O'Brien v Building Professionals Board [2009] NSWADT 189

CITATION: O'Brien v Building Professionals Board [2009] NSWADT 189

DIVISION: General Division

APPLICANT Russell O'Brien PARTIES: RESPONDENT Building Professionals Board

FILE NUMBER: 083129

HEARING DATES: 6 May 2009

SUBMISSIONS CLOSED: 6 May 2009

DATE OF DECISION: 21 July 2009

BEFORE: Hennessy N - Magistrate (Deputy President); Hayward P - Non-Judicial Member

CATCHWORDS: Power of Tribunal to allow administrator to amend reasons for decisions - whether amendment should be permitted in this case

Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Environmental Planning and Assessment Act 1979 Environmental Planning and Assessment Regulation 1994 Building Professionals Act 2005

Frugtniet v Administrative Decisions Tribunal [2005] NSWCA 257 Shi v Migration Agents Registration Authority (2008) 82 ALJR 1147 McKee v Allianz Australia Insurance Ltd [2008] NSWCA 163 CASES CITED: Herron v McGregor & Ors (1986) 6 NSWLR 246 Kardas v ASC (1998) 29 ACSR 304 Austcorp No. 459 Pty Ltd v Baulkham Hills Shire Council [2002] NSWLEC 90 Barakat v Building Professionals Board [2009] NSWADT 5

APPLICANT G McNally, counsel REPRESENTATION: RESPONDENT T Robertson, counsel

ORDERS: The application by the Building Professionals Board to amend its reasons for decision is refused.

