Payne v Queensland Building and Construction Commission - [2025] QCAT 268

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Payne v Queensland Building and Construction Commission [2025] QCAT 268

PARTIES:

JACQUELINE VERONICA PAYNE

(applicant)

v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(respondent)

APPLICATION NO/S:

GAR116-20

MATTER TYPE:

Building matters

DELIVERED ON:

23 June 2025

HEARING DATE:

21 February 2025

HEARD AT:

Brisbane

DECISION OF:

Member Bertelsen

ORDERS:

1. The Queensland Building and Construction Commission pay to Jacqueline Veronica Payne the sum of $200,000.00 in full and final satisfaction of her claim for assistance under the Queensland Home Warranty Scheme.

2. The Queensland Building and Construction Commission and Jacqueline Veronica Payne are given twenty-eight days to make submissions on the applicability of interest and costs after which a final fully quantified decision shall be made.

CATCHWORDS:

PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO PROVIDE INSURANCE COVER FOR DEFECTIVE OR INCOMPLETE BUILDING WORK – where Queensland Building and Construction Commission declined to provide cover in respect of undisputed structurally defective and or incomplete building work – where an owner applied to the Tribunal to review the decision – where it was not disputed such work was primary insurable work under the Queensland and Construction Commission Regulation – where the property the subject of the proceeding was sold prior to remedial work being carried out – loss associated with forced sale – whether statutory insurance scheme should respond to loss incurred

Queensland Building and Construction Commission Act 1991 (Qld), s 67X, s 67WA.

Queensland Building and Construction Commission Regulation 2018 (Qld), Schedule 6 s 7, s 15, s 24, s 25, s 38, s 39, s 64

Kelly v R (2004) 218 CLR 216

Harvey v Minister for Primary Industry and Resources (2024) HCA 1

APPEARANCES & REPRESENTATION:

Applicant:

Simon Formby of Counsel for the Applicant

Respondent:

Travis Schmitt of Counsel with him Suliana Tabaiwalu in house lawyer for the Respondent

REASONS FOR DECISION

On 27 March 2020 the Applicant Jacqueline Veronica Payne filed an application seeking review of the Queensland Building and Construction Commission (‘Commission’) decision of 3 March 2020 whereby the Commission disallowed her claim for non-completion of building work at 137 Melbourne Street, West End under the Queensland Home Warranty Insurance Scheme (‘Scheme’). The builder Brizform Pty Ltd was initially also a Respondent to the review application but was removed by Tribunal direction on 2 April 2024.

