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Naqebullah v Victorian Building Authority (Review and Regulation) [2022] VCAT 895 (5 August 2022)

Last Updated: 5 August 2022

VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL

ADMINISTRATIVE DIVISION

ORDERS

1. Pursuant to s 187(1)(c) of the Building Act 1993 (Vic), the decision of the Internal Review Manager of the Victorian Building Authority dated 10 August 2020 is overturned and the following decision is substituted in its place.
2. On Grounds 1, 7 and 8:

(a) The Applicant is reprimanded;

(b) The Applicant is fined a sum of $18,000;

(c) Within 18 months of the date of these Orders, the Applicant must complete an accredited education course in the subject of ‘identifying and applying legal and ethical requirements including compliance with building permits’ (or similar), and that course must be approved by the Victorian Building Authority; and

(d) For a period of 12 months following the date of these Orders, the Applicant must personally attend on site at all Mandatory Inspections listed on the Building Permit for all of the building projects conducted by Shangri-La Construction Pty Ltd or any other business at which the Applicant is the responsible permit holder, to the satisfaction of the Victorian Building Authority.

3. On Ground 2:

(a) The Applicant is reprimanded;

(b) The Applicant is fined a sum of $7,000 (cumulative with Order 2(b));

(c) Within 18 months of the date of these Orders, the Applicant must complete an accredited education course in the subject of ‘identifying and applying legal and ethical requirements including compliance with building permits’ (or similar), and that course must be approved by the Victorian Building Authority (concurrent with Order 2(c)); and

(d) For a period of 12 months following the date of these Orders, the Applicant must personally attend on site at all Mandatory Inspections listed on the Building Permit for all of the building projects conducted by Shangri-La Construction Pty Ltd or any other business at which the Applicant is the responsible permit holder, to the satisfaction of the Victorian Building Authority (concurrent with Order 2(d)).

4. On Ground 6 – No additional action.
5. In the event that no appropriate education course is sourced within 18 months in order to fulfil the requirement in Orders 2(c) and 3(c), the parties have liberty to apply to the Tribunal to vary these Orders.

REASONS

INTRODUCTION

1. These proceedings relate to building practitioner misconduct at a building site in 2012. Mr Obaid Naqebullah (the Applicant) is a registered builder who was responsible for ensuring his building company complied with the building permit in relation to the site. The Victorian Building Authority (VBA or the Respondent) found the Applicant guilty of various disciplinary action offences and imposed sanctions which the Applicant challenges.
2. In these proceedings, the Applicant, seeks review pursuant to s 186(1) of the Building Act 1993 (Vic) (the Act) of the penalties decision of the Internal Review Manager of the VBA to impose certain sanctions in respect of building practitioner misconduct.
3. On review, the Tribunal may affirm the decision, amend the decision or substitute another decision.
4. The Applicant sought to rely on two affidavits which were sworn by his solicitor^[1] and which exhibited a number of records of the VBA which were summaries extracted from the VBA’s Prosecution and Disciplinary Register located on the VBA’s website. The affidavits were tendered subject to leave being granted. The admission and the weight to be given to this evidence is considered in the body of this decision.^[2]

