JM Kelly (Project Builders) Pty Ltd v Queensland Building Services Authority
[2013] QCAT 489
| CITATION: | JM Kelly (Project Builders) Pty Ltd & Anor v Queensland Building Services Authority [2013] QCAT 489 |
| PARTIES: | JM Kelly (Project Builders) Pty Ltd |
| v | |
| Queensland Building Services Authority |
| APPLICATION NUMBER: | GAR007-11, GAR008-11, GAR175-11, GAR183-11 |
| MATTER TYPE: | Tribunal Hearing |
| HEARING DATE: | 13, 15, 16, 17 May 2013 |
| HEARD AT: | Brisbane |
| DECISION OF: | Paul Favell, Member |
| DELIVERED ON: | 19 September 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Pursuant to section 72(8) of the QBSA Act the time for the QBSA to give any direction to JM Kelly (Project Builders) Pty Ltd to rectify and/or complete works be extended to 21 days after the handing down of the Tribunal’s Decision in GAR007-11 and GAR183-11. |
| CATCHWORDS: | Direction to rectify/or complete-review application-direction held void-application for extension of time to give direction to rectify - whether in the circumstances there is sufficient reason for giving an extension Queensland Building and Services Authority Act 1991 s 72(8) R v His Honour Judge Miller and the Building Registration Board of Queensland (1987) 2 QdR 446 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Queensland Building Services Authority represented by Mr Brett Turnbull |
| RESPONDENT: | JM Kelly (Project Builders) Pty Ltd represented by Mr T Sullivan SC instructed byCooper Grace Ward Lawyers) Group Kildey Pty Ltd represented by Mr A Harding (Macpherson & Kelley Lawyers) |
REASONS FOR DECISION
On or about 5 February 2004, JM Kelly (Project Builders) Pty Ltd entered into a contract with Group Kildey Pty Ltd. Of the terms of that contract, the respondent was required to complete the construction of premises located at 5 Lilla St, Woody Point. The construction of the premises had been commenced by a previous builder which went into liquidation.
In 2010 and 2011 the QBSA issued directions to rectify and/or complete to JM Kelly and Kildey.
JM Kelly and Kildey filed reviews pursuant to section 86(1) of the Queensland Building Services Authority Act 1991 (Qld) (‘QBSA Act’) in respect of their respective directions. Those reviews are proceedings GAR007-11 and GAR183-11 (with respect to JM Kelly) and GAR008-11 and GAR175-11 (with respect to Kildey). After a part hearing of those matters had commenced, the QBSA applied for an order under section 72(8) of the QBSA Act to allow it to issue a draft direction to rectify and/or complete to the respondent out of time.
The draft direction is IR-3 to the affidavit of Ian Roderick White, sworn on 10 May 2013. That application was bought about after I refused an adjournment application on 13 April 2013 and JM Kelly contended that unless the QBSA is granted an extension of time pursuant to section 72(8) then the Tribunal cannot confirm the directions that were issued to the respondent.
That was that because the Supreme Court on 9 May 2013 declared, “the directions to rectify and/or complete numbered 35691 and 36338 issued by [the authority] are void.”
I have not been provided with the reasons for that declaration. I have been informed that the reasoning followed the reasoning in McNab Constructions Australia Pty Ltd v Queensland Building Services Authority[1] which declared various directions to rectify void because they did not comply with the requirement of section 72(3) of the QBSA Act for the person who carried out the building work to be given at least 28 days to rectify the building work. I am told that decision is subject to appeal.
[1] [2013] QSC 057.
That declaration was not in respect of the directions given to Kildey. Kildey did not make submissions in respect of this application.
Section 72(8) of the QBSA Act relevantly provides:
“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 authority, that there is in the circumstances of the particular case sufficient reason for extending the time for giving of direction and extends the time accordingly.”
The works which are set out in the draft direction were undertaken between 2004 and 2005. The purported declarations which were declared void were given in time.
