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Lange v Queensland Building Services Authority

Lange v Queensland Building Services Authority

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SUPREME COURT OF QUEENSLAND

CITATION:

Lange v Queensland Building Services Authority [2011] QCA 58

PARTIES:

SHANE ANDREW LANGE
(appellant)
v
QUEENSLAND BUILDING SERVICES AUTHORITY
(respondent)

FILE NO/S:

Appeal No 9164 of 2010
SC No 1930 of 2009

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

1 April 2011

DELIVERED AT:

Brisbane

HEARING DATE:

24 February 2011

JUDGES:

Margaret McMurdo P, Margaret Wilson AJA and Ann Lyons J
Separate reasons for judgment of each member of the Court, each concurring as to the order made

ORDER:

The appeal is dismissed with costs.

CATCHWORDS:

PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – where appellant’s company contracted to build three townhouses for owners – where townhouses comprised one detached dwelling and one duplex – where owners covered by insurance policy pursuant to the Queensland Building Industry Services Authority Act 1991 (Qld) – where respondent’s liability limited under the policy – where work was not completed – where owners terminated contract – where owners successfully claimed $200,000 from respondent on policy – where respondent sought indemnity from appellant pursuant to Queensland Building Industry Services Authority Act 1991 (Qld) s 111C – whether exclusion clause in policy applicable

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – PARTICULAR WORDS AND PHRASES – where insurance policy a statutory instrument – whether exclusion clause applicable – whether "residential construction work" has same meaning throughout policy – whether contra proferentem maxim applicable – whether later legislative amendment can inform interpretation of policy – whether "payment on a claim under the insurance scheme" pursuant to Queensland Building Industry Services Authority Act 1991 (Qld), s 71 and s 111C

Acts Interpretation Act 1954 (Qld), s 14B
Judicial Review Act 1991 (Qld), s 4, s 20
Queensland Building Services Authority Act 1991 (Qld) (Reprint No 8E), s 3, s 4 (Schedule 2), s 5, s 9(a), s 9A, s 69(2), s 71(1), s 111C
Queensland Building Services Authority Act 1991 (Qld) (Reprint No 8F), s 70A
Queensland Building Services Authority Insurance Policy Conditions, Edition 7, 29 September 2006, cl 1.1, cl 1.9, cl 2.1(a), cl 2.4(c), cl 2.6 3.1(a), cl 3.4(b), cl 3.6, cl 9
Queensland Building Services Authority Regulation 2003 (Qld) (Reprint No 2E), s 9, s 10, s 11, s 12
Statutory Instruments Act 1992 (Qld)

Allina Pty Ltd v Federal Commissioner of Taxation (1991) 28 FCR 203; [1991] FCA 78, cited
Insurance Commission (WA) v Container Handlers Pty Ltd (2004) 218 CLR 89; [2004] HCA 24, cited
Interlego AG & Anor v Croner Trading Pty Ltd (1992) 39 FCR 348; [1992] FCA 624, cited
Johnson v American Home Assurance Company (1998) 192 CLR 266; [1998] HCA 14, cited
King v Victoria Insurance Co Ltd [1896] AC 250, cited
Lange v Queensland Building Services Authority [2010] QSC 266, cited
McCann v Switzerland Insurance Australia Limited (2000) 203 CLR 579; [2000] HCA 65, cited

COUNSEL:

G J Gibson…

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: [2011] QCA 58
Decision Date: 1 April 2011

CaseChat Overview and Summary

Lange v Queensland Building Services Authority involves a dispute between Lange, a builder, and the Queensland Building Services Authority (QBSA). The QBSA, as the statutory body overseeing building services, provided insurance coverage to the homeowners under the Queensland Building Industry Services Authority Act 1991 (Qld). The homeowners terminated a contract with Lange due to incomplete work and claimed $200,000 from the QBSA under the insurance policy. The QBSA subsequently sought indemnity from Lange under the same Act, arguing that an exclusion clause in the insurance policy applied. The central legal issue before the court was whether this exclusion clause barred the QBSA from making a claim against Lange. This required the court to interpret the meaning of "residential construction work" within the policy and the Act and to determine whether certain legislative provisions and amendments could inform this interpretation.

The court held that the exclusion clause in question did not apply to the facts of this case. It found that the clause was intended to cover specific types of buildings and not to create nonsensical results that would allow the QBSA to escape liability. The court noted that the policy was a statutory instrument, and thus, its interpretation should best achieve the purpose of consumer protection as set out in the Act. Furthermore, the court found that "residential construction work" had the same meaning in the Act, the QBSA Regulation, and the policy. The court also observed that the purpose of the Act was consumer protection, and the policy should be construed to best achieve this purpose. The court rejected Lange’s argument that a later legislative amendment could inform the interpretation of the policy, holding that such amendments could not be used to retrospectively alter the meaning of the policy.

The appeal was dismissed with costs, and Lange was ordered to pay the QBSA’s costs. The court concluded that the QBSA was correct in its interpretation that the exclusion clause did not apply and that the homeowners were entitled to payment. The court further held that the purpose of the legislation and the policy was to protect consumers, and the interpretation that best achieved this purpose should be preferred. The court also noted that if the legislature had intended for the exclusion clause to apply in circumstances such as these, it would have been relatively simple to incorporate this into the clause.

