1. The factual background is not controversial.
2. In and around 2012, JG King Pty Ltd was involved in the construction of a number of homes in a staged development in Lilydale. The homes were being constructed under contract with a developer, Rand Development Group Pty Ltd ('the building contract' and 'the developer'). On the material before me, it is not clear whether JG King Pty Ltd and/or a closely associated company with a similar name was the named 'builder' under the building contract. As it is not an issue raised by either party, in these reasons I will refer to JG King Pty Ltd as the builder.
3. The inquiry allegations relate to three of the homes in the development. Each of the three homes had been purchased by owner/s (a different owner/s for each of the three homes) from the developer.
4. At the time of the construction of the homes, and at all relevant times in respect of the inquiry allegations, Part 4 (sections 44 to 50) of the Domestic Building Contracts Act 1995 ('DBC Act') made provision for the appointment, by the VBA, of an inspector to examine whether or not domestic building work performed by a builder was defective.[1] Section 48 provided that, after conducting an examination, the inspector must report the results to the parties in dispute ('section 48 report'). Section 48(3) provided:

If the inspector believes that the building work is defective, he or she must include in the report recommendations as to what should be done to rectify the defective work.

1. In 2015, an inspector appointed by the VBA provided a section 48 report in respect of each of the three homes, one report for each home. Each of the reports identified items of building work which the inspector considered to be defective. Although most of the items of defective work differed from home to home, each of the reports included an item of defective work related to water leaks into the home. In each report, the inspector made recommendations for the rectification of the items of defective work together with an estimated time frame that the inspector considered sufficient for the builder to complete the recommended rectification works.
2. The inspector carried out subsequent follow-up inspections in January/February 2016 and confirmed in the follow-up reports that none of the recommended rectification works had been carried out. Each of the follow-up reports included the inspector's 'Recommendation/Conclusion':

Given that the required rectification work had not been carried out in the required time, the matter should be referred for appropriate action as required.

1. Under the heading 'Specific offences/breaches identified', each follow-up report references 's179(1)(fb)'.
2. Section 178 the Act, at that time, provided amongst other things:

(1) Subject to section 179A(2), the Building Practitioners Board may conduct an inquiry about the conduct or ability to practise of a registered building practitioner -

(b) on the recommendation of a person appointed under section 177; or

(2) At least 7 days before the inquiry is to be conducted, the Board must cause to be served on the registered building practitioner written notice of the date, time and place of the inquiry, and whether it is to proceed by written submissions or hearing.

1. Section 179 of the Act, at that time, provided:

(1) On an inquiry into the conduct of a registered building practitioner, the Building Practitioners Board may make any one or more of the decisions mentioned in subsection (2) if it finds that the registered building practitioner -

(a) is guilty of unprofessional conduct; or

• (b) has failed to comply with this Act or the regulations; or

(c) has failed to comply with a determination of the Building Appeals Board or a direction of the Authority; 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; or

(da) has shown in the information provided to the Board under section 172A that he or she is not a fit and proper person to practise as a building practitioner; or

(e) has employed or engaged to do, on his or her behalf, work of a kind that can only be done by a person registered under this Part in a particular category or class, a person who is not so registered; or

(f) has obtained his or her registration under this Part or any required insurance by fraud or misrepresentation; or

(fa) has failed to comply with a reasonable direction of an insurer in respect of the completion or rectification of defective building work or any payment to be made to the insurer in respect of the completion or rectification of defective building work in accordance with required insurance or in accordance with a guarantee under the House Contracts Guarantee Act 1987 or has failed to comply with a direction under section 44 of the House Contracts Guarantee Act 1987; or

(fb) has failed to carry out a recommendation contained in an inspector's report under section 48 of the Domestic Building Contracts Act 1995; or

(fc) has failed to comply with the Domestic Building Contracts Act 1995; or

(g) has had his or her authority to practise as a building practitioner in a place outside Victoria cancelled or suspended otherwise than for failure to renew that authority; or

(h) has failed to comply with an undertaking given to the Board under this Division.

(2) The following are the decisions which the Board may make -

(b) to require the person to pay the costs of or incidental to the inquiry;

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

(ca) to require the person to complete a specified course of training within a specified period;

(d) to impose a fine of not more than 100 penalty units unless -

(i) a charge has been filed in the Magistrates' Court in respect of the matter; or

(ii) the matter has been dealt with by a court exercising its criminal jurisdiction; or

(iii) the matter has been dealt with by the issue of an infringement notice;

(da) to impose a condition or limitation on the person's registration;

(e) to suspend registration for not more than 3 years;

(g) to disqualify the person from being registered for a specified period of up to 3 years.

(3) If satisfied that there is good reason to do so, the Board may at any time revoke a suspension under this section, and must without delay give written notice of that revocation to the registered building practitioner.

1. In response to the inspector's follow-up reports, the VBA appointed an investigator to investigate the matter. By letter of 29 March 2016, the investigator notified Mr King that he wished to arrange a time to discuss an allegation against Mr King:

It is alleged that you failed to carry out the recommendations contained within three Inspector's reports contrary to section 179 (1)(fb) of the Building Act 1993 ...