Background and Evidence

At hearing commencement written admissions by the parties were produced to the Tribunal as follows:
(a)On 10 January 2018, the Applicant and Brizform Pty Ltd (‘Brizform’) executed a QBCC Level 2 Renovation, Extension and Repair Contract (‘the Contract’) for the renovation of residential property at 137 Melbourne Street, South Brisbane in the State of Queensland (‘the Property’) for $235,950.00.
(b)Renovation works commenced on 10 January 2018.
(c)On 17 October 2019, Brizform ceased work, and Mr Troy Clout, former director of Brizform, advised the Applicant that he was putting Brizform into liquidation.
(d)Based on the above communication, the Applicant, through her solicitors, terminated the contract on 22 October 2019.
(e)At the time of termination, the building work under the contract was incomplete and defective.
(f)At the time of termination, the Applicant had paid claims for stages 1-5 totalling $202,393.38.
(g)On 31 October 2019, the Applicant lodged with the Commission a non- completion residential construction work complaint form, pursuant to the Scheme.
(h)On 5 December 2019, the Applicant was advised of the Commission’s decision to disallow her claim under the Scheme on the basis that the Contract was not validly terminated by the Applicant at the default of Brizform (‘Original Decision’). The Commission found that the Applicant’s underpayment of the stage 1 payment in July 2018 meant the Applicant was in fundamental breach of the Contract, which disentitled her from terminating the Contract on 22 October 2019.
(i)On 3 January 2020, the Applicant lodged with the Commission her application for internal review of the Original Decision.
(j)On 3 March 2020, the Commission notified the Applicant of its internal review decision to disallow her claim under the Scheme on the basis that the Contract was not validly terminated by the Applicant at the default of Brizform because the Applicant was in breach of the contract disentitling her to terminate for breach (‘the Review Decision’).
(k)On 25 May 2020, a liquidator was appointed for Brizform under external administration.
(l)On 9 July 2020, the Applicant obtained a quote for the cost to rectify and complete the building work under the Contract. The cost to rectify and complete the work was $222,264.00.
(m)On 8 September 2020, the Applicant (through her legal representative) sought advice from the Commission as to the possible consequences to the Applicant’s claim should she sell the property.
(n)On 11 September 2020, the Applicant sold the property to a developer for $2,050,000.00.
(o)On 28 September 2020, the Commission provided advice to the Applicant (through her legal representative) as to the possible consequences to her claim should she sell the property.
(p)On 4 July 2023, after reconsidering the Review Decision pursuant to section 23 of the Queensland Civil and Administrative Act 2009 (Qld), the Commission confirmed the Review Decision on the basis that the Commission could not be satisfied that Brizform repudiated the contract.
(q)On 5 September 2024, the Commission notified the Applicant that it had changed its position concerning termination and admitted that the Contract was validly terminated by the Applicant on 22 October 2019 for Brizform’s repudiation.
The Commission however maintained its position that its reconsidered decision was nevertheless correct for the reason the sale of the property in September 2020 prior to any rectification/completion work being undertaken disentitled Ms Payne to cover under the Scheme (the terms of cover for statutory insurance are set out in schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld) (‘QBCC Regulation’)) because in any event it was not possible for rectification/completion work the subject of her claim to be undertaken on her behalf.
Mr Formby Counsel for Ms Payne stated there were two primary issues to be addressed. Firstly, did Ms Payne suffer a loss and secondly, if so, did the scheme answer to her claim. The Queensland Building and Construction Commission Act 1991 (‘QBCC Act’) is beneficial consumer legislation. It was contended looking at section 67X of the QBCC Act the purpose of the Scheme is to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete.
Loss, whilst not defined in the QBCC Act, denotes diminution, detriment, disadvantage, and failure to recover evidenced by Chapman Builders quote dated 9 July 2020 for $222,464.00 to rectify defective work and complete construction work in circumstances where due to the unliveable (and unrentable) state of the property Ms Payne was unable to maintain the mortgage over the property. She was forced to sell on 11 September 2020. That sale could have been avoided had the correct decision allowing Ms Payne’s claim been made in 2019 well before the forced sale of the property.
According to a statement by Mr Huw Feeney, former commercial real estate agent and latterly a property developer, the sale price of the property if completed and certified in mid-2020 would have been in the range of 2.2 million to 2.3 million. As it transpired, the September 2020 sale price was 2.05 million indicative of a loss of $195,000.00 to $295,000.00.
The loss incurred by Ms Payne was loss “associated” with (as well as a consequence of) work that was defective or incomplete for the reason Ms Payne was compelled to sell for less because of the properties’ defective and incomplete state, its unhabitable state and the Commission’s refusal to allow her Scheme claim.
It was argued that “assistance” under the Scheme ought not be limited to rectification or completion of construction by a Commission appointed contractor. Rather in accepted parlance it was a case of giving aid, support or help. Section 7 of schedule 6 of the QBCC Regulation states “the consumer is entitled to claim assistance for the reasonable cost of completing the residential construction work.” The same applies to section 15 for defective work. The cost it was submitted was the quote by Chapman Builders as admitted in the party’s admissions document.
“Assistance” as defined in section 67WA of the QBCC Act “includes arranging and paying for the rectification or completion of residential construction work by a licensed contractor appointed by the Commission.” Quoting Kelly v R,[1] it was contended that a definitions section was not substantive enactment but rather an aid to construction of the relevant statute and that to “construe the definition before its text has been inserted into the fabric of the substantive enactment invites error as to the meaning of the substantive enactment.” The word “includes” is used if it is intended to enlarge the ordinary meaning of the word.
[1](2004) 218 CLR 216, [103] (McHugh J).
It was contended that section 67WA of the QBCC Act should be read as an inclusive definition of assistance; that appointment of a contractor to rectify or complete construction work was just one of the ways assistance could be provided to a consumer who has suffered loss. Cash settlement as sought here is contemplated by the QBCC Regulation sections 7 and 15.
Mr Formby quoted by way of example a case of where a ceiling is constructed to a height of 2.9 metres instead of a plan specified 3.0 metres but otherwise compliant a consumer would be entitled pursuant to section 15(3) of the Scheme to claim loss of value by way of, and only by way of, cash payment. Additionally, it was claimed there was a sum of $10,212.00 which was paid by Ms Payne to an entity Duce Doors for provision of doors and a further $2,000.00 for installation both with permission from the Commission. That would involve a cash payment to which Ms Payne would therefore be entitled.
Nor was there any requirement either in the QBCC Act or QBCC Regulation that mandated that a money claim be applied to rectification or completion. Rather the purpose of the Scheme was to provide assistance for loss incurred. That might or might not involve actual rectification or completion.
With respect to assessing quantum of loss (money loss) incurred it was suggested that section 24 of the QBCC Regulation stating that the “maximum amount the Commission may pay for all claims” was $200,000.00 meant a ceiling of $200,000.00 each on all claims made and not a ceiling of $200,000.00 for the total of all claims. Therefore, $200,000.00 could be claimable, for instance, for defective work and $200,000.00 for incomplete work a total of $400,000.00.
Mr Formby asserted interest ought to be allowed on Ms Payne’s insurance claim due to the manner in which her claim was handled originally. She would have had otherwise long since in 2020 the benefit of her claim. Whilst the QBCC Act did not specifically include interest on an insurance claim it was submitted that the Common Law Practice Act 1867 (Qld) provided “a court may order there shall be included in the sum for which a judgement is given interest at such rate as it thinks fit on the whole of that sum for the whole or part of period between the date on which the cause of action arose and the date of judgement.”
In finality, Mr Formby submitted there was nothing in the QBCC Act or QBCC Regulation disentitling a person to claim just because the property in question had been sold. In that regard, he pointed to the enquiry made to the Commission by Ms Payne on 8 September 2020 requesting information on the Commission’s position should the property be sold and to the Commission’s reply on 28 September 2020 that “if Ms Payne sells a property that is incomplete, she is the consumer according to section 67WA of the Act, but she may not be able prove her loss that she has suffered by selling the property and therefore may not be entitled to assistance under the Scheme.” That reply it was suggested meant the Commission was saying that the sale of the property did not of itself disentitle Ms Payne to be paid.
Mr Formby reiterated the two-stage test. Firstly, loss must be associated with residential construction work. Secondly, quantum must be proved and that had effectively admitted in the admissions. He asserted that it could not be in the contemplation of the Scheme that where the Commission makes a wrong decision/s over a period of four years and because of that wrong decision/s Ms Payne was forced to sell her house that therefore the Commission acquired the benefit of that wrong decision/s to deny any payment whatsoever to Ms Payne. Not every single permutation of insurance was considered when the Scheme was drafted. Though a peculiar situation it fits under the Scheme. It ought not be excluded.
On behalf of the Commission, Mr Schmitt initially stated that the Scheme was intended to put the consumer in the position that the consumer would have been in but for the default of the builder. The Scheme could not operate in circumstances where the consumer no longer held an interest in the property. That was because the Commission could not provide assistance for the cost to rectify or complete that work that the owner had contracted for. The instant circumstances were such that the Scheme neither contemplated nor could respond to.
Whilst it may be the case that Ms Payne had suffered loss in peculiar circumstances such did not mean the Scheme operated to afford assistance. Ms Payne had not paid the costs claimed nor could such costs be expended for the purpose for which they were intended, namely rectification and completion. Even if Ms Payne had incurred actual costs of rectification and completion prior to claiming there was yet no entitlement to Scheme assistance perforce of section 64 of the QBCC Regulation requiring written approval of the Commission to rectify work. If Ms Payne had suffered a loss, it was claimable elsewhere not under the Scheme.
Section 67X of the QBCC Act provided for the purpose of the Scheme, which it was argued, was the cost of actually undertaking rectification or completion work and that it was the Scheme that set out the operating structure for assistance. Loss ought to be determined by reference to the assistance that could be provided by sections 7 and 15 of the QBCC Regulation which was the reasonable cost of rectifying or completing construction work. However, it was not possible to physically rectify or complete because Ms Payne no longer held an interest in the property (sold).
Making a cash payment as in Mr Formby’s example of a plan specified 3 metre ceiling resulting in a constructed 2.9 metre ceiling did not mean the Scheme contemplated certain types of loss but rather accommodated a monetary payment as a consequence of defective work. Cash payment was a form of assistance specifically prescribed in the Scheme.
Mr Schmitt said Mr Formby’s argument was to the effect that so long as some form of loss had some connection to defective or incomplete work then the Scheme should respond to a reasonable cost merely quoted for but not completed.
Mr Schmitt referred to the example of a new house where a defective roof leaked resulting in the ruining of a TV, couch and personal items. The Scheme would respond to having the roof fixed and that was all. The loss would be the defective roof. The Scheme’s remedy is to fix it. He said Mr Formby’s attempt to draw a line from some loss to an ability to claim for a quoted rectification or completion cost was a fallacy.
Nor did Mr Schmitt agree that there were two maximum amounts of $200,000.00 claimable pursuant to sections 24 and 25 of the QBCC Regulation. Sections 38 and 39 dealing with a single detached dwelling were the relevant sections and provided for a ceiling of $200,000.00 for all claims noting that it had been conceded that whatever the claimed sum was it should be reduced by the liability amount (here the difference between the total contract sum and what was paid by Ms Payne - $33,556.62 qualified by Ms Payne’s payment with the Commission’s permission of $12,212.73.
With respect to the Commission’s correspondence of 28 September 2020, Mr Schmitt referred to a further passage therein under the heading Commission’s view “the sale of the property might affect how Ms Payne is affected by the reviewable decision, being no longer the owner of the property. Therefore, the final decision of the Tribunal in this matter, on whether the contract was validly terminated or not, may be interpreted as not affecting Ms Payne, and therefore she is not a person affected by the reviewable decision.” That meant if you sell the property with a reviewable decision on foot there might be consequences. Referring to Mr Formby’s quoted passage, that too was indicative of a problem regarding Ms Payne’s claim. But Ms Payne did not wait for a response.
Mr Schmitt considered what price Ms Payne could have got for the property in early 2020 was of limited assistance when considering a September 2020 loss. Price rises since were not within the bounds of judicial notice. The limit on all claims was $200,000.00. There was no evidence of storage costs though claimed. There was no power conferred on the Tribunal either under the Scheme in making the reviewable decision or under the Queensland Civil and Administrative TribunalAct2009 (Qld) to award interest as claimed (except in minor civil disputes). Mr Schmitt reiterated that if assistance is to be provided it is to rectify work under the contract not to give away money to do something else that is not under the contract.
The Scheme as it stood was incapable of responding to Ms Payne’s assistance claim. Put alternatively, the issue was not about estimate or cost but about the actual expenditure on doing the rectification/completion work for which it was intended.

