Building Amendment (Cladding Rectification) Act 2019

No. 43 of 2019

TABLE OF PROVISIONSSection Page

1 Purpose 12 Commencement 23 Principal Act 24 Definitions 25 Schedule 2 to apply 36 Relevant building surveyor must apply for building permit

number for building permit 37 Issue of building permit number 38 Authority may refuse to issue building permit number 49 New Division 4 inserted in Part 9 410 Functions of the Authority 711 Victorian Building Authority Fund—establishment and

structure 712 Payments into Building account 813 Payments out of the Building account 814 New sections 205DA and 205DB inserted 915 Building permit levy must be paid 1116 Building permit application must contain information about cost

of building work 1317 Relevant building surveyor must refuse permit in certain

circumstances 1318 Section 205I substituted 1419 Authority must be notified of increased building costs 1620 Authority may reassess levy after building permit issued 1621 Authority to give notice of additional levy to be paid 1722 New section 205LBA inserted 1823 Authority may impose amount of penalty levy 1824 Review by VCAT 1925 New Subdivision 4C inserted in Division 2 of Part 12 1926 Additional powers 2027 New sections 277 and 278 inserted 2028 Repeal of this Act 22

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Endnotes 23

1 General information 23

1

Building Amendment (Cladding Rectification) Act 2019†

No. 43 of 2019

[Assented to 19 November 2019]

The Parliament of Victoria enacts:

1 Purpose

The purpose of this Act is to amend the Building Act 1993—

(a) to confer further functions on the Victorian Building Authority in relation to cladding rectification; and

(b) to provide financial assistance for building work associated with cladding rectification; and

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(c) to provide for the subrogation of the Crown to the rights and remedies of an owner to whom financial assistance is given; and

(d) to establish a new account in the Victorian Building Authority Fund; and

(e) to impose an additional levy on certain building permits.

2 Commencement

(1) Subject to subsection (2), this Act comes into operation on a day or days to be proclaimed.

(2) If a provision of this Act does not come into operation before 1 July 2020, it comes into operation on that day.

3 Principal Act

In this Act, the Building Act 1993 is called the Principal Act.

4 Definitions

(1) Insert the following definitions in section 3(1) of the Principal Act—

"cladding rectification work means—

(a) building work in connection with, or otherwise related to, a product or material that is, or could be, a non-compliant or non-conforming external wall cladding product; or

(b) work of a type specified in a notice under section 185I of the Local Government Act 1989;

non-compliant or non-conforming external wall cladding product means—

(a) an external wall cladding product that does not comply with the requirements of this Act and the regulations; or

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(b) an external wall cladding product that is installed or used in, or applied to, a building in a manner that does not comply with the requirements of this Act and the regulations; or

(c) a high risk external wall cladding product that is used in contravention of a declaration under section 192B applying to that product;".

(2) Insert the following definitions in section 3(1) of the Principal Act—

"regional Victoria has the same meaning as in section 18(8) of the First Home Owner Grant Act 2000;

staged permit means a building permit referred to in section 20(b);".

5 Schedule 2 to apply

(1) In note 1 at the foot of section 18 of the Principal Act, for "determined" substitute "calculated".

(2) In note 2 at the foot of section 18 of the Principal Act, for "determined (see section 205H(1)" substitute "calculated (see section 205H(1) and (1A)".

6 Relevant building surveyor must apply for building permit number for building permit

Section 18AA(2)(c) of the Principal Act is repealed.

7 Issue of building permit number

In section 25BA(1)(b) of the Principal Act, for "determined" substitute "calculated".

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8 Authority may refuse to issue building permit number

In section 25BB(b) of the Principal Act, for "determined" substitute "calculated".

9 New Division 4 inserted in Part 9

After section 137E of the Building Act 1993 insert—

"Division 4—Cladding rectification subrogation

137F Subrogation

(1) This section applies if—

(a) after the commencement of this Division, the Authority pays an amount to an owner of a building (the payee) by way of financial assistance in relation to cladding rectification work on the building; or

(b) before the commencement of this Division, an amount was paid by or on behalf of the Crown in right of the State of Victoria to an owner of a building (the payee) by way of financial assistance in relation to cladding rectification work on the building.

(2) At the relevant time, the Crown is subrogated to all the rights and remedies of the payee against any person in relation to the installation or use of any non-compliant or non-conforming external wall cladding product, or other building work, that required the cladding rectification work to be undertaken.

