Queensland Building Services Authority v Last Laugh Pty Ltd
[2011] QCAT 263
•7 June 2011
| CITATION: | Queensland Building Services Authority v Last Laugh Pty Ltd [2011] QCAT 263 |
| PARTIES: | Queensland Building Services Authority |
| v | |
| Last Laugh Pty Ltd (t/a T R Gotts Builders Pty Ltd) |
| APPLICATION NUMBER: | OCR006-10 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 31 May 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr Richard Oliver, Senior Member |
| DELIVERED ON: | 7 June 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The respondent pay to the applicant a penalty in the sum of $3,000.00 by 30 September 2011. 2. The respondent pay to the Authority $1,500.00 in costs by 30 September 2011. |
| CATCHWORDS: | Disciplinary proceeding – where Applicant issued a Direction to Rectify to the Respondent – where Respondent failed to carry out the rectification work to the satisfaction of the Applicant within the required time – whether proper grounds exist for bring disciplinary proceeding. Penalty – consideration of actions of the Respondent in response to the Direction to Rectify – whether respondent responsible for work of subcontractors. Queensland Civil and Administrative Act 2009, ss 100, 102 McNab Constructions Australia Pty Ltd v Queensland Building Services Authority [2010] QCA 380 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Queensland Building Services Authority represented by Ms Heyward in house legal officer |
| RESPONDENT: | No Appearance |
REASONS FOR DECISION
In 2005 the Respondent carried on business as a registered builder. In December of that year he entered into a contract with Daniel Denis to construct a new highset brick dwelling at 17 Manning Street, Eimeo for $399,875.00.
The construction was completed in or about May 2007.
Subsequent to Mr Denis taking up occupation of the house, he became aware of building defects, in particular, water penetration into the house. He engaged in discussions with Mr Tim Gotts, the nominee builder of the Respondent to carry out rectifications work. It seems that for about two years some attempts were made by Last Laugh to attend to the rectification work but a stalemate developed resulting in a letter from Mr Denis’s solicitor to Last Laugh on 3 February 2009 setting out particulars of the defective building work which required rectifications.
Despite that correspondence it seems there was no specific action on the part of Last Laugh so Mr Denis made a complaint to the Authority. In his complaint form on 4 March 2009 he sets out the details of his complaint using the solicitor’s letter of 3 February 2009 as the particulars of the defective work.
On receipt of the claim and complaint, the Authority undertook an investigation. Mr Michael Hulme, a building inspector with the Authority attended the premises on 5 May 2009 to carry out an inspection and then prepared a report.
On 18 May 2009 the Authority issued Direction to Rectify number 32993 requiring Last Laugh to attend to the rectification of the items set out in the Direction within 28 days.
Subsequent to the Direction issuing, Mrs Gotts wrote to the Authority on 16 June 2009 advising it of steps Last Laugh was taking to attend to the rectification. In essence, she states that they were attempting to get subcontractors back to the site to attend to the rectification work and attend to other items as soon as they could engage contractors. It seems clear from her response that Last Laugh considered the responsibility of this work was with the subcontractor.
Despite the efforts of the Gotts to have the rectification work completed, not very much was done and then on 26 June 2009 the Authority wrote to Last Laugh stating that the rectification work was not satisfactorily carried out and the matter would be referred to the insurance fund.
On 25 August 2009 the Authority issued an infringement notice pursuant to section 72(10) because Last Laugh failed to comply with the Direction to Rectify and a penalty of $2,000.00 was imposed.
[10] The Respondent challenged the penalty and as a consequence the Authority was then obliged to file an application for a disciplinary proceeding in the Tribunal which it did on 11 January 2010. The application seeks an order that the Tribunal find that proper ground exist for the taking of disciplinary action against the Respondent pursuant to section 90(e) of the Queensland Building Services Authority Act 1991 in that it failed to comply with Direction to Rectify and/or Complete CRB32993 within the time stipulated in contravention of section 72(10) of the Act.
[11] The Respondents have filed submissions in response which were directed to be filed after a Compulsory Conference was held on 29 December 2010.
Hearing on 31 May 2011
[12] The application was listed for hearing on 31 May 2011. A notice of hearing was sent to the parties on 31 January 2011. The Authority appeared through an in-house legal officer but there was no appearance by the Respondent. Telephone numbers were on the file for contact with Mrs Gotts who has appeared via telephone at previous Directions Hearings, not only in this matter but in other Building Services Authority review applications. She was telephoned on those numbers at the commencement of the hearing, and subsequently on at least two occasions. Her name, as well as Tim Gotts was called outside the hearing room on three occasions subsequent to the commencement to the hearing.