JM Kelly disputes that an extension ought to be granted under section 72(8) of the QBSA Act. However, it submits that if an extension is granted then the appropriate form of the order ought to be:
“pursuant to section 72(8) of the QBSA Act, that the time for the QBSA to give any direction to JM Kelly (Project Builders) Pty Ltd to rectify and/or complete works be extended until 21 days after the handing down of Mr Favell of Counsel’s decision in GAR007-11 and GAR183-11, and such direction to be only in respect of those works as described in the documents called ‘Direction to Rectify 35691’ and ‘Direction to Rectify 36338’ and then only to the extent to which Mr Favell decides in proceedings GAR007-11 and GAR183-11 that such particular parts of the said works ought to be rectified or completed by JM Kelly (Project Builders) Pty Ltd.”
There is no dispute that the works were carried out approximately 8 years ago. The time limit proposed in section 72(8) of the QBSA Act is 6 years and 3 months after the work is completed or left in an incomplete state.
The QBSA states that issues with the building have been apparent since January 2006.
During submissions, I was directed by both sides to the decision of Member Lohrisch (of the former Commercial and Consumer Tribunal) in QBSA v Bengsten Developments Pty Ltd.[2] Both sides referred to the decision for principles applicable to the exercise of the discretion under section 72(8).
[2] [2006] CCTLO13-05.
In the decision Member Lohrisch said:
“9. The applicant submitted that applications under this subsection are rare, although the situation was considered, in terms of an earlier incarnation of the relevant section, in QBSA v McDonnell D288-94 [1994] QBT1 (1 November 1995). In the applicant’s submission, that case established relevant factors, as being:
a) When the allegedly defective or incomplete work was carried out;
b) Whether there has been any delay by the authority in making the application for an extension of time;
c) Whether there is evidence to establish the right of the authority to give a direction pursuant to section 72(1), apart from the expiry of the limitation periods ;
d) Whether the exercise of the discretion will promote the obtainment of the specified objects of the act listed in section 3 of the Act.
10. The applicant submitted that the Tribunal noted in that case that there must be “sufficient” reason in determining whether the discretion should be exercised in favour of the authority which amounted to “peculiar” or “special” circumstances particular to any given application…
20. I agree that the factors relevant to an application such as this include those factors identified in the decision in McDonnell, (a) – (d), with the addition of, most pertinent in this instance in my view, the conduct of the builder, where the authority’s behaviour has not been the sole cause of the need for an extension of time.”
The applicant, QBSA, submits “the key to the present application is whether the Tribunal is satisfied that there is in the circumstances of the particular case sufficient reason for extending the time for giving the draft direction.” It submits that the Tribunal should be so satisfied in this case.
The QBSA points out that JM Kelly must have been aware of issues associated with its work for “quite some period of time” that in that regard points to directions to rectify issued in 2010 and 2011 and the fact that there was litigation on foot between JM Kelly and Kildey which had been initiated in September 2005.
The QBSA says that there has been no delay in seeking the application to extend time, it being instituted on 15 May 2013, after the Supreme Court made the declaration concerning the validity of the directions to rectify on 9 May 2013.
The QBSA submits that there is evidence to demonstrate that the authority had the right to give a direction tor rectify pursuant to section 72(1) apart from the expiry of the limitation period.
There is no dispute that there are problems with the building. JM Kelly argues that it cannot “be said that the problems are clearly the fault of JM Kelly.” JM Kelly says that it did not carry out building work with respect to the first three floors, constructed by a different builder, and that when Kildey contracted with JM Kelly, Kildey positively took design responsibility for the building and the contract operated so that JM Kelly was not responsible for the design. It submits that this is not one of “those extension cases where it can be said that it is inevitable that the builder is responsible for the defects in the building.”[3]
[3]Paragraph 25 of the written submissions of JM Kelly; R v His Honour Judge Miller and the Building Registration Board of Queensland (1987) 2 QR 446.
JM Kelly points out that the extension being sought is substantial and it submits that the sole conduct giving rise to the need for an extension of time lies with the authority. It contends in that regard that the need for the application resulted from the QBSA not serving the notices in a way which could have factually allowed JM Kelly to comply with them. They say that there was no conduct by the builder which has contributed to the issuing of invalid directions.
The QBSA contends that the need to apply for the extension was “in significant part the fault of” JM Kelly’s conduct. The basis for making that submission apparently is that JM Kelly was successful in obtaining the direction from Justice P Lyons that the directions were void.
