Is Victoria Building Authority a Sham?

Is Victoria Building Authority a Sham?

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Number 10 in Top 10 Sourceable Articles for July 2014

8 COMMENTS AND 14 SHARES

Is Victoria Building Authority a Sham? 

A recent Victorian Building Authority media release highlights the sham that is the ‘building regulation regime’ in Victoria.

In the release, titled Costly Lesson in Building Fire Safety, the VBA says that “[a] group of property owners is facing a bill of about $500,000 to fix problems after the VBA issued a building order in response to fire safety concerns.” It sounds impressive, as if the VBA is playing the role of ‘regulator’, but it disguises a significant fact. The builder, surveyor and others involved in building the 55-apartment complex ignored many fire safety regulations and the risk to people’s lives. Yes, this is a “costly lesson for the owners,” but why are the owners responsible for rectification costs when they are not at fault?

For those who build or buy new properties in Victoria, this is a common story and raises all the usual concerns, underscoring the myths and exposing what is effectively an industry without any governance, and one for which consumers bear the financial burden.

Murray Smith from the VBA cites the myth that buildings “must meet fire safety requirements under the Building Regulations 2006.” As this case demonstrates, without enforcement by the VBA, all building practitioners know they can do as they please. With no audits, no enforcement and a minuscule number of cowboys ever given any penalty, those in the building industry realize that no matter how outrageous their conduct, they can ignore all regulations and with complete impunity!

The VBA has now issued an order, but after the fact. Furthermore, the order was not issued to the offenders, but rather to the owners, who are supposed to be protected by the builders’ warranties. This case brings to mind the Childers Palace Backpackers Hostel fire of 2000 in which the hostel did not have working smoke detectors, fire alarms, sprinklers or fire extinguishers, and 15 people lost their lives.

In 2011, the Victorian Auditor General’s Office concluded that “The Commission has not adequately discharged its responsibilities under the Act and its obligations as a regulator” and “there is little assurance that surveyors are carrying out their work competently, that the Act is being complied with and the risk of injury or damage to any person is being minimized.” It is now 2014, three years later and we learn that nothing has changed! “When the plans for the building were developed, there was little consideration for fire safety,” Smith said. “As a result, the owners are now fixing the problem, at a cost of almost $500,000.”

The Building Practitioners Board registered all of the building practitioners, with the VBA’s role to enforce compliance. But be it the Building Commission or the VBA, over two decades, both have failed. They have performed so badly that after two extremely damning reports from the Victorian Auditor General (2011) and the Victorian Ombudsman (2012), they decided in 2013 to put a disclaimer on their website. “Registration with the Building Practitioner’s Board is a minimum legal requirement in order to be able to conduct many building related business activities,” The disclaimer reads: “However, registration does not guarantee that a practitioner has maintained up-to-date technical knowledge or meets the current standards required for registration as a new registered practitioner.” In other words, registration is essentially worthless! What other registration boards would be unable to deliver to the public any confidence in those they registered, such that they would be compelled to make a statement in the form of a public warning? Of course, with building practitioners the public should be warned; whether they are newly registered, or old and ‘grandfathered in,’ consumers are unprotected and in many cases their lives are at risk. However, until 2013 the public was denied this knowledge, with owners unaware of the dangers of building and oblivious to the fact that ‘registration’ was no guarantee of anything. The disclaimer has now been removed from the website and thus owners are once again uninformed, with the truth hidden and consumers exposed to serious harm.

Recently, it was revealed that the Department of Human Services has no confidence in the registration system and it has established its own accreditation board for registering building practitioners involved in Victorian public housing projects. DHS recognizes that the VBA regulation system has been a total failure and abandoned it as ‘not good enough.’ Victorian consumers agree with the DHS. We demand that this sub-standard system be abolished and a new rigorous registration system be established to provide competent builders who can guarantee to construct structurally sound and safe buildings. “It would have saved a lot of money and time for everyone involved if the developers had made sure the required safety measures were installed when the building was constructed,” Smith said. But the fault is not with the developers. It is squarely with the VBA, which failed in its duty of care and allowed the builder and surveyor to construct dangerous, non-compliant buildings.

Smith went on to attribute blame to owners, who he said need to do their ‘homework’ in these matters. “If you are thinking of buying a house or a building, you should consider arranging a professional inspection to make sure it is safe and meets the building regulations before you buy,” he said. This statement is absurd. How can the owners be blamed for not doing their homework when they purchased new apartments that were constructed by practitioners the VBA registered, with the VBA responsible for ensuring that new buildings comply with building regulations?

