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Seirlis v Queensland Building and Construction Commission[2020] QCA 283

Seirlis v Queensland Building and Construction Commission[2020] QCA 283

SUPREME COURT OF QUEENSLAND

CITATION:

Seirlis & Ors v Queensland Building and Construction Commission [2020] QCA 283

PARTIES:

TERRY SEIRLIS

(first applicant)

TIES GROUP PTY LTD

ACN 130 450 341

(second applicant)

UKL PTY LTD

ACN 123 360 823

(third applicant)

v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(respondent)

FILE NO:

Appeal No 3638 of 2020

QCATA No 261 of 2018

DIVISION:

Court of Appeal

PROCEEDING:

Application for Leave Queensland Civil and Administrative Tribunal Act

ORIGINATING COURT:

Queensland Civil and Administrative Appeals Tribunal at Brisbane – [2020] QCATA 37 (Senior Member Aughterson, Member Hughes)

DELIVERED ON:

11 December 2020

DELIVERED AT:

Brisbane

HEARING DATE:

24 August 2020

JUDGES:

Philippides and Mullins JJA and Henry J

ORDER:

The application for leave to appeal is refused with costs.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – WHAT IS – DISTINCTION BETWEEN QUESTION OF LAW AND QUESTION OF FACT – where the owner of two townhouses lodged statutory insurance policy claims for defective residential construction work before selling the townhouses – where the respondent refused the claims – where the Queensland Civil and Administrative Tribunal (QCAT) dismissed the application to review the decisions of the respondent – where the Tribunal’s decision was upheld on appeal by the appeal tribunal of QCAT – where the appeal tribunal found that the Tribunal’s failure to make findings in relation to category 1 defects was an error, but there was no consequence of that failure – where the appeal tribunal concluded that the claims were made out of time and there was no evidence to base an exercise of discretion under the policy to allow an extension of time – where the appeal tribunal found it was open to the Tribunal to exercise the discretion to refuse a claim under the policy for rectification work undertaken without approval by the respondent – whether the appeal tribunal made an error of law

Land Title Act 1994 (Qld), s 110

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142, s 150

Trusts Act 1973 (Qld), s 15

Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720; [2006] FCA 1352, cited

C & E Pty Ltd v CMC Brisbane Pty Ltd [2004] 2 Qd R 244; [2004] QCA 60, related

Commissioner of State Revenue v Harrison [2019] QCA 50, considered

National Provincial Bank Ltd v Ainsworth [1965] AC 1175; [1965] UKHL 1, cited

Pivovarova v Michelsen (2019) 2 QR 508; [2019] QCA 256, followed

R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327; [1982] HCA 69, cited

Secure Parking (WA) Pty Ltd v Wilson (2008) 38 WAR 350; [2008] WASCA 268, cited

St Vincent de Paul Society Qld v Ozcare Ltd [2011] 1 Qd R 47; [2009] QCA 335, cited

COUNSEL:

M J Steele for the applicants

G I Thomson for the respondent

SOLICITORS:

Hillhouse Legal Partners for the applicants

QBCC Legal Services for the respondent

  1. [1]
    PHILIPPIDES JA:  I agree with the reasons for judgment of Mullins JA and the order her Honour proposes.
  2. [2]
    MULLINS JA:  The applicants apply for leave to appeal pursuant to s 150 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) against the decision of the appeal tribunal of the Queensland Civil and Administrative Tribunal that confirmed the decision of the Tribunal at first instance: Seirlis & Ors v Queensland Building and Construction Commission [2020] QCATA 37 (the reasons).
  3. [3]
    There is a long history to the claims made under a statutory insurance policy that were the subject of the proceedings in the Tribunal.  The proceedings were originally commenced on 18 September 2007 in the Queensland Commercial and Consumer Tribunal (QCCT) seeking a review of the decisions of the then Queensland Building Services Authority to disallow two statutory insurance claims made in respect of defective residential construction work in two townhouses at Yeronga (to which I will refer as Lots 2 and 5).  The QCCT summarily dismissed the proceedings on 2 September 2008, but a successful appeal to the District Court on 15 June 2011 on the basis of denial of natural justice resulted in the matters being remitted, but by that time the Tribunal had absorbed the functions previously exercised by the QCCT.
  4. [4]
    The Tribunal’s decision on the review was to dismiss the applications to review: Seirlis & Ors v Queensland Building and Construction Commission [2018] QCAT 291 (the original reasons).  On the application for leave to appeal or appeal of the decision of the Tribunal, the appeal tribunal confirmed the decision of the Tribunal at first instance.  The appeal tribunal had observed at [6] of the reasons that “other than questions going to the proper interpretation of the provisions of the statutory insurance scheme, the grounds of appeal raise questions of fact or mixed law and fact”.  The significance of the appeal to the appeal tribunal involving questions of fact or questions of mixed law and fact was dealt with at [7] of the reasons where the position was correctly set out that leave to appeal was required pursuant to s 142(3)(b) of the QCAT Act.  The appeal tribunal also set out at [7] of the reasons the established principles on whether to grant leave to appeal, including whether there is a reasonably arguable case of error in the primary decision, whether there is a reasonable prospect the appellant will obtain substantive relief, whether substantial injustice was caused by the error, or whether there is a question of general importance for which a decision of the appeal tribunal would be to the public advantage.

