Bradbury v Queensland Building and Construction Commission [2023] QCAT 466

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Bradbury v Queensland Building and Construction Commission [2023] QCAT 466 PARTIES: WAYNE NEVILLE BRADBURY (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent) APPLICATION NO/S: GAR113-22 MATTER TYPE: General administrative review matters HEARING DATE: 2 August 2023 and later written affidavit material and submissions delivered by the parties. DELIVERED ON: 5 December 2023 DECISION OF: Member Roney KC ORDERS: 1. Pursuant to section 24(1)(a) of the Queensland Civil and Administrative Tribunal Act (2009) the decision of the Queensland Building and Construction Commission made on 3 March 2022 to disallow a claim under the Queensland Home Warranty Scheme is confirmed. 2. The Application for review of a decision is dismissed. CATCHWORDS: PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – where applicant sought review of decision by Commission to disallow claim under the Queensland Home Warranty Insurance Scheme – where Commission’s expert found structural defects resulting in damage to surrounding building elements and causing loss a loss of amenity for the property occupants – when the defect first became evident to an owner or insured – whether defect first became evident after 6 years and 6 months of both the date of entering into the contract for the performance of the work and the date the insurance premium was paid and – whether on a the proper construction of the Policy Conditions, the applicant was entitled to benefits under the statutory insurance scheme where a defect was evident to the former owner or occupier of the property, within 6 -- 1 of 17 -- 2 years and 6 months of the date of payment of the insurance premium, or the date of entering into the contract – where the claimant under the policy did not have such knowledge in time – whether Commission’s decision to refuse indemnity ought be set aside Queensland Building and Construction Commission Act 1991 (Qld), s 3, s 7, s 28 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20, s 24 Fane v Queensland Building and Construction Commission [2017] QCAT 59 Harley v. Department of Justice and Attorney-General [2012] QCAT 620 Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58 Lange v Queensland Building Services Authority [2012] 2 Qd R 457 Reiterer v Queensland Building Services Authority [2007] QCCTB 177 Van Kampen v Queensland Building And Construction Commission [2017] QCAT 163 Ross Barry Winter & Debra Anne Winter v Queensland Building and Construction Commission unreported 5 April 2022 Orlanski v Queensland Building Services Authority [2011] QCAT 35 APPEARANCES & REPRESENTATION: Applicant: Self- represented Respondent: Ms G Yates of Counsel instructed by the respondent REASONS FOR DECISION [1] The Applicant, who owns a home at Norfolk Drive, Hidden Valley, Queensland has applied pursuant to sections 86(1)(h) and 87 of the Queensland Building and Construction Commission Act 1991 (the QBCC Act) for review of the respondent Commission’s decision made on 3 March 2022 to wholly decline Mr Bradbury’s claim under the statutory insurance scheme in respect of defective waterproofing to an ensuite shower at the home and associated damage caused by it. The Decision under review is taken to be the same as the decision made by the Commissioner on 7 January 2022 following an application for internal review. -- 2 of 17 -- 3 The Tribunal’s powers and functions upon review [2] On review of the Commission’s Decision, the Tribunal must hear and decide the matter by way of a fresh hearing on the merits. The purpose of the review is to produce the correct and preferable decision.1 [3] Section 24 of the QCAT Act provides that upon determining the correct and preferable decision, the Tribunal may:2 (a) confirm or amend the Commission’s Decision; or (b) set aside the Commission’s Decision and substitute its own decision; or (c) set aside the Commission’s Decision and return the matter for reconsideration to the Commission, with the directions the Tribunal considers appropriate. [4] This means that the Applicant need not prove any error by the Commission in its original decision – the original decision is not presumed correct.3 [5] In conducting the review, the Tribunal:4 (a) may inform itself in any way it considers appropriate, and must ensure as is (b) practicable that all relevant material is disclosed to the Tribunal to enable it to (c) decide the proceeding with all the relevant facts; (d) is not bound by the rules of evidence, other than to extent the Tribunal adopts the rules, practices or procedures of a court of record; and (e) must observe the rules of natural justice. The review and defective water proofing of an ensuite shower cubical [6] It is common ground that the review concerns defective water proofing of an ensuite shower cubical at the home, which was carried out in or about 2015, long before the Applicant purchased the home, and which he did by contract of sale made on or about 1 April 2021. The 2021contract was preceded by a pre-contract Building report completed 2 weeks before the contract was entered into. It is common ground that the pre-contract Building report did not identify of refer to these defects in the ensuite, and the Applicant would not have learned of them from that report. [7] It is also common ground that the defects are properly described as stage 1 structural defects, resulting in damage to surrounding building elements and causing loss a loss of amenity for the property occupants. 1 Queensland Civil and Administrative Tribunal Act 2009, s 20. 2 Queensland Civil and Administrative Tribunal Act 2009, s 24. 3 Harley v Department of Justice and Attorney-General [2012] QCAT 620 at [8], citing with approval Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58 at [9]. 