Second, how would an inspection have helped the owners when, if registered, the inspectors would have obtained their registration from the BPB or VBA? As for self-titled ‘inspectors’ who offer inspections, many are ex-builders, some suspended or de-registered and still others use the title of ‘building consultants’ for which no registration is required. In either case, such an ‘inspector’ would not provide any reassurance to prospective owners.

If the VBA cannot register competent practitioners and cannot enforce building regulations, then no amount of ‘homework’ will protect owners from all the cowboys, whether they are registered or not. The CEO of the VBA, Prue Digby, has said that as the industry regulator, “protecting the safety of the public is a priority” for the VBA. Who could have guessed? Digby is commenting after the building has been constructed, after it was ‘approved’ and after the apartments were sold, after those registered have failed, and after the VBA failed to meet any and all of its obligations!

Worst of all, this case highlights that there is nothing ‘new’ about the VBA. It is a re-named, re-badged Building Commission, with the same old phony registration process, the same old non-enforcement and the same old non-existent consumer protection. The VBA is a sham, camouflaging the scam that is the old policy reinvented as ‘new’, re-branded as the ‘Consumer Protection Strategy.’

Published on 05 July 2014 CONTRIBUTED BY: Anne Paten

Anne Paten is a well-known and highly respected Consumer Advocate and Secretary of the Building Compliance Reform Association…. – See more at: http://sourceable.net/victoria-building-authority-sham/#sthash.fZmzCqYG.dpuf

 

COMMENTS

Heaton says: July 8, 2014 at 3:29 pm Anne, One of the things which strikes me about this whole debacle is the extent to which industry representatives and consumer representatives such as yourself all seem to agree that the process of building industry reform here in Victoria has been shambolic, that there has been a complete lack of genuine consultation on either side, and that neither industry or consumer representatives see these reforms as doing anything to help consumers – only adding costs to builders. Contrast to the situation in Queensland, where reforms there at least at face value appear to promote greater accountability and a new rapid dispute system should reduce the costs and time-frames associated with disputes for parties on both sides. Reply

 

Paul says: July 9, 2014 at 12:26 pm About time someone highlighted this betrayal of trust. A government body whose purpose is to protect consumers through registration of COMPETENT practitioners& take action where proven otherwise. Instead they allow repeatedly incompetent offenders ongoing registration, totally negating their advice to consumers to check registration before engaging a builder but more critically results in consumers being forced to cover the costs of their tardiness & as Anne reminds us, even deaths on occasion. Why were the promised reforms to this regulatory body and Warranty Insurance dropped? Shame on Victoria’s ministers if it was as I suspect, due to pressure from industry groups who stand to lose millions in insurance premium income?

 

Reply Mick says: July 15, 2014 at 7:58 pm Well, what a great description of the current Victorian Building Industry regulator. Matthew Guy announced with great “fanfare” a “new” industry fix regarding the old Building Commission with the Victorian Building Authority. What a great new name change. From an informed and well educated registered practitioner point of view, they failed to bring out the “yard” broom and begin from the top floor and keep sweeping until the building was empty. Replace with industry educated employees that have social conscience and strong moral fibre.

 

Reply Sonya says: July 17, 2014 at 11:22 am A perfect description of the VBA Anne It is disgraceful that such injustice continues at the financial and personal expense of consumers. Purchasing / building a home is one of the single largest investments consumers will make in their lifetime and yet the Government agencies established for the purpose of regulating the building industry and providing consumer protection continue to fail in their duty of care and are not held accountable for their errors! Shame on the Victorian Government – consumers need REAL protection and REAL change, not these phony agencies you have established who offer nothing.

 

Reply Ari says: July 30, 2014 at 3:03 pm Anne there is plenty of merit in what you have said here, and this is coming from a registered building practitioner in the category of Building Surveyor. I do not have any in depth knowledge of the particular matter, but agree wholeheartedly that there are many problems in the industry that have not and are not being properly dealt with. Unfortunately, the VBA does not appear to be listening to sound advice from genuine, unbias and competent industry groups and consumer groups. Many of us from industry have been crying out for years for the real problems to be addressed but to no avail. To make matters worse, there are some very strange proposed changes to the Act that will in my view make matters worse.