1. Mr King's solicitor, Mr Champion, responded with a letter dated 4 April 2016.
2. It is not in dispute that by prior correspondence from Mr King's solicitor to the VBA and to the owners of the three homes, the builder had asserted, on the advice of its solicitor, that it was under no obligation to attend to the recommended rectification works. The basis for such assertion was that the builder was owed a large sum of money under the building contract with the developer, and for that reason works had been suspended and the builder was justified in refusing to carry out any further works, including the recommended works in each of the three section 48 reports.
3. In his letter to the investigator of 4 April 2016, Mr King's solicitor, amongst other things:
   • - asserts that the builder was under no obligation to carry out the recommended rectification works in the three section 48 reports;
   • - asserts that a recommendation for rectification works in a section 48 report does not create a legally binding obligation on a building practitioner to comply with the recommendation, and nor does a failure to comply with the recommendation in a section 48 report constitute a breach of the Act;
   • - confirms that the builder was acting on the legal advice provided to it.
4. The legal advice to the builder, that the builder was under no obligation to attend to further works, was in part founded on an interpretation of section 9 of the DBC Act, which provides:

In addition to the building owner who was a party to a domestic building contract, any person who is the owner for the time being of the building or land in respect of which the domestic building work was carried out under the contract may take proceedings for a breach of any of the warranties listed in section 8 as if that person was a party to the contract.

1. The three home owners were not parties to the building contract. The developer was a party to the building contract and the three home owners had purchased their properties from the developer. The builder asserted an entitlement under the building contract to suspend the building works. The builder further asserted that such entitlement, by reason of the concluding words in s 9 of the DBC Act (underlined above), extended to limit the rights of the three home owners. I need not assess such contention in these reasons. I note that the contention has been rejected in a recent decision of Senior Member Kirton on 9 October 2018[2], a decision I agree with. It is, however, important to note that the contention was, at all relevant times in respect of the inquiry allegations, a serious contention advocated by the builder's lawyers and part of the legal advice relied on by Mr King.
2. The builder and Mr King held their ground and, as noted above, on 31 August 2016, the inquiry notice was served on the Mr King. The inquiry notice sets out one allegation in respect of each of the three homes, three allegations in all. As the three allegations are similar in their terminology, it is not necessary to set out all three. Set out below is one of them, allegation 1:

Allegation 1 - ground for inquiry - section 179(1)(fb)

1. Between 5 November 2015 and 6 January 2016 or thereabouts, you failed to comply with section 179(1)(fb) of the Building Act 1993 (Act) in that you failed to carry out and/or failed to ensure that JG King Pty Ltd (Company), a company of which you were a director, carried out the recommendations contained in an inspector's report prepared by Nick Kukulka dated 24 September 2015 and issued under section 48 of the Domestic Building Contracts Act 1995 in relation to building work, namely the construction of a two storey dwelling and attached garage (Building Work) at [street address] Lilydale

1. As noted above, the inquiry was conducted on 1 November 2016. Mr King was represented by his solicitor. There was no dispute as to the existence of the defective works and the rectification recommendations as set out in the inspector's three section 48 reports. There was no dispute as to the builder's failure to attend to the recommended rectification works.

1. At the hearing before me, no witnesses gave evidence. The VBA provided a folder of material setting out the relevant facts and the history of the matter. The hearing consisted of submissions made by the parties.
2. As noted above, the builder's contention in respect of section 9 of the DBC act has been dealt with in the recent decision of Senior Member Kirton. That said, there remains, in essence, three submissions put on behalf of Mr King.
3. First, it is submitted that the allegation forming the subject of the inquiry, namely Mr King's failure (on three counts) to comply with s179(1)(fb) of the Act, is fatally flawed in that s179(1)(fb) does not, of itself, impose a statutory obligation.
4. Second, it is submitted that if it can be said that there has been a failure to comply with s179(1)(fb), any such failure is the failure of the builder, not Mr King. The fact that Mr King, as a director of the builder, may have procured the builder's compliance does not transform the failure to comply with the section 48 reports' recommendations into a failure on the part of Mr King.
5. Third, it is submitted that if the above hurdles are overcome, such that the Board was empowered to impose a sanction on Mr King, it would be unreasonable to impose a sanction in the circumstance where Mr King had acted in reliance on the legal advice of his lawyers.
6. I accept the first submission, namely that the inquiry notice is fundamentally flawed.
7. The inquiry notice provides that the inquiry was to be conducted into Mr King's conduct as a registered building practitioner, and sets out three allegations, each of which is headed:

Allegation [1,2 or3] - 'ground for inquiry - section 179(1)(fb)'. Each allegation then details the alleged failure of Mr King to comply with s179(1)(fb) of the Act.

