Fane v Queensland Building and Construction Commission [2017] QCAT 59

CITATION: Fane v Queensland Building and Construction Commission [2017] QCAT 59 PARTIES: Peter Eugene Fane (Applicant) v Queensland Building and Construction Commission (Respondent) APPLICATION NUMBER: GAR046-16 MATTER TYPE: General administrative review matters HEARING DATE: 9 February 2017 HEARD AT: Brisbane DECISION OF: Member Hughes DELIVERED ON: 28 February 2017 DELIVERED AT: Brisbane ORDERS MADE: The decision of the Queensland Building and Construction Commission dated 6 June 2016 to decline the claim under the statutory insurance scheme is confirmed. CATCHWORDS: PROFESSSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – HOME WARRANTY INSURANCE CLASS OF DEFECT - whether defect ‘category 1’ or ‘category 2’ – where definitions focus on impact of defect – where home owner did not provide independent expert evidence of impact of defect on structural integrity, function or safety – where based on expert evidence, defect properly classed as ‘category 2’ PERIOD OF COVER FOR ‘CATEGORY 2’ DEFECT– whether defect within period of cover – where defect evident at least nine months after period of cover – where Commission not liable under policy of insurance – whether -- 1 of 14 -- 2 Tribunal can extend period of cover – where language of clause proscriptive and mandatory – where no provision to extend time or exercise discretion – where time limit is strict and Tribunal cannot extend period of cover TIME PERIOD TO CLAIM IF ‘CATEGORY 1’ DEFECT – where defect within period of cover if ‘category 1’ - whether claim within time – where home owner descriptions consistent with defect first becoming objectively evident on 15 January 2015 - where claim made six months outside time limit EXTENSION OF TIME IF ‘CATEGORY 1’ DEFECT - whether Tribunal should extend time – whether reasonable explanation for delay – where purpose of time limit is to ensure Commission is given notice of facts and circumstances giving rise to claim to enable action to protect home owner and insurance fund – where home owner has obligation to act in own best interests – where not in home owner’s own best interests to wait until defect became “more pronounced” – where home owner failed to mitigate loss and delayed early remedial action – where no evidence that home owner attempted to locate documents when defect first became evident - where means of Commission’s knowledge within home owner’s control and has therefore obliged to notify Commission promptly – where not in home owner’s best interests to wait for builder to examine cause of defect – where complaint form did not require technical expertise to complete and required details that would or should reasonably have been within home owner’s knowledge – where being overseas did not obviate home owner’s obligations as responsible home owner – where home owner understood claims process from previous complaints – where home owner should reasonably have known time limits and was on notice to be conscientious about making claim - where no reasonable explanation for delay – where delay prejudiced Commission by increasing its potential liability as the Commission was not allowed to address a deteriorating problem at an early stage -- 2 of 14 -- 3 Queensland Building and Construction Commission Act 1991 (Qld), s 3, s 7, Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20, s 28, Ackermann v. Queensland Building Services Authority [2006] QCCTB 4 Aon Risk Services Aust. Ltd v. Australian National University (2009) 239 CLR 175 Birrell v. Queensland Building Services Authority [2013] QCAT 56 Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541 Campaigntrack Victoria Pty Ltd v. The Chief Executive, Department of Justice and Attorney- General & Ors [2016] QCA 37 Creek v. Raine & Horne Mossman [2011] QCATA 226 Edmonds v. QBSA [2003] QBT 22 Fotia v. Queensland Building Services Authority [2013] QCAT 160 Harley v. Department of Justice and Attorney- General [2012] QCAT 620 Kehl v. Board of Professional Engineers of Queensland [2010] QCATA Mansoor & Rezaee v. Queensland Building Services Authority [2011] QCAT 53 Orlanski v. Queensland Building Services Authority [2011] QCAT 35 Perrett & Solomon v. Queensland Building Services Authority [2010] QCAT 84 R v. War Pensions Entitlement Appeal Tribunal (1933) 50 CLR 228 Ramke Constructions Pty Ltd v. Queensland Building Services Authority (No. 2) [2013] QCAT 575 Reiterer v. Queensland Building Services Authority [2007] QCCTB 177 Rezaee v. Queensland Building Services Authority [2012] QCAT 147 Young v. Queensland Building Services Authority [2014] QCAT 75 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Peter Fane represented himself RESPNDENT: Ms Amanda Shaw, solicitor, appeared for the Queensland Building and Construction Commission -- 3 of 14 -- 4 REASONS FOR DECISION What is this Application about? [1] Mr Peter Fane has applied to the Tribunal to review the Queensland Building and Construction Commission’s decision to decline his claim