Reply Peter says: August 6, 2014 at 9:23 pm A very good description of the regulator(!) in its past and present form. No law seems to apply meaningfully to builders. The question I have is ‘why’? Surly no-one thinks that a Regulator that so blatantly enables practitioners to treat the community with such contempt isn’t encouraged or pressured in this direction very strongly by Industry associations

Reply Andrew says: August 31, 2014 at 10:00 am Home owners have known for years that the VBA was not a regulator in any sense. As for owners needing to pay a ‘Building Inspector’ to inspect brand new buildings, supposedly built by a ‘Registered Builder’ and certified by a ‘Registered Surveyor’, this is crazy. But the lawless domestic building industry is more than crazy. It is outrageous. And as we have learned recently, so many of those posing as ‘Building Inspectors are unregistered, unskilled and numbers of them are failed builders, now unregistered! Prue Digby says that the VBA is “protecting public safety”. Then how are all these cowboys operating outside the law and unpunished? How are so many ‘Inspectors’ masquerading as real and registered? No enforcement of compliance by VBA! Reply – See more at: http://sourceable.net/victoria-building-authority-sham/#comments

 

 

How to Embark On Building a Home and End Up Homeless!

How to Embark On Building a Home and End Up Homeless! 25 August 2014
Number One of Top Ten articles for August 2014
It is ironic that in attempting to build a home, owners through no fault of their own end up homeless!

BUILDING HOME TO HOMELESS

Every part of the ‘con-sumer protection strategy’ has been broken for more than 20 years. Insurance is but one example of the issues with the scheme. For consumers who build or renovate, the Government mandated that they pay for ‘Last Resort’ Builders’ Warranty Insurance. There is no other class of ‘insurance’ operating anywhere in the world like BWI because it is not a typical form of insurance, where one pays a premium to mitigate against risk, with the guarantee of payment if the risk is realised. Owners are forced to pay for what is actually ‘No Resort Insurance’, where 99 per cent of owners have not been able to make a claim, much less get any payout. BWI is ‘non-insurance’, where consumers’ ‘donations’ flow to insurers and brokers.
Introduced in 2002, under the guise of offering consumers limited protection, BWI offers no protection for home owners. In order to trigger this non-insurance, the builder has to die, disappear or become insolvent. Few builders die, fewer disappear only to later be ‘found’ by the insurers. As for insolvency claims, the insurance companies refuse to pay out on genuine claims or offer a pittance of the full entitlement. This scam has proved been a godsend for insurance companies and brokers, the beneficiaries making multi-millions of dollars from consumers’ compulsory donations. In
order to appreciate the magnitude of this swindle, let us look at some statistics. In 2011, it was revealed that during the previous year, more than 53,000 Victorians had paid an estimated $87.8 million for ‘warranty insurance’ on home building projects.
Around $38 million went in premiums, with most of the other $39.8 million gifted to insurance brokers as commissions. The shocking reality is that from this pool of nearly $88 Million, only three owners managed to make successful insurance claims that year, for a grand payout of $108,476! Lots of money went in, but little was paid out, and consequently the minute claims-loss ratio of 0.12 per cent! So much for ‘warranty insurance’ and a safety net. It is a mega million dollar scam!
The best way to appreciate how this scam rewards insurers is to consider a real story. One such case involves Alex Furman and Lana and Igor Kozak. They engaged a ‘registered builder,’ with CBL Insurance Limited providing the BWI. The building phase was disastrous and after years of heartache, the builder declared himself to be insolvent and the BWI was triggered. The owners thought this would offer a lifeline, but no! They lodged a claim with CBL in April 2013, providing all the evidence of defects and invoices to substantiate their expenses. CBL accepted liability for defects in May 2013.
Prior to the builder becoming insolvent, the owners discovered many defects and sought advice from Consumer Affairs Victoria (CAV). Several CAV officials informed them that under the Domestic Building Contracts Act, if they were unable to find a builder willing to rectify as in this case, the original ‘builder’ could be paid for rectification. The owners were assured that this was in line with the DBCA! After lodging their claim with CBL, Alex and the Kozaks provided proof of money paid for materials, rectification works and payments to the builder and trades, and they claimed for work still to be rectified. They answered the many questions put to them by CBL in an endeavour to overcome the hurdles hindering them from achieving a just outcome. When they lodged their claim 16 months ago, the owners were entitled to be paid for all the defects which had been rectified and those still outstanding. At present, a Building Notice is on the property what is built is non-compliant with the Plans. According to the owners, CBL was provided all the supporting evidence for their genuine claim, $740,000 for defects rectified and around $200,000+ for defects yet to be rectified.
However in August 2013, CBL offered a mere $17,500, with a story that the owners had been at fault! But this was false. The ‘offer’ was not based in law and ignored the facts. The owners would not accept the offer as full payment and sent the cheque back to ‘No Risk CBL’; if you do not intend to ever pay out, then there are no risks! To date, CBL has not paid one cent of this legitimate claim!
After CBL offered the paltry payout, blaming the owners for paying the same ‘builder’ for rectification, the owners again contacted CAV. Once more, they spoke to several officials, who confirmed that CBL’s assertions were baseless, and CAV also confirmed that the owners had done nothing wrong and their actions had not jeopardized their genuine right to claim and be paid. In fact, it is unclear as to how this figure was arrived at, and quite apart from the issue of the original builder being paid for rectification works, CBL ignored all the accounts paid by the owners for materials and labour and the amount required to be spent on rectification works.
The owners pleaded for assistance from every quarter – from their local member, Georgie Crozier, who committed to help, but did nothing. Many letters and appeals in person were made to Robert Clark, the ‘junk’ insurance Minister, who gave no response. Then they reached out to Heidi Victoria, Minister for Consumer Affairs, and again got nothing! After three months of CAV considering the case, in August 2014 the owners were informed that CAV would not pursue CBL. CAV’s position now is that it has four entries (of the owners’ calls) recorded, but that these do not disclose that any
Reply
• Lisa Livingston says:
August 30, 2014 at 5:46 pm
In 2012 the Victorian Building Commission found our builder, Bur*^%$ Homes to be responsible for causing the defect of slab heave to our home when they built it. As this article says, BWI is not worth the paper it’s written on and we found the hard way that it didn’t help us at all. The Ministers for Building, Consumer Affairs and the Attorney General’s department have all declined to help us. Mediation through BACV isn’t worth the paper it’s written on because no one will enforce it. Bur*^%$ Homes continue to refuse to compensate us because they think that no one will make them. An inquiry into this unethical, heartbreaking system must be held before it ruins any more lives, like it ruined ours.
Reply
• Judy-Ann Steed says:
August 30, 2014 at 11:22 pm
Congratulations Anne on taking these matters forward on 774’s John Faine program and with me last Thursday 28 August on 3mdr 97.1fm creating more meaningful publicity to raise awareness of consumers’ building plights and in the face of meaningless reforms muted by State Government. If you want to hear just how well Anne aquits herself have a listen just after 9 a.m. by logging on to 3mdr.com, go to programs and the time slot Thursday.
I was so impressed with Anne and her cause, I’ve entered her interview with me in the Walkley Journalist Media awards. Congrats Anne and keep up the good work. Judy-Ann Steed Independent Broadcast Journalist.
Keep up the good work.
Reply
• Alexander says:
August 31, 2014 at 1:00 pm
The Government tolerance to Building Insurances behavior is just outraging. How can they do nothing about injustice of Insurance Companies and support a low, which allow these Greedy Fat Cats to make a billions of dollars without any responsibilities, completely ignoring the claims and robbing people like a usual criminals, destroying their lives.

