to contact the registered building surveyor for an inspection on completion of the building work. Alarmingly, he believed that there were hundreds if not thousands of lapsed permits existing in Victoria, presumably with unchecked building work.
3. Mr de Chataeu's evidence was corroborated by the evidence of Mr Goddard, the municipal building surveyor who initiated the complaint to the BPB giving rise to the Mooroolbark Allegation. Mr Goddard confirmed that there were many outstanding building permits and that it was sometimes difficult for building surveyors because they relied upon builders to notify them when the stage of work had been completed. He conceded that many builders did not notify the relevant building surveyor when the stage of work had been completed.
4. Further evidence was given by Ms Kammergruber, a qualified building surveyor and compliance officer with the Victorian Building Authority. She conceded that it was not always common practice for a private building surveyor to contact the builder or owner prior to the lapsing of a building permit.
5. In my view, what may be common practice does not necessarily equate to good practice. In the context of lapsing building permits, I note that the former Building Commission (now Victorian Building Authority) issued a Practice Note dealing specifically with this issue. That Practice Note states, in part:

The relevant building surveyor (RBS) must follow proper administrative procedures for lapsed building permits and those approaching their expiry date. The RBS and the owner of the building each have specific responsibilities, depending on the status of the permit and the building work. Where the RBS declines to grant an extension, the owner may apply to the Building Appeals Board (BAB) to overturn the decision.

An owner or agent on behalf of the owner may seek an extension of time from the RBS for the commencement and/or completion of the building work before the permit expires.

The RBS may grant this extension if the extent of the building work warrants an extension of time. If the RBS refuses to grant an extension of time for the permit, the owner may appeal the decision of the RBS through the BAB.

1. Where a building permit lapses and building work has not commenced or is incomplete

Where a building permit has lapsed the RBS remains responsible for administering any necessary enforcement procedures, under Part 8 of the Building Act 1993 (The Act).

The Owner or agent on behalf of the owner, of building work not commenced or completed must obtain a new building permit from the RBS. Where a private or municipal building surveyor (MBS) is the RBS who issued the original building permit, he/she remains as the building surveyor for the functions related to the building permit and only the same building surveyor can issue a new building permit for those same functions. A building permit could only be issued by another private building surveyor (PBS) upon application of section 81 of the Act (termination of appointment) or if the entire design of the project differs from the original design approved under the original building permit issued...

The RBS clearly has a responsibility to address lapsed building permits and therefore it is important that office procedures be implemented to administer the requirements of the Regulations.

To assist proper administration of building permits and inspections, and reduce the number of lapsed building permits, the following procedures are suggested:

At the time of issuing the building permit it is recommended that the RBS highlight the important information regarding the building permit which the owner builder has a responsibility during construction...

Building surveyors must also maintain a record keeping system, so that owners can be reminded when the building permits are about to expire. At this stage the procedure, administrative fees and consequences relating to lapsed building permit should not be a surprise if these matters were previously highlighted by the RBS at the time the building permit was issued.

An option for the RBS is to commence enforcement action by issuing a building notice under section 106. The requirements for a final inspection and the issue of a certificate of final inspection or an occupancy permit is clearly a condition of the building permit. Section 106 (a) of the Act states that a building notice can be issued if building work has been carried out in contravention of the building permit. Failure to complete the building work within the time limit stated on the permit would be considered a contravention of the building permit. Details of lapsed building permits must be included on the "building work inspection, completion or permit lapse return", submitted monthly to the Building Commission.

