Duke Building Pty Ltd v Queensland Building and Construction Commission [2014] QCAT 190

CITATION: Duke Building Pty Ltd v Queensland Building and Construction Commission [2014] QCAT 190 PARTIES: Duke Building Pty Ltd (Applicant) v Queensland Building and Construction Commission (Respondent) APPLICATION NUMBER: GAR154-13 MATTER TYPE: General administrative review matters HEARING DATE: 31 January 2014 HEARD AT: Brisbane DECISION OF: Senior Member Oliver DELIVERED ON: 15 May 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The decision of the respondent dated 3 April 2013 is set aside. CATCHWORDS: DIRECTION TO RECTIFY – WHETHER UNFAIR – where Direction to Rectify unable to be complied with within the 28 day period – where delay on the part of the homeowner in obtaining certified plans – whether Direction to Rectify voidable – whether unfair in the circumstances. Queensland Building and Construction Commission Act 1991 (Qld) s 72 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 20 McNab Constructions Australia Pty Ltd v Queensland Building Services Authority [2013] QSC 057 Camill Constructions Pty Ltd v Queensland Building Services Authority [2013] QSC 275 -- 1 of 6 -- 2 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Hughes, director of the applicant RESPONDENT: Ms Joyce, solicitor of the respondents legal division. REASONS FOR DECISION Introduction [1] In 2011, Duke Building Pty Ltd and Sharna Wright entered into a contract for renovation work to be carried out on her house at Karragata Court Tallebudgera for a contract price of $145,500. For the purposes of carrying out the work, Ms Wright had plans for the work drawn up but they were not certified. As Mr Hughes, the director of the applicant, and Ms Wright were friends, the lack of certification was of no great consequence. There was sufficient detail in the plans for the work to be carried out. Unfortunately, before the work was complete Mr Hughes and Ms Wright fell into dispute and on 2 July 2011, the applicant stopped all work and left the site. At that point, there was a total of $9,000 worth in variations and Ms Wright still owed the applicant $10,550 of the contract price.1 [2] Ms Wright was unhappy about the state of the works so she lodged a complaint with the Queensland Building and Construction Commission about defective and incomplete building work. The Commission arranged for one of its building inspectors, Mr Luckan, to carry out an inspection of the work and as a consequence, a Direction to Rectify was issued to Mr Hughes. Since the contract for the building work was with the applicant, and it was the responsibility entity, the direction issued to Mr Hughes was withdrawn and Direction to Rectify 38673 was issued to the applicant on 3 April 2013. The applicant then applied to the Tribunal to review the decision to issue the Direction to Rectify. [3] The Tribunal’s function on a review application under s 20 of the Queensland Civil and Administrative Tribunal Act is to produce the correct and preferable decision by way of a rehearing on the merits. Further History [4] Between the applicant doing the work for Ms Wright and the issuing of the Direction to Rectify, Mr Hughes, who was the nominee licensee for the applicant relinquished his building licence. The consequence of relinquishing his building license was that the applicant was not in a position to comply with the Direction to Rectify. Another difficulty with compliance was that Ms Wright did not have a certified copy of the plans so even if the applicant wanted to engage another registered builder to 1 Statement of Reasons page 10. -- 2 of 6 -- 3 attend to rectification and completion, the work could not be done due to the lack of certified plans. [5] This case highlights, again, the difficulties that can arise when personal relationships are involved. Mr and Mrs Hughes were good friends of Ms Wright and therefore Mr Hughes agreed to carry out the work in accordance with plans provided by her. The fact that they were not certified was of no real concern to him at the time the works commenced. However, after the falling out between them as friends, and the involvement of the Commission, the fact that the plans weren’t certified became problematic. [6] The applicant was not able to comply with the direction because it did not have a valid licence, it could not engage a registered builder to do so, and the Commission could not enforce the direction to rectify because Ms Wright would not get the plans certified. This was despite the review application being on foot. The lack of certification also stalled processing the review application in the Tribunal. Finally, in December 2013 Ms Wright produced a certified set of plans. The plans have noted on them ‘ND Wright – Certifier # A54481’ with the stamped approval number of 10263.2 [7] At the hearing on 31 January 2014, the applicant did not lead any evidence addressing the defective or incomplete building works. Therefore, the Commission’s evidence, save for the cross-examination of Mr Luckan, was uncontested by the applicant. Although Mr Hughes filed a witness statement on the morning of the hearing, it did not go to the substance of the report prepared by Mr Luckan but mainly addressed the differences in the certified plans to those from which the applicant worked doing the renovation. [8] Mr Hughes made the point that the time between the signing of the original contact, 16 February 2011 and receipt of the certified plans on 17 December 2013 a period of 2 years and 10 months had lapsed. In the meantime, Duke Building was not able to do any further work on the building not only because the contract had been lawfully terminated by Ms Wright,3 but also because the plans are not the same. He says, and this is not challenged, that the changes to the plans that were included for the purposes of certification would result in extra costs being incurred over and above the original contract price. This evidence was not challenged. The Direction to Rectify [9] With respect to the Direction to Rectify, during the course of the hearing Mr Luckan conceded that items 2, 3 and 4 of the Direction relating to the toilet was a product defect and not building work. In respect of item 5, that is the front gate, side gate and rear gates that have been installed back-to- 2 Exhibit 4. 