BACKGROUND

5. In 2008, the Applicant obtained registrations in the categories of domestic builder (unlimited) and commercial builder (limited – medium rise). He later obtained a registration in the category of commercial builder (unlimited) in 2018.
6. On 8 April 2008, Shangri-La Construction Pty Ltd (ABN 44 130 534 244) (Shangri-La) was registered as a company, with the Applicant as a director. Shangri-La originally had another director but this shareholder was not a builder.
7. In or about November 2011, the Applicant was appointed as the responsible registered builder for the construction of a residential apartment building, containing 81 dwellings and a basement carpark, at 3-7 Dixon Street and 6-8 Murray Street in Clayton (the project).
8. On 24 November 2011, the Stage 1 Building Permit for the project was issued (BP 20112708/1). On 13 December 2011, the Stage 2 Building Permit was issued (BP 20112708/2).
9. Construction work on the project occurred between approximately December 2011 and June 2013, and on 21 June 2013 an occupancy permit was issued.
10. On 28 June 2013, the Applicant became the sole director and secretary of Shangri-La.
11. By June 2017, the Owners Corporation of the project building had concerns about the fire safety of the building. They organised for the building to be inspected by a registered fire engineer, Mr Stephen Kip of SKIP Consulting Pty Ltd. He attended the property on two occasions in that month. On 28 June 2017, Mr Kip wrote to the Owners Corporation with his findings, highlighting several areas of fire safety non-compliance, including:
    • 11.1 The external cladding was combustible and not installed properly;
    • 11.2 The insulation in the external walls was combustible; and
    • 11.3 The plasterboard ceilings and the walls separating some apartments were not installed in accordance with the manufacturers fire test reports and were therefore not adequately fire resistant.
12. On 10 July 2017, the Owners Corporation provided Mr Kip’s letter to the Municipal Building Surveyor (MBS) for the Monash City Council. Between July and August 2017, the MBS attended the building for multiple inspections, with either Mr Kip or another fire engineer Dr Jonathan Barnett, resulting in a statement being produced for the VBA. The MBS statement included findings that:
    • 12.1 The external cladding used was not the type of cladding approved on the building permit documents – it was combustible expanded polystyrene (EPS);
    • 12.2 The structural steel columns did not meet the required standard because they had an outer layer of EPS cladding;
    • 12.3 The external walls of sole occupancy units did not meet the required standard because they had an outer layer of EPS cladding;
    • 12.4 There were points of ignition such as barbeques in range of the EPS cladding;
    • 12.5 There was no fire separation space between the top storey units and the ceilings below; and
    • 12.6 There was no separation between the pump room and electrical room.
13. The MBS concluded that the building was not constructed in accordance with the permits and the stamped blueprints and was not consistent with the relevant fire engineering report. The MBS formed the opinion that the occupants of the building were at risk and issued various emergency orders. These orders related to security and avoidance measures and did not result in any evacuation orders.
14. On 21 March 2018, Dr Barnett provided a detailed report based on the findings of the MBS investigation. The main conclusions of the Barnett report were that the construction issues may:
    • 14.1 Allow the spread of fire from one unit to other units; and
    • 14.2 Cause external walls, common walls or ceilings to collapse prior to occupants being safely evacuated or during fire brigade intervention.
15. A consultant building practitioner, Mr Stuart McLennan, was contracted by the VBA. On 2 May 2018, Mr McLennan produced a technical report concluding that the risk to the occupants and members of the fire service was “extreme”.
16. On 3 July 2018, the VBA issued an initial allegations letter to the Applicant. The Applicant was given an opportunity to respond to the allegations and the VBA conducted further investigations. On 8 November 2019, the VBA issued a Show Cause Notice to the Applicant, per s 182 of the Act – this set out 11 grounds on which the VBA proposed to take disciplinary action.
17. Following the show cause process, including oral and written submissions made by the Applicant, on 26 May 2020 the VBA issued a Notice of Decision (the Previous Decision) finding 9 of the 11 grounds substantiated and imposing the following penalties:
    • 17.1 Reprimands;
    • 17.2 $54,000 in fines; and
    • 17.3 A total suspension of his registrations for 6 months.
18. On 13 July 2020, the Applicant sought internal review of the Previous Decision, per s 185(2) of the Act. The internal review process included the Applicant providing a further written response and attending a meeting with the Internal Review Unit for oral submissions. In his submissions, the Applicant sought reprimands and a smaller fine only.
19. Following the review process, the VBA Internal Review Manager issued a decision. The Notice of Internal Review Decision (the Decision), dated 10 August 2020, overturned the Previous Decision, reduced the guilty grounds to 6 grounds, and imposed the following penalties:
    • 19.1 Two reprimands;
    • 19.2 $20,000 in fines; and
    • 19.3 A total suspension of his registrations for 3 months.
20. A detailed breakdown of the Decision is as follows:

21. On 14 August 2020, the Applicant applied to the Tribunal for a review of the Decision, pursuant to s 186(1) of the Act. Section 187(2) functions to automatically stay the operation of the decision until the Tribunal’s review is finalised.
22. The final hearing was held on 13 July 2022.

