Mythical Reform and the Reality of No Reform 10

Thursday, July 9th, 2015
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From a consumer perspective, Parliament’s confusion and lack of enthusiasm to pass the Building Legislation Amendment Bill 2014 was the only good news last year. Emanating from the Consumer Protection Reform Strategy, its purpose was to conceal the reality: there was no reform for consumers.

A review of the proposed legislation reveals no improvement in consumer protection. Worse, it would actually make more consumers more defenceless and more susceptible to damage than is currently the case.

Let us consider a few of the key foundations of the fundamentally flawed ‘consumer protection framework’ and its performance, and then evaluate the outcomes of its successor, the ‘Strategy.’

Registration and Discipline of Building Practitioners

Of 21,186 building practitioners currently registered, the majority hold registration without meeting any or all of the requisite criteria. Whether holding no qualifications, not passing the test, buying the licence or among those ‘grandfathered’ in 1993, registration guarantees nothing. The VBA actually announced this fact in the form of an official disclaimer on its website in 2013.

In May 2015, the Victorian Auditor-General’s Office (VAGO) also confirmed the meaningless value of the almost non-existent ‘discipline’ component of the framework, with few practitioners going to an inquiry and most walking away before or after a VCAT appeal. In a May 2015 audit report, the VAGO stated that registration “does not ensure that the only practitioners who are registered are qualified, competent and of good character and the disciplinary system is not protecting consumers, as current sanctions are ineffective in deterring practitioner misconduct.” For those currently on the disciplinary register, VBA advises clients to “make your own judgement of their character.”


The ‘reform’ is to allow all registered building practitioners to remain so, regardless of the consequences for consumers, with the sullied VBA to be in charge of ‘registration.’ The significant change would be to require a ‘Police Check’ with such a check simply demonstrating that a practitioner has not been caught, not proof of ‘good character.’

Regarding discipline, the second supposedly significant measure is that the VBA may issue a ‘Show Cause Notice.’ This is likely to be a rare occurrence, but if it ever did happen, the recalcitrant practitioners could appeal internally, and if that appeal was unsuccessful, they could have a second appeal at VCAT. No doubt they will appeal, and given VCAT’s illustrious record on hearing practitioner appeals, together with its record on building disputes, it seems likely VCAT will allow the overwhelming majority of offenders to walk away.

Further, the proposed bill would mean no registration board. Whilst the BPB’s performance was deplorable, it was never in charge of registration. The discredited registration regime was created by the Department of Building and ‘controlled’ by Building Commission officials. The ‘strategy’ is to retain the same policy conceived by the same Department, from whence the current VBA CEO came. All those who should not be ‘registered’ remain registered and the VBA officials continue the Commission’s ‘everyone can be registered’ practice, following the tenets that inspired this sorry state of affairs.

In short, the new ‘strategy’ falls under the same meaningless ‘registration regime.’

Enforcement of compliance

The VBA’s statistics demonstrate that, like the Building Commission, the ‘no touch regulator’ continues with no enforcement. For example, in 2013/14, out of 13,261 registered domestic builders (limited and unlimited), not one was audited for compliance with building and safety standards. The surveyor audits conducted focused on permit levies and not on auditing surveyors’ work.

The VAGO’s findings of 2015 verify that the VBA does not identify ‘risks,’ does not enforce compliance and makes no attempt to prevent harm to consumers. Likewise, the VAGO found that CAV is loath to use its enforcement powers, with a mere four prosecutions in 2012/13, usually of ‘unregistered’ persons. Further protection for the rogues is provided by CAV and VCAT, both supporting the ’strategy’ of not referring any offenders to the BPB for discipline.


The reform is the VBA in charge of compliance, as was the Commission and the old ‘no enforcement’ mindset is the new ‘strategy.’

In short, the new ‘strategy’ brings about no change and even less enforcement.

Complaints and Dispute Resolution

CAV conducts few conciliations, declaring most disputes ‘resolved’ without providing any assistance to consumers. The VAGO concluded that it was unclear if CAV’s activities were at all helpful in reducing consumer detriment. However, many thousands of consumers have verified that CAV’s ‘helpers’ do not help consumers. CAV officials know the builders and their lawyers well, acting unequivocally as collaborators. These officials have a record of openly demonstrating prejudice, fully aware that by acting to protect the builders, they will cause additional damage the owners and their families, not to mention the blatant injustice.


The reform here is to move dispute handling from the CAV to the VBA. If a consumer makes a complaint, the mythical strategic boast is that Rectification Orders (RO) will help consumers. If, for example, an owner knows that the slab and frame are defective and complains to the VBA, it may appoint an ‘inspector’ to examine the work. If past practice of the Commission and VBA is a good predictor of future performance, the ‘inspectors’ will omit and or/minimize defects and support the offending builder. If the VBA issues a RO, and it need not, the VBA can compel the owner to pay more money to a builder. Meanwhile, the builder can get a VBA review and if this is unfavourable, he can then go to VCAT for another review.