Consideration

Whichever way one looks at the circumstances here Ms Payne has suffered a loss whether a diminution of sale price of her property or non-provision of assistance due to erroneous decisions of the Commission effectively forcing her to sell her property without any rectification/completion work being undertaken. It is trite to say that had the Commission correctly found that Ms Payne had terminated the building contract in 2019, Scheme assistance would have been forthcoming.
As beneficial legislation couched in general terms the QBCC Act and QBCC Regulation are open to a reasonable degree of interpretation. They are certainly not black letter law and ought not to be read down. As beneficial legislation, it can be assumed that the legislators intended that the QBCC Act and QBCC Regulation ought to have a wider definition than their literal meaning, and that any interpretation ought to favour the persons it was set up to protect, namely consumers. Such a position is supported by a number of factors.
Section 67X of the QBCC Act states the purpose of the Scheme is to provide assistance (which Ms Payne sought) to consumers (admitted) of residential construction work (admitted) for loss associated with work that is defective or incomplete (which is the case).
Assistance as defined includes (but is not limited to) arranging and paying for rectification or completion by a licensed contractor. Ms Payne’s loss was not only associated with but also was consequence of defective/incomplete work. She was compelled to sell for less because of the properties defective/incomplete state, its uninhabitable state and the Commission’s erroneous refusal to allow her Scheme claim. One ponders how much more associated with loss one must be. There is nothing in the QBCC Act or QBCC Regulation mandating that a money claim be applied directly to rectification or completion. Assistance under the Scheme might or might not involve actual rectification or completion. As correctly pointed out, not every permutation of insurance could be considered in the legislation. Peculiar situations as here were always bound to arise.

