Plaintiff v Defendant

2 The board rejected that contention. It decided that, under the relevant legislation, it retained jurisdiction, for Mr Ariss was registered when the inquiry commenced. If its jurisdiction was lost, an unscrupulous builder could avoid scrutiny of its practices by orchestrating the suspension of its registration before the inquiry was completed.

3 This is an application for judicial review of the board's decision. Mr Ariss submits the board has exceeded its jurisdiction and committed an error of law on the face of the record by misinterpreting the legislation. He asks the court to quash the decision and restrain the board from continuing the inquiry.

4 The Building Act 1993 makes provision for the registration and regulation of building practitioners. The main purpose of the Act is to protect the public by regulating the industry and ensuring proper standards of building and construction. As Beach J held in Ktori v The Building Practitioners Board,[1] the legislation operates for 'the protection of the public ... from delinquents and wrongdoers.'

5 In Rodwell v Building Practitioners Board,[2] Hollingworth J held, and I respectfully agree, that these purposes must be kept in mind when interpreting and applying the legislation:[3]

The court's task is to construe the Act, in accordance with the relevant principles of statutory construction. A construction that would promote the purpose or object underlying the Act, whether or not expressly stated in the Act, is to be preferred to a construction that would not promote that purpose or object.[4]

6 Part 11 of the Act gives effect to those purposes by making provision for inquiries into the practices of registered building practitioners and the standard of their work. Section 177 enables the board to appoint someone suitable to report and make recommendations. Section 178 enables the board to conduct an inquiry in response to such a recommendation or on its own initiative. Section 179 enables the board to make a number of disciplinary decisions if, for example, it finds the builder guilty of professional misconduct. Among other things, the board can reprimand the builder or cancel its registration.

7 The board has an important role in exercising these powers. This was also described by Hollingworth J in Rodwell v Building Practitioners Board.[5] I gratefully adopt what her Honour said:[6]

The board has been given broad powers to inquire into the conduct of registered building practitioners, and to make certain findings and exercise certain powers against them. Having regard to the statutory scheme, I am satisfied that the main purpose of such an inquiry is to ensure that registered builders adhere to the high standards expected of them, primarily for the protection of the public and the reputation of the building industry itself.

The importance of the role of the board was also emphasised in these remarks in the second reading speech for the Building Act:[7]

It is expected that the combination of the commission's capacity to oversee the system and the Building Practitioners Board's inspectorial, inquiry and disciplinary powers will achieve maintenance of the existing high quality of building.

8 There is no doubt the board can inquire into and deal with a builder who was and remains registered at all material times. The problem arises in respect of builders whose registration becomes suspended after the conduct occurred or an inquiry under s 178 has been commenced. That can happen compulsorily by the operation of the legislation, as the present case demonstrates.

9 Under s 172(2)(a), one of the obligations of a builder is to pay the appropriate annual fee to the Building Administration Fund. Section 172(3) requires the board (the word is 'must') to suspend the registration of a builder who fails to comply with this obligation. By s 175, a builder whose registration is so suspended is deemed not to be registered under Part 11. As we have seen, it is Part 11 which contains the important provisions by which the board can hold inquiries and make disciplinary decisions about builders. For the purposes of that Part, the builder is not a registered building practitioner. There are provisions for reinstating a suspended registration which I need not go into.[8]

10 Because the operation of these provisions is mandatory, a builder who fails to pay their annual fee brings about (in effect) the suspension of their own registration. In such a case, the board must act accordingly. So it did in the present case.

11 After receiving a recommendation from an appointed person to do so, the board commenced an inquiry into Mr Ariss's building practices. The commencement of the inquiry was postponed on a number of occasions at his request. After the hearing of the inquiry was commenced, Mr Ariss's registration was compulsorily suspended for failing to pay a statutory fee in the sum of $90. Mr Ariss then contended the board no longer had jurisdiction to continue the inquiry. The board points to this case as an example of the kind which it fears could undermine the protective purposes of the regulatory system.

12 The question at issue in this proceeding may now be specifically stated: when, if at all, can the board inquire into and deal with a builder whose registration is suspended? That will require an examination of the provisions of the Act as originally enacted in 1993 and as amended in 2001.

Building Act 1993

13 Under the provisions originally enacted in 1993, the jurisdiction of the board to appoint someone to make a preliminary assessment under s 177(1), to conduct inquiries under s 178(1) and to make disciplinary decisions under s 179(1) is confined, in each case, to a builder who is a 'registered building practitioner'.

14 The board is a statutory authority. As such, it has only such power as the legislation confers and has no inherent jurisdiction. Under the 1993 provisions, the board did not have jurisdiction to appoint someone to make a preliminary assessment, to conduct an inquiry or to make disciplinary decisions unless the builder was a 'registered building practitioner'.

15 Section 175 deals specifically with the 'consequences of suspension of registration', to use the description in the section heading. It provided in 1993 (and still provides): 'While a person's registration as a building practitioner is suspended under this Part, he or she is deemed not to be registered under this Part.' Moreover, such a practitioner also falls outside the general definition of 'registered building practitioner' in s 3(1), which depends on the practitioner being registered under Part 11.

16 According to the plain and literal meaning of those words, a builder whose registration is suspended is not a registered building practitioner for the purposes of Part 11. If that is correct, as I think it is, the consequence must be that, under the 1993 provisions, a practitioner with suspended registration was not within the scope of the jurisdiction of the board under ss 177, 178 or 179 (which are in that Part), for the board's jurisdiction under those provisions was confined to practitioners who were registered. This position was changed by amendments made in 2001. I will deal with those amendments presently.

17 The board submits that, under the original 1993 provisions, it had jurisdiction to continue an inquiry into the practices of a builder who was registered but whose registration was subsequently suspended . It submits the provisions of s 175 should not be interpreted according to their plain and literal meaning and the provisions of ss 177, 178 and 179 should not be interpreted in the way that I prefer. It relies on principles of interpretation which allow capricious and absurd consequences to be avoided.

18 Those principles where analysed and applied by Kaye J in Director of Consumer Affairs v Glenvill Pty Ltd.[9] That case also concerned legislation in the building industry - the Domestic Building Contracts Act 1995. This is his Honour's summary of the principles, which he gave by reference to the relevant authorities:[10]

Accordingly, it may be necessary to modify, or depart from, the literal grammatical meaning of the words of a statutory provision where such a construction will yield a capricious or absurd result, where it would lead to an inconsistency within the statute in which the provision occurs, or where it would render another part of the statutory nugatory or ineffective. In such a case, the Court is justified in departing from, or modifying, the literal meaning of the words chosen by Parliament, but only to the extent necessary to avoid such a result.

19 The capricious or absurd consequence identified by the board is that, on the plain and literal interpretation of ss 175, 178 and 179 in their original form, and as I would interpret these provisions, the board could not continue to inquire into a builder's practices, nor take disciplinary action, if its registration was later suspended, even though the builder was registered when the inquiry began and the practices occurred when its registration was current. The board submits the provisions should be interpreted such that it retains jurisdiction under ss 178 and 179 over a builder who was registered when the relevant conduct occurred and the inquiry commenced, even though its registration may later be suspended. That interpretation, it submits, best conforms to the regulatory and protective purposes of the legislation. More than that, on the board's submission, the plain and literal interpretation would, to use the words of Kaye J in Director of Consumer Affairs v Glenvill Pty Ltd[11], 'undermine or nullify the statute.'

20 On the contrary, I think it is quite clear from the terms of the legislation, as originally enacted, that the board was not to have jurisdiction with respect to a builder whose registration was or became suspended. Although I think this was an unfortunate weakness in the regulatory and protective scope of the legislation, the provisions reflected a policy choice and did not bring about capricious and absurd consequences.

21 Under the provisions, the board did not have jurisdiction under s 177, 178 or 179 to appoint someone to make a preliminary assessment, to conduct or continue an inquiry or to make disciplinary decisions with respect to a builder who was not a registered building practitioner. That category includes a builder whose registration was or became suspended. In consequence, the board lost jurisdiction to continue an inquiry when the registration of a builder which was current when the inquiry commenced was compulsorily suspended for failing to pay the statutory fee, whether the suspension was 'orchestrated' or otherwise.

23 To deal with this weakness, the Building Act was amended, with the support of the whole Parliament, by the Building (Amendment) Act 2001. A new s 179A(1) was introduced. Its material terms provide that a reference to a 'registered building practitioner' in ss 177, 178 and 179 includes 'a reference to any person who was a registered building practitioner at the time of the conduct, even though that person's registration is suspended at the time any action is taken under those sections.' Section 178A(2) goes on to provide that, under those provisions, the board can only inquire into a builder whose registration has been suspended in respect of 'conduct that occurred during the three year period that immediately preceded the suspension.' In the present case, the conduct alleged against Mr Ariss occurred outside that period.

24 As we have seen, the board submits it has jurisdiction to inquire into Mr Ariss's conduct because he was registered when the inquiry under s 178 was commenced. It submits that s 179A does not limit, but only widens, the category of builder into whose conduct the board may inquire. In its submission, s 179A has no work to do in a case like the present because the board already possesses jurisdiction.

25 I cannot accept those submissions. In my view, for reasons I have explained, the legislation in its original form did not permit the board to commence or continue an inquiry or take disciplinary action with respect to a builder whose registration was or became suspended. The legislation was amended to address this weakness in the statutory scheme. The jurisdiction which the board now has with respect to such builders was brought about by the amendments. It does not exist otherwise. It is confined to conduct which occurred within the three-year time period.

26 The 2001 amendments represent a trade-off. Builders with suspended registration were brought into the regulatory scheme, but a three-year time limit was placed on the capacity of the board to examine their building practices. The rationale of the time-limit applies equally to all suspensions, however and whenever they are brought about. The rationale of the time limit applies to conferring, for the first time, jurisdiction on the board to continue an inquiry in respect of a builder whose registration was suspended after the inquiry commenced.

27 The board submits the original provisions had a wider scope than I have determined; the parliamentary materials show the amendments were not intended to limit it. That is not so.

28 On those materials, the amendments had a general purpose, which was to enable the board to inquire into and deal with a builder whose registration was suspended, as long as it was registered at the time of the conduct, and the conduct came within the three-year period. The purpose of the amendments was to enable the board to commence and to continue an inquiry in those circumstances, which it could not otherwise do. Thus the second reading speech said the bill was (relevantly) to enable the board 'to conduct inquiries into the conduct of registered building practitioners whose registration has been suspended.'[12] The explanatory memorandum said s 179A was to enable the board 'to hold an inquiry into the conduct of a building practitioner who was registered at the time the conduct occurred but whose registration has since been suspended by the board.'[13] There are similar references to this general purpose in the debates.[14] Enabling the board to continue a commenced inquiry, and make disciplinary decisions, with respect to a builder whose registration has subsequently been suspended comes within this general purpose.

29 The board submits this reading of the materials is too wide. In its submission, the materials suggest the legislation was aimed at giving the board new jurisdiction to commence an inquiry into the practices of a builder who was registered when the conduct occurred but whose registration was suspended before the inquiry had commenced, which was admittedly outside the scope of its jurisdiction before the 2001 amendments. The legislation was not aimed at ensuring the board retained jurisdiction to continue an inquiry where the builder's registration was subsequently suspended, which was (on the board's submission) already within the scope of its jurisdiction under the 1991 legislation.

30 I cannot accept that submission. I think the materials show the amendments were aimed at both commencing and continuing inquiries with respect to builders whose registration was or came to be suspended. This is not only evident from the generality of the second reading speech, the explanatory memorandum and the debates to which I have referred. The issue was expressly mentioned in the debates. Speaking on behalf of the opposition, Mr Ted Baillieu said the bill

ensures that, even though a building practitioner may have been suspended, inquiries can continue in the relation to any activity of that practitioner. During its briefings the opposition was told that a suspension can be indefinite but that under the clause there is a capacity to correct what was otherwise an anomaly and allow further inquiries to be made (emphasis added).[15]

31 In my view, before the 2001 amendments were passed, the board did not have jurisdiction under ss 177, 178 and 179 over building practitioners whose registration was suspended. It had no authority under s 178 to start an inquiry in respect of a builder whose registration was already suspended or to continue an inquiry into one whose registration was later suspended. Nor could it deal with a builder with suspended registration under s 179, even though the builder was registered when the inquiry under s 178 began. The scope of the jurisdiction of the board with respect to such builders is specified in the 2001 amendments. Those amendments confer a limited jurisdiction with respect to conduct that occurred during the three-year period immediately preceding the suspension.

32 Finally, the board supports its submissions about its existing jurisdiction under ss 177, 178 and 179 by reference to the terms of new s 179A(1). As we have seen, that provision gives the board jurisdiction over a builder who was registered when the conduct occurred, even though its registration 'is suspended at the time any action is taken under those sections' (emphasis added). The board submits commencing an inquiry into the conduct of a builder whose registration was suspended comes into this category, for this is 'any' action. An inquiry commenced into the conduct of a builder whose registration was only later suspended does not, for the 'action' has already been taken by commencing the inquiry. The new provision is only needed in the former case; the board already has jurisdiction in the latter. The board further submits that, if there is any ambiguity about the interpretation of s 179A(1) in this respect, 'any' should be interpreted as 'an' or 'first', to avoid capricious or absurd results. That, in effect, is what the board decided at first instance.

33 Again, I cannot accept that submission. I do not think s 179A(1) is ambiguous or, when interpreted according to the ordinary meaning of the words used, produces capricious of absurd results. In s 179A(1), 'any' action under ss 177, 178 or 179 refers to just that - any action. 'Any action' includes appointing someone to make a preliminary assessment and making the assessment, commencing and continuing an inquiry and making a disciplinary decision. The purpose and effect of s 179A(1) and (2) is to give the board the jurisdiction to take such action, which it did not previously have. Such action can be taken with respect to a builder whose registration is suspended only if the case comes within s 179A(1) and (2). Such action can only be taken only where the relevant conduct comes within the three year period specified in s 179A(2).

34 On the account given by the board, it commenced an inquiry on 2 December 2009 into conduct alleged against Mr Ariss between October 2001 and August 2005. Mr Ariss failed to pay a $90 statutory fee which was due on 12 November 2009. The board then compulsorily suspended Mr Ariss's registration under s 172 (3).

35 Under s 146(1)(a), the board's decision to suspend Mr Ariss's registration took effect on 12 January 2010, after the expiry of the appropriate prescribed appeal period of 60 days. When the board commenced the inquiry on 2 December 2009, the suspension decision had not taken effect and Mr Ariss was still a registered building practitioner. [16] But after the suspension took effect on 12 January 2010, he was not.

36 The board then took submissions from Mr Ariss on the issue of jurisdiction. In written reasons dated 21 January 2010 which form part of the record of the case, the board held it had jurisdiction under s 178 because the inquiry has already commenced and s 179A did not apply.

37 In my view, that decision was made in excess of jurisdiction and was also an error of law on the face of the record. The decision was based on a misinterpretation of ss 175, 178 and 179A of the Building Act.

38 On the proper interpretation of the provisions of Part 11, action may be taken under ss 177, 178 and 179 in respect of a builder with suspended registration only to the extent permitted by s 179A(1) and (2). The conduct which may be inquired into under s 178 is limited to that which occurred during the three-year period immediately before the suspension. The conduct alleged against Mr Ariss fell outside this period. While Mr Ariss's registration as a building practitioner is suspended, the board has no jurisdiction to continue present the inquiry or take action under s 179 with respect to that conduct. If his registration were to be reactivated, the jurisdiction of the board would be re-enlivened.

39 While that conclusion is demanded by the terms of the legislation, I acknowledge the force of the concerns of the board. The integrity of the protective scheme in the legislation is weakened when builders are able, and seen to be able, to avoid regulatory scrutiny by delaying inquiries and 'orchestrating' suspensions which are favourable to them in terms of the three-year time limit.

40 That problem could be addressed by removing the incentive for builders to delay inquiries. This could be achieved by making further amendments in the direction of those made in 2001. For example, the time limit could be extended to five years from the date of the suspension, for three years is not a long time in the building industry, especially taking into account the time needed to conduct an inquiry. Further or alternatively, the time could be reckoned back from the date of the suspension or the date of the action under 177 or 178 (or 179, if action under it also relevant in this context), whichever is the earliest.

41 There will be an order in the nature of certiorari quashing the decision of the board that it has jurisdiction to continue the inquiry, an order in the nature of prohibition restraining the board from continuing the inquiry and a declaration that the board does not have jurisdiction to continue an inquiry, or make disciplinary decisions, in respect of a builder whose registration was suspended after the inquiry commenced.

42 Stephen Ariss delayed the conduct of a disciplinary inquiry by the Building Practitioners Board. Then, when the time passed for his payment of a $90 statutory fee, his registration as a builder was compulsorily suspended. According to Mr Ariss, this meant the board had no jurisdiction to continue the inquiry. In this application for judicial review, he has challenged the board's decision that it had jurisdiction.

43 Mr Ariss's application for judicial review will be granted. I have concluded that, on the proper interpretation of the present provisions of Part 11 of the Building Act 1993, the board has jurisdiction to continue an inquiry into the conduct of a builder whose registration is suspended after the inquiry has commenced only if the conduct occurred within the three-year period prior to the suspension, as specified in s 179A(1) and (2). The conduct alleged against Mr Ariss occurred more than three years prior to his suspension. But if Mr Ariss re-enters the industry and his suspension is reactivated, the jurisdiction of the board to continue the inquiry will be re-enlivened.

44 While the present terms of the legislation demand this conclusion, I have noted the concerns of the board about the consequences. The purposes of the statutory scheme are to ensure proper standards of building and construction, to protect the public from delinquent and unscrupulous building practices and to maintain the standing of the building industry. Those purposes are weakened when some builders are able, and seen to be able, to avoid regulatory scrutiny of their practices by delaying an inquiry and 'orchestrating' their own suspension. To remove the incentive for builders to delay inquiries, I have suggested the legislation could be amended to increase the time limit for examining the practices of suspended builders to (say) five years. Also, the time could be reckoned back from the suspension or the commencement of the regulatory action, whichever is the earliest.

45 Mr Ariss's application for judicial review will be granted. The decision of the board dated 21 January 2010 that it had jurisdiction to continue the present inquiry under s 178 of the Building Act into the specified building practices of Mr Ariss will be quashed. The board will be restrained from continuing that inquiry while his registration is suspended. There will be a declaration that, under Part 11 of the Building Act, the board does not have jurisdiction to continue an inquiry under s 178 into, or make disciplinary decisions under s 179 about, the conduct of a builder whose registration is suspended after the inquiry was commenced unless the conduct comes within the three-year time period specified in s 179A(1) and (2) or the registration of the builder is reactivated.

[1] [2009] VSC 404, [22].

[2] [2009] VSC 146; (2009) 21 VR 683.

[4] In a footnote, her Honour referred to s 35(a) of the Interpretation of Legislation Act 1984 and the modern approach to statutory construction discussed in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355.

[5] [2009] VSC 146; (2009) 21 VR 683.

[7] Victoria, Parliamentary Debates, Legislative Assembly, 11 November 1993, 1690 (Robert McLellan).

[9] [2009] VSC 76.

[11] [2009] VSC 76, [21].

[12] Victoria, Parliamentary Debates, Legislative Assembly, 27 September 2001, 764 (Jon Thwaites).

[13] Victoria, Explanatory Memorandum for the Building (Amendment) Bill 2001, section 10.

[14] Victoria, Parliamentary Debates, Legislative Assembly, 18 October 2001, 1182 (Hugh Delahunty), 1228-1229 (Anthony Robinson), 989 (Peter Katsambanis), 996 (E J Powell).

[15] Victoria, Parliamentary Debates, Legislative Assembly, 18 October 2001, 1178 (Ted Ballieu). Leonie Bourke spoke of an inquiry being able to 'go on' by reason of the amendments: ibid, 1238.

[16] Mr Ariss submitted in the alternative that the decision took effect on 12 November 2009 because the compulsory suspension 'decision' was not appellable. On this submission, Mr Ariss's registration was suspended before the board commenced the inquiry and the board had no jurisdiction even on its submissions. It is not necessary to determine this submission.