Application for the grant of leave to appeal

  1. [5]
    The applicants set out in the proposed notice of appeal the errors of law they rely on for the setting aside of the appeal tribunal’s decision.  The applicants claim that if they succeed on the appeal, the decision will affect other proceedings in QCAT to which the parties to this application are also parties.  The applicants also submit that the resolution of the appeal would resolve whether the subject matter of a claim for insurance under the statutory insurance policy can form trust property or is otherwise inalienable and resolution of that question may affect not only holders of policies of insurance under the same statutory insurance policy, but persons with rights under other statutory schemes of insurance.
  2. [6]
    Under s 150(3)(a) of the QCAT Act, an appeal to this court from the appeal tribunal may be made only on a question of law.  The question of law under s 150(3)(a) must be a pure question of law and only a question of law: Pivovarova v Michelsen (2019) 2 QR 508 at [4], [14] and [37].  Leave to appeal on the question of law under s 150(3)(b) of the QCAT Act should be granted only if it is necessary to correct a substantial injustice or some important principle arises: Commissioner of State Revenue v Harrison [2019] QCA 50 at [15], [30] and [66].

Background

  1. [7]
    The first applicant Mr Seirlis was a director of Terry Seirlis Constructions Pty Ltd which as trustee of the Terry Seirlis Family Trust (constituted by the deed of settlement dated 12 November 1997) became the owner of land at Yeronga that was divided into 10 lots for a townhouse development.  Mr Seirlis’ company entered into a building contract with CMC Brisbane Pty Ltd for the construction of the 10 townhouses.  It appears that it was the one contract for the construction of all the townhouses.  On 4 October 2001 the Authority issued 10 separate certificates of insurance pursuant to the statutory insurance scheme.  On 22 July 2003 Terry Seirlis Constructions Pty Ltd changed its name to C & E Pty Ltd.  It remained as the trustee of the family trust until 27 October 2005 when that role was taken over by TSPD Pty Ltd which was another company of which Mr Seirlis was a director.
  2. [8]
    On 23 January 2004 C & E submitted an unsigned insurance claim to the Authority in relation to defective residential construction work on each of Lots 2 and 5.  Signed versions of the claim forms were submitted on 10 February 2004.
  3. [9]
    Prior to the insurance claims being determined, C & E sold Lot 2 to a third party on 30 January 2005 and Lot 5 to a third party on 4 February 2005.
  4. [10]
    C & E was ordered to be wound up by the court on 31 July 2006.  The winding up was subsequently completed and C & E deregistered.
  5. [11]
    By letters dated 31 July 2007, the respondent refused the insurance claims made by C & E in respect of each of the lots.
  6. [12]
    On 11 October 2007 receivers and managers were appointed to TSPD.  That was an event under the deed of settlement for the family trust that resulted in the vacation of office of trustee by TSPD.
  7. [13]
    On or about 16 October 2007 the third applicant UKL Pty Ltd was appointed the new trustee of the family trust by the appointors named for that purpose in the deed of settlement.
  8. [14]
    On or about 2 June 2008 the second applicant Ties Group Pty Ltd entered into a deed of assignment by which it purported to take from C & E (in liquidation) the benefits of any rights under the certificates of insurance for Lots 2 and 5.  The liquidator signed the deed on behalf of the assignor and Mr Seirlis who was the sole director of Ties Group signed the deed on behalf of Ties Group.  UKL was joined to the proceedings in 2013, when it became apparent that the liquidator of C & E may not have had the authority to assign the rights under the statutory insurance scheme to Ties Group, if they were assignable.  Mr Seirlis was the sole director of UKL when it applied in September 2013 to be joined as an applicant in the proceedings.
  9. [15]
    The quantum the applicants ultimately sought before the Tribunal was the loss in value of each lot as at the date of sale.  On the basis the loss in value in relation to Lot 5 was more than $200,000, but the maximum amount payable on a claim under the statutory insurance policy was capped at $200,000, the applicants sought the sum of $200,000 for Lot 5 and the sum of $160,000 for the loss of value in relation to Lot 2.

Statutory insurance policy

  1. [16]
    It was common ground that the relevant policy was edition 5.  The definitions for the purpose of the policy are set out in clause 9.1.  The term “Insured” is defined to mean the owner of the land or a consumer who has entered into a contract with the contractor to have residential construction work carried out in Queensland.  Relevantly, the term “owner” of land is defined to mean for freehold land, the registered owner of the land under the Land Title Act 1994 (Qld).  The definition of “practical completion” is:

“unless the context suggests otherwise, is that stage, in the opinion of BSA, when the residential construction work becomes fit for intended use or occupation;”

  1. [17]
    Under clause 2.2(a) of the policy, but subject to clause 2.2(c), the amount of the payment under Part 2 is limited to the reasonable cost, as determined by the Authority, of undertaking those works necessary to rectify the defects less any remaining liability of the owner under the contract with the contractor.  Clause 2.2(c) provides:

“Where, in the opinion of BSA, the undertaking of remedial works is unnecessary or unreasonable, the payment will be limited to the loss in value, if any, in the residential construction work, produced by the departure from the plans or specifications or by the defective workmanship or materials.”

  1. [18]
    The time limit for making a claim is dealt with in clause 2.5:

“The Insured is NOT ENTITLED to payment for loss under this Part unless:

  1. (a)
    in the case of a category 1 defect, the claim is made within three months of that defect first becoming evident (in the opinion of BSA); or
  1. (b)
    in the case of a category 2 defect, the claim is made within seven months of the date of practical completion,

or within such further time as BSA may allow.”

  1. [19]
    The expressions “category 1 defect” and “category 2 defect” are also defined in clause 9.1 of the policy.  A category 1 defect is a defect which may allow water penetration into a building or adversely affect the health and/or safety of the occupants, the structural adequacy of the building or the serviceability, performance or functional use of the building.  A category 2 defect is a defect which is not a defect of another category and which results from the failure of the contractor to meet reasonable standards of construction and finish or is of a kind which commonly occurs during the “settling in” period of a new building.
  2. [20]
    Clause 5.1 of the policy permits the Authority to refuse to make payment for loss under the policy where residential construction work or associated works have been completed or rectified (as applicable) without the prior written approval of the Authority.
  3. [21]
    Clause 7.1 deals with payment of a claim under the policy.  The Authority is given the discretion to make payment in full discharge of its liability in a number of different ways.  Where the issue of rectification or completion of the insured works is not relevant, the Authority can choose to pay the amount of the claim to the insured.

The proposed grounds of appeal

  1. [22]
    On the hearing of this application, the applicants grouped the errors of law they assert had been made by the appeal tribunal into four topics: 
    1. (a)
      category 1 defects;
    2. (b)
      practical completion;
    3. (c)
      rectification work without approval;
    4. (d)
      rights under the statutory policy as trust property.

Category 1 defects

  1. [23]
    The applicants had appealed to the appeal tribunal on the basis the Tribunal erred in finding that all claims related to category 2 defects and in not making any findings in relation to category 1 defects.  This relates to the statement at [39] of the original reasons that “All of the defects for which the Applicants now seek recompense under the policy are ‘category 2’ defects, as defined”.  The respondent conceded before the appeal tribunal that finding in the Tribunal was in error.  The appeal tribunal found (at [34] of the reasons) that because the Tribunal’s material findings were limited to category 2 defects (such as in [78], [119], [132] and [145] of the original reasons), the appeal tribunal was not satisfied that the error affected the ultimate outcome.  The appeal tribunal repeated (at [79] of the reasons) that the Tribunal did not proceed to assess or make findings about the category 1 claims which had not been abandoned by the applicants and that was therefore an error.  The appeal tribunal then considered (at [80] of the reasons) that the categorisation of the defects as category 1 or category 2 was only relevant to the time for making an insurance claim.  The appeal tribunal found there were no consequences in the Tribunal’s error in not considering the defects as category 1 defects, as explained (at [81] of the reasons):

“The Tribunal’s failure to make findings about ‘category 1’ defects impacts only the question of whether the claims for those defects were made within time. It does not obviate any of the Tribunal’s other material findings unrelated to the claims being out of time. Each of those other material findings apply whether the defects are category 1 or 2 and of themselves are individually fatal to the Appellants’ claims – even if they were ‘category 1’ defects and within time. The Tribunal’s findings on the other issues were each sufficient to dispose of the review proceedings. In other words, the Tribunal’s error in not referring to ‘category 1’ defects did not affect its ultimate findings.”

  1. [24]
    The applicants now assert that the appeal tribunal’s conclusion that the Tribunal’s error in not referring to category 1 defects did not affect its ultimate finding was wrong for two reasons.  The first is that the Tribunal’s failure to consider category 1 defects had a direct effect on its analysis of clause 5.1 and whether the discretion should be exercised to make the payment, even though there was rectification without approval.  The second is that the Tribunal did not otherwise make any assessment of the value of the category 1 defects.
  2. [25]
    The Authority relies on the fact (which is apparent from the evidence and submissions before the Tribunal) that, during the hearing before the Tribunal, category 1 defects did not assume great importance and were relatively insignificant in terms of the number of defects and quantum compared to the category 2 defects.  The Authority also submits the key findings of the Tribunal were made by reference to the category 2 defects as recognised by the appeal tribunal (at [34] of the reasons).  That submission is a sufficient answer to the applicants’ argument that the failure of the Tribunal to consider the category 1 defects may have affected the exercise of the discretion under clause 5.1 of the policy.
  3. [26]
    There is also no significance in the Tribunal’s failure to make any assessment of the value of the category 1 defects in light of the basis on which the applicants put their quantum case before the Tribunal.  The applicants may not have abandoned their claim for the category 1 defects, but they only calculated loss of value in one amount for each of the lots.
  4. [27]
    The applicants have not shown that any of the proposed grounds in respect of the category 1 defects can succeed.

