1. Under section 51(2)(d) of the Victorian Civil and Administrative Tribunal Act 1998:
   • (a) the decision of the respondent not to grant the applicant registration as a commercial builder - limited to construction of low-rise building work is set aside; and
   • (b) the matter is remitted to the respondent with a direction that the applicant be granted registration as a commercial builder - limited to construction of low-rise building work subject to such condition or conditions as the parties agree are necessary or appropriate to limit the applicant to the construction, transportation and installation of transportable commercial buildings of the type with which he has appropriate experience and that is required in those geographic regions in which his business ordinarily operates.

1. The parties have liberty to apply for further directions or orders if they are unable to agree as to the condition(s) to be imposed on the registration in accordance with order 1(b).

1. Mr Paul Freckleton is a registered domestic builder[1] located in the Sunraysia region who, in partnership with his wife, has carried on a business known as Coolibah Cabins since 2011. That business specialises in the construction of transportable cabins and buildings which can be used in both domestic and commercial settings, including park cabins, dependent person units, group accommodation, offices blocks, etc.
2. Mr Freckleton seeks review of a decision by the Victorian Building Authority (VBA) refusing to grant him registration as 'commercial builder - limited to the construction of low-rise building work' (CB-L registration). He contends that the VBA should grant the registration and impose conditions limiting the scope of the registration to the types of construction that he actually does, and which is consistent with the needs of the community in the Sunraysia region.
3. The VBA contends that its decision should be affirmed, either because:
   • (a) the Tribunal (stepping into the shoes of the VBA) does not have any discretion to do anything other than refuse the application; or
   • (b) if a discretion to impose conditions in the manner sought exists, the Tribunal should not do so having regard to the purpose of the legislation and VBA's policy that it should only be exercised in special circumstances where there is a demonstrated industry need.

1. On 9 October 2018, Mr Freckleton submitted an application for CB-L registration.[2] He did so as, unlike the position in New South Wales, his domestic building licence does not permit him to construct transportable buildings in Victoria for commercial use. When he does construct a building for commercial use, eg. a site office or library, the client needs to obtain a building permit as an owner-builder. Also, he cannot tender for local council or other government contracts involving such buildings, as those bodies require evidence of registration as a commercial builder.
2. Mr Freckleton's application was rejected by Ms Jayne McCubbin, registrar at the VBA, on 27 March 2019.[3] The reason given for the rejection was that the VBA was not satisfied that Mr Freckleton held the prescribed qualifications for registration as set out in Schedule 9 of the Building Regulations 2018 (Vic) (Regulations). It was said that Mr Freckleton lacked academic qualifications and failed to demonstrate that he had adequate practical experience and knowledge to carry out the construction of commercial buildings and structures up to 15 metres in height, and with bulk excavations up to a depth of three metres.
3. The rejection of Mr Freckleton's application was the subject of an internal review conducted under Part 11, Subdivision 2 of the Building Act 1993 (Vic) (Act). On 3 May 2019, Mr Michael Vickers (Manager, Internal Review) affirmed the original rejection (IR Decision).[4] In so doing, Mr Vickers noted that:
   • As Mr Freckleton did not have any academic qualifications, he was relying on the 'equivalent qualification' criterion.[5]
   • There were 'several important gaps' in Mr Freckleton's practical experience and the activities authorised by the CB-L registration relating to construction of steel portals for large buildings, basement construction, multistorey construction and construction of 'Type B' buildings.[6]
   • While accepting that basement construction and multistorey construction are rare in north-western Victoria and could be 'appropriately managed by the imposition of a condition', the conditions required in order to match the CB-L registration to Mr Freckleton's experience 'go significantly beyond this' and were not considered appropriate 'having regard to the current policy position'.[7]
4. On 8 May 2019, Mr Freckleton applied to the Tribunal for review of the IR Decision under section 186 of the Act.[8] Under section 187 of the Act, after hearing the matter, the Tribunal can affirm, amend or substitute another decision for the decision under review. However, for similar reasons to those articulated in Cusmano v Commissioner of State Revenue,[9] I consider that the Tribunal can also exercise the power in section 51(2)(e) of the Victorian Civil and Administrative Tribunal Act 1998 to set aside a decision of the VBA and remit it to the authority for reconsideration with directions or recommendations.
5. The matter came before me for hearing on 5 December 2019. Mr Freckleton, Ms McCubbin and Mr Wayne Wilkie (a building surveyor who works with Mr Freckleton) each gave evidence and were cross-examined.
6. Relevantly, Mr Freckleton concedes that he does not have practical experience in three areas which are covered by a CB-L registration, being basement excavation, multistorey construction exceeding nine metres and concrete panel construction. However, Mr Freckleton contends that section 171H of the Act:
   • confers a discretion on the VBA allowing it to impose conditions limiting his CB-L registration to exclude those matters where he does not have practical experience; and
   • should be exercised to impose such conditions having regard to all of the facts and circumstances.
7. Mr Freckleton has suggested the following condition be imposed on any registration:

restricted to building works not exceeding 9 metres in height, excluding concrete panel construction and basement excavation

1. Mr Brnovic, who appeared for the VBA, handed up the Respondent's Legal Contentions dated 5 December 2019 (Respondent's Contentions) at the hearing. The VBA contends that:
   • As Mr Freckleton does not hold the mandatory qualifications required by section 171 of the Act, the VBA (and the Tribunal on review) must refuse to grant the registration.[10] In this regard, the VBA relies on a decision of this Tribunal in Krause v Medical Board of Australia (Krause)[11] - albeit in relation to different legislation - for the proposition that it does not have a discretion to conditionally register Mr Freckleton in such circumstances.
   • Even if the Tribunal had the power to conditionally register Mr Freckleton, it should not do so because the Tribunal should apply the VBA's policy, being certain 'Procedure Business Rules' described in Ms McCubbin's affidavit (Policy).[12] The Policy as described provides that:[13]

the VBA will not implement a condition to facilitate registration in circumstances where an individual applicant for registration does not meet the prescribed qualifications and experience required by the Act and Regulations.

