Perrett & Solomon v Queensland Building Services Authority

CITATION: Perrett & Solomon v Queensland Building Services Authority [2010] QCAT 84

PARTIES:	Mr Jeff Perrett & Ms Fiona Solomon
V
Queensland Building Services Authority

APPLICATION NUMBER:   QR034-06

MATTER TYPE: Building matters

HEARING DATE:     Decision on the papers

HEARD AT:  Brisbane

DECISION OF: Peta Stilgoe

DELIVERED ON: 29 March 2010

DELIVERED AT:      Brisbane

ORDERS MADE: Application dismissed

CATCHWORDS :  Claim under the Statutory insurance fund – delay in making claim – exercise of discretion - prejudice

APPEARANCES and REPRESENTATION (if any):

APPLICANT: 

RESPONDENT: 

REASONS FOR DECISION

1. The issue for determination is whether a claim on the statutory insurance fund by Mr Perrett and Ms Solomon (“the owners”) was lodged out of time.

2. There are some facts that are not in dispute:

a)The owners had a home constructed pursuant to a contract dated 29 April 1995. Practical completion occurred on 24 November 1995.

b)The owners lodged a claim with the Authority on 2 November 1998.

c)The Authority issued a direction to rectify on 7 April 1999.

d)The owners notified the Authority that the work was completed by letter dated 12 November 1999.

e)The builder was declared bankrupt on 24 November 2000.

f)The owners received a building report from Roger Karrasch on or about 16 December 2002 (“the Karrasch report”). That report listed some 176 defects.

g)Most of the defects listed in the Karrasch report are major defects.

h)On 19 January 2005, the owners lodged a further complaint with the Authority.

1. The relevant policy of insurance is Edition 2. Clause 6.1.2 of the policy provides that, in the case of major defects, the owner is not entitled to compensation where the defect first became evident more than six years and six months after the earlier of, the date of payment of the insurance premium, or the date of entering into the building contract.

2. The owners’ submissions do not argue that the policy should be extended to cover defects in the original works. It is their contention that:

a)The defects identified in the Karrasch report are defects arising from the rectification works.

b)The expiry date for cover relating to the rectification works is 12 May 2006 (six years and six months from the date of completion).

c)The complaint was made within time.

1. There is a dispute about whether the defects identified in the Karrasch report are defects related to the rectification work of 1999 or are defects in the original work. For the purposes of this decision, I am prepared to assume that the defects do arise from the rectification works.

2. Clause 8.2 of the policy states that all claims (in the case of a major defect) must be made within three months of that defect, in the opinion of the Authority, becoming evident. The policy gives the Authority the discretion to extend the time in which to lodge the claim.

3. The Authority argues that the defects became evident when the owners received the Karrasch report in 2002. It says that the owners have given no explanation for the delay in lodging…