1. Mr Mitchell argued that the Practice Note, although not having any legislative force, was relevant in determining whether the Applicant had acted in a competent manner. He argued that the Practice Note required the applicant to:
   • (a) consider whether to carry out a final (or other) inspection;
   • (b) consider whether to issue a building notice for failing to complete works within the permit period; and
   • (c) consider whether to require the builder to apply for a new permit.
2. As highlighted by Vickery J in Colonial Range Pty Ltd,[18] the importance of the Building Commission Practice Notes, although not having any legislative influence; nevertheless provide evidence of the practical context in which the legislation and the Regulations are intended to operate. That said, the difficulty in establishing that the Applicant's actions or inaction amounted to unprofessional or incompetent conduct is that the statutory framework does not expressly require a building practitioner to do anything to initiate a final inspection if it has not been called for during the currency of the building permit. Although the Practice Note makes suggestions as to what building surveyors should do to reduce the number of lapsed permits, that is merely a suggestion.
3. In the present case, the BPB contends that it was open for the Applicant to have issued a notice pursuant to s 106 of the Act, in order to force a final inspection. Although that course of conduct may be within the power of a private building surveyor, it does not seem to be the evident purpose behind s 106, nor is there any evidence suggesting that this course of conduct is what is to be expected of a reasonably competent private building surveyor, faced with the same factual circumstances. Indeed, none of the witnesses called to give evidence in this proceeding were able to recall one instance where they issued a s 106 notice in order to enforce compliance with reg 315, being the regulation that requires building work to be completed within 24 months of the issue of the building permit. Moreover, the Mooroolbark Allegation is not framed in that manner. It is not suggested that the Applicant acted incompetently or unprofessionally by failing to issue a s 106 notice.
4. Mr Mitchell further pointed to the correspondence said to be forwarded to the Applicant by Yarra Ranges Council dated 27 July 2011 and referred to above. That correspondence urged the Applicant to take positive action to resolve the matter.
5. No action was taken in response to that letter, although the Applicant gave evidence that he had no recollection of having received the letter. In my view, the letter or the failure to act on the letter, does not take the matter any further. Ultimately, it is a question of whether a reasonably competent private building survey would have forced a final inspection in circumstances where the regulatory regime does not prescribe that course of conduct. As I have already indicated, the evidence does not point to that being the case.
6. Mr De Chateau gave evidence that as managing director of a building surveying company in which he practised, a procedure was put in place where files were reviewed on an irregular basis to determine what permits had lapsed. However, he conceded that this process was carried out in order for the firm to close its books, rather than to comply with any regulatory requirement. He did say, however, that he would attempt to make the final inspection, even after the permit lapsed, provided the owner was agreeable to that occurring. He said that it was a bit of a negotiation process.
7. Mr Goddard was asked what he considered to be good practice when a building permit lapsed. He answered that it was always difficult for a registered building surveyor because he or she had to rely upon the building practitioner to notify whether the work comprising the stage was complete. He suggested that there should be some process to alert the registered building surveyor that the permit was about to lapse. He was asked whether he was familiar with the Practice Note dealing with lapsed building permits. He answered that it was not complied with that much. He said there were a lot of outstanding building permits that had not been finalised. He further said that it was not a common practice of registered building practitioners to initiate inspections on their own volition.
8. Similarly, Ms Kammergruber was asked what would be good practice in circumstances where the building permit was due to expire but the work had not been completed. She answered that it was her personal view, that prior to the permit lapsing; the registered building practitioner surveyor should contact the owner and remind the owner of the completion date. If the work could not be completed by that date, the registered building surveyor should advise the owner to apply for an extension. She was asked how that conduct fitted within good practice. She answered it would be good practice to be aware of when the building permit was about to expire. However, she said that was not always common practice given the role of registered building surveyors and the work in hand. She conceded that building permits do lapse. She also conceded that it was not common practice for a registered building surveyor to contact an owner prior to the building permit lapsing.
9. Having regard to the fact that the regulatory scheme does not impose any positive obligation on private building surveyors to notify owners or building practitioners that the relevant building permit is about to expire or any requirement to conduct a final inspection prior to a building permit lapsing, coupled with the evidence of all witnesses that it is not common practice to initiate or force a final inspection without notice that the work has been completed, I am of the view that the BPB has failed to establish that the Applicant has acted either in an incompetent or unprofessional manner by failing to be more proactive and not initiate a final inspection either prior to or after the building permit lapsed. Therefore, based on the evidence before me, I find the Mooroolbark Allegation unproven.
10. My finding should not be regarded as an endorsement for such conduct. Clearly, a more diligent private building surveyor would notify the homeowner or building practitioner that the building permit is due to expire and, as Mr De Chateau suggested, negotiate with the homeowner or building practitioner to take appropriate steps to either complete the building work or apply for an extension. However, I do not consider that a failure to be diligent necessarily equates to incompetence or unprofessional conduct. Here, the legislature has seen fit not to impose any positive obligation on private building surveyors to force a final inspection prior to the permit lapsing. The only regulatory requirement concerning this issue is to notify the Victorian Building Authority, in accordance with reg 322, of any permits that have lapsed during each reporting month.

