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  •   Notable Unreported Decision

Queensland Building and Construction Commission v Marshall

 

[2016] QSC 200

 

 

SUPREME COURT OF QUEENSLAND

PARTIES:

FILE NO:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

Delivered Ex Tempore on 16 August 2016

DELIVERED AT:

Brisbane

HEARING DATE:

16 August 2016

JUDGE:

Jackson J

ORDER:

The order of the court is that:

  1. The application is dismissed.
  2. The defendants pay the plaintiff’s costs of the application.

CATCHWORDS:

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – PARTICULAR WORDS AND PHRASES – GENERALLY – where the plaintiff made a payment pursuant to the insurance scheme in the Queensland Building and Construction Commission Act 1991 (Qld) – where s 71 of the Act permitted the plaintiff to recover payments made under the insurance scheme “from the building contractor by whom the relevant residential construction work was, or was to be, carried out or any other person through whose fault the claim arose” – where the plaintiff alleged that second defendant was the private certifier in respect of the work, and the other defendants were directors of the second defendant at relevant times – where the defendants alleged that s 71 of the Act did not apply, so applied for summary judgment or that the statement of claim be struck out – whether the second defendant was a “person through whose fault the claim arose” for the purposes of s 71(1)

Queensland Building and Construction Commission Act 1991 (Qld), s 71, s 72

Queensland Building and Construction Commission Regulation 2003 (Qld), sch 1AA item 34

Uniform Civil Procedure Rules 1999 (Qld), r 171, r 293

COUNSEL:

R Derrington QC and N Cooke for the plaintiff

A Collins for the second to fifth defendants

SOLICITORS:

Rostron Carlyle Lawyers for the plaintiff

Carter Newell for the second to fifth defendants

[1] Jackson J: The defendants apply for summary judgment under r 293 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) or to strike out the claim and statement of claim under r 171 of the UCPR.

[2] The application proceeds on the basis that if the facts alleged in the statement of claim are correct, the plaintiff still cannot succeed.  The basis for that contention is that the statutory cause of action relied upon by the plaintiff does not apply to the defendants.

[3] The relevant section of the Queensland Building and Construction Commission Act 1991 (Qld) (“QBCC Act”) provides as follows:

 

71 Recovery from building contractor etc.

 

(1) If the commission makes any payment on a claim under the insurance scheme, the commission may recover the amount of the payment, as a debt, from the building contractor by whom the relevant residential construction work was, or was to be, carried out or any other person through whose fault the claim arose.

(2) For subsection (1)—

(a) a building contractor by whom the relevant residential construction work was, or was to be, carried out is taken to include—

(i) a licensed contractor whose licence card is imprinted on the contract for carrying out the work; and

(ii) a licensed contractor whose name, licence number and address are stated on the contract; and

(iii) a licensed contractor whose name is stated on the contract for carrying out the work; and

(iv) a licensed contractor whose name is stated on an insurance notification form for the work; and

(v) a licensed contractor whose licence number is stated on the contract for carrying out the work; and

(vi) a licensed contractor whose licence number is stated on an insurance notification form for the work; and

(vii) a licensed contractor whose PIN was used for putting in place, for the work, insurance under the statutory insurance scheme; and

(viii) a building contractor by whom the work was, or was to be, carried out; and

(ix) a person who, for profit or reward, carried out the work; and

(b) a person through whose fault the claim arose is taken to include a person who performed services for the work if the services were performed without proper care and skill.

(3) The commission is subrogated, to the extent of any payment that the commission has made, or has undertaken to make, to the rights of a person to whom, or for whose benefit, the payment has been, or is to be, made in respect of the matter out of which the insurance claim arose.

(4) In a proceeding brought by the commission under subsection (1) against a licensed contractor mentioned in subsection (2)(a)(i), it is a defence for the licensed contractor to prove that—

(a) the licensed contractor’s licence card was imprinted on the contract for carrying out the work without the licensed contractor’s authority; and

(b) the licensed contractor took all reasonable steps to ensure that the licence card was imprinted on contracts only with the licensed contractor’s authority.

