How Building Licences Are Cancelled and Suspended in New South Wales

What it is

Building Commission NSW can suspend, cancel or impose conditions on a contractor licence under Part 3 of the Home Building Act 1989 (NSW). Grounds range from financial failure through to serious workmanship complaints, dishonest conduct and repeated breaches of the HBA.

The process is administrative rather than judicial: Building Commission NSW makes the decision on the papers and licensees can seek internal review and, if unsuccessful, external review through the NSW Civil and Administrative Tribunal (NCAT).

Grounds for cancellation

Section 22 of the HBA lists the grounds on which Building Commission NSW can take disciplinary action against a contractor licence, qualified supervisor certificate or tradesperson certificate. The main grounds are:

• serious or repeated breach of the HBA or a condition of the licence
• serious or repeated defective or incomplete work
• financial failure (insolvency, external administration, unpaid QBCC or icare debts)
• dishonest, misleading or unconscionable conduct in the course of the licensed business
• failure to satisfy the qualified supervisor requirement under section 25
• criminal convictions relating to fraud, dishonesty or the licensed activity

The list is not exhaustive. Section 22 also picks up any other conduct the Commission considers renders the licensee not a fit and proper person.

Show cause notice

Building Commission NSW must give the licensee a show cause notice before taking disciplinary action. The notice sets out the grounds and the proposed action, and gives the licensee an opportunity to respond within the prescribed period (typically 21 days).

The licensee's response can include evidence, submissions and undertakings offered to avoid or reduce the proposed action. Building Commission NSW considers the response and issues a decision.

Possible outcomes

Building Commission NSW can:

• take no action
• impose a caution or reprimand
• impose conditions on the licence
• suspend the licence for a specified period
• cancel the licence
• impose a fine
• disqualify the individual from being a director or nominee

Conditions can include mandatory further training, supervision requirements, financial reporting or restrictions on the scope of work.

Internal and external review

A licensee dissatisfied with the decision can seek internal review by Building Commission NSW within the prescribed period (typically 28 days). Where the internal review does not resolve the matter, the licensee can apply to NCAT for external review under section 55 of the Administrative Decisions Review Act 1997 (NSW).

NCAT considers the decision de novo (on its own facts) and can affirm, vary or set aside the Building Commission's decision. Legal representation is permitted; hearings are typically in the Occupational Division.

Interaction with icare HBCF

Where the licence is cancelled or suspended, icare HBCF is notified and any existing certificates of insurance may be affected. New contracts cannot be entered under the cancelled licence, and existing contracts may be at risk depending on the nature of the cancellation.

Consumers can claim on HBCF where the cancellation itself is a trigger event under section 99 of the HBA. That includes cancellations for financial failure and certain grounds relating to defective work.

Consequences of a cancellation

A cancelled licensee cannot:

• carry out or contract for residential building work above $5,000 (section 4 HBA)
• act as a qualified supervisor
• be a director or nominee of another contractor for a period specified in the disqualification order

The cancelled licensee may face civil recovery action from icare HBCF for any policy payouts flowing from the cancellation. Directors and shadow directors can be personally liable.

Reapplication

A cancelled licensee can generally reapply for a licence after a specified period (typically 3 to 5 years). The reapplication is treated as a fresh application and must satisfy the current fit and proper person test.

How NSW compares

NSW's Building Commission NSW / NCAT framework aligns with VIC BPC / VCAT and QLD QBCC / QCAT frameworks. The distinctive NSW feature is the section 22 breadth of grounds and the specific interaction with icare HBCF as a licensed insurance scheme.

TradeForm NSW templates flag the licensing risk to owners and to builders considering their exposure to disciplinary action.