under the statutory insurance scheme, because he did not claim within time.1 [2] Mr Fane can only claim on his Home Warranty Insurance Policy for defects evident within the period of cover.2 He must also claim within three months of a ‘category 1’ defect becoming evident, or seven months from practical completion for a ‘category 2’ defect.3 What does the Tribunal do? [3] In a review application, the Tribunal’s purpose is to produce the ‘correct and preferable’ decision by way of a fresh hearing on the merits.4 This means that Mr Fane need not prove any error by the Commission in its original decision – the original decision is not presumed correct.5 Is the defect ‘category 1’ or ‘category 2’? [4] Mr Fane’s flooring has a drop of 12mm to 20mm over a length of 900mm between the kitchen and living room. Mr Fane believed this defect to be ‘category 1’ (structural or affecting health and safety or function), while the Commission classed it as ‘category 2’ (non-structural).6 [5] Mr Fane submitted that the defect is ‘category 1’ because the floor is distorted and its boards separated. He said that the difference in height between the supporting beam and adjacent supporting beams is a serious error affecting functional use of the building. He said that the deflection of at least 12mm is well outside the Australian Standard and in his opinion, the deflection can only be consistent with the Hyjoists being installed parallel to the rear wall below the height of the rear wall. [6] Mr Fane submitted that the defect is a safety hazard because he once stumbled on it and his two children, aged two and three have also fallen on it. He “presumed” this was because of the drop. 1 Letter QBCC to Peter Fane dated 6 June 2016. 2 Insurance Policy Conditions, Edition 8, effective 1 July 2009, Part 4.5. 3 Insurance Policy Conditions, Edition 8, effective 1 July 2009, Part 4.4. 4 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20. 5 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]. 6 Insurance Policy Conditions, Part 11: Definitions and interpretation. -- 4 of 14 -- 5 [7] On the day of the hearing, Mr Fane produced a report from James Harcourt of Odyssey Engineering Group that had not previously been filed with the Tribunal.7 The report did not assess the defect as ‘category 1’ or ‘category 2’ and noted that “a detailed observation and assessment was not possible”.8 [8] Moreover, Mr Harcourt did not attend to give evidence. The Tribunal must observe procedural fairness.9 A party is required to make their expert available for cross-examination by the other party. Relying upon Mr Harcourt’s report would be contrary to procedural fairness, as it would deny the Commission the opportunity to cross-examine Mr Harcourt.10 [9] Unfortunately for Mr Fane, he did not provide any independent expert evidence to support his opinion on whether the defect is ‘category 1’ or ‘category 2’. Although Mr Fane gave evidence why he thought the defect was ‘category 1’, he is not an independent expert but a party to the application and therefore has a vested interest in the outcome of the proceedings: his evidence is therefore neither independent nor objective.11 [10] Conversely, Mr David Adams, a Building Inspector with the Commission inspected the defect and prepared two reports.12 In Mr Adams’ opinion, the defect is ‘category 2’ because:  The hump has no sharp edges or lips to be a safety hazard;  The hump has a load bearing wall underneath;  The building has no evidence of foundation movement;  The hump is detrimental only to the overall appearance of the wall; and  The hump does not affect structural integrity of performance of the building.13 [11] Mr Adams is a licensed builder with tertiary qualifications in building and construction, construction management and project management and over 15 years’ experience in the building industry.14 7 Site Inspection Report dated 26 October 2016. 8 Site Inspection Report dated 26 October 2016. 9 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28(3)(a). 10 Olindaridge Pty Ltd & Anor v. Tracey & Anor [2014] QCATA 207 at [40] to [43]. 11 Ramke Constructions Pty Ltd v. Queensland Building Services Authority (No. 2) [2013] QCAT 575 at [39] to 40]. 12 Reports dated 29 January 2016 and 20 March 2016. 13 Affidavit of David Joseph Frank Adams sworn 22 December 2016, paragraphs 8, 13. 