THE APPLICABLE LAW

Legislative Framework

23. The relevant sections of the Act are contained in the following paragraphs.
24. Section 179 sets out the grounds on which disciplinary action may be taken against a registered building practitioner. It relevantly provides:

(1) Each of the following is a ground for which disciplinary action may be taken against a registered building practitioner—

(a) the practitioner has contravened—

(i) this Act or the regulations under this Act;

...

(b) the practitioner has engaged in unprofessional conduct or has failed to comply with a code of conduct;

...

(f) the practitioner has engaged in conduct in relation to the practitioner's practice as a building practitioner that is—

(i) constituted by a pattern of incompetence; or

(ii) negligent in a particular matter ...

25. Section 16(1), as in force at the time of the conduct in question, provided:

(1) A person must not carry out building work unless a building permit in respect of the work has been issued and is in force under this Act and the work is carried out in accordance with this Act, the building regulations and the permit.

Penalty: 500 penalty units, in the case of a natural person.

26. Section 178 sets out the types of disciplinary action that may be taken against a practitioner where a disciplinary ground is made out. It provides:

In this Division, disciplinary action in relation to a registered building practitioner means one or more of the following—

(a) reprimand the practitioner;

(b) direct the practitioner—

(i) to do a specified thing, including to rectify or complete specified building work; or

(ii) not to do a specified thing;

(c) require the practitioner to successfully complete a specified course of training within a specified period;

(d) impose a penalty of not more than 150 penalty units, in the case of a natural person, or 750 penalty units, in the case of a body corporate, unless—

(i) a charge has been filed in the Magistrates' Court in relation to the matter; or

(ii) the matter has been dealt with by a court exercising its criminal jurisdiction; or

(iii) the matter has been dealt with by the issue of an infringement notice;

(e) vary a condition (other than a prescribed condition), or impose a condition, on the practitioner's registration;

(f) suspend registration for not more than 3 years either wholly, or as a partial suspension in relation to a specified matter;

(g) cancel registration;

(ga) disqualify the practitioner from being a nominee director of a registered body corporate or a specified registered body corporate for a specified period not exceeding the period during which the body corporate is registered;

(gb) in the case of a registered body corporate, disqualify a registered building practitioner who is an officer of the body corporate from being a nominee director, or being otherwise involved in the management, of the body corporate for a specified period not exceeding the period during which the body corporate is registered;

(h) disqualify the practitioner for a specified period of up to 3 years from being registered in any category or class of building practitioner.

27. The value of a penalty unit is currently $181.74, therefore:
    • 27.1 The maximum of 150 penalty units referred to in s 178(d) is $27,261.
    • 27.2 The maximum of 500 penalty units referred to in s 16(1) is $90,870.
28. On review of a final decision of the VBA, s 187(1) of the Act allows the Tribunal to affirm the decision, amend the decision, or substitute another decision in its place. This means that the Tribunal is conducting a de novo hearing of the penalty issue in this case.
29. The whole of the Tribunal Book was tendered as evidence before the Tribunal without objection and was relied upon variously by both parties in their submissions to the Tribunal.^[5]

