J & K Homes Pty Ltd v Queensland Building and Construction Commission
[2017] QCAT 269
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- Unreported Judgment
- J & K Homes Pty Ltd v Queensland Building and Construction Commission[2017] QCAT 269
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J & K Homes Pty Ltd v Queensland Building and Construction Commission[2017] QCAT 269
J & K Homes Pty Ltd v Queensland Building and Construction Commission[2017] QCAT 269
CITATION: | J & K Homes Pty Ltd v Queensland Building and Construction Commission [2017] QCAT 269 |
PARTIES: | J & K Homes Pty Ltd (Applicant) v Queensland Building and Construction Commission (Respondent) |
APPLICATION NUMBER: | GAR078-15 |
MATTER TYPE: | General administrative review matters |
HEARING DATE: | 8 August 2016 |
HEARD AT: | Brisbane |
DECISION OF: | Member McLean Williams |
DELIVERED ON: | 3 August 2017 |
DELIVERED AT: | Brisbane |
ORDERS MADE: | QCAT does not have jurisdiction to make ancillary orders requiring the re-costing of rectification works in accordance with an agreed scope of works. |
CATCHWORDS: | ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where application made to review a decision under the Queensland Building and Construction Commission Act 1991 (Qld) – where scope of works previously amended by agreement and consent order of the Tribunal – whether QCAT review jurisdiction includes a power for QCAT to make ancillary orders requiring the re-costing of a scope of works prepared for purposes of an insurance claim under the statutory insurance scheme in the QBCC Act – whether the circumstances surrounding the making the consent order amending the scope of works by consent concludes the Tribunal’s review jurisdiction CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – where parties had agreed on a revised scope of works and consent orders made to that effect – where Tribunal considered meaning of the expression ‘a decision about the scope of works to be undertaken under the statutory insurance scheme to rectify or complete tribunal work’ as used in s 86(1)(g) of the Queensland Building and Construction Commission Act 1991 (Qld) – whether the parties’ agreement on a revised scope of works, given effect by consent orders, rendered the Tribunal functus officio Queensland Building and Construction Commission Act 1991 (Qld), s 71, s 86(1)(g), s 87, s 93 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 19, s 24 Bradley Smith T/A Hazelfield Homes v QBSA [2008] QCCTB 255 Dunbar v Commissioner of Police [2007] WASAT 90 Kuhn v QBSA and Trackson [2004] QCCTB 159 Middling v QBSA [2005] QCCTB 14 Tadc Pty Ltd v QBSA [2004] QCCTB 28 Turcinovic v QBSA [2012] QCAT 14 |
APPEARANCES: |
|
APPLICANT: | Michael J Ohlson, Solicitor |
RESPONDENT: | Maire Guiney, Principal Lawyer, QBCC |
REASONS FOR DECISION
Background
- [1]By an Application to Review a Decision filed on 20 April 2015, J & K Homes Pty Ltd trading as Kirra Homes (Kirra Homes) seeks to review a decision of the Queensland Building and Construction Commission (QBCC), made on 24 March 2015. By that decision, the QBCC advised Kirra Homes that it had approved an insurance claim by Joanna Dayle Lynton (the home owner), for defective/incomplete construction performed by Kirra Homes on a property owned by Ms Lynton on Scenic Road at Kenmore, pursuant to the insurance provisions of the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act).
- [2]Pursuant to s 71 of the QBCC Act the QBCC may seek to recover all claim expenses from Kirra Homes, once the final payment has been made under the insurance policy. That fact was advised to Kirra Homes by the decision made on 24 March 2015. In the event that the QBCC does seek to recover an amount under s 71 it must may[1] make application to this Tribunal under s 93 of the QBCC Act. It will then be for the Tribunal to determine an amount that is owing: s 93(2).
- [3]In the Application to Review a Decision, Kirra Homes contend that the scope of rectification works approved by the QBCC was incorrect, thus resulting in a grossly inflated insurance payment. Kirra Homes assert that had circumstances allowed it to complete the works the job would have been completed by them for approximately $75,000. Even allowing for the additional costs that arise whenever a new contractor takes over the completion of an unfinished home, Kirra Homes contend that the task ought to have cost no more than about $120,000. Kirra Homes complain that the insurance claim was approved prior to any opportunity to challenge the scope of rectification works. In parallel with this Application to Review a Decision Kirra Homes commenced an internal review with the QBCC seeking to challenge the scope of works.
- [4]The Application was listed for determination before the Tribunal on 8 August 2016. On the morning of the hearing the Applicant and the QBCC informed the Tribunal that they had reached an agreement regarding a revision of the scope of works. The Tribunal was then requested to make consent orders, in the following terms:
- That the scope of works be in accordance with Annexure A [to the orders];
- The Applicant file written submissions on whether the Tribunal has the Jurisdiction to make ancillary orders regarding re-costing the cost of rectification works in accordance with the scope of works in Annexure A by close of business on 26 August 2016;
- The Respondent will file submissions in response by close of business on 16 September 2016;
- The Applicant will file submissions on reply (if any), confined to matters of law, by 30 September 2016.[2]
- [5]By agreement therefore the nature of this review has changed since it was filed in April 2015. Now, the Tribunal is asked to determine a jurisdictional question: whether QCAT has the power to make “ancillary orders” regarding the re-costing of an agreed scope of works for an approved claim under the home-owners’ statutory insurance scheme.
- [6]For reasons that follow, I determine that QCAT does not have that jurisdiction.
Factual Background
- [7]In May 2013, Ms Joanna Dale Lynton (the owner) entered into a contract with Kirra Homes as the builder to construct a new home at Scenic Drive at Kenmore. On 4 November 2014 Ms Lynton terminated the contract. At that time construction work had not been completed.
- [8]On 7 November 2014 the QBCC received a claim application from Ms Lynton under the statutory insurance scheme that operates under the QBCC Act.
- [9]On 10 December 2014 the QBCC determined that the owner had validly terminated the contract and proceeded to obtain a scope of works to complete the outstanding works required under the contract. A scope of works was obtained on 22 January 2015 and this was put out to tender. Three tenders were received and the QBCC accepted the lowest of these, as provided by the Sensus Building Group.
- [10]On 24 March 2015, the QBCC sent Kirra Homes a Notice of Debt advising that the QBCC had approved $181,682.31 as an insurance claim under the provisions of the statutory insurance scheme, also advising that the QBCC may seek to recover all claim expenses from Kirra Homes, under s 71 of the QBCC Act.
- [11]On 13 April 2015 a revised scope of works (second scope of works) was issued by the QBCC. On 17 April the QBCC sent Kirra Homes a copy of the second scope of works and again advised that the QBCC was proceeding with a claim under the insurance provisions of the QBCC Act and that the QBCC may seek recovery from Kirra Homes pursuant to s 71 of the QBCC Act.
- [12]On 21 April 2015 the Applicant commenced this Application to review a decision, seeking to review the decision of the QBCC made on 24 March 2015. No application to stay that decision was made by or on behalf the Applicant pursuant to s 22 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) when the review application was filed.
- [13]On 8 May 2015 the second scope of works was further revised, by removing certain items from it.
- [14]On 8 August 2016 (when the matter was by now before the Tribunal and ready for determination) the Applicant and the Respondent agreed to a further revision of the scope of works (the agreed scope of works). The agreed scope of works has now been given effect by means of a consent order made by the Tribunal on 8 August 2016.
- [15]This Application to Review a Decision remains on foot solely because the parties are unable to agree whether the Tribunal’s review jurisdiction includes a power to make ancillary orders requiring that the agreed scope of works be re-costed. The Applicant contends that the Tribunal does have the power to require that the new scope of works be re-costed, yet the Respondent says that there is no such power in the Tribunal. In an ideal world the Applicant would like for the agreed scope of works to be costed by an independent quantity surveyor, due to the Applicant apprehending that building firms on the QBCC rectification panel tend to quote rapaciously, “knowing that the QBCC will pay inflated prices”.[3]
- [16]The Tribunal’s authority to conduct this review emanates from s 86(1)(g) and s 87 of the Queensland Building Services Authority Act 1991 (Qld).[4] The QBCC Act is an “enabling Act” for purposes of the Tribunal’s review jurisdiction under Chapter 2, Division 3 of the QCAT Act.
- [17]Relevantly, s 86 provides that each of the various types of decision of the QBCC under the QBCC Act as specified therein is a “reviewable decision” for purposes of the QCAT Act. Of relevance here is s 86(1)(g), which provides:
- (g)a decision about the scope of works to be undertaken under the statutory insurance scheme to rectify or complete tribunal work;
- [18]Section 87 of the QBCC Act then provides that a person who is affected by a reviewable decision of the QBCC may apply, as provided under the QCAT Act, to the tribunal for a review of the decision.
