Cardillo v Queensland Building Services Authority [2011] QCAT 574

CITATION: Cardillo v Queensland Building Services Authority [2011] QCAT 574 PARTIES: John Michael Cardillo (Applicant) v Queensland Building Services Authority (Respondent) APPLICATION NUMBER: GAR215-11 MATTER TYPE: Building matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Michael Howe, Member DELIVERED ON: 21 November 2011 DELIVERED AT: Brisbane ORDERS MADE: Application for extension of time within which to review decisions of the Queensland Building Services Authority dismissed. CATCHWORDS: Building and Construction – Application to review a decision of the Queensland Building Services Authority – application out of time – whether s 61 QCAT Act relief from procedural requirements able to be utilised – mandatory exclusion provisions of s 86(2)(c) Queensland Building Services Authority Act 1991 – factors for consideration in grant of extension of time Queensland Civil and Administrative Tribunal Act 2009, ss 33(3), 33(4) (a), 61(1) Queensland Building Services Authority Act 1991, ss 86(1)(g) and (i), 86(2), 87 Smith v Queensland Building Services Authority [2010] QCAT 448 Gallagher v Queensland Building Services Authority [2010] QCAT 383 CMC v Chapman & Anor [2011] QCAT 229 -- 1 of 7 -- 2 Lucic v Nolan [1982] FCA 217 Hunter Valley Developments Pty Ltd v Barry Cohen Minister for Home Affairs [1984] FCA 176 at [18] APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). REASONS FOR DECISION The Application [1] Mr Cardillo seeks an extension of time to apply for review of two decisions of the Queensland Building Services Authority, first that a domestic building contract has been validly terminated between owner and builder and second a decision about the scope of works to be undertaken under the statutory insurance scheme to rectify or complete tribunal work. Background [2] On or about 22 July 2009 Mr Cardillo entered into a building contract with an owner to perform extensive excavation and renovation work at a dwelling at Kelvin Grove. [3] On or about 28 October 2010 the Queensland Building Services Authority received a complaint from the owner alleging defective and incomplete work carried out by Mr Cardillo. At the time the Authority was provided with a copy of a notice to remedy breach of contract forwarded to Mr Cardillo by solicitors acting for the owner dated 7 October 2010 and a subsequent letter of termination of the contract by those same solicitors to Mr Cardillo dated 26 October 2010. [4] An inspection was carried out by the Authority on 1 December 2010. Subsequently on 4 March 2011 a Direction to Rectify and/or Complete work was issued to Mr Cardillo requiring rectification of 13 items within 28 days. Mr Cardillo requested an extension of time to perform the rectification work, which was granted to 15 April 2011, and all items were rectified by then save three. [5] The Authority says it posted a letter to Mr Cardillo on 3 May 2011 advising that a claim had been received in relation to the non-completion of work at the property, advising that in the Authority’s view the contract between the parties appeared to have been terminated and requesting Mr Cardillo notify the Authority within 7 days of evidence to the contrary. [6] The Authority received no response from Mr Cardillo. On 9 May 2011 a further letter was posted to Mr Cardillo noting he had not rectified the work as required, which was wrong. He had rectified all save three items. He contacted the Authority about that. [7] On 24 May 2011 the Authority wrote to Mr Cardillo advising the Authority had determined the contract between the parties had been validly terminated on the default of Mr Cardillo, and advising that a claim had -- 2 of 7 -- 3 been made on the insurance and the Authority might seek recovery from him of moneys paid out because of that. The letter also enclosed a scope of works required to complete the contract. [8] There was nothing heard from Mr Cardillo until 5 July 2011 when he contacted the Authority to discuss the letter of 24 May 2011 and was advised to lodge a review application with this Tribunal. On about 8 July 2011 the Authority received a letter from Mr Cardillo’s solicitor stating the letter of 24 May 2011 had not been received by Mr Cardillo until 28 June 2011 and disputing that the contract between his client and the owner had been validly terminated. [9] An application to review the Authority’s decisions that the building contract has been validly terminated by the owner and the scope of works to be undertaken under the statutory insurance scheme to rectify or complete tribunal work was filed in the Tribunal on 26 July 2011. Extension of Time Application [10] Section 87 of the Queensland Building Services Authority Act 1991 (“QBSA Act”) provides that a person affected by a reviewable decision of the Authority may apply as provided under the QCAT Act to the Tribunal for a review of the decision. [11] Section 86(1)(g) of the QBSA Act makes a decision about the scope of works to be undertaken under the statutory insurance scheme to rectify or complete tribunal work a reviewable decision. [12] Section 86(1)(i) of the QBSA Act makes a decision that a domestic building contract has been validly terminated having the consequence of allowing a claim for non-completion under the statutory insurance scheme, similarly, a reviewable decision. The Reviewable Decision About Scope of Works [13] An application to the Tribunal to review either of the above reviewable decisions had to be made within 28 days after the relevant day1. Relevant day means amongst other things, the day the applicant is notified of the decision2. Mr Cardillo states that he was only made aware of the letter of 24 May 2011, which is the relevant correspondence, when his 9 year old son handed him a white A4 size package containing the said letter and attachments which he says his son told him he found in the house yard. Mr Cardillo says this occurred on 28 June 2011. He says the envelope was without marked addressee or postal stamp or addressor. Mr Cardillo now seeks an extension of time within which to make the review application concerning the aforementioned decision based on 28 June 2011 as the relevant day for the purpose of s 33. [14] By s 86(2) of the QBSA Act the legislature has provided, however, that the Tribunal must not review certain decisions. One such is a decision about the scope of works to be undertaken under the statutory insurance scheme to rectify or complete insurance work if 28 days have elapsed 1 Section 33(3) Queensland Civil and Administrative Tribunal Act 2009. 