Practical completion

  1. [28]
    The applicants claim that the appeal tribunal did not make any finding at all in relation to the ground that was before the appeal tribunal, namely that the Tribunal did not consider or make findings about whether the work was “fit for intended use or occupation” for the purpose of the definition of “practical completion” which was relevant to whether the claim for the category 2 defects was made outside the time allowed under clause 2.5(b) for making the claim.
  2. [29]
    One aspect of this topic on which the applicants assert an error of law was made by the appeal tribunal was in finding (at [45] of the reasons) that s 67(6) of the Domestic Buildings Contract Act 2000 (Qld) (DBCA) did not apply to the definition of “practical completion” in the policy.
  3. [30]
    C & E and CMC were involved in early litigation about the application of the DBCA to the building contract for the construction of the 10 townhouses.  It was held by the Court of Appeal that the DBCA did apply: C & E Pty Ltd v CMC Brisbane Pty Ltd [2004] 2 Qd R 244.  It does not follow from the fact that the DBCA applied to the building contract that the definitions in the DBCA were incorporated in the statutory insurance policy.  It is a matter for construction of the insurance policy.  That is exactly what the appeal tribunal stated (at [45] of the reasons) endorsing the same view expressed by the Tribunal (at [74] of the original reasons).  The reference in the definition of “practical completion” in s 9.1 of the policy applies to the use of that expression in the policy “unless the context suggest otherwise” which is a reference to the context in which the expression “practical completion” is used in the policy.  There is nothing in the context in which reference is made to “the date of practical completion” in clause 2.5(b) of the policy that suggests that the definition of “practical completion” in clause 9.1 of the policy should not apply.
  4. [31]
    Another aspect on which the applicants assert the appeal tribunal erred was in not finding that the Tribunal erred in failing to consider the exercise of the discretion to extend time for making a claim under clause 2.5(b) of the policy.  The appeal tribunal dealt with this issue (at [48] - [52] of the reasons) on the basis that the applicants did not produce evidence to the Tribunal to justify why they should be allowed an extension of time.  In fact, the Tribunal in the original reasons did not deal at all with whether there should be a discretionary extension of time to make the claim.  On day 3 of the hearing before the Tribunal, the Tribunal member ruled, for reasons given when making the ruling, that the applicants’ case should be confined to the matters raised in the amended points of claim and the only case that was advanced in relation to the timing of the claim for the purpose of clause 2.5(b) was that the date for practical completion with respect to Lots 2 and 5 had been attained by a defined date and the claims made by the applicants were made within the time limit created by clause 2.5 of the policy.  The Tribunal member therefore refused to allow the applicants at that stage of the proceedings to amend their case to rely upon the final words contained in clause 2.5 of the policy to claim an extension of the time for making the claim for the category 2 defects.
  5. [32]
    The applicants rely on the fact that, despite that ruling, in paragraph 154 of their written submissions made to the Tribunal, an express submission was made that, even if practical completion did occur at some time earlier than seven months prior to the claims being made, the Tribunal should, in any event exercise the discretion in clause 2.5 to allow further time.
  6. [33]
    Not surprisingly, in light of the ruling that was made by the member in the course of the hearing, the Tribunal did not address paragraph 154 in the original reasons.  The submission in paragraph 154 did not advance reasons for, and was not accompanied by an application or request to, the Tribunal to reconsider the ruling that had limited the applicants’ case in respect of clause 2.5(b) to the case it advanced as to the date for practical completion which did not involve seeking an extension for the making of the claim.  There was also no attempt in those written submissions to outline the factors that could be relied on by the applicants for a favourable exercise of the discretion to extend the time for making the claim under clause 2.5(b) for the category 2 defects.  A matter cannot be made an issue merely because of a sentence in a written submission, if it has otherwise been the subject of an adverse ruling by the Tribunal that resulted in its exclusion as an issue and no application or request was made to the Tribunal to reconsider the ruling.
  7. [34]
    The applicants in their written submissions to the appeal tribunal did not characterise paragraph 154 of the written submissions to the Tribunal as a submission made to the Tribunal that required it to re-visit the ruling refusing to allow the applicants to seek an extension of the time for making the claim for category 2 defects and for the Tribunal to exercise the discretion to extend accordingly.  It was therefore open to the appeal tribunal to dispose of the matter before it on the basis that there was no evidence to base an exercise of discretion under clause 2.5 of the policy which reflected the state of affairs before the Tribunal.  That could not be an error of law in the circumstances.
  8. [35]
    Another aspect in which the applicants assert the appeal tribunal erred in law in relation to the date of practical completion was in not finding that the Tribunal did not consider or make any findings about whether the residential construction work was fit for intended use or occupation.  The Tribunal dealt with this issue (at [77] of the original reasons) and found that the time limits for clause 2.5(b) of the policy should commence to run from the date of practical completion as was certified by the architect Cottee Parker.  The applicants had relied on the evidence of Mr Helmold, an architect and builder, as an expert witness in relation to the question of practical completion, but the Tribunal found a number of deficiencies with Mr Helmold’s evidence (at [81]-[84] of the original reasons) including that the factual basis for Mr Helmold’s opinion was not satisfactorily established.  The Tribunal stated further (at [77] of the original reasons) that the Authority and now the Tribunal “is perfectly entitled to determine that it will rely on the certificates of practical completion as certifying that the subject lots were fit for their intended use or occupation, even no matter that there may still have been defects or omissions from the contract specification”.  The appeal tribunal interpreted the Tribunal’s reasons on this issue (at [44] of the reasons) as implicitly preferring some evidence that it had before it to support its ultimate findings on practical completion and that it did not accept the evidence to the contrary.  The appeal tribunal found (at [44] of the reasons) that it was not an error to prefer one version of facts to another.
  9. [36]
    There is no substance in any of the aspects covered by the proposed grounds of appeal that relate to the date of practical completion.