3 See Reasons in GAR260-12. -- 3 of 6 -- 4 front, I accept that this was done on the instruction of the home owners to ensure child safety by ensuring the horizontal bracing is on the outside. [10] Item 6 relates to the existing building and was not part of the original building work. Mr Luckan conceded this, and therefore that item, would not be subject to the Direction. It follows that the Commission decision in respect of these items would be set aside in any event. [11] In respect of items 7, 8, 9, 10 and 11, the applicant concedes that this work is defective and Mr Hughes would have attended to this had certified plans been available at the time the Direction was issued. He says it would now be unfair to make the applicant comply because of the amended certified plans and delay. I would make the observation, that It is unclear why the owner has not attended to these matters in the intervening period. [12] In the end, the dispute about the direction to rectify came down to items as follows: 7. The installation of the roofing on the building has been installed in a manner that shows numerous defects to be visible therefore adversely affecting the structural integrity of the roofing and producing an extremely unsightly appearance. The following defects were evident at the time of the BSA inspection: Sarking visible in valley gutter. The roofing sheets were cut too short, approximately in line with the ridge in the valley iron. The anticon blanket was exposed in the valley. The ridge in the valley iron was exposed allowing water to track over the ridge. The sheet overhang into the valley gutter was approximately 60mm. Sections of roof not screwed down. The last 2 rows roofing screws in the roofing on the RH side of the front valley has not be installed. Several ridge and hip roofing screws have not been installed. The last row of roofing screws above the eves for the entire length of the back of the building has not been installed. Ridge capping not scribed. Ridge and hip capping toward the centre and rear of the roof have not been scribed to the sheet profile to match the remainder of the roof. Ridge and hip capping throughout the whole roof have not been fastened to the roof. Section of roof not completed. There was a last piece of cut sheet missing from under the hip flashing at the rear LH corner of the dwelling. -- 4 of 6 -- 5 Valley gutter above baby room is too narrow: The sheet overhang throughout the whole valley above the babys room is inconsistent in that the sheets from both sides meet at the centre completely covering the valley near the ridge end. From midway to the eaves the gap between the ends of the sheets was approximately 20 mm. 8. Water penetration is occurring into the air conditioning isolation switch at the rear LH side of the building causing a danger to the occupants of the building. (Pertains to complaint item 28a) 9. The shower rose plumbing connection to the wall in the en-suite shower has not been installed in accordance with the manufacturers? Installation instructions in that water seepage is occurring at the interface between the shower rose and the male pipe connection on the shower wall. (Pertains to complaint item 35) 10. The waste water outlet pipe from the wash basin in the en-suite vanity has a leak is causing damage to the surrounding areas including stains on the vanity cupboard floor. (Pertains to complaint item 36) 11. The waste water outlet pipe from the wash basin in the main bathroom vanity has a leak is causing damage to the surrounding areas including stains on the vanity cupboard floor. (Pertains to complaint item 37) Validity of the Direction to Rectify [13] The applicant also raised the issue of the validity of the direction to rectify. That comes about as a consequence of the decision of the Supreme Court in McNab Constructions Australia Pty Ltd v Queensland Building Services Authority4 because the applicant was never in a position to be able to comply with the direction to rectify in the time stated of 28 days from receipt of the Direction. In McNab Justice Dalton said that where a builder was not given the statutory minimum time under s 72 of the then Queensland Building Services Authority Act, at least 28 days, to carry out rectification work the direction to rectify was void. [14] In another case, Camill Constructions Pty Ltd v Queensland Building Services Authority5 a similar circumstance arose to McNab where the builder was not given the 28 day period to carry out the rectification work. However, unlike McNab, Camill Constructions applied for an extension of time to comply with the direction to rectify and the Authority extended the date for the work to be completed to 28 September 2011, as opposed to the 28 days from the date of the direction to rectify of 3 August 2011. In that case, the Court held that the direction, when made, could have been given in a way that complied with the Act that is, sent by facsimile or 4 [2013] QSC 057. 5 [2013] QSC 275. -- 5 of 6 -- 6 hand delivered. In this case it was posted. The effect of it being posted, the Court held, rendered the direction to rectify ‘voidable subject to the power of the Court to declare it void at a later time’. The Court relied on s 24AA of the Acts Interpretation Act 1954 (Qld) which permitted amendment to the instrument. [15] Here, the Direction to Rectify when issued, was incapable of compliance. Consistent with Camill Constructions, it seems to me that the Direction was voidable however, the applicant made no attempt to seek a declaration that the Direction was void. Upon the applicant being supplied with the compliant plans the question then is, did the time for compliance start to run from the receipt of those plans? I think not. In my view, the Direction to Rectify is voidable however, the time for its compliance is passed and no new time for its compliance has been fixed by the Commission nor has the applicant sought and extension of time to comply. Delay [16] Section 72(14) of the Queensland Building and Construction Commission Act 1991 (Qld) provides: The commission is not required to give a direction under this section to a person who carried out building work for the rectification of the building work if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction. Example for subsection (14)— The commission might decide not to give a direction for the rectification of building work because of the amount payable but unpaid under the contract for carrying out the building work. [17] The delay was occasioned by Ms Wright in not producing certified plans, which really deprived the applicant of an opportunity to comply with the Direction in a timely way. In addition, the certified plans are different to the ones worked on by the applicant. The statement of reasons also discloses that the applicant is owed money under the building contract. Whether the applicant has an entitlement to that money remains to be decided because this Tribunal has also found that the homeowners lawfully terminated the contract. [18] Not only is there money owed under the contract but there is also monies owed for variations. I am unsure as to whether or not the applicant has any entitlement to that by reason of the provisions in the Domestic Building Contracts Act 2000 (Qld). In any event, the items of building work requiring rectification are relatively minor, and it would seem that in all the circumstances Ms Wright has not been put to any real disadvantage. [19] For these reasons, I consider it would be unfair under s 72 (14) to now make a decision confirming the Commission’s decision. Therefore, in the circumstances of this case I propose to set aside the Commission’s decision. -- 6 of 6 --