Crocker v Queensland Building and Construction Commission [2017] QCAT 304

CITATION: Crocker v QBCC [2017] QCAT 304 PARTIES: Lee Anthony Crocker (Applicant) v Queensland Building and Construction Commission (Respondent) APPLICATION NUMBER: GAR232-16 GAR234-16 GAR235-16 MATTER TYPE: General administrative review matters HEARING DATE: On the papers and 17July 2017 HEARD AT: Brisbane DECISION OF: Member Gardiner DELIVERED ON: 15 September 2017 DELIVERED AT: Brisbane ORDERS MADE: 1. The time to file an application to review a decision is extended until 9 September 2016. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – TIME, EXTENSION AND ABRIDGEMENT – extension of time to lodge a review – where applicant sought extension of time to file a review application – whether extension should be granted Domestic Building Contracts Act 2000 (Qld), s 71, s 86, s 87, s 90, s 111C Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 61 Cardillo v Queensland Building Services Authority [2011] QCAT 574 Crisp v QBSA [2010] QCAT 263 Jasch v QBSA [2013] QCAT 586 Mahoney v QBSA [2013] QCA 323 Molier v The Body Corporate for Q1 CTS 34498 [2012] QCATA 008 Namour v QBSA [2014] QCA 72 -- 1 of 9 -- 2 QBCC v Turcinovic [2017] QCA 77 Samimi & Anor v QBCC [2015] QCA 106 Turner v QBSA [1999] QBT 66 This matter was partially heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”) with a further oral hearing for submissions on 17 July 2017. REPRESENTATIVES on 17 July 2017: APPLICANT: represented by Mr D. Carrier-Hubbard, solicitor of Streten Masons Lawyers RESPONDENT: represented by Ms M. Guiney, in-house solicitor of the Queensland Building and Construction Commission REASONS FOR DECISION [1] On 9 September 2016, Lee Anthony Crocker filed an application to extend time for him to review a decision of the Queensland Building and Construction Commission (“the Commission”) to grant an insurance claim in regards to the construction works at Norman Park, Toowong and Ashgrove in Brisbane. [2] Statewide Residential Building Inspection and Maintenance Services Pty Ltd (“Statewide”), formerly known as Build Restore Pty Ltd and Kitchens 2 Pty Ltd, undertook alleged incomplete construction at these properties. [3] Mr Lee Crocker was a director of Statewide from 2004 to 11 January 2013. [4] On 12 December 2013, Statewide had liquidators appointed. At the time, Mr Lee Crocker’s brother, Mr Dean Crocker was the nominee licensee for Statewide. [5] Because of Statewide’s liquidation, Mr Dean Crocker’s licence was cancelled and he is now classified as an excluded individual until December 2018. [6] Three insurance claims were made under the statutory insurance scheme for non-completion of work. These claims were for contracts between parties and Statewide at the Norman Park, Toowong and Ashgrove properties. [7] On 2 April 2014, the Commission issued a scope of works decision to the company liquidator in relation to the Norman Park property. [8] On 8 June 2014, the Commission granted an indemnity concerning the Norman Park property in the sum of $123,267.83 in respect of incomplete building work. -- 2 of 9 -- 3 [9] On 3 December 2014, the Commission issued a scope of works decision to the company liquidator in relation to the Toowong property. [10] On 15 December 2014, the Commission granted an indemnity concerning the Toowong property in the sum of $200,000.00 in respect of incomplete and defective building work. [11] On 24 September 2014, the Commission issued a scope of works decision to the company liquidator in relation to the Ashgrove property. [12] On 27 January 2015, the Commission granted an indemnity concerning the Ashgrove property in the sum of $200,000.00 in respect of incomplete building work. [13] Mr Lee Crocker now seeks to review these decisions. He says he was informed for the first time by the Commission of the payment and that he was personally liable for the amounts claimed totalling $528,267.83 by letter on 27 July 2016, when the Commission wrote to him advising him he was liable for the sums paid out under the insurance scheme. [14] Prior to this, correspondence concerning the various decisions made by the Commission had been sent to Mr Dean Crocker and the company directly or, after its liquidation, to the company’s liquidator. [15] The Commission argues Mr Crocker is attempting to review decisions under s 71 of the Queensland Building and Construction Act 1991 (Qld) (“the QBCC Act”). This section says that if the Commission makes any payment on a claim under the statutory insurance scheme, it may recover the amount of the payment, as a debt, from the building contractor by whom the relevant residential construction work was, or was to be, carried out or any other person through whose fault the claim arose. [16] The Commission submits that