Established Case Principles

30. Some established principles can be drawn from other building practitioner disciplinary proceedings as well as similarly conducted disciplinary proceedings, such as legal practitioner disciplinary proceedings.
31. The purpose of penalties imposed by the Tribunal in building practitioner disciplinary proceedings is primarily protective consistent with the purposes of the Act. The Act’s core objectives in s 4(1) include “to protect the safety and health of people who use buildings”.
32. Whilst this protective purpose is paramount, in discharging that duty, specific and general deterrence are relevant considerations – that is, deterring both the offending practitioner and all other practitioners from similar conduct. To properly give effect to the principles of deterrence, “which serve the protection of the public”, penalties must be seen to punish the offender.^[6]
33. Further, the Tribunal notes the observations in Cole-Sinclair v Building Practitioners Board that the range of disciplinary sanctions available under the Act “operate as a mechanism by which the purposes and objectives of the Act are to be maintained”.^[7]
34. There are a range of factors that the Tribunal should consider in determining penalty, including:
    • 34.1 The nature and seriousness of the conduct and the risk of harm if it were engaged in by others;
    • 34.2 Specific and general deterrence;
    • 34.3 Any delay from the time the investigation started to the end of the Tribunal hearing; and
    • 34.4 Evidence of character and community contributions.^[8]
35. The nature or seriousness of the misconduct or the severity of the breach at issue is a highly relevant consideration. The seriousness of the misconduct or breach can be measured in multiple ways, including by considering:
    • 35.1 Whether or not the conduct constituted an offence under the Act or the Regulations;^[9]
    • 35.2 The potential for serious consequences to flow from the conduct, whether or not such consequences actually eventuated;^[10]
    • 35.3 How important the exercise of a particular statutory function or compliance with a particular statutory obligation is to the maintenance of the Act’s specific objectives;^[11] and
    • 35.4 Whether the conduct arose from (a) dishonesty or an ulterior motive for personal gain (which is not alleged here); or (b) a professional failing or serious mistake made in the conduct of building activities.^[12]
36. It is well established, and evident in cases such as Stirling v Legal Services Commissioner (Stirling),^[13] that whilst disciplinary proceedings are not criminal in nature, criminal sentencing principles apply by analogy. In addition to community protection and principles of deterrence, the principles weighing in favour of stringent penalties include denunciation and just punishment. The principles that can be classified as mitigatory include rehabilitation, remorse, delay, personal character and circumstances, financial impact and mental illness.^[14]
37. The relevance of consistency or parity between cases was described by Member Wentworth in Victorian Legal Services Commissioner v O’Brien (No 2):

Orders made in any comparable cases may be a useful guide to proportionality, and parity is important, but every case necessarily involves a different combination of factors. The nature of the offending conduct and its duration, the particular circumstances of the practitioner, the context of the offending, and the assessed risk of repetition are all factors which will rarely be identical in any two cases.^[15]

CONTENTIONS OF THE PARTIES

The Applicant

38. The Applicant’s primary contention on review was to avoid any suspension of his registrations on the basis that such a penalty was excessive. He also sought that the reprimands be reduced to one reprimand (instead of two) and that the total fines be reduced to $10,000.
39. The Applicant pointed to his “clean history” and submitted that the disciplinary action imposed by the Decision is “punitive” and “harsh and excessive”, in that:
    • 39.1 Whilst the Applicant accepts legal responsibility and shows remorse, his moral culpability was not at the highest level – this included raising the fact that in 2012 when the building was constructed the dangers of EPS cladding were not known;
    • 39.2 A suspension is not consistent with disciplinary action taken against other building practitioners – this raised a question of the admissibility and relevance of the snapshots of cases listed on the Prosecution and Disciplinary Register of the VBA website, which the Applicant sought leave to tender;
    • 39.3 A suspension would have financial and reputational consequences for both the Applicant and third parties which would be unfair and unreasonable on a balance of all the circumstances; and
    • 39.4 A suspension amounts to an unreasonably punitive punishment, where the primary purpose of the Act is a protective one.

The Respondent

40. The VBA submitted that the penalties imposed by the Decision were the minimum required to serve the purposes of the Act and should be affirmed.
41. The VBA contended that the culpability of the Applicant could not be reduced materially, if at all. The VBA submitted that the Applicant’s role as the registered building practitioner and permit holder for the project attracted ultimate responsibility for the offending conduct. The VBA emphasised the fact that, regardless of the importance to be placed on the use of combustible cladding, the Applicant had ultimately breached his fundamental duty to adhere to the building permit – this was serious conduct.
42. The VBA objected to the admissibility of the case snapshots from the VBA website. The VBA said that these summaries could not be relied upon to demonstrate consistency in disciplinary action between practitioners, because they were devoid of any meaningful detail and thus no sufficient comparisons could be drawn.
43. The VBA pointed to the fact that the Applicant had not provided any evidence supporting his contentions about the financial and business consequences of a suspension for himself and third parties such as employees and contractors. The VBA conceded that delay had some relevance in this case but was not materially unfair to the Applicant, particularly due to the stay of the operation of the Decision.
44. The VBA contended that a suspension was proportionate to the gravity of the conduct. The VBA emphasised the importance of protecting the community from further risk and deterring others from repeating this kind of serious misconduct, which they contended is a necessary extension of the protective purposes of the Act.
45. Whilst general deterrence was in contention in this case, the parties were in agreement that specific deterrence was not a relevant consideration.