REASONS FOR DECISION Introduction 1 Mr O'Brien, an accredited certifier, applied to the Tribunal for a review of a decision made by the Building Professionals Board (the Board). The decision was that Mr O'Brien was guilty of unsatisfactory professional conduct and should be reprimanded and fined $11,000. Two days prior to the hearing, the Board notified Mr O'Brien that it wished to add an alternative ground in support of its decision. Mr O'Brien opposed that application saying either that the Tribunal has no power to allow the grounds for the decision to be amended or, even if it does, it should not do so. The hearing dates were vacated so that the Board's application could be determined. We have decided that while the Tribunal has power to allow the Board to amend its reasons for decision we should not allow it to do so in this case. Background 2 In 2000 Mr O'Brien and Mr Cohen were accredited certifiers working together in a business known as Essential Certifiers Pty Ltd. This matter concerns a construction certificate issued in relation to a 26 unit residential flat building in Northmead in September 2000. A construction certificate is required before building work on a project can begin. The certificate is an audit of the design against the development consent, the Building Code of Australia (BCA) and the Environmental Planning and Assessment Regulation 1994. It verifies that a proposed development will comply with those requirements: Environmental Planning and Assessment Regulation 1994, (EPA Regulation) former Reg 79G(1)(b). Mr Cohen was appointed as Principal Certifying Authority (PCA) for the project. 3 On 1 September 2000, prior to going on leave, Mr Cohen wrote to the builders saying that he had assessed the plans for compliance with the BCA and the development consent. He advised that in order to issue the construction certificate six further items needed to be attended to. After Mr Cohen went on leave, Mr O'Brien endorsed the construction certificate with Mr Cohen's name using the words "B Cohen per ROB" (Mr O'Brien's initials). Mr O'Brien says that he wrote the words "B Cohen per ROB" next to the word "signed" intending to convey that he was signing on behalf of Mr Cohen. Although Mr Cohen was the Principal Certifying Authority, and his name was on the certificate as being the accredited certifier, the certificate could be signed by any accredited certifier. Mr O'Brien says that there was no need for him to re-check Mr Cohen's assessment and compare the construction certificate plans with the development consent before endorsing the certificate. He says it was sufficient for him to rely on the checklist already completed by Mr Cohen and his letter of 1 September 2000 containing the six outstanding items. 4 On 20 September 2000, the architect informed the builder of the outstanding issues that were delaying the issuing of the construction certificate. Mr O'Brien asserts that by 22 September 2000, all remaining documents required for the release of the construction certificate had been provided. 5 The construction certificate was dated "12/Sep/2000". Mr O'Brien relies on evidence that the date on the construction certificate was generated by the computer system when the certificate was printed. Mr O'Brien does not remember exactly when he endorsed the certificate on Mr Cohen's behalf but says it was some time between 12 September and 26 September 2000 after satisfying himself that all the outstanding requirements had been or would be met. There is evidence which indicates that the construction certificate was not actually issued (released to the builder) until 26 September 2000. Board's initial reasons for decision 6 The Board commenced an investigation of Mr Cohen's conduct in 2006, some six years after the events had taken place. Two years after that, on 4 March 2008, the Board issued a Statement of Decision to Mr O'Brien. The Board found that Mr O'Brien was guilty of unsatisfactory professional conduct as that term was defined in the (now repealed) s 109R(a) of the Environmental Planning and Assessment Act 1979, namely Conduct (whether consisting of an act or omission): (a) occurring in connection with the exercise of an accredited certifier's functions as a certifying authority that falls short of the standard of competence, diligence and integrity that a member of the public is entitled to expect of a reasonably competent accredited certifier (Emphasis added.) 7 The same definition now appears in s 19(a) of the Building Professionals Act 2005 (BP Act). 8 The findings of the Board, so far as they are relevant, were as follows: Mr O'Brien was not the agent of Mr Cohen nor did he act under his direction or with his consent or knowledge. The assessment process engaged in by Mr O'Brien was manifestly inadequate. . . the Board is satisfied that had Mr O'Brien applied any professional rigor to his review of the documentation that was available to him he would have detected inconsistencies between the plans and specifications approved as part of the development consent and those that were submitted with the application for the construction certificate. In particular, Mr O'Brien would have been reasonably expected to have identified the major inconsistency of the change of two levels of car parking to one level. It is evident that . . . these two items (Item 2: Compliance certificates from the hydraulic engineer and structural engineer and Item 6: confirmation that the sound transmission of stack is to be constructed of two layers of 13mm gyprock on metal studs, with seals to openings) remained outstanding as at 20 September 2000. Item 6 . . . was satisfied by a second fax from Silky Constructions (the builders) dated 22 September 2000. Item 2 of Mr Cohen's fax of 1 September 2000 was addressed by the certificate by JDT Design Pty Ltd dated 11 September 2000. The Board concludes from the other correspondence that although this certificate was in existence as at 11 September 2000 it was not provided to Essential Certifiers Pty Ltd until 20 September 2000. On the basis of the above findings about the provision of information to Essential Certifiers Pty Ltd it is apparent that as at 12 September 2000, and up to at least 22 September 2000, all of the requirements of Mr Cohen and Essential Certifiers Pty Ltd for the issue and release of the construction certificate had not been met. (Words in brackets and emphasis added.) 