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High Court of New Zealand Decisions |
Last Updated: 7 August 2018
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
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CIV-2017-404-3031
[2018] NZHC 1662 |
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UNDER
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the Building Act 2004 and the Criminal Procedure Act 2011
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IN THE MATTER
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of an appeal pursuant to s 340 of the
Building Act 2004 and s 296 of the Criminal Procedure Act 2011
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BETWEEN
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MINISTRY OF BUSINESS INNOVATION AND EMPLOYMENT
Apellant
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AND
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JEFFREY BELL
Respondent
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Hearing:
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14 June 2018
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Appearances:
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M Bryant and EGR Dowse for the Plaintiff
M R Taylor for the Respondent (leave to withdraw) Respondent in person as
observer only
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Judgment:
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6 July 2018
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JUDGMENT OF MUIR J
This judgment was delivered by me on Friday 6 July 2018 at 3.30 pm Pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:..............................
Counsel/Solicitors:
M J Bryant, Crown Law, Wellington EGR Dowse, Crown Law, Wellington M R Taylor, Barrister, Auckland
MINISTRY OF BUSINESS INNOVATION AND EMPLOYMENT v BELL [2018] NZHC 1662 [6 July 2018]
Introduction
[1] This is an appeal (and associated leave application pursuant to s 34 of the Building Act 2004) by the Ministry of Business, Innovation and Employment (MBIE) against a decision of Judge Gibson in the District Court 1. That decision was, in turn, on appeal from a decision of the Building Practitioners Board (the Board). The underlying issue concerns whether the respondent Mr Bell, a licensed building practitioner, was required under s 88(1) to file a “record of work” with the relevant “territorial authority” when he ceased working on renovations to a house owned by a Mr Lu, being (arguably) restricted work. Mr Lu was the original complainant, but is not a party to this appeal.
[2] On 27 February 2018, Hinton J directed that the application for leave and the substantive appeal were to be determined together.2 For the reasons I set out below I consider both the application for leave and substantive appeal are both appropriately allowed.
Factual Background
[3] Mr Bell was engaged by Mr Lu to renovate a garage by transforming it into a living room and bedrooms in late 2014. A building consent was applied for and was granted.
[4] Mr Lu dismissed Mr Bell in May 2015 before the work was completed, engaged a new builder to finish the work, and submitted a complaint to the Board. The complaint was received on 12 June 2015. It alleged that Mr Bell carried out the work in a negligent or incompetent manner, and that the work did not comply with the building consent. These are among the grounds on which the Board may discipline building practitioners.3
[5] The Registrar of the Building Practitioners Board prepared a report for the Board to assist in its assessment. The purpose of such report is to provide a neutral
1 Bell v Lu [2017] NZDC 23847.
3 Building Act 2004, s 317(1).
summary of the facts that are agreed and those that are in dispute as per the submissions of the parties, which were likewise provided to the Board.4 The unusual feature of the Registrar’s report in this case was that it included an additional ground of complaint to those identified by Mr Lu. That ground was that Mr Bell had not provided a “record of work” to Mr Lu and the relevant “territorial authority” as the Registrar stated he was required to do under s 88(1) of the Act in respect of “restricted building work”. This was the only ground the Board found was made out. It ordered Mr Bell to pay a penalty of $500 and a further $500 towards the costs of and incidental to the Board’s enquiry.
District Court decision
[6] Mr Bell appealed to the District Court against the ruling of the Board. He did so on the following bases:
(a) the Board did not have jurisdiction to penalise him for not filing a record of work because it was not a ground raised in the original complaint;
(b) the plain meaning of s 88(1) only required Mr Bell to provide a record of work when the restricted work in question had been completed, and that “completed” meant when the work was finished and did not include a situation where a builder’s contract had been terminated before completion;
(c) the work carried out did not require a building consent—although one was issued that covered the work—so the work was not “restricted building work” and s 88 did not apply.
[7] Judge Gibson found the Board did have jurisdiction to consider other breaches of discipline discovered in the course of its investigation, and not raised in the initial complaint. There is no cross-appeal for that finding.
