Krishnan v Queensland Building and Construction
[2022] QCAT 63
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION: Krishnan v Queensland Building and Construction
Commission [2022] QCAT 63PARTIES: MANU KRISHNAN
(applicant)v QUEENSLAND BUILDING AND CONSTRUCTION
COMMISSION
(respondent)APPLICATION NO/S: GAR412-20 MATTER TYPE: General administrative review matters DELIVERED ON: 8 February 2022 HEARD AT: Brisbane DECISION OF: Member Sammon ORDERS:
1.
The Application filed by the applicant Manu Krishnan on 3 March 2021 to extend the time for filing his Application to review a decision by the respondent Queensland Building and Construction Commission is dismissed.
2.
The Application to review a decision of the respondent Queensland Building and Construction Commission filed by the applicant Manu Krishnan on 23 October 2020 is dismissed.
CATCHWORDS:
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – contract for construction of a house – claim under statutory insurance scheme in Queensland Building and Construction Commission Act 1991 (Qld) – whether contract was abandoned by both parties
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – application to extend time to file application to Tribunal to review decision of Queensland
Building and Construction Commission – application of
s 61 of Queensland Civil and Administrative Tribunal Act
2009 (Qld)Queensland Building and Construction Commission Act
1991 (Qld), s 86, s 86C, s 86E
Queensland Building and Construction Commission
Regulation 2018 (Qld), schedule 6
Queensland Civil and Administrative Tribunal Act 2009(Qld), s 3(b), s 6, s 17, s 33, s 47, s 61 Crime and Misconduct Commission v Chapman & Anor
[2011] QCAT 229
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138
CLR 423 at 434APPEARANCES & This matter was heard and determined on the papers REPRESENTATION: pursuant to s 32 of the Queensland Civil and
Administrative Tribunal Act 2009 (Qld)REASONS FOR DECISION
Introduction
In an application filed in the Tribunal on 23 October 2020, the applicant Mr Krishnan applied to review a decision made by the respondent Queensland Building and Construction Commission (QBCC) to refuse his claim under the Queensland Home Warranty Scheme arising out of a contract for construction of a home for him. The Warranty Scheme is a statutory insurance scheme established under the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act).
The basis of Mr Krishnan's claim on the Warranty Scheme is that a contract he entered into with a builder for construction of a home and swimming pool was not completed, and ground to a halt after some work was done by the builder for a swimming pool. He subsequently entered into a contract with another builder to complete the work.
Mr Krishnan filed his application to the Tribunal outside the time required under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act). It was therefore necessary for Mr Krishnan to apply to the Tribunal for an extension of time in which to do so. This decision is on Mr Krishnan's application for that extension of time.
Statutory framework on applications for extensions of time, and applicable principles
For the Tribunal’s review jurisdiction, s 33(3) of the QCAT Act provides that if the application to the Tribunal is for review of a 'reviewable decision',[1] the application must be made, by filing it in the Registry within 28 days after the date, in this case, when the applicant to the Tribunal is notified of the decision the applicant wants reviewed.
[1] A 'reviewable decision' is defined in s 17 of the QCAT Act, to be a decision described as a reviewable decision in an 'enabling Act’ which provides for review, by the Tribunal, of the decision. An 'enabling Act’ is defined in s 6(2) of the QCAT Act, relevantly as an Act that confers review jurisdiction on the Tribunal.
For external review to the Tribunal, s 86E of the QBCC Act describes a 'reviewable decision' relevantly to mean an internal review decision within the meaning of part 7, division 3, subdivision 1 of that Act. Section 86C(1) defines an internal review decision to be an internal review of a 'reviewable decision’. Section 86(1)(h) describes a decision to disallow a claim under the statutory insurance scheme wholly or in part to be a reviewable decision. The decision about which Mr Krishnan seeks review in the Tribunal is a decision of that kind.