For Whom Doth the Bell Toll?

If the Andrews Government’s ‘Consumer Protection’ legislation before Parliament is passed, it will have seriously damaging, far-reaching consequences for all Victorians.

The bells have been ringing for more than a decade, but successive governments have muted the dissenters, ignored public protests and muffled the media. However, this time it is different. Along with building consumers, the entire community is outraged. Not only does this legislation void consumers’ human rights, it is disrespectful of us all. Cries through the community are sounding the distress signal and ominously warning the government: for whom doth the bell toll?

CLOCK

Government on the gravy train

The consequences of the current lack of ‘consumer protection’ have been well documented, the government fully informed on the magnitude of the disaster that has swept across the state for the last 20 years. It knows the shocking statistics from government reports – all on the public record. It is very familiar with the ever-escalating numbers of Victorians caught up in what is now the greatest consumer catastrophe in our history, leaving in its wake the destruction of more than 250,000 families each year.

In incremental steps over recent decades, successive governments have abandoned democratic principles and opportunistically boarded the gravy train. Increasingly self-assured and smug, they have locked ‘people’ out, and in defiance of the public interest, fashioned their policies to suit the vested interests.

But in cases like this, there comes a tipping point, a time at which the affront to those damaged incites anger, and anger morphs into action. Hence it is now that time with disadvantaged, exploited building consumers. This legislation is literally the final straw. Building consumers are determined to spotlight their plight and expose the truth of their traumatic stories so far largely covered up; these obscured by government misinformation and secrecy, suppressed under threats from building interests of ‘defamation’ and concealed by official ‘gag orders.’

This time the ranks of disaffected consumers have been swelled by others who are speaking out across the Victorian community. These include many who work in the building industry, local councils, other community organizations, the Metropolitan Fire Brigade and ordinary Victorians.

