Kirby v Queensland Building Services Authority

[2010] QCAT 379

CITATION: Kirby v Queensland Building Services Authority [2010] QCAT 379

PARTIES:	Mrs Cecilia Kirby
v
Queensland Building Services Authority

APPLICATION NUMBER:   GAR085-10  

MATTER TYPE: General administrative review matters

HEARING DATE:     On the papers

HEARD AT:  Brisbane

DECISION OF: K Buxton – Adjudicator

DELIVERED ON: 6 August 2010

DELIVERED AT:      Brisbane

ORDERS MADE:

(1)  The Review Application is dismissed

(2)  Each party bear their own costs

CATCHWORDS :  QBSA Act,  Regulations and statutory policy. Limit of cover.  Meaning of “deposit”

APPEARANCES and REPRESENTATION (if any):

APPLICANT:	Mrs Cecilia Kirby represented by Mr Liam Kirby of Kerr Lawyers
RESPONDENT:	Queensland Building Services Authority representing itself

REASONS FOR DECISION

1. In this Application for review of the decision of the Respondent Authority (the “BSA”) to decline to pay to the Applicant home owner the sum of $6900, the Application is dismissed for the reasons which follow.

1. The relevant legislation is helpfully set of in the submissions of the Respondent filed 21 May 2010. The legislative structure provided by the QBSA Act, Regulations and Insurance Policy allows for a mechanism for a home owner who has entered into a contract for building work to recover against the policy for certain losses suffered by that home owner when the contractor fails to complete work.

1. The scheme is not a substitute for, but a supplement to, a home owner's rights at common law to recover for losses under the contract. In this case, the contractor has been placed into administration, with the practical effect that the home owner, if able to pursue the contractor, would be left to rank amongst the contractor’s other creditors . The prospects of the home owner recovering any sum would therefore be remote.

1. The insurance cover under the legislative scheme provides some relief. It is, not, however, an indemnity for any and all losses sustained by the home owner. It is expressly limited by operation of clause 1.4 to the sum of 5% of the contract price (here, $1150) plus interest. These sums have been paid by the BSA to the home owner.

1. The home owner seeks to recover under the policy a further $6900 which was paid to the contractor very shortly after the deposit was paid, but prior to building works commencing.   The $6900 was not a deposit, but a stage payment, notwithstanding its proximity in time to the payment of the 5% deposit.  The terms of the policy are quite clear. Cover is provided only based on the lower of the two alternative scenarios presented in clause 1.4 of the policy, which in this case amount to the same figure of $1150, together with interest.

1. There is tacit acceptance in the applicants submissions, filed 11 June 2010, that the policy wording is so limited. At the heart of the Applicants submission is the assertion that the result is unfair and is an unacceptable and unintended result of the application of the insurance policy. The Review Application contains the suggestion that a “loophole” exists in the legislation. QCAT is asked to refer the matter to the Ombudsman.

1. Whilst it is certainly true that the facts in the matter have left the home owner in an invidious position in terms of recovering the sum of $6900 from the contractor, I do not accept that the result of the application of the plain wording of the policy is unintended, or even surprising. The insurance does not provide an indemnity for all losses and is expressly limited to the amounts already paid out by the BSA to the home owner.

1. The particular circumstance in which this home owner finds herself do not, and cannot, alter the way in which the policy is interpreted. The Review should therefore be dismissed and I decline to accede to the home owner’s request to refer the matter to the Ombudsman.

1. I note that this matter has progressed by way of written submission and in a manner which has ensured the minimum possible exposure to costs by each party.

10. On the basis, I make the following orders:

i)     The Review Application is dismissed.

ii)    Each party bear their own costs.