It is the VBA's position that it cannot use its conditions discretion to [do so] ... because the conditions discretion should not be used to create new categories or classes of registration beyond what is prescribed in the Regulations.

The VBA would only depart from this position if special circumstances exist which would justify the creation of a business rule relevant to a particular category or class of registration.

1. At the end of the hearing, I reserved my decision and made orders:
   • (a) for the VBA to produce a copy of its procedure business rules relating to conditions on registration, which Ms McCubbin indicated had been published in November 2019 (2019 Written Policy, which the VBA filed on 6 December 2019);[14] and
   • (b) granting liberty for Mr Freckleton to file short written submissions in relation to the relevance or otherwise of the decision in Krause (Final Submissions, which were filed on 12 and 20 December 2019).

Is the VBA (and the Tribunal on review) obliged to refuse registration?

1. Whether the VBA (and the Tribunal on review) is obliged to refuse registration, or has a discretion to grant a conditional registration, depends on the interpretation of the applicable legislation, particularly the interaction between sections 171 and 171H of the Act.
2. Section 171(1)(a) of the Act provides that the VBA must register an applicant as a building practitioner in a category or class if it is satisfied that the applicant 'holds the prescribed qualifications for the registration' or 'holds a qualification that the [VBA] considers is ... equivalent to a prescribed qualification'.
3. Section 171(2) of the Act provides that the VBA must refuse an application if it is 'not satisfied of the matters specified in subsection (1)'.
4. Section 171H provides that the VBA must impose on a registration any prescribed conditions, and may impose on a registration any other conditions that the VBA considers appropriate. It is not contended that there are any prescribed conditions applicable in the present case.

Properly construed, s 171H does not, either expressly or by implication, abrogate the need for an applicant to have complied with the eligibility criteria prescribed in s 171(1). The imposition of conditions under s 171H is predicated on an individual applicant having first satisfied the criteria for registration.

That conclusion is inescapable having regard to the text, purpose and context of both ss 171(2) and 171H.

1. The VBA goes on to set out six reasons why this is so, as briefly summarised below:[16]
   • (a) Section 171H refers to imposition of conditions on registration, where registration must mean registration under section 171.
   • (b) There is only one pathway to registration, and nothing to suggest that an applicant may be eligible for registration via conditions.
   • (c) Section 171H permits conditions that are 'appropriate for the registration' and, as the CB-L registration already sets maximum heights and depths for commercial building work, conditions that alter those maximums would not be appropriate.
   • (d) Construing section 171H to enable the VBA to disregard the prescribed qualifications would 'frustrate' the statutory purpose of protecting the public. In this regard, the VBA notes that the power to impose conditions implemented recommendations made by the Victorian Auditor-General's Office (VAGO) following an inquiry into the building industry, highlighting the need for 'minimum standards' as a 'baseline for practitioner competency'.[17] The VBA says this is supported by the second reading speech where the responsible minister said:[18]

VAGO also found that the current registration system does not ensure that the only practitioners who are registered are qualified, competent and of good character.

The bill therefore allows the authority to attach conditions to registration. This means that registrations will be able to be more effectively restricted to what work the authority considers a practitioner is competent to perform. ... This will make the registration system more capable of reflecting the particular competencies of different building practitioners and address the VAGO finding.

The VBA says that the conditions discretion 'relates to competence of the registered building practitioner', not qualification.

(e) To allow the VBA to confer a registration outside the scheme established by the Act by administrative decision 'would be to allow the regulator to create its own regime for registrations despite the Act'. The Parliament could not have intended to allow the stream to rise above its source.

(f) Registration by condition would be contrary to the objectives of the Act because it would 'promote arbitrary and inconsistent decision-making' and 'promote confusion within the public as to the qualifications of building practitioners'.

The VBA refers to the decision in Krause, where Vice President Judge Jenkins had occasion to consider a similar issue in relation to the registration of a surgical assistant and observed that:[19]

registration by way of conditions, notwithstanding that the applicant does not satisfy the basic requirements of general registration, would subvert the registration system.

... The circumstances which may give rise to appropriate conditions attaching to registration, of the kind outlined above, do not relate to a deficiency in prescribed eligibility.

The VBA contends that the Tribunal should follow the decision in Krause on the basis of comity and because her Honour's reasoning is 'plainly right'.

1. In his Final Submissions filed on 12 December 2019, Mr Freckleton responds to the VBA's submissions as follows:
   • (a) Parliamentary intention[20] - The changes that were introduced in 2016 (including the conditions discretion) were to implement essential reforms to the consumer protection framework for domestic building and dispute resolution, while consolidating the regulation, registration and discipline of building practitioners in the VBA. Section 171H gives effect to Parliament's intention to effectively restrict registrations to work that a practitioner is competent to perform.[21]

This construction is consistent with the IR Decision which 'conceded the imposition of a condition ... excluding basement construction may be appropriate'.