4 Queensland Civil and Administrative Tribunal Act 2009, s 28(3). -- 3 of 17 -- 4 [8] A QBCC inspector who eventually looked carefully at the ensuite in late 2021, concluded that the original waterproofing of the shower cubicle in 2015 had not been achieved in compliance with the Building Code for wet areas, resulting in water escaping the shower cubicle, damaging surrounding building elements and causing a loss of amenity. The Inspector concluded that the repairs, including painting by the previous owner or its contractor had disguised the water damage in the ensuite and other areas associated with the defect. It was also observed that the shower waste had not been fitted with a drainage flange. [9] All of this meant that the defect in question was present probably from the time the original works were done and had been present at all times thereafter. Any manifestation of what the consequences were of it did not occur until whenever it was that the previous owner carried out the cosmetic repairs on a date unknown. And they remained present, albeit concealed, as I explain later in these reasons, until the 22 June 2021. I shall refer to these as the cosmetic repairs. Submissions of the Owner [10] The Applicant owner filed submissions and filed further written submissions in response to the directions made after the hearing in relation to the questions of law and construction, and submitted that the defect was one for which he was entitled to indemnity under the policy. The Applicant does not address how it is that he comes within the scope of the policy. He submits that this matter has caused his wife and himself considerable distress. He says they have spent countless hours engaging in the process. It is impacting their mental health and subsequently their ability to run their small business. He asks for fairness in the matter. He asks that the structural defect be addressed by the Commission on the basis that it says its purpose is to “provide peace of mind to all people who use buildings in Queensland” by “providing Australian-leading insurance that helps to safeguard building work”. Initial Submissions of the QBCC [11] The QBCC relied on written submissions of 18 April 2023 on those on the hearing on 2 August 2023.It also filed further submissions dated 22 August 2023 in response to directions concerning a discrete question that arose for the Tribunal’s determination regarding the proper construction of the Policy Conditions. That issue was whether the applicant was entitled to any rights or benefits under the statutory insurance scheme, in circumstances where there is evidence that the relevant defective ensuite waterproofing was evident to the former owner or occupier of the Property, within 6 years and 6 months of the date of payment of the insurance premium, or the date of entering into the contract having regard to the fact that the cosmetic repairs had been carried out to conceal or cosmetically repair them? [12] The Commission submitted in this context, that put another way, the discrete question for the Tribunal’s determination can be framed as being whether the Applicant can rely upon the ostensible knowledge of the individual who carried out the painting recorded in the QBCC inspector’s report referred to at paragraph 10 above, to enliven the Commission’s liability under the Policy Conditions of the statutory insurance scheme? I do not agree with that characterisation; it is not about ostensible knowledge; it is about whether the defect became apparent withing the period during which the policy was in existence within the meaning of the policy. -- 4 of 17 -- 5 [13] The Commission submitted that the answer to this question must be in the negative because on the proper construction of the Policy Conditions: (a) It is clear that the Policy Conditions are intended to apply to an “Insured” and provide rights to an “Insured” to obtain payment for the costs of rectifying defective works, within the particular circumstances prescribed by the terms of the Policy Conditions. (b) An “Insured” by definition under the Policy Conditions is the owner of property. The interests of Mr Bradbury as the “Insured” can only arise from the date that Mr Bradbury became the owner of the Property. (c) The Policy Conditions treat the rights of subsequent property owners differently, by limiting and/or excluding indemnity available to a subsequently “Insured” property owner. [14] The Commission submitted that the construction of the Policy Conditions it has contended for by the Commission is supported by authority. In that respect it refers to the matter of GAR274-20, Ross Barry Winter & Debra Anne Winter v Queensland Building and Construction Commission, in a decision made on the papers by Member Lee on 5 April 2022 (which decision was not published, but reasons were provided to the parties), Member Mr Ross Lee is said to have accepted this construction in analogous circumstances. As I point out later in these reasons, the facts in that case were very different to those here. [15] The Commission submitted in the alternative, that there is insufficient evidence to establish that the defective works in the ensuite bathroom were “evident” within the period of cover provided under clause 4.4(a) of the Policy Conditions. The Statutory Insurance Scheme Insurance Policy Conditions [16] Residential construction contracts entered into between 1 July 2009 and 27 October 2016 were subject to the Statutory Insurance Scheme Insurance Policy Conditions, Edition 8. The subject works to the relevant ensuite were carried out by a builder engaged by an earlier owner of the. The date of the contract for the performance of the work was 28 October 2014 and the insurance premium in respect of the works so as to engage the Statutory Insurance Scheme Insurance Policy was paid on 6 March 2015. 4.4 Expiry of Cover (a) [T]he QBCC is only liable to pay for loss under this Part for a category 1 defect where the defect first become evident within 6 years and 6 months after: (i) the date of payment of the insurance premium, or the date of entering into the contract (and where more than one date, whichever is the earlier) [17] Hence pursuant to clause 4.4(a) of the Policy Conditions, the Commission will be liable to pay for loss in respect of a category 1 defect, if the defect first became evident within 6 years and 6 months of, relevantly: (a) the date of entering into the contract for the performance of the work; or (b) the date the insurance premium was paid, whichever date is earlier. -- 5 of 17 -- 6 [18] Hence although Clause 4.4 of the policy does not reference a particular insured, as its heading denotes, it is identifying the “expiry of cover” and more particularly, the circumstances in which an Applicant insured will be covered under the relevant policy. Again, the construction of it is not assisted by the fact that the clause itself does not say anything about when cover expires. [19] In this case, applying that formula to the present facts, the 28th April 2021 was the date 6 years and 6 months from the date of the contract for the performance of the work. 6 September 2021 was the date 6 years and 6 months from the date the insurance premium in respect of the works was paid. [20] The critical issue for determination before me, for reasons I will explain shortly, is when the defect first became evident to Mr Bradbury and whether it was, as the QBCC contends after 6 years and 6 months of both the date of entering into the contract for the performance of the work, and the