Kim v Queensland Building and Construction Commission - [2025] QCAT 217

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Kim v Queensland Building and Construction Commission & Anor [2025] QCAT 217

PARTIES:

EI KYUNG KIM

(applicant)

v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(first respondent)

368 CONSTRUCTION GROUP PTY LTD

(second respondent)

APPLICATION NO/S:

GAR498-23

MATTER TYPE:

General administrative review matters

DELIVERED ON:

9 June 2025

HEARING DATE:

On the Papers

HEARD AT:

Brisbane

DECISION OF:

Member Munasinghe

ORDERS:

1. The decision of the Queensland Building and Construction Commission, to disallow the applicant’s claim under the statutory insurance scheme (‘claim’), is set aside and substituted with the Tribunal’s decision that the claim is allowed.

2. It is declared that the Contract between the applicant and the second respondent was validly terminated within the meaning of section 4(1)(a), Schedule 6 of the Queensland Building and Construction Commission Regulation2018 (Qld).

3. Each party must bear its own costs in the proceeding.

CATCHWORDS:

ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – PROFESSIONS AND TRADES – BUILDERS – REVIEW OF A DECISION A DOMESTIC BUILDING CONTRACT HAS BEEN VALIDLY TERMINATED – where the applicant purported to terminate a residential building contract it had entered into with the second respondent – where the applicant subsequently made a claim under the statutory home warranty scheme – where the first respondent refused the claim because it contended the applicant did not validly terminate the contract – whether the applicant validly terminated the contract, either under the contract itself or at common law – whether the contract was abandoned – where the Tribunal upheld the claim – where the Tribunal considered the First Respondent’s conduct unbecoming of an entity vested with a statutory mandate to protect consumers

Queensland Building and Construction Commission Act 1991 (Qld), s 67Y

Queensland Building and Construction Commission Regulation 2018 (Qld), Schedule 6, s 4(1)(a)

Associated Newspapers Ltd v Bancks (1951) 83 CLR 322

Fitzgerald v Masters (1956) 95 CLR 420
King v Poggioli (1923) 32 CLR 222
Minion v Graystone Pty Ltd [1990] 1 Qd R 157
Motor Oil (Hellas) Corinth Refineries SA v Shipping Corp of India [1990] 1 Lloyd’s Rep. 391
Qline Interiors Pty Ltd v Jezer Construction Group Pty Ltd [2002] QSC 88
Ripley v McClure (1849) 154 ER 1245
Shepherd v Felt Textiles of Australia Ltd (1931) 45 CLR 359
Shevill v Builders Licensing Board (1982) 149 CLR 620
Spencer v Cali [1986] 2 Qd R 456
Stocznia Gdanska SA v Latvian Shipping Co (No.2) [2002] EWCA Civ 889
Stocznia Gdanska SA v Latvian Shipping Co (No.3) [2002] EWCA Civ 889
Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 61 CLR 286

Tropical Traders Ltd v Goonan (1964) 111 CLR 41

APPEARANCES & REPRESENTATION:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act2009 (Qld)

REASONS FOR DECISION

Ei Kyung Kim (‘the applicant’) applies to the Tribunal to review a decision by the Queensland Building and Construction Commission (‘QBCC’) to disallow her claim against…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] QCAT 217
Decision Date: 9 June 2025

CaseChat Overview and Summary

In the matter of Kim v Queensland Building and Construction Commission, the applicant, Ei Kyung Kim, sought a review of a decision by the Queensland Building and Construction Commission (QBCC) to disallow her claim against the statutory insurance scheme. The dispute centred around the validity of the termination of a residential building contract between the applicant and 368 Construction Group Pty Ltd, the builder. The applicant claimed that the builder failed to complete the works to a satisfactory standard and within the stipulated timeframe, leading her to terminate the contract. The QBCC disallowed the applicant's claim, arguing that the contract was not validly terminated. The Tribunal was tasked with determining whether the applicant validly terminated the contract under the terms of the contract, at common law, or whether the contract was mutually abandoned.

The Tribunal found that the builder was in default under the contract due to substantial breaches, including unreasonable failure to replace or remedy defective work and unreasonably delaying, suspending, or failing to maintain reasonable progress. The Tribunal also determined that the applicant did not validly terminate the contract under the terms of the contract, as there was no explicit mention of termination in the August Notice. However, the Tribunal found that the applicant validly terminated the contract at common law due to the builder's repudiation of the contract. The Tribunal concluded that the contract was validly terminated within the meaning of section 4(1)(a), Schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld).

The Tribunal set aside the decision of the QBCC and allowed the applicant's claim under the statutory insurance scheme. The Tribunal declared that the contract between the applicant and the builder was validly terminated. Each party was ordered to bear their own costs in the proceeding.

Orders

Orders of the court

1. The decision of the Queensland Building and Construction Commission, to disallow the applicant’s claim under the statutory insurance scheme (‘claim’), is set aside and substituted with the Tribunal’s decision that the claim is allowed.

2. It is declared that the Contract between the applicant and the second respondent was validly terminated within the meaning of section 4(1)(a), Schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld).