(5) In a proceeding brought by the commission under subsection (1) against a licensed contractor mentioned in subsection (2)(a)(ii), it is a defence for the licensed contractor to prove that—

(a) the licensed contractor’s name, licence number and address were stated on the contract for carrying out the work without the licensed contractor’s authority; and

(b) the licensed contractor took all reasonable steps to ensure that the licensed contractor’s name, licence number and address were stated in contracts only with the licensed contractor’s authority.

(6) In a proceeding brought by the commission under subsection (1) against a licensed contractor mentioned in subsection (2)(a)(iii), (iv), (v), (vi) or (vii), it is a defence for the licensed contractor to prove—

(a) for a licensed contractor mentioned in subsection (2)(a)(iii)—that the licensed contractor’s name was stated on the contract for carrying out the work without the licensed contractor’s authority; and

(b) for a licensed contractor mentioned in subsection (2)(a)(iv)—that the licensed contractor’s name was stated on the insurance notification form for the work without the licensed contractor’s authority; and

(c) for a licensed contractor mentioned in subsection (2)(a)(v)—that the licensed contractor’s licence number was stated on the contract for carrying out the work without the licensed contractor’s authority; and

(d) for a licensed contractor mentioned in subsection (2)(a)(vi)—that the licensed contractor’s licence number was stated on the insurance notification form for the work without the licensed contractor’s authority; and

(e) for a licensed contractor mentioned in subsection (2)(a)(vii)—

(i) that the licensed contractor’s PIN was used for putting in place, for the work, insurance under the statutory insurance scheme without the licensed contractor’s authority; and

(ii) that the licensed contractor took all reasonable steps to ensure the licensed contractor’s PIN was kept and used in accordance with the commission’s requirements for the keeping and use of the PIN.”

[4] Of particular reference here are the terms of ss 71(1) and 71(2), to which I will return.  These provisions appear in pt 5 of the QBCC Act, that is headed “The Statutory Insurance Scheme” and which contains provision for statutory insurance under what is called the “Queensland Home Warranty Scheme”, in relation to residential construction work.

[5] The plaintiff’s claim, as it is alleged in the statement of claim, is that the plaintiff has made payment on a claim under the statutory insurance scheme.  The claim on which the payment was made arose as follows.

[6] A company, Vynian Pty Ltd, was the original owner of land situated at 2 Nicol Way, Brendale, in the State of Queensland.

[7] Vynian entered into a building contract or building contracts with Nolimit Pty Ltd, under which Nolimit agreed to carry out building work which became a building known as “The Grange”.

[8] There was an associated community titles scheme under the Body Corporate and Community Management Act 1997 (Qld), under which Vynian was the original owner.

[9] Between about March 2002 and December 2004, Nolimit carried out the building work by engaging trade contractors.

[10] The building work as constructed is alleged to have incorporated defects because the fire separation walls between adjoining residential units or in the roof spaces of adjoining units did not comply with the requirements of the Building Code of Australia.

[11] Within the meaning of the statutory insurance scheme under the QBCC Act, it is alleged that the defects were category 1 defects.

[12] It is further alleged that, pursuant to ss 70 and 71A of the QBCC Act, the body corporate for The Grange sought indemnification, as did the owners of the lots.  The body corporate or owners’ claims have been paid.

[13] The second defendant is alleged to have been trading as the Brisbane Certification Group, a private certifier, who was the certifier in respect of the building work.

[14] The plaintiff alleges that the second defendant was a person through whose fault the claim arose for the purposes of s 71(1) of the QBCC Act.

[15] It is not necessary to go further into the alternative bases of liability in the statement of claim.

[16] The plaintiff further alleges that the other defendants were either individuals who were directors of the second defendant when building work the subject of the claim was carried out or was to have been carried out, or were directors of the second defendant when the payment was made by the plaintiff.

