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Van Kampen v Queensland Building And Construction Commission QCAT 163
Van Kampen v Queensland Building And Construction Commission  QCAT 163
Annette Van Kampen
Queensland Building And Construction Commission
General administrative review matters
7 December 2016
Member McLean Williams
24 May 2017
Application for review dismissed.
Review of decision of Queensland Building and Construction Commission to disallow a claim under the statutory insurance scheme – where claim made outside timeframe in statutory insurance scheme – where claim made outside time limit for making claim – meaning of ‘became evident’ in policy
Orlanski v QBSA  QCAT 35
APPEARANCES and REPRESENTATION (If any):
Annette Van Kampen, In person
Jodie Stroud, Legal Officer
Queensland Building and Construction Commission
REASONS FOR DECISION
- On 11 April 2016 Ms Van Kampen filed an Application to Review a Decision seeking review before QCAT of an internal review decision by the Queensland Building and Construction Commission (‘QBCC’) made on 15 October 2015. By that internal review decision the QBCC declined Ms Van Kampen’s application seeking further review of a decision made by the QBCC on 17 August 2015, declining Ms Van Kampen’s claim under the statutory insurance (‘Home Warranty’) scheme.
- Pursuant to s.86(1)(h) of the Queensland Building and Construction Commission Act 1991 (the QBCC Act), internal review decisions such as that made on 15 October 2015 under s.86C of the QBCC Act may be subject to further review, as a ‘reviewable decision’ before QCAT. When exercising its review jurisdiction QCAT is required to decide the review in accordance with the provisions of the QCAT Act, and the QBCC Act, and has all the functions of the decision-maker for the decision being reviewed. Under s.24 of the QCAT Act, the tribunal may:
- confirm or amend the decision; or
- set aside the decision and substitute its own decision; or
- set aside the decision and return the matter for reconsideration to the decision-maker for the decision, with the directions the tribunal considers appropriate.
- Part 5 of the QBCC Act establishes the statutory insurance scheme known as the Queensland Home Warranty Scheme, in sections 67X to 71AC (inclusive).
- The relevant insurance policy conditions in this instance arise under Edition 6 of the Home Warranty Scheme, in Part 2.
- Clause 2.1 specifies:
“2.1 Payment for Defective Construction
a. Subject to the terms of this policy, BSA agrees to pay the cost of rectifying defects in the residential construction work that is primary building work, other than for defects from subsidence or settlement referred to in Part 3 of this policy.”
- Clause 2.4 provides:
“2.4 Expiry of Cover
a. Subject to clause 2.4(c), BSA is only liable to pay for loss under this Part for a category one defect where the defect first became evidence within six years and six months after:
i. the date of payment of the insurance premium, or the date of entering into the contract (and where more than one date, whichever is the earlier); or
ii. where no insurance premium was paid and there was no written contract, the date of commencement of construction.
b. BSA is only liable to pay for loss under this part for a category 2 defect where the defect first became evident within six months after the date of practical completion of the residential construction work.”
- Clause 2.5 then provides:
“2.5 Time Limit for Making a Claim
The insured is NOT ENTITLED to payment for loss under this Part unless:
- in the case of a category one defect, the claim is made within three months of that defect first becoming evident (in the opinion of the BSA); or
- 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 might allow.”
- On 2 April 2004 AH and AG Van Kampen entered into a new home construction contract with Phillip Brown as the builder to construct a low set veneer house (‘construction works’), situated at Mapleton. These construction works were completed by the builder by 30 September 2004. The construction works were covered by a policy of insurance issued by the QBCC under the Queensland Home Warranty Scheme (Policy number 2482366) from the commencement of construction on 2 April 2004, and for a further period of six years and six months, expiring on 2 October 2010.
- In April 2014 Mr Tony Van Kampen requested a firm of engineers ICPS Australia Pty Ltd (‘ICPS’) to carry out an inspection of the flooring elements of the property. An engineering inspection was undertaken on 28 April 2014 and a report was provided by ICPS on 30 May 2014. That report, which is now in the materials filed before QCAT, identified category one defects with the house. Specifically, ICPS identified problems arising in consequence of excessive moisture in the subfloor of the house, thereby causing rotting to the floor and joists. In the opinion of ICPS these problems were the result of inadequate sub-floor ventilation, caused by the edge bearers of the floor frame being situated too close to the external walls, thus blocking the air vents, thereby precluding the possibility for adequate cross ventilation in the sub-floor crawl space.
- In July or August 2015, the Applicant lodged a complaint with the QBCC seeking to access the Queensland Home Warranty Scheme.
- In a letter dated 17 August 2015 the QBCC notified Ms Van Kampen that because of clause 2.4 of the insurance policy it had decided to refuse the claim. This resulted in an application by Ms Van Kampen for an internal review, and the internal review decision made by the QBCC on 15 October 2015 pursuant to s.86C(3), which is now the subject of this review application before QCAT.
- On 11 March 2016 the builder filed a debtor’s petition (Ref QLD 1033/16/2) and remains an undischarged bankrupt.
This Application for Review
- Upon this Application, Ms Van Kampen relies upon an engineering report from JTC Consulting Engineers (‘JTC’) dated 10 October 2016, as well as a one page undated document entitled “Response to the reasons for the Decision”, attaching a copy of the ICPS report dated 30 May 2014. In addition, Ms Van Kampen relies upon a one page letter dated 12 October 2016 addressed “To whom it may concern”. I note that the QBCC objects to parts of the letter dated 12 October 2016 on the basis that it reveals aspects of ‘without prejudice’ discussions between the parties at a compulsory conference held at QCAT on 1 August 2016. At least to the extent of that objection, which is an entirely valid objection, I will not have regard to the Applicant’s document dated 12 October 2016.
- In paragraph 4 of the ICPS report reference is made to various complaints by the homeowners regarding visible defects in the home. These must have arisen some time prior to ICPS having been retained by Mr and Mrs Van Kampen, but there is no evidence as to when the homeowners became aware of matters of concern in their home. In paragraph 5.2 of the ICPS report reference is also made to the homeowners having made prior contact with Hynes timbers to discuss problems with the condition of the subfloor joists. Again, it is unclear when that occurred.
- The JTC report dated 10 October 2016 also documents the nature of the problems revealed by an engineering inspection and provides an opinion that these are the result of inadequate sub-floor ventilation, caused by the perimeter floor joists blocking the external ventilation openings in the northern and southern sub-floor walls. The reports do not provide any explanation for when the alleged defects became noticeable for the first time, and nor do the engineering reports explain why the Applicant did not contact the QBCC until as late as either July or August 2015. On the evidence before the Tribunal I conclude that the Applicant did not understand that the problems with her house were the result of unsatisfactory building work until such time as she was in receipt of the ICPS Report, on 30 May 2014. This was several years after the expiry of insurance cover on 2 October 2010.
- The QBCC submits that the Applicant’s complaint was not lodged with the QBCC until 15 August 2015, nearly eleven years after the building works that are the subject of the complaint had been completed. Even if the Applicant is correct in contending that the complaint was lodged in July rather than August 2015, the result would be the same. The QBCC submits that, because of clause 2.4(a) of the insurance policy conditions, the QBCC is only liable to pay for the loss out of the Queensland Home Warranty Scheme if the defect first became evident within six years and six months after the date of payment of the insurance premium or the date of entering into the building contract (whichever is the earlier).
- In this case the insurance premium was paid on 2 April 2004, being the same date for the entering of the building contract. Accordingly the QBCC says that insurance cover expired on 2 October 2010.
- Furthermore the QBCC submit that because of clause 2.5 of the insurance policy conditions and in circumstances where the complaint was not made to the QBCC until either July or August 2015 the claim cannot be accepted as the complaint was required to have been lodged within 3 months of the defects becoming evident, which occurred at the latest when the Applicants had the ICPS Report dated 30 May 2014. The QBCC says that the Applicant notified the QBCC 15 months after receipt of the ICPS Report.
- Upon this Application for Review Ms Van Kampen agrees that the central issue is clause 2.4 in the insurance policy and the wording therein where it says that the BSA is only liable to pay for a loss where the defect within six years and six months after the defect “becoming evident”. Yet, Ms Van Kampen submits that the defect became “evident” on the day of construction, by reason that a defective building technique undertaken at that stage caused the creation of a latent problem and that the defect was not then “visible” until much later when engineering experts hired by the Van Kampen’s revealed the true nature of the problem for them. I do not accept this construction. It is not sufficient for the defect to exist as a latent defect within six years and six months and for awareness of it to occur much later. Rather, the defect must have become apparent (or “evident”) to the homeowner within the period of six years and six months from the date of commencement of the policy of insurance. As identified in Orlanski v Queensland Building Services Authority the statutory policy of insurance is a limited policy of insurance, with strict time frames, that cannot be extended. Expressed another way, the claimant homeowner must know about the problem within six years and six months if they are to have any redress under the time-limited Home Warranty Scheme. To adopt the Applicant’s interpretation of when a defect becomes evident would be to create a policy of insurance with unlimited cover. If that interpretation were to prevail, then a problem arising even 100 years after construction (if per chance traceable to some defective building technique during construction) would still be covered by the Home Warranty Scheme. This cannot be the intention of the policy.
- Furthermore, I agree with the submission of the QBCC that because of clause 2.5 in the policy the Applicant was also required to notify the QBCC of a claim under the Queensland Home Warranty Scheme ‘within 3 months of that defect first becoming evident (in the opinion of the BSA)’. At the latest, the defect complained of became evident upon receipt of the engineering report from ICPS, on 30 May 2014. In that light the QBCC should have been notified by no later than 30 August 2014. Yet the QBCC complaint was not lodged until as late as either July or August 2015.
- Pursuant to section 24(1)(a) of the QCAT Act I confirm the decision under review. The Application for Review of a Decision is dismissed.
- Published Case Name:
Annette Van Kampen v Queensland Building And Construction Commission
- Shortened Case Name:
Van Kampen v Queensland Building And Construction Commission
 QCAT 163
Member McLean Williams
24 May 2017