ANALYSIS AND FINDINGS

46. The relevant issues will be addressed according to the topics raised by the Applicant and summarised at paragraph [39] above.

Culpability

47. There were two main aspects of culpability at issue in this case. The first related to the role of the Applicant as the registered building practitioner for the project and the level of responsibility and liability conferred on him by that role.
48. The second issue concerned the use of combustible cladding materials in building sites constructed in the 2010s (resulting in the Victorian Cladding Taskforce being established in 2017 and the ban on combustible cladding effective in this state from February 2021), and the relationship between that environment and the timing of the Applicant’s conduct.

Role of the Applicant in the Conduct

49. The Tribunal agrees with the VBA that the Applicant’s role as the registered building practitioner and permit holder for the project attracts liability and ultimate responsibility for the offending conduct. It follows that the legal responsibility of the Applicant cannot be disputed or reduced. The Applicant did not contest liability and the review is on penalties alone.
50. However, the level of moral culpability that should be attributed to the Applicant must be assessed for the purposes of determining the appropriate penalty. As noted above at [35], whether the conduct arose from (a) dishonesty or an ulterior motive for personal gain or (b) a professional failing or serious mistake, is an important consideration.^[16] In the present case, the Applicant is not alleged to have acted for dishonest purposes and this is consistent with his submissions. Rather, the conduct is in the category of falling below the standard of conduct required by reason of his negligence and error.
51. As in the criminal jurisdiction, professional offending which falls into the categories of intentional versus reckless or negligent conduct should be accorded different levels of culpability and gravity. The mistakes of the Applicant in not properly supervising and checking the work of the employees, contractors, and other persons assigned to the project represent a serious failure to discharge the duties of a building practitioner conferred generally under the Act and particularly upon the grant of a permit. His role and his culpability should be assessed on that basis. However, they should also be assessed according to the reckless or negligent nature of the conduct, showing recognition for the absence of dishonesty.^[17]
52. Further, weight should be given to the fact that the contraventions for which the Applicant has been found guilty relate in particular to non-compliance with the building permit. Compliance with permits is an essential pillar of the regulation of the building industry. Failures to adhere to critical requirements of the industry, particularly where those requirements represent a safeguard for the protection of the public, should be taken very seriously.^[18] It is important to ensure that message is conveyed to the community in penalising the Applicant. This aspect, as well as the fact that two of the grounds are s 16 offences, demonstrates the gravity of the Applicant’s failures regarding professional supervision and conduct.^[19] The culpability of the Applicant must be metered against the considerations of community perception and protection.

The Significance of Combustible Cladding Issues: 2012 to Now

53. Submissions were made on behalf of the Applicant that the fact that the building was constructed in or about 2012, well before the building industry and the public became aware of the risks of EPS and other types of combustible cladding, was a mitigating factor.
54. It was submitted that the danger of combustible cladding became a public issue in late 2014, with the particularly notable fire incident at the Lacrosse building in Docklands.^[20] The Victorian Cladding Taskforce became active in early 2017, and the ban on combustible cladding in Victoria did not come into effect until February 2021. In that time period, the discovery of various buildings which were constructed with combustible cladding was covered significantly in the media, and the building industry was involved in the investigations and consultations that took place.
55. The Tribunal agrees that the ubiquity of knowledge in the community may be a mitigating factor, however it is not a significant one overall in the current context.
56. What ultimately should be noted is that the Applicant should have foreseen the potential for serious consequences to arise as a result of not ensuring adherence to the permit.^[21] This contextualises the culpability of the Applicant in terms of the core standard at issue.

Consistency

57. Consistency between penalties imposed on building practitioners, by reference to various case samples, was a significant issue at the hearing.