Whilst it is correct to say that the reason for the need to make an application for an extension has arisen because of the direction His Honour gave, in my view that fact does not point to any conduct by either the builder or the authority which has been the sole cause of the need for an extension of time.
Whether the extension is required in the circumstances here is arguable.
This Tribunal has the review jurisdiction conferred by section 9 of the QCAT Act. Section 17 states that the Tribunal’s review jurisdiction is the jurisdiction conferred by an enabling Act to review a decision made or taken to have been made by another entity under that Act. The review involves a fresh hearing.[4] Section 24 provides for the functions of the review jurisdiction.
[4] QCAT Act s 20.
The Tribunal may review “a decision to direct or not direct rectification or completion of Tribunal work.”[5] That is the subject of the applications currently being heard.
[5] QBSA Act s 86.
The Tribunal in those applications is not concerned with the validity of the Directions given as a result of the decision under review but with the decision to issue a direction.
The Tribunal’s decision under section 24(1)(a) and (b) of the QCAT Act is taken to be a decision[6] of the decision maker for the reviewable decision except for the tribunal’s review jurisdiction or an appeal under part 8 and subject to any contrary order of the tribunal, has effect from when the reviewable decision takes or took effect.
[6] QCAT Act s 24(2).
The authority makes the submission that granting the extension would promote the objects of the QBSA Act. In particular, it says that the object relating to the provision of remedies for defective work would be promoted. It submits that if the contrary is accepted “then the objects of the QBSA Act would be frustrated (as a person in the shoes of the respondent would be able to escape responsibility in relation to a direction to rectify which was issued within time but which was subsequently declared void owing to non-compliance with section 72(3) of the QBSA Act”. That frustration would be highlighted because the building work is not residential construction work for the purposes of the QBSA Act and owners of the lots in question could not make a claim under the Queensland Home Warranties Scheme. Further they say that lot owners and the body corporate may not have a remedy because of the Limitations of Actions Act.
JM Kelly submits that those matters are not relevant to the forming of an opinion to issue a direction to rectify or to the discretion to extend time. I accept that submission.
The scheme of the Act does contemplate a time limit within which to issue directions to rectify. That is itself part of the scheme of the Act. In my view, if individuals are not covered under the Queensland Home Warranties Scheme or are precluded from taking private actions because of the operation of the Limitations of Actions Act they are not matters which are relevant to the objects of the QBSA Act.
Whilst the allegedly defective work was carried out approximately 8 years ago, there was no need to seek an extension of time until after Justice Lyons made a declaration with respect to the directions. Soon after that declaration was made the application now under consideration was made. Until that time, the authority was blissfully unaware of any need to make an application. In that sense, I do not find the timing of the application such as to be an impediment on the exercise of the discretion to grant an extension of time.
It appeared that the problems with the building are not disputed. What is disputed is whether or not the builder is responsible. To extend the time I am not making a decision whether the draft direction would survive review. In my view there is evidence to establish the right of the authority to give a direction to rectify pursuant to section 72(1) apart from the expiry of the limitation period.
There is, in making the determination in GAR007-11 and GAR183-11, much to be considered. I have not yet heard all the evidence to be relied on or submissions in that regard. In my view, it is appropriate to give the extension in the modified terms suggested by JM Kelly if the extension was granted.
In my view, given that I am concerned with the decision and not the validity of the direction and because my decision will be the decision of the decision maker and because on balance I am satisfied that there are sufficient reasons for extending the time a modification of the suggested alternative order has some merit. If I confirm or modify the decision the authority will have 21 days to issue the direction. If I set aside the decision and substitute another the there is no need for any extension of time.
The direction IRW-3 is in the same terms as ‘Direction to Rectify 35691’ and ‘Direction to Rectify 36338’. Any direction to be given should reflect the decision made.
Accordingly the order will be:
Pursuant to section 72(8) of the QBSA Act the time for the QBSA to give any direction to JM Kelly (Project Builders) Pty Ltd to rectify and/or complete works be extended to 21 days after the handing down of the Tribunal’s Decision in GAR007-11 and GAR183-11.
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