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(3) If a right or remedy to which the Crown is subrogated under this section is exercisable against an entity that is not an individual, it is enforceable jointly and severally against the entity and the people who were its officers at the time the act or omission that gave rise to the right or remedy occurred.

(4) If it is proved that an act or omission by an entity occurred without the knowledge or consent of an officer of the entity, a right or remedy is not enforceable as provided by subsection (3) against the officer in relation to the act or omission.

(5) The Crown may exercise its rights and remedies under this section in its own name or in the name of the payee.

(6) If the Crown brings proceedings under this section in the name of the payee, the Crown must indemnify the payee against any costs awarded against the payee in the proceedings.

(7) If, in exercising its rights and remedies under this section, the Crown recovers more money than the amount of financial assistance paid to the payee, the Crown must pay the difference to the payee after deducting costs incurred to recover the money.

(8) The payment of an amount referred to in subsection (1) in relation to cladding rectification work does not affect any right or remedy of the Crown by virtue of subsection (2) to recover from a person in relation to the installation or use of any non-compliant or non-conforming external wall cladding product, or other building work, that required the cladding rectification work to be undertaken.

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(9) A reference in this section to the rights of a payee includes any right the payee may have under section 86 of the Sentencing Act 1991.

(10) In this section—

officer—

(a) in relation to an entity that is a corporation—means an officer of the corporation within the meaning of section 9 of the Corporations Act; or

(b) in relation to an entity that is neither an individual nor a corporation—means an officer of the entity within the meaning of section 9 of the Corporations Act;

relevant time means—

(a) in the circumstances referred to in subsection (1)(a)—when the financial assistance is paid to the payee; or

(b) in the circumstances referred to in subsection (1)(b)—when this Division commences.

137G Repayment of financial assistance

(1) This section applies if—

(a) a payee has been paid an amount referred to in section 137F(1) in relation to cladding rectification work; and

(b) the payee receives or recovers from another source or sources an amount in relation to the installation or use of any non-compliant or non-conforming

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external wall cladding product, or other building work, that required the cladding rectification work to be undertaken, including an amount received or recovered before the commencement of this Division.

(2) Subject to subsection (3), an amount referred to in subsection (1)(b) is a debt payable by the payee to the Crown.

(3) The total amount payable by the payee under subsection (2) cannot exceed the amount referred to in subsection (1)(a).".

10 Functions of the Authority

In section 197 of the Principal Act—

(a) in paragraph (f), after "information" insert "and advice";

(b) in paragraph (f)(iii), after "plumbers;" insert "and";

(c) after paragraph (f)(iii) insert—

"(iv) cladding rectification work;";

(d) after paragraph (f) insert—

"(fa) to monitor and provide financial assistance in relation to cladding rectification work;".

11 Victorian Building Authority Fund—establishment and structure

In section 205(2) of the Principal Act—

(a) in paragraph (b), for "account." substitute "account; and";

(b) after paragraph (b) insert—

"(c) the Cladding Safety Victoria account.".

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12 Payments into Building account

In section 205A(1) of the Principal Act—

(a) in paragraph (b), after "Plumbing account" insert "and money required by section 205DA to be paid into the Cladding Safety Victoria account";

(b) in paragraph (c)—

(i) in subparagraph (i)—

(A) omit "of Division 2";

(B) after "levy" insert "(other than amounts received on account of, or in relation to, the building permit levy payable under section 205G(2A))";

(ii) in subparagraph (ii)—

(A) omit "of Division 2";

(B) after "section 205LJ(1)" insert "(other than amounts received on account of, or in relation to, the building permit levy payable under section 205G(2A))";

(c) in paragraph (h), after "Fund" insert "(other than money required or authorised by section 205DA to be paid into or credited to the Cladding Safety Victoria account)".

13 Payments out of the Building account

In section 205B(2) of the Principal Act, after "section 205D" insert "or the Cladding Safety Victoria account under section 205DB".

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14 New sections 205DA and 205DB inserted

After section 205D of the Principal Act insert—

"205DA Payments into the Cladding Safety Victoria account

There must be paid into the Cladding Safety Victoria account—

(a) any amounts received by the Authority under Subdivision 4 on account of the building permit levy payable under section 205G(2A); and

(b) the following received by the Authority on account of, or in relation to, the building permit levy payable under section 205G(2A)—

(i) any amounts under Subdivision 4A or 4B;

(ii) any penalty levy imposed by the Authority under those Subdivisions;

(iii) any costs charged by the Authority under section 205LJ(1); and

(c) income from the investment of the Cladding Safety Victoria account; and

(d) money appropriated by Parliament for the purposes of the Cladding Safety Victoria account; and

(e) grants or other amounts received from the Commonwealth for the purpose of cladding rectification work; and

(f) any other money required or authorised by or under this or any other Act or the regulations to be paid into or credited to the Cladding Safety Victoria account.

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205DB Payments out of the Cladding Safety Victoria account

(1) There must be paid out of the Cladding Safety Victoria account—

(a) any amounts required to enable the Authority to carry out its functions in relation to cladding rectification work; and

(b) the amount of any refunds required to be given by the Authority under section 205LBA(1)(b); and

(c) any amounts authorised by the Minister for the purposes of conducting—

(i) the review under Subdivision 4C; and

(ii) any other review of this Act, the regulations and any other Acts or regulations related to the building industry; and

(d) any amounts directed under subsection (2) to be paid into the Consolidated Fund; and

(e) any other amounts required or authorised to be paid out of the Cladding Safety Victoria account by or under this or any other Act.

(2) If the Treasurer is satisfied that there is in the Cladding Safety Victoria account at any time an amount in excess of the amount required to meet the anticipated payments from the account, the Treasurer, after consultation with the Authority and the Minister, may direct the payment of the whole or any part of that excess amount out of the account into the Consolidated Fund.".

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15 Building permit levy must be paid

(1) After section 205G(2) of the Principal Act insert—

"(2A) In addition to the levies imposed by subsections (1) and (2), a building permit levy in the amount calculated under subsection (2B) or (2C) must be paid in relation to the cost of building work for which a building permit is required in respect of a building—

(a) that is not, or will not be, in regional Victoria; and

(b) that is, or will be, of any of the following classes of building—

(i) a class 2 building;

(ii) a class 3 building;

(iii) a class 4 building;

(iv) a class 5 building;

(v) a class 6 building;

(vi) a class 7 building;

(vii) a class 8 building.Note

A levy paid under subsection (2A) is paid into the Cladding Safety Victoria account of the Victorian Building Authority Fund (see section 205DA(a)).

(2B) If the building permit is a permit other than a staged permit, the levy imposed by subsection (2A) is calculated as follows—

(a) if the cost of the building work for which the permit is required is $800 000 or more but less than $1 000 000—0·128 cents in every

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dollar of the cost the building work for which the permit is required;

(b) if the cost of the building work for which the permit is required is $1 000 000 or more but less than $1 500 000—0·256 cents in every dollar of the cost of the building work for which the permit is required;

(c) if the cost of the building work for which the permit is required is $1 500 000 or more—0·82 cents in every dollar of the cost of the building work for which the permit is required.

(2C) If the building permit is a staged permit, the levy imposed by subsection (2A) is calculated as follows—

(a) if the cost of the whole of the building work is $800 000 or more but less than $1 000 000—0·128 cents in every dollar of the cost the building work for which the permit is required;

(b) if the cost of the whole of the building work is $1 000 000 or more but less than $1 500 000—0·256 cents in every dollar of the cost of the building work for which the permit is required;

(c) if the cost of the whole of the building work is $1 500 000 or more—0·82 cents in every dollar of the cost of the building work for which the permit is required.".

(2) In section 205G(3) of the Principal Act, after "payable" insert "under subsection (1) or (2)".

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(3) After section 205G(3) of the Principal Act insert—

"(4) In this section a reference to a particular class of building is a reference to that class of building within the meaning of the Building Code of Australia.".

16 Building permit application must contain information about cost of building work

(1) After section 205H(1) of the Principal Act insert—

"(1A) If an application is for a staged permit, the application must also—

(a) specify the contract price for the whole of the building work (including the cost of labour and materials), if there is a contract for the whole of the building work; or

(b) in any other case, include sufficient information to enable the relevant building surveyor to estimate the cost of the whole of the building work (including the cost of labour and materials).".

(2) In section 205H(2) of the Principal Act, for "subsection (1)" substitute "subsections (1) and (1A)".

