Canchester Pty Ltd v Queensland Building Services Authority [2013] QCAT 601

CITATION: Canchester Pty Ltd v Queensland Building Services Authority [2013] QCAT 601 PARTIES: Canchester Pty Ltd (Applicant) v Queensland Building Services Authority (Respondent) APPLICATION NUMBER: GAR235 -13 MATTER TYPE: General administrative review matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM DELIVERED ON: 6 November 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The application to strike out the application for review is refused. 2. The Queensland Building Services Authority must file two (2) copies and give to Canchester Pty Ltd one copy of its statement of reasons, by: 4:00pm on 29 November 2013. 3. Canchester Pty Ltd must file two (2) copies and give to the Queensland Building Services Authority one (1) copy of any statements of evidence, by: 4:00pm on 6 January 2014. 4. The Queensland Building Services Authority must file two (2) copies and give to Canchester Pty Ltd one (1) copy of any statements of evidence in reply, by: 4:00pm on 31 January 2014. 5. The application is listed for a Compulsory Conference in Brisbane at 9:30am on 3 March 2014. CATCHWORDS: QUEENSLAND BUILDING SERVICES AUTHORITY – STATUTORY INSURANCE – where defect came to insured’s attention -- 1 of 3 -- 2 during the policy period – where insured notified the Authority after the policy expired – whether the insured notified the Authority within time – whether the insured can claim under the policy - Orlanski v Queensland Building Services Authority [2011] QCAT 35 APPEARANCES and REPRESENTATION (if any): The tribunal heard and determined this matter on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION [1] In 2004, Canchester Pty Ltd engaged Noosabuild Pty Ltd to build a home at Noosa Springs. Practical completion occurred on 29 May 2007. On 6 June 2013, the Queensland Building Services Authority received notice of a complaint that the building work was defective. By that time, Noosabuild had been deregistered. Canchester would have to rely on the statutory insurance policy if the defect was to be rectified. [2] On 20 June 2013, the Authority wrote to Canchester, advising that the statutory insurance period had expired, the Authority received the complaint after the time limits in the policy and, therefore, it was unable to assist with either the complaint or a claim under the policy. [3] Canchester has applied to the tribunal for a review of that decision. The Authority has applied to strike out Canchester’s claim. [4] Clause 2.5 of the policy states that a person is not entitled to payment for loss unless the claim is made within specific time frames. For a Category 1 defect, a person must make a claim within three months of the defect first becoming evident. For Category 2 defects, a person must make a claim within seven months of the date of practical completion. [5] Canchester became aware of some defects in February 2011. The defects related to cracking tiles, poor alignment of tiles, excessive gaps in the tiles, poor flashing and inadequate drainage and guttering. These appear to be Category 1 defects. On any view, Canchester did not make a claim under the policy within three months of those defects becoming evident. [6] In February 2013, Canchester received a report from Galbraith & Scott. Canchester’s notice to the Authority was just outside three months after it received that report. [7] The Authority can extend time for the notification of defects. Here, the Authority declined to exercise its discretion to extend because the policy expired on 29 May 2013 and, it says, it has no discretion to extend the operation of the policy. -- 2 of 3 -- 3 [8] The Authority advanced a similar argument in Orlanski v Queensland Building Services Authority1. Member Howard was not persuaded that: … an extension of time to lodge a claim cannot be granted in appropriate circumstances when it is apparent that a defect did become evident during the period of insurance, although the period has concluded. [9] I agree with the learned Member’s conclusions. Clause 2.4 states that the Authority is only liable to pay for a Category 1 defect if it first became evident during the policy period. Clause 2.5, which sets out the time for making a claim, is not proscribed in the same way. The policy does not say, although it could have, that the claim must be made within the policy period. It says that the claim must be made within three months of the defect becoming evident. The combined effect of clauses 2.4 and 2.5 must be that a claim might validly be made if it came to the insured’s attention prior to the expiry of the policy and the claim was made within three months after that date, or such later time as the Authority might grant. [10] I am not satisfied that Canchester’s application for review should be struck out on this application. The Authority has not turned its mind to whether the defects identified in the Galbraith & Scott report are Category 1 defects. It has not turned its mind to whether the defects identified in that report are the same defects as those identified in 2011 or new defects. If the claim would have been valid if made on 29 May 2013, the Authority has not satisfied me that the intervening period of 8 days justifies its decision that to refuse the claim. [11] Canchester should not take too much comfort from this decision. It received a copy of the policy when it signed the building contract. It should have read the policy and been mindful of its rights and obligations. It should have acted to protect its position. The steps that it did take, and the reasons why it did not take other steps, will be relevant to the tribunal’s final decision. [12] I direct: a) The Queensland Building Services Authority must file two (2) copies and give to Canchester Pty Ltd one copy of its statement of reasons, by: 4:00pm on 29 November 2013. b) Canchester Pty Ltd must file two (2) copies and give to the Queensland Building Services Authority one (1) copy of any statements of evidence, by: 4:00pm on 6 January 2014. c) The Queensland Building Services Authority must file two (2) copies and give to Canchester Pty Ltd one (1) copy of any statements of evidence in reply, by: 4:00pm on 31 January 2014. d) The application is listed for a compulsory conference in Brisbane at 9:30am on 3 March 2014. 1 [2011] QCAT 35. -- 3 of 3 --