Kitchen Plus (Nerang) Pty Ltd v Queensland Building and Construction Commission
[2014] QCAT 84
| CITATION: | Kitchen Plus (Nerang) Pty Ltd v Queensland Building and Construction Commission [2014] QCAT 084 |
| PARTIES: | Kitchen Plus (Nerang) Pty Ltd (Applicant) |
| v | |
| Queensland Building and Construction Commission (Respondent) |
| APPLICATION NUMBER: | GAR001-13 |
| MATTER TYPE: | General Administrative Review matters |
| HEARING DATE: | 21 February 2014 |
| HEARD AT: | Southport |
| DECISION OF: | Member McLean Williams |
| DELIVERED ON: | 10 March 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application for review of a decision is upheld. 2. The decision of the respondent made on 30 November 2012 to issue direction No. 38298 is set aside. 3. The respondent is to pay the applicant’s costs of this application to review a decision, fixed in the amount of the applicant’s filing fee for the application. |
| CATCHWORDS: | Application to review a decision by the respondent to issue a direction to rectify defective building work – discretion not to issue a direction where in all the circumstances it would be unfair to give the direction – circumstances where the factual matters in dispute had been previously adjudicated in a civil claim before QCAT – questions whether that civil adjudication comprises a circumstance that should inform exercise of the discretion Queensland Civil and Administrative Tribunal Act 2009 ss 20, 24, 102(1) Birrell v Queensland Building Services Authority [2013] QCAT 56 |
APPEARANCES and REPRESENTATION (If any):
| APPLICANT: | Mr Stephen Bugg (director), in person. |
| RESPONDENT: | Ms Brooke Gilbey, in-house solicitor |
REASONS FOR DECISION
The Applicant, Kitchenplus (Nerang) Pty Ltd, applied to QCAT on 14 January 2013 pursuant to sections 86(1)(e) and 87 of the (former) Queensland Building Services Authority Act 1991 (‘QBSA Act’) for the review of a decision made by the Queensland Building and Construction Commission[1] (‘respondent’) on 30 November 2012.
[1]At the time of the decision, the Commission was known by its former name, the Queensland Building Services Authority.
By that decision (Decision No. 38298), the respondent directed the applicant to rectify and/or complete bathroom renovation works, previously undertaken by the applicant in a residential unit located at Gladstone, in Central Queensland. Although based at Nerang, the applicant periodically undertakes work in the city of Gladstone, on a ‘fly-in-fly-out’ basis.
The QBSA Act has since been re-styled as the Queensland Building and Construction Commission Act 1991 (‘QBCC Act’) Sections 86(1)(e), and 87 of the QBCC Act are in essentially identical terms to the predecessor Act, and provide:
86 Reviewable decisions
(1)The tribunal may review the following decisions of the commission—
…
(e) a decision to direct or not to direct rectification or completion of tribunal work;
87 Application for review
A person affected by a reviewable decision of the commission may apply, as provided under the QCAT Act, to the tribunal for a review of the decision.
When hearing an application for review, QCAT is required to produce the ‘correct and preferable’ decision, by way of a fresh hearing, on the merits (QCAT Act, s.20). When conducting any hearing de novo the Tribunal stands in the shoes of the original decision maker, and may:
(a) confirm or amend the decision; or
(b) set aside the decision, and substitute its own decision; or
(c) set aside the decision and return the matter for reconsideration by the decision-maker for the decision, with the directions the tribunal considers appropriate (QCAT Act, s 24).
Factual Background
On 2 November 2011 the applicant entered into a contract with Ms Cathy-Anne Townsend, the owner of a residential unit at Gladstone, to renovate her bathroom. The agreed price for that renovation was $10,300.00. Works commenced on 2 November 2011, and the project attained practical completion by 1 December 2011.
Despite demand, the homeowner failed to pay the applicant the final instalment sum of $2,300.00. Because of this non-payment, the applicant commenced a minor civil claim before QCAT at Southport, seeking payment of the outstanding amount. Those proceedings (Southport minor civil dispute Q96/2012) were commenced by the applicant even before the homeowner hade made any complaint to the respondent.
On 26 July 2012 the respondent received a complaint from the homeowner. This was more than seven months after the date of practical completion. As at the date of the making of that complaint, minor civil dispute Q96/2012 had been brought before QCAT (on 23 April 2012), yet had been adjourned, part-heard, until 30 October 2012.