14 Affidavit of David Joseph Frank Adams sworn 22 December 2016, Exhibit 1. -- 5 of 14 -- 6 [12] Although Mr Adams is employed by the Commission who is also a party to the application, the Commission’s statutory role is simply to administer the Act and further its objects.15 Those objects include ensuring the maintenance of proper standards in the industry, achieving a reasonable balance between the interests of building contractors and consumers and providing remedies for defective building work.16 [13] Mr Adams’ evidence is based on reports prepared in furtherance of those objects, rather than any vested interest. Mr Adams has no personal interest in the outcome. [14] The definitions of ‘category 1’ and ‘category 2’ defects focus on the impact of a defect. ‘Category 1’ defects are more serious and focus on structural integrity, function and safety. Mr Adams measured and evaluated the hump and found no impact on structural integrity, function or safety. [15] Conversely, Mr Fane’s evidence appeared to focus on what the defect is and its cause, rather than its impact and how it affects structural integrity, function or safety. Mr Fane produced three videos showing the defect at various stages. None of them showed the defect as structural or affecting health and safety or function. Importantly, Mr Adams did not alter his opinion after viewing them.17 He maintained that the structure is intact and stable [16] I do not accept that the dip caused Mr Fane or his children to fall. Mr Fane “presumed” the dip caused each fall. Mr Fane’s children are at an age where they are prone to slips and falls. Moreover, during the hearing, Mr Adams explained that the defect is a “gentle curve” and although the dip is outside the tolerance guide, the design is within manufacturer specifications. He said that to be a hazard, the defect would need to be more than 20mm or have a moveable or dislodged board. I am not satisfied on the weight of evidence that the dip is a hazard. [17] In conducting a proceeding, the Tribunal must act fairly and according to the substantial merits of the case.18 It is not bound by the rules of evidence and may inform itself in any manner it considers appropriate.19 That does not mean, however, that the rules of evidence are to be ignored.20 Mr Fane did not possess specialised knowledge or independence and did not provide any expert evidence. In the absence of expert evidence of the defect affecting structural integrity, function or safety, I am not satisfied to adjust Mr Adams’ findings.21 15 Queensland Building and Construction Commission Act 1991 (Qld), s 7. 16 Queensland Building and Construction Commission Act 1991 (Qld), s 3. 17 Mr Fane recorded the final video the day before the hearing and only provided it to the Commission and the Tribunal on the day of the hearing, denying Mr Adams the opportunity to re-inspect and denying the Commission the opportunity to cross-examine based on a re-inspection. 18 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28(2). 19 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28(3)(b), (c). 20 R v. War Pensions Entitlement Appeal Tribunal (1933) 50 CLR 228 at 256, per Evatt J. 21 Birrell v. Queensland Building Services Authority [2013] QCAT 56 at [37]; Young v. -- 6 of 14 -- 7 [18] Based on Mr Adams’ evidence, I am satisfied that the hump is properly classed as a ‘category 2’ defect because:  The hump does not affect structural integrity because it is supported by a load bearing wall;  The hump does not affect function because the floor is within manufacturer specifications and still fit for its purpose as an integral part of human habitation and; and  The hump does not affect safety because it has a smooth, gradual gradient without edges or lips presenting as a tripping or falling risk. Is the defect within the period of cover? [19] Because the defect is ‘category 2’, the Commission is only liable to pay for loss where the defect first became evident within six months of practical completion.22 The house achieved practical completion on 3 October 2013.23 Mr Fane’s policy of insurance covered ‘category 2’ defects discoverable until 3 April 2014. [20] Initially, Mr Fane said he first noticed the defect on 15 January 2015.24 However, during the hearing Mr Fane qualified this by saying he first noticed a “problem” or “something wrong” on 15 January 2015, but did not identify it as a ‘defect’ until a builder, Mr McBain examined the cause some time later in June or July 2015. If that is correct, then the defect is some 14 to 15 months outside the period of cover. [21] Even on an analysis most favourable to Mr Fane, the earliest that the defect became evident was in January 2015, some nine months after the period of cover expired in April 2014. [22] Because the defect was not evident within the period of cover, the Commission is not liable under its policy of insurance with Mr Fane. Can the Tribunal extend the period of cover? [23] Part 4.4(b) of the insurance policy reads (my underlining): The QBCC is only liable to pay for loss under this Part for a category 2 defect where the defect first became evident within 6 months after the date of practical completion of the residential construction work.25 Queensland Building Services Authority [2014] QCAT 75 at [44]. 22 Insurance Policy Conditions, Part 4.4(b). 23 Certificate of Classification dated 3 October 2013. 24 Complaint Form dated 18 October 2015. 