- [19]Pursuant to s 19 of the QCAT Act, when exercising its review jurisdiction, the Tribunal:
- (a)must decide the review in accordance with this Act and the enabling Act under which the reviewable decision being reviewed was made; and
- (b)may perform the functions conferred on the tribunal by this Act or the enabling Act under which the reviewable decision being reviewed was made; and
- (c)has all the functions of the decision-maker for the reviewable decision being reviewed.
- (a)
- [20]Pursuant to s 24 of the QCAT Act, in a proceeding for a review of a reviewable decision, the tribunal may:
- (a)Confirm or amend the decision; or
- (b)Set aside the decision and substitute its own decision; or
- (c)Set aside the decision and return the matter for reconsideration to the decision-maker for the decision, with directions the tribunal considers appropriate.
- (a)
- [21]The scope of the Tribunal’s review power under s 86(1)(g) of the QBCC Act has been considered on a number of prior occasions. In Middling v QBSA,[5] Member Lohrisch said at [25]:
I agree with the Authority’s submissions that the exercise to be undertaken pursuant to the applicant’s review of the Authority’s quotation/scope of works is towards assessing whether the scope of works are works reasonable and necessary to rectify and/or complete the items referred to in the Authority’s direction of 28 January 2003.
- [22]The correctness of the approach adopted by Member Lohrisch in Middling in the former Tribunal has since been accepted as correct by Member Allen in the current Tribunal in Turcinovic v QBSA.[6]
- [23]Even prior to Middling, in Tadc Pty Ltd v QBSA,[7] Member Lohrisch determined that the Tribunal’s review jurisdiction under s 86(1)(g) of (what is now) the QBCC Act does not extend beyond the reasonableness or necessity of the scope of works, expressing the matter in these terms:
[117] …the Applicant submitted that, in terms of [s 86(1)(g)], this application is not an application to review the respondent’s scope of works, but is an application to review a decision “about” the scope of works.
[118] The applicant further submitted that this means that, not only can the scope itself be assessed, as to whether it compares, and is consistent, with the relevant Direction to Rectify, but also all matters relevant to the decision (the relevant matrix) can be reviewed towards determining whether the decision has been properly taken. The applicant submitted that such matters include the decision of the Authority to pursue the rectification works via the insurance mechanism, the conduct of the respondent after 5 June 2003 and, in particular, that the applicant may have been able to rectify the works more cheaply itself, or that the prices obtained by the respondent during its tender process might be excessive.
[119] For its part the Authority submitted that the scope of this review is limited to the question as to whether or not the works, specified in the document entitled “quotation” enclosed with the Authority’s letter of 5 June 2003, are necessary to rectify the defects noted in the Direction to Rectify, or whether they go beyond what is necessary. The Authority further submitted that the review is not a de facto review of the Direction to Rectify, nor is it relevant that the applicant may have been able to rectify the works more cheaply itself, or that the prices obtained by the respondent during its tender process might be, in the opinion of the applicant, excessive.
[120] I consider that the words “scope of works” in sub-paragraph (g) are not meant as a reference to a specific document by that title which, as appears from the applicant’s submissions, and based upon the decision in Barry,[8] is inherent in the interpretation, for which the applicant contends. I consider that what is intended in sub-paragraph (g) is simply that the word “scope” is to bear its ordinary meaning, namely “extent or range”, and that the proper interpretation of sub-paragraph (g) is that the review is to be about the extent or range of the proposed rectification works, and limited to such matters.
- [24]In Kuhn v QBSA and Trackson[9] Member D.P. Morzone (as his Honour then was), expressed the scope of a review under s 86(1)(g) in these terms:
[19] At the time of this review, it was common ground that the work described in the scope of works had already been undertaken on the Authority’s behalf. However, the decision under review remains confined to the scope of works. That is, a review of whether the scope of works defines the work required to fix the tribunal work carried out by the contractor. The tribunal is not empowered to also effectively review a non-reviewable decision by the Authority to recover a debt for the payment of work, which may involve an examination of compliance with the tender process, cost, coverage of payment, and completion of the rectification work under the statutory insurance scheme. That debate may well happen in another place in the future, if the Authority pursues the applicant (or second respondent) for the insurance debt without first completing the requisite steps.
Applicant’s submissions
- [25]The Applicant made initial written submissions on 30 August 2016. In them, the solicitor acting for Kirra Homes complains that the QBCC approved the insurance payment to the homeowner Ms Lynton whilst this QCAT review was already in progress. Yet, as was noted by Member Morzone in Kuhn[10] (at [24]), an Application for review of a decision does not act as a stay of the decision. In this instance no application had been made by the builder seeking a stay of the decision under s 22(3) of the QCAT Act.