2 Section 33(4)(a). -- 3 of 7 -- 4 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 that decision3. [15] Section 86(2) of the QBSA Act is a statutory imperative that directs the tribunal not to exercise its powers of review in the circumstances prescribed by that provision. The power given the Tribunal to grant relief from procedural requirements such as the making of an application for review within 28 days of decision contained in s 61 QCAT Act can only be exercised within the bounds of jurisdiction. Section 86(2) declares that matters falling within that subsection are beyond the tribunal’s jurisdiction. [16] By s 39 Acts Interpretation Act 1954 if an Act requires or permits a document to be served on a person the document may be served by sending it by post to the address of the place of residence or business of the person last known to the person serving the document. By s 39A if a document is served by post the document is taken to have been served at the time at which the letter would be delivered in the ordinary course of post, unless the contrary is proved. I accept that the Authority posted the letter of 24 May 2011 enclosing a scope of works to Mr Cardillo at his residential address on or about that day and service was therefore affected on him on or about 27 May 2011. Accordingly there is no power in the Tribunal to grant the relief sought in respect of the scope of works decision4. The Reviewable Decision That The Contract Had Been Terminated [17] There is scope for exercise of the Tribunal’s discretion pursuant to s 61 of the QCAT Act however, as regards the decision advised to Mr Cardillo in the letter of 24 May 2011 that the Authority had determined the domestic building contract between Mr Cardillo and the owner had been validly terminated. [18] The accepted factors for consideration on an application for an extension of time have been set out in a number of decisions in the Tribunal5: 1 Has a satisfactory explanation been given to account for the delay? 2 The strength of the case the applicant will bring if allowed to proceed. 3 Will other parties be prejudiced? 4 Has the delay been short or long? 5 Is it in the interests of justice to grant the extension? The Explanation for Delay [19] Mr Cardillo claims not to have received the letter of 24 May 2011. Rather he claims he did not have it to hand until 28 June 2011. Apparently he also failed to receive the letters from the owner’s solicitors dated 7 and 3 Section 86(2)(c). 4 See Smith v Queensland Building Services Authority [2010] QCAT 448. 5 Gallagher v QBSA [2010] QCAT 383; CMC v Chapman & Anor [2011] QCAT 229. -- 4 of 7 -- 5 26 October 2011 purporting to terminate the building contract with their client. He fails to make mention of them. These letters were all addressed to Mr Cardillo at the address he nominated in the building contract. [20] Similarly with respect to the letter of 3 May 2011. He makes no mention of that either. In that letter the Authority referred to the purported termination of the building contract by the owner. [21] Mr Cardillo states at paragraph 35 of his affidavit of 29 September 2011 concerning the letter of 24 May 2011 “When I received this letter this was the first time I found out the Residential Building Contract had been terminated.” I find that hard to believe. [22] Mr Cardillo does say he received the letter from the Authority dated 9 May 2011. That letter erroneously stated Mr Cardillo had failed to remedy any of the defects previously advised. Mr Cardillo contacted the Authority to discuss that, because, as stated, he had remedied 10 of the 13 defects. That letter was addressed to Mr Cardillo at the same address as the address in the solicitor’s letters of October 2010 and the letter of 24 May 2011. [23] As to the circumstances of finding the letter of 24 May 2011 in his front yard, he maintains the envelope had no addressee or sender details and no post marks. Mr Cardillo submits this shows that either the Authority did not deliver the documents by standard post or courier or that some third party interfered with the item after delivery. [24] Ms Stone of the Authority has provided affidavit evidence that she was the author of the letter of 24 May 2011 and that she caused that letter to be posted to Mr Cardillo in the usual way to his address stated in the letter. Mr Cardillo urges in his submissions that the unusual circumstances concerning the letter of 24 May 2011 should be taken into consideration when deciding whether to grant the extension of time. I do, and I conclude that I have no reason not to accept Ms Stone’s evidence that the letter of 24 May 2011 was posted to Mr Cardillo at his usual address as stated in the letter so as to arrive at that address in the normal course of post. I cannot accept as reasonable the proposition which Mr Cardillo’s account requires for acceptance that neither of the letters from the owner’s solicitors arrived at his address as noted in the building contract, nor the relevant letters from the Authority to the same address, yet the letter of 9 May 2011 did, which letter happened to be the one which he was able to readily refute. [25] Further, whilst Mr Cardillo describes his delay after 5 July 2011 taking to 26 July 2011 to actually