Admissibility of Case Snapshots from the VBA Disciplinary Register

58. The Applicant filed two affidavits with the Tribunal on 12 July 2022, the day before the hearing, containing various case snapshots from the Prosecution and Disciplinary Register section of the VBA website. The Applicant sought leave for these affidavits to be tendered into evidence so he could rely on the case samples to demonstrate the rare occurrence of the VBA imposing suspension as a penalty, even in building practitioner disciplinary actions involving combustible cladding.
59. As aforementioned, the VBA objected to the admissibility of these case summaries. Whilst the Tribunal agrees with the VBA that the case snapshots are very basic and do not provide the level of detail that would be present in the decision of a court or tribunal in order to establish a precedent, the Tribunal is of the view that the case snapshots are of some utility and relevance. The case snapshots cannot be used to specify what exact penalties should be imposed in any specific circumstance, however they do demonstrate a general pattern of the nature of the disciplinary dispositions most commonly utilised by the VBA.
60. An inference can be drawn, based on the case summaries, that the VBA does not regularly impose suspensions, and that the most common penalties are reprimands and fines with an occasional emphasis on conditional or supervisory terms on a practitioner’s registrations. The Tribunal concludes that the case samples are admissible, but only to the extent that the relevance and weight of the cases are limited to findings based on that inference.^[22]

Relevance and Weight of Consistency Issues

61. The Tribunal is of the view that there should be some weight attached to the snapshot evidence of the lack of suspensions being imposed by the VBA. The Tribunal is of the view that this factor can be considered, alongside the many factors that the Tribunal should consider in determining the appropriate penalty. It should be given some weight but there are other considerations which ought to be taken into account for or against suspension.

Consequences of a Suspension and Related Considerations

62. In determining whether a suspension should be amongst the penalties imposed, the relevant factors for the Tribunal to consider are as follows:
    • 62.1 The financial and reputational consequences for the Applicant and third parties;
    • 62.2 The professional history of the Applicant, including his performance since the present investigation up to the date of the hearing; and
    • 62.3 Delay as a general consideration.

Financial and Reputational Consequences

63. The Applicant runs an established building company, which evidently has the capacity to attract significant construction projects. Shangri-La employs 25 staff with a cited turnover of between 30 and 50 million dollars per annum. For the Applicant, establishing the company was part of establishing a life in Australia, following a difficult refugee migration from Afghanistan.
64. The Applicant contended that the flow-on consequences for his business, if his registrations were suspended, would be drastic to the extent that the company would likely collapse. His reputation would be damaged to the extent that his ability to obtain tenders for projects would be significantly hindered.
65. The Applicant stressed that, during the period of the suspension, he would have no employee qualified as a registered builder and therefore no one to take over responsibility for building permits. This would mean that all projects would need to be paused for the duration of the suspension, resulting in disputes with existing clients and a hiatus of business that would be difficult to come back from.
66. Whilst the above matters would clearly have financial and reputational consequences for the Applicant, the Tribunal agrees with the VBA that the extent of these consequences is difficult to gauge when the Applicant has not provided any specific documentation in support of the contention. However, balanced against this is the fact it is difficult to provide documents outlining hypothetical or predicted consequences. Ultimately, the Tribunal can give some, but not significant, weight to this factor.

Professional History of the Applicant

67. The Tribunal accepts that the Applicant has no previous disciplinary history prior to the present offending and has run a successful construction company over a period of 14 years.
68. As there has been no further disciplinary action, the Tribunal can be reasonably satisfied that some steps have been taken to ensure greater care and attention to detail. The Applicant has evidently learned from his mistakes and appears, from the information before the Tribunal, to have avoided any repetition of the offending behaviour. The passage of five years since the defects in the building were detected provides an ample period over which to assess the Applicant’s progress. During that time, the Applicant has been subject to increased scrutiny by the VBA, who have checked the compliance of the Applicant’s other construction projects over the years without any negative findings.
69. In professional disciplinary proceedings, courts and tribunals are “obliged to take into account” an offending practitioner’s failure to see the error of their ways.^[23] The other side of that coin is that the Tribunal should give significant weight to the Applicant’s demonstrated insight and ability to rehabilitate his behaviour. However, given the serious nature of the charged conduct, the Tribunal is of the view that a further period of scrutiny in the form of supervision and training is required in order to solidify the Applicant’s rehabilitation (discussed further below at [84] to [86]).

