The rap sheet against Matthew Rixon was damning.
In April 2013, he was found guilty in the NSW Supreme Court of carrying out unlicensed building work on multiple occasions and hit with court orders to cease doing so. Than on May 9, 2014, he was found guilty of contempt of court for having breached these orders. He was given a suspended prison sentence of 18 months and made to perform 300 hours of community service.
Undeterred, by early 2015, he was advertising “labour and material under $1,000.00” in the Sutherland Shire Leader newspaper. From this, he secured a contract with Allawah home owner Simon Gilbara for the demolition of a brick wall on the left perimeter fence for less than $1,000. He then secured a further supervisory role from Gilbara involving the installation of a new concrete driveway and a new colorbond fence (total cost $21,000)
Unlicensed building work was not his only offense. He has also had judgements against him for fraud involving the setting up of monthly credit accounts with building suppliers in Newcastle and passing valueless cheques to pay for rent and building materials.
Often, his work was shoddy and incomplete (having accepted deposits).
For the 2015 offence, he was finally thrown behind bars. He was given an 18-month sentence with a 12-month non-parole period.
Whilst the judgement intended to send a message to repeat offenders, the case underscored the problems which consumers – often elderly – face from unlicensed and unscrupulous builders and trade contractors.
Last year, Carol Nicol in New South Wales hired builder Sam Robinson to renovate her home whilst she shuttled her teenage son (who had cystic fibrosis) to and from hospital.
Whilst the builder did a competent job at ripping things out, he removed the bulkhead from her ceiling (voiding her home insurance), failed to replace door handles (leaving her stranded outside) and failed to pass on payments for a stacked stone fireplace (which left a debt collector on her back).
His main job had been to renovate two bathrooms. Despite four months of work, both were left unusable: taps fell off, the toilet leaked and faulty wiring in the ceiling short circuited the house.
On top of $39,000 already paid to the builder, she had to fork out $40,000 in repairs.
In another case, 58-year-old unlicensed builder Paul Arneric was fined $10,600 in the Adelaide Magistrates Court after having never returned a rangehood which had been taken from the client’s home for measurements in respect of a job which involved installing kitchen equipment.
A second disgruntled client complained of substandard work after Aneric was hired to repair water damage to an investment property (having accepted an $800 deposit).
The extent of the problem should not be underestimated.
In the last financial year alone (2016/17), Fair Trading NSW says it received 477 complaints about alleged unlicensed building work and prosecuted 28 builders.
In Queensland, the Queensland Building and Construction Commission (QBCC) prosecuted 21 unlicensed building work cases in 2016/17. This resulted in $571,027 worth of penalties as well as $264,779 in compensation for home owners. In the current financial year, the QBCC says it is investigating about 200 cases of referrals across a number of trades.
Across Queensland, random compliance audits which check thousands of individuals to ensure they are appropriately licensed have shown that unlicensed work was occurring on 1.63 per cent of cases.
This raises questions about the consequences of engaging unlicensed builders and how consumers can protect themselves.
In New South Wales, a spokesperson for NSW Fair Trading said licensing is required where building work exceeds $5,000 and for plumbing, electrical or air conditioning or refrigeration work irrespective of the cost.
Consumers who deal with licensed tradespeople have the peace of mind that that person or business is legitimate and has the qualifications to perform the work in question.
Furthermore, Fair Trading NSW is only able to mediate disputes and perform inspections as well as issue rectification orders for defective work in cases where the builder or contractor is licenced. This is because the agency is not able to issue rectification orders or complain inspection reports to unlicensed entities.
Finally, as with all states, unlicensed builders will not be able to obtain home warranty insurance. Thus, consumers who use unlicensed builders and tradespeople will not be covered by home warranty insurance.
“Only a builder or trader who is properly trained and has the relevant experience to do the work, may be licensed with Fair Trading,” the spokesperson said.
“Any person who carries out residential building work worth more than $5,000 in labour and materials, without an appropriate licence, is breaking the law and could be prosecuted.”
According to the spokesperson, homeowners can protect themselves in two ways.
First, they can access a public register of licences and certificates maintained by Fair Trading NSW. This includes the particulars of the licence or certificate holder, the categories of work authorised and the details of any disciplinary action, outstanding tribunal orders, insurance claims paid and cancellations or suspensions.
Consumers can also confirm that the person has a suitable home warranty insurance policy by performing an online check via a search function maintained by the State Insurance Regulatory Authority. This protects homeowners in cases where the builder in question is unable to complete the work because they have died, disappeared, become insolvent or had their licence suspended for failing to comply with a tribunal order. Builders or tradespeople are required to provide consumers with an insurance certificate before commencing work or accepting payment in cases where the value of the work exceeds $20,000.
In Queensland, a spokesperson for the QBCC says licensing is required across most product categories. Generally, the threshold above which licenses are required is $3,300, although licensing is required for plumbing and drainage, gas fitting and some other types of work whilst hydraulic services design work must be done by a licensed person if the value of the work exceeds $1,100.
As with NSW, Queensland has an online searchable database which shows the type of work permitted by the licence and a full licence history including disciplinary action.
From a homeowner’s perspective, Queensland also has the best protection of any state under the Queensland Home Warranty Scheme.
Queensland is the only Australian state with a first-resort warranty scheme for residential construction work. This means a home owner can contact the QBCC as a first resort if they have issues with a contractor’s work.
They can apply to the QBCC to have defective work rectified by the contractor, and the QBCC has power to direct contractors to rectify defects. If a licensed contractor fails to rectify defects covered by the Queensland Home Warranty Scheme, the defects will be rectified as a claim, and the cost of the claim recovered from the contractor responsible.
Where work is incomplete, a homeowner can make a claim under the Queensland Home Warranty Scheme if they have terminated their contract with the contractor due to the contractor’s default, even if their contractor is solvent and still trading. Where the contractor is insolvent and its licence has been cancelled, the homeowner does not have to terminate the contract; they can just make a claim.
This differs from the ‘last resort’ model adopted through other states, where homeowners can claim insurance only after he builder or contractor dies, disappears, becomes insolvent or fails to comply with orders to rectify work.
“Licensed contractors play a vital role in maintaining public health and safety in a number of building areas, including plumbing and drainage, and gas-fitting work,” the spokesperson said.
“The QBCC urges home and property owners who are considering undertaking building work to obtain at least three quotes from an appropriately licensed contractor for the work. They should then conduct a free online licence search on the QBCC website, which will show the type of work permitted by the licence and a full licence history, including any disciplinary action.”
Melissa Adler, executive director, Industrial Relations and Legal Services says the importance of hiring licensed tradespeople should not be underestimated.
“They’ve been vetted by the relevant regulator to demonstrate that they have the relevant qualifications, skills and experience which is considered appropriate to carry out building work,” she said.
Adler says the most important thing for consumers is to use online databases to confirm that the person in question is suitably licensed.
“Consumers need to do a license check before they engage somebody. In all jurisdictions, there is a way to put somebody’s name and make sure that they are appropriately licensed,” Adler says.
“You can do it online now. That’s one very easy thing which a consumer can do to make sure they are engaged with someone who is appropriately licenced.
Unlicensed builders place consumers at risk.
By undertaking a few simple steps, consumers can go a long way toward ensuring that they don’t fall victim.