if s 111C(3) of the QBCC Act is invoked (if a company owes the Commission an amount because of a payment made by the Commission on a claim under the insurance scheme), then s 111C(6) allows the Commission to recover debts of this kind from each individual who was a director of the company when building work the subject of the claim was, or was to have been, carried out and each individual who was a director of the company when the payment was made by the Commission. [17] The Commission further submits that the decisions to recover the money in relation to the Toowong and Ashgrove properties are not decisions reviewable by Mr Lee Crocker because of the operation of s 86F(1)(a) of the QBCC Act, which states that a decision to recover an amount under s71 of the QBCC Act is not a reviewable decision.1 1 Supplementary Submissions of the Commission dated 1 August 2017. -- 3 of 9 -- 4 [18] The Commission further submits that the earlier decisions to allow the three insurance claims are also not reviewable decisions under s 86(h) of the QBCC Act. [19] In supplementary submissions,2 the Commission also submits 28 days have elapsed since the decision was served on the building contractor and the contractor has not, within that time, applied to the tribunal for a review of the decision.3 [20] The Commission submits that in essence, Mr Lee Crocker is attempting to review non-reviewable decisions and that this Tribunal has no jurisdiction to entertain these reviews. The SOW decisions [21] The Commission argues there is only one category of potentially reviewable decisions. These are the three decisions to issue a scope of works in relation to each of the properties. The dates of these decisions were: Norman Park – 22 April 2014, Ashgrove – 24 September 2014 and Toowong – 3 December 2014 – collectively referred to as the “SOW decisions”. [22] The Commission accepts that this Tribunal has jurisdiction to review the SOW decisions.4 [23] However, the Commission submits that Mr Lee Crocker has no standing to review the SOW decisions under s 87 of the QBCC Act. This section simply states that a person affected by a reviewable decision of the Commission may apply to the Tribunal to a review of the decision. [24] The Commission acknowledges the question of who is “an affected person” has not been previously considered by this Tribunal. Although the Commission submits numerous cases with references to this question, the Commission acknowledges these were decisions of the former Queensland Building Tribunal, the former Commercial and Consumer Tribunal and the District Court of Queensland on appeal from those former Tribunals. In the main, these decisions pre-date substantial amendments to the QBCC Act and significant guidance from the Queensland Court of Appeal about s 71 of the QBCC Act. 2 Ibid. 3 The QBCC Act, s 86F(1)(c), which states a decision about the scope of works to be undertaken under the statutory insurance scheme to rectify or complete tribunal work is not reviewable if 28 days has elapsed. 4 Ibid, s 86(1)(g). -- 4 of 9 -- 5 [25] In Namour v QBSA5 (“Namour”), Justice Fraser comments on the position of a director such as Mr Lee Crocker, stating: A director may plausibly claim to be a person affected by such a decision because the readily foreseeable results of cancellation of a corporate building contractor’s licence during the course of a contract include termination of the contract, a claim upon the respondent by the owner under the statutory insurance policy, payment of that claim by the respondent, and a claim by the respondent against the company and its directors. [26] The Commission has extensively reviewed the current case law on s 87 and provided by way of submissions a comprehensive table of decisions highlighting the particular passages of relevance. I am grateful for this assistance in this matter. [27] A review of the numerous cases submitted as relevant to this decision shows a consistent view in the latter cases culminating in the comments of Justice Fraser stated above in Namour. [28] Mr Crocker particularly highlights the decisions of Turner v QBSA6 (“Turner”) and Crisp v QBSA.7 Both of these decisions concluded that the applicant was an “affected person” where recovery could be sought against that person under s 71, even if it has not commenced. The decision in Turner is also authority to show the onus is on the Commission to prove that the decision does not adversely affect Mr Crocker. [29] Mr Crocker submits that the Commission’s action on 27 July 2016 of writing to him requesting payment of $528,267.83, being monies paid out under the insurance scheme, and stating that legal action would commence if not received by 10 August 2016, makes him a “person affected” within the meaning of s 87 of the QBCC Act. [30] I accept this submission and am satisfied that Mr Lee Crocker has standing and that he is a “person affected” within the meaning of s 87 of the QBCC Act. [31] Concerning the application of s 86F(1)(c) of the QBCC Act, the Commission relies on the service of these decisions on the liquidators in respect of the Ashgrove and Toowong properties by letter on 24 September 2014 and 3 December 2014 respectively. The Commission also points to the proceedings started by Mr Dean Crocker in QCAT in relation to the Commission’s termination decision on the Norman Park property in matter number GAR157-14. This review application by Mr Dean Crocker was ultimately dismissed by the Tribunal. 