[13] The Authority submitted that the hearing should proceed in the absence of the Respondent and after considering the history of this matter, and the consequences of failing to attend the Tribunal hearing which are clearly noted on the Notice of Hearing, the Tribunal decided to proceed. Reasons for that were given at the time. Subsequent to giving those reasons, Mrs Gotts was again telephoned with no response.
[14] The application proceeded on the basis of the material that had been filed by both parties including the affidavit of Mr Hulme, the building inspector.
[15] The Authority submits that in the absence of any evidence filed by the Respondent as to whether or not proper grounds exist for the taking of disciplinary action the facts are self evident that the Respondent is in breach of section 90(1) of the QBSA Act. A direction to rectify was issued by the Authority and was not complied with. On careful perusal of the submissions filed by Last Laugh[1] it does not really put forward any facts or basis upon which Last Laugh could reasonably argue it had a defence to the infringement.
[1] Exhibit two - submissions of 25 June 2010 and 8 November 2010.
[16] In fact, Last Laugh goes further, and does not challenge any of the facts alleged in the chronology of events set out in the Authority’s submissions and further states that:
“If this matter is to be decided according solely to the QBSA Act then it’s agreed that rectification works were not completed within the time frames directed by the Applicant”.
[17] Last Laugh contends, as it has from the very beginning of this matter that the responsibility for the defective work lay with its sub-contractors and not with it. However, it is now well established that it is the principal contractor who remains liable under the QBSA Act to rectify any defective building work the subject of a Direction to Rectify[2].
[2]McNab Constructions Australia Pty Ltd v Queensland Building Services Authority [2010] QCA 380.
[18] I have therefore come to the conclusion that proper grounds do exist for the taking of disciplinary action against the Respondent.
Penalty
[19] The infringement notice issued by the Authority carried with it a fine of $2,000.00. The Applicant now submits that the fine should be in the range of $3,000 to $5,000. The basis for that submission is that:
a) The imposition of the fine will act as a deterrent to other licensees in the building industry who fail to comply with the Authority’s Directions to Rectify;
b) The imposition of a fine and its deterrent effect is in the public interest to insure that confidence is maintained in the building industry for both licensees and consumers;
c) Any sanction imposed reinforces that licensees are responsible for Tribunal work and for the work of any subcontractors engaged by them. Failure to comply with the Direction has the consequence of bringing the building industry into disrepute which will impact on consumer confidence;
d) The imposition of a fine is also a penalty for failing to comply with the regulatory Authority’s decision when no review application has been made.
[20] I accept these submissions as a proper basis for the imposition of a penalty.
[21] Last Laugh had a reasonable opportunity to attend to the defective work but was not sufficiently proactive to ensure compliance within the time required.
[22] Last Laugh acknowledges that the Direction to Rectify was not completed within the time frames allowed but attempts were made to do so. This is made clear in the email from Mrs Gotts to Michael Hulme on 16 June 2009 that Last Laugh made conscientious attempts to engage the contractors responsible for the defective work but without success.
[23] Last Laugh relies on the Authority’s submission that disciplinary proceedings are “not intended to punish but are to protect public” to support its contention that the contractor who carried out the defective building work should be responsible for it and not the principal. That submission is inconsistent with the obligations of the principal contractor under the QBSA Act. It is the principal contractor’s obligation to insure that rectification of defective work is carried out by either using the contractor who was responsible for it, or some other contractor.
[24] Last Laugh’s submissions in mitigation of penalty only support a finding that it did make some attempt to carry out the rectification work and therefore, was not totally dismissive either of its obligations under the QBSA Act, or pursuant to the Direction to Rectify.
[25] In refusing to pay the fine, Last Laugh put the Authority in a position where it had to commence a disciplinary proceeding in the Tribunal, file evidence and submissions in circumstances where there already was no defence to the disciplinary proceeding. Obviously the imposition of the fine at an early stage is to an attempt to save both parties the time and cost of having the matter proceed to the Tribunal.
