Cester v Queensland Building and Construction Commission [2018] QCAT 87

CITATION: Cester & Anor v Queensland Building and Construction Commission [2018] QCAT 87 PARTIES: Claude Cester Patricia Puzzi (Applicants) v Queensland Building and Construction Commission (Respondent) APPLICATION NUMBER: GAR140-17 MATTER TYPE: General administrative review matters HEARING DATE: 2 February 2018 HEARD AT: Brisbane DECISION OF: Member Deane DELIVERED ON: 29 March 2018 DELIVERED AT: Brisbane ORDERS MADE: 1. The decision of the Queensland Building and Construction Commission dated 8 May 2017 to disallow a claim under the statutory home warranty scheme is confirmed. CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – General Administrative Review – application to review a decision to disallow a claim – whether home owners should have the benefit of a legislative amendment PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – claim under statutory insurance scheme for residential construction work – where contractor not licensed – whether a contract of insurance came into existence – whether fraudulent claim made that a relevant licence was held -- 1 of 8 -- 2 Queensland Building and Construction Commission Act 1991 (Qld), s 86, s 87 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20, s 24 BM Farage Pty Ltd as trustee for Farage Discretionary Family Trust v Queensland Building Services Authority [2003] QCCTB 11 Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 Jensen v Queensland Building and Construction Commission [2017] QCAT 232 Jorg v Queensland Building and Construction Commission [2016] QCAT 364 Re Costello and Secretary, Department of Transport (1979) 2 ALD 934 Shi v Migration Agents Registration Authority (2008) 235 CLR 286 APPEARANCES: APPLICANTS: Claude Cester Patricia Puzzi RESPONDENT: Queensland Building and Construction Commission REPRESENTATIVES: APPLICANTS: represented by Ms Patricia Puzzi RESPONDENT: represented by Ms E Roberts of Robinson Locke Litigation Lawyers REASONS FOR DECISION [1] Mr Cester and Ms Puzzi (the Home Owners) seek a review of a decision of the Queensland Building and Construction Commission (the QBCC) to disallow a claim under the statutory home warranty scheme (the Scheme). The decision is dated 8 May 2017.1 This application was filed on 5 June 2017. 1 Exhibit 3, pages 88 – 90. -- 2 of 8 -- 3 [2] The Tribunal has power to review a decision to disallow a claim against the Scheme.2 [3] On review, the Tribunal has power to confirm or amend the QBCC’s decision, set aside the decision and substitute its own or set aside the decision and return it to the QBCC for reconsideration.3 [4] The Tribunal’s function is to reach the correct and preferable decision.4 [5] During the hearing, the parties accepted that the only question I was required to determine was whether a contract of insurance came into existence. If I found a contract of insurance did not come into existence then I would confirm the QBCC’s decision. If I found that a contract of insurance did come into existence then it was submitted I should set aside the QBCC’s decision and remit it for further consideration including whether the relevant work was primary building work. [6] I find that a contract of insurance did not come into existence. [7] The Home Owners entered into a contract for the performance of concreting work at their home with Brentley Heaton. The parties did not sign a formal written contract. [8] The evidence is that: a) on 4 October 2016, Mr Heaton provided an initial quote by SMS. A copy of the SMS is not in evidence before me. b) on 24 October 2016, the Home Owners paid an advance sum of $5,000 to Mr Heaton’s bank account. c) the first concreting work was performed on 26 October 2016. d) after Mr Heaton commenced performing the work he provided a written quote. The written quote is hand written and appears to be dated 4 November 2016.5 No ABN or QBCC Licence number appears on the quote. e) the work performed was not satisfactory to the Home Owners. Mr Heaton failed to rectify or have someone else rectify the work to the Home Owners’ satisfaction. f) the Home Owners seek access to the Scheme. 2 Queensland Building and Construction Commission Act 1991(Qld) (QBCC Act), s 86(1)(h), s 87. 3 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 24. 4 Ibid, s 20. 