25 Insurance Policy Conditions, Part 4.4(b). -- 7 of 14 -- 8 [24] The language used is proscriptive and mandatory. No provision is made to extend time or exercise a discretion. The clause defines the limits of cover and is substantive rather than procedural,26 meaning that the Tribunal cannot extend time under section 61 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). [25] When considering the equivalent clauses under the policy at that time and the equivalent section of the Commercial and Consumer Tribunal Act 2003 (Qld), the then Commercial and Consumer Tribunal held: [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 [26] Unfortunately for Mr Fane, this means that the time limit is strict and the Tribunal cannot extend the period of cover: … the Policy provides that [QBCC] is only liable to pay for loss for a… defect where the defect ‘first became evident’… I accept the respondent’s argument that it is not possible to extend the period of insurance cover. It is a strict time frame which cannot be extended. [QBCC] is only liable to pay for losses for defects which became evident within the stated period.28 What is the ‘correct and preferable’ decision? [27] Because the ‘category 2’ defect became evident after the insurance policy expired and the Tribunal cannot extend the period of cover, the correct and preferable decision is to confirm the decision of the Queensland Building and Construction Commission dated 6 June 2016 to decline the claim under the statutory insurance scheme. 26 Unlike the provisions considered by the Court of Appeal in Campaigntrack Victoria Pty Ltd v. The Chief Executive, Department of Justice and Attorney-General & Ors [2016] QCA 37. 27 Reiterer v. Queensland Building Services Authority [2007] QCCTB 177 at [19] to [21]. 28 Orlanski v. Queensland Building Services Authority [2011] QCAT 35 at [58]. -- 8 of 14 -- 9 What if the defect was ‘category 1’? [28] Although I have found that the defect is ‘category 2’, because Mr Fane spent considerable time and effort preparing submissions focusing on the defect being ‘category 1’, I will also consider his application to review on the basis that the defect is ‘category 1’. Is the defect within the period of cover? [29] If the defect were ‘category 1’, the Commission would be liable where the defect became evident within six years and six months from the earlier of payment of the insurance premium or entering into the building contract.29 [30] Mr Fane entered into the building contract on 24 August 2009.30 Mr Fane’s policy of insurance would cover ‘category 1’ defects discoverable until 24 February 2016. This would have included the defect, whether it was first noticed by Mr Fane on 15 January 2015 or in June or July 2015. Did Mr Fane claim within time? [31] However, if a ‘category 1’ defect, Mr Fane had three months from when the defect became evident (in the opinion of the Commission) to make his claim.31 [32] Before the hearing, Mr Fane had maintained that he first noticed the defect on 15 January 2015. Specifically, in his complaint form dated 18 October 2015, when inserting when he first noticed the problem and describing the building work complaint item, Mr Fane wrote: 15/01/15 Floor has a drop between dining area and kitchen32 [33] Then, in his Statement of Evidence filed on 3 May 2016, Mr Fane said (my underlining): In early 2015 I noticed a distortion in the upper level floorboards running across the dining area. Over the next few months the distortion became worse.33 [34] However, during the hearing Mr Fane sought to qualify his earlier statements by saying that although he first noticed a “problem” or “something wrong” on 15 January 2015, he did not identify it as a ‘defect’ until a builder examined the cause some time later in June or July 2015. He said that he had thought the floorboards were infused with water and vinegar rather than a building defect. Mr Fane had not mentioned this in any of his earlier statements. 29 Insurance Policy Conditions, Part 4.4(a). 30 Contract between Peter Fane and ABD Developments Pty Ltd dated 24 August 2009. 31 Insurance Policy Conditions, Part 4.5(a). 32 Complaint dated 18 October 2015. 33 Statement of Evidence filed 3 May 2016. -- 9 of 14 -- 10 [35] I do not accept that Mr Fane did not identify the issue as a ‘defect’ until June or July 2015. Within the context of a claim under the Home Warranty Insurance Policy, I am satisfied that ‘defect’ means faulty or unsatisfactory building work.34 Before the hearing, Mr Fane consistently referred to early 2015 as when he first noticed a “drop” or “distortion”. During the hearing, he referred to having noticed a “buckling” in early 2015. These descriptions suggest a degree of fault consistent with building work rather than mere spilling of water and vinegar. They are consistent with a ‘defect’ being objectively evident. [36] On this basis, I find that the defect first became evident on 15 January 2015. This means that Mr Fane would have had until 15 April 2015 to make his claim had the defect been ‘category 1’. [37] However, Mr Fane did not make his complaint to the Commission until 18 October 2015. [38] This means that Mr Fane’s claim was six months outside the time limit to make a claim for a ‘category 1’ defect. Should the Tribunal extend time? Does Mr Fane have a reasonable