Perrett & Solomon v Queensland Building Services Authority
[2010] QCAT 84
•29 March 2010
| 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
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.
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.
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.
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.
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.
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.
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 the complaint and no reason why the Authority should exercise its discretion to extend time. It claims that it is prejudiced by the owners’ delay in lodging the claim:
a)It could not assess and address the defective work at the earliest opportunity.
b)A substantial number of defects were as a result of water ingress. It is reasonable to expect that, as time passed, consequential and associated damage occurred.
c)There is a significant increase in the cost of rectification.
The owners acknowledge that the defects were evident in the Karrasch report but they
”reserve the right to take responsible and reasonable steps to protect the building by hiring the services or professional to compile reports in relation to the continual degradation of the dwelling that include but are not limited to”: collection of data, collection of evidence, reports from professionals, legal advice, research and compilation of reports.
That is the owners’ only explanation for the delay in submitting the claim.
It is true that the owners did not sit on their hands on receipt of the Karrasch report:
a)In May 2003 they commissioned termite investigation and treatment;
b)In April 2004, Mr Karrasch undertook a further dilapidation report.
c)In June 2004, they commissioned further termite investigation and treatment.
10. The difficulty with the owners’ approach is that it is contrary to the approach taken by the Authority, and the decisions of the Commercial and Consumer Tribunal. Where there have been quite short periods of delay, but obvious prejudice to the Authority, the tribunal has determined that the Authority was justified in refusing to exercise its discretion to allow a claim.
11. Murray –v- Queensland Building Services Authority[1] is particularly on point. The owners delayed for a period of 8 months as they “had tried to do the right thing…and had fully explored whether the problems were maintenance and then tried to have the builder inspect before talking the matter further with the BSA”. The tribunal confirmed the Authority’s decision to refuse the claim. Similarly, if the owners’ delay, although well-intentioned, caused prejudice then the Authority is entitled to refuse the claim.
[1] [2005] QCCTB 33
12. To counter the Authority’s claims of prejudice, the owners say that the Authority’s actions in relation to the 1999 rectification work are the real cause of the damage and, therefore, the Authority always had notice of the circumstances giving rise to the claim. In particular, the owners say:
a)A report commissioned by the Authority in September 1999 was a “progress report” (“Carey report”). It was not conclusive in its content and did not accurately reflect the attempted rectification.
b)The Carey report failed to address some matters of rectification.
c)In response to its direction to rectify, the Authority accepted temporary, substandard and inappropriate work. It is therefore responsible for the results of that defective work.
d)The Authority failed to administer adequately the Building Services Supervision Policy.
e)The owners relied on the Authority to ensure that rectification was carried out properly.
13. It seems to me that the owners’ arguments about lack of prejudice are really arguments in support of a claim against the Authority that it failed to carry out its functions appropriately. Even if the owners are right about this, the means of the Authority’s knowledge of the inadequacy of the repairs was within the owners’ hands. It does not relieve them from the obligation to notify the Authority promptly. The owners declined to bring these matters to the Authority’s attention for 25 months after they became aware of the situation. I find that such a period of delay in making the claim did operate to the Authority’s prejudice, particularly as much of the damage relates to water ingress.
14. After the owners lodged the second claim, the Authority commissioned further reports. The owners point out that at no stage while these reports were being commissioned did the Authority advise the owners that their claim was not accepted. The owners submit that the further reports confirm the owners’ contentions that the rectification work was not to the required standard.
15. I do not consider that any of the Authority’s actions after the second claim was lodged amount to an admission of liability operate to estop the Authority from denying liability.
16. The Authority’s decision to decline the claim is confirmed. The application is dismissed.
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