- [26]Next, the Applicant asserts that the Tribunal has the power to make ancillary orders requiring the re-costing of the agreed scope of works, because of s 24(1)(b) and or s 24(1)(c) of the QCAT Act. Despite the assertion, no justification has been provided as to why s 24 should now be read as containing the claimed power. Indeed, no effort has been made by the Applicant in its final submissions to deal with what are now settled authorities regarding the nature of reviews under s 86(1)(g), as have been set out above in paragraphs [21] – [24] (above) of these reasons for decision.
- [27]It was only in its submissions in reply[11] given in response to the submissions of the Respondent that the Applicant belatedly submits[12] that the Tribunal should not consider itself as bound by the previous authorities. Although that may be vaguely true – in the sense that the decisions in each of Middling v QBSA, Turcinovic v QBSA and Kuhn v QBSA and Trackson are not binding decisions of either the QCAT Appeal division or the Court of Appeal, some good reason must still be shown as to why these decisions should not be followed. In this instance, no good reason has been proffered by the Applicant.
- [28]The Applicant alternatively submits[13] that the decisions are distinguishable, on the basis that they are claimed not to deal with the Tribunal’s jurisdiction to make ancillary orders, such as an order requiring the re-costing of the scope of works. In my assessment the past authorities that have been cited are on point, and do deal with the limits of the Tribunal’s review jurisdiction under s 86(1)(g) of the QBCC Act.
- [29]Finally, the Applicant submits that the Tribunal has jurisdiction to make the ancillary orders requested because of s 93 of the QBCC Act.[14] Here, the Applicant misconceives the nature of the Tribunal’s jurisdiction under s 93(2), which only arises in the event that the QBCC may seek to recover a debt from the Applicant pursuant to s 71 of that Act. That event has not yet occurred. In the event that the QBCC does seek to recover an amount from Kirra Homes under s 71 then the fact of the QBCC having proceeded with the rectification works despite this Application to review a decision having been commenced before the Tribunal will be considered in the Tribunal’s exercise of the power under s 93(2) of the QBCC Act.[15]
- [30]In conclusion, there is no power within the Tribunal’s review jurisdiction that would now place the Tribunal in the shoes of the decision-maker for any purpose other than dealing with the precise decision now under review.[16] That decision goes only to the content of the scope of works. As was observed by Member Oliver in Bradley Smith T/A Hazelfield Homes v QBSA: “A review of a Scope of Work is limited to the extent that it can only be challenged if the applicant asserts that the Scope of Work is above and beyond what is required, or the method of rectification is unreasonable and excessive”.[17]
- [31]Once the scope of works has been settled the Tribunal’s review jurisdiction under s 86(1)(g) is exhausted. In this instance the Applicant and the Respondent agreed on a revised scope of works, which was then given effect by means of consent orders. On the making of those orders the Tribunal became functus officio.
- [32]I invite written submissions from the parties on costs.
Footnotes
[1] Amended on 21 September 2017 due to typographical error.
[2] Having first obtained an extension of time within which to comply with the orders, submissions in reply were filed by the Applicant on 20 October 2016.
[3] Applicant’s submissions filed 30 August 2016, [10].
[4] Now Queensland Building and Construction Commission Act 1991 (‘QBCC Act’). The relevant provisions are identical. Further reference in these reasons for decision will be to the current legislation.
[5] [2005] QBSA CCT Q600-03, dealing with the provision in the previous QBSA Act.
[6] [2012] QCAT 14, [6], [27].
[7] [2004] QCCTB 503-03, [117] – [120]. See also [121].
[8] Terrance Ralph Barry v QBSA [2003] QBT Q193-02.
[9] [2004] QCCTB 159.
[10] Ibid.
[11] Filed in the Tribunal on 20 October 2016.
[12] Reply submissions, [4].
[13] Reply submissions, [14].
[14] It is to be noted that at several points throughout the Applicant’s reply submissions reference is made to a power in s 93 of the QCAT Act. I infer that to be a mistaken reference to s 93 of the QBCC Act.
[15] Here, consider the comments of Member Morzone in Kuhn v QBSA and Trackson [2004] QCCTB 159, [25].
[16] Dunbar v Commissioner of Police [2007] WASAT 90; (2007) 51 SR(WA) 318, [19].
[17] [2008] QCCTB 255, [3]; citing QBSA v Chesmar (QN002-06), (13 June 2006).