[17] For present purposes, the application made by the defendants turns on the question whether the second defendant was a person “through whose fault the claim arose” within the meaning of s 71(1) of the QBCC Act.

[18] The defendants submit that the plaintiff must establish:

“(c)The second, third, fourth and fifth defendants carried out the relevant residential construction work;

(d)The claim arose through the fault of the second, third, fourth and fifth defendant; and

(e)In respect of subparagraph (d), they were persons who performed services for the work the subject of the claim.”

[19] In my view, those submissions must be rejected.

[20] First, the plaintiff’s claim is not necessarily predicated on the proposition that the second, third, fourth and fifth defendants carried out the relevant residential construction work.  The plaintiff alleges that the second defendant was a person through whose fault the claim arose.  The other defendants are alleged to be responsible because they were directors of the second defendant at relevant times.

[21] Second, the plaintiff does not allege that the relevant residential construction work was carried out by any of the defendants.  In summary, it alleges that Nolimit was the building contractor by whom the relevant residential construction work was carried out or was to be carried out.

[22] Third, the plaintiff does not allege, necessarily, that the second defendant was a person who performed services for the work, although that is at least one available view of its claim.  The plaintiff alleges, however, that even if the second defendant was not a person who performed services for the work, it was still a person through whose fault the claim arose.

[23] Having regard to the submissions of the parties, some propositions about the operation and meaning of s 71 appear to be relatively uncontentious.  Section 71(1) distinguishes between two classes of persons from whom the plaintiff may recover the amount of a payment on a claim under the insurance scheme.  The first class or limb is the “building contractor”.  The second class or limb comprises “any other person through whose fault the claim arose”.

[24] The difference between the two classes is that a person other than the building contractor is liable only if they are a person through whose fault the claim arose.

[25] Second, it may be accepted that the meaning which might otherwise be given to the second class or limb, that is “the person[s] through whose fault the claim arose”, is further defined by s 71(2)(b), which provides that the class is to be taken to include “… a person who performed services for the work if the services were performed without proper care and skill.”

[26] Third, within the meaning of that paragraph, “the work” is a reference to the “relevant residential construction work” referred to in s 71(1).  That meaning is confirmed by the structure of ss 71(1), 71(2), and the various subparagraphs of section 71(2)(a) which refer to “the work” as well.

[27] The substance of the defendants’ submission is that a building certifier should not come within the meaning of a “person through whose fault the claim arose” because that person is not subject to the same regime as a building contractor.  However, in my view, that is not a basis for determining the meaning and scope of the text taken in context to determine the operation of s 71(1).

[28] The starting point is that such a person is not “the building contractor by whom the relevant residential construction work” was or was to be carried out.  That is what the text of s 71(1) expressly provides.

[29] Accordingly, for the defendants’ contention or submissions to succeed, it is necessary to be able to discern in the text or the context in which s 71(1) appears a legislative intention that a building certifier cannot be an “other person” within the meaning of s 71(1).

[30] In oral submissions, the defendants placed heavy reliance on a two-step analysis.  The first step is that where section 71(1) identifies “any other person through whose fault the claim arose”, it is referring to any other person who carried out or was to carry out relevant residential construction work.  The second step was that building certifiers are excluded from those who perform “building work” within the meaning of the QBCC Act, a point to which I will return.

[31] This argument immediately confronts contextual difficulties in both s 71 and the surrounding sections.  First, in s 71(1) itself, it is a building contractor who carries out relevant residential construction work who is the first class, or limb, of the subsection.  If it had been intended that the same qualification apply to the second class of “any other person through whose fault the claim arose”, one might have expected that the same qualifying expression would have been used in the second limb of the section.