date the insurance premium was paid and hence whether the finding of the Commission that it is not liable to pay for loss in respect of the defective works was correct. [21] There is debate on the evidence about then it was that the defect first became evident to the Applicant. The Applicant contends, and indeed I accept his evidence that it was on 22 June 2021 that he first had the defect brought to his attention. He notified the QBCC on 23 September 2021 of the defect after he observed water gushing through the bathroom wall however, prior to that time, on 22 June 2021 he did notice discolouration on the wall under the towel rack. The Respondent invited the finding that it later, on 23 September 2021 when water was observed to be came to be coming through the wall. As I have already said, in this case, applying that formula to the present facts, the 28th April 2021 was the date 6 years and 6 months from the date of the contract for the performance of the work and the earlier of the 2 potential events, and therefore that it had already passed when the defect first became evident to him on 22 June 2021. [22] In a complaint made to the Commission on 1 October 2021, Mr Bradbury advised of the defect and implied that he first became aware of the defect on 23 September 2021. Subsequently, having been notified by the Commission on 2 November 2021, that the building contractor who had done the work had been liquidated and a direction to rectify the defect would therefore not be issued and on 7 January 2022, that the Commission contended that it was not liable pursuant to the Policy Conditions to pay for loss in respect of the defect On 31 January 2022 in his request for internal review, Mr Bradbury advised that he had in fact became aware of the defect from the earlier date of 22 June 2021, when he moved into the property. [23] That means that focussing solely on when the defect became apparent to the Applicant, in either case the date was outside either of the possible dates 6 years and 6 months after the identified event even if one took the later of the 2 dates. [24] In an initial inspection Report completed by the Commission following Mr Bradbury’s complaint, dated 29 October 2021 the author says, and I accept it to be the case, that “there is evidence of a previous repair and some repainting to damages areas near the ensuite door and in the robe with paint residue on the carpet of the robe against the wall and floor skirting. Some paint overpainting was also evidence on the bottom door hinge of the ensuite door. This is evidence of a pre-existing condition that had been repair painted prior to the current owner purchasing the property. The repair painting would -- 6 of 17 -- 7 have disguised the damage without the cause being repaired and the property purchaser would not have been aware of the water leak until a period of time after occupation.” [25] I am able to infer from that, that at some earlier time, before the purchase of this property by the Applicant, and within the 6 year and 6-month limit, that the defect had become apparent to someone, but not the Applicant. It was then concealed by inadequate repairs [26] I accept that there is no discretion afforded to the Commission to extend the application of the Statutory Insurance Scheme by the Policy Conditions. Clause 4.4 of the Policy Conditions imposes strict time limits upon the period in which the Statutory Insurance Scheme remains current and is available for making claims. In Reiterer v Queensland Building Services Authority [2007] QCCTB 177, [19] to [22] it was held when considering the equivalent clauses under the policy at that time and the equivalent section of the Commercial and Consumer Tribunal Act 2003 (Qld), by the then Commercial and Consumer Tribunal as follows: [Clause 4.4] of the policy, as its heading denotes with “expiry of cover” and more particularly, the circumstances in which the Applicants remain under the relevant policy. It is to be noted that [clause 4.4] is not expressed in terms of doing any act, or compliance with a procedural requirement, as might attract the operation of [section 61] … although the applicability of that section to the time restraints in the statutory insurance policy must be doubted. [Clause 4.5] on the other hand, deals with the time limited for the making of claims. As will be noted, the time limited in clause [4.5] can be extended (as allowed by the clause), whereas, in [clause 4.4], there is no such allowance or qualification. In such circumstances, [clause 4.4], in my view, imposes strict and absolute time restraints (which are not adjustable), upon the period in which any statutory policy of insurance remains current, and is available for making claims. [27] The policy is a statutory instrument, and the interpretation of the Policy Conditions which will best achieve the purpose of the QBCC Act ought to be preferred to any other interpretation. Lange v Queensland Building Services Authority [2012] 2 Qd R 457, [26] per Wilson AJA. [28] The objectives of the QBCC Act are contained in section 3. They are: (a) to regulate the building industry to ensure the maintenance of proper standards in the industry and to achieve a reasonable balance between the interests of building contractors and consumers;(b) to provide remedies for defective building work; and (c) to provide support, education and advice for those who undertake building work and consumers. Hence consumer protection is undoubtedly a primary purpose of the QBCC Act. [29] As I mentioned earlier, the Applicant does not address how it is that he nevertheless comes within the scope of the policy. He submits that this matter has caused his wife and himself considerable distress. He says they have spent countless hours engaging in the process. It is impacting their mental health and subsequently their ability to run their small business. He asks for fairness in the matter. He asks that the structural defect be addressed by the Commission on the basis that it says its purpose is to “provide peace of mind to all people who use buildings in Queensland” by “providing Australian-leading -- 7 of 17 -- 8 insurance that helps to safeguard building work”. In this case, he says they have not been supported nor have they had any “peace of mind” since they took the big step of purchasing our home. [30] Unfortunately, I have had nothing in the way of submissions from a contractor, and none from the Applicant in relation to any of the issues of law or policy or contractual construction that have been advanced on the submissions on behalf of the commission. [31] On the first issue as to when the defect became apparent to the Applicant, in either case the date was outside