The relevant internal review decision was sent to Mr Krishnan by email dated 23 August 2018. The 28 day period in which he had to apply to the Tribunal commenced on 24 August 2018 meaning that he had until 20 September 2018 to apply to the Tribunal, applying s 33(3) of the QCAT Act. As it was, Mr Krishnan did not file his application to the Tribunal until 23 October 2020, some two years and one month after that time.
Section 61(1)(a) of the QCAT Act allows the Tribunal to order that an applicant may file an application to the Tribunal beyond the required timeframe in the following terms:
(1) The tribunal may, by order—
(a) extend a time limit fixed for the start of a proceeding by this Act or an enabling Act.
Although the power of the Tribunal to extend a time limit is discretionary, conferred by the word 'may', it must be guided by applicable legal principles. In a number of decisions, the Tribunal has described the principles to be applied, helpfully listed by Judicial Member Thomas in Crime and Misconduct Commission v Chapman & Anor[2] as including the following factors, often in combination:
[2] [2011] QCAT 229 at paragraph [9].
(a) Whether a satisfactory explanation (or ‘good reason’) is shown to account for the delay; (b) The strength of the case the applicant wishes to bring (assuming it is possible for some view on this to be formed on the preliminary material); (c) Prejudice to adverse parties;[3] (d) Length of the delay, noting that a short delay is usually easier to excuse than a lengthy one; (e) Overall, whether it is in the interests of justice to grant the extension. This usually calls for some analysis of the above factors considered in combination. [3] This factor is contained in s 61(3) of the QCAT Act which provides that the Tribunal can not extend a time limit if to do so would cause prejudice or detriment, not able to be remedied by an appropriate order for costs or damages, to a party or potential party to a proceeding.
Mr Krishnan was directed to file an Application to extend time of compliance with a procedural requirement, which he did on 2 March 2021. The QBCC filed submissions opposing that application on 29 March 2021.
Application of principles
Explanation for delay
On this factor, Mr Krishnan explained that the reason for the delay was that he was unable to afford over $12,000 requested by his solicitor for a review application with the Tribunal. He also said that the cost of bank repayments and his mental health meant he did not do anything with the property for over two years due to depression because of financial and emotional stress endured due to not having the house constructed.
The QBCC accepted that Mr Krishnan may have an arguable case for a reasonable excuse for the delay, in circumstances where he was suffering from mental health issues, but the QBCC noted that Mr Krishnan did not provide any medical evidence to support that assertion.[4]
[4] Paragraph 20 of the QBCC written submissions.
On the other hand, the QBCC submitted that Mr Krishnan's explanation of lack of financial resources to afford a solicitor was not a sufficient explanation for the delay, given that Mr Krishnan was self-represented in the Tribunal’s current proceeding, and he was informed in the decision under review of his review rights and the need to file an application with the Tribunal within the relevant time. The QBCC points out that he has not demonstrated how his financial circumstances prevented him from filing a review application.
The strength of Mr Krishnan's case
This is the most significant factor in this case.
The QBCC submits that on application of the statutory provisions which create an entitlement to make a claim under the statutory insurance policy, when applied to the relevant facts, Mr Krishnan has a weak case.
[15] The terms of the statutory insurance policy are contained in schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld) (the Regulation) made under the QBCC Act.
[16] Part 2 of schedule 6 provides for the assistance 'a consumer' for 'residential construction work' is entitled to claim under the statutory insurance scheme if the work has been started, but is incomplete.[5] That is the part of schedule 6 which applies to Mr Krishnan’s claim under the scheme.
[5] See s 1 of schedule 6. Mr Krishnan's claim falls within the scope of the defined terms.
Section 7(1) in part 2 provides that a consumer is entitled to claim assistance for the reasonable cost of completing the residential construction work (started, but incomplete). However, part 2, division 2 provides that the division (which includes s 7) only applies to a consumer for residential work relevantly if under s 6:
(a) the work is carried out under a fixed price residential contract; and (b) the contract ‘ends’ within 2 years after the day work starts under the contract; and (c) the work is incomplete.