17 Relevant building surveyor must refuse permit in certain circumstances

In section 205HA(b)(i) of the Principal Act, after "section 205H(1)(b)" insert "or (1A)(b)".

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18 Section 205I substituted

For section 205I of the Principal Act substitute—

"205I Calculation and notification of levy

(1) If an application is for a building permit other than a staged permit—

(a) the relevant building surveyor must—

(i) estimate the cost of the building work (including the cost of labour and materials) for which the building permit is sought, having regard to the information given under section 205H(1)(a) or (b); and

(ii) without delay, give the Authority and the applicant written notice of the estimate; and

(b) the Authority must—

(i) calculate the amount of building permit levy payable; and

(ii) give the applicant written notice of the amount calculated under subparagraph (i).

(2) If an application is for a staged permit—

(a) the relevant building surveyor must—

(i) estimate the cost of the whole of the building work (including the cost of labour and materials), having regard to the information given under section 205H(1A)(a) or (b); and

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(ii) estimate the cost of the stage of the building work (including the cost of labour and materials) for which the permit is sought, having regard to the information given under section 205H(1)(a) or (b); and

(iii) without delay, give the Authority and the applicant written notice of the matters specified in subsection (3); and

(b) the Authority must—

(i) determine the applicable rate of the building permit levy under section 205G(2C); and

(ii) calculate the amount of building permit levy payable under section 205G in relation to the cost of the stage of the building work for which the permit is sought; and

(iii) give the applicant written notice of the rate determined under subparagraph (i) and the amount calculated under subparagraph (ii).

Notes

1 The building permit levy is imposed under section 205G. The amount of building permit levy payable in relation to a building permit is the sum of amounts payable under section 205G(1), (2) and (2A).

2 The imposition and rate of building permit levy under section 205G(2A) in relation to staged permits will depend on the cost of the whole of the building work—see section 205G(2C).

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(3) For the purposes of subsection (2)(a)(iii), the matters are—

(a) the estimates referred to in subsection (2)(a)(i) and (ii); and

(b) whether the application is for the final stage of the building work.".

19 Authority must be notified of increased building costs

In section 205KA(1) of the Principal Act, after "building permit" insert "other than a staged permit".

20 Authority may reassess levy after building permit issued

(1) In section 205L(1)(b) of the Principal Act, for "section 205I" substitute "section 205I(1)".

(2) After section 205L(1) of the Principal Act insert—

"(1A) If a staged permit has been issued, the Authority may also reassess the amount of building permit levy imposed by section 205G(2A) after a building permit for the final stage of the building work has been issued because—

(a) of a variation made to the building work which has resulted in an increase in the cost of the whole of the building work; or

(b) the estimate under section 205I(2) or (3) of the cost of the whole of the building work was incorrect; or

(c) the Authority considers that the information provided by the applicant in the application for the building permit required under

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section 205H(1A) was incorrect or misleading.".

21 Authority to give notice of additional levy to be paid

In section 205LB(3) of the Principal Act, in the definition of person liable to pay the additional amount of levy—

(a) in paragraphs (a) and (b), for "building levy" substitute "building permit levy";

(b) in paragraph (c), for "permit;" substitute "permit; or";

(c) after paragraph (c) insert—

"(d) if the reassessment of the building permit levy was based on the ground under section 205L(1A)(a) and the variation to the building work is not related to an amendment of the building permit, the owner of the building or land at the time at which the work that caused the increase to the cost of the building work was carried out; or

(e) if the reassessment of the building permit levy was based on the ground under section 205L(1A)(a) and the variation to the building work is related to an amendment of the building permit, the applicant for the amendment of the permit; or

(f) if the reassessment of the building permit levy was based on a ground under section 205L(1A)(b) or (c), the applicant for the building permit;".

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22 New section 205LBA inserted

After section 205LB of the Principal Act insert—

"205LBA Authority to give notice of refund

(1) If a reassessment of the building permit levy under section 205L(1A)(b) or (c) is less than the amount of levy calculated under section 205I by at least the prescribed amount, the Authority must give to the person who paid the levy—

(a) a notice of the reassessment of the levy; and

(b) a refund of the difference between the amount of levy the person paid and the reassessed levy amount.

(2) A notice under subsection (1) must state that the person given the notice has the right to apply to VCAT for review of the reassessment of building permit levy.

(3) In this section—

prescribed amount means—

(a) the amount prescribed by the regulations (if any); or

(b) if an amount is not prescribed, $20.".