[8] In respect of the second ground, the Judge considered that the obligation of each licensed building practitioner to file a record of work under s 88(1) accrues when they cease to work on the project, regardless of the overall state of completion of such project. He noted that to construe the obligation otherwise would mean only the last licensed building practitioner would be obliged to file a record of work. He found that this could not have been what Parliament intended as the purpose of the provision was to ensure the extent of any consented work was made known to the owner and the territorial authority.
[9] However, the Judge further considered that the obligations in s 88 must be read in the context of s 87, which requires that an owner inform the building consent authority (which can be a different body from a territorial authority) of the names of any licensed building practitioners who are engaged to carry out or supervise restricted building work under a building consent. It further requires that when a licensed building practitioner ceases to do or supervise restricted building work under a building consent, the owner must give notice to the building consent authority of that fact.
[10] The Judge regarded the decision of the District Court in Ali v Kumar as helpful in assessing the combined effect of these sections and, in particular, the following paragraphs:5
- [44] The board noted at [65] that there may be situations where a practitioner will not be involved in the work at its completion. It then said:
The board has consistently held that in such circumstances, regardless of the reasons why the work cannot be completed, the licensed building practitioners restricted building work under the building consent will, in effect, have been completed as they will not be able to carry out any further restricted building work. To require otherwise would mean that a record of work would never be due and this would defeat the reason why records of work were brought into being.
[45] However, this analysis seems to overlook completely the provisions of s 87. That provides firstly that before restrictive work commences the owner must give the building consent authority the name of every licensed building practitioner who will be engaged in carrying out or supervising the restricted building work.
5 Ali v Kumar [2017] NZDC 23582 at [44]-[48].
...
[48] The time frame is governed by s 87 which requires the owner to notify the building consent authority if the practitioner ceases to be engaged in respect of the work. The owner is obliged to notify the name of ay new practitioner engaged. The building consent authority will then be in a position to demand, if necessary, a record of work to the point his engagement ceased in the event that the practitioner has not already done that of his own volition.
[11] The Judge considered that the obligation in s 88 of the Act could not be seen in isolation from s 87 for the reasons set out in Ali v Kumar. Applying that decision, he held that the requirement to file a record of work only accrued when the owner had fulfilled his or her obligations under s 87. Applying this framework, the Judge held that as Mr Lu had not given notice to the territorial authority (by which, I assume, he meant the building consent authority, being the authority to whom the obligation under s 87 is owed), the obligation on Mr Bell to file a record of work never crystalised. He held, therefore, that Mr Bell was not in breach of the requirement to file a record of work.6
[12] As to the final point on appeal—whether the work was restricted work—the Judge held that, had it been necessary to decide that point (which based on his decision it was not), he would have referred the matter back to the Board to determine whether the work was restricted work.7
Application for leave to appeal
[13] MBIE appeals only the finding that the fulfilment of an owner’s obligation under s 87 is a precondition to a licensed building practitioner’s obligation to provide a record of work under s 88.
[14] It does so under s 340 of the Act, which permits appeals from the District Court to the High Court against “any determination of law arising in the appeal”.8 Subsection (3) in turn provides “Subpart 8 of Part 6 of the Criminal Procedure Act 2011 (CPA) applies as far as applicable with the necessary modifications to every appeal under this section”. Subpart 8 concerns appeals on questions of law. However,
6 Bell v Lu [2017] NZDC 23847 at [28]–[30].
7 Pursuant to s 337 of the Act.
8 Building Act 2004 s 340(1).
Subpart 8 contains two procedures for two different types of appeal: a first appeal and a second appeal, and it is not immediately apparent which applies in this case.
[15] A first appeal is an appeal against the decision of the “trial court”, and is to the “first appeal court”. Section 297 defines which Court is the “first appeal court”:
297 First appeal courts
The first appeal court for an appeal under this subpart is—
(a) the District Court presided over by a District Court Judge, if the appeal is against a ruling by the District Court presided over by 1 or more Community Magistrates or 1 or more Justices of the Peace; or
(b) the High Court, if the appeal is against a ruling by the District Court presided over by a District Court Judge, other than a ruling–
(i) made in proceedings for a category 3 offence after the person charged elected a jury trial; or
(ii) made in proceedings for a category 4 offence; or
(c) either the Court of Appeal or the Supreme Court, in any other case.