(b) Objectives of the Act[22] - Granting conditional registration would be consistent with the objectives and intent of the Act and Regulations as it would promote:

• safety and quality, by ensuring any work Mr Freckleton undertakes is 'within the parameters of [his] skills, qualifications and experience';
• national building standards, as the non-residential building construction he is engaged in would be 'in full compliance with any appropriate conditions or restrictions';
• enhanced amenity of buildings, because as a registered builder he would be 'personally accountable for quality and compliance'; and
• competition and cost effective construction, as it would make available a 'highly cost effective non-residential building option'.

By contrast, the refusal to grant the conditional registration is contrary to the objectives of the Act, specifically sections 4(1)(e) ('to facilitate the cost effective construction ... of buildings') and 4(1)(g) ('to aid the achievement of an efficient and competitive building ... industry').

(c) Consumer clarity and protection[23] - It would not be easier or more difficult for consumers to understand what work a builder can or cannot undertake whether conditions are imposed on a 'full registration' or in the manner proposed. In any event, clarity would be 'delivered through the current permit approval system'.

(d) Categories of building registration[24] - Mr Freckleton is qualified to carry out work in 30 out of the 44 categories of builder contemplated by the Regulations,[25] and commercial building registration would permit him to carry out work in an additional nine categories, which would be 'clearer and more transparent to customers'.

Further, the requirement for an applicant for CB-L registration to show experience building up to 15 metres in height, to undertake concrete panel construction and excavations to a depth of three metres are all matters that are 'determined by the VBA', rather than being provided for in the Act or Regulations. In north-western Victoria, buildings generally do not have basements, exceed nine metres or involve concrete panels. As such, the requirements for experience of such construction makes it 'virtually impossible' for a builder in that region to gain the necessary experience.

(e) Relevance of Krause[26] - Unlike the health practitioner legislation considered in Krause, the Act 'allows registration where formal specified qualifications are not held but suitable experience or alternative training, certificates or similar exist'. What Ms Krause sought in that case was registration as a general medical practitioner subject to a condition restricting her to work as a surgical assistant, with constant supervision. This is 'akin to an apprentice seeking full registration as a commercial builder with a condition', which is distinguishable from Mr Freckleton's situation as the holder of an unlimited domestic building registration and who is able to and does practice as a commercial builder in New South Wales.

1. The first issue to be addressed is whether Mr Freckleton satisfies the requirements for registration in section 171(1)(a) of the Act.
2. The prescribed qualification for the purposes of CB-L registration (limited to construction of low rise building work) are set out in clause 21 of Schedule 9 of the Regulations, which require the successful completion of a course on construction and at least three years' of practical experience.
3. The first three courses are the same as the prescribed qualifications for commercial builder (unlimited) registration. The last course is a diploma of building and construction (building) from a registered training organisation that includes certain 'required units of competency', being to 'apply building codes and standards to the construction process for large building projects' and 'apply structural principles to the construction of large, high rise and complex buildings'.
4. In his application, Mr Freckleton crossed out the section on qualifications relating to completion of a course, and he concedes that he does not have any such qualifications. It follows that he cannot satisfy the requirements of section 171(1)(a)(i) of the Act.
5. The question is then whether, having regard to any qualification he does hold and any certificate, authority or experience, Mr Freckleton holds qualifications that are 'equivalent to a prescribed qualification'.
6. While there is no direct evidence of the scope of the content of the four courses listed as the prescribed qualifications, it can be inferred from the competencies for the last course that each of the courses must cover large, high rise and complex buildings.[27]
7. I also infer that the reference to competencies in large, high rise and complex buildings would cover construction of buildings exceeding nine metres in height, having basements and involving the use of concrete panels.
8. As Mr Freckleton concedes that he does not have any experience in the matters mentioned in the preceding paragraph, it necessarily follows that he does not satisfy the requirements for registration under section 171(1)(a)(ii) of the Act, at least in the absence of any conditions limiting the scope of his work.
9. The VBA contends it necessarily follows that the VBA (and the Tribunal on review) must refuse the application for registration under section 171(2) of the Act, and that the conditions discretion in section 171H cannot be used to subvert the minimum qualification requirements.
10. Some support for VBA's contention can be found in the decision of Krause. However, in my view, Krause should not be followed in the current proceedings for the following reasons:
    • Krause concerned different legislation,[28] regulating the medical profession, and where the practitioner concerned had actually failed a number of tests to qualify for registration.
    • The legislative scheme considered in Krause did not have an equivalent to section 171(1)(a)(ii) of the Act permitting qualification by experience.
    • The interpretation adopted in Krause was rejected by the Queensland Court of Appeal in Chinese Medicine Board of Australia v Lee (Lee).[29]
11. In Lee, the Court indicated it did not accept the reasoning in Krause for three reasons:[30]
    • No attention had been paid to the significance of the words in the relevant legislation that the relevant board 'may decide the individual is eligible for general registration in the profession by imposing conditions', which made it 'clear that the eligibility is achieved per force of the imposition of conditions'.
    • The three circumstances where the Tribunal had determined that conditions might be applied[31] 'do not appear anywhere in the text of the legislation' and 'cannot circumscribe the general discretion'.
    • As the relevant provision 'expressly confers a discretion' to achieve eligibility for registration by imposing conditions, it cannot subvert the registration system of which it is part.
12. Of course, a difference in the scheme under the Act (when compared to that considered in Lee (and Krause)) is that there is no express statement that the VBA can 'decide the individual is eligible for ... registration ... by imposing conditions' or otherwise clarifying the interaction between sections 171 and 171H.
13. However, when read in context, I do not consider that it is correct to say (as submitted by the VBA) that section 171H(1)(b) of the Act presupposes qualification under section 171 before the discretion is enlivened. This is because section 171H(1)(a) contemplates that there might be prescribed conditions that are mandatorily imposed such that they automatically operate to condition any registration under section 171.
14. The approach to interpretation pressed by the VBA in the current proceeding is also inconsistent with:
    • The concession in the IR Decision that the condition discretion could have been appropriately exercised to exclude basement and multistorey construction because they are 'rare in north-western Victoria'.[32]
    • The recognition in Ms McCubbin's affidavit that the condition discretion could be used 'if special circumstances exist which would justify the creation of a business rule relevant to a particular category or class of registration'.[33]
    • The oral evidence given by Ms McCubbin that the condition discretion has actually been exercised to allow registration of building surveyor (limited), with conditions limiting such surveyors to domestic building alone. In this regard, the following information appears on the website of the VBA:[34]