23 Authority may impose amount of penalty levy

(1) In section 205LC(1) of the Principal Act—

(a) for "determined" substitute "calculated";

(b) after "section 205L(1)(a) or (c)" insert "or (1A)(a) or (c)";

(c) in paragraph (a), after "section 205L(1)(a)" insert "or (1A)(a)";

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(d) in paragraph (b), after "section 205L(1)(c)" insert "or (1A)(c)".

(2) In section 205LC(2) of the Principal Act, after "section 205L(1)(a)" insert "or (1A)(a).".

24 Review by VCAT

At the end of section 205LF of the Principal Act insert—

"(2) A person who is given a notice under section 205LBA(1) may apply to VCAT for review of the reassessment of the amount of building permit levy by the Authority under section 205L.".

25 New Subdivision 4C inserted in Division 2 of Part 12

After Subdivision 4B of Division 2 of Part 12 of the Principal Act insert—

"Subdivision 4C—Review of cladding rectification levy

205LO Review of cladding rectification levy

(1) The Minister must ensure that a review of the additional levy imposed under section 205G(2A) is undertaken no later than 4 years after the commencement of section 15 of the Building Amendment (Cladding Rectification) Act 2019.

(2) The purpose of the review is to determine whether there is an ongoing need for that additional levy to fund cladding rectification works.

(3) The Minister must cause a report of the review to be laid before each House of Parliament within 7 sitting days of that House after the expiry of the 4-year period referred to in subsection (1).".

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26 Additional powers

In section 262(d) of the Principal Act, for "fees prescribed" substitute "levies or fees imposed or prescribed by or".

27 New sections 277 and 278 inserted

After section 276 of the Principal Act insert—

"277 Transitional and savings provisions—Building Amendment (Cladding Rectification) Act 2019

(1) Any amount held in the Building account immediately before the commencement day for the purpose of cladding rectification work must be paid out of that account on the commencement day into the Cladding Safety Victoria account.

(2) In this section—

commencement day means the day on which section 11 of the Building Amendment (Cladding Rectification) Act 2019 comes into operation.

278 Transitional regulations

(1) The Governor in Council may make regulations containing provisions of a transitional nature, including matters of an application or savings nature, arising as a result of the enactment of the Building Amendment (Cladding Rectification) Act 2019, including any repeals and amendments made by or as a result of the enactment of that Act.

(2) Regulations made under this section may—

(a) have a retrospective effect to a day on or after a date not earlier than the day on which the Building Amendment

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(Cladding Rectification) Act 2019 receives the Royal Assent; and

(b) be of limited or general application; and

(c) differ according to time, place and circumstances; and

(d) leave any matter or thing to be decided by a specified person or class of person.

(3) To the extent to which any provision of the regulations under this section takes effect from a date that is earlier than the date of its making, the provision does not operate so as—

(a) to affect, in a manner prejudicial to any person (other than the State or an authority of the State), the rights of that person existing before the date of its making; or

(b) to impose liabilities on any person (other than the State or an authority of the State) in respect of anything done or omitted to be done before the date of its making.

(4) Regulations under this section have effect despite anything to the contrary in—

(a) this Act or any other Act (other than the Building Amendment (Cladding Rectification) Act 2019 or the Charter of Human Rights and Responsibilities Act 2006); or

(b) any subordinate instrument.

(5) The following are not required for any proposed statutory rule that is to be made under this section—

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(a) consultation under section 6 of the Subordinate Legislation Act 1994;

(b) the preparation of a regulatory impact statement under section 7 of the Subordinate Legislation Act 1994.

(6) This section expires on 1 December 2023.".

28 Repeal of this Act

This Act is repealed on 1 July 2021.Note

The repeal of this Act does not affect the continuing operation of the amendments made by it (see section 15(1) of the Interpretation of Legislation Act 1984).

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Endnotes1 General information

See www.legislation.vic.gov.au for Victorian Bills, Acts and current authorised versions of legislation and up-to-date legislative information.

Endnotes

Building Amendment (Cladding Rectification) Act 2019No. 43 of 2019

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† Minister's second reading speech—

Legislative Assembly: 16 October 2019

Legislative Council: 31 October 2019

The long title for the Bill for this Act was "A Bill for an Act to amend the Building Act 1993 in relation to cladding rectification and for other purposes."