[16] Leave is required to commence a first appeal,9 but there are no explicit statutory criteria that an appeal must meet in order for the Court to grant leave.
[17] A second appeal is an appeal against the determination of the first appeal court.10 When the first appeal court is the District Court, the second appeal court is the High Court.11 Leave is also required for a second appeal. However, s 303(2) provides that the second appeal court must not grant leave unless satisfied that the appeal involves a matter of general or public importance or that there is a possibility of a miscarriage of justice.
[18] There is sparse case law on point. Indeed, the only appeal under s 340 which appears to have come before the Court is that in Beattie v Licensed Building Practitioners’ Board. Mr Beattie had appealed a decision of the Board to the District Court, and the District Court had made an order for security for costs against him.12 It
9 Criminal Procedure Act 2011, s 296(2).
10 Section 303.
11 Section 304.
12 Beattie v Licensed Building Practitioners’ Board [2015] NZHC 1903.
was his procedural decision that was appealed to this Court. There is no discussion in the case about the application of Subpart 8 Part 6 of the CPA. It appears the parties did not turn their mind to it or the case was for some other reason considered to fall outside the s 340 framework. In any event it is not helpful on the procedural point that arises in the present case.
[19] MBIE submits that this is a first appeal. Since I would grant leave irrespective of whether that categorisation is correct it is not essential that I decide the point but, to the extent it may be relevant to any future appeal, I discuss it below. The question is what procedure under Subpart 8 best applies, and what modifications are necessary, to best facilitate it governing appeals under s 340.
[20] MBIE says that the scheme of Subpart 8 envisages a process by which there is a first appeal on a question of law, and then a procedure for challenging that determination through a second appeal. They say that as the appeal against the determination of the Board was not a first appeal on a question of law, this appeal would be the first such appeal; therefore, it should be treated as a first appeal for the purposes of Subpart 8. They also argue that, as the right of appeal to the District Court is governed by ss 330-339 of the Building Act, and not Subpart 8, the appeal to the District Court could not be characterised as a first appeal for the purposes of Subpart 8.
[21] If I were to adopt this approach, the “necessary modification” to Subpart 8 is to treat the District Court as the trial court for the purpose of s 296. “Trial Court” is helpfully defined in s 5 as “the court before which the defendant ... is to be tried”. In the circumstances of the Building Act, the body before which the defendant is “tried” is the Board. It is the body that has original jurisdiction to receive, investigate and determine the substance of a complaint, and then impose a range of penalties.13 Although the District Court hears appeals by way of rehearing,14 it does not do so on a de novo basis. It acts in a wholly appellate capacity. If the choice is between the District Court being described as a “trial court” or “first appeal court”, the latter is a very much more comfortable fit.
13 Building Act 2004, ss 316-317.
14 Section 335(2).
[22] Moreover, if applications under s 340 are considered first appeals then they could potentially proceed to the Court of Appeal as a second appellate court and then on to the Supreme Court.15 This would be an unexpected result as s 340 contemplates an appeal to the High Court only. Normally, appeals from appellate decisions of the District Court are finally determined by the High Court.16
[23] By contrast, if the District Court is treated as the first appeal court, its relationship to the Board would be analogous to that between the District Court and a community magistrate, for the purpose of s 297. The only necessary modification to Subpart 8 would be to s 297, to the effect that the District Court is the court of first appeal against a ruling of the Building Practitioners’ Board. Were that the case, leave would only be granted were it in the public interest or if there was the likelihood of a miscarriage of justice. Further, the High Court’s decision would be final, and could not be appealed against.17
[24] Overall, I consider this approach better fits the Building Act context. Although I accept MBIE’s submission that this is, in a literal sense, the first appeal against “any determination of law”, a question of law on a first appeal is one that in terms of s 296 of the Criminal Procedure Act is against a “ruling by the trial court”, in the “determination of the charge”, on “proceedings which relate to or follow the determination”.18 For the reasons I have indicated, classification of the District Court as “the trial court” is uncomfortable to the point of awkwardness.
[25] MBIE further submits that a District Court appeal is not under Subpart 8. This is, of course, true. But the issue here is how best to adapt Subpart 8 to fit the Building Act context. In my view, categorisation as a second appeal requires fewer modifications and does less violence to the wording of s 296.