either of the possible dates 6 years and 6 months after the identified event even if one took the later of the 2 dates and unless he succeeds on the second issue, the policy did not apply to provide cover when he discovered the defect. A similar outcome has been reached on a similar point in this Tribunal before.5 The language used is proscriptive and mandatory. No provision is made to extend time or exercise a discretion. Under clause 4.4(a) of the Policy Conditions, the Commission will be liable to pay for loss in respect of a category 1 defect, if the defect first became evident within defines the limits of cover in the times mentioned earlier. This is a substantive rather than procedural provision and means that the Tribunal cannot extend time under section 61 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) either.6 [32] The applicant, though well motivated as he is, was unable to grasp the issues which were actually required to be determined on the application and has not directed his submissions to those matters either before or since the hearing when further submissions were invited on what I call the second discrete question in the balance of these reasons. [33] Sadly, there is no statutory or contractual duty on the Commission to provide indemnity to home owners in respect of defects which might at a given time been caught by a policy but which are not in fact caught by the policy when a claim is made under it. [34] A second discrete question that arose for the Tribunal’s determination was whether on a the proper construction of the Policy Conditions, the applicant was entitled to any rights or benefits under the statutory insurance scheme, in circumstances where there is evidence that the relevant defective ensuite waterproofing was evident to the former owner or occupier of the Property, within 6 years and 6 months of the date of payment of the insurance premium, or the date of entering into the contract [35] The Commission submitted that “in this context”, Member Hughes in Fane v Queensland Building and Construction Commission [2017] QCAT 59 highlighted the importance of ensuring adherence to the time limitations imposed by the statutory insurance policy. Reference was also made to paragraphs 40 to 41, of those reasons, where Member Hughes went on the say that explained: “This is because the burden of insuring against and responding to ongoing and indefinite complaints is inevitably passed on to other builders and home owners through higher insurance premiums and increased building costs. The Commission has statutory responsibilities to ensure proper industry standards and achieve a reasonable balance between the interests of builders and consumers. The purpose of the time limit is to ensure that the Commission is given notice of the facts and circumstances giving rise to the claim to enable it to take action, to protect the home owner and the insurance fund.” 5 Fane v Queensland Building and Construction Commission [2017] QCAT 59 at [22]. 6 Ibid, at [24]. -- 8 of 17 -- 9 [36] The time limit he was referring to was not the time limit under the policy in respect of which cover existed, but was in fact a reference to make a claim to the Commission within three months from when the defect became evident to the person covered and to whether to allow an extension of that time, which was possible. That statement was therefore not made “in this context”. Moreover, the extracted passage from that judgement relied on in the respondent’s written submissions left out the critical first sentence to it, which was “[40] The time limit within which to claim is not arbitrary and should not be extended without a reasonable explanation.” Are the Policy Conditions intended to apply to an insured who is a property owner and is only the particular insured’s knowledge of a defect relevant in construing clause 4.4? [37] On the second discrete question the Commission submitted by reference to the language of Clause 4.4(a)(i) of the Policy Conditions which I have set out earlier, that the Policy Conditions are intended to apply to an “Insured” and an “Insured” is a property Owner. [38] While the Commission conceded that clause 4.4 does not specifically refer to an “Insured”, it submits that: “the clause is plainly intended to apply to the rights of an “Insured” under Part 4. Notably, clause 4.4: (a) refers to the Commission’s liability “under this Part”; (b) follows clause 4.3, imposing limitations upon the Commission’s liability to pay under Part 4, including at clause 4.3(a) (extracted at paragraph 23(a) above) in circumstances where “in the opinion of the QBCC, the Insured unreasonably refuses access to the contractor or his/her agent to undertake rectification”; and (c) is followed by clause 4.5 imposing the time limitations within in an “Insured” must make a claim for loss “under this Part”. [39] The Commission submits that the Tribunal can be satisfied from the context in which clause 4.4 appears within the Policy Conditions that the clause, plainly and logically, is intended to capture circumstances in which a defect first becomes evident to an “Insured”. It follows that the proper construction of the Policy Conditions requires that the interests of Mr Bradbury as the “Insured” can only arise from the date that Mr Bradbury became the owner of the Property, and clause 4.4 is not intended to extend to a previous owner’s (or occupier’s) knowledge of defective works. [40] In support of that contention the Commission submitted in this context that “on the logical construction of the Policy Conditions, the interests of Mr Bradbury as the “Insured” can only arise from the date that Mr Bradbury became the owner of the Property. It is at the point in time that Mr Bradbury became the owner of the Property that he assumed the right to claim indemnification from the Commission under the Policy Conditions, subject to its terms and conditions. [41] There can be no doubt that this is so, however it is not the case that under the policy only the original owner, or insured is protected. An “Insured”, relevantly, is defined by the Policy Conditions to mean the owner of property in Queensland. The definitions of “Insured”, “land” and “owner” within the Policy Conditions make this clear. The Policy Conditions provide: ““insured” means: (a) the owner of the land; or (b) a consumer who has entered into a contract with the contractor to have residential construction work carried out in Queensland”. The owner does not mean the one who has entered into a contract with the contractor to have residential construction work carried, but could include one who is a later owner. -- 9 of 17 -- 10 [42] The Commission submitted that Part 4 