Notable decisions against three LBPs

Posted: 5 June 2018

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The Building Practitioners Board (the Board) recently handed down significant sanctions after complaints against a Christchurch-based LBP and two Hamilton-based LBPs. The Board has chosen to publish the details of the matters due to their seriousness and the strong penalties.

The first complaint was made against Ronald Carmichael (C2-01688).

The second and third complaints were against Zi Xiang Lin, alias Jiew Chong (C2-01720), and Steven Morrow (C2-01666), who both have prior criminal convictions and had been imprisoned for a period exceeding six months. These convictions affected their fitness to carry out building work and brought the LBP scheme into disrepute.

While the nature of the three complaints differ, it is important that LBPs are aware of the consequences and avoid similar outcomes.

Ronald Carmichael (C2-01688)

Mr Carmichael, based in Christchurch, held a Carpentry licence and was found to have:

  • carried out building work in a negligent or incompetent manner
  • failed to provide a record of work as required by the Building Act
  • acted in a manner that would bring the LBP scheme into disrepute.

Mr Carmichael was engaged by the homeowner to build a new dwelling. Mr Carmichael's quote for the build was incorrect, which meant the build costs were $100,000 above the contract price. Mr Carmichael was negligent in failing to correctly read and interpret the plans and to price the project based on the actual size of the dwelling and the materials required.

The homeowner stated that she had not received a record of work from Mr Carmichael and that he had refused to provide one. The territorial authority did not receive a copy, despite Mr Carmichael's claims.

Mr Carmichael also did not meet the requirements of Part 4A of the Building Act 2004 in relation to contracts for building work. Variations (described as 'extras') were not dealt with in accordance of the legislative requirements. Mr Carmichael took a cavalier approach to pricing, failed to keep the homeowner informed and took advantage of the homeowner’s assumed ability to pay.

The Board cancelled Mr Carmichael's licence with a stand-down period of 24 months before he can reapply. The Board ordered Mr Carmichael to pay some costs towards the inquiry and advised that this decision would be published.

Jiew Chong (C2-01720)

Mr Chong, based in Hamilton, held a Brick and Blocklaying licence and was found to have:

  • been convicted of an offence punishable by imprisonment for six months or more that reflects adversely on his fitness to carry out building work
  • made a false and misleading declaration for the purpose of becoming licensed
  • acted in a manner that would bring the LBP scheme into disrepute.

The Board considered the dishonesty offences Mr Chong was convicted of to be serious and would affect public confidence and his fitness to carry out or supervise building work.

Mr Chong was also found to have used a false name and identity and made a false declaration in order to obtain his LBP licence.

As Mr Chong was convicted of a serious criminal offence involving deliberate deceit, behaviour that continued when he sought an LBP licence, the Board established that he had also brought the LBP scheme into disrepute.

The Board cancelled Mr Chong's licence, with a stand-down period of five years before he can reapply for licensing. The Board also ordered Mr Chong to pay some costs towards the inquiry and advised that this decision would be published.

Steven Morrow (C2-01666)

Mr Morrow, based in Hamilton, held Carpentry and Foundations licences and was found to have:

  • been convicted of an offence punishable by imprisonment for six months or more that reflects adversely on his fitness to carry out building work
  • acted in a manner that would bring the LBP scheme into disrepute.

Mr Morrow had been convicted of offences under the Tax Administration Act and imprisoned for two years. The Board determined that carrying out or supervising building work is an undertaking that often involves handling client funds or entering into credit arrangements and as such there is a link between the nature of the charges and Mr Morrow's fitness to be licensed.

The Board also determined that the offending was serious, prolonged and designed to benefit Mr Morrow. He made false claims regarding his innocence and his general conduct in relation to the offending has been disreputable. The Board accordingly found he has brought the LBP scheme into disrepute.

The Board cancelled Mr Morrow's licences, with a stand-down period of three years before he can reapply. The Board also ordered Mr Morrow to pay some costs towards the inquiry and advised him that this decision would be published.

Key learnings

Understanding your regulatory and contractual obligations is key. Ensuring that there is a written contract for work that costs $30,000 or more (including GST) and the required documents are provided before starting building work is a requirement by law.

NZS 3902:2004 is a standard building contract you can use for clients/home owners who engage you to build their house, or undertake simple building work or alterations. MBIE has sponsored access for anyone to view and print NZS 3902:2004 (housing, alterations and small buildings contract) at no charge.

NZS 3902:2004 is available on the Standards New Zealand website.

Why contracts are valuable has more information.

How you conduct yourself is important. If you are convicted of certain offences that reflect adversely on your fitness to hold a licence, you could be subject to discipline including your licence being cancelled. It does not matter if the offending was before you became licensed.

Being honest on your licence application and in your business decisions is important – not only for your reputation and that of your business, but also to maintain your licence.

The LBP website has full details on these and other past decisions.

This information is published by the Ministry of Business, Innovation and Employment’s Chief Executive. It is a general guide only and, if used, does not relieve any person of the obligation to consider any matter to which the information relates according to the circumstances of the particular case. Expert advice may be required in specific circumstances. Where this information relates to assisting people: