Owners corporations and strata managers have the potential to benefit from two recent decisions in Victoria and New South Wales in which building certifiers are being held accountable for work they signed off on which has been found to be defective.

Building defects and their rectification are major problems in residential strata buildings, with nearly three-quarters of residents living in strata have experienced one or more defects in their scheme.

The Victorian Building Authority (VBA) has just rendered a high-profile decision relating to the fire in Melbourne’s Lacrosse Building in Docklands in November 2014.

Highly flammable and non-compliant external aluminium cladding contributed to the rapid spread of the blaze, with the fire jumping from a balcony on the eighth floor to the top of the 23-storey building. When the Metropolitan Fire Brigade reviewed the case, it found the aluminium cladding did not comply with the Building Code of Australia.

The subsequent investigation by the VBA has resulted in the building surveyor who signed off on the building work facing disciplinary action, with the authority recently announcing it had referred the registered building surveyor, Anastasios Galanos, to the Building Practitioners Board.

The VBA’s investigation led to the allegation that the building surveyor had breached the Building Act and Regulations and failed to carry out his work in a competent manner and to a professional standard in that he “could not have been satisfied that the building work would comply with the Building Act and Regulations when he issued the building permit.”

Penalties if the allegation is found to be true include fines and cancellation or suspension of the certifying surveyor’s registration.

The VBA is also referring the conduct of the architect to the Architects Registration Board of Victoria, the regulatory body responsible for the conduct and discipline of architects.

The disciplinary action follows increased scrutiny of the operations and current practices of building surveyors in Victoria.

In December 2015, the government announced that builders would be banned from hiring their own surveyors under a radical shake-up of Victoria’s construction laws.

Last year, an examination of data from Victoria’s Auditor General by Fairfax Media found that the state’s building surveyors had been found guilty over more than 700 misconduct claims since 2009, with many ignoring illegal building work or serious fire risks, or issuing an occupancy permit when a building was not fit for occupation.

It comes amid concerns that there is an inherent conflict of interest in requiring private building surveyors to assess building work while they are also employed by the builder.

The VBA action follows a decision in New South Wales late last year where the Supreme Court found a certifier liable to a home owner for building defects. While the certifier in that case was a local council, it offers hope to owners corporations whose buildings are affected by defects.

In the case Chan v Acres (2015), the plaintiffs bought their home from an owner-builder who had renovated and built extensions at the property. A firm of engineers had been engaged by the previous owner to prepare structural drawings and carry out inspections of the structural work as it was built. The previous owner then got the local council to certify the property when the renovations were completed and the council issued an occupation certificate for the house to certify that it was suitable for occupation and use. Despite the involvement of the engineers and council, there were significant defects in the home.

The plaintiffs subsequently sued the owner-builder for breach of statutory warranties, and both the council and the engineers in negligence. The claim against the previous owner was a success but the Court was not satisfied that there was enough evidence to establish that the engineers owed a duty of care

However, the Court found that the council owed the new owners a duty to use reasonable care in performing its critical stage inspections during the renovations of the house and in issuing the final occupation certificate for the house once the renovations had been completed.

The Court found that the negligent performance of the council’s function as certifier could well injure the economic interests of the purchasers of the house, who it knew would rely on the occupation certificate.

This is an important verdict for owners corporations considering negligence claims against certifiers of residential buildings.

We know the incidence of building defects in New South Wales is significant. There have been a number which have had serious consequences: the Bankstown apartment block fire with resulting death and injury; the Lane Cove balcony collapse and resulting injuries; and the Macquarie Park failure of a high level balustrade and resulting death.

Compliance and certification of building work in New South Wales is currently under review, as part of the continued reform of the planning system. Recent reforms under the Strata Management Bill 2015 do not address the issues that exist.

Developers should be subject to a statutory obligation to ensure compliance by engaging professional accredited designers of critical building elements. That should include an obligation to rectify non-compliant construction work.

There also needs to be a stronger certification process which requires that design and construction compliance for critical building elements be undertaken by qualified professional practitioners, and preferably by the actual designer of the building element or system.

We need to improve the scope and detail of mandatory building inspections of critical building elements. Construction compliance certification has to be based on professional inspections during construction, not afterwards.

  • About bloody time – inspectors and certifiers bear a large share of culpability for the shoddy quality of so many new apartment builds.

  • A good article Matthew. Lets hope the current certification review delivers on full accreditation of designers and installers who are insured and can be called upon under their insurance to fix bad design or bad installation of building work. That's certainly what accredited certifiers have been campaigning for to government for the last 10 years. When it comes to Private Certifiers, their role is misunderstood by most people who dont have full insight into the system. Remember there was once a system where the Architect was responsible to run a project and the Architect employed a Clerk of works to ensure quality of workmanship and compliance with standards across the whole project. That role took anything from a couple of days a week to full time. On major projects more than one clerk of works was needed full time. The Builder lead, design and construct process replaced the Architect and the Clerk of works. Unfortunately now, many people (including many who should actually know better) look to the Private Certifier to fill that gap but if you look at their regulatory role it does not and cannot replace an Architect and Clerk of Works and nor does the Industry wish to pay for the Private Certifier to take on those roles. The certifiers role is highly regulatory and is in large part a practitioner or the Town Planning system.
    Its more complicated than simply looking for someone to blame. Not that your article did that and thank you for writing it as I think it expressed broad and quite balanced views. As I said, lets hope the upcoming changes implement more accountability in the appropriate places and achieve better outcomes for consumers

  • I would say that the first step in repairing this mess is to find out who is to blame and make them entirely responsible. It cannot simply be nobody. Builders are deemed to possess the appropriate experience to construct — should be aware of the Australian Standards and National Building Code and have a responsibility as does every body else in the chain including certifiers and the regulator. All have failed.