Rectification work without approval

  1. [37]
    The appeal tribunal disposed of the appeal from the Tribunal by concluding (at [58] of the reasons) on the basis of the factual findings made by the Tribunal that it was open for the Tribunal to exercise the discretion under clause 5.1 of the policy to refuse to make a payment.  As the factual findings made by the Tribunal were not disturbed by the appeal tribunal, those factual findings cannot be the subject of review in this Court, where any appeal is limited to a pure question of law.  Those factual findings included a finding (at [118] of the original reasons) that no oral approval to proceed and rectify urgent defects had been given by Mr Cragg on behalf of the Authority to Mr Seirlis.  The basis for exercising the discretion to refuse payment pursuant to clause 5.1 of the policy was then set out at [119] of the original reasons that it was not possible when Mr Cragg conducted his inspections of the properties to discern which of the alleged category 2 defects had been caused by CMC and which of those arose in consequence of works conducted by other contractors also working on the site.
  2. [38]
    The applicants seek to characterise as an error of law made by the appeal tribunal that the appeal tribunal (at [56] of the reasons) failed to find that the Tribunal had not applied the correct test in relation to the discretion to refuse to make a payment pursuant to clause 5.1 of the statutory insurance policy, in circumstances where the Tribunal did not articulate the basis for the exercise of its discretion to refuse payment and the appeal tribunal did not consider or make any finding about what was the correct test.
  3. [39]
    The Tribunal in deciding whether to exercise the discretion to make the payment pursuant to clause 5.1 of the policy, as it stood in the shoes of the Authority, had to make a decision that considered the relevant considerations thrown up by the evidence that was accepted by the Tribunal.  It was not for the Tribunal to articulate a test other than whether the discretion should be exercised in the circumstances which the Tribunal found applied in this case.  The applicants submit that the findings made by the Tribunal did not support an exercise of the discretion, as the Tribunal did not identify any relevant link between the unauthorised rectification work and any of the category 2 defects, as all the Tribunal identified was that other contractors had performed some other work without finding that the other contractors had performed rectification work.  This submission misses the point made in the Tribunal’s reasons.  It was the fact that other work had been done that made it impossible for the Authority to discern which of the alleged category 2 defects had been caused by CMC or arose as a result of those other works.  The appeal tribunal had to consider whether the exercise of the Tribunal’s discretion to refuse to make the payment in the circumstances was in error.  In order to carry out that task, the appeal tribunal did not have to articulate a test for the purpose of reviewing the exercise of the discretion.  It was sufficient for the appeal tribunal to record (at [57] of the reasons), as was the case, that “[t]he Tribunal’s reasons articulate sufficient evidence to support its ultimate findings”.
  4. [40]
    There was therefore no error of law made by the appeal tribunal in reviewing the Tribunal’s exercise of the discretion under clause 5.1 of the policy.

Whether the right to make a claim under the statutory insurance policy can be trust property

  1. [41]
    The applicants’ claim in the Tribunal proceeded primarily on the basis that UKL was the appropriate claimant as the trustee of the family trust to pursue the claim under the policy, as the benefit of the claim made by C & E was the property of the family trust.  An alternative argument was pursued by the applicants in the Tribunal on the basis the claim is a chose in action that was capable of being assigned to Ties Group.  The Tribunal did not deal directly with the effect of the claim being made by the owner of Lots 2 and 5 as trustee.  The Tribunal disposed of the question of the proper claimant (at [60] of the original reasons) by concluding “that the rights of indemnity arising under the statutory insurance scheme are personal to the Insured as defined, and these are not now accessible by either Ties Group, or UKL”.
  2. [42]
    Grounds 6, 7 and 8 before the appeal tribunal were based on the allegation that the Tribunal erred in making that finding.  Again before the appeal tribunal, the applicants contended that the benefit in the claim under the policy was the property of the family trust and UKL was the appropriate claimant as trustee of that trust.  The applicants also pursued an alternative argument that the claim under the policy is a chose in action capable of being, and had been assigned, to Ties Group.  The appeal tribunal reached the same conclusion of the Tribunal in finding (at [64] of the reasons) that the right of indemnity under the statutory policy is personal to the insured.  The appeal tribunal then undertook a process of statutory construction in respect of the policy, as it is a statutory instrument to which the Acts Interpretation Act 1954 (Qld) applies and concluded (at [69] of the reasons) that “the Tribunal did not err in law in concluding that the rights conferred by the insurance policy are less than a chose in action and are not capable of assignment”.  The appeal tribunal concluded (at [69] of the reasons) that only C & E met the statutory definition of “Insured” and neither Ties Group nor UKL was the insured.  The appeal tribunal observed (at [70] of the reasons) that there was no error in the Tribunal’s finding that the state of the evidence was insufficient to show any entitlement to the rights of the insured by UKL, as the Tribunal had evidence upon which it could properly reach the conclusions that it did.  The appeal tribunal then recorded (at [71] of the reasons) that the finding by the Tribunal that the deficiencies in the applicants’ evidence could not establish an unbroken chain of devolution of trust property to UKL via TSPD was open on the evidence (or lack thereof) and that was sufficient to dispose of the applicants’ submission that the rights of the trust devolved to UKL.
  3. [43]
    One of the proposed grounds of appeal for numerous reasons challenges the finding of the appeal tribunal (at [71] of the reasons) that the “deficiencies in the appellants’ evidence could not establish an unbroken chain of devolution of trust property” to UKL.  One of those reasons is that the appeal tribunal did not find that the claim pursuant to the insurance policy was not capable of forming trust property.  It is implicit in the findings the appeal tribunal did make as to which entity was the insured that the appeal tribunal did find the claim pursuant to the insurance policy was not capable of forming trust property.  The other proposed ground of appeal in relation to this topic raises the issue of whether the appeal tribunal should have considered whether, as a matter of construction, the rights of indemnity under the statutory insurance scheme are personal to the insured as defined in the policy and, for that reason, UKL as the present trustee of the trust has no entitlement to the benefit of the claim.
  4. [44]
    As the applicants have not otherwise shown that leave to appeal should be given in respect of any of the other grounds which would result in a determination that the claim should have been accepted by the Authority and was of value, it is strictly not necessary to deal with the questions of construction of the policy raised by the grounds of appeal on this topic.  Fundamental questions of trust law were raised by the submissions on this application on the applicants’ primary argument based on the existence of the trust which were not addressed by either the Tribunal or the appeal tribunal.  Even though it will not have any bearing on the outcome of this application, in the circumstances of other proceedings between the same parties and as the parties made submissions on the effect of the existence of the trust, it is appropriate to make some observations about these fundamental questions.
  5. [45]
    The starting point is that there is nothing in the policy that precludes the insured being a trustee.  As a matter of construction of the policy, it is intended to benefit the owner of the land on which the townhouse was constructed which, as in the case of C & E, was the registered owner which held the land on trust for the family trust.  Section 110 of the Land Title Act 1994 (Qld) expressly recognises that a registered owner may hold the interest in freehold land as a trustee.  The claim under the policy may be made by the owner of the land at the time of the claim.  If the registered owner of the land holds the land on trust, as a matter of construction of the statutory policy, the insured is the trustee of the trust and the claim by that insured is as trustee for the benefit of the trust.  The sale of the land does not preclude the owner from continuing with the claim under the policy that was made prior to the sale.
  6. [46]
    The Authority was successful before the Tribunal (at [109] of the original reasons) in having its submission accepted that the rights of an insured under the statutory policy were “inalienable personal rights of the Insured as defined” and therefore incapable of passing to a new trustee of the relevant trust on which the registered owner had owned the subject property.  The Authority repeats the submission on the hearing of this application, asserting that the claim under the policy is not alienable and therefore did not become trust property, even though C & E as the owner of the subject land held the land on which the townhouses were built on trust.  By analogy, the Authority relies on Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 at [50]-[55] and the authorities referred to in those paragraphs for the proposition that a cause of action under s 82 of the Trade Practices Act 1974 (Cth) was not one capable of assignment, but those authorities say nothing whatsoever that would preclude a claim for loss or damage pursuant to s 82 of that Act (or its successor provision) being brought by a trustee of a trust.
  7. [47]
    Even if the Authority is correct in its view that the statutory policy did not permit a claimant to assign the benefit of the claim, that factor does not preclude the claim from being trust property, where the claim was made by the owner of the property as trustee.  The frequently quoted statement by Lord Wilberforce in National Provincial Bank Ltd v Ainsworth [1965] AC 1175, 1247-1248 is used in considering what constitutes property, including trust property:

“Before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability.”

  1. [48]
    That statement is, however, only a guide and not exhaustive of the characteristics that must pertain for a right or interest to constitute property.  As was observed by Mason J in R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327, 342 “[a]ssignability is not in all circumstances an essential characteristic of a right of property”.  Similar observations were also made by Buss JA in Secure Parking (WA) Pty Ltd v Wilson (2008) 38 WAR 350 at [100]-[101] and by Muir JA in St Vincent de Paul Society Qld v Ozcare Ltd [2011] 1 Qd R 47 at [61]-[62].
  2. [49]
    When there is a change of trustee in respect of a trust, no assignment of the trust property is required, as s 15(1) of the Trusts Act 1973 (Qld) provides that:

“Where a new trustee is appointed the instrument of appointment vests, subject to the provisions of any other Act, the trust property in the persons who become and are the trustees as joint tenants without any conveyance, transfer or assignment.”

  1. [50]
    If the owner of the real property on which the relevant construction took place was the trustee of a trust at the time the claim under the statutory policy was made, it follows the claimant must be the trustee from time to time of that trust.  The vesting of the trust property in the new trustee would not offend any preclusion on the assignability of the claim.
  2. [51]
    Arguably then, the implied acceptance by the appeal tribunal that the ordinary operation of the law in relation to trusts and trust property did not apply to the claim pursuant to the statutory policy was in error, but that has no consequence on this application.  No doubt the uncertainty by the Tribunal on the evidence before it as to whether UKL was the trustee of the trust was contributed to by the receiver of TSPD purporting to assign the benefit of the claim to another company associated with Mr Seirlis, namely Ties Group.  It is not necessary to consider whether the appeal tribunal (at [71] of the reasons) was correct in upholding the Tribunal’s conclusion that the evidence did not establish an unbroken chain of devolution of trust property to UKL.

Order

  1. [52]
    It follows that the order which should be made is:

The application for leave to appeal is refused with costs.

  1. [53]
    HENRY J:  I agree with the reasons of Mullins JA and the order proposed by her Honour.
Close

Editorial Notes

  • Published Case Name:

    Seirlis & Ors v Queensland Building and Construction Commission

  • Shortened Case Name:

    Seirlis v Queensland Building and Construction Commission

  • MNC:

    [2020] QCA 283

  • Court:

    QCA

  • Judge(s):

    Philippides JA, Mullins JA, Henry J

  • Date:

    11 Dec 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720
2 citations
Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352
1 citation
C & E Pty Ltd v CMC Brisbane Pty Ltd (Administrators Appointed)[2004] 2 Qd R 244; [2004] QCA 60
3 citations
Commissioner of State Revenue v Harrison [2019] QCA 50
2 citations
National Provincial Bank Ltd v Ainsworth [1965] UKHL 1
1 citation
National Provincial Bank Ltd v Hastings Car Mart Ltd (1965) AC 1175
2 citations
Pivovarova v Michelsen(2019) 2 QR 508; [2019] QCA 256
3 citations
Queen v Toohey; Ex parte Meneling Station Pty Ltd [1982] HCA 69
1 citation
Secure Parking (WA) Pty Ltd v Wilson [2008] WASCA 268
1 citation
Secure Parking (WA) Pty Ltd v Wilson (2008) 38 WAR 350
2 citations
Seirlis v Queensland Building and Construction Commission [2018] QCAT 291
1 citation
Seirlis v Queensland Building and Construction Commission [2020] QCATA 37
2 citations
St Vincent de Paul Society Qld v Ozcare Ltd[2011] 1 Qd R 47; [2009] QCA 335
3 citations
The Queen v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327
2 citations

Cases Citing

Case NameFull CitationFrequency
Allen v Queensland Building and Construction Commission [2024] QCA 24 2 citations
Crime and Corruption Commission v Andersen [2021] QCA 222 2 citations
Edwards v Sovereign Homes Qld Pty Ltd [2022] QCA 4 2 citations
Re KJN [2025] QCATA 732 citations
1

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