3. Each party must bear its own costs in the proceeding.

Background

Background to the litigation

Ei Kyung Kim (‘the applicant’) applies to the Tribunal to review a decision by the Queensland Building and Construction Commission (‘QBCC’) to disallow her claim against the statutory insurance scheme (‘scheme’). Background On 7 May 2021, the applicant entered a QBCC New Home Construction Contract (‘Contract’) with 368 Construction Group Pty Ltd (‘builder’) for the construction of a two-story house with a pool (‘works’). Hereafter, it is convenient to describe the applicant and the builder collectively as the parties. The date for practical completion stated in the contact was 5 February 2022. The contract had progress payment stages, namely: (a)base stage. (b)frame stage. (c)enclosed stage. (d)fixing stage. (e)practical completion stage. The works commenced on or about 10 May 2021. On 9 May 2022, at the applicant’s behest, Mr Nigel Crocker of Jim’s Building Inspections examined the works and produced a report (‘First Report’), which identified: (a)safety hazards; (b)non-compliance with the National Construction Code and Australian Standards;(c)substandard workmanship;(d)incomplete work; and (e)suspected noncompliance with the Contract and specifications. Suffice to say, the First Report identified numerous defects. On 13 June 2022, the applicant’s solicitor, MYG Legal (‘applicant’s solicitor’), wrote to the builder and requested that it promptly rectify the defects identified in the in the First Report (‘June Notice’). On 26 July 2022, the builder’s solicitor, Saal & Associates (‘builder’s solicitor’), sent an email to the applicant’s solicitor stating the following: (a)from early December 2021, the builder commenced experiencing issues with its working capital, but it intended to complete the remaining works. (b)the parties had agreed to vary the Contract such that the applicant would pay subcontractors and suppliers directly for the remaining stages of the build. In its e-mail the builder’s solicitor requested confirmation that the applicant would permit the builder to proceed with the works. On 11 August 2022, the applicant’s solicitor sent the builder’s solicitor an email (‘August Notice’): (a)disputing that the builder had completed works up to the enclosed stage because: (i) the dimensions of the pool were wrong. (ii) the builder failed to provide the applicant with documentation pertaining to warranties for waterproofing work undertaken in the bathrooms, kitchen etc. (iii) the window panels of the front door, garage door etc were not enclosed.(b)refuting assertions that the Contract was varied.(c)noting that the builder did not fence, secure, and clean the construction site, contrary to regulatory requirements.(d)indicating that the applicant refused to make any further payments until the builder rectified the defects identified in the First Report. (e)indicating that the applicant was willing to give the builder “one last chance to rectify the defects”. (f)demanding the builder satisfactorily complete rectification works in which case the applicant would consent to the builder proceeding with the fixing and practical completion stages. (g)requesting that the builder provide the applicant’s solicitor with a “comprehensive and coherent cost plan, program to complete the works and estimated completion date”. (h)noting that it would be necessary to vary the terms of the contract prior to the commencement of any future works. (i)requesting a response to its proposal no later than 5.00pm on 18 August 2022, otherwise the applicant intended to commence proceedings against the builder.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

In written submissions filed in the Tribunal, the applicant contended: (a)whilst the applicant’s intention to terminate the contract is not specifically stated in the August notice, her intention to terminate can be “implied”. (b)it was unnecessary for the applicant to refer to the 10-day compliance period in its default notices because the builder was legally represented and it ‘goes without saying’. (c)it was unnecessary for the applicant to refer to the 10-day compliance period in the November Notice because it was a ‘reminder notice’ and the applicant was entitled to rely on the September Notice and follow up notices and emails sent from October to November 2022. The applicant considers the 2 December deadline specified in the November Notice a final follow up of the September Notice. (d)the builder breached essential terms of the contract, namely: (i) it failed to comply with legislated health and safety obligations, contrary to Condition 15;(ii) it failed to achieve the Date for Practical Completion stated in the Contract, contrary to Condition 22;(iii) it did not seek an extension of time, as provided for by Condition 23;(iv) it did not pay the applicant liquidated damages, as required under Condition 24. (e)the builder repudiated the contract by 14 November 2022, when it: (i) ceased engaging in discussion to vary the Contract; and(ii) delayed in performing the Contract and rectifying the defective and incomplete work identified in the First Report. Consideration The primary issue in dispute in this proceeding, is whether the applicant validly terminated the contract within the meaning of section 4(1)(a), Schedule 6 of the Regulation. The following questions are apposite to resolving that controversy: (a)was the builder in default under the Contract? (b)did the applicant validly terminate the Contract under the terms of the contract? (c)did the applicant validly terminate the Contract at common law? (d)did the parties ‘mutually abandon’ the Contract? Was the builder in default? Condition 26.4(c) of the Contract provides that a substantial breach by the contractor “includes, but not limited to unreasonably failing to replace or remedy defective work or materials”. The First and Second Reports lead me to the inescapable conclusion that that the builder’s work was defective. The findings in each report are unchallenged by either respondent. The existence of defects first came to the builder’s knowledge on 9 May 2022 when Mr Crocker conducted his first inspection. Most of the defects remained on 25 November 2022, when Mr Crocker inspected the works for the second time. Over a period of 18 months, the builder took almost no action to remedy the defects. That was unreasonable. I am satisfied that the builder substantially breached Condition 26.4(c) of the Contract by failing to remedy his defective work. Condition 26.4 of the Contract provides that a substantial breach by the contractor includes “unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress”. The Contract required the builder to achieve practical completion by 5 February 2022. However, by the time applicant purported to terminate the Contract on 2 December 2022, the builder had not commenced the fixing stage, or satisfactorily completed preceding stages of the works. The builder has not proffered any reasonable excuse for its delay. In the circumstances, I am satisfied that the builder breached Condition 26.4 of the Contract by unreasonably delaying, suspending, or failing to maintain reasonable progress. Did the applicant lawfully terminate the contract under the terms of the contract?