They have taken umbrage with governments prepared to put profits over people, and in so doing, consciously causing the public serious harm. As the voices of Victorians have been stifled, cynicism has turned to resentment, and animosity converted into calls for action.

The momentum is building as Victorians reflect on being victims of a lawless industry, one enabled by uncontrolled, unaccountable governments and public officials who refuse to govern in the public interest and for the public good. Community hostility has intensified toward our government, especially as the reality of our third world built environment has been revealed, along with the perilous dangers for people forced to live in unsafe buildings.

Vic Community Speaks Out

This ‘Building Legislation Amendment Bill (Consumer Protection) 2015’ is so reprehensible that on February 22, the Victorian Building Action Group wrote to the Premier and relevant Ministers on behalf of building consumers and all Victorians to express a vote of no confidence in the government.

The letter concluded that the reprehensible legislation is: “irrational, unfair and unlawful. It is also unconscionable, an indictment on the Andrews Government and its scandalous betrayal of trust.”

As always with consumers, this elicited no response.

Following the three Victorian Auditor-General’s Reports (2000, 2011 and 2015) and the Ombudsman’s Report (2012) all scathing of the building ‘regulator,’ in July 2015 the walls of a construction pit in Mt Waverly collapsed.

Another failure of the ‘regulator’ was highlighted, with the Manningham Council describing it as “alarming.”

At MAV’s governing council meeting in October 2015, the Manningham Council declared the councils’ and community’s “loss of trust” in the VBA, moving a motion of no confidence in the VBA, with a call to the Andrews Government to protect the community. As expected, the VBA’s CEO Prue Digby responded, saying that the council “had not ‘understood’ the role of the VBA” and that it had “met its aim of expediting building permits to reduce work delays.”

Astoundingly, the VBA’s self-perceived ‘role’ that no-one else ‘understands’ is not a ‘regulatory’ one, with increasing the number of permits the VBA’s ‘aim’ – not safe, compliant and quality buildings. Of course, consumers knew this long ago, but now councils and the community are cognizant too.

Since the Lacrosse building fire in November 2014, the Metropolitan Fire Brigade has spoken out continuously. When the building caught fire, it sent shock waves through the community, no one more shocked than the MFB who for decades were led to think that Victoria had a robust regulatory regime. Justifiably, the MFB was aghast. It had been misled and more disturbingly learned that the community and firefighters had a ‘regulator’ who has never done any ‘regulating.’

Over the past 15 months (not one person held accountable for the Lacrosse fire or other buildings with the non-compliant cladding), the MFB has been highly critical of the VBA – for good reasons. The MFB has published reports, appeared at the 2015 Senate Inquiry and tried to make the government listen. Deputy chief Adam Dalrymple has expressed “grave concerns” with regard to the flammable cladding crisis and “questions whether the VBA understands the extent or consequences of the problem or how to resolve it (Fire Brigade Slams Building Authority, The Australian, December 9, 2015).

Prue Digby’s reply was that she would discuss the “important issues it raises.” Such a condescending response underscored the contempt of officials, not only for the MFB but for consumers and all Victorian residents. Our money, our safety and our lives are of no import, our sad stories not of ‘interest.’

In the MFB’s report on the Reform of the Building Regulatory Regime published in November 2015, perhaps one of the most frightening issues raised was the future “unquantified public and consumer risk.” The MFB report applied the VBA “figure of up to 1% of building permit documentation showing serious non-compliance” and based on this figure calculated that “this means there were potentially 20,000 building permits issued based on documents which are seriously non-compliant.” However, this did not include “buildings built without a building permit, or those buildings where the documentation may have been compliant but the building work is non-compliant.”

For those familiar with the building industry, this is no surprise. But in light of the VBA’s highly unreliable ‘figures,’ one can but imagine the potential 20,000 buildings posing risk as very unrealistic. Scary!

We all know that those in power know the financial loss and heartbreak, the staggering numbers of Victorian deaths from heart attack, stroke and suicide and the impact on those forced into bankruptcy and homelessness through no fault of their own. Sadly and simply, such stories do not seem to register with those in charge.

Governments are spectacularly skilful. They have many helpers on our payroll. They can fool many people much of the time, but as Abraham Lincoln wisely remarked, they “cannot fool all of the people all of the time.”

The bells are ringing, sounding rich in reverberation literally and metaphorically. The pealing portending: for whom doth the bell toll?

Vote of No Confidence in Andrews Government

Dear Premier and Ministers Wynne, Garrett and Scott

As the President of the Victorian Building Action Group, I am writing to you as the Ministers responsible for the duplicitous ‘Consumer Protection’ legislation now before Parliament. We represent the silenced voices of all Victorians who have been ignored and we have NO CONFIDENCE in you as the Government.