make the application as evincing an intention to comply with the spirit of the QCAT Act, I consider it further delay which is not adequately explained. I do not consider that there has been a reasonable explanation for his delay in bringing the review proceedings. The Strength of the Case [26] The owner’s solicitors purported to terminate the building contract with their client by letters to Mr Cardillo dated 7 and 26 October 2011. The notices were given pursuant to clauses 28.3 and 28.4 of the building -- 5 of 7 -- 6 contract. The basis of the termination is substantial breach of the contract by Mr Cardillo and failure to rectify the substantial breach within 10 working days after notice given. The owner alleges that has occurred. Given the statements by Mr Cardillo in his affidavit concerning his cash flow difficulty in completing work under the contract and delay in performing the work actually done, and the extent of the work required for completion, it would appear that Mr Cardillo has limited prospects in successfully arguing the contract was not validly terminated as claimed. I have something more to say about this below. Will Other Parties Be Prejudiced [27] The Authority claims it will be prejudiced in this matter should the extension of time be granted, given, through the delay of Mr Cardillo, the claim under the insurance scheme has been allowed and another contract granted in respect of matters required to complete the construction contract. I note the insurance claim was approved after 8 July 2011 when Mr Cardillo’s solicitor contacted the Authority by letter advising he had instructions to apply for review of the decisions the subject of this application before the Tribunal, however, before doing so proposed discussions to attempt to resolve the issues in dispute. [28] In my opinion, given the stage the matter had progressed as at 8 July 2011, and in the circumstances, it should not be considered unexpected, and more so when one considers the absence of contact with the Authority post 24 May 2011, that the Authority would delay complying with its obligations under the statutory insurance scheme as regards a completion of works contract with another contractor. [29] Having said that, I note the further contract had not been entered into as at 8 July 2011, when Mr Cardillo’s solicitor contacted the Authority. In respect of this factor it might be argued that the prejudice the Authority claims it will face with a further contract awarded to complete the project is in part self-induced so that the significance of this factor is necessarily reduced in the weighing process. That may be the case, however there is still weight in the argument of the Authority on balance. I say this because as far as the Authority was concerned the contract between Mr Cardillo and the owner had been terminated for a significant period without Mr Cardillo taking issue. Further despite a telephone call from him and then a letter from his solicitor wherein the Authority was advised that he had instructions to make an application to QCAT for review there was still no application made to QCAT for review. Has the Delay Been Short or Long? [30] Had the application for review been brought within time it should have been brought on or before 24 June 2011. The application was filed on 26 July 2011. The application was one month out of time. That is not in itself an excessive period, though each case depends on its own facts. Is it In the Interests of Justice to Grant the Extension? [31] In my opinion what must be considered is not simply the period from 24 May 2011 when the authority wrote to Mr Cardillo to advise him of the Authority's decision that it had determined the building contract had been -- 6 of 7 -- 7 validly terminated by Mr Cardillo's default. I accept, on the material before me, that the owner’s solicitors sent letters on 7 and 26 October 2010 purporting to terminate the building contract between Mr Cardillo and their client. As such Mr Cardillo was put on notice concerning termination of the contract six months before the letter of 24 May 2011 and he did nothing about it. Accepting as I have that the authority did post a letter of 24 May 2011 to Mr Cardillo, he then failed for a further 39 days to do anything about the matter of termination of the contract. What he did was to telephone the Authority. It took yet a further 21 days before an application was filed seeking review. [32] To my mind Mr Cardillo’s failure to respond to the solicitor’s letters of October 2010 evinced an acceptance on his part at that time that the building contract was at an end. Given that, one wonders how Mr Cardillo's prospects of success in opposing the termination now should be described as anything but very limited. [33] It has been said that it is the prima facie rule that proceedings commenced outside the prescribed period will not be entertained6. Further it has also been said that it is a precondition to the exercise of discretion in the applicant's favour that the applicant for extension show an acceptable explanation of the delay7. I find that Mr Cardillo has not done that and the prima facie rule should prevail. [34] In all the circumstances I do not consider that on balance it is unjust not to grant the extension of time sought, based on Mr Cardillo’s limited prospects of opposing the termination of the building contract by the owner coupled with the inadequate explanation for delay in bringing the application prior to 5 July 2011 and then thereafter until application was actually made on 26 July 2011. [35] Mr Cardillo's application is therefore refused. Orders [36] The following order should be made: 1. Application for extension of time within which to review decisions of the Queensland Building Services Authority dismissed. 6 Lucic v Nolan [1982] FCA 217. 7 Hunter Valley Developments Pty Ltd v Barry Cohen Minister for Home Affairs [1984] FCA 176 at [18]. -- 7 of 7 --