Barry & Anor v Queensland Building and Construction Commission [2015] QSC 50

SUPREME COURT OF QUEENSLAND CITATION: Barry & Anor v Queensland Building and Construction Commission [2015] QSC 50 PARTIES: TERRENCE RALPH BARRY (first applicant) TERRY BARRY BUILDERS PTY LTD ACN 115 050 998 (second applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISION (respondent) FILE NO: SC No 915 of 2015 DIVISION: Trial Division PROCEEDING: Application DELIVERED ON: 13 March 2015 DELIVERED AT: Brisbane HEARING DATE: 4 March 2015 JUDGE: Flanagan J ORDER: 1. Application dismissed. 2. I will hear the parties as to costs. CATCHWORDS: PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – where the second applicant was contracted to construct an outdoor deck and extension to an existing deck – where the majority of building work was completed on 18 December 2007, further building work was completed on 21 May 2008 and the final inspection certificate of the building work was issued on 26 August 2008 – where a direction was issued by the respondent to the second applicant to rectify defective or incomplete building work on 22 August 2014 – where the direction was required to be given within 6 years and 3 months after the “building work to which the direction relates” was completed pursuant to s 72(8) of the Queensland Building Construction Commission Act 1991 (Qld) – whether a direction issued outside 6 years and 3 months is invalid – whether the relevant date for s 72(8) should be identified by reference to the completion date of the defective work identified in the direction or the completion date of the whole of the building work, including the issuing of a final -- 1 of 11 -- 2 inspection certificate Queensland Building Construction Commission Act 1991 (Qld), s 72(1), s 72(2), s 72(8) Guitar Buildings v Queensland Building Services Authority & Meznaric [2013] QCATA 260, distinguished Lange v Queensland Building Services Authority [2012] 2 Qd R 457; [2011] QCA 58, cited O’Grady v Northern Queensland Co Limited (1990) 169 CLR 356, 374; [1990] HCA 16, cited Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, cited Torea Pty Ltd v Queensland Building Services Authority [2013] QCAT 004, not followed COUNSEL: M T Labone for the applicants T J Mitchell (sol) for the respondent SOLICITORS: BCCS Law for the applicants CBP Lawyers for the respondent [1] By originating application, the first and second applicants seek a declaration that a Direction to Rectify and/or Complete Number 40384 (“the Direction”) is void. [2] The Direction was given by the respondent, Queensland Building and Construction Commission (“QBCC”), on 22 August 2014. The Direction was given to the second applicant, Terry Barry Builders Pty Ltd, of which the first applicant is a director. [3] The Direction relevantly provides: “You are directed to rectify the following defective or incomplete building work within the Time Period for Completion. 1. The inspection found that a significant percentage of the timber joists to the newly constructed deck area are not fit for purpose in that the timber joists do not comply with the legislation and standards prevailing at the time of construction due to excessive untreated sapwood to the top edge of joists resulting in premature surface ability failure issues with the deck framing, including the safety hazard associated with nails becoming loose and raised. Pertains to items 1-4 on the QBCC Complaint Form.” [4] The Direction was given by the QBCC pursuant to the Queensland Building Construction Commission Act 1991 (Qld) (“QBCC Act”). The parties agreed that the -- 2 of 11 -- 3 relevant reprint of the QBCC Act was that which was current at the time the Direction was given on 22 August 2014. This is reprint “[c]urrent as at 1 July 2014”. [5] The relevant provision permitting the giving of a direction pursuant to the QBCC Act is s 72(1) which provides: “(1) If the commission is of the opinion that building work is defective or incomplete, the commission may direct the person who carried out the building work to rectify the building work within the period stated in the direction.” [6] Section 72(8) of the QBCC Act imposes a time limit for the giving of such a direction: “(8) A direction cannot be given under this section more than 6 years and 3 months after the building work to which the direction relates was completed or left in an incomplete state unless the tribunal is satisfied, on application by the commission, that there is in the circumstances of a particular case sufficient reason for extending the time for giving a direction and extends the time accordingly.” [7] The validity of the Direction is challenged on the basis that it was given out of time. This requires the court to determine what constitutes “the building work to which the direction relates” and when that work was completed. The Direction will be out of time if “the building work to which the direction relates” was completed before 22 May 2008. Background [8] The second applicant is a builder licensed under the QBCC Act. In or about October 2007 the first applicant was contacted by the owners of a property at Thornlands to price the construction of a timber outdoor deck and extension to an existing deck at the property. [9] On 16 October 2007 the second applicant provided the owners with a sketch plan for the works and a quotation to undertake the works. Subsequently on 2 November 2007 the owners entered into a contract with the second applicant for the construction