The ‘Building Legislation Amendment Bill (Consumer Protection) 2015’ was quietly introduced into Parliament in December 2015, and as you know the Government deliberately excluded all consumers from consultation. This Bill is about to be passed by the Legislative Council and instead of providing any level of ‘protection’ as you have pretended, it will ensure that all Victorian consumers remain totally unprotected. The objective of this Bill could not be further from giving consumers a ‘fair go’. In fact, it continues the 23 year long consumer con!

An examination of the almost 300 pages of this Bill and its Explanatory Memorandum reveal a cruel hoax. Beneath the layers of complexity contrived to be convoluted and confusing, the reality is uncovered: no ‘improvement’ for building consumers. But even worse, under this legislation more consumers will be placed at greater risk of serious harm. Of course as always, consumers were locked out, all their letters and submissions ignored, they were denied any consultation and as the Bill makes manifest, they remain disenfranchised and without any representation. All their voices were sagaciously silenced. It is for this reason that the Victorian Building Action Group has decided to speak out on behalf of all Victorians and to publicly register its vote of NO CONFIDENCE in the Andrews Government.

There have been hundreds of independent reports on the corrupted practices of the building industry and the appalling performance of the ‘regulatory’ agencies over decades. This Bill was supposedly created in response to the most recent highly critical reports from the Victorian Ombudsman (2012) and the Victorian Auditor-General’s Office (2011, 2013 and 2015), but once again the Government has unashamedly failed consumers and all Victorians.

The findings of all reports were scathing of the governance and maladministration of the Building Commission/Victorian Building Authority and Consumer Affairs Victoria, but the 2015 Victorian Auditor-General’s Report also established that every element of the so-called ‘consumer protection’ regime had failed consumers, confirming this to be the case for the last 22 years. Hence, the Government was obligated to address the problems repeatedly identified and should have delivered genuine ‘reform’.

The Government should have focused on tough regulation and good governance as preventative measures to decrease consumer harm, and for the first time it should have afforded owners access to their ‘consumer rights’. However, all those identified as ‘registered’, who should not be registered (Ombudsman 2012 and other Reports) remain licenced. The ‘no enforcement’ policy of the VBA continues unabated. Just consider the Lacrosse Apartment fire; of all those responsible for the non-compliant, dangerous cladding, not one person has been called to account in 15 months – the owner victims are facing a $40 Million bill to make the building safe! And let us reflect on the total lack of accurate and truthful ‘consumer information’ – again no change; the Government agencies’ spin-a-lot continues. Take but one example, the CAV claim of 90% resolution of ‘building disputes’, with CAV’s nonsensical definition of ‘resolution’ that the parties simply identify the “consumer’s problem”!

Thus, instead of cleaning up the industry and its shameful governance, and in the name of ‘protection’, this Bill will continue to deny consumers their supposed ‘consumer rights’, but most disturbingly it will also revoke their human rights! As you know, under Victorian law every new Bill put to Parliament must be compatible with the Victorian Charter of Human Rights and the Government “must not knowingly be in breach of these rights unless there are “exceptional circumstances”. Yet this Government, through Ministers Wynne and Garrett openly declared a Statement of Compatibility before Parliament, but proclaimed that this ‘protection’ legislation is not compatible with the Charter of Human Rights! And there are no “exceptional circumstance”! Paradoxically, this legislation will limit consumers’ rights to access a court or tribunal, to have a fair hearing and rescind their rights to property and privacy.

The main thrust of the legislation as you know is on disputation. Instead of taking positive steps to prevent ‘building disputes’, owners who have building disasters are now to be directed into ‘disputes’ and this compelled by your Government. Consider that there were 35,000 ‘disputes’ in 2002, and under CAV’s leadership, this grew to 256,000 in 2011 – this was 256,000 owners in 2011 who suffered financial detriment in the billions of dollars. This an extraordinary achievement by CAV officials who managed such exponential growth of the ‘building dispute industry’ and managed to damage so many owners. As you would appreciate, this was very predictable, the inevitable result of a lawless industry combined with the assistance of CAV officials acting as business partner to protect builders’ interests. The corollary is clear: this had to be at the expense of not protecting consumers’ interests.