5 Exhibit 3, page 32. -- 3 of 8 -- 4 [9] It is uncontroversial that Mr Heaton did not in fact hold a QBCC licence to undertake the work performed, did not notify a contract to the QBCC and did not pay any insurance premium relevant to the Scheme. [10] The QBCC contend, and I accept, that: a) the contract between the Home Owners and Mr Heaton came into existence on 24 October 2016. Payment is evidence that the Home Owners accepted Mr Heaton’s offer to perform the works and communicated that acceptance. b) the only provision under which a policy of insurance could come into force under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), as it existed on 24 October 2016, is section 69 (2)(a)(iii), which relevantly provides: A policy of insurance comes into force in the terms stated in the board’s policies for the purpose— (a) if a consumer enters into a contract for the performance of residential construction work, and— (iii) the contract is with a person fraudulently claiming to hold a licence under which the person may enter into contracts with consumers to carry out residential construction work covered by the statutory insurance scheme. [11] Under this provision, the central issue is whether Mr Heaton, in the circumstances, fraudulently claimed to hold a licence. [12] The Home Owners claim that Mr Heaton: a) fraudulently claimed to hold a licence by not disclosing that he did not hold a licence. b) misrepresented himself by carrying out the work in contravention of section 42 of the QBCC Act. [13] The Home Owners do not rely upon any positive false representation that Mr Heaton was appropriately licensed made either before or after they entered into the contract with him. As stated earlier in these reasons, his written quote does not contain a QBCC licence number. During the oral hearing, Mr Cester gave evidence that Mr Heaton’s vehicle did not have a sign with a QBCC licence number on it. [14] I accept that the Home Owners did not check whether Mr Heaton held an appropriate licensed before engaging him. Mr Cester’s evidence was that it was not his practice to make enquiries about whether tradespeople were licensed and that he often engaged tradespeople without requesting a written quote, if he knew them. -- 4 of 8 -- 5 [15] Mr Cester had the pre-contract dealings with Mr Heaton. His evidence was that: a) he knew Mr Heaton’s father, Mr Dallas Heaton, as someone who was an experienced concreter and bricklayer. b) he saw the Heatons whilst out and noticed Mr Heaton was wearing a t-shirt with a concreting logo, which he thought represented that he was skilled in the concreting trade. c) Mr Dallas Heaton informed him that he was helping his son, who was just getting started in his concreting business. Mr Cester’s evidence is supported in this regard by Mr David Williams, who gave evidence that Mr Cester made a statement along these lines in Mr Williams’ and the Heatons’ presence, which they did not dispute.6 [16] There is no evidence that the Home Owners or anyone else suggested to Mr Heaton that he was licensed and that he failed to correct the incorrect statement. [17] Mr Jeczny also gave evidence that the progress of the works and the tools on site indicated to him that the Heatons had considerable experience in the industry.7 There is no evidence before me about whether the tools were Mr Heaton’s or his father’s. Mr Jeczny specifically refers to them having a bobcat on site as indicating their experience. There is evidence before me that the bobcat was not Mr Heaton’s but rather his father’s.8 [18] The evidence is essentially that the Home Owners assumed that Mr Heaton was licensed because: a) his father held a licence and he told Mr Cester he was helping his son. b) as his father was licensed it would be reasonable to assume that Mr Heaton would know that it was unlawful to carry out such works without a licence. c) Mr Heaton wore a t-shirt with a concreting logo. d) Mr Heaton did not expressly tell them that he was not licensed. e) Mr Heaton acted in the same way as other licensed tradespeople, in quoting and, in particular, in performing the work. f) of the amount Mr Heaton was charging for the work, being in excess of $15,000. 6 Exhibit 8 at [4]. 7 Exhibit 10. 8 Exhibit 7 at [3]. -- 5 of 8 -- 6 [19] The QBCC provided a written statement by Mr Heaton that stated that he told the Home Owners that he was not licensed. Mr Heaton, despite request, did not make himself available to be cross-examined on his statement at the final hearing. In these circumstances, I do not accept that part of his evidence and prefer the Home Owners’ evidence that he did not tell them he was not licensed. [20] There is no evidence before me that the t-shirt contained any representation that the concreting business was licensed or that the concreting business was Mr Heaton’s or that Mr Heaton had even been employed by the business represented on the t-shirt. Mr Cester’s apparent assumptions of Mr Heaton’s skill, because he was wearing a t-shirt with a logo seems somewhat naïve. [21] I am not satisfied that it could reasonably be assumed that Mr Heaton was licensed from the above circumstances. [22] I am also not satisfied that Mr Heaton ought to have known that the Home Owners would believe he was licensed such that he should tell them he was not. There is not sufficient evidence from which I can conclude that Mr Heaton chose to deceive them. The Home Owners submit that silence can constitute misleading and deceptive conduct. [23] I am not satisfied that the matters as set out constituted a false representation that he was licensed. [24] In any event, much of what is relied upon is conduct, which occurred after the contract was formed and Mr Heaton commenced to perform the work. [25] The Tribunal and its predecessor, the