Deleje Pty Ltd v Queensland Building and Construction Commission - [2023] QCAT 214

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Deleje Pty Ltd v Queensland Building and Construction Commission [2023] QCAT 214

PARTIES:

DELEJE PTY LTD

(applicant)

v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(respondent)

APPLICATION NO:

GAR076-22

MATTER TYPE:

General administrative review matters

DELIVERED ON:

30 May 2023

HEARING DATE:

25 May 2023

HEARD AT:

Brisbane

DECISION OF:

Member Olding

ORDERS:

1. The Tribunal determines that in accordance with s 70A(2) of the Queensland Building and Construction Commission Act 1991 (Qld), Deleje Pty Ltd is not entitled to indemnity under the statutory insurance scheme for work carried out at 42 Bernhard Street, Paddington.

2. Deleje Pty Ltd and the Queensland Building and Construction Commission must file in the Tribunal and give to the other party a copy of short written submissions regarding the orders they submit the Tribunal should make to give effect to these reasons, by: midday 5 June 2023.

CATCHWORDS:

PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – meaning of “person” in s 70A(2) of the Queensland Building and Construction Commission Act 1991 (Qld) – where company that is a commercial developer engaged builder to carry out works on property to be occupied as residence by the company’s director entitled to coverage under statutory insurance scheme

Queensland Building and Construction Commission Act 1991 (Qld), s 70A(2)

Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55

CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
Lange v Queensland Building Services Authority [2011] QCA 58
Newcastle City Council v GIO General Ltd (1997) 191 CLR 85

Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9

APPEARANCES & REPRESENTATION:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)

Applicant:

S Seefeld instructed by Hearthstone Legal

Respondent:

S Moody instructed by Holding Redlich

REASONS FOR DECISION

What is this case about?

The Applicant, Deleje Pty Ltd, engaged a construction company to carry out renovation work on a house now occupied by its director, Mr Davin Johnson, as his principal place of residence (“the Property”).
Mr Johnson on behalf of the Applicant complained to the Queensland Building and Construction Commission that the work was incomplete and defective. There is a separate proceeding on foot in which Deleje Pty Ltd has applied for review of decisions by the Commission relating to whether notices to remedy defects should issue.
In the current proceeding, the Applicant seeks a review of a deemed decision of the Commission to disallow its claim in relation to the work under the statutory Queensland Home Warranty Scheme.
The dispute raises an issue concerning the proper construction of s 70A of the Queensland Building and Construction Commission Act 1991 (Qld). If that issue is resolved in the Applicant’s favour, a separate issue arises regarding whether the discretion to extend the time for claiming under the insurance scheme should be exercised.

Procedural history

On 15 August 2022, another member of the Tribunal made directions for these issues to be the subject of written submissions and for the issues to be determined on the papers without an oral hearing.
The directions required submissions by the Applicant, and reply submissions by the Respondent, in relation to:
a. Disputing, addressing, contesting [the Applicant’s] exclusion from making a claim under section 70A of the Queensland Building and Construction Commission Act 1991 (Qld), current as at 1 July 2014;
b. In support of [the Applicant’s] entitlement to claim payment for loss in respect of defects in the context of time limits for making a claim recited in Clause 4.5 of the Home Warranty Insurance Policy.
I refer to these issues as “the s70A issue” and “the timing issue” respectively.