1. But s179(1)(fb) does not impose an obligation on a building practitioner to comply with the recommendations in a section 48 report. There is no section in the Act, or the DBC Act, which imposes such obligation.
2. Section 179 of the Act provides that, on an inquiry into the conduct of a registered building practitioner, the Board may impose one or more of a range of specified sanctions in the event the Board makes one of a specified range of findings. One of those specified findings is set out in s179(1)(fb), that is a finding that the practitioner has failed to carry out an inspector's recommendations in a section 48 report. But such finding does not, of itself, impose any statutory obligation on the builder.
3. The VBA refers to section 179B of the Act, as it was at the relevant time, which provides:

Conduct of company or partnership to be conduct of building practitioner director or partner

If a company or partnership of which a registered building practitioner is a director or partner fails to comply with this Act or the regulations in carrying out building work, that failure is taken to have been the conduct of the registered building practitioner and a failure by the registered building practitioner to comply with this Act and the regulations for the purposes of sections 178, 179 and 179A.

1. But this section of the Act does not remedy the flaw in the inquiry notice. The section provides that the failure of a builder company to comply with the Act or the regulations will be taken to be the failure of the building practitioner who is a director of the company. It does not transform s179(1)(fb) of the Act into a section which creates or imposes a statutory obligation.
2. Likewise, the decision of Beach J in Ktori v The Building Practitioners Board[3], a decision referred to me by the VBA, does not remedy the flaw in the inquiry notice. That case involved an appeal of the finding of the Board against two building practitioners. His Honour noted that the mere existence of a company through which building work is actually performed does not deprive the Board of its jurisdiction to inquire into the conduct of the building practitioners involved in the building work.[4] But the decision does not support a contention that s179(1)(fb) of the Act creates a statutory obligation demanding compliance.
3. The VBA submits that s179(1)(fb) should be interpreted as creating the obligation on a building practitioner to comply with the recommendations in a section 48 report, because without such interpretation the section has nothing to do. I do not accept the submission.
4. It is the inquiry notice, and not s179(1)(fb), that is flawed. The inquiry notice identifies the ground of inquiry as the alleged failure on the part of Mr King to comply with s179(1)(fb). I have found, in effect, that there can be no failure to comply with s179(1)(fb) because the section does not create an obligation demanding compliance. As such, there is no basis for finding the three allegations proven.
5. It might have been different had the inquiry notice specified an allegation which was capable of being substantiated. It might have been alleged that Mr King acted unprofessionally or incompetently in not ensuring that the builder attended to rectification works recommended in the section 48 reports. Such allegation may or may not have been proven. But it is not the role of this Tribunal to retrospectively amend the allegations forming the subject of an inquiry into the conduct of a building practitioner. It is a matter for VBA to draft the allegations it brings against a building practitioner.
6. Mr King faced an inquiry into specific allegations as to his conduct. He defended the allegations relying on legal advice. I have found that the allegations cannot be substantiated as they are fundamentally flawed. Mr King does not appear before me to defend other re-drafted allegations.
7. For the above reasons, I am satisfied that the inquiry decision should be set aside, and I consider it appropriate to substitute a new decision dismissing the inquiry allegations.
8. It is not necessary to assess the further submissions put on behalf of Mr King, however I make the following brief comments.
9. The submission that it is the builder, and not Mr King, who has failed to comply with the investigator's recommendations in the section 48 reports is an arguable proposition. That does not mean, however, that there can never be an adverse finding against, and consequential sanction of, a registered building practitioner who is the controlling director of the building company that was the 'builder' of the relevant works. Again, as noted by Justice Beach, the mere existence of a company through which building work is actually performed does not deprive the Board of its jurisdiction to inquire into the conduct of the building practitioners.[5] The nature and terms of the allegation brought against the building practitioner will, however, be important.
10. There is merit in the submission that a building practitioner's conduct should be measured in light of the circumstance that he was acting on advice from his lawyers. There is also merit in the VBA's submission that such circumstance would be appropriately considered when assessing the severity of the sanction/penalty to be applied. There is no hard and fast rule. It depends on the nature of the allegation brought against the builder, and the facts in each case. A plea of 'acting on my lawyer's advice' may be of little significance where there is no substantiating evidence as to the nature of the legal advice, when it was provided and the building practitioner's reliance on it. But when, as in this case, the articulation of the legal advice and the building practitioner's reliance upon it was raised early and formally in open correspondence from the building practitioner's lawyer to the VBA, it may be a very significant factor.

1. For the reasons set out above, and pursuant to the Tribunal's powers under section 51(2) of the Victorian Civil and Administrative Tribunal Act 1998, I will order that the inquiry decision be set aside and substituted with the Tribunal's decision that the allegations contained in the Notice of Inquiry dated 30 August 2016 are dismissed.

[1] Part 4 of the DBC Act was subsequently replaced with a new Part 4 that provides for the scheme of referral of domestic building work disputes to Domestic Building Dispute Resolution Victoria (DBDRV).

[2] Waddell v JG King Project Management Pty Ltd [2008] VCAT 1531

[3] [2009] VSC 404