gives rights to an “Insured” to obtain payment for the costs of rectifying defective works, subject to, and within, the particular terms and conditions prescribed by the Policy Conditions. The terms and conditions imposed by the Policy Conditions include Limitations upon the Commission’s liability under Part 4, dependent upon the conduct of the “Insured” as provided for under clause 4.3(a) of the Policy Conditions. It refers to clause 4.3: 4.3 Limits upon Right to Payment The QBCC’s liability to pay under this Part will not arise: (a) where, in the opinion of the QBCC, the Insured unreasonably refuses access to the contractor or his/her agent to undertake rectification. [43] In my view, this is a disqualifier where an Insured unreasonably refuses access. A person who is not an insured is not disqualified in this context. [44] The Commission also submitted in this context that the policy also refers to the time limitation imposed upon an “Insured” under clause 4.5(a) of the Policy Conditions, in which an “Insured” must make a claim under the policy. Clause 4.5(a) reads, relevantly: 4.5 Time Limit for Making a Claim The Insured is NOT ENTITLED to payment for loss under the Part unless: (a) in the case of category 1 defect, the claim is made within 3 months of that defect first becoming evident (in the opinion of the QBCC); or …or within such further time as the QBCC may allow.” [45] In my view this is a disqualifier where an Insured does not give notice the claim is made within 3 months of that defect first becoming evident. Again, it presumes the claimant to whom the defect has become evident is an insured person. It does not limit insurance cover to persons who are the original proprietor who had the work done. It does not concern itself with when or to whom a defect has become evidence so as to limit when other conduct must occur, is therefore neutral on the question at issue here. [46] The Commission also submitted in this context that the Limitations of the Commission’s liability is to pay an “Insured” under Part 6 of the Policy. Clause 6.1 of the Policy reads: 6.1 Limits of Liability In no case will the QBCC be liable to an Insured for an amount in excess of the maximum of payment for loss calculated in accordance with this policy. [47] In my view this is merely a limit on the amount of cover, is therefore neutral on the question at issue here. [48] The Commission also submitted in this context that one can refer to the Limitations of the Commission’s liability to pay a subsequent purchaser of property under Clause 7.2 of the Policy. Clause 7.2 provides 7.2 Subsequent Purchasers -- 10 of 17 -- 11 Where the Insured purchased the land on which residential construction work has been performed, the Insured is NOT ENTITLED to payment for loss under Parts 2, 3, 4 or 5 of this policy where the damage, destruction, defect, subsidence or settlement was, in the opinion of the QBCC, evident prior to completing the contract to purchase the land. [49] The Commission also referred to the procedure for claims to be followed by an “Insured” as set out under clause 8.1 of the Policy that subject to insolvency etc, prior to making a claim under this policy, for defective construction or subsidence or settlement, the Insured will (except in the case of insolvency or death of the contractor) give it notice. Apart from its focus on what an Insured must do, it is neutral on the present issue. [50] The Commission also submitted in this context that, on the proper construction of the Policy Conditions, it is evident that its terms treat subsequent owners differently by limiting and excluding indemnity to a subsequent “Insured”. [51] The Commission refers to Clauses 7.2 and 4.5(a), of the Policy Conditions and 23(d)) in particular to submit that they demonstrate the intention of the Policy Conditions, and the statutory insurance scheme, to treat a subsequent owner, and subsequent “Insured”, differently. [52] The Commission submits that: pursuant to clause 4.5(a), an “Insured” must make a claim within 3 months of a defect becoming evident to the “Insured” within the opinion of the Commission and pursuant to clause 7.2, a subsequently “Insured” owner is treated in a manner broadly consistent with the maxim caveat emptor (“let the buyer beware”).It submits that should the Tribunal accept that the defective works in the ensuite of the Property were evident to the owner, or occupier, of the Property who repair painted the damage prior to Mr Bradbury purchasing the Property, accepting the terms of both clause 4.5(a) and clause 7.2, Mr Bradbury is not entitled to cover under the Policy. [53] In my view that is clearly not the effect of those clauses. Even if the defective works in the ensuite of the Property were evident to the owner, or occupier, of the Property who repair painted the damage prior to Mr Bradbury purchasing the Property, Mr Bradbury is not disentitled to cover under the Policy, as long as he was an owner before the 6 years 6 months expired . [54] The present case is not one where in the opinion of the QBCC as to whether the particular defect was evident prior to completing the contract to purchase the land. Its focus is on the purchase of land and the condition that land was in when purchased. That is not this case. That clause is therefore neutral on the question at issue here. [55] At paragraphs 33 and 34 of the submissions of Counsel for the Respondent, part of which is extracted above at [52], it submitted that clause 7.2 has some implicit notion that the maxim caveat emptor applies in construing the policy, and creates different treatments of individuals who might be insured depending upon whether they are an original owner who had the work performed or took out the policy and a later owner. [56] In my view, nothing in the language of either clauses 4.3 or 7.2 creates differently entitled classes of insured depending upon whether the claimant is an original owner or a subsequent owner or purchaser. Clause 7.2, which I have dealt with above, means that the statutory scheme operates such that if a subsequent purchaser gets a report showing a class 1 defect -- 11 of 17 -- 12 that would enable the seller to make a claim under the policy, or make the purchaser seek its remedy in contract or otherwise in respect of that defect, for example to terminate on the basis of a contract conditioned on a building inspection, or to make claim for damages based on any precontractual representations or contractual warranties. In other words, all that clause 7.2 does is exclude a purchaser who discovers the defect prior to completing the contract, because in those circumstances it seeks to pass the risk to the purchaser to use all