explanation for the delay? [39] It is for Mr Fane to show why he should be allowed further time.35 In an email to the Commission dated 11 May 2016, Mr Fane relevantly said (my underlining): ... while I noticed the flooring was not level around January 2015, the step became more pronounced after that, and I asked a builder who was doing some other work for me as to what might be causing the floor to “buckle”. The builder who looked at the cause of the step in the floor was Mark McBain... and that occurred between 10 July when I returned from working in Indonesia and 22 August, when I returned to Indonesia. I can’t be any more specific with the date than that. It was he who advised that, in his opinion, the steel beams that supported the rear section of the house were at a different level to the timber framing that supported the front of the house. I was only able to complete my application to QBCC in October 2015 since I was working from overseas from 23 August until October. 36 [40] The time limit within which to claim is not arbitrary and should not be extended without a reasonable explanation.37 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.38 34 Insurance Policy Conditions, Part 11, definitions of ‘category 1 defect’ and ‘category 2 defect’. 35 Mansoor & Rezaee v. Queensland Building Services Authority [2011] QCAT 53 at [48]. 36 Email Peter Fane to David Adams dated 11 May 2016 at 8.55am. 37 Mansoor & Rezaee v. Queensland Building Services Authority [2011] QCAT 53 at [46]. 38 Review of the Limitation of Actions Act 1974 (Qld), Report No. 53, Queensland Law -- 10 of 14 -- 11 [41] The Commission has statutory responsibilities to ensure proper industry standards39 and achieve a reasonable balance between the interests of builders and consumers.40 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.41 [42] Within this context, Mr Fane has an obligation to act in his own best interests as a home owner.42 It was not in Mr Fane’s best interests to wait until the step became “more pronounced” before acting. By doing so, he failed to mitigate his loss and unnecessarily delayed early remedial action by the Commission. Although no evidence was adduced of any cost increase, it is reasonable to infer that a defect becoming “more pronounced” requires more remedial work, costing more. [43] Mr Fane was vague about when he contacted Mr McBain and when Mr McBain informed him of the cause. He did not call Mr McBain to give evidence that may have clarified these dates. The Tribunal therefore cannot be satisfied that Mr Fane contacted Mr McBain at the first available opportunity upon returning from overseas. [44] Mr Fane said the complaint form required supporting documents including his property description and the building contract which were in boxes in his shed, taking him at least “a day or two” to find. However, Mr Fane was vague on whether he had time to locate the documents between Mr McBain inspecting the defect in July 2015 or August 2015 and his returning overseas in August 2015. [45] There is no evidence that Mr Fane attempted to locate the documents when the defect first became evident in January 2015, or upon his first return from overseas in June or July 2015, or even before he went away again in August 2015. Mr Fane only attempted to locate them upon his second return in October 2015. [46] The vagueness of the evidence surrounding the dates of Mr Fane’s return from overseas, when he contacted Mr McBain, when Mr McBain inspected the defect, and whether Mr Fane had time before returning overseas in August 2015 to complete the complaint form, means that the Tribunal cannot be satisfied that Mr McBain acted reasonably and in his own best interests.43 Reform Commission September 1998, p 8, citing Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541, per McHugh J at 553. 39 Queensland Building and Construction Commission Act 1991 (Qld), s 3(a)(i). 40 Queensland Building and Construction Commission Act 1991 (Qld), s 3(a)(ii). 41 Edmonds v. QBSA [2003] QBT 22 at [76]. 42 Creek v. Raine & Horne Mossman [2011] QCATA 226 at [13], citing with approval Aon Risk Services Australia Ltd v. Australian National University (2009) 239 CLR 175, 217. 43 Mansoor & Rezaee v. Queensland Building Services Authority [2011] QCAT 53 at [49]. -- 11 of 14 -- 12 [47] Mr Fane had already provided his building contract to the Commission in a previous complaint. He could have obtained his property description from a Land Titles Office search. The means of the Commission’s knowledge of the defect was within Mr Fane’s control and he was therefore obliged to notify the Commission promptly44 - well before October 2015. [48] Moreover, it was not in Mr Fane’s best interests to wait for a builder to examine the cause of the defect before completing the complaint. The complaint form is five pages in length and does not require technical expertise to complete, with a mainly tick box format and requiring details that would or should reasonably have been within Mr Fane’s knowledge since 