For the purposes of Mr Krishnan's application for an extension of time to file his application for review to the Tribunal, I will take requirements (a) and (c) to be satisfied.
In this case, the contentious requirement is the application of paragraph (b). Section 4(1) defines when a fixed price residential contract 'ends', and relevantly that is if:
(a) the contract is validly terminated on the default of the licensed contractor.
Importantly, the expression ‘validly terminated’ is defined for the purposes of s 4 in s 4(2) as follows:
validly terminated, for a fixed price residential contract, does not include
mutual abandonment of the contract by the parties to the contract.In the initial decision[6] dated 26 June 2018 made by the QBCC on Mr Krishnan's claim, the QBCC rejected his claim on the basis that the contract was mutually abandoned by the parties prior to a purported termination by Mr Krishnan.
[6] Which became the internal review decision that is the subject of Mr Krishnan's application to the Tribunal. That is because after Mr Krishnan applied for an internal review of that initial decision, the QBCC did not make the internal review decision within the required time, meaning that the initial decision was deemed to be the internal review decision due to the effect of s 86C(3) of the QBCC Act.
Documents attached to the submission from the QBCC set out the chronology of relevant events.
On 22 May 2017, Mr Krishnan entered into a new home construction contract with the first builder including for construction of a swimming pool. The first component of the work was for construction of the swimming pool. That component did not go well between the parties to the contract. Although the pool was excavated and the shell constructed, together with associated plumbing and electrical work, Mr Krishnan contended that the pool was built in the wrong place and conflicted with the designs and plans for the house.
[24] Documents supplied to the QBCC by the first builder reveal a plethora of negotiations about construction of the pool and suggested changes by Mr Krishnan to the pool and associated features.
Once the shell was constructed, it appears that the relationship between Mr Krishnan and the builder completely deteriorated and the builder took no further steps under the contract from July 2017 onwards. Mr Krishnan did not take any action at that time to terminate the contract.
On 13 September 2017, the builder sent a letter to Mr Krishnan requesting that the contract be terminated, releasing both parties of any legal requirements or obligations from that date. On 27 September 2017, evidently having received no response to the letter dated 13 September 2017, the builder sent an invoice to Mr Krishnan for $7,221.51, being the balance between the value claimed for work done by the builder of $57,221.15 and the deposit paid by Mr Krishnan of $50,000.
Those two items of correspondence together with the builder having not undertaken any further work on the contract since July 2017 at least establish that the builder had abandoned the contract and treated it as at an end.
Mr Krishnan still did not terminate the contract at that stage. Importantly, what he did was to enter into a further contract with a new builder on 14 October 2017, for the same or materially similar work as under the first contract.
The QBCC contends that at the point in time when Mr Krishnan entered into the new contract with the new builder, reflects action taken on his part to abandon the first contract. I agree. The two contracts for carrying out the same work cannot stand together. Entering into the new contract is inconsistent with keeping the contract with the first builder on foot.
The High Court described a helpful test for when a contract should be taken to have been mutually abandoned by the parties in DTR Nominees Pty Ltd v Mona Homes Pty Ltd[7] when stating that on the facts of that case, ‘Neither party intended that the contract should be further performed.’
[7] (1978) 138 CLR 423 at 434.
That test is satisfied on the facts of this case. The first builder, by ceasing work on the contract in July 2017 and in his correspondence of September 2017 evinced an intention not to continue with the contract. Mr Krishnan did the same when he engaged a new contractor to carry out the relevant work.
Subsequently, matters did not proceed well under the second contract. The second contractor went into bankruptcy and Mr Krishnan was successful in being paid the amount of the deposit under the second contract through a separate successful claim to the QBCC under the statutory insurance scheme.