[32] Second, s 71(2) defines, for the purposes of s 71(1) who is a building contractor by whom the relevant residential construction was or was to be carried out so as to include nine enumerated classes of person.  The last of those categories in s 71(2)(a)(ix) is “a person who, for profit or reward, carried out the work”.  In other words, a person who is not otherwise a building contractor is included in the meaning of that expression in the first limb of s 71(1) by the operation of s 71(2)(a)(ix) if they are a person who carried out the work for profit or reward.

[33] Third, s 72(1) of the QBCC Act provides that if the plaintiff is of the opinion that building work is defective or incomplete, the plaintiff may direct the person who carried out the building work to rectify the building work within a period stated in a direction.

[34] In my view, both ss 72(1) and 71(2)(ix) illustrate that the text of s 71(1) that identifies “any other person through whose fault the claim arose” is not limited to a person who carried out the work.

[35] As previously mentioned, the defendants place reliance on the provisions of the legislation that exclude certification work from the meaning of “building work” under the QBCC Act.  In particular, they place reliance on item 34 in Sch 1AA of the Queensland Building and Construction Commission Regulation 2003 (Qld).  That item expressly excludes certification work performed by a building certifier in a certifier’s professional practice, under the Building Act 1975 (Qld), from being “building work” within the meaning of that term as defined in the dictionary of the QBCC Act.

[36] However, in my view, the operation of s 71(1) does not turn on whether a relevant “other person” carried out or was to carry out the work.  It is the liability of the building contractor, for a claim under the insurance scheme, that is conditioned on the contractor being the person who carried out or was to carry out the relevant residential construction work.

[37] It is true that as defined, “residential construction work” is a subset of “building work”.  Be that as it may, the liability of an “other person through whose fault the claim arose” is not expressly conditioned on that person being a person who carries out or was to carry out building work.  Accordingly, in my view, the defendants’ focus on whether certification work is “building work”, as defined, does not assist in determining the reach of s 71(1).

[38] The defendants build upon the exclusion of certification work from building work to submit that it is entirely inconsistent with a proper interpretation of the legislation to suggest that a building certifier could perform services for residential construction work.  In that submission, they pick up the language of s 71(2)(b), in which it is provided that a person through whose fault the claim arose is taken to include a person who performed services for the work, if the services were performed without proper care and skill.

[39] In my view, this contention must also be rejected.  That certification work is not itself building work does not exclude the possibility that a building certifier could perform services for residential construction work.  There are a number of categories of persons who would potentially be classed as design professionals who might come within the meaning of the words “a person who performs services for the work”.

[40] However, even if the performance of certification work does not amount to performing services for residential construction work, that does not resolve the question of the proper construction of s 71(1) in the defendants’ favour.  Section 71(2)(b) does not limit the meaning of s 71(1) conveyed by the words “any other person through whose fault the claim arose”.  That is because, by providing that the meaning of those words includes performance of services for residential construction work, if the services were performed without proper care and skill, s 71(2)(b) is either extending or confirming the meaning of the words contained in s 71(1).

[41] In my view, these points are enough to dispose of the present applications.  Bearing in mind the nature of the present applications, it is not helpful to go further.  The grounds advanced by the defendants for concluding that s 71(1) cannot apply to the second defendant are not persuasive. 

[42] It is unnecessary to go further and to engage in any more detailed consideration of whether, properly construed, s 71(1) does extend to the plaintiff’s claim against the second defendant and to the other defendants as directors. 

[43] For those reasons, in my view, the application must be dismissed.

[44] The orders that I will make are:

(1)   The application is dismissed.

(2)   The Defendants pay the Plaintiff’s costs of the application.

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Editorial Notes

  • Published Case Name:

    Queensland Building and Construction Commission v Marshall & Ors

  • Shortened Case Name:

    Queensland Building and Construction Commission v Marshall

  • MNC:

    [2016] QSC 200

  • Court:

    QSC

  • Judge(s):

    Jackson J

  • Date:

    16 Aug 2016

  • White Star Case:

    Yes

Litigation History

No Litigation History

Appeal Status

No Status