remedies as against the from the seller rather than under the insurance policy. It says nothing about the situation that applies where a purchaser, as here, does not become aware of the defect, or it is not evident to that person prior to completing the contract, such as occurred in this case. [57] Notwithstanding arguments about whether it is a buyer beware policy and where the risk falls as between a seller and a purchaser of property which has defective workmanship, it clearly presents a conundrum and a commercial anomaly in that in this case, had the property owner who had the work inadequately repaired made a claim, the works probably would have been caught by the policy and would have been completed either by the builder or indemnity existed under the policy. The concealment of the defective work was such that it deprived this potential insured of an opportunity to have had the defects brought to his attention and make a timely claim in respect of it. Had the pre contract inspection report disclosed it, and subject to arguments about notice not being given by that seller within 3 months of discovery of the defect, indemnity may have been enlivened in favour of the seller. [58] In my view, the evident purpose of the statutory policy is to provide cover in respect of defective works for which the statutory policy operates and subject to relevant notice being given to the Commission upon the defect becoming evident, it matters not whether the discoverer of the defect whilst an insured, is an original or a later purchaser. [59] The Commission also submitted in this context that to otherwise find “that rights of an “Insured”, current property owner, extend to a previous owner’s knowledge of defective works, would not only be contrary to the logical construction of Part 4, but would also impose a burden upon the Commission to insure against and respond to ongoing and indefinite complaints – a burden inevitably passed on to other builders and home owners through the cost of higher insurance premiums and increased building costs”. [60] In construing the relevant policy, it is not my task to decide whether there are financial or political or social policy considerations which a legislator might think were relevant. The notion that in a case such as this, where the defect which was always there, became evident to the Insured a matter of weeks outside the 6 year six month limit, and could if the latent defect had led to the inevitable failure in the ensuite a month earlier, would is impose a burden upon the Commission to insure against and respond to ongoing and indefinite complaints and that this burden would be inevitably passed on to other builders and home owners through the cost of higher insurance premiums and increased building costs is hyperbolic. It is only by an accident of fate that the water damage of 23 September 2021 did not occur between 1 April and 28 April 2021, and if it had, it would have become demonstrably evident within the relevant 6-year 6-month time frame, and while the Applicant was an insured. The “expiry of policy” argument from Clause 4.4, and other decisions [61] As I have said, Clause 4.4, makes reference to the expiry of cover and timing from when the defect became evident., Hence although Clause 4.4 of the policy does not reference a particular insured, or reference an insured at all, in the context of that event of disclosure. If as its heading suggests, it is identifying the “expiry of cover” and more particularly, the circumstances in which an Applicant insured will be covered under the relevant policy, it -- 12 of 17 -- 13 cannot have that effect if an earlier disclosure of the defect to someone else than this insured, can satisfy the requirement for it to have become evident. Again, the construction of it is not assisted by the fact that the clause itself does not say anything about when cover expires. [62] Earlier decisions of this Tribunal have treated equivalent clauses as providing a time limit under the policy of 6 years and 6 months. In Orlanski v Queensland Building Services Authority [2011] QCAT 35 Member Howard said, in dealing with a similar earlier version of the clause 4.4 provision (my emphasis) 58. Clause 2.4 of the Policy provides that QBSA is only liable to pay for loss for a category 1 defect where the defect ‘first became evident’ within 6 years and 6 months. I accept the respondent’s argument that it is not possible to extend the period of the insurance cover. It is a strict time frame which can not be extended. QBSA is only liable to pay for losses for defects which first become evident within the stated period. 59. The Policy does not define the phrase ‘first became evident’ or the word ‘evident’. In my view, the words therefore have meaning according to their common usage. 60. Under clause 2.5, an insured is not entitled to a payment for loss in the case of a category 1 defect, unless a claim is made within 3 months of that defect first becoming evident in the opinion of the QBSA or such further time as the QBSA may allow. This clause provides for time frames for making claims, and for the QBSA to extend the time frame provided. It does not provide for extension of the period of insurance cover. 61. In the ordinary course, accepting that liability may exist for defects first becoming evident up until the last day of the six years and six months insurance cover period, claims might be made at latest 3 months after the expiry of the insurance cover. That is, unless the QBSA allows additional time for the making of the claim. The Policy does not indicate factors to be taken into account in considering whether to exercise the discretion to extend time. It is appears to be a broad discretion which may be exercised in appropriate circumstances. 