To help alleviate the pressure of entry and support registration retention, the VBA is now considering applications for the classes of Building Surveyor (Limited) and Building Inspector (Limited), where the applicant's practical experience is restricted to class 1 and 10 buildings.

The VBA has also formalised its position regarding the consideration of applications in the category of Building Inspector (Limited), again, where the applicant's practical experience is restricted to class 1 and 10 buildings.

Previously, to obtain registration as a Building Surveyor (Limited) or a Building Inspector (Limited), applicants needed to demonstrate work experience in both commercial and domestic buildings.

This change is being implemented to reflect current industry practices, as building surveyors and inspectors are increasingly specialising in either commercial or domestic work. The change will also assist with career progression from building inspector to building surveyor and support the supply of registered building practitioners in Victoria.

... To obtain registration, these applicants will still need to demonstrate that they hold the required level of knowledge and experience in building surveying or inspecting work relevant to class 1 and 10 buildings.

Suitably qualified and experienced Building Surveyor (Limited) applicants will be restricted to class 1 and 10 buildings up to three storeys in height, with a maximum floor area of 500m2 excluding basements.

1. The difficulty for the VBA is that it effectively contends that what Mr Freckleton seeks is beyond its power, but that what it has otherwise done or would envisage doing is within its power, based on limitations[35] that do not in fact exist in the legislation. This is not tenable.
2. In my view, sections 171 and 171H of the Act do permit conditional registration.
3. I consider that this approach to interpretation is consistent with:
   • (a) the reference in the second reading speech to 'allow[ing] the authority to attach conditions to registration ... effectively restrict[ing a practitioner] to what work the authority considers [that] practitioner is competent to perform'; and
   • (b) the requirements of section 32 of the Charter of Human Rights and Responsibilities Act 2006 to interpret legislation compatibly with human rights. In this case, to adopt the interpretation pressed by the VBA would not be consistent with the right to equality before the law enshrined in section 8 of that legislation in circumstances where others have been permitted to obtain conditional registration.

Should the power to impose conditions be exercised?

1. Having determined that the VBA does have (and so the Tribunal stepping into its shoes can exercise) a discretion to grant conditional registration, the question is whether it should do so.

1. The VBA submits that the Tribunal should decline to impose the conditions as proposed by Mr Freckleton. It says that it is not appropriate to do so because:
   • (a) The proposed conditions 'meaningfully deprives the class of registration of its authority'.[36]
   • (b) Registration is designed to facilitate protection of the consumer, not the commercial interests of established builders like Mr Freckleton.[37]
   • (c) Mr Freckleton has indicated that he is unwilling to undertake any of the prescribed qualifications or to seek experience.[38]
   • (d) Conditions should not be used to differentiate builders in 'different regions or, without sufficient evidence, on the basis of the profile of a market'.[39]
   • (e) The proposed conditions are 'vague, uncertain and unclear to lay members of the public'.[40]
   • (f) The Tribunal should apply the VBA's Procedure Business Rules as they are clear government policy and there are no cogent reasons to depart from them, and Mr Freckleton has not established that 'special circumstances' exist based on that policy.[41]

The circumstances that Mr Freckleton relies upon do not compel the imposition of the proposed conditions as, at its highest, the evidence of Mr Freckleton is that:[42]

there is a significant market for his services in [the] Sunraysia [region], ... no real market to construct buildings over nine metres or with basements [in that region], it is impracticable to gain the required experience, and reliance on existing arrangements to construct the buildings he wants to, is unsustainable.