1. As indicated above, the Hampton Allegation concerns the granting of a building permit to an owner builder in circumstances where it is alleged that the value of work stated on the application is grossly undervalued.
2. The importance of accurately stating the estimated value of the proposed building work is heightened in the case of owner builders, given that the Act imposes restrictions on building work undertaken by owner builders where the value of work is more than $12,000. In that regard, s 25B of the Act states:

An owner of land or a building must not carry out domestic building work as builder on that land or in respect of that building if the cost of the work (estimated in accordance with section 201) is more than $12,000 unless the owner -

(a) has been issued with a certificate of consent for the work; or

(b) is a builder who is registered under Part 11; or

(c) is an architect which is registered under the Architects Act 1991; or

1. In the present case, the application for a building permit stated that the value of work was $11,000. It further stated that the proposed works comprised the construction of a carport and gazebo. On 8 September 2009, the Applicant issued a building permit noting that the approved works were GAZEBO AND CARPORT. No certificate pursuant to s 25B of the Act was provided, given that the Applicant was satisfied that the approximate value of the proposed building was $11,000.
2. There are two issues which arise for consideration. First, the Applicant contends that he was under no obligation to conduct a cost assessment of the proposed works. By contrast, the BPB contends that the Act imposes an obligation on the Applicant to ensure that the stated value of the proposed building works is reasonably accurate. In that regard, it says that the value of the building works, the subject of the Hampton Permit exceeded $50,000.
3. Second, the Respondent contends that the value of the proposed works measured by the BPB is inflated because it includes a brick fence that was never part of the Hampton Permit. However, the BPB contends that the brick fence forms part of the Hampton Permit because it is depicted in the architectural and engineering drawings approved by the Applicant, notwithstanding that it is not specifically mentioned on the Hampton Permit itself.

1. The architectural drawings submitted with the application for the Hampton Permit clearly depict the construction of a brick fence with red gum sleeper infills positioned above a brick dwarf wall and between the brick piers. The architectural drawings also set out engineering detail concerning the construction of the brick fence, including details of its footing design.
2. Moreover, the documents forming part of the permit application comprised a letter from Bayside City Council, indicating that dispensation was given in respect of two aspects of the proposed construction; namely, the setback of the proposed carport and the height of the proposed front fence. That dispensation was noted on the Hampton Permit issued by the Applicant.
3. The Applicant contends that the front fence does not form part of the Hampton Permit because the description of work on the Hampton Permit itself does not make specific reference to the brick fence. In my view, that argument is too simplistic. The description of work on a building permit may, in some cases, be general in nature. Every element of the proposed building work may not be mentioned specifically on the building permit. However, the architectural or engineering drawings will contain all details of the proposed work. In the present case, the architectural drawings were stamped as approved by the Applicant. In my view, that approval extended to all of the work depicted on that drawing. The express reference in the Hampton Permit to the dispensation given by the municipal council in respect of the front fence height, reinforces my view that the approved works extended to the construction of the brick fence. In particular, the building permit states:

The following bodies are reporting authorities for the purposes of the application of this permit in relation to the matters set out below:

Prescribed Reporting Authorities Matter Reported On Regulation

1. If the brick fence was not part of the approved works, there would be no need to mention that the municipal council has reported on the front fence height.
2. Moreover, in the Applicant's record of interview prepared by Ms Kammergruber, the following exchange is noted:

I said: On what did you base your decision or how do you conclude the estimate of $11,000 was adequate?

He said: Looking at the plan, I estimate that about $5K each for the carport and gazebo and about $1K for the front fence or $2K at most. Also the fact that the owner builder was going to undertake work would keep the building costs down.

1. The Applicant repeated that evidence during the course of this hearing. Given that statement, it would appear that the Applicant had formed the view that the construction of the front fence comprised part of the overall value of the works. In those circumstances, how can it be said that the brick fence was not part of the approved works?
2. Given the above, I find that the approved works included the construction of the brick fence as depicted in the approved drawings.

1. The Applicant gave evidence that at the time he received the permit application, he believed the building cost estimate was within the ballpark. He conceded, with the benefit of hindsight, that the building cost estimate was, in all likelihood, to be closer to $20,000.
2. The BPB called a number of witnesses going to that issue. Mr Buchanan, quantity surveyor, prepared a report in which he separately estimated the cost of the gazebo, carport and fence. He stated:

8.2 In my opinion the reasonable value of the gazebo work was $38,177 at September 2009 prices. Refer to appendix A for a detailed breakdown of the cost.