  • One would also think it appropriate for suppliers to the industry to ensure their products were presented in accordance with the building regulations and that those products and associated technical specifications are made available in a manner that all inspectors and certifiers are able to rely.
    If the industry isn't presenting the credentials of a product then it's hard for a certifier to sign off.

    This shouldn't be about a witch hunt as to who's responsible – It's more about obtaining a better outcome for the consumer in order they have the confidence in the construction industry.

  • All those 67 Sharing people at the time I wrote this comment, only three comments were revealed, so I will make it simple .
    Who pays the' innocent parties' the people who have purchased a faulty property in these cases.
    The time limitation issue devised by the Government and in certain cases must be 'extinguished' it is unreasonable, the product was faulty at the start and the parties and their insurers at that point must be pursued to pay.
    If that is the real case, the parties constructing the building, the original owner of the building or subsequent parties MUST PAY.
    It's such a mine field at the end of the day, but no one will touch the issue that's the way the political system engineered this issue.
    For all you 'smarties' who are entrenched in the system, more so the political system, I would like to head up a group that takes the Chinese Government to the International Court at the Hague
    The International Court of Justice acts as a world court. The Court has a dual jurisdiction : it decides, in accordance with international law, disputes of a legal nature that are submitted to it by States (jurisdiction in contentious cases); and it gives advisory opinions on legal questions at the request of the organs of the United Nations or specialized agencies authorized to make such a request (advisory jurisdiction).

    Why because if people bother to read the "gobble gook" Free Trade Agreement, particularly with China, I believe it's all 'manure,' there is no protection for an innocent party via either Governments and their Departments. No wonder Mr Robb our Trade Minister is retiring.
    Before I build my case anyone who wants to 'knit pick" make some constructive comments, and don't expose your lack of 'class.'
    From some research I have conducted, I believe basically the Chinese Communist Government owns Chinese Companies and appoints their Corporate Structure.
    Therefore, ULTIMATELY the Chinese Government is responsible for their corporate companies mismanagement, as appears with the non compliant products issues.
    If the buyer of these Chinese product has failed in writing for the Chinese Company not to provide products to the buyers countries Standards, then the purchaser is obviously at fault, and must suffer.
    How simple is that, assuming backroom shuffling of paperwork is not undertaken.
    I read most of the articles on non compliant products, but no one is helping the innocent owners.
    Maybe the legal eagles know they can't make any money from the innocent and in some cases the new destitute owners.
    Or is it we can't upset or Trading partners?
    Like the artificial islands that China have illegally built and it appear got away with, are we that dependent on China to sell our soul or will we risk a confrontation by standing up for the general population of Australia. What has happened to free speech?
    Well manufacture back in our country, give our people safe quality products fit for purpose, jobs, hope, and the general population will have to manage to pay the increased prices and forgo some of their expectations of lifestyle, especially Company management who buy oversees to keep their company profit high to compete against Chinese products. Finally correctly police and enforce our Standards for imported goods, Government of the day.

  • The Lindcombe Council signed off on a building that recently lost part of its roof but note- the councillor was the developer and the Mayor was in strata management business with the developer!!
    No accountability and to use that profession as an example: would a company's financial reports be audited by one of its own subsidiaries or associated entities? No.
    Independence is one of the key qualities entrenched in the Code of Professional Conduct for us Accountants. Similarly, a lawyer known to a dependent must not act for that party. A school teacher cannot mark the work of his or her children.
    Independence. Credibility. Accountability. Professionalism. Integrity.
    Lives depend on these qualities in the Building Industry.

  • Good to read, Matthew.
    Accountability for the trillions of dollars spent on building should apply to all responsible and most importantly in domestic building, as well as strata building and the other building sectors.

    As for the BPB and an Inquiry, if ever held and if anyone is found 'guilty', this will have little value. Even if suspended, the offenders will continue to work and often if fined, the fines are never paid.

    All owners should all be able to get what they pay for! And if not, the reprobates should be made to pay. As for public buildings where taxpayers foot the bill – think all the hospitals in Melbourne, Adelaide, Perth, etc.,etc. – again those responsible should be forced to pay. And all should also be punished. But this is not utopia – or perhaps it is in actuality the TV 'Utopia' – and hence we need say no more!.

    The most responsible of all are the Government and its advisors – and they should not have immunity from punishment. If made accountable, then we would not be in this mess.

    As for owners appointing surveyors, this will make no difference to the 'arrangements' between builder and surveyor. Another meaningless PR exercise.