High Court declares that Mutual Recognition Scheme means what it says…

In today’s economy and with an increasingly mobile workforce, the mutual recognition scheme is more important than ever. A recent High Court of Australia decision (Victorian Building Authority v Andriotis [2019] HCA 22) has shed light on the right of a person to be registered in a new State in relation to their chosen occupation.

What is the Mutual Recognition Scheme? 

The mutual recognition scheme was created by the Mutual Recognition Act 1992 (Cth) (Act). In substance, the scheme provides that a person who has been licensed or registered in one State or Territory can apply to be licensed or registered in another State or Territory for an equivalent occupation. Relevantly, section 20 of the Act provides:

  • A person who lodges a notice under section 19 with a local registration authority of the second State is entitled to be registered in the equivalent occupation, as if the law of the second State that deals with registration expressly provided that registration in the first State is a sufficient ground of entitlement to registration.
  • The local registration authority may grant registration on that ground and may grant renewals of such registration.

Given that there are licensing regimes in a number of States which affect the building industry, the scheme is very relevant to the building industry (although the scheme is of much broader import). This article will concern itself with the building industry alone.

Mr Andriotis’ Application for Registration in Victoria

Mr Andriotis was registered as a waterproofer in New South Wales. In his application to be registered as a waterproofer in NSW, he had claimed to have certain work experience. At least some of those claims were not true. When Mr Andriotis applied to be registered in Victoria under the mutual recognition scheme[1], his application was refused. The relevant Victorian authority took the view the provision of the untrue information to the New South Wales registering authority meant Mr Andriotis was not of good character (which he would have been required to demonstrate had he applied for registration under the Building Act 1993 (Vic), rather than under the mutual recognition scheme).

The Argument

The Victorian Building Practitioners Board (subsequently the Victorian Building Authority) sought to suggest that despite section 20, the Board had a residuary discretion to refuse registration (noting the word “may” in section 20(2) and that section 17(2) of the Act allowed for refusal on character grounds, because all licensees registered in Victoria are required to be of good character). This argument was accepted by the Administrative Appeals Tribunal, but rejected on appeal to the Full Federal Court. From that rejection, the Victorian Building Authority appealed to the High Court.

The High Court Appeal

Unanimously, a bench of seven Justices of the High Court rejected the Victorian Building Authority’s contentions. The basis of registration in the second State is, as is clearly articulated in section 20 of the Act, the registration in the first State and the giving of the relevant notice (and associated materials). In that regard, the Court accepted that the use of the word “may” in section 20(2) ought to be read, not as allowing for a discretion, but as empowering the registering authority to register the applicant. Secondly, because it is the Act which allows for the registration in the second State, there is no room for the Building Act 1993 (Vic) to operate in relation to the registration.

Considerations

Whilst this case reinforces the idea that a person is entitled to registration in a second State, effectively for the asking, there is a significant sting in the tail because the High Court accepts that once a person is registered in a second State, then that second State can regulate the conduct of that person within their occupation. For example, the registering authority in the second State can take disciplinary action against the person if that were warranted. If a person gave false information to an authority in the form of a statutory declaration in their home State, the registering authority in the second State might take disciplinary action against that person.

Put simply, they might have to register you, but they don’t have to let you do as you please.

In the Queensland context, we observe that nothing in section 74B of the Queensland Building and Construction Commission Act 1991 (Qld) (which provides the grounds upon which disciplinary action may be taken) must have some territorial connection to Queensland. Therefore, if someone registered in New South Wales under false or misleading information, Queensland authorities have the power to use that unlawful act (even though it is in another jurisdiction) as a basis for exercising disciplinary action in Queensland.

We observe that if disciplinary action were taken in the second State, then the consequences of that disciplinary action would flow back to the licence held in the first State. Consequently, New South Wales authorities could potentially use the disciplinary action taken in Queensland as a basis for taking away the New South Wales licence.

Conclusion

Seeking registration in a new State can be a complicated process. You need to obtain detailed, specialised legal advice in relation to it; particularly if you are considering seeking registration in Queensland (which has the most regulated building industry in the nation). Queensland registration involves not just consideration of the relevant licence categories, but of how you might structure your business to ensure that you comply with the financial regulations imposed on building companies in Queensland (such as the maintenance of sufficient Net Tangible Assets). Protecting yourself is important in the event that you wish to close down, or finalise the business of, any entities which might be considered construction companies.

[1] There was no suggestion that the application did not comply with the terms of the Act or that the information contained in the application was deficient.

Disclaimer
This article is general commentary on a topical issue and does not constitute legal advice. If you are concerned about any topics covered in this article, we recommend that you seek legal advice.

Queries
For further information please contact the authors, Brent Turnbull, Partner (Brisbane), Nina Wos, Lawyer (Brisbane), Richard Hutchings, Partner (Melbourne), Paul McCann, Partner (Sydney), or any member of Cornwalls’ Building and Construction team.

The Building and Construction team has extensive experience in dealing with the regulatory regime confronting the building industry. Our presence in Brisbane, Sydney and Melbourne means that we have detailed, ‘on the ground’ knowledge of the regulatory environment in the areas where we practice, and the ‘boots on the ground’ to deal with your matter in a timely and efficient manner. If you have a regulatory issue, we have probably seen it before, and can provide you with strategic advice to assist you in achieving outstanding outcomes.

The Authors

Nina Wos

LAWYER, BRISBANE

Brent Turnbull

PARTNER, BRISBANE