[26] For these reasons, I consider that an appeal from the District Court under s 340 of the Building Act is governed by ss 303–308 of the Criminal Procedure Act; i.e. the “further appeal” provisions of Subpart 8. In the result, the threshold that must be met
15 Criminal Procedure Act 2011, s 309.
16 Section 308.
17 Section 308.
18 Section 296(2).
for leave to be granted is that the appeal raises a matter of general or public importance (or there is a possibility of a miscarriage of justice, which is not argued here).19
[27] Although MBIE initially submitted on the basis that leave simplicter was required, it relied on similar arguments whether that was the case or it was obliged to establish a matter of general or public importance. It says that there is no decision of the senior courts on the interrelationship of ss 87 and 88; there is a conflict of interpretation between the Board (as a specialist Body) and the District Court; and that the appeal relates to an identified and specific error of law, and not one of fact.
[28] It further says that it has been its longstanding view (supported by the Board) that the obligation under s 88 is an independent one that arises when a licensed building practitioner ceases to work on restricted work. It says that the obligation to provide a record of work is widely understood, that such record is important for the purposes of the Building Act as it identifies restricted work done on a building, and that were the decision of the District Court left to stand, it would undermine the efforts of the Ministry to combat non-compliance.
[29] The leading decision on the general or public importance threshold is the decision of the Court of Appeal in McAllister v R.20 It held that an important question of law having broad application beyond the circumstances of the particular case will satisfy the test.21 For the reasons advanced by MBIE I consider this threshold established. I therefore grant leave to appeal. Self-evidently, I would have come to the same conclusion had I considered this a first appeal, although slightly different considerations could have applied.
MBIE’s submissions on the substantive appeal
[30] MBIE submits that the District Court erred in finding that a licensed building practitioner does not have to provide a record of work under s 88 until the building owner has fulfilled his or her obligations under s 87. It says that on a plain reading of s 88 the obligations are not “triggered” by the fulfilment of the separate obligation in
19 Section 303.
20 McAllister v R [2014] NZCA 175, [2014] 2 NZLR 764.
21 At [36].
s 87, and that the only precondition to the obligation is that the work be “completed”. Further, it says this interpretation is more consistent with the statutory purpose of the provisions, which it submits is to promote public safety, compliance and accountability—there being demonstrable public benefit in provision of a comprehensive history of the work done to houses. It says the District Court’s approach undermines these goals by creating a significant potential lacuna in performance of the s 88 obligation.
Relevant statutory provisions
[31] The Building Act 2004 superseded the earlier Building Act 1991. It was enacted against the background of the leaky building crisis, and addressed concerns over the activities of unqualified and inexperienced builders. It introduced a licensing regime for builders and created the Building Practitioners’ Board to monitor compliance on the part of builders with the statutory regime. It is an important piece of legislation.22 It provides a regime that creates “licensed building practitioners”.23 Only licensed building practitioners are able to do, or supervise, “restricted building work”, which includes that done under a building consent.
[32] Section 88 creates an obligation on licensed building practitioners to file with the building owner and the territorial authority (usually a city or district council) a “record of work” (which states what restricted building work the licensed building practitioner carried out or supervised), “on completion of the restricted building work”.24
[33] Section 87 requires building owners to give notice of the name of every licensed building practitioner who is engaged to carry out or supervise restricted building work on their property to the “building consent authority”—which is often, but not necessarily, the same body as the territorial authority.25 They must also give notice if a licensed building practitioner ceases to work on restricted work after the
22 I have gratefully borrowed much of this description from Judge Gibson’s judgment in Bell v Lu
[2017] NZDC 23847 at [5].
24 Building Act 2004, s 7.
25 Section 212. Private organisations or persons may also be Building Consent Authorities.
work has begun, or if another licensed building practitioner is engaged to do the restricted work.
Discussion
[34] The essence of this appeal is how s 88 is to be interpreted; and, in particular, whether the obligation in s 88 is dependent on discharge of the owner’s obligations under s 87.
[35] The meaning of an enactment is ascertained from its text and in light of its purpose.26 The leading case on the interpretation of a statutory provision is Commerce Commission v Fonterra Co-Operative Group Ltd.27 It establishes the following principles:
(a) The statutory test must be considered in isolation of purpose to determine its plain and ordinary meaning(s).