This does not suggest the condition is necessary to 'allow the building industry to function efficiently and safely'[43] or 'aid the achievement of an efficient and competitive building industry'.[44]

Rather, the imposition of the condition would 'jeopardise the integrity of the building industry in the eyes of the public due to the State giving no real effect to s 171(1)(a), 171(2) and Schedule 9 to the Regulations'[45] and 'would be confusing, vague, unclear and reli[ant] on the ability of consumers to know what the condition does and does not authorise'.[46]

1. Mr Freckleton contends that the VBA policy 'has the practical effect of nullifying s 171H'[47] and, that instead, the discretion 'can and should be exercised in the current situation where the prescribed qualifications and experience requirements in part cannot be satisfied for good reason and/or other special circumstances exist'.[48]
2. Mr Freckleton submits the special circumstances which should be taken into account in present circumstances are as follows:[49]
   • (a) The only reason he does not have the experience in the three areas of construction to be covered by the condition is that that type of work is rarely (if ever) undertaken in north-western Victoria where he operates and builds.
   • (b) Concrete tilt slab construction and basement excavation are not relevant for transportable building construction.
   • (c) Demand for transportable non-residential buildings is increasing.
   • (d) His business supplies such buildings to remote rural communities and geographically isolated businesses.
   • (e) The product he produces is 'exceptionally cost effective' due to the construction method and the geographical location of the business and its customer base.
   • (f) The lack of demand for (and consequent lack of opportunity to gain practical experience in) construction or excavation of basements, etc.
3. The granting of conditional registration would not, in Mr Freckleton's submission, adversely affect the quality, standard or safety of non-residential construction in north-western Victoria 'as there are sufficient safeguards in the permit approval system to protect the public' by ensuring that he only undertakes projects that he is qualified and experienced to undertake.[50]
4. Mr Freckleton notes that the current position, where any commercial transportable buildings he produces are for owner-builders under section 24B of the Act, is undesirable as 'it places accountability for the quality of work carried out on the owner builder rather than the person who actually undertakes the building activity'.[51]
5. In so far as the 2019 Written Policy is concerned, Mr Freckleton contends it is not relevant as it did not exist at the time of the decision about his registration.[52] Further, he submits it is unfair for the VBA to rely on the 2019 Written Policy when it was only produced after the hearing. In any event, he says the policy supports his case that section 171H does allow the VBA to 'exercise its discretion to issue a registration subject to conditions where the applicant does not quite meet the requisite skills and experience for registration of a particular type'. Rather, he says the VBA 'is required to give consideration to special circumstances and factors, particularly wider industry trends' which, in his case, must be considered in the context of a business in a remote rural area without construction activity of the type sought to be covered by the conditions.
6. As already noted at [19(b)], Mr Freckleton considers that the imposition of the proposed conditions is consistent with the objectives and intent of the Act.

The approach to adopt when considering the exercise of a discretion

1. I have had occasion in the past to consider the role of the Tribunal when considering the exercise of a broad discretion, albeit in a state taxation rather than builder registration context.
2. In South Wharf Towers Pty Ltd v Commissioner of State Revenue,[53] I made the following observations:[54]

In Tadcaster Sorrento Pty Ltd v Commissioner of State Revenue (Tadcaster Sorrento),[55] Judge Harbison (in her honour's capacity as a Vice President of VCAT) considered the Tribunal's role in relation to the exercise of a discretion under state tax legislation,[56] stating:[57]

I have approached this question [regarding the exercise of the discretion] from the perspective that given the nature of my enquiry, it is not appropriate for either party to bear any general burden of proof. Of course, where facts are asserted and relied on by a party, that party bears the onus of proving those facts. ... my task is to take into account all relevant matters and exercise the discretion anew.

After quoting from the decision of Menzies J in Giris Pty Ltd v Federal Commissioner of Taxation,[58] Judge Harbison observed:[59]

So I must be guided by the purpose and policy of the Act, excluding fanciful or farfetched interpretations of that policy in exercising what might otherwise appear to be a discretion without any boundaries.

1. In that case, I exercised the relevant discretion,[60] paying due regard to the applicable statement of government policy in line with the Re Drake and Neat Domestic Trading Pty Ltd v AWB Ltd.[61]
2. By contrast, in Pitard and Others v Commissioner of State Revenue,[62] I refused to exercise a discretion not to impose stamp duty (if, contrary to my view, such a discretion existed).
3. In that case, I noted other relevant decisions on the nature of the exercise of a discretion:[63]

In NT Tourism Holdings, Mildren J noted:[64]

[the] principle of administrative law that every person entrusted with a discretion granted by statute must exercise it in accordance with law and in accordance with the purposes for which the discretion is given. Where the power to make an administrative decision is given in broad terms, the question of whether or not the action taken is within power is to be determined by implication from the subject matter, scope and purpose of the Act ...

One of the authorities provided by the parties in their joint book of authorities was Challenger Listed Investments Ltd (as trustee for Challenger Diversified Property Trust v Commissioner of State Revenue[65] (Challenger).

In that case, the Court was dealing with the imposition of landholder duty under section 89C of the Duties Act, and the discretion then found in section 85(2) for the Commissioner to determine that an acquisition was exempt if 'satisfied that the application of this Part to the acquisition in the particular case would not be just and reasonable'.

Pagone J rejected the Commissioner's contention that the test was whether the outcome was 'anomalous or abnormal', saying there is 'no warrant for the substitution of ... the statutory formula', concluding that:[66]

What the Commissioner is compelled to consider is everything which may bear relevantly and probatively both for and against the exercise of the discretion and to do so by reference to the statutory criteria.