Delay

70. Whilst the Tribunal agrees with the VBA that the delay in these proceedings has not resulted in substantial unfairness to the Applicant because of the operation of the stay, the Tribunal is of the view that delay would have caused significant distress to the Applicant. It would be difficult for the Applicant to operate his company on a day to day basis with no certainty as to that company’s future.
71. Delay should be assessed from the time the investigation into the conduct commenced.^[24] It has been 5 years since the issues were detected, and 2 years since the proceeding was initiated with the Tribunal. This is not an insignificant period, and therefore delay should be given a moderate degree of weight in determining the appropriate penalties.

Punitive versus Protective

72. As already stated, a strong theme in professional disciplinary proceedings is the concept of punishing in order to protect.^[25] Ultimately, the task before the Tribunal is to balance all of the above considerations against the protective purpose of the Act and the disciplinary process. The intended result of that balancing exercise is clarity as to where the case at hand falls on the punishment-protection scale.

Principles of Deterrence

73. We accept the proposition, set out in the cases of Thomas v Victorian Building Authority and Quinn v Law Institute of Victoria Limited, that in professional disciplinary proceedings discharging the protective sentencing purpose requires a consideration of general and specific deterrence.^[26] However, the inquiry does not stop there – the level of relevance of these principles will vary on a case by case basis.
74. As the parties have agreed that specific deterrence is not relevant in the present case, there is no need to discuss that principle in detail. It should be noted that this is not a situation where the Applicant lacks insight or remorse which would generally increase the relevance of specific deterrence.^[27] Further, it is accepted that the stress of the present proceedings and the related civil proceedings in the Supreme Court would have some deterrent effect on the Applicant.
75. Regarding general deterrence, the factors which must be considered are more extensive. Whilst the Tribunal has discussed how the timing of the conduct in the context of the public awareness of combustible cladding issues relates to the Applicant’s culpability (see above at [53] to [56]), there is more to be said about the combustible cladding epidemic.
76. Some of the comments and findings made by the Victorian Cladding Taskforce in its interim report delivered in November 2017 are relevant. Not only do these findings pertain to cladding, there were many findings relating to compliance with standards and permits in the building industry generally. Examples of these findings include:
    • 76.1 The Taskforce was confronted with considerable and widespread concern at the level of non-compliance with Victorian building and construction regulations beyond cladding; and
    • 76.2 That deeper issues of non-compliance in the building industry were significant contributing factors to cladding issues.^[28]
77. These observations are important in analysing issues pertaining to general deterrence. The findings by the Taskforce represent the nexus between cladding issues and the core issue in this matter – compliance with permits, the Act and the Regulations. There is certainly a need in the present case to send a message to the community that these fundamental aspects of compliance must be adhered to.
78. As stated by Member Eastman in Valentine v Victorian Building Authority, a breach of building compliance laws:

...requires a penalty which not only signifies the seriousness of the breaches of the Building Act and the DBC Act, but which serves to ensure other members of the profession strictly follow the requirements of the Act, signalling this type of conduct will not be tolerated, and which also has regard to the interests of maintaining professional standards and public confidence in the profession.^[29]

79. Overall, general deterrence is something that the Tribunal must have serious regard to in this case. Deterrence ultimately achieves a protective rather than punitive end.^[30]

Nature of Suspension

80. A suspension is a punitive penalty. Whilst a suspension may have some incidental rehabilitative effect because of the lessons that one would most likely learn from being suspended, its purpose is to punish.
81. It should be noted that the type of suspension available in the present case is discretionary, and it is so for a reason. The Applicant in the present case has not committed the kind of offending that would attract an immediate suspension, which can be imposed by the VBA where the offending practitioner appears not to be fit and proper and where it is in the public interest.^[31] That kind of offending sets the bar against which less serious conduct, such as that in the present case (noting the various issues discussed above between [47] and [56]), should be judged. At some point, the need for a suspension falls away.
82. In Victorian Building Authority v Tsaganas, the Court of Appeal summarised the inquiry as follows:

When, as in the present case, the remedies imposed may include fines, orders for costs, requirements for ongoing supervision and requirements for further training, the decision-maker may consider whether the purpose of specific deterrence and adequate protection of the community by way of deterrence and re-education will be adequately served by the imposition of a conditional suspension or not. A judgment of fact and degree will have to be made as to whether in all the circumstances a conditional transition back into the profession is appropriate or not.^[32]

83. On a balance of all the matters before this Tribunal, for the reasons discussed above, the Tribunal is of the view that the ultimate penalty in the present case does not need to be a significantly punitive one.