9 In summary, the Board concluded that Mr O'Brien was guilty of unsatisfactory professional conduct because he had issued the certificate as the accredited certifier (rather than as agent for Mr Cohen) on 12 September and that a number of the requirements were still outstanding as of that date. In particular, the Board found that Mr O'Brien should have detected inconsistencies between the plans and the specifications approved as part of the development consent and those that were submitted with the application for the construction certificate. One major inconsistency was the change of two levels of car parking to one level. Mr O'Brien agrees that even though Mr Cohen had assessed the plans for compliance with the BCA and the development consent, and found no reason for concern, in fact there were significant reasons for concern. In particular, there were differences between the construction plans and what had been approved by the development consent which Mr Cohen either overlooked or did not appreciate. However Mr O'Brien says that it was not his responsibility to do again what Mr Cohen had already done in his role as the Principal Certifying Authority. 10 The Board decided Mr O'Brien was guilty of unsatisfactory professional conduct in that: a. The degree of scrutiny and consideration given by Mr O'Brien to the documents which accompanied the application for a construction certificate was far below that required to form the level of satisfaction required under clause 79G(1)(a) of the Regulation for the proper determination of a construction certificate (this matter relates to the issue of Mr O'Brien's competence and diligence); and b. Mr O'Brien made the endorsement on the construction certificate without any actual or implied authority from Mr Cohen (this relates to the issue of Mr O'Brien's integrity). Mr O'Brien's response to the Statement of Reasons 11 Mr O'Brien responded by saying that when he endorsed the certificate he was not exercising his functions as a certifying authority. He said that he and Mr Cohen were independent accredited certifiers with different accreditation numbers and that Mr Cohen's accreditation number appeared on the certificate. Mr O'Brien said that he performed an administrative task only. He acknowledged that he did not perform any of the functions of a certifying authority in signing Mr Cohen's name. If the Tribunal accepts that, in making the endorsement, Mr O'Brien was not issuing the certificate, or not exercising his function as a certifying authority, then a finding that he engaged in conduct "in connection with the exercise of an accredited certifier's functions as a certifying authority" cannot be sustained: s 109R(a) of the EPA Act. In addition, Mr O'Brien says that the construction certificate was not issued until some time after 22 September 2000 when all the outstanding requirements had been met, not on 12 September. The Board's application to amend the reasons for its decision 12 After receiving this submission, the Board applied to amend its Reasons for Decision to add further particulars in the alternative. The Board submitted that even if Mr O'Brien's account is accepted, he is nevertheless guilty of unsatisfactory professional conduct, not because of the standard of his competence, diligence or integrity but because he is unfit to carry out the duties of an accredited certifier. Section s 19(1)(l) of the BPA Act defines unsatisfactory professional conduct to include: Any other improper conduct or unethical conduct of the accredited certifier that indicates that the accredited certifier is unfit to properly carry out the duties of an accredited certifier (Emphasis added.) 13 The Board's alternate view is based on the assumption that the certificate was issued after 12 September and that Mr O'Brien did not ensure that he had received two outstanding compliance certificates with the application for the construction certificate. The Board's additional particulars were, in summary, that: 1. the construction certificate did not include three plans or specifications which were required to be certified and specified in the certificate; 2. the structural engineering plans were not provided in the correct form required of a compliance certificate and were not endorsed by an accredited certifier as required by the EPA Regulation 1994; 3. the stormwater details were incomplete, were not endorsed by an accredited certifier and did not comply with the EPA Regulation 1994; 4. the construction certificate did not inscribe the owner's consent in breach of the EPA Regulation 1994; and 5. the construction certificate did not bear the date of certification or if it did it was issued before the relevant plans and specifications had been certified. 