Sections 7 and 15 of the QBCC Regulation state that the consumer, Ms Payne, is entitled to claim assistance for the reasonable cost of completing/rectifying building work. The cost of rectifying/completing building work was quoted by Chapman Builders on 9 July 2020 two months before the property sale and is not disputed. Nor is it disputed that a cash payment is a form of compensation that can be applied to defective or non-compliant building work.

The Legislative Scheme

The modern approach to legislative construction places a far greater emphasis on context than has traditionally been the case to arrive at a more perfect understanding of the legislature’s intention and hence the correct interpretation of the legislation. Edelman J recently explained this in Harvey v Minister for Primary Industry and Resources:[2]
[111]The modern common law approach is not so constrained. The modern approach has now been approved and applied many times, even if its spirit has not always been entirely respected. That modern approach was set out by Brennan CJ, Dawson, Toohey and Gummow JJ in CIC Insurance Ltd v Bankstown Football Club Pty Ltd. Referring to information in the reports of law reform bodies and speaking of context “in its widest sense”, which includes the identification of external matters such as “the existing state of the law and the mischief which…. the statute was intended to remedy”, their Honours said that context is “considered in the first instance, not merely at some later stage when ambiguity might be thought to arise”. Their Honours clarified that context is not limited to information contained in extrinsic documents but also includes the application of reasonable expectations concerning any “inconvenience or improbability of result” that could arise on one interpretation of the statutory text which would then be inconsistent with the “legislative intent”. The modern approach thus generally aligns the techniques for interpretation of statutes with the techniques for interpretation of ordinary speech. Nevertheless, since the intention is that of a notional Parliament, and not any individual member or collection of members, even statements in second reading speeches or Explanatory Memoranda are only part of the context to be considered.
[2][2024] HCA 1.
Loss can occur in several ways. The Scheme is there to provide assistance for loss incurred which is associated with work that is defective or incomplete. There was no provision either in the QBCC Act or the QBCC Regulation that disentitled Ms Payne to recovery of loss just because she was forced to sell her property almost a year after making her initial complaint to the Commission. Nor would it be fair and reasonable for the Commission to make no payment at all based on its own first instance erroneous refusal to assist and subsequent delay. That is akin to the principle that a party to a contract ought not to benefit from its own breach.
Observing the Tribunal’s mandate, it is to deal with matters in a way that is accessible, fair, just, economical, informal, and quick. In circumstances where Ms Payne’s initial claim would have been a “run of the mill” insurance claim turning as it did into a protracted four-to-five-year saga makes it ever so incumbent on the Tribunal to produce a decision that is fair and just to Ms Payne as long-suffering consumer.
The Commission’s correspondence of 28 September 2020 was equivocal, imprecise and nothing more than fence sitting. It certainly did not amount to a statement of disentitlement. However, the Tribunal considers the $200,000.00 claim ceiling correct. There was only ever one claim involving rectification and completion accounted for in one quote. Because there might be two aspects to a single claim that does not serve to double the quantum claimable. The ceiling here is $200,000.00.
Quantum can be determined by reference to Chapman Builders quote for $222,264.00 (admitted) less the non-disputed liability sum of $33,556.62 (not disputed) plus the $12,212.73 Ms Payne paid out with the Commission’s permission (not disputed), a net figure of $200,920.11. Given the applicable ceiling the sum assessed in Ms Payne’s favour is $200,000.00. In short form any peripheral non quantifiable claims fall by the wayside. For clarity, it matters not whether the loss on sale was greater or less than $200,000.00. The determination of award arises out the legislation itself. Even if that were not to be so it appears on balance sale loss would well have exceeded $200,000.00. The Tribunal considers that sum fair compensation on the substantive claim.

Conclusion

Ms Payne’s claim is allowed at $200,000.00. Interest and costs remain in contention. The parties’ representatives requested/suggested time subsequent to the substantive decision to address particularly costs. The parties are given 28 days to make submissions regarding the applicability of interest and costs after which a final fully quantified decision will be made.

Orders

The Queensland Building and Construction Commission pay to Jacqueline Veronica Payne the sum of $200,000.00 in full and final satisfaction of her claim for assistance under the Queensland Home Warranty Scheme.
The Queensland Building and Construction Commission and Jacqueline Veronica Payne are given twenty-eight days to make submissions on the applicability of interest and costs after which a final fully quantified decision shall be made.