Importance of Supervision and Education

84. Whilst the issue of training and education was not promoted as a sentencing option by the parties, the Tribunal is of the view that in the present case supervision and education would better serve the protective purposes of the Act than a suspension. Being subject to further checks and balances, whilst being able to continue to operate his company, would ensure that the Applicant’s interests and those of the community are both served.
85. In the context of legal practitioner proceedings, the Court of Appeal in Quinn discussed this issue. Maxwell P stated as follows:

...the Tribunal’s protective function is paramount. Thus, where there is a choice of sanctions, it is to be expected that the Tribunal will choose that sanction which maximises the protection of the public... [T]he imposition of a continuing obligation... would seem likely to afford considerably greater protection to the public than a period of suspension.^[33]

86. In the view of the Tribunal, the imposition of supervision and education conditions would also sit more squarely within the current sentencing climate in building practitioner disciplinary proceedings, as demonstrated by the above findings regarding the rare use of suspension in comparable cases (see above at [60]). It could be said that the modern approach is one which encourages the longevity of a skilled and educated workforce, with the ultimate goal of future compliance.

Penalty

87. The Tribunal agrees with the VBA that this case represents a serious failure by a builder practitioner to comply with the conditions of the relevant building permit and the Act. However, the Tribunal is of the opinion that the gravity of the offending conduct can be reflected in an alternative penalty which represents both punitive and rehabilitative considerations.
88. Ultimately, the Tribunal finds that a suspension is not necessary in this case, as the principles applicable to this disciplinary proceeding can be served by alternative education and supervision conditions. The education and supervision conditions should go to the heart of the issue underlying the offending conduct – ethical and compliant building practices.
89. The Applicant will be required to undertake an accredited education course in the subject of ‘identifying and applying legal and ethical requirements including compliance with building permits’ (or similar), and that course must be approved by the VBA.^[34] The Applicant will also be required to personally attend on site at all Mandatory Inspections listed on the Building Permit for all of the building projects conducted by Shangri-La Construction Pty Ltd or any other business at which the Applicant is the responsible permit holder, for a period of 12 months.^[35]
90. The Tribunal is of the view, however, that the reprimands^[36] should remain as is, and the fine^[37] should be increased slightly to account for some of the loss in punitive effect that results from the removal of the suspension.
91. The Tribunal sees no reason to change the grouping of the Grounds of the conduct, which were grouped in the Decision according to the offences relating to the cladding and the offences relating to the walls/ceilings. However, the penalties imposed in the Decision are to be substituted with the penalties outlined in the Orders at the commencement of these reasons.

Conclusion

92. The Applicant neglected his duties as a building practitioner, and the results of that neglect created a serious risk to members of the public. However, the Applicant has admitted his liability and, since the offending conduct occurred, the Tribunal has not been made aware of further complaint.
93. The passage of time since the period in which the issues in this proceeding arose has demonstrated several things. It has revealed a serious epidemic in the use of combustible cladding in Victoria; it has revealed the less than acceptable responses and adherence to professional practice of some building practitioners to that event; and it has revealed a transitioning from punitive to educative strategies for practitioner rehabilitation in a manner which honours the purposes and objectives of the Act. These matters give the Tribunal confidence that the Applicant can be trusted to maintain his registration, albeit subject to specific training conditions, appropriate admonition, and financial penalty.

Justice Michelle Quigley
President

John Clampett
Member

^[1] Affidavit of Daniel John Prior and Further Affidavit of Daniel John Prior both sworn 12 July 2022 and marked Exhibits A-2 and A-3 respectively.

^[2] See below at paragraphs [58] to [61].