Queensland Building Services Authority v Ward Construction Pty Ltd
[2011] QCAT 289
•21 June 2011
| CITATION: | Queensland Building Services Authority v Ward Construction Pty Ltd [2011] QCAT 289 |
| PARTIES: | Queensland Building Services Authority |
| v | |
| Ward Construction Pty Ltd |
| APPLICATION NUMBER: | OCR031-11 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr Ron Joachim, Member |
| DELIVERED ON: | 21 June 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The respondent pay the Authority the penalty sum in the amount of $6,000 within 60 days. 2. The respondent pay the Authority’s costs of $500 within 14 days. |
| CATCHWORDS: | OCCUPATIONAL REGULATION – QUEENSLAND BUILDING SERVICES AUTHORITY – DISCIPLINARY PROCEEDINGS – where respondent accepted proper grounds existed for disciplinary action – where respondent builder given 2 directions to rectify – where builder failed to rectify – where deterrent necessary – where builder surrendered building license – where order made as to costs Queensland Building Services Authority Act 1991, ss 72(10), 89(j), 91 Queensland Building Services Authority v Brian Federick Blach (unrep DO33/92, 13 April 1993) |
APPEARANCES and REPRESENTATION (if any):
| On the papers. |
REASONS FOR DECISION
In February 2011 the Queensland Building Services Authority (“the Authority”) applied to the Queensland Civil and Administrative Tribunal for disciplinary proceedings to be taken against Ward Construction Pty Ltd.
The particulars of the offences alleged against Ward Constructions are contained in an attachment to the application. In summary, in October 2008 the Authority received a complaint from Mr and Mrs Pope regarding alleged defective work carried out by Ward Construction at their home at 30 Beatrice Street, Bardon.
An inspection was subsequently carried out at the property by Mr Bruce Haynes, a Building Inspector of the Authority, who identified 16 defective and incomplete items at the property.
Subsequently a direction dated 23 December 2008 to rectify and or complete was issued to Ward Construction requiring Ward to rectify these 16 defective items in 35 days. As at 27 January 2009 Ward had failed to rectify the items.
A second direction to rectify and or complete was issued on 3 July 2009 to rectify 3 defective items within 28 days. As at 31 July Ward had failed to rectify the items.
The Authority sought orders that proper grounds existed for taking disciplinary action against Ward Construction pursuant to section 89(j) of the Queensland Building Services Authority Act 1991 because they were in contravention of section 72(10) of that Act.
The Authority was seeking a penalty to be paid to them by Ward and was also seeking costs. At a directions hearing on 7 April 2011 the respondent accepted that proper grounds existed for disciplinary action against Ward and directions were made that the parties file submissions in respect of penalty and costs. It was further directed that the application be determined on the papers.
Both parties have provided their submissions as to penalty and costs. In its submissions the Authority refers to relevant case law. In the matter of Queensland Building Services Authority v Brian Federick Black, Mr Wensley QC commented that once the Authority has demonstrated that there has been a relevant direction and failure to comply with it, proper grounds for taking disciplinary action are established. It is quite irrelevant to that determination that the builder may have had some reason, even a good reason, for failing to comply with the direction.
In the matter of the Queensland Building Services Authority v Lindenberg, the respondent Glen Albert was ordered to pay a penalty for failure to rectify defective work. The respondent did not have the work rectified and it was subsequently rectified under the Authority’s statutory scheme. In that matter Ms Schafer stated:
“It is fundamental that a person to whom the direction to rectify is issued by the BSA as regulatory Authority should comply with it. Failure to rectify causes the building industry to be brought into disrepute and consumers loss confidence in the industry.”
[10] The Authority submits that in determining a relevant penalty the Tribunal should take into account the following consideration in the Queensland Building Services Authority v Taylor, R (2005) QCCTB70 at paragraph 25:
“Disciplinary proceedings are not intended to punish but are to protect the public and members of the organisation concerned. The High Court has stated that a disciplinary power is entirely protective and notwithstanding that its exercise may involve a great deprivation to the person disciplined, there is no element of punishment involved.”