of the outdoor deck and extension to the existing deck. The contract included a provision of $1,900 for fitting timber slats under the deck. The timber slats are not shown on the sketch plan or the approved plans. -- 3 of 11 -- 4 [10] On 10 December 2007 the plans were approved. On or about 13 December 2007 the owners requested that the fitting of the timber slats under the deck be delayed to allow the owners to install a concrete boundary. On 18 December 2007 the second applicant completed the construction of the timber outdoor deck and the extension to the existing deck. [11] On 21 December 2007 the owners paid the second applicant $10,500 for the works which had been completed, retaining $1,900 for the slats under the deck. The slats were installed by the second applicant on 21 May 2008. On 30 June 2008 the second applicant received a cheque from the owners for $1,900 for fitting the timber slats under the deck. [12] In August 2008 the owners requested that the second applicant arrange for the final inspection. The completed deck was inspected on 21 August 2008. A final inspection certificate for the deck was issued on 26 August 2008.1 [13] Whilst the parties agree that a final inspection certificate in Form 21 was issued by a private building certifier on 26 August 2008 in relation to the deck, the first applicant alleges that the delay in obtaining the final inspection certificate was entirely due to the need for the owners to install glass balustrade. The separate installation of glass balustrading was however always contemplated.2 [14] As I have already noted, the Direction will be out of time if the building work to which the Direction relates was completed before 22 May 2008. The only events that took place after 22 May 2008 was the receipt by the second applicant of the cheque for $1,900 as payment for the fitting of the timber slats under the deck and the final inspection and issuing of the final inspection certificate on 26 August 2008. The physical construction of the deck was completed by the second applicant on 18 December 2007.3 The proper construction of s 72(8) of the QBCC Act 1 Affidavit of Terrence Ralph Barry sworn 26 February 2015, [27]; exhibit MH-10 to the affidavit of Martyna Ewa Hinchliffe sworn 3 March 2015. 2 The “Approved Plans”, exhibit TRB-3 to the affidavit of Terrence Ralph Barry sworn 26 February 2015, contains the following notation, “Future glass balustrade (by others)”. 3 Affidavit of Terrence Ralph Barry sworn 26 February 2015, [15]. -- 4 of 11 -- 5 [15] Section 72 falls within Part 6 of the QBCC Act. Part 6 deals with the rectification of building work. One of the objects of the QBCC Act is “to provide remedies for defective building work”.4 Part 6 seeks to achieve this object by various means including for example, dispute resolution5 and the power to require rectification of the building work6 (including penal provisions for the failure to comply with such a notice).7 [16] In seeking to achieve the object of providing remedies for defective building work the purpose of Part 6 is consumer protection.8 [17] The respondent’s power to give a direction to rectify is contained in s 72(1). The respondent has a discretion whether to give such a direction. Section 72(2) identifies certain matters that the respondent may take into consideration in exercising that discretion. The exercise of the discretion under s 72(1) is conditioned on the respondent forming the relevant opinion that building work is defective or incomplete. In the present case the respondent determined that the building work was defective, both from a site inspection by one of its own building inspectors and a subsequent report from Timber Queensland.9 The Timber Queensland report dated 4 August 2014 identified nine joists and one bearer which were the subject of decay and concluded:10 “From the site inspection and assessment, it is considered that a significant percentage of the timber joists do not comply with the legislation and standards prevailing at the time of construction due to excessive untreated sapwood to the top edge of joists. This coupled with splits that have occurred in the tops of joists has resulted in premature serviceability failure issues with the deck framing, including the safety hazard associated with nails becoming loose and raised.” [18] By use of the word “cannot” in s 72(8), the legislature has imposed a mandatory time limit on the giving of a direction to rectify. A failure to comply with such a direction has serious consequences which includes the committing of an offence under s 72(10). It follows that the giving of a direction out of time would constitute a breach of a 4 Queensland Building and Construction Commission Act 1991 (Qld) s 3(b). 5 Queensland Building and Construction Commission Act 1991 (Qld) s 71A(4). 6 Queensland Building and Construction Commission Act 1991 (Qld) s 72. 7 Queensland Building and Construction Commission Act 1991 (Qld) s 72(10). 8 See Lange v Queensland Building Services Authority [2012] 2 Qd R 457; [2011] QCA 58, [30] (Margaret Wilson AJA). 9 Affidavit of Geoffery James Barrett sworn 3 March 2015, [5], [8]. 10 Exhibit GB-2 to the affidavit of Geoffrey James Barrett sworn 3 March 2015, 9. -- 5 of 11 -- 6 mandatory condition regulating the exercise of the respondent’s statutory power to give a direction.11 A direction to rectify given by the respondent out of time would therefore be void and of no effect. [19] The issue for determination is whether the Direction was given more than 6 years and 3 months after the “building work” to which the Direction relates was completed. The word “completed” is not defined in the QBCC Act. It therefore takes its ordinary meaning. The Macquarie Dictionary (5th edition) defines the word “completed” as: “ 5. To make complete; make whole or entire. 