(b) The meaning(s) of the test must then be cross-checked against the purpose of the legislation.
(c) In determining the purpose, regard must be had to both the immediate and general legislative context; it may also be relevant to consider the social, commercial or other objective of the legislation.
[36] In R v Pora, the majority of a Full Bench of Court of Appeal accepted that materials such as select committee reports and parliamentary debates may be relevant to the interpretative exercise.28
[37] MBIE submits that, on a plain reading of the provision, the only precondition to the obligation to file a record of work is the “completion” of the restricted work. The Ministry acknowledges that the word “completion” is ambiguous: it could refer to the completion of the entirety of the restricted work—i.e. all of the work under a
26 Interpretation Act 1999, s 5.
28 R v Pora [2000] NZCA 403; [2001] 2 NZLR 37 (CA).
building consent—or the point at which a licensed building practitioner ceases to work under the building consent, either because he has completed his/her portion of the work or, for example, is removed from the project before doing so. Judge Gibson adopted the latter interpretation, applying the decision of Judge Harrison in Ali Kumar.29 This finding is not challenged on appeal. In any event, I consider it correct for the reasons identified by Judge Gibson.
[38] His Honour went on to find, however, that fulfilment of the owner’s obligations under s 87 was a precondition to the builder’s obligations under s 88. MBIE challenges that conclusion. It says the two obligations are entirely separate, evidenced by the fact that one is owed to the building consent authority and the other to the territorial authority. It submits that there is no statutory requirement on the building consent authority to notify the territorial authority. Further, it says that it is not a precondition to the s 88 obligation that the territorial authority call for a record of work.
[39] I agree with the MBIE that, on its plain meaning, “completion” is the only prerequisite to the accrual of the statutory obligation under s 88. In line with the Fonterra framework, that meaning then needs to be cross-checked against the purpose of the legislation.
[40] Section 3 of the Act lists such purposes:
3 Purposes
This Act has the following purposes:
(a) to provide for the regulation of building work, the establishment of a licensing regime for building practitioners, and the setting of performance standards for buildings to ensure that—
(i) people who use buildings can do so safely and without endangering their health; and
(ii) buildings have attributes that contribute appropriately to the health, physical independence, and well-being of the people who use them; and
(iii) people who use a building can escape from the building if it is on fire; and
29 Ali v Kumar [2017] NZDC 23582.
(iv) buildings are designed, constructed, and able to be used in ways that promote sustainable development:
(b) to promote the accountability of owners, designers, builders, and building consent authorities who have responsibilities for ensuring that building work complies with the building code.
[41] Of these, the purpose of promoting the accountability of builders is clearly the most relevant to this appeal.
[42] Section 4 is titled “Principles to be applied in performing functions or duties, or exercising powers, under this Act”. Subsection (2)(q)(i) relevantly provides:
(2) In achieving the purpose of this Act, a person to whom this section applies must take into account the following principles that are relevant to the performance of functions or duties imposed, or the exercise of powers conferred, on that person by this Act:
...
(q) the need to ensure that owners, designers, builders, and building consent authorities are each accountable for their role in ensuring that–
(i) the necessary building consents and other approvals are obtained for proposed building work;...
[43] While the Court is not a “person to whom this section applies”, the section reinforces the importance the Act places on the accountability of those involved in building work. In Tan v Auckland Council, Brewer J noted that ss 3 and 4 together:30
... make it clear that the purpose of the [Building Act] is to ensure that building work meets certain standards in order to achieve the goals of public health, safety and wellbeing, and sustainable development. The [Building Act] makes owners, designers, builders and authorities responsible for ensuring that this purpose is met.
[44] Brewer J also noted that the corresponding disciplinary regime;31
... address the purposes of the [Building Act] by imposing liability for inadequate supervision and therefore helps ensure that the most important parts of a building meet the relevant building standards.
30 Tan v Auckland Council [2015] NZHC 3299 at [34].
31 At [51].
[45] Similar considerations apply by analogy to the imposition of liability for failing to provide a record of work.
[46] Further support for the proposition that a purpose of the Act is to increase protection for consumers through higher regulatory compliance can be discerned from the parliamentary debates. In introducing the Building Bill, the Hon Lianne Dalziel MP stated that the Bill was designed to minimise the risk of regulatory failure and address consumer protection.32
[47] I accept, therefore, MBIE’s submission that one of the central purposes of the Act was to increase regulation on building work so as to provide local authorities and present and future owners with assurance that the building work was completed to required standards. As MBIE submits, if the s 88 obligation is conditional on a discharge of that under s 87, the result will be fewer records of work being filed. This would not be consistent with the purpose of the Act. As Judge Gibson himself recognised, the record of work “is useful historical knowledge for owners both present and future, and for other parties who may come to be involved in cases alleging defective building practice”.33 And it could indeed be even more important if the owner has not complied with their obligations under s 87. Further it serves as protection for the innocent licenced building practitioner if a dispute arises over who did what work on a site where sequential builders have been employed.
[48] For these reasons, I consider the purposes of the legislation consistent with the plain meaning I have adopted.
[49] I accept that the “territorial authority” (for the purposes of s 88) will, in practice, often also be the “building consent authority” (for the purposes of s 87). And notification by the owner to such combined body would put it on notice that a licenced building practitioner ought to file a record of work. However, under the legislation, the two entities are separate and the position I have described will not always be the case. Further, as the MBIE submits, there is no mechanism in the legislation for one body to notify the other of the relevant filing and the ability of the licenced building
32 (4 September 2003) NZPD 8425.
33 Bell v Lu [2017] NZDC 23847 at [26].
practitioner to file a record of work is not in any way prejudiced by failure of the owner to fulfil his/her obligation under s 87. This is of course simply another way of saying the two obligations are independent.
[50] For the foregoing reasons, I respectfully disagree with the conclusions of the District Court in Ali v Kumar and in the decision under appeal insofar as they engage the issued I have discussed.34 In my view the only relevant precondition to the obligations of a licenced building practitioner under s 88 is that he/she has completed their work.
Result
[51] For the foregoing reasons, I allow the appeal.
Consequential orders
[52] Sections 300 and 307 of the CPA set out the powers available to the Court if an appeal is allowed. These too must be adapted as required for the Building Act context. Relevantly, the Court must determine the appeal by:35
- (a) confirming the ruling appealed against; or
...
(c) varying or substituting the sentence or remitting the sentence to the sentencing court with directions, if the decision relates to sentence and the court thinks the decision is erroneous; or
(d) remitting the matter to the trial court in accordance with the opinion of the appeal court; or
(e) making any other order that the court considers justice requires.
[53] As indicated, one of the issues raised on appeal to the District Court was not determined—namely whether the work fell within Schedule 1 to the Building Act, (which defines building work for which a building consent is not required). If it did, then Judge Gibson held that a record of work was itself not required.36 Had it been
34 Ali v Kumar [2017] NZDC 23582.
35 Criminal Procedure Act 2011 ss 300(1)(a), (c)–(e).
36 Bell v Lu [2017] NZDC 23847 at [31]–[32].
necessary he would have remitted that matter to the Board. The question is whether I should do likewise.
[54] Given the fact that Mr Bell was exonerated of negligence, the very small penalty imposed by the Board for the breach of s 88 and the extent to which he has since been caught up in something of an arcane legal debate, I have given consideration to whether I should exercise my reserve powers under s 300(e) to “make any other order that the Court considers justice requires”, by staying the proceedings and remitting the penalty.
[55] Regrettably, I do not consider relevant Court of Appeal authority would support such a course. Although the power in s 300(e) does include a power to stay and has been invoked in circumstances where the relevant sentence has already been served and there would accordingly be no useful purpose in a retrial,37 the Court of Appeal has on another occasion noted that a stay will only be appropriate in “rare and exceptional circumstances”.38 These are not such circumstances. Rather the highest I can put it is that Mr Bell has had to endure the significant inconvenience of a protracted dispute and appeal process, at least part of which is not of his making.
[56] Somewhat reluctantly, therefore, I remit the issue, identified in [53] above, to the Building Practitioners’ Board.
Costs
[57] Responsibly, MBIE does not seek costs on the appeal. No order is therefore made.
Muir J
38 R v Vaihu [2010] NZCA 145 at [55].
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