Orders

Orders of the court

The appeal is dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

His Honour reasoned –"Conclusions[28]The construction advanced by the applicant would result in a situation where QBSA could escape liability where a contract for the construction of a duplex also contained a requirement that there be a simple concrete path leading to the front door of that duplex as the latter would be 'residential construction work' within the meaning of the legislation. As Jordan CJ said in Hall v Jones[10]:'A court is entitled to pay the legislature the not excessive compliment of assuming that it intended to enact sense and not nonsense.'[29]To adopt the construction advanced by the applicant would allow for nonsensical results and I do not accept that the purpose of the legislation as set out in the Act, the Regulation and the insurance policy was to allow for such a result.[30] When, in clause 1.9(a)(ii), there is a reference to 'more than one duplex', that necessarily involves a consideration of the class of items for which there is more than one. Clause 1.9(a)(i)-(v) contains references to particular types of dwellings and numbers of them. It is internally consistent with that delineation of types of structures that one should adopt the construction that each sub-clause necessarily refers to a type of building; thus, a reference to more than one type of building means no more than that the exclusion will apply if the contract or contracts involves more than the specified number of particular types of construction. Had the legislature intended that the policy could be excluded in the circumstances of this case then it would have been a relatively simple task for that to have been incorporated into clause 1.9.[31]The QBSA was correct in its appreciation that clause 1.9 did not apply and that the insured were entitled to payment. It follows that the application is dismissed. I will hear the parties on costs."[10](1942) 42 SR (NSW) 203, 208. Because the policy is a statutory instrument, the interpretation of clause 1.9 which will best achieve the purpose of the QBSA Act is to be preferred to any other.[11][11]Statutory Instruments Act 1992 s 14(1), Sch 1; Acts Interpretation Act 1954, s 14A. The objects of the Act are set out in s 3: A "consumer" is – By s 69(2) a policy of insurance comes into force when a consumer enters into a contract for residential construction work with an appropriately licensed contractor.[13] [13]See also cl 4.10 of the policy, which imposes limits on the respondent’s liability where the insured work is contained in a building incorporating both residential purposes and commercial purposes. Thus, the purpose of Pt 5 of the Act is consumer protection, and the policy is to be construed in the way which will best achieve that purpose. "Residential construction work" has the same meaning in the Act, the Queensland Building Services Authority Regulation 2003[14] ("the QBSA Regulation") and the policy.[15] Under s 10 of the QBSA Regulation both "primary building work" (for example, the construction of a residence) and "associated building work" (for example, the construction of a fence under a contract for primary building work) are classified as "residential construction work".[16][14]The parties agreed that Reprint No 3E contains the provisions of the Regulation in force at all material times.[15]QBSA Act s 4, Sch 2 (Dictionary); QBSA Regulation (Reprint No 2E) s 10; policy cll 9.1 and 9.2.[16]QBSA Regulation (Reprint No 2E) ss 11 and 12.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Lange v Queensland Building Services Authority [2011] QCA 58
PARTIES:	SHANE ANDREW LANGE (appellant) v QUEENSLAND BUILDING SERVICES AUTHORITY (respondent)
FILE NO/S:	Appeal No 9164 of 2010 SC No 1930 of 2009
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	1 April 2011
DELIVERED AT:	Brisbane
HEARING DATE:	24 February 2011
JUDGES:	Margaret McMurdo P, Margaret Wilson AJA and Ann Lyons J Separate reasons for judgment of each member of the Court, each concurring as to the order made
ORDER:	The appeal is dismissed with costs.
CATCHWORDS:	PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – where appellant’s company contracted to build three townhouses for owners – where townhouses comprised one detached dwelling and one duplex – where owners covered by insurance policy pursuant to the Queensland Building Industry Services Authority Act 1991 (Qld) – where respondent’s liability limited under the policy – where work was not completed – where owners terminated contract – where owners successfully claimed $200,000 from respondent on policy – where respondent sought indemnity from appellant pursuant to Queensland Building Industry Services Authority Act 1991 (Qld) s 111C – whether exclusion clause in policy applicable STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – PARTICULAR WORDS AND PHRASES – where insurance policy a statutory instrument – whether exclusion clause applicable – whether "residential construction work" has same meaning throughout policy – whether contra proferentem maxim applicable – whether later legislative amendment can inform interpretation of policy – whether "payment on a claim under the insurance scheme" pursuant to Queensland Building Industry Services Authority Act 1991 (Qld), s 71 and s 111C Acts Interpretation Act 1954 (Qld), s 14B Judicial Review Act 1991 (Qld), s 4, s 20 Queensland Building Services Authority Act 1991 (Qld) (Reprint No 8E), s 3, s 4 (Schedule 2), s 5, s 9(a), s 9A, s 69(2), s 71(1), s 111C Queensland Building Services Authority Act 1991 (Qld) (Reprint No 8F), s 70A Queensland Building Services Authority Insurance Policy Conditions, Edition 7, 29 September 2006, cl 1.1, cl 1.9, cl 2.1(a), cl 2.4(c), cl 2.6 3.1(a), cl 3.4(b), cl 3.6, cl 9 Queensland Building Services Authority Regulation 2003 (Qld) (Reprint No 2E), s 9, s 10, s 11, s 12 Statutory Instruments Act 1992 (Qld) Allina Pty Ltd v Federal Commissioner of Taxation (1991) 28 FCR 203; [1991] FCA 78, cited Insurance Commission (WA) v Container Handlers Pty Ltd (2004) 218 CLR 89; [2004] HCA 24, cited Interlego AG & Anor v Croner Trading Pty Ltd (1992) 39 FCR 348; [1992] FCA 624, cited Johnson v American Home Assurance Company (1998) 192 CLR 266; [1998] HCA 14, cited King v Victoria Insurance Co Ltd [1896] AC 250, cited Lange v Queensland Building Services Authority [2010] QSC 266, cited McCann v Switzerland Insurance Australia Limited (2000) 203 CLR 579; [2000] HCA 65, cited
COUNSEL:	G J Gibson…