14 The precise additional particulars as provided to Mr O'Brien are set out below: ADDITIONAL PARTICULARS 1. Failure to comply with s109C(1)(b) of the EPA Act in that he caused to be issued a Construction Certificate which did not specify the plans and specifications which either were certified or were required to be certified for the proposed development, other than the architectural plans. The plans omitted from the face of the certificate, which were or were required to be certified and specified in the certificate, are as follows: i. drawing no. 9951\s1 - s18 referred to in the letter of JDT Design Ply Ltd (engineering plans); ii. stormwater details certified by A.R Abbas (plan/s not specified on the face of purported compliance certificate); iii. specification by Drummond and Rosen Pty Ltd dated 24/7/00. 2. Contrary to Mr Cohen's requirement of 1 September 2000, no compliance certificate was issued by an accredited certifier as required by s.109D(1)(a) for the structural engineering plans (the letter of 11/9/00 from P.C Liu of JDT Design Pty Ltd was not a compliance certificate within the meaning of cl.79 and was not in or to the effect of Form 10 of the Environmental Planning and Assessment Regulation 1994, and Liu was not an accredited certifier). 3. Contrary to Mr Cohen's requirement of 1 September 2000, no compliance certificate was issued by an accredited certifier as required by s.109D(1)(a) for the stormwater details (the purported compliance certificate issued by A. R Abbas dated 18/9/00 for the stormwater details does not comply with cl.79 and is not in or to the effect of Form 10 of the Environmental Planning and Assessment Regulation 1994, because it failed to specify the plans and specifications the subject of certification and did not give details of the specific aspect of the development including its design and the specific standards or requirements with which that aspect of the development design complies, and Abbas was not an accredited certifier). 4. In breach of cl. 79I Environmental Planning and Assessment Regulation 1994, the construction certificate did not inscribe the owners consent. 5. In breach of cl. 79D(1)(a) of the EPA Regulation 1994, the construction certificate either did not bear the date of certification or if it did, it was issued before the relevant plans and specifications had been certified. 15 The Board conceded that Item 4 is a minor matter. Of most significance, according to the Board, is Item 5 because if the construction certificate was issued after 12 September is was incorrectly dated. The date on which the certificate was issued is important because building work cannot commence until that date and all the legislative and other requirements have to be completed. While the Board concedes that these matters may not be as serious as the first basis on which the decision was made, they submit that they are sufficiently serious to warrant the same penalty being imposed, that is a reprimand and a fine of $11,000. Issues 1. Does the Tribunal have power to allow the grounds for the decision to be amended? 2. If so, should the Tribunal do so in this case? Tribunal's power 16 Legislative provisions. The Board has made a disciplinary finding against Mr O'Brien (that he is guilty of unsatisfactory professional conduct) and taken action under s 31 of the BP Act to reprimand and fine him. Mr O'Brien has applied to the Tribunal for a review of that finding and of the action taken by the Board: BP Act, s 33. The Tribunal has power to review both the Board's finding of unsatisfactory professional conduct and the action it has taken as a result of that finding: Administrative Decisions Tribunal Act, (ADT Act) s 38. Pursuant to s 63 of the ADT Act, when determining such an application the Tribunal is to "decide what the correct and preferable decision is having regard to the material then before it" including: (a) any relevant factual material, (b) any applicable written or unwritten law. 17 Section 63(2) provides that for that purpose "the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision." 18 Mr O'Brien's submissions. Mr O'Brien submitted that the Tribunal has no power to deal with the new grounds because to do so would allow the Board to by-pass the normal statutory process for investigating and determining complaints. According to Mr O'Brien, Divisions 3 and 4 of the BP Act are designed to provide an accredited certifier with procedural fairness in relation to the investigation of complaints. The mechanisms for procedural fairness contained in the BP Act would be avoided if the Tribunal were permitted to act on new grounds which were not dealt with by the Board. The Board's investigation is now complete. It did not decide to deal with these "new matters" when it could have done so. Mr O'Brien said that the legislation should not be construed so as to allow the Tribunal to perform the Board's functions. 19 The Board's submissions. The Board's response to this submission is two fold. First, the investigation was not conducted pursuant to a complaint but was an investigation by a Departmental auditor as provided for in the now repealed s 118Q of the EPA Act. The jurisdiction to review the Board's decision is conferred by reference to 'a disciplinary finding', which is the finding by the Board that the accredited certifier is guilty of unsatisfactory professional conduct. Whether the origin of the finding flows from the making of a complaint or the conduct of an audit makes no difference. Secondly, the Board submitted that there is no doubt that the Tribunal has the power in a disciplinary matter to make a finding which was not made or raised before the original decision maker. There is nothing in the EPA Act or the BP Act to the contrary. Mr O'Brien has not been denied procedural fairness because he will have the opportunity to respond to the amended grounds of decision prior to and at the hearing. 