1. Consistent with the last decision referred to in that extract, there is no warrant for the discretion in section 171H to be limited to situations where 'special circumstances' or 'industry need' are found to exist as suggested by the Policy.[67] Rather, the role of the VBA (and the Tribunal on review) is to consider everything that is relevant and probative to the exercise of the discretion, guided by the purpose and policy of the Act.
2. So far as relevant, the purpose of the Act is to regulate building work, building standards and practitioners.[68] The express objectives of the Act include:[69]
   • (a) to protect the safety and health of people who use buildings and places of public entertainment;
   • (b) to enhance the amenity of buildings;
   • (c) ...
   • (d) to facilitate the adoption and efficient application of -
     • (i) national building standards; and
     • (ii) ...
   • (e) to facilitate the cost effective construction and maintenance of buildings ...;
   • (f) to facilitate the construction of environmentally and energy efficient buildings;
   • (g) to aid the achievement of an efficient and competitive building ... industry.
3. It is important to consider each of these matters in determining whether or not to exercise the discretion in relation to Mr Freckleton's application for registration.

1. If Mr Freckleton was seeking CB-L registration without the imposition of conditions, then it is apparent that the health and safety of building users could be negatively affected by granting registration in circumstances where he has neither the qualifications nor experience to undertake the excavation of basements or the construction of buildings with concrete panels or in excess of nine metres.
2. However, no issue has been taken by the VBA with respect to the safety of the transportable commercial buildings which have been constructed by Mr Freckleton.
3. Further, the evidence given by Mr Wilkie is that, having regard to Mr Freckleton's experience in the building industry and construction of numerous commercial buildings, 'there would be no safety impacts' if Mr Freckleton were granted conditional registration.[70] (While Mr Wilkie may not strictly qualify as an independent expert given that he does work with Mr Freckleton (and, in fact, recommended Mr Freckleton seek registration), his evidence can still be taken into account by the Tribunal.)
4. In my view, there is nothing in this objective that is inconsistent with the exercise of the discretion.

1. As a general proposition, the amenity of buildings is likely to be improved if they include basements (eg. for car parking) and are multi-storey, particularly where they are located in areas where land is scarce (eg. the Melbourne CBD).
2. However, the evidence of Mr Freckleton, and supported by Mr Wilkie, is that there is limited demand for such buildings in the Sunraysia region where Mr Freckleton operates. This is also supported by the concessions in the IR Decision.
3. As such, the granting of conditional registration will not impact (either way) on the amenity of buildings.

1. Again, no issue has been taken by the VBA with respect to Mr Freckleton's compliance with national building standards in relation to the transportable commercial buildings that he has constructed.
2. Further, Mr Wilkie's uncontradicted evidence is that conditional registration 'would not adversely affect non-residential building standards across the Sunraysia Region and surrounding areas'.[71]
3. It follows that granting conditional registration to Mr Freckleton is not inconsistent with the object of maintaining national building standards.

1. Mr Freckleton's evidence is that his '[t]ransportable style of construction is in high demand in regional areas' because of 'economies of scale in small regional towns [that mean] other methods of construction [are] not cost effective' having regard to the high costs of materials and labour associated with 'traditional methods'.[72] Further, the transportable buildings are 'much faster to deliver' and are 'often the only affordable/cost effective option available for small regional communities and geographically isolated businesses'.[73]
2. In his oral evidence, Mr Freckleton referred to two situations to illustrate the point:
   • The local council in Murrayville wanted a transportable library constructed. The project did not go ahead because there was no other commercial builder in the Sunraysia region available to take on the project, and the cost to have a transportable building constructed in Melbourne and then transported to and installed in Murrayville was 'too prohibitive'.
   • The local council in Mildura wanted to construct a transportable club building, and had 'no choice' but to pay $1.6 million, which compares unfavourably with his own price of around $700,000.
3. Mr Freckleton was not challenged by the VBA on this evidence, and no relevant evidence was given by Ms McCubbin in relation to this issue.
4. As indicated in the cases already referred to, there is no onus of proof on Mr Freckleton as such, although the Tribunal does need to be satisfied on the balance of probabilities as to the underlying facts sought to be established.
5. In the absence of any evidence to the contrary, I accept the evidence of Mr Freckleton in this regard and find that his method of transportable construction is more cost effective than:
   • (a) traditional methods of commercial building construction; and
   • (b) construction of transportable commercial buildings in Melbourne and their transportation and installation in the Sunraysia region.
6. In my view, this objective strongly supports the exercise of the condition discretion in the present case.

1. Neither Mr Freckleton nor Mr Wilkie gave any evidence about whether the transportable commercial buildings that Mr Freckleton builds are environmentally or energy efficient, particular when compared to buildings produced by traditional building methods.
2. Equally, there is no evidence to suggest (and no reason to infer) that a transportable commercial building is, by its nature, likely to be less environmentally friendly or energy efficient than a traditional building.
3. Accordingly, this is a neutral factor when considering the exercise of the discretion.