Section 70A issue

At the relevant time, s 70A provided:
70A Persons not entitled to indemnity under insurance scheme
. . .
(2) Where a person has entered into 1 or more building contracts, in force at the same time, to construct 3 or more living units, the person is not entitled to indemnity under the statutory insurance scheme for the work.
The applicant’s submissions state:
For the purposes of these submissions, the Applicant accepts that the Tribunal may proceed on the basis that it had entered into 1 or more building contracts which were in force at the same time to construct 3 or more living units. . .
However, . . . the Applicant submits that the “person” for the purposes of section 70A of the QBCC Act should not be construed so as to include the Applicant in respect of the Contract for the works at the Property . . .
The Applicant goes on to submit that “person” in s 70A:
should not be interpreted to include a person contracting in their personal capacity as a consumer, and not in their capacity as a property developer.
In support of this submission, the Applicant referred to well-known authorities to the effect that statutory provisions must be construed in context, which includes the purpose of the provision, in particular the mischief it is seeking to remedy, and that a construction that best serves the object of an Act is to be preferred.
The objects of the Act as a whole are set out in s 3 and include regulation of the building industry to ensure maintenance of proper standards and provision of remedies for defective building work.
In relation to s 70A itself, the Applicant referred to the second reading speech by the Minister who introduced the amending bill that added s 70A. The Minister stated:
The Bill also amends the QBSA Act to ensure developers cannot claim on the Home Warranty Scheme for defective building work carried out as part of their development.
The purpose of the scheme is to provide protection for home owners. It is not and never was intended to cover business risks associated with commercial development projects.
(Emphasis added by Applicant.)
The Applicant also referenced Lange v Queensland Building Services Authority in which the Court of Appeal identified the purpose of Part 5 of the Act, in which s 70A appears, as consumer protection, and noted:
It is apparent that the purpose of those amendments [which included introduction of s 70A] was to clarify the consumer protection focus of the provisions.[1]
[1][2011] 2 QCA 58, [30], [61].
The modern, now orthodox, purposive approach to statutory interpretation was stated by the High Court in CIC Insurance Ltd v Bankstown Football Club Ltd:
It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent.[2]
[2](1997) 187 CLR 384 at 408 (footnotes omitted, emphasis added).
Fully accepting the importance of construing s 70A in its context, including its consumer protection focus and stated purpose as set out by the Minister, I am, with respect, unable to accept that such considerations lead to the construction for which the Applicant advocates.
The highlighted phrase in the extract from CIC Insurance above makes clear that taking into account context in the broadest sense, including reference to extraneous materials, and policy identified by permissible means, does not authorise the substitution of policy for construction of the text of a statutory provision. For an alternative construction that is contrary to apparently plain words of a provision to be adopted must be “reasonably open”. Further, it has also long been clear that “extrinsic materials cannot displace the meaning of the text.”[3]
[3]Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55, [39].
The Applicant’s construction is contrary to the plain meaning of s 70A. In my view it is not reasonably open on the text chosen by Parliament.
In reality, the Applicant does not propose a particular construction of “person” in s 70A and argue that that construction is reasonably open and to be preferred. Although not articulated as such, the Applicant’s submissions would require the Tribunal to read into s 70A an exclusion that does not appear on its face.
The cases make clear that the circumstances in which words may be read into a statutory provision are limited. In the end, whether to do so is permitted is a matter of statutory construction. As the High Court stated in Taylor v The Owners – Strata Plan No 11564,[4] even if a modified construction is consistent with a statutory scheme, it must be consistent with the language actually used by the legislature and:
[i]f the legislature uses language to cover one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances.[5]
[4][2014] HCA 9, [39]-[41].
[5]Newcastle City Council v GIO General Ltd (1997) 191 CLR 85, 113 cited in Taylor v The Owners – Strata Plan No 11564 at [39].
In my view, an interpretation that would exclude a person who has entered into the offending building contracts, where a director of that person occupies the Property as their residence, is not reasonably open. Such an interpretation “cannot be reconciled with the language that the Parliament has enacted”.[6]
[6]Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9, [41].
There is simply nothing in the text of s 70A(2) or its context within s 70A or the Act generally that is sufficient to support reading in an exclusion that is not found in the provision. Section 70A is capable of applying in a rational and coherent way without reading in exclusionary words.
The Applicant has not identified a construction that is reasonably open on the language adopted by Parliament. The statements of policy in the second reading speech do not provide a warrant for reading into s 70A(2) an exclusion not found in the text of the provision and without which it is capable of coherent operation. That would, in my view, impermissibly amount to construing the second reading speech and imputing to the legislature an intention not reasonably open on the language of the provision.
Further, the “person” seeking to claim under the insurance scheme is the Applicant. It is the Applicant that entered into the building contracts including the renovation contract for the Property. Even on the Applicant’s own construction, it is not clear that the Applicant could be said to be “contracting in their personal capacity as a consumer”. It is Mr Johnson, not the Applicant, that is the occupant of the premises. On no view, could the “person” be read as Mr Johnson .
It follows from this conclusion that the Applicant is not entitled to claim under the statutory insurance scheme.

The timing issue

The timing issue does not arise if, as I have concluded, the Applicant is precluded by s 70A(2) from claiming under the insurance scheme.
I have considered whether, in case I am wrong in respect of that conclusion, I should express a view regarding whether the discretion to extend the time for claiming should be exercised in favour of the Applicant.
The time limits that apply depend upon the category of defect and when practical completion was achieved. It appears there is some controversy regarding these issues, which the Respondent has submitted, if the Tribunal were to find against it on the Section 70A issue, should be left to the ordinary course of the hearing of the review. The Applicant also seems to accept that the correct categorisation of some items would be determined if the matter proceeds to hearing, but suggests the Tribunal proceed on an assumption regarding the categorisation of these alleged defects. Further, the Respondent has not addressed the circumstances relevant to the exercise of the discretion to extend the time for making a claim.
In those circumstances, I have concluded that it is preferable that I do not express a view regarding the exercise of the timing issue. A conclusion on whether the discretion should be exercised could have no effect if my conclusion on the s 70A issue is correct.

Orders

The Respondent submitted that, if the Tribunal decides the s 70A issue against the Applicant, it should confirm the decision under review.
There is much to commend itself in that submission. It is difficult to see how the Applicant could otherwise succeed in the application for review.
However, the Applicant’s submissions state:
In essence, if both of these issues are resolved in the Applicant’s favour then the review application may proceed. Alternatively, and without committing the Applicant to any particular course, if both these issues are not resolved in the Applicant’s favour then this may affect the utility of the review application proceeding further.[7]
[7]Applicant’s submissions, [3].
In the circumstances, and while perhaps in an abundance of caution, I will allow time for the parties to file short submissions regarding the orders the Tribunal should make to give effect to these reasons.
The outcome of this proceeding may affect the parties’ approach to the other proceeding concerning notices to remedy referred to above, which I am advised is currently listed for hearing on 6 June 2023. As it is desirable that the Applicant clarify its approach before that hearing, I will direct the parties to make their submissions on the orders to give effect to these reasons before that date.