[11] In cases provided to the Tribunal by the Authority namely QBSA v Kalona Pty Ltd, QBSA v T&T Building Pty Ltd and QBSA v Lazar, the decision of the Tribunal with the power to make decisions awarded a penalty of $3,000 plus costs to the Authority. These matters related to the failure of the builder to rectify work in accordance with a direction issued by the Authority.
[12] In some of these matters the respondent indicated an intention to carry out some rectification work but failed to do so or attempted to carry it out. In the matter of QBSA v Hipwood Constructions, where there was a failure to rectify water penetration defects, the respondent was ordered to pay an amount of $1,000 plus costs to the Authority. This decision was reached on the basis that the Authority had expended $34,000 in rectification costs.
[13] In considering the penalty which might be imposed for the contravention of section 89(j) of the Act, the Tribunal may have regard to a number of factors including the amount which may serve as a deterrent, an assessment of the gravity of the respondent’s conduct, failure to comply with a direction such failure bringing the building industry into disrepute and causing consumers to lose confidence in the industry.
[14] I also have to be satisfied that the respondent was allowed ample time to rectify the defective work and whether the respondent appeared to have attempted to rectify some items.
[15] The Authority submits that in this matter Ward appears to have attempted to have rectified some items listed on the direction but submits that Ward could have been more active in resolving the problems involved in the defective work.
[16] The Authority further submits that it has expended approximately $65,000 from its statutory insurance scheme in rectifying the defective work. The Authority argues for a penalty of between $6,000 and $10,000 on the basis that Ward’s conduct requires a significant penalty to underline the deterrent effect against conduct of this type reoccurring. The Authority also seeks its costs under section 102 of the Queensland Civil and Administrative Tribunal Act 2009 of $500.
[17] The submission from Ward Constructions is that no penalty be applied and that the applicant’s costs of $500 be paid within 14 days.
[18] Ward Constructions submits that having met with the Authority’s representatives on 16 September 2009 it agreed to carry out works itemised under the Authority’s supervision and sent an open letter to the Authority and the owners to this effect. The Tribunal notes this is well outside the time given to rectify.
[19] Ward further submits the owners refused access and the Authority then proceeded to carry out the rectification works with leave from QCAT. Subsequently the payment of $57,250 was paid by the sole director on 22 September 2009 after a payment was demanded by the Authority of that amount.
[20] Ward submits that Ward Construction and its sole director has suffered significant financial damage as a result of the dispute at 30 Beatrice Street, Bardon. The submission states that the action of the Authority in carrying out works (some of which were unnecessary) and the manner in which it intervened in the dispute exacerbated the financial loss and incurred significant additional legal expense. This is not explained in any further detail.
[21] The Tribunal notes that the notices to rectify were issued on 23 December 2008 and 3 July 2009. In its submission Ward has provided no explanation as to why these notices were not complied with. Ward Construction further submitted that it surrendered its building license in February 2010 and whilst continuing as a legal entity has not traded since that time. It further submits that it has no ability to reoffend and the penalties sought by the Authority are wholly punitive.
[22] Finally it submits that should the orders be made for Ward Construction to pay fines it would put the company to insolvency and the company would be liquidated with any creditors having little chance of receiving any payment.
[23] This is not a matter that the Tribunal can take into account in determining penalty. The Tribunal accepts the submissions of the Authority in that a significant penalty needs to be applied for failure of Ward’s to comply with the Authority’s rectification direction. Public confidence in the building industry and the regulatory authority is of prime importance. It rejects Ward’s submission as to a penalty being wholly punitive. The penalty is a deterrent to others to ensure the public is protected and confidence maintained in the industry.
[24] The Authority has requested a penalty in the range of $6,000 to $10,000. The Tribunal takes into consideration that there had been 2 directions that have not been complied with. Noting cases in which a $3,000 penalty has been applied for failure to rectify the Tribunal considers that a penalty in the sum of $6,000 is appropriate. The respondent will have 60 days to pay the penalty sum. The Tribunal will also order that the applicant’s costs of $500 are to be paid within 14 days.
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