20 Conclusion. We agree with these submissions which are supported by the Court of Appeal's decision in Frugtniet v Administrative Decisions Tribunal [2005] NSWCA 257 and the High Court's decision in Shi v Migration Agents Registration Authority (2008) 82 ALJR 1147. In Frugtniet although the power to disqualify a travel agent had been exercised by reference to notified reasons, the Tribunal was not bound by them and could consider whether the travel agent should be disqualified by reference to any other reason. Handley JA, speaking for the Court of Appeal, said in relation to the disciplinary powers in the Travel Agents Act 1986 and the provisions of the ADT Act at [45] that: Section 22(2) permits a person who has been disqualified by the Commissioner to apply to the Tribunal for a review of the decision. Section 63(1) of the ADT Act obliges the Tribunal to decide "what the correct and preferable decision is having regard to the material then before it" and by para (a) this is to include "any relevant factual material". Such an inquiry cannot be confined within the particulars of the reason, ground or matter specified in the original notice or notices. 21 In Shi v Migration Agents Registration Authority (2008) 82 ALJR 1147, the High Court considered that the power of the Administrative Appeals Tribunal when reviewing a decision of a disciplinary tribunal extended 'to do over again' what the original decision-maker did, drawing upon the grant of powers and discretions of the primary decision-maker as well as those powers conferred upon the Tribunal by its legislation: [47], [50], [100], [134], [136]-[143]. Section 63(1) of the ADT Act is relevantly the same as the AAT's power considered by the High Court in Shi. Indeed, it is more explicit because it makes it clear that it is to decide the matter "having regard to the material then before it" which includes any new matter of fact or allegation that may be raised. 22 In Barakat v Building Professionals Board [2009] NSWADT 5 at [18] to [23] the Tribunal noted that the Board had widened its case at the hearing by adding the ground that the applicant was not a fit and proper person to hold accreditation as a certifier. The Tribunal did not find that such an amendment was impermissible. 23 The scope of the inquiry by the Tribunal on review is determined by whether proof of any matter would rationally affect that finding. Accordingly, the Tribunal may accept evidence and hear submissions concerning any matter which may support or undermine that finding. The subject matter of the review is not confined by any complaint or other matter which stimulated the Board's investigation but by the Board's ultimate finding. Whether or not that ultimate finding was confined to certain factual matters is irrelevant, because it is not an appeal from the reasons of the Board. A submission to that effect was rejected in the McKee v Allianz Australia Insurance Ltd [2008] NSWCA 163 at [26]-[30], which considered a broadly similar power of review under s.63 of the Motor Accidents Compensation Act 1999. Should the Tribunal allow the Board to amend its reasons? 24 The Tribunal's discretion. The Tribunal may, subject to the ADT Act and the rules of the Tribunal, determine its own procedure: ADT Act, s 73(1). The Board accepted that the Tribunal may refuse to allow an agency to amend its grounds or reasons for decision if such an amendment would permit matters to extend beyond a reasonable time. 25 Relevant factors. Mr O'Brien relied on the decision of the Court of Appeal in Herron v McGregor & Ors (1986) 6 NSWLR 246 and of the Federal Court in Kardas v ASC (1998) 29 ACSR 304 at 313. In the first case McHugh JA, speaking for the Court, held that disciplinary proceedings against two doctors should be stayed because they were an abuse of process. A complaint had been laid against one of the doctors in 1986, ten years after the death of the patient. McHugh J found that the facts relied on had been known to the Health Commission for nine years. McHugh J emphasised the right to a speedy trial saying at p 252, that it was relevant to take into account the length of the delay, the reason for the delay, the extent of the assertion by the accused of his right to a speedy trial and the prejudice to the accused. These factors are also relevant when determining whether to allow the Board to amend its Statement of Reasons. 26 Length of the delay. An investigation by an accredited body is to be conducted as expeditiously as possible: EPA Act, former s 109Y and BP Act, s 28(1). While this matter was conducted by way of audit rather than the investigation of a complaint, the same principle applies. The present case has its genesis in an audit investigation commenced in 2006, six years after the events occurred. Although the Board contacted Mr O'Brien about a complaint from Baulkham Hills Shire Council in 2003, it admitted in a letter to his solicitor dated 26 July 2006 that it did so in error. The complaint related to Mr Cohen, not Mr O'Brien and the investigation of that complaint was completed before 2006. After the finalisation of that investigation and in circumstances where Mr O'Brien has applied for a review of the Board's finding, the Board is seeking to add an alternative basis for its decision. 