1. Mr Freckleton's evidence,[74] which I accept, is that because he does not have CB-L registration, he:
   • (a) cannot bid for government and council projects in Victoria; and
   • (b) cannot undertake private commercial projects in Victoria where the client is unwilling to act as an owner-builder.[75]
2. In oral evidence, Mr Freckleton indicated that while it might be possible for transportable commercial buildings to be constructed in New South Wales,[76] similar issues would be encountered to obtain a building permit for the installation of such buildings in Victoria.
3. In closing, Mr Brnovic (for the VBA) submitted that the evidence regarding competition is 'not sufficiently strong' noting that, in cross-examination, Mr Freckleton conceded that he has a good business and is projecting that business to increase regardless of CB-L registration.
4. Despite those contentions, in my view it can readily be inferred that, where the only business that provides transportable commercial buildings in the Sunraysia region is unable to be involved in certain projects, this affects the competitiveness of the building industry in that region as already illustrated in the second example referred to at [64].
5. Further, it can also be inferred that this also affects the efficiency of the building industry in that region given the evidence that transportable buildings are much faster to deliver, the limited number of commercial builders in the region[77] and the time it would take to transport to the region any buildings constructed in Melbourne.
6. In my view, this objective strongly supports the exercise of the condition discretion in the present case.

1. As previously noted, the VBA contends that the proposed conditions meaningfully deprives the class of registration of its authority. It appears that what is being suggested is that, by conditioning the CB-L registration to exclude certain types of commercial construction currently within that class, it effectively creates a new category of registration.
2. That proposition may well be correct. However, it is not apparent that declining to exercise the discretion supports any of the purposes or objectives set out in the Act. In my view, this is not a relevant consideration.
3. The VBA also contends that registration is designed to facilitate protection of the consumer, not the commercial interests of established builders like Mr Freckleton.
4. It is correct, of course, that the registration scheme under the Act is not concerned with the commercial interests of builders as such. However, cost-effectiveness, efficiency and competitiveness within the building industry are clearly objects of the Act. To the extent that conditional registration might advance those objects and, at the same time, produce commercial benefits for a builder, I do not consider the latter to be a matter that weighs negatively on the exercise of the discretion.
5. Another matter raised by the VBA is Mr Freckleton's unwillingness to undertake any of the prescribed qualifications or to seek experience to address the gaps identified by the VBA. In this regard, Mr Freckleton's evidence appears to be that it is uneconomical for him to take time out of his business to undertake commercial building qualifications or to spend time working outside the Sunraysia region where he could get exposure to those aspects of commercial construction where he lacks experience.
6. There is no suggestion by the VBA that Mr Freckleton is not appropriately qualified or experienced to undertake the construction and installation of the transportable commercial buildings he has in fact been producing. Rather, the VBA suggests that he should obtain additional qualifications or experience in relation to those aspects of commercial construction where he lacks experience.
7. The counter to the VBA's proposition is that it is unclear how requiring Mr Freckleton to obtain the qualifications or experience would advance the objects of the Act, particularly those concerned with cost-effectiveness, efficiency and competitiveness within the building industry given the evidence (which I have accepted) that there is limited call for those matters in the region in which Mr Freckleton operates.
8. Rather, it seems more likely that if Mr Freckleton was forced to take time out of his business in order to obtain additional qualifications or experience, the 'cost' of doing so would then need to be passed on to future clients, reducing the cost-effectiveness of his current approach and competition within the industry. It might also hinder efficiency by delaying projects while Mr Freckleton undertakes study or work in other places.
9. The VBA also says that conditions should not be used to differentiate builders in different regions or, without sufficient evidence, on the basis of the profile of a market.
10. It is true that the references in the Act to cost-effectiveness and competition are across the whole of the building industry rather than in respect of particular regions. However, in my view, addressing regional cost-effectiveness and competition is not inconsistent with those objects. Further, so far as the evidence is concerned, the Tribunal only needs to be satisfied on the balance of probabilities on the evidence before it.
11. The VBA suggests the proposed conditions are vague, uncertain and unclear to lay members of the public. In response, Mr Freckleton contends that any ambiguity could be appropriately addressed through the requirements to obtain building permits for any actual construction.
12. I think there is some merit to the contentions of the VBA. For example, the reference to 'building works' does not make clear what is covered (eg. construction, or installation (or both) of transportable buildings). Further, under cross-examination, Mr Freckleton conceded that his proposed conditions do not address all gaps identified by the VBA 'in their entirety'.
13. However, I do not see any deficiency in the proposed conditions as a reason to deny registration. Rather, it seems to me that the VBA ought to work with Mr Freckleton to determine conditions that would allow him to operate his business in a manner that promotes cost-effectiveness, efficiency and competition in the region, while also providing clarity and certainty to consumers.
14. Lastly, the VBA contends the Tribunal should apply the VBA's Policy as it is a clear government policy and there are no cogent reasons to depart from it, and Mr Freckleton has not established special circumstances exist based on that policy.
15. In this regard, I have already indicated that it is inappropriate for the VBA Policy to impose a requirement to prove 'special circumstances' before the condition discretion is exercised. To this extent, the Policy departs from the Act. Further, in my view, the current Policy pays insufficient regard to the matters that need to be considered as outlined above.
16. The legislature has seen fit to provide the VBA with a broad and unconstrained discretion. The VBA cannot, by adoption of a policy, restrict the operation of that discretion and disregard relevant and probative considerations consistent with the purpose and objects of the Act. As such, in my view, there are cogent reasons for this Tribunal on review to depart from the Policy.

1. Given my views that:
   • (a) two of the relevant considerations strongly support the exercise of the discretion to grant conditional registration; and
   • (b) the other considerations raised by the VBA do not point against such exercise,

I consider that the discretion ought to be exercised to grant Mr Freckleton's CB-L registration, subject to a condition or conditions to be determined.