6. To make perfect. 7. To bring to an end; finish; fulfil.” [20] The term “building work” in s 72(8) is a defined term within the QBCC Act:12 “building work means— (a) the erection or construction of a building; or (b) the renovation, alteration, extension, improvement or repair of a building; or (c) the provision of lighting, heating, ventilation, airconditioning, water supply, sewerage or drainage in connection with a building; or (e) any site work (including the construction of retaining structures) related to work of a kind referred to above; or (f) the preparation of plans or specifications for the performance of building work; or (fa) contract administration carried out by a person in relation to the construction of a building designed by the person; or (g) fire protection work; or (h) carrying out site testing and classification in preparation for the erection or construction of a building on the site; or (i) carrying out a completed building inspection; or (j) the inspection or investigation of a building, and the provision of advice or a report, for the following – (i) termite management systems for the building; (ii) termite infestation in the building; 11 See generally Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, [91], [92] (McHugh, Gummow, Kirby and Hayne JJ). 12 Queensland Building and Construction Commission Act 1991 (Qld) sch 2. -- 6 of 11 -- 7 but does not include work of a kind excluded by regulation from the ambit of this definition.” [21] The term “contract administration” in subsection (fa) of the definition of “building work” is also a defined term:13 “contract administration, in relation to building work designed by a person, includes the following— (a) preparing tender documentation and calling and selecting tenders; (b) preparing, or helping the person’s clients with the preparation of, contracts; (c) preparing additional documentation for the person’s clients or building contractors; (d) arranging and conducting on-site meetings and inspections; (e) arranging progress payments; (f) arranging for certificates, including certificates from a local government, to be issued; (g) providing advice and help to the person’s clients including during the maintenance period allowed under a contract.” [22] In the present case the respondent did not make any application, pursuant to s 72(8), to the tribunal for any extension of time. The question is when was the “building work” to which the Direction relates completed? [23] The applicant, relying on a QCAT decision in Torea Pty Ltd v Queensland Building Services Authority,14 submitted that the “building work to which the direction relates” should be identified by reference to the defective work identified in the Direction. I have set out the Direction above. The applicant’s submission would limit the “building work to which the direction relates” to “the timber joists to the newly constructed deck area”. The applicant relied on the following passage from Torea Pty Ltd v Queensland Building Services Authority: “[21] In my view it is not correct to determine the completion date on which all of the building work was completed. That is, it is not correct to have regard to dates of certification for a building or dates of practical completion for a building or dates of certification for fire requirements. To do so would be to ignore the words 13 Queensland Building and Construction Commission Act 1991 (Qld) sch 2. 14 [2013] QCAT 004. -- 7 of 11 -- 8 which qualify the building work as they are used in s 72(8) of the Act.” [24] To the extent that the applicant relies on the decision in Torea Pty Ltd v Queensland Building Services Authority, I am of the view that the case was wrongly decided. As I have already observed, the term “building work” is a defined term in the QBCC Act. Section 32A of the Acts Interpretation Act 1954 (Qld) provides that definitions in or applicable to an Act apply except so far as the context or subject matter otherwise indicates or requires. The words “the building work to which the direction relates” does not indicate that “building work” is to have other than its defined meaning. The defined meaning of “building work” includes not just the physical construction of the deck but also arranging for a certificate to be issued. The legislature, had it intended to limit “the building work to which the direction relates” to the defective building work identified in the direction, could have used other terms such as “the building work referred to in the direction” or “the building work the direction requires to be rectified” rather than the broader term “the building work to which the direction relates”. [25] The word “relates” in s 72(8) is a word of broad import.15 The use of the word “relates” does nothing more than simply identify the whole of the building work that is to be completed. [26] The ordinary meaning of the word “completed” involves an element of finality and an identifiable endpoint from which the time limit begins.16 If the applicant’s construction of s 72(8) was accepted this would require building work to be divided into discrete components before an analysis of when each component was completed could be undertaken. This may be neither practical nor possible in many circumstances.17 The factual inquiry in relation to each requirement to rectify would involve identifying when the specific defective work was completed, rather than when the building work as a whole was completed. 