5 [2014] QCA 72, [19]. 6 [1999] QBT 66, [51]. 7 [2010] QCAT 263, [13] – [14]. -- 5 of 9 -- 6 [32] While this evidence goes to notification of the company in liquidation and to its then director Mr Dean Crocker, no evidence is provided to show notice was given to Mr Lee Crocker as a previous director of the liquidated company. [33] Mr Lee Crocker points out he had ceased to be a director of the company on 11 January 2013 and the company went into liquidation on 12 December 2013.8 [34] I find no evidence to support the service of the SOW decisions on Mr Lee Crocker personally and decline to rely on any form of inferred knowledge based on the service on the company in liquidation where Mr Lee Crocker had long not been a director on the action of his brother Mr Dean Crocker. The Section 71 decisions [35] The second category of decisions in time identified by the Commission are the decisions that followed on from the SOW decisions to grant the insurance claims over the three properties – collectively called the “Section 71 decisions”. [36] The Commission submits the Section 71 decisions are not reviewable decisions which enliven this Tribunal’s jurisdiction. [37] The Queensland Court of Appeal has addressed the jurisdiction of this Tribunal to review under s 71 in a number of decisions. More fully, Justice Fraser9 said in Namour:10 The scheme of the Act is that a building contractor or other interested person who wishes to challenge such decisions should make the challenge before the respondent pays under the policy. A building contractor who does not make such a challenge is liable under s 71(1) whether or not one of those anterior decisions might have been the subject of a challenge. In the case of a building contractor which is a company, a director caught by s 111C(6) is similarly unable to challenge one of those anterior decisions in a proceeding for recovery of a debt. This is so because the director’s liability is fixed by reference only to the liability of the building contractor. (I would add that there is a strong argument that in circumstances such as occurred in this case, a director is also entitled to challenge a decision to cancel a company’s building licence. A director may plausibly claim to be a person affected by such a decision because the readily foreseeable results of cancellation of a corporate building contractor’s licence during the course of a contract include termination of the contract, a claim upon the respondent by the owner under the statutory insurance policy, payment of that claim by the 8 Submissions in response dated 14 August 2017. 9 With whom the President and Justice Douglas agreed. 10 [2014] QCA 72 at [19]. -- 6 of 9 -- 7 respondent, and a claim by the respondent against the company and its directors.)11 [38] Mr Crocker replies agreeing with the Commission’s submission concerning s 71 of the QBCC Act. However, he submits that the grounds for the review under which his applications are made are the review of decisions about a scope of works to be undertaken under the statutory insurance scheme to rectify or complete tribunal work12 and whether domestic building contracts have been validly terminated.13 [39] Mr Crocker submits that the directions to rectify or remedy in relation to the decision and later the proposed scope of remedial works were not brought to his attention within an adequate time or at all in which to review these “anterior decisions”. The question Mr Crocker poses is whether he now has the right to review the “anterior decisions” on the basis that he was not made aware of them within time. [40] The effect of what Mr Crocker says are inadequate procedural steps is the grant of the insurance claims and that the decisions to be reviewed are actually the “anterior decisions” - scope of works decisions leading to the insurance grant. [41] Mr Crocker asserts that it is the failure to provide adequate notice or opportunity to respond that led to an adverse decision to him being made. He says at no time did he receive the directions to rectify from the Commission and denies that the reviews have no prospect