8.3 In my opinion the reasonable value of the carport was $16,775 at September 2009 prices. Refer to appendix B for a detailed breakdown of the cost.

8.4 In my opinion the reasonable value of the front fence was $7,674 at September 2009 prices. Refer to appendix C for a detailed breakdown of the cost.

8.6 I have been asked to identify the cost of materials. For this purpose I have identified the principal materials to be supplied for each item in my assessment and costed those materials.

8.7 In my opinion the reasonable value of the materials required for the gazebo was $12,514 at September 2009 prices. Refer to appendix D for a detailed breakdown of the cost.

8.8 In my opinion the reasonable value of the materials required for the carport was $5,961 at September 2009 prices. Refer to appendix E for a detailed breakdown of the cost.

8.9 In my opinion the reasonable value of the materials required for the front fence was $2,089 at September 2009 prices. Refer to appendix F for a detailed breakdown of the cost.

1. According to Mr Buchanan, the cost of materials alone exceeded $20,000.
2. The Applicant contended that the building cost estimate was low because the work was to be undertaken by an owner builder, rather than contracted out to a registered builder. In other words, the owner was either undertaking the physical labour himself or was contracting out each separate aspect of the works. Although the BPB conceded that the total cost of building would be less if undertaken by an owner builder, the fact remains that even if the work was undertaken by the owner, the value of materials alone almost double the estimate given in the application for the Hampton Permit.
3. Simple cost assessments were also prepared by Mr Goddard and Ms Kammergruber, with each concluding the estimated cost of the building work was in excess of $40,000. In that regard, Mr Goddard made the following comments in his witness statement adopted as his evidence in the proceeding:
   1. I have indicated in my statement that I valued the material and labour costs of the gazebo as being approximately $31,000.00. Further to my statement I also make the following observations from the approved plans forming part of the building permit:

- This structure was to be constructed on a concrete slab which included stiffening beams and reinforcement.

- The structure was to be enclosed on both the rear and side boundaries and was to include 3.0 m high fire rated walls on these boundaries.

- The structure was to be constructed with 190 mm x 45 mm F7 rafters with colourbond steel tray deck roof.

- The structure was going to be rendered and painted.

1. I have indicated in my statement that I value the material and labour costs of the carports being approximately $9,000.00. Further to my statement I also make the following observations from the approved plans forming part of the building permit:

- This structure was to be constructed on a concrete slab which included stiffening beams and reinforcement.

- The roof structure was to be a polycarbonate roofing material.

1. I have indicated in my statement that I value the material and labour costs of the front fence as being approximately $10,000.00. Further to my statement I also make the following observations from the approved plans forming part of the building permit:

- The fence was to be constructed with brick piers, being separated by a brick dwarf wall in between the piers and then an infill of red gum sleepers.

- The estimated cost of these works did not include the value of the sleeper infill.

- Footings were to be constructed to a depth of 600 mm.

- There was the inclusion of a gate within the fence area.

- The fence (including the gate) was to be approximately 11.55 metres in length.

1. Having regard to the evidence of Mr Buchanan, Mr Goddard and Ms Kammergruber, I am of the opinion that taking the most optimistic valuation, the cost of the works, including labour, was likely to exceed $40,000 if undertaken by a tradesperson or in excess of $20,000 if constructed by the owner himself. In either case, the stated estimated cost of the building work was grossly undervalued.

1. Ms Fitzgerald submitted that the Act did not impose an obligation on the Applicant to be satisfied that the building cost estimate was accurate. She argued that there was no requirement, mandatory or otherwise, imposed on the Applicant to certify the building costs estimate in the permit application or to reach any particular level of satisfaction about the accuracy of those building costs.
2. I do not accept that submission. In my view, the argument undermines the important role that building surveyors play in the collection of the building permit levy, which in itself, is a critical component of the regulatory framework for the building industry within Victoria.
3. Section s 201 of the Act imposes a building permit levy of .064 cents for every dollar of the cost of building work. Subsection (2) states that the levy is payable by the applicant for the building permit and must be paid before the building permit can be issued. Importantly, subsection (5) states:

The relevant building surveyor must estimate the cost of the building work for which the application is sought (including the cost of labour and materials), having regard to the information given under subsection (4)(a) or (b), and must without delay give written notice of the estimate and the amount of levy payable to the applicant.