Ordinarily, by reason of s 83 of the QBCC Act, the commencement of proceedings before QCAT acts as a stay upon any action by the respondent, except as allowed by s 84 of the QBCC Act. Notwithstanding these provisions, and the applicant challenging the jurisdiction of the respondent to act in these circumstances,[2] the respondent still wrote to the applicant on 28 September 2012, inviting it to attend at an inspection of the bathroom in the unit at Gladstone, on 18 October 2012.
[2]Applicant’s letter to the respondent dated 21 September 2012: Annexure “SOR-5” to the statement of reasons for the decision dated 9 April 2013.
An appropriately qualified representative of the applicant was unable to attend on 18 October 2012. Despite that, the respondent’s inspection proceeded, and was undertaken by a Mr George Wright, a building inspector in the employ of the respondent, and in the presence of the homeowner. Mr Wright then produced a report dated 23 October 2012.[3]
[3] Annexure “SOR-8” to the statement of reasons for the decision dated 9 April 2013.
On 29 October 2012, the homeowner provided the Respondent with a copy of the QCAT decision in minor civil dispute Q96 of 2012, given on 23 November 2012. The decision by QCAT was to dismiss the minor debt claim by the present applicant against the homeowner.
On 30 November 2012 the respondent notified the applicant of its decision to issue the applicant with a Direction to Rectify and/or Complete, No. 38298 (“the direction”) pursuant to s 72(1) of the (former) QBSA Act. That provision is in effectively identical terms to s 72(1) of the current QBCC Act.
Statutory Framework
Part 6 of the QBCC Act sets out, amongst other matters, the Respondent’s powers to require rectification of defective building work, by licensed contractors. Relevantly, s 72 provides:-
Power to Require Rectification of Building Work
(1)If the commission is of the opinion the building work is defective or incomplete the commission may direct the person who carried out the building work to rectify the building work within the period stated in the Direction.
(2)In deciding whether to give a direction under subsection (1), the commission may take into consideration all the circumstances it considers are reasonably relevant, and in particular, is not limited to a consideration of the terms of, including the terms of any warranties included in, the contract for carrying out building work.
….
(5)For subsection (1), the person who carried out the building work is taken to include:-
(a)a licensed contractor whose licence card is imprinted in the contract for carrying out the building work; and
(b)a licensed contractor whose name, licence number and address are stated on the contract; and
(ba)a licensed contractor whose name is stated on the contract for the carrying out of the building work; and
(bb) a licensed contractor whose name is stated on an insurance notification form for the building work; and
(bc) a licensed contractor whose licence number is stated on the contract for carrying out the building work; and
(bd)a licensed contractor whose licence number is stated on an insurance notification form for the building works; and
(be) a licensed contractor whose licence PIN was used for putting in place for the building work, insurance under the Statutory Insurance Scheme; and
(c)a building contractor by whom the building work was carried out;
….
(14)The commission is not required to give a direction under this section to a person who carried out building work for the rectification of the building work if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction.
The term “building work” is defined in Schedule 2 of the QBCC Act as including:-
(b)the renovation, alteration, extension, improvement or repair of a building;
In this case there can be no doubt that the bathroom renovation performed by the applicant qualifies as “building work”, as defined in Schedule 2. The term “defective” is then also defined by Schedule 2:-
“defective”, in relation to building work, includes faulty or unsatisfactory.”
In deciding whether to give a direction under subsection 72(1), the respondent has regard to the objects of the QBCC Act, which are set out in s 3 of the Act. These are expressed as:-
(a)to regulate the building industry –
(i)to ensure the maintenance of proper standards in the industry; and
(ii)to achieve a reasonable balance between the interests of building contractors and consumers; and
(b)to provide remedies for defective building work; and
(c)to provide support, education and advice for those who undertake building work and consumers.
When giving the Direction, the respondent is also required to have regard to the Rectification of Building Work Policy (‘rectification policy’), made pursuant to s 9 of the QBCC Act. Under ss 7 & 9 of the Statutory Instruments Act 1992 the rectification policy is a statutory instrument, which takes on the same force as any piece of subordinate legislation.
It is expressed to be a “guideline policy” of the rectification policy that a building contractor who carries out either category 1, or category 2 defective building work should be required to rectify that defective building work, unless in the circumstances rectification would be “unfair”. That term is to be given its ordinary meaning. In essence, it is a synonym for “unreasonable”.
It is also a guideline policy within the rectification policy that consumers who wish for the respondent to issue a direction to rectify to a licensed contractor should not delay in their making that application, if the delay would result in the issue of the direction to the licensed contractor being unfair in the circumstances.