Commercial and Consumer Tribunal, have previously found that a fraudulent claim is only relevant if made up to the time of the formation of the contract.9 [26] The learned Commercial and Consumer Tribunal member in Farage also considered a submission in relation to silence constituting misleading and deceptive conduct. In view of the terminology used in section 69, she concluded, and I agree, that assistance should be sought from the law of fraud rather than the law of misrepresentation. She stated at [49]: The starting point is the well known case of Derry v Peek [1889] UKHL 1; (1889) 14 App Cas 337. The House of Lords ruled that fraud is proved when it is shown that a false representation has been made knowingly or without belief in its truth, or recklessly without caring whether it be true or false. A false statement made through carelessness and without reasonable ground for believing it to be true may be evidence of fraud, but does not necessarily amount to fraud. Such a statement, if made in the honest belief that it be 9 Jorg v Queensland Building and Construction Commission [2016] QCAT 364, [52]; BM Farage Pty Ltd as trustee for Farage Discretionary Family Trust v Queensland Building Services Authority [2003] QCCTB 11 (Farage), [41]. -- 6 of 8 -- 7 true, is not fraudulent and does not render the person making it liable to an action of deceit. [27] I am not satisfied on the evidence before me that there was any deliberate deception on Mr Heaton’s part. [28] The Home Owners contend that in reviewing the decision I should apply the provisions of the QBCC Act at the time the review application was filed10 and the law as at the date of the hearing.11 Ordinarily a fresh hearing on the merits requires that the Tribunal decide it based on the facts and law that exists at the time of the review.12 [29] The Home Owners submitted that the amendments gave clarity to the previous intentions of Parliament. [30] The QBCC Act was amended to provide in section 68H (1): Cover under the statutory insurance scheme comes into force if— (b) a consumer enters into a contract for the carrying out of residential construction work with a building contractor and, at or before the time the contract is entered into, the building contractor makes a representation that would cause a reasonable person to believe that the residential construction work is covered by the statutory insurance scheme; [31] I note that section 68H(1)(c) is in substantially the same terms as the previous section 69(2)(a)(iii) where a contract was entered into with a person fraudulently claiming to hold a licence. In this regard, it is clear that the amendments extended the range of circumstances where cover would come into force. [32] This is not a case where the legislation has been amended since the QBCC made the decision under review. The provisions were amended prior to the QBCC making its decision. [33] The Tribunal has previously considered which law is to apply where there have been legislative amendments. Member Traves stated: Whether the current legislation applies depends upon the construction of that legislation and the nature of the decision under review.13 The statute may make clear, for example, that it is only to apply prospectively to future licence applications. If there is no clear indication as to whether the legislation in force at the time of the review is to apply, it will be a question of examining what the effect of applying that legislation to the relevant reviewable decision would be. 10 5 June 2017. 11 2 February 2018. 12 Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60; Re Costello and Secretary, Department of Transport (1979) 2 ALD 934. 13 Shi v Migration Agents Registration Authority (2008) 235 CLR 286. -- 7 of 8 -- 8 If its application would affect an accrued right or liability it will not be applied because that would be giving the legislation a retrospective operation. Does the amending law in this case affect an accrued right or liability?14 [34] As stated earlier in these reasons, I find that the contract between the Home Owners and Mr Heaton was entered into not later than 24 October 2016. [35] I find that the amended law affects an accrued right or liability. Any right by the Home Owners to cover under the Scheme or liability by the QBCC under the Scheme accrued upon the entering into of the contract with Mr Heaton. [36] The Scheme that was in place as at 24 October 2016 clearly does not apply to all contracts entered into with unlicensed contractors, otherwise there would not have been a need for the qualification that the contractor fraudulently claimed to be licensed. [37] Even if the amended provision applied, I am not satisfied that anything said or done by Mr Heaton or omitted to be said or done by Mr Heaton at or before 24 October 2016 would cause a reasonable person to believe he was licensed and that the work was covered by the Scheme. [38] I confirm the QBCC decision. 14 Jensen v Queensland Building and Construction Commission [2017] QCAT 232, [28]- [30]. -- 8 of 8 --