(4) In addition to anything else required to be stated in an application for a building permit, the application must state -

(a) the contract price for the building work (including the cost of labour and materials), if there is a contract for the work; or

(b) in any other case, sufficient information to enable the relevant building surveyor to estimate the cost of the building work (including the cost of labour and materials).

1. In my view, the Act clearly imposes an obligation on building surveyors to conduct some evaluation of the cost of the proposed building work. In that regard, they may have regard to the contract price, if a contract exists. Alternatively, if there is no contract there must be sufficient information available to enable the building surveyor to estimate the cost of the building work. A figure stated in the permit application, of itself, may not constitute sufficient information. Ultimately, the building surveyor must exercise his or her judgment as what is sufficient information.
2. In the present case, the Applicant gave evidence that he was relatively familiar with the type of construction proposed in the building permit application and he believed that it was within the ballpark for the cost of doing that type of work. He gave evidence that he later got someone to look at the proposed works and they confirmed that they could undertake the works for around $15,000. Regrettably, that person was not called to give evidence in this proceeding. Moreover, the evidence is contrary to the direct evidence of Mr Buchanan, Mr Goddard and Ms Kammergruber, which I accept on this issue.
3. Ms Fitzgerald further argued that the Applicant's conduct did not fall short of the standard observed by members of the profession of good repute and competency because:
   • (a) Building surveyors have only 10 days under the regulations to decide permit applications, which does not allow sufficient time to obtain a quantity surveyors report.
   • (b) The fees charged by building surveyors could not justify engaging the services of a quantity surveyor;
   • (c) The error in accepting the figure of $11,000 was not intentional.
4. Mr Goddard gave evidence that he used Rawlinsons Construction Cost Guide to provide a simple estimate of the cost of construction. That publication gave prices based on the floor area of different types of structures to be constructed. In relation to the gazebo, Mr Goddard used the prices applicable to the construction of a garage, given the similarity in construction. He calculated the estimated cost to be approximately $33,000 based on the rates in that publication. In relation to the carport, he calculated a figure of approximately $9,000, again based on rates set out in that publication. In relation to the brick fence, he requested a verbal quotation from a contractor, which he said equated to $9,500, excluding the red gum sleeper infills.
5. Mr Goddard's evidence demonstrates that it is not necessary to engage a quantity surveyor in order to make simple assessments of the value of building work. Estimating guides, such as Rawlinsons Construction Cost Guide, offer a quick reference resource, in order to reasonably scrutinise whether the stated value of work is truly within the ballpark.
6. In my view, a reasonably competent building surveyor would have been cautious to accept $11,000 as being the reasonable value of the proposed building work, even if one excludes the brick fence as part of the cost assessment. As highlighted by Mr Goddard, the architectural and engineering drawings depict comprehensive building structures. The evidence of Mr Buchanan, which I accept, clearly demonstrates that the cost of construction far exceeds the stated figure of $11,000. That should have been obvious to the Applicant.
7. In the absence of there being any building contract, some assessment should have been done prior to the Hampton Permit being issued to verify whether the stated cost of the proposed building work represented a fair assessment of the value of the works. Alternatively, it was open for the Applicant to have requested further information as to how the figure of $11,000 was calculated or derived. The Applicant failed to adopt either of these two measures.
8. Therefore, when considering what options were open to the Applicant, I find that the Applicant's conduct did fall short of the standard observed by members of the profession of good repute and competency, contrary to reg 1502 of the Regulations. That being the case, I find the Hampton Allegation proven.

[1] The second allegation concerning the Mooroolbark Permit is referred to as Allegation 3 in the Notice of Decision of the BPB dated 30 May 2013.

[2] The Mooroolbark Allegation is referred to as Allegation 2 in the Notice of Decision of the BPB dated 30 May 2013.

[3] The Hampton Allegation is referred to as Allegation 1 in the Notice of Decision of the BPB dated 30 May 2013.

[6] [1927] SAStRp 9; [1927] SASR 58.

[8] [1999] VSC 113.

[9] [1990] 1 Qd. R 498 at 507.

[10] [1999] VSC 113 at [23].

[12] [2014] VSC 272.

[13] See the Act s 2 and Part 12, Division 5.

[18] [2014] VSC 272 at [29].