$110,000 Fine for Failing to Comply with a Building Order

Whitehorse City Council, represented by Russell Kennedy, commenced prosecution proceedings against a corporate proprietor for failing to comply with a Building Order issued under section 118(1) of the Building Act 1993 (Vic).

The company, which had purchased a $10 million residential aged care facility in November 2023, was found to have changed the use of the building to a hostel, while also neglecting essential safety measures.

Despite repeated inspections, a building notice, a building order and extensions of time, the property remained non-compliant, prompting Council to pursue a charge carrying a significant penalty for corporate offenders.

Russell Kennedy represented Whitehorse City Council (Council).

The corporate accused was charged with a breach of section 118(1) of the Building Act 1993 (Vic) (Building Act) for failing to comply with a Building Order dated 10 October 2024.

Section 118(1) provides as follows: 

A person to whom an emergency order or building order is directed must comply with that order.

Penalty:

500 penalty units, in the case of a natural person

2500 penalty units, in the case of a body corporate.

The registered proprietor of the subject property was a proprietary limited company who purchased the property in November 2023 for approximately $10 million. The property was purchased as a residential aged care building.

As a result of complaints from Fire Rescue Victoria, inspections by Council were carried out at the Property on 21 May 2024 and 23 July 2024 which found that a change of use of the building had occurred, from a special accommodation building (known as a residential care building or residential aged care building under the Building Code of Australia) to a Hostel type building without Building Permit first building obtained.

The Essential Safety Measures (ESM’s) in the Building were observed to be non-compliant and not being adequately maintained.

Occupants were also believed to be cooking within their rooms rather than the common area kitchens, interfering with fire systems, and requiring numerous attendances by the local fire brigade.

On 12 August 2024 a building notice was issued by the Municipal Building Surveyor (MBS) of Council requiring the Accused to within 30 days to show cause as to why it should not carry out work to bring the Building at the Property into compliance with the Building Regulations. 39 deficiencies were identified.

On 25 September 2024 a further inspection revealed no change.

On 10 October 2024, after the show cause period specified in the building notice elapsed and as satisfactory cause had not been showed, the MBS issued a building order to the Accused. The building order required the Accused to carry out the work comprising the show cause requirements set out in the building notice by 8:00am on 18 December 2024.

On 31 December 2024 Council wrote to the Accused advising that the building order had expired and providing additional time to comply with the order to 11 March 2025.

A further inspection on 11 March 2025 revealed no change and prosecution proceedings were commenced.

Magistrates' Court Plea Hearing

After numerous adjournments the matter proceeded as a plea at the Ringwood Magistrates’ Court on 12 November 2025 before Her Honour Magistrate Keogh who found the charge proven.

The Accused had no prior matters. Russell Kennedy Lawyers submitted to the Court the following amongst other things in relation to the charge:

• the offending was serious and the court should have regard to the main purpose of the Building Act to provide for the regulation of building and building standards and to provide an efficient and effective system for enforcing related building and safety matters;
• also have regard to the objectives of the Building Act including to protect the safety and health of people who use buildings and places of public entertainment;
• specific and general deterrence were particularly important sentencing considerations for the Court to have regard to when sentencing an Accused for an offence which exists on this occasion to primarily protect the public;
• the maximum penalty is 2500 penalty units which equated to $493,975;
• that compliance in full had still not been achieved;
• a significant amount of Council’s resources were tied up with the failure of the Accused to comply with the building order to the detriment of other work the building department could have been undertaking; and
• the Accused had been given multiple opportunities and time to comply with the building order and did not do so.

The Accused submitted that they were aware of the seriousness of the matter, that they attempted to engaged the relevant professionals to comply and other personal factors inhibited achieving compliance.

Her Honour reserved her decision on penalty which was handed down on 4 December 2025.

Magistrates' Court Sentence

A consent injunction requiring compliance within 120 days was agreed to and ordered.

Her Honour as relevant when delivering her sentence remarked the following:

• outlined key objectives of the Building Act
• that company been the owner since November 2023 when it purchased it for $10 million
• prior to the purchase the building operated as a residential aged care building
• the accused advised after being unable to bring in an aged care provider they had lease agreements with many people with the building being nearly fully tenanted (over 45 rooms)
• the defendant had a rental income of approximately $40000 per month
• the building notice was clear, detailed and provided the next inspection date
• a significant concern to the court was the nature and number of items that needed attention
• ESM’s manage a risk to public safety especially in the event of a fire and these were absent or woefully inadequate
• the fact there had been an unnotified change of use with many people now living in the property presented a significant risk to public safety
• Council agreed some limited rectification work has occurred
• this was not a case where the defendant completely disregarded council notices and orders but nor is it a case that they have undertaken meaningful and timely rectification
• defendant set out personal circumstances which the Court has regard to
• the court found it was an aggravating factor that the defendant has been so slow to action noting the considerable risk to public safety while operating the building outside approved permissions and deriving them significant rental income
• ESM’s are essential for a reason – failure to meet and maintain those measures can have catastrophic effects in the event of an emergency and not just on the occupants of buildings, but for emergency services and neighbours
• the court was at times astonished and alarmed at the defendants approach to the issues raised
• it was unclear whether the defendant was naïve and inexperienced or cold and calculating and willing to play fast and loose with the law to further their own financial interest
• given the financial outlay the court is less willing to believe it was naivety or inexperience
• there is a clear requirement for general deterrence in this matter\
• The legislation allows for a significant fine which shows Parliament’s clear intention that public safety is a priority
• It is important that a penalty reflects the standards required so other people do not behave in this manner and that the community is aware that public safety is paramount
• Having taken into account the personal circumstances and the plea of guilty, and the efforts although limited and after a period of time of the defendant and no criminal history Her Honour concluded a significant fine with conviction is warranted
• With conviction fine of $110,000.00 and made an order as to legal costs

Her Honour imposed a with conviction fine of $110,000 and ordered costs with both the fine and costs order being referred to the Director of Fines Victoria for collection and management.

Her Honour concluded that but for the plea of guilty a fine of $150,000 with conviction would have been imposed.

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