By Timothy Bates and Sabina Boyd, Legal Vision
The High Court decision of the Ministry of Business Innovation and Employment (MBIE) v Bell dealt with the question of whether a licensed building practitioner is required, under section 88(1) of the Building Act 2004, to file a “record of work on completion of the restricted building work”.
This was an appeal brought by the MBIE, who wished to review the decision of the District Court.
In 2014, Mr Lu engaged Mr Bell to undertake building renovations on his home. Mr Lu was not satisfied with the quality of these works, so engaged a new builder in Mr Bell’s place.
Mr Lu submitted a complaint to the Building Practitioners Board against Mr Bell, alleging negligent works, and that the works completed did not comply with the building consent that was previously issued.
The Registrar of the Building Practitioners Board prepared a report to assist in its assessment of Mr Bell’s building works.
The report included an additional ground that Mr Bell had not submitted a “record of work” to both Mr Lu and the relevant territorial authority, as required under section 88(1) of the Act.
Ultimately, the Board ruled that Mr Bell had not provided a “record of work” as he was required to do so in respect of section 88(1) of the Act.
The Board 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
Mr Bell appealed the ruling of the Board on three bases:
• The Board could not penalise him for not filing a record of work because Mr Lu had not included it in his original complaint;
• The meaning of section 88(1) was that Mr Bell only had to file a record of work once the works had been fully completed, rather than partially completed;
• The work carried out did not require a building consent, so could not be “restricted work”, and therefore section 88(1) could not apply.
The District Court found that the Board did have jurisdiction to consider additional breaches, and that it did not matter that it was not included in the original complaint.
The court further found that Mr Bell was required to file a record of work when he ceased working on the project, regardless of whether it was “completed” or not.
If Mr Bell, or someone in a similar position, was not required to file a record of work, this would mean that only the last builder, who was completing the works, would be required to file a record.
This would defeat Parliament’s intention to ensure that all works were made known to the owner and the territorial authority.
Also on the second point, the judge considered that the obligations of section 88 must be read in light of section 87.
This section requires an owner to inform the building consent authority of all names of the licensed building practitioners carrying out work, and when that builder ceases the work.
The court found that there was only an obligation to file a record of work with the territorial authority when the owner had fulfilled their obligations under section 87, which Mr Lu never did. The court considered it unnecessary to consider the third point.
The appeal to the High Court
The MBIE only appealed the finding that an owner’s compliance with section 87 is a precondition to a licensed building practitioner filing a record of work under section 88.
They submitted that filing a record of work is important in light of the purpose of the Building Act 2004 as it identifies all works done on the building.
If section 87 were indeed a precondition to section 88, it would be inconsistent with the purpose of the Act, which is to promote public safety, compliance and accountability.
Therefore, the appeal was concerned with how section 88 should be interpreted and, in particular, whether section 87 is to be read as pre-condition of compliance with section 88.
In considering this issue, the following principles from Commerce Commission v Fonterra Co-Operative Group Ltd were looked at:
• The statutory test must be considered in isolation of purpose to determine its plain and ordinary meaning(s);
• The meaning(s) of the test must then be cross-checked against the purpose of the legislation;
• Regard must be had to both immediate and general legislative context, and may also be relevant to consider social, commercial or other objectives of the legislation.
The court agreed with the MBIE, in that the plain meaning of “completion” of works in section 88 is ambiguous, and could either mean the completion of the whole works, or the completion of a portion of works (as in Mr Bell’s case).
However, the meaning of “completion” should also be checked against the purpose of the legislation.
The purpose of the legislation, relevant to this issue, is to promote accountability of builders, and to “ensure that building work meets certain standards in order to achieve the goals of public health, safety and well-being, and sustainable development”.
In light of this purpose, the court considered that if section 87 were a precondition of section 88, it would result in fewer records of work being filed, which would be inconsistent with the purpose of the legislation.
The only precondition of section 88 is that the builder has completed their work. The appeal by the MBIE was allowed.
This decision establishes the importance of both builder and owner notifying the territorial authority/building consent authority of a builder completing building works on site.
Note: This article is not intended to be legal advice (nor a substitute for legal advice). No responsibility or liability is accepted by Legal Vision or Building Today to anyone who relies on the information contained in this article.