Item 3(2) in the rectification policy specifies that it may be unfair if, for example, the delay in relation to category 2 defective building works exceeds:-
(i) six (6) months after the building work was completed or left incomplete; or
(ii) seven (7) months, if the owner notified the contractor of the defect within six (6) months after the building work was completed or left incomplete.
Applicant’s Contention
The applicant contends that it would be unfair in all the circumstances to give a direction to rectify on the basis of the inspection conducted by the respondent on 18 October 2012. As basis for that contention the applicant submits that the respondent has not sufficiently taken into account the reasons for decision underpinning the judgment made by QCAT, on 23 November 2012.
So too, the applicant submits that the majority of the matters required to be rectified by the applicant by reason of Direction No. 38298,[4] are category 2 defects, and these are very minor, or cosmetic in nature. These were not brought to the attention of the respondent by the homeowner until more than seven months after the date of practical completion, and beyond the period specified in the guideline policy. It would also appear from the Applicant’s unchallenged oral testimony that some of these items were deliberately constructed in that manner, or otherwise left in that manner (for example the unpainted door trims and the bathroom shelves supplied by the owner at the very end of the job) at the specific instruction of the homeowner.
[4] See annexure “SOR-10” to the Statement of Reasons dated 9 April 2013.
There are some further matters in the report of Mr Wright,[5] that are category one defects. Yet, the applicant denies responsibility for these category one matters, and suggests that the category one defects either pre-date any work in the bathroom by the applicant; or have arisen as a consequence of tampering in the intervening period between the date of practical completion (1 December 2011), and the date of Mr Wright’s inspection on 18 October 2012, either by the owner, or other tradespeople; or are not properly categorised as category one defects, given they are so minor and so easily rectified, thereby making them category 2 matters.
[5] Annexure “SOR-8”.
On the evidence before me it would seem that the unit at Gladstone is located in an old building, and there was evidence of pre-existing water damage at the time of Mr Wright’s inspection. So too, the evidence suggests that other tradespeople have worked on this bathroom since the departure of the applicant. I think too that at least one of the category one defects specified in Mr Wright’s report (cupboard doors catching on the bathroom counter) is, more properly, categorised as a category 2 issue.
The respondent submits that it not unfair to issue the direction, despite the passing of more than seven months before the making of the complaint, citing Birrell v Queensland Building Services Authority;[6] Feoderoff v QBSA;[7] and Glen Williams Pty Ltd v Queensland Building Services Authority[8] as authority for that contention, and as basis for the need to now issue the direction. Yet, the unfairness discretion in s 72(14) is one that must be considered in all of the circumstances that are known to the prospective decision maker at the time of the making of the decision under s 72(1). As part of that, the need for proper deliberation regarding the potential for unfairness in any proposed direction must not be overshadowed by mere incantations about the need to safeguard industry standards. If that were permissible then the discretion in s 72(14) would never have been included by the legislature.
[6] [2013] QCAT 56.
[7] [2005] QCCT Q035.
[8] [2012] QCAT 127.
In the particular circumstances of this case, it is necessary for the decision maker under s 72 to do more than merely note the fact of the dismissal of the applicant’s civil claim by QCAT, and must also descend into the judgement so as to consider the precise reasons given by the Tribunal for that dismissal, so as to thereby properly inform the exercise of the discretion. Here, the transcript of the judgement in minor civil dispute Q96/2012 reveals that the applicant’s claim was dismissed because the learned member was satisfied that she should not order that the applicant rectify the outstanding matters and defects revealed in the inspection report dated 23 October 2012, and that it was appropriate to instead order (consistent with the alternate relief sought from QCAT by the respondent/homeowner) that the homeowner should be excused from making the final payment, so as to place the homeowner in sufficient funds to attend to the fixing of any residual problems in the bathroom for herself. Other than to note the fact of the dismissal of QCAT claim Q96/2012, there is no evidence in the respondent’s reasons for decision dated 9 April 2013 to indicate that the respondent has properly considered the basis for that result.
The fact of those QCAT reasons, when coupled with the conventional time limits for complaints regarding category 2 defects as specified in the rectification policy; as well as the state of the evidence regarding the ability to attribute the ‘category one’ defects to the applicant leads me to the view that it would be unfair to order any rectification by the applicant of the building works.
Conclusion
The application for review is upheld. I order that the decision of the respondent made on 30 November 2012 to issue direction No. 38298 be set aside.
It is appropriate in this instance that there also be an order for costs against the respondent, pursuant to s.102(1) of the QCAT Act. I therefore further order that the respondent now pay the applicant’s costs of this application, fixed in the amount of the applicant’s filing fee paid to commence this application to review a decision.
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