From past experience, we know that most will do this to avoid VCAT orders against them for failing to comply with the RO. As construction lawyer Peter Micevski notes, the “prospects of appeal are likely to be high” and leading to “an over-crowded VCAT and high demand for construction lawyers to assist in the litigation of building disputes.”

What are the consequences for consumers? First, the RO can be within a ’reasonable time’ – which can be taken to mean months or even years! If the builder fails to rectify, the VBA may issue another RO, extending the time. Then there are two reviews open to the builder (VBA and VCAT). If a breach of the RO notice is issued, the owner may end the contract, but then has to apply to VCAT for an order against the builder. By now, how many years have passed? When the case comes up at VCAT, it can make any order it considers ‘fair,’ including ordering the owner to pay more money to the builder. This ‘strategy’ will allow owners to be legally robbed of more money, whilst years slip away (VCAT cases lasting up to nine years), owners paying the mortgage for a house they cannot live in and rent to live elsewhere, and more VCAT costs. All this because they wanted to exercise their ‘consumer rights’ to get the house they paid for.

This leaves VBA and VCAT in charge, both with appalling records of causing injurious harm to owners. The big winners again are litigation, lawyers and their cowboy clients. Consumers are hammered harder and more heartlessly.

The refusal to improve the scheme, underpinned by conflict of interest, collusion and secrecy is shameful. But to spin a ‘strategy’ to increase consumer harm disguised as genuine reform is truly wicked.

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  1. Beverley-jane

    Consumers are nothing more than fodder for this industry Anne and year after year, audit after audit, nobody is listening or cares. The basic survival instincts to provide safety and shelter for one's family drives us to risk our financial security in believing our builder's registration equates to honesty and competence, after all, our red tape clogged society surely they would be monitored by an effective regulator, legislation etc ? Our misplaced trust ensures we will continue to be herded by these wolves in lambs clothing like lambs to the slaughter.

  2. Mark Whitby

    Couldn't agree more Anne.

    Anything over 1 year is an unbelievable time to resolve a dispute. What a defective system we've got.

    It seems that the aim of the authorities is to simply make disputes go away, no matter if it's via delays that make people give up, or bullying in VCAT or immune authority appointed so-called experts with no definition of defect commenting on alleged defects. It's a joke

  3. Branko Mladichek

    As Building Expert practising in Melbourne with thousands of pre purchase and building stage inspections behind me I have had a front row seat to building problems and disputes.
    It all comes down to greed. Builders are really well paid for what they do(or at least they are paid their price) but it seems for some its not enough. Much more money can be made by under delivering on the promise particularly as builders know they can get away with it with impunity. So we have new houses built built with defects in sub standard workmanship because there is no quality control (quality control costs money to implement and maintain you see) Apart from skimping on quality and compliance there is also cost stripping once dwellings are sold off the plan.
    As I write this I have houses under construction now where builders are simply not complying with engineering recommendations for site drainage, thereby risking foundation damage , all with impunity.
    So it seems "Greed is Good" where there is impunity.
    A lot can be said and we can beat about the bush till cows come home but the stark reality is that building control system without enforced penalties is no defence against greed.

    • Mark Whitby

      Good point Branko,

      About the builders not complying with recommendations… it's the recommending and not requiring that is the heart of this problem, because owners are locked into a maximum amount that they can afford contract… and complying with the recommendations would cost lot's more. It's a sort of cronyism I say… with the owners kept in the dark all the time

  4. Andrew

    How can these government department justify their existence with absolutely no protection for consumers.
    After having dealings with VCAT and other government departments responsible for the building industry with my own house, I can't understand why there is no help and why the unjust system is not changed.
    The only people that benefits for this system are the lawyers, building consultants and of course the builders.
    Keep up the good work.

  5. Mel

    Slowly but surely the curtains are being drawn back on this issue thanks to Anne and others. The many (and there are thousands upon thousands) of people harmed by the 'system' must stand together to force the issue out into the open. Real reform will only happen when genuine consumer voices are heard.

  6. Val

    This is not surprising to me. I have known of so many people seriously harmed, including close family members. The system has been organized for owners to lose their money and they have no means of recourse.

    As for reform, it appears that this has again been orchestrated for owners to lose, but more of them and even worse. This is disgraceful, especially seeing that it has been arranged by government and the officials who are supposed to protect owners.
    It is time for this to be stopped. People must unite as clearly the government will never take action and it has allowed owners to be so damaged.
    Good on you Anne for persevering for so long. I look forward to your hard work bearing fruit.

  7. Dick Gower

    It is difficult to understand the apathy of both sides of politics on an issue so obviously and seriously in need of reform.

  8. Connie

    The spotlight on the government again. It seems the reforms are not reforms for consumers at all. Even more saddening these if passed would make owners worse off than they are at present.

  9. Rob

    This system obviously suits the building enterprise in the short term, but in the long team they are running it into the ground. The more consumers that experience this, the more consumers will avoid building or renovating. They are doing a good job of keeping this secret for now, but that can't last. Once bitten twice shy.