62. The respondent argues that clause 2.5 only applies regarding the giving of an extension of time to circumstances when the Policy cover remains current under clause 2.4. Reading the Policy as a whole and clauses in Part 2 together does not lead me to conclude that an extension of time to lodge a claim cannot be granted in appropriate circumstances when it is apparent that a defect did become evident during the period of insurance, although the period has concluded. The Policy specifically contemplates that claims may be made after the insurance period has concluded, provided the claim is made within the prescribed period. It also specifically allows for time to be extended for the making of a claim. [63] It should be noted that the strict and very limited limitation time for complaint of three months from becoming aware of the defect was introduced by the 2016 amendments to the policy. [64] In Van Kampen v Queensland Building and Construction Commission [2017] QCAT 163 the member held as follows; (again my emphasis) -- 13 of 17 -- 14 Upon this Application for Review Ms Van Kampen agrees that the central issue is clause 2.4 in the insurance policy and the wording therein where it says that the BSA is only liable to pay for a loss where the defect within six years and six months after the defect “becoming evident”. Yet, Ms Van Kampen submits that the defect became “evident” on the day of construction, by reason that a defective building technique undertaken at that stage caused the creation of a latent problem and that the defect was not then “visible” until much later when engineering experts hired by the Van Kampen’s revealed the true nature of the problem for them. I do not accept this construction. It is not sufficient for the defect to exist as a latent defect within six years and six months and for awareness of it to occur much later. Rather, the defect must have become apparent (or “evident”) to the homeowner within the period of six years and six months from the date of commencement of the policy of insurance. As identified in Orlanski v Queensland Building Services Authority the statutory policy of insurance is a limited policy of insurance, with strict time frames, that cannot be extended. Expressed another way, the claimant homeowner must know about the problem within six years and six months if they are to have any redress under the time limited To adopt the Applicant’s interpretation of when a defect becomes evident would be to create a policy of insurance with unlimited cover. If that interpretation were to prevail, then a problem arising even 100 years after construction (if per chance traceable to some defective building technique during construction) would still be covered by the Home Warranty Scheme. This cannot be the intention of the policy. [65] Those cases did not involve a previous insured who had identified the defect and concealed it, but for present purposes, it seems to me that the focus must be upon the state of knowledge of the current home owner is correct and it is not enough to focus upon whether the defect had become evident to anyone else, or for that matter, a previous insured or the previous owners, advisers or experts or indeed anyone at all such as another trades person carrying out work. [66] Reference has also been made to the decision in Ross Barry Winter & Debra Anne Winter v Queensland Building and Construction Commission, an unreported decision of this Tribunal. The decision was by Member Lee on 5 April 2022. The decision was not published, but reasons were provided to the parties and the Registry was able to provide me with a copy. The reasons are short, some 4 and a half pages. It should also be noted that that decision was made on the papers and it is not apparent that they were comprehensive submissions provided, which went to the alternative arguments around this issue. [67] The member said that essentially, the substantive claim entails a complaint about what is said to be defective work which was performed in the construction of a new residential dwelling for Michael Pratt (former owner) in 2005 and the proceedings related to a subsequent owner who sought to rely on a policy of insurance given to the previous owner under the scheme to rectify the work. [68] The member said the issue was “Are the applicants in this proceeding entitled to any rights or benefits arising out of the claim made by the former owners of 23 Pendoma Drive, Hodgson Vale, Queensland under the Statutory Queensland Home Warranty Scheme.” -- 14 of 17 -- 15 [69] That case was factually different to the present and the analysis being conducted seems to have accepted and adopted the submissions for the Authority. Critically that was not a case such as that here, where the relevant owner, the subsequent purchaser was even an insured, because the 6 years and 6 months had expired before that owner purchased. [70] The Member found; [12] In this case, I am persuaded by and accept the force of respondent’s submissions over submissions of the applicant, as follows: (a) that the conditions of the subject policy do not grant former claim entitlements to subsequent insureds, on the following basis; (i) ‘insured’ is plainly defined as meaning the owner of the land; (ii) ‘owner’ of land is plainly defined as including a registered owner of freehold land; 8 and (iii) the interests of the subsequent insured in a policy of the scheme can only arise from the date the subsequent insured purchases the property (in this case 30 June 2014), at which time he becomes an ‘insured’ under applicable conditions. This does not equate to an accrual of the benefit of former claim entitlements, simply that a subsequent insured is able to make a claim which is then assessed in the ordinary way by the QBCC. (b) that the relevant conditions treat subsequent owners differently by limiting and excluding indemnity to subsequent insureds, including; (i) limitations on time: The insured is NOT ENTITLED to payment for loss under this part unless the claim is made within three months of the subsidence or settlement first becoming evident (in the opinion of BSA), or within such further time as BSA may allow. (ii) buyer beware Where the Insured purchased the land on which residential construction work has been performed, the insured is NOT ENTITLED to payment for loss under Parts 2 or 3 of this policy where such defect or subsidence or settlement was, in the opinion of BSA, evident prior to completing the contract to purchase the land. (c) the commencement of insurance cover and claims is specifically provided for in sections 69 and 70 of the QBSA Act; the latter of which enables a person claiming to be entitled to indemnity under the scheme, to give notice of the claim to the authority and, if dissatisfied by the decision, the claimant may apply to the tribunal for a review of the decision following which the tribunal may confirm, vary or reverse the decision and give orders and directions. These provisions support the matters set out in (a) and (b) above. (d) That the original policy had expired before the applicant became an owner and made a claim. Cover under the original policy expired either on 30 November2011 or on 13 August 2012, that is about 2.5 or 1.9 years respectively before the applicant became an owner on 30 June 2014. The applicant did not become a subsequent insured under the original policy prior to its expiry. [13] Consequently, 1 accept and find that the applicant has no entitlement to ‘piggyback’ on a claim made by a former owner under an expired policy of the scheme, to take advantage of any former claim entitlements arising under an