Now, despite their sullied record, the VBA and CAV will be in charge of the ‘new’ arrangements; the VBA as the ‘refuse-to-regulate’ regulator, and CAV as the ‘king of disputes maker’, their assigned roles to ‘control’ consumers into ‘disputes’ for their ‘protection’! In actuality, the VBA and CAV, together with VCAT will continue their ‘old’ roles, protecting the recalcitrant rogue offenders and the vested building industry interests.

This as you know is not the full picture. It is even worse. Under new section 48(1), and in order to circumvent current building law, this Bill creates a new group of ‘Assessors’, who can be “any person in a class of persons”, without any building qualifications or registration! This is absurd – it could be you, me or a street sweeper! Shamefully as you are aware, this is a breach of Section 176 of the Building Act 1993, which stipulates that only qualified, registered Building Inspectors can legally inspect buildings.

Then there is more. These ‘Assessors’ will have powers to write reports which will be used to force owners to pay money to builders – this in breach of the Domestic Building Contracts Act and regardless of builders having no entitlement to any money! Thus Wynne’s way means that although it is illegal under the Building Act, ‘any person’ will now ‘legally’ masquerade as an ‘Assessor’, and based on these Assessors’ fake and false reports, money will be forcibly and illegally extracted from owners. In reality, this is Government authorized building fraud.

This Bill continues the ‘old’ anti-consumer policy. Cleverly contrived to proclaim ‘protection’, it masks the deception that all consumers will remain totally unprotected. Most alarmingly, this Bill is an unlawful decree disguised as ‘lawful’, the pretext of ‘protection’ used to feign legitimacy. It will ‘regulate’ consumers to drive the economy, grow the building industry and create a deluge of disputes as the building dispute industry spirals out of control. All involved will be beneficiaries – except the disadvantaged, vulnerable consumers who will remain isolated and defenceless. The staggering statistics provide the evidence of past failed policy: four in every ten (4:10) consumers suffer financial damage (2011); today it is 5 years later and more likely to be five in every ten – or 50%. The number at perilous risk is now set to skyrocket, with the greatest man-made disaster in our history primed to reach an all-time new record.

This reprehensible legislation is irrational, unfair and unlawful. It is also unconscionable, an indictment on the Andrews Government and its scandalous betrayal of trust.

 

Vic Building Legislation: A Wolf in Sheep’s Clothing

The Building Legislation Amendment (Consumer Protection) Bill 2015 tabled in Parliament in December 2015 should set alarm bells ringing throughout the Victorian community.

sheep wolf shadow

The bill is a smokescreen devised to mask the deception of nil ‘consumer protection’ and the pretence has been formulated to feign legitimacy for revoking consumers’ human rights. Disguised as ‘lawful,’ this decree is a veritable wolf in sheep’s clothing!

If this bill were a genuine attempt at improving safeguards for building consumers, logically it would have addressed the problems repeatedly identified as causing consumer harm. The ‘solutions’ are self- evident, preventative measures the key: clean up the industry, introduce sound governance and give consumers a chance to compete in a fair market. However, this bill continues the old anti-consumer policy, with the ‘old’ classic features remaining totally intact and the ‘old’ VBA and CAV in charge.

An examination of the legislation reveals its negative focus on disputation.

Dispute history

Let us begin by considering the path to the current consumer catastrophe, including the colossal number of building disputes, the massive financial loss to consumers and the exponential increase over time. In 2002, there were 35,000 building disputes according to a media release by the building commissioner – hardly insignificant. But in 2002, CAV began its ‘conciliation’ service, supposedly to ensure dispute reduction.

However, as the statistics indicate, CAV was an extraordinary failure if its objective was as stated. From 35,000 disputes in 2002, this rose to 206,000 in 2008 and to 256,000 by 2011 – or 38 per cent of all Victorian building consumers!

In terms of consumers’ financial loss, it was $500 million in 2005, rising to $706 million in 2006, escalating to $1.6 billion in 2008 and reaching an estimated $3 billion in 2011. If we consider building consumers’ financial loss as a percentage of total consumer detriment, it was 22 per cent of total consumer detriment in 2006, 53 per cent by 2008 and not disclosed in 2011, according to the CAV Consumer market Experience Study of 2006, 2008 and 2011.

The irrational rationale

Under Victorian law, every new bill put to Parliament must be compatible with the Victorian Charter of Human Rights, “checked against the Charter,” and “telling Parliament how it relates to human rights.” It can only be incompatible with the Charter “in exceptional circumstances,” and a statement explaining how/why human rights came to be ignored is compulsory. Minister Wynne’s Statement of Compatibility declared this legislation as incompatible, his reasoning being that violation of human rights was a necessary precondition for ‘protecting’ consumers. Thus, regardless of their wishes, the ‘protective’ path for consumers is forced disputation and human rights nullification.