15 January 2015.45 It did not require a home owner to specify a cause. [49] Being overseas did not obviate Mr Fane’s obligations as a responsible homeowner who has discovered a defect or his commensurate obligations under his statutory home warranty insurance policy, as the Tribunal has previously noted (my underlining): Questions of prejudice are significant in such matters, however, they are not totally determinative. Whilst the builder and the Authority certainly have obligations, the homeowners do also. The homeowners in this case abrogated any responsibility to examine or inspect the premises to see whether or not there were any Category 2 type defects, with respect to which, they should have been aware, they were required to take steps within 6 months of the date of practical completion. They have offered no reasonable excuse or explanation for not doing so, save and except for the fact that they had travelled overseas. There can of course be no complaint or criticism of the applicants simply for the fact that they had travelled overseas. However, they were in the process of building a new house and had responsibilities and obligations as indeed did the builder. In all the circumstances, whilst I accept that the Authority has not suffered any significant prejudice by reason of the delay… I think that weighing the actions of the homeowners as I detailed above, this is a case where it would not be appropriate to exercise the discretion to extend the period for giving notice with respect to category 2 defects.46 [50] Although the learned Member was considering the time limit for a ‘category 2’ defect, the reasoning is as apposite to the time limit for a ‘category 1 defect. Although Mr Fane was not “in the process of building a new house”, he was a homeowner who had discovered a defect. 44 Perrett & Solomon v. Queensland Building Services Authority [2010] QCAT 84 at [13]. 45 Complaint dated 18 October 2015. 46 Ackermann v. Queensland Building Services Authority [2006] QCCTB 4 at [77] to [78]. -- 12 of 14 -- 13 [51] Mr Fane understood the claims process from previous complaints to the Commission – he should reasonably have known the time limits and was on notice to be conscientious about making a claim. Mr Fane could and should reasonably have notified the Commission on or around when he first discovered the defect on 15 January 2015 and before he went overseas - or at least at the first opportunity upon his return. The evidence does not show that he did. [52] Mr Fane did not – before he went or while he was overseas – make enquiries with the Commission about a possible claim or whether he could submit what he had. [53] In these circumstances, the Tribunal cannot find a reasonable explanation for the delay in making the claim had the defect been ‘category 1’. Extending the time limit in the absence of a reasonable explanation would render its operation nugatory and undermine the scheme as a whole. [54] Therefore, even if the defect were ‘category 1’, the absence of a reasonable explanation for the delay in making the claim is sufficient for the Tribunal not to extend time.47 Did the delay prejudice the Commission? [55] An issue about prejudice does not arise if there is no excuse for the delay, as I have found here.48 [56] Regardless, by waiting for the defect to become more pronounced before acting, Mr Fane did not mitigate his loss and thereby prejudiced the Commission by increasing its potential liability: the Commission was not allowed to address a deteriorating problem at an early stage.49 [57] Therefore, even if the defect were ‘category 1’, the prejudice to the Commission from the further damage caused by Mr Fane’s delay also weighs against the Tribunal exercising its discretion to extend time. What is the ‘correct and preferable’ decision if the defect were ‘category 1’? [58] Even if the defect were ‘category 1’, because Mr Fane did not claim within time for a ‘category 1’ defect and did not provide an adequate explanation for the delay that prejudiced the Commission, it is not appropriate for the Tribunal to exercise its discretion to extend time. 47 Mansoor & Rezaee v. Queensland Building Services Authority [2011] QCAT 53 at [54] to [55], citing with approval Ackermann v. Queensland Building Services Authority [2006] QCCTB 4. 48 Rezaee v. Queensland Building Services Authority [2012] QCAT 147 at [32]. 49 Reiterer v. Queensland Building Services Authority [2007] QCCTB 177 at [29]; Fotia v. Queensland Building Services Authority [2013] QCAT 160 at [8]. -- 13 of 14 -- 14 [59] Therefore, even if the defect were ‘category 1’, the correct and preferable decision is to confirm the decision of the Queensland Building and Construction Commission dated 6 June 2016 to decline the claim under the statutory insurance scheme. What is the appropriate Order? [60] The appropriate Order is that the decision of the Queensland Building and Construction Commission dated 6 June 2016 to decline the claim under the statutory insurance scheme is confirmed. -- 14 of 14 --