Later, by a letter dated 13 April 2018 from Mr Krishnan's solicitors to the solicitors for the first builder, Mr Krishnan purported to terminate the first contract due to the builder’s default. A few days later, on 19 April 2018, Mr Krishnan made his claim to the QBCC under the statutory insurance scheme.
The QBCC submits that the purported termination on 13 April 2018 was ineffective, because the first contract had already ended due to the mutual abandonment. I agree.
[35] Alternatively to the primary decision made by the QBCC in the decision under review that the first contract was mutually abandoned, the QBCC arrived at an alternative basis that Mr Krishnan was not entitled to treat the first contractor’s inactivity as constituting an unlawful repudiation of the contract entitling termination, in circumstances where Mr Krishnan must have been taken to have acquiesced in the first builder’s conduct in not proceeding with the contract. The acquiescence includes engaging the second builder and also not insisting that the first builder perform the contract.
In view of my findings on the strength of the QBCC first basis for decision, it is not necessary for me to consider the alternative basis. However, the contention appears to have merit.
My conclusion on this aspect of the principles for when an extension of time would be granted are that Mr Krishnan's prospects of success are very poor.
Prejudice to adverse parties
The QBCC submits that it would suffer prejudice if the application for an extension of time would be granted to Mr Krishnan.[8] In general terms, the QBCC submits that it would be 'saddled with the cost of rectifying and completing work’ on a property that has been left in an incomplete state for four and a half years. Further, it would be difficult to ascertain whether any other work was done by a third party on the site, causing uncertainty about what the QBCC's costs would be to pay for rectification or remedial work.
[8] Paragraphs 26-30 of the QBCC written submissions.
There is no clear evidence on the current state of the site. I am not persuaded that the QBCC’s submission on this point is a strong one. The prejudice that needs to be considered under s 61(3) of the QBCC Act in an extension of time application is the prejudice that would be done because of the extension itself, not because of any eventual success of the substantive application of the party applying for the extension. A good example of how a party might be prejudiced by a grant of an extension of time, is that crucial evidence may longer be available. That does not appear to be the case on the present facts. If prejudice because of an extension was to be extended to potential loss because of an applicant’s substantive case, then meritorious applications for extension of time would never succeed. That cannot be the intention of s 61 of the QCAT Act.
Length of delay
[40] The delay in Mr Krishnan filing his substantive application for review to the Tribunal is two years and one month. That is a substantial delay. Almost inevitably, this factor needs to be considered with the first factor about the explanation for the delay. Taken together, the substantial delay, taken with the fact that Mr Krishnan was self-represented in the application that he did make to the Tribunal does not suggest a compelling reason to grant the extension of time. He could have made a self- represented application to the Tribunal, as he eventually did, within the 28 days of which he was informed as the time in which to file an application for review of the relevant decision.
The interests of justice
The QBCC submits[9] that when all the relevant factors are considered together, it is in the interests of justice that Mr Krishnan's application for an extension of time should be refused.
[9] Written submissions, paragraphs 35-36.
The QBCC submits that the objects of the QCAT Act in s 3(b) in the Tribunal dealing with matters in a way that is 'accessible, fair, just, economical, informal and quick’ would not be achieved by allowing Mr Krishnan to commence his application for review after the delay in this case.
I agree that the interests of justice are reflected in the objects of the QCAT Act contained in s 3(b). Overall, especially given the poor merits of Mr Krishnan's application, in my opinion, the interests of justice are best served by refusing Mr Krishnan's application for an extension of time.
Orders
I will order that Mr Krishnan's application for an extension of time filed on 2 March 2021 be dismissed.
That will have the effect that Mr Krishnan has not filed an Application for review of the relevant reviewable decision within the time required by s 33 of the QCAT Act. His application therefore lacks substance under s 47(1)(b) of the QCAT Act. I therefore dismiss Mr Krishnan's substantive Application to review a decision filed on 23 October 2020. The orders on the first page of these reasons reflect those decisions.
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