[26] Once the matter is referred to the Tribunal, it must consider all facts and circumstances including, the extent of the defective building work, the actions of the Authority in issuing the Direction to Rectify, and the response to it by Last Laugh. The scope of works which was filed with Mr Hulme’s affidavit indicates that the work was going to cost in excess of $40,000.00. In fact the cost was about $60,000.00. It is reasonable to conclude from these figures, that the rectification work was extensive.
[27] I accept the Authority’s submission that the purpose of the imposition of a penalty is to act as a deterrent and to insure that there is compliance with licensee’s obligations under the Act which is administered by the Authority. A direction to rectify must be complied with in the interests of both the industry and consumers and, if it is not then sanctions will be imposed.
[28] I also take into account that the Respondent did make some attempt to carry out the rectification work but seem to have been somewhat misguided in their belief that it was the responsibility of the contractor and not the builder.
[29] In the circumstances, I am of the view that an appropriate penalty in this case is $3,000.00.
Costs
[30] The Authority claims costs in the sum of $1,500.00. It does so because firstly it has an obligation to administer the Act and commence disciplinary proceedings in circumstances where there has been a clear breach of the Act and a party has elected to proceed to the Tribunal by not accepting the infringement notice and paying the fine. Secondly, the Respondent has utilised the services of an in-house legal officer to prepare the material in support of the application, attend the Tribunal and attend the hearing.
[31] The Authority also acknowledges that the costs do not follow the event and section 100 of the QCAT Act is applicable which provides that each party must bear their own costs.
[32] There are discretionary factors to be taken into account under section 102(3) in considering whether the interests of justice require the making of a costs order. The Authority has addressed each of those discretionary factors.
[33] The conduct of the parties: Both parties have conducted this application both reasonably and sensibly. The Authority has provided all information necessary for the Respondent to make an informed decision about whether proper grounds exist for the imposition of a penalty and the amount of the penalty to be imposed. Last Laugh has filed its submissions at an early stay and complied with all directions. They did not attend the final hearing of the application but that has not put the Authority to any disadvantage. The conduct of Last Laugh is not such that would warrant an exercise of discretion in favour of the Authority.
[34] Nature and complexity of the proceeding: The only complexity is that which is raised by Last Laugh. That relates to its confusion about who is responsible for the rectification work and its obligations under the Act. Had it been fully cognisant of its obligations to attend to the rectification work, it may well be that a different approach would have been taken when the infringement notice issued.
[35] The relevant strengths of the claims made by each of the parties: Here, the Authority is on solid ground. Last Laugh, as I have indicated, has no grounds to dispute whether it was appropriate for the Authority to commence the disciplinary proceedings. Cleary it was, and obliged to do so in a proper administration of its responsibilities under the QBSA Act. Last Laugh has not put forward any evidence in response to contend that there were not grounds for the taking of the disciplinary action.
[36] Other relevant factors: I am not persuaded that, given the mandate under section 100 of the QCAT Act that each party must pay its own costs, success in the proceeding is justification here for a favourable order. One factor already alluded to, and which is relevant, is that the Authority was obliged to commence the proceeding once the infringement notice was ignored.
[37] On the basis of the lack of merits in the Respondent’s defence to the application, and the Authority’s obligation under the Act to insure compliance by licensees with their obligations under the Act, the Authority is entitled to a costs order in its favour.
[38] The amount sought is $1,500.00 based on costs assessed under regard to Schedule Part Two of the Justices Act Regulation 2004 which makes the maximum allowable under the schedule for disciplinary proceedings $1,500.00.
[39] Last Laugh contends that as the Applicant, the Authority has utilised the services of in-house lawyers and had they not been for this case, the lawyers would have been doing some other matter. This submission is somewhat facile in that the Authority’s resources were diverted to having to commence a proceeding to pursue the disciplinary action against Last Laugh and obviously, internally at least, there is a cost to the Authority. The costs included the preparation and filing of the application, preparation and filing of the affidavit of Mr Hulme, preparation of submissions for the Tribunal’s assistance and attending the Tribunal on Directions Hearings and for the final hearing. Had this matter been referred to lawyers outside the Authority the costs would have been substantially more. I am of the opinion that $1,500.00 is reasonable for the work undertaken in the proceeding by the Authority.
Orders
[40] The orders I propose to make are firstly; that Last Laugh pay to the Authority a penalty in the sum of $3,000.00. Secondly; Last Laugh also pay to the Authority $1,500.00 in costs. Both sums are to be paid by 30 September 2011.
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