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Jackson v Queensland Building and Construction Commission[2018] QCAT 290

Jackson v Queensland Building and Construction Commission[2018] QCAT 290

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Jackson & Ors v Queensland Building and Construction Commission [2018] QCAT 290

PARTIES:

BRETT JACKSON

and

GARY JACKSON

and

LYNETTE JACKSON

and

KAREN JOHNSTON

and

CHRIS JOHNSON

(applicants)

 

v

 

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(respondent)

APPLICATION NO/S:

GAR086-17

MATTER TYPE:

General administrative review matters

DELIVERED ON:

31 August 2018

HEARING DATE:

20 July 2018

HEARD AT:

Brisbane

DECISION OF:

Member Olding

ORDERS:

The decision to wholly disallow the applicants’ claim under the statutory insurance scheme is confirmed.

CATCHWORDS:

PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – statutory insurance scheme under the Queensland Building and Construction Commission Act 1991 (Qld) – whether defects category 1 or category 2 defects – whether time for making claim should be extended

Queensland Building and Construction Commission Act 1991 (Qld), s 3, s 67X

Little v QBSA (2006) QCCTB 195

Mansoor & Rezaee v Queensland Building Services Authority [2011] QCAT 53

Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] 162 CLR 24

APPEARANCES & REPRESENTATION:

 

Applicants:

G Jackson

Respondent:

E Ward, legal counsel for the Queensland Building and Construction Commission

REASONS FOR DECISION

  1. [1]
    Despite numerous attempts to have defects remedied by the builder, the applicants remained dissatisfied with aspects of the construction of their residence.
  2. [2]
    They made a claim against the statutory insurance scheme, but the claim was out of time. The respondent Commission had a discretion to extend the time for making a claim, but in the circumstances decided it was not appropriate to do so. Hence, the Commission disallowed the claim in full.
  3. [3]
    The applicants have applied for review of the Commission’s decision to disallow the claim.
  4. [4]
    The hearing proceeded on the basis that the Tribunal should determine whether to extend the time for making the claim. If the Tribunal decided to extend the time, it should set aside the decision and return it to the Commission for assessment of the claim. If not, the decision must be confirmed.
  5. [5]
    I have decided that it is not appropriate to extend the time for making the claim. My reasons follow.

The facts

  1. [6]
    There was no dispute regarding the essential facts. The applicants provided written statements. Two of the applicants, Mr Gary Jackson and Mrs Lynette Jackson, attended the hearing, confirmed their statements and were not cross examined. The following summaries are taken from the applicants’ statements and other documents in evidence.

The insurance claim

  1. [7]
    Although the applicants listed numerous other alleged issues with the house, such as faulty lighting and switches, sinks that do not hold water and an inadequate waste system, their complaint form, which was treated as an insurance claim, is concerned with the plasterboard ceilings.
  2. [8]
    The claim details these issues:

Punch marks in ceiling
Screw marks in ceiling
Plaster off arounds screws in all ceilings
Within ceiling cavity plaster boards not stuck to beans
Plaster ceilings dropped
Ceilings warped.

A simplified chronology

  1. [9]
    The following is a chronology of some key events:
    1. (a)
      18 July 2008 – construction contract entered into (and statutory insurance contract came into effect);
    2. (b)
      17 April 2009 – practical completion reached;
    3. (c)
      22 June 2015 – applicants lodged their complaint with the Commission;
    4. (d)
      9 December 2015 – after completing two inspections of the property (one accompanied by a representative of plasterboard supplier USG Boral Building Products Pty Ltd, Mr Jim Browning), a Commission building inspector, Mr Michael Hulme, completed an inspection report determining that the complaint items constituted a category 2 defect;
    5. (e)
      10 December 2015 – the Commission decided not to issue a Direction to Rectify to the builder;
    6. (f)
      14 October 2016 – liquidators were appointed to the builder;
    7. (g)
      4 April 2017 – the applicants applied to the Tribunal for review of the decision not to issue a Direction to Rectify to the builder;
    8. (h)
      6 September 2017 – as the builder was in liquidation, the Commission referred to the matter to its insurance division for assessment as an insurance claim;
    9. (i)
      28 September 2017 – the Commission decided to wholly disallow the insurance claim;
    10. (j)
      5 October 2017 – the Tribunal directed that the applicants’ application for review of the decision not to issue a Direction to Rectify proceed as an application to the review the Commission’s decision to wholly disallow the insurance claim.