1. In reaching this conclusion, I note that Mr Freckleton has been involved in the construction of transportable buildings for approximately nine years, and has been registered as a domestic builder (unlimited) for approximately five years. He has demonstrated experience in the construction and installation of transportable commercial buildings in both New South Wales (where his existing licence allows him to do so) and Victoria (where the client engages him as an owner-builder). There is no evidence before the Tribunal to suggest that Mr Freckleton is not sufficiently experienced to undertake the work for which he seeks conditional CB-L registration.

1. Given the issues raised by the VBA as to the clarity and certainty of the conditions which have been proposed by Mr Freckleton, I will set aside the IR Decision and remit the matter to the VBA to enable it to agree with the appropriate condition or conditions with Mr Freckleton, failing which the parties have liberty to apply for further directions or orders.

[1] He has held Domestic Builder (Unlimited) registration in Victoria since 2015 and obtained a New South Wales building licence in 2016.

[2] Material pursuant to s 49 of the Victorian Civil and Administrative Tribunal Act 1998 (Section 49 Material) at tab 2.

[3] Section 49 Material at tab 12.

[4] Section 49 Material at tab 19.

[8] The application was originally made under s 221ZZZP(1)(a) of the Act, but was amended (with consent of the VBA) by the Tribunal's order made on 5 December 2019.

[9] [2010] VCAT 1056 [68].

[11] [2013] VCAT 1009.

[12] Affidavit of Jayne Danielle McCubbin dated 19 August 2019 (Exhibit 4).

[14] By orders made under s 146(4)(b) of the Victorian Civil and Administrative Tribunal Act 1998, only the parties and their legal representatives are permitted to inspect or obtain a copy of this document from the Tribunal's file.

[15] Respondent's Contentions [21]-[22].

[17] Citing VAGO, Victoria's Consumer Protection Framework for Building Construction, May 2015 [2.3.2].

[18] Citing Richard Wynne MP, Parliamentary Debates, Legislative Assembly, 10 December 2015, 5542.

[19] [2013] VCAT 1009 [70]-[71].

[20] Final Submissions, 12 December 2019 [1]-[6].

[21] Citing the same passage from the second reading speech referred to above.

[22] Final Submissions, 12 December 2019 [7]-[13] and Statement of Position dated 9 September 2019 [24]-[25].

[23] Final Submissions, 12 December 2019 [14]-[15] and Statement of Position [16].

[24] Final Submissions, 12 December 2019 [16]-[21].

[25] Building Regulations, Sch 9, clause 2(6).

[26] Final Submissions, 12 December 2019 [22]-[27].

[27] It is not clear why there is a requirement for competency in high rise construction for a registration limited to construction of low rise building work, however that is what the Regulations provide.

[28] Health Practitioner Regulation National Law (Victoria) adopted under the Health Practitioner Regulation National Law (Victoria) Act 2009.

[29] [2014] QCA 149. This has since been followed in New South Wales (see Linquist v Nursing and Midwifery Board of Australia [2018] NSWCATOD 183).

[31] Where the practitioner's professional performance had been found deficient, where the practitioner has suffered a physical impairment making unconditional practice inappropriate or impracticable or where the practitioner seeks to restrict their practice and exposure to professional indemnity insurance: Krause [68].

[32] Section 49 Material at tab 19 [60].

[34] VBA, 'New registration pathways for building surveyors and building inspectors', 9 December 2019: at www.vba.vic.gov.au/news/news/2019/new-registration-pathways-for-building-surveyors-and-inspectors (retrieved 24 December 2019) (emphasis added).

[35] That is, the need for 'special circumstances' and consideration of 'industry need'.

[41] Ibid [45], citing Re Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] 24 ALR 577 (Re Drake).

[52] Final Submissions, 20 December 2019. The VBA says in its reply to those final submissions (dated 9 January 2020) that the Tribunal is required to take account of the policy as relevant material before it at the time of making the decision.

[53] [2019] VCAT 64.

[55] [2015] VCAT 611.

[56] In that case, the discretion to group companies under s 50 of the Land Tax Act 2005 (Vic).

[57] [2015] VCAT 611 [40].

[58] [1969] HCA 5; (1969) 1 ATR 3, at 14.

[60] To determine whether a particular party should be treated as not having a controlling interest in the taxpayer, with the effect that taxpayer would not be a 'foreign purchaser' subject to a stamp duty surcharge in relation to its acquisition of property.

[61] [2003] HCA 35; (2003) 216 CLR 277 at 298 [24] (Gleeson CJ).

[62] [2019] VCAT 1074.

[64] [2002] NTCA 10 [10] (references omitted).

[65] [2010] VSC 464; (2010) 80 ATR 630.

[67] As the Policy and the 2019 Written Policy appear to be consistent in this regard, it is unnecessary to resolve the question whether the Tribunal should take account of the 2019 Written Policy which was published after the IR Decision.

[70] Expert Witness Statement of Mr Wayne Wilkie dated 11 September 2019 (Exhibit 3) (Wilkie WS) [3] .

[72] Witness statement of Paul Freckleton dated 9 September 2019 (Exhibit A1) (Freckleton WS) [36].

[76] Which apparently allows a registered domestic builder to do so.

[77] Mr Freckleton says there are four.