earlier claim”. -- 15 of 17 -- 16 [71] I accept the member’s analysis to that extent that it can have any application by analogous reasoning to the present case, although it is of limited assistance. [72] In my view the reference to that person to whom it has become evident must be the insured claimant, not an earlier insured, whether a claimant or not, because the clause concerns itself with the rights and interests to be protected of an insured under Part 4 of the policy .Sadly the matter is not free from doubt because clause 4.4 doesn’t say it creates an “ insurance period” as member Howard called it in Orlanski and would have been a simple and easy thing to have done to have worded the relevant clause in a way that says that it has that effect. The way in which they insurance scheme operates in relation to sequential ownership of property [73] I have not been referred to any decision in which there has been a comprehensive analysis of the way in which they insurance scheme operates in relation to sequential ownership of property and how in those circumstances the requirement that a category one defect must become evident and to whom. [74] It seems to me that for the requirements that and insured notify the Commission within a relevant time of the defect becoming evident to be effective, it must refer to the defect having become evident to the particular insured or home owner who is claiming to be insured. [75] The focus then is not upon the objective nature of whether something is evident, for example, whether it might have been evident to an expert engineer or plumber, but whether the defect became evident to the claimant insured. [76] For the defect to become evident, it may not be necessary to actually understand what the defect is, and it may be enough for there to be a manifestation of the defect, which indicates the existence of a problem which in turn might be category 1 without disclosing the precise character of the defect. [77] There can be no doubt that the statutory scheme protects those who have the works done when the insurance is taken out and who pay for those works under the original construction contract but also subsequent owners. Whether subsequent owners are entitled to make claims and be identified depends, it seems to me, on when it was that that owner became aware of the defect, or to use the precise language of the policy” when the defect became evident”. [78] For example, in the present case, had a post contractual settlement inspection been carried out for the present applicant actually identified some element of the defect or identified the characteristics of damage to the bathroom, which in turn made the defect evident, then, assuming appropriate notice was given to the Commission, the applicant would have been insured under the policy and entitled to be identified. [79] How it is that the building inspector who conducted that work pre-contractually did not identify that there was any defect in the ensuite bathroom remains unexplained and there is no evidence from that author or inspector to explain it? [80] It seems to be a commercial anomaly that had the applicant been properly advised by his inspector, the defect would have been evident to him once his inspector informed him of -- 16 of 17 -- 17 it. And he would have been in a position to notify the Commission well within the time required. [81] The inspection for the report was carried out in March 2021, so probably some 6 weeks before the 6-year 6 months expiry date. The Applicant took possession of the property some 4 weeks before the 6-year 6-month expiry date end. He could have noted the very things that he did in fact note on the twenty second of June about two months later. But he did not. [82] In terms of the statutory scheme and the purpose which it exists, the expiry of cover 4 weeks after the applicant bought his home, and the loss of an opportunity for him to be indemnified seems an arbitrary and unsatisfactory result from the point of view of consumer protection. [83] There can be no doubt whatsoever that the defect was present because as I have already mentioned, the QBCC inspector who eventually looked carefully at the ensuite in late 2021, concluded that the waterproofing of the shower cubicle had not been achieved in compliance with the Building Code for wet areas, resulting in water, escaping the shower cubicle, damaging surrounding building elements and causing a loss of amenity. The Inspector concluded that the repairs, including painting by the previous owner or its contractor had disguised the water damage in the ensuite and other areas associated with it. It was also observed that the shower waste had not been fitted with a drainage flange. All of this meant that the defect in question was present probably from the time the original works were done and had been present at all times thereafter. Any manifestation of what the consequences were of it did not occur until whenever it was that the previous owner carried out the cosmetic repairs. And they remained present albeit concealed, until the 22 June 2021. [84] In a case such as this, which was a concealed defect, in the sense that the absence of adequate waterproofing would not have been visible unless one partially demolished the shower cubicle, and also in the sense that it was concealed by cosmetic repair, it could have been conceptually possible for the applicant to make a claim under the policy and be indemnified even if he discovered it ten years after he bought the property as long as he gave notice of his discovery within the requisite three months. That does not seem to me to present a reasonable interpretation of the way in which the statutory policy is intended to operate. [85] The decisions which have dealt with the subject matter of these policies make clear that they are not designed to provide indefinite cover. There are time limitations around the cover which they provide. The policy had in effect expired at the time the defect became evident to the previously insured Applicant. He was not therefore entitled to indemnity un the policy when it did become evident to him. [86] Were the position to be accepted that a defect could become evident to a person, not the insured who was making the claim, within the 6 year, 6 months, leaving it possible for it only to become later evident to a later purchaser who could then make a claim under the policy, it could potentially mean that cover could be extended almost indefinitely. [87] It follows that I decline to set aside the commission's decision. Pursuant to section 24(1)(a) of the QCAT Act I confirm the decision under review. The Application for Review of a decision is dismissed. -- 17 of 17 --