The applicants’ attempts to have the builder remedy the defects

  1. [10]
    The applicants contacted the builder numerous (at least 30) times, requesting that defects be rectified. At first, they were told by the builder to make a list of defects which would be considered at the 12-month point, but the defects were not rectified.
  2. [11]
    The applicants’ complaint form indicates that they had raised concerns with the builder about the ceiling by no later than ‘Upon handover & move in 18/4/09’.
  3. [12]
    Although the Commission has treated this date as applicable to all of the aspects in which problems with the ceiling were alleged to have occurred, it is not clear from the claim form that this date refers to all areas or only to kitchen ceiling. The evidence establishes that the applicants’ awareness of the extent of the problem with the plasterboard emerged progressively.
  4. [13]
    As a statement by Karen and Chris Johnson says:

We have absolutely exhausted all attempts to make contact with John Addeson and Andy (office person at the time) to rectify many minor and major issues starting from 2009 to current. One of the major items being the visual exposure of screws within the ceiling, plaster dropping onto furniture, carpet and tiles. With the amount being just a few screws to turning into the whole house.

  1. [14]
    However, a long list of issues detailed in an email from Karen Jackson to the builder on 29 April 2009 includes:

Bulge appearing in ceiling from a stud needs to be repaired.

  1. [15]
    Also, in a statement by Gary Jackson and Brett Jackson, immediately under the heading ‘April 2009’ and before the next heading ‘February 2014’, they said:

Bought (sic) to the attention of the Builder a numbers (sic) of issues and especially the screws popping through the ceiling in a number of areas in the Initial years of occupancy.

  1. [16]
    Additionally, a list of alleged defects the applicants sent to the builder on 12 July 2012 (and then again on 15 May 2014) included:

Workmanship –

  • Ceiling in big lounge room dropping, around fan cracked, screw marks always seen & now plaster dropped and exposed screws
  • Screw mark outlines always there from move in, paint and now plaster coming away within weeks, months and still now

Bedrooms Kitchen Dining Room Big Lounge Room Everywhere

  • Numerous gyprock cracks

Kitchen Hallway Lead to big Lounge Room Dining Little Lounge

  1. [17]
    It was not until the ceiling in the main lounge started to fall away from the roof trusses in May 2014 that the builder attended the property and carried out repairs. This involved bracing the ceiling and re-affixing the plasterboard with numerous screws.

Insurance Policy Conditions

  1. [18]
    Clause 2.5 of the insurance conditions provides –

2.5 Time Limit for Making a Claim

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.

(emphases in original)

  1. [19]
    The expressions category 1 defect and category 2 defect are defined in the policy conditions as follows –

“category 1 defect’ means building work that is faulty or unsatisfactory because it either:

  1. (a)
    adversely affects the structural performance of a building;
  1. (b)
    adversely affects the health or safety of persons residing in or occupying a building;
  1. (c)
    adversely affects the functional use of the building; or
  1. (d)
    allows water penetration into a building.

“category 2 defect” means building work that is faulty or unsatisfactory, other than a category 1 defect, because:

  1. (a)
    it does not meet reasonable standards of construction or finish; or
  1. (b)
    it has caused a “settling in period” defect in a new building

What is the nature of the defect?

  1. [20]
    The Commission assessed the defects as category 2 defects. This categorisation is supported by the report of Mr Browning of USG Boral Building Products Pty Ltd. Unfortunately, there was no expert evidence on behalf of the applicants.
  2. [21]
    Mr Browning’s inspection took place on 4 December 2015, after the