On 1 April 2009 the Home Building Act's licence
suspension provisions were
One significant change was that, when a licensed contractor has
been ordered by a Court or Tribunal to pay money to a home-owner
pursuant to a building claim, if such money is not paid by the
due date, the contractor's licence is automatically
The change only applies to building claims commenced on or
after 1 April 2009. It takes many months for a building claim
to work its way through the CTTT or the courts, sometimes
years. I am yet to see the new suspension requirement apply
but, as it has been law for seven months, its impact will soon be
felt. It seems therefore a good time to
review its operation and identify ways it might be addressed.
The suspension takes place 28 days after the due date for
payment unless, within that time, the contractor appeals the
underlying decision and obtains a stay of the payment order.
The granting of such a stay is by no means a foregone conclusion
but the bar to be cleared is not a particularly high one.
Licence suspension makes it illegal to contract to do any
residential building or specialist work (plumbing, gas-fitting,
electrical wiring, air-conditioning or refrigeration work).
Not only does it prohibit contracting, it also prohibits the
contractor from performing any specialist work at all or any other
residential building work to a market value that exceeds
The contractor's residential building work and specialist
work will grind to a halt. That cessation will extend to all
of the contractor's residential sites and all of its
residential customers. For specialist work, the cessation
will extend to all sites. The potential for delay and
inconvenience is immense and its impact will be felt by the
contractor's other clients, who have nothing to do with the
dispute causing the disruption.
There are however some exemptions. The Director-General
may defer the operation of the suspension for any period up to the
date on which the licence is due for renewal. To complicate
things, the Director General has delegated this discretion to the
Commissioner for Fair Trading, so from here on I'll be
referring to the Commissioner.
The Commissioner has issued some guidelines in respect of the
exercise of the discretion to defer suspensions of licences for
non-payment of court or tribunal monetary orders. These
guidelines indicate that a request to defer the operation of the
suspension of a licence will be exercised where:
evidence is provided satisfying the Commissioner that the
payment order has been satisfied
the licence holder has filed an appeal against the decision
giving rise to the payment order and the court has ordered that
enforcement of the payment order be stayed
the licence holder satisfies the Commissioner that the person
entitled to be paid under the payment order has accepted an
alternative arrangement, such as a payment plan or arrangement for
the work to be rectified.
The guidelines note that in the last such circumstances the
Commissioner will seek confirmation of the arrangements from the
other party and the deferral of the suspension will be subject to
the licence holder's continuing compliance with that
The guidelines also state that:
'Requests for deferral of the suspension of a licence
based on other circumstances will be considered on individual
merit. However, submissions as to the impact of the
suspension of a licence on the personal or business circumstances
of the licence holder (and/or associated parties) or submissions as
to the validity of the decision of the Tribunal or court will not
be accepted as warranting the deferral of the suspension of a
The guidelines also provide that the Commissioner may
temporarily defer the operation of the suspension whilst
considering a request for deferral of the operation of the
The Office of Fair Trading's philosophy and the
Commissioner's role are built on the concept of consumer
protection. Yet no acknowledgment is given to the impact of
licence suspension on the progress on the
contractor's other clients' projects. Such
disruption will cause real hardship. Heart-felt pleas by
home-owners likely to be adversely affected by their
contractor's licence being suspended are matters that the
Commissioner should take into account.
To further complicate matters, the commencement of the
suspension is the fourth trigger for home-owners to access their
home warranty insurance indemnity. This stands to raise the
bar for licence holders seeking deferral of the suspension and
provides another good reason to consign that junk form
of insurance to the tip.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
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