15 O’Grady v Northern Queensland Co Limited (1990) 169 CLR 356, 374; [1990] HCA 16 (Toohey and Gaudron JJ) (the words “in relation to”); and see generally D S Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7th ed, 2011), [12.7]. 16 Respondent’s outline of submissions dated 4 March 2015, [34]. 17 Respondent’s outline of submissions dated 4 March 2015, [35]. -- 8 of 11 -- 9 [27] A construction of s 72(8) which does not depart from the defined meaning of “building work” is also generally consistent with the consumer protection purpose of Part 6 of the QBCC Act. [28] The applicant also referred to another QCAT decision, Guitar Buildings v Queensland Building Services Authority & Meznaric.18 In that case the Appeals Tribunal considered s 4C of the Queensland Building Services Authority Act 1991 (Qld). That provision is in similar terms to s 4C of the QBCC Act: “ 4C Certain building contractors not bound Parts 5 and 6 do not bind a building contractor to the extent that the business carried on by the building contractor consists of or includes— (a) carrying out completed building inspections; or (b) contract administration carried out in relation to work designed by the building contractor.” [29] The Appeals Tribunal concluded that s 4C excluded certain works from the operation of s 72(1) but it was limited to contract administration carried out in relation to building work designed by the building contractor and not in relation to the construction of a building.19 Section 4C, however, has a completely different operation to s 72(8). Section 72(8) stipulates a time limitation for the giving of a direction to rectify. That time limitation for defective building work runs from when the building work is completed. Building work for that purpose includes contract administration. All that s 4C of the Queensland Building Services Authority Act 1991 (Qld) seeks to achieve is to identify that carrying out completed building inspections and contract administration carried out in relation to building work designed by the building contractor cannot be the subject of a direction to rectify. Section 4C is irrelevant to any inquiry as to when the building work to which the direction relates was completed. Consideration [30] In applying the statutory definition of “building work”, which includes contract administration, and in determining when the building work was completed, the starting 18 [2013] QCATA 260. 19 Guitar Buildings v Queensland Building Services Authority & Meznaric [2013] QCATA 260, [18]. -- 9 of 11 -- 10 point should be the relevant building contract. The present building contract identified the date for practical completion as 20 December 2007.20 The contract contained a brief description of the works in Item 1, which was the construction of a deck in accordance with a previous quotation and sketch provided on 16 October 2007, and also included the replacement of existing decking and the provision of timber slats under the deck. Pursuant to Item 15 the second applicant as the builder was the party responsible for obtaining plan approvals. A development permit for the building work was issued on 10 December 2007 and carried with it a requirement for a mandatory inspection being a final inspection. The development permit was issued in accordance with drawings completed by the second applicant.21 The development permit was issued under the hand of Alister Marr, an independent building certifier. [31] In August 2008, one of the owners requested that the second applicant arrange for the final inspection. Mr Marr came to the owners’ property to inspect the completed deck on 21 August 2008. It was the second applicant who organised for Mr Marr to carry out the inspection and to issue the final inspection certificate. This certificate was received by the owners from the second applicant. The final inspection certificate Form 21 is dated 26 August 2008 and was provided together with the drawings for the deck which had been prepared by the second applicant. [32] The provision of a final inspection certificate falls within the definition of “building work” which means, among other things, contract administration. Contract administration includes arranging for certificates. The building work was therefore not completed until the second applicant arranged the final inspection and issued the final inspection certificate on or about 26 August 2008. Time therefore commenced to run from 26 August 2008. It follows that the respondent gave the Direction within time. Conclusion [33] The term “building work” in s 72(8) of the QBCC Act carries its defined meaning. The “building works to which the direction relates” was completed on the issuing of the final inspection certificate on or about 26 August 2008. The Direction given by the 20 Exhibit TRB-2, item 4, to the affidavit of Terrence Ralph Barry sworn 26 February 2015. 21 Exhibit TRB-3 to the affidavit of Terrence Ralph Barry sworn 26 February 2015. -- 10 of 11 -- 11 respondent was therefore within time for the purposes of s 72(8). I decline to grant the declaratory relief sought by the applicants and otherwise dismiss the applicants’ originating application. [34] I will hear the parties as to costs. -- 11 of 11 --