First, Wynne acknowledged the breach of an owners’ right to access a court or tribunal, requiring owners to “refer the dispute to the dispute resolution service” before being “entitled to commence proceedings in VCAT or a court.” He rationalized that “no less restrictive alternative is reasonably available” and “it is my view the right is a reasonable limit.” This is his justification for incompatibility with the Charter.

This new body will have extraordinary legally binding powers to forcibly extract money from owners to give to builders – this under CAV, which has an abominable record on dispute resolution and protecting consumers.

Second, Wynne argued it reasonable to violate a consumer’s right to a fair hearing by making dispute resolution compulsory for consumers, stating: “it is my view the right is a reasonable limit.” In his statement defending the bill’s compatibility, Wynne argued that the ‘old’ dispute resolution process “has a 90 per cent resolution rate but its voluntary nature… limits its effectiveness.” If we accept this figure and Wynne’s reasoning, such a successful outcome on a voluntary basis would negate any argument for mandatory disputes!

The horrendous dispute statistics above make it clear that this ridiculous 90 per cent claim is untrue. Almost 40 per cent of consumers suffered enormous financial detriment via ‘disputes’ in 2011, yet Wynne quoted a 90 per cent resolution rate.

On this point, CAV’s definition of ‘resolved’ is insightful; according to the Consumer Confidence and market Experience Study 2010-2011, “The term ‘resolved’ is used to mean that the consumer and the trader or supplier had reached an agreement about the consumer’s problem.”

According to this, ‘resolve’ does not mean ‘finding a resolution!’ This fallacious storytelling renders the 90 per cent claim ridiculous. Also telling is the victim blaming, with disputes being seen as the “consumer’s problem” and the irrational supposition that since consumers are the problem, they must be ‘regulated’ into disputes and punished.

Further calling into question CAV’s performance is this staggering statistic from the CAV Consumer Experience’ Report of 2008: “44% of problems with home building were unresolved.”
But there’s more! In 2013, the Auditor General found CAV had falsified the ‘consumer satisfaction’ statistics in its annual reports. And, despite 256,000 building consumers suffering financial loss in 2011, CAV concluded its 2011 Report on Consumer Experience: “This study shows that the Victorian market environment is working effectively.”

This CAV will continue to ‘control’ disputes and damage consumers. Obviously, CAV’s credibility as Wynne’s basis for mandating disputes and breaching human rights is discredited.
How can CAV and the VBA, with their blighted history on the public record ‘dictate’ the dispute arrangements? Consider the craziest of claims, Wynne’s assurance that the VBA will use “suitably qualified conciliators and technical assessors capable of examining domestic building work.”

This is not so! Under new section 48(1), an assessor can be:
• an architect registered under the Architects Act 1991
• a building practitioner registered under the Building Act in a prescribed category or class
• a person in a prescribed class of persons.

According to this, assessors can be any building practitioner – say a demolisher! Or it could be any ‘person’ without any building qualifications or expertise! All have powers to inspect buildings, write reports nominating a building as defect free and to invoke orders compelling owners to pay money to builders who have no entitlement to payment!

This is not just illogical, but illegal. Section 176 of the Building Act stipulates that only registered building inspectors can legally inspect buildings. Unregistered imposters do not qualify. But Wynne’s way, breaching the Building Act, removes any impediment to ‘protecting’ the cowboys!

Third, the Charter protects a person’s right not to have his or her privacy unlawfully or arbitrarily interfered with. Wynne explained his willingness to contravene the Charter by saying “In my view, while the exercise of the entry power may interfere with the privacy of an individual in some cases, any such interference will not be arbitrary” and adding that “Any resulting interference with privacy will occur lawfully under these provisions.”

In layman’s language, Wynne’s overreach of his position and powers has him deem the unlawful contravention of the Charter and rescinding our human right to privacy as lawful, demonstrating his contempt for consumers and the law.

Fourth, under the Charter, a person’s right not to be deprived of their property other than in accordance with law is protected.
“It is unlikely in my view that any exercise of this power will result in any real deprivation of property,” Wynne reasons, adding that “should it result in any deprivation of property, I am satisfied it would occur in accordance with law.”

As above, Wynne has rationalized deprivation of our right to property as lawful by his decree and thus justified the unlawful breach of the Charter of Human Rights!
In conclusion, it is not surprising that this bill defies rationality. How could one possibly justify breaching the Charter of Human Rights and violating consumers’ inalienable rights to ‘protect’ them?

By Anne Paten
Monday, February 22nd, 2016