of success. [42] I am satisfied that this Tribunal has no jurisdiction to review decisions made under s 71 of the QBCC Act. I am therefore satisfied that this Tribunal cannot review the final Commission’s decisions to grant the insurance claims over the three properties. The Extension of Time application [43] The operative date for the purpose of review rights should be the date upon which the Commission informed Mr Crocker by letter on 27 July 2016 that he was personally liable for the amount totalling $528,267.83 paid out under the insurance scheme. [44] The QCAT Act requires a review application to be filed within 28 days of the relevant day. Mr Crocker’s original review application was filed on 9 September 2016 - some 45 days after the relevant day. Mr Crocker asserts that the Commission consented to an extension of time by 14 days to file these reviews. The Commission denies this and in any event, the 11 See also Mahoney v QBSA [2013] QCA 323, [38]; Samimi & Anor v QBCC [2015] QCA 106, [30]; QBCC v Turcinovic [2017] QCA 77, [15]. 12 Queensland Building and Construction Act 1991 (Qld), s 86(g). 13 Ibid, s 86(i). -- 7 of 9 -- 8 Commission does not have the right to grant such an extension – that lies only with this Tribunal.14 [45] The extension application is pursuant to s 61 of the QCAT Act. [46] The factors that are to be considered in respect of an application to extend time have been summarised in the leading case of Cardillo v Queensland Building Services Authority.15 They are: a) Has a satisfactory explanation been given to account for the delay; b) The strength of the case the applicant will bring if allowed to proceed; c) Will other parties be prejudiced; d) Has the delay been short or long; and e) Is it in the interests of justice to grant the extension. Has a satisfactory explanation been given? [47] Mr Lee Crocker submits the delay is wholly the product of the Commission’s actions by not providing him with the SOW decisions at the appropriate time. However, even on his own calculations he did not file within the requisite time. He gives no reason for that. [48] The Commission does not address this element of s 61 in its submissions as it relies on earlier discussed sections to assert the decisions are not reviewable at all. [49] Considering this matter overall and taking into account the liability claimed by the Commission, while I do not condone the delay of 45 days, I do not think it is of sufficient length to hold Mr Lee Crocker out of litigating his potential liability. In the circumstances of this matter, neither side seems to have followed the necessary procedures closely. I accept that while satisfactory explanation for the delay has not been provided, in considering the complexity of the matter and the impact of the debt if proven on Mr Crocker, I do not place great weight on this factor when considering the application to extend time. Strength of the case the applicant will bring [50] The Commission submits the application has no merit because of the provisions of s 86F(1)(c) and because Mr Crocker has no standing to review under s 87 of the QBCC Act. I have found against the second of these submissions. 14 QCAT Act, s 61. 15 [2011] QCAT 574; subsequently affirmed in Molier v The Body Corporate for Q1 CTS 34498 [2012] QCATA 008. -- 8 of 9 -- 9 [51] The Commission further says Mr Crocker has not adduced evidence as to the merit of his substantive applications, indicating any error in the SOW decisions. [52] Mr Crocker submits that, as he has not been served with the SOW applications, he is unable to provide a response to this factor. [53] I am satisfied that Mr Crocker should have the opportunity to argue his case under this factor. After proper process, Mr Crocker may make decisions concerning the strength or otherwise of his position and take appropriate steps either way. Will other parties be prejudiced? [54] The Commission submits if the extension is granted, there will be prejudice to the administration of the statutory insurance scheme because a builder should make a challenge before payment is made. [55] However this argument pre-supposes that Mr Crocker has been made aware of the SOW decisions. [56] Mr Crocker submits that he is the person prejudiced by not being able to challenge the decisions. Other factors – delay and interests of justice [57] The delay of some 45 days I have dealt with above. [58] Not allowing Mr Crocker to consider and potentially argue his position regarding the SOW decisions and further taking into account the substantial amount of money being claimed against him, on balance in my view, is not in the interests of justice in this particular matter. Conclusion [59] Having considered all the factors, overall I am satisfied this extension should be granted. -- 9 of 9 --