We recently advised you about changes under the Statutes Amendments (Directors’ Liability) Act 2013 (Act) which reform directors’ vicarious liability in numerous Acts including the Development Act 1993. (See here for details).

Those changes came into force on 17 June 2013, and include changes to Section 105(3) of the Development Act 1993.

Liability will now attach to directors and CEOs of corporations which are found guilty of a “prescribed offence” unless they prove that they could not, by the exercise of due diligence, have prevented the commission of the offence.

The “prescribed offences” for the purpose of Section 105(3) include: undertaking development contrary to the Development Act 1993, performing building work contrary to technical details, failing to comply with an emergency order, and failing to comply with a fire safety notice.

Liability will also apply to directors and CEOs of companies for a small number of other offences against the Development Act 1993. However, for these offences the prosecution will be required to prove each element of the offence.

Increased Penalties

The Act also amends the penalty provisions for some (but not all) of the “prescribed offences”, including:

  • failure to use, maintain and operate a major development in accordance with the relevant approval (Section 48(14)) now attracts a maximum fine of $30,000 and default penalty of $500;
  • contravention or failure to comply with an emergency order (Section 69(12)) now attracts a maximum fine of $15,000 and default penalty of $200; and
  • contravention or failure to comply with a fire safety notice issued under Section 71(3)(b) or (6) (Section 71(14)) now attracts a maximum fine of $15,000 and default penalty of $200.

The commencement of the changes to several penalty provisions is a timely reminder for councils to review of their notice templates (particularly for Section 69 emergency orders and Section 71 fire safety notices) to reflect the new fines and default penalties.