27 Reason for the delay. The legislation changed the identity of the decision-maker in 2007 and, according to the Board, a substantial period of delay was caused by the time afforded to the applicant to respond to the Draft Investigation Report. Mr O'Brien says that the Board, or its predecessor, has had the judgment of Cowdroy J in Austcorp No. 459 Pty Ltd v Baulkham Hills Shire Council [2002] NSWLEC 90 for over 6 years and failed to take action against Mr O'Brien in relation to the form of the certificate. That judgment noted at [21] that: The applicant appointed Mr B Cohen of Essential Certifiers Pty Limited as a Principal Certifying Authority, (PCA) or private certifier. Mr Cohen issued a purported Construction Certificate (No 01/4121) dated 12 September 2000 and a Notice of Commencement of Building Work (indicating work to commence in October 2000) was lodged with the council. 28 In my view, the delay in notifying Mr O'Brien of the alternative basis for its decision arose because, until it received Mr O'Brien's detailed submissions, the Board was firmly of the view that he had signed the construction certificate on 12 September as the certifying authority. The Board apparently did not regard Mr O'Brien's submission as tenable until close to the hearing date. It was at that stage that it sought to amend the Reasons for Decision. 29 Prejudice to Mr O'Brien. Mr O'Brien says that this is the first time that the Board has said that he is "unfit to properly carry out the duties of an accredited certifier" and that is a different "charge" from that brought previously. The Board, correctly in our view, says that the alternative grounds for its decision is not a fresh "charge" based on a complaint. It is however another ground in support of the decision that Mr O'Brien is guilty of unsatisfactory professional conduct. The Board says that the application to amend the reasons is necessary to answer the case that has been put by Mr O'Brien in his submissions to the Tribunal. No facts are sought to be raised in the alternative ground which have not already been canvassed by Mr O'Brien himself in the submissions made on his behalf to this Tribunal. 30 On examination it is clear that Particulars 1 to 4 referred to above at [14] have never been previously notified to Mr O'Brien. They raise questions as to whether Mr O'Brien conscientiously discharged his duties between 12 and 26 September 2000. Particular 5 relates to the date on which Mr O'Brien endorsed the construction certificate. A number of findings in the Board's original decision were predicated on the assumption that the date which the certificate bore, 12 September 2000, was the date of Mr O'Brien's endorsement. Mr O'Brien says he is prejudiced in relation to these allegations because the files of Essential Certifiers Pty Ltd from June to December 2000 are missing. According to the Board, any prejudice to Mr O'Brien could be addressed at the hearing. While Mr O'Brien would be able to raise these difficulties at the hearing, he will not be able to overcome them. He is significantly prejudiced in relation to the presentation of his case because of the length of time since he endorsed the certificate. 31 Public interest. According to the Board, it is the Tribunal's responsibility in matters involving professional discipline to protect the public interest. The Board submitted that the date on the certificate is critical because no building work can commence until the certificate is issued: EPA Act, s 81A(2). Unless the date of the certificate accurately reflects the date on which the certifier applied his or her mind and determined that the certificate should issue, and did so, then it could never accurately be determined whether building work was lawfully commenced. The penalty for unlawful building work is now 1.1 million dollars: EPA Act, s 126. Lawful commencement of building work has important legal implications for the security of the development consent, which will lapse unless work is commenced within the statutory time frame: EPA Act, s 95. It also has obvious implications for insurance, the building contract and contractual claims. 32 According to the Board, there is a further implication if it is found that Mr O'Brien signed the certificate after receipt of the further information which his company required the applicant to provide. Mr O'Brien must have reviewed that information to determine whether it was satisfactory before signing the certificate. It was not, and if it is to be contended that Mr O'Brien did not sign the certificate on 12 September 2000, it is open to the Tribunal to consider and make findings about the inadequacy of his consideration of those documents. 33 Conclusion. In our view, Mr O'Brien has done his best to meet the original allegations against him in circumstances where his memory in relation to events that occurred in September 2000 is admittedly poor. Because of the effluxion of time, Mr O'Brien no longer has any significant recollection of the events in question. The delay in this case means that Mr O'Brien has no real prospect of calling any evidence in relation to the issues raised by the requested amendment. Despite the fact that there is a public interest in ensuring that accredited certifiers comply with their obligations, the alternative grounds do not disclose that this is a case of the most serious kind. The public interest in the Board pursuing the alternative grounds for its finding is outweighed by the prejudice to Mr O'Brien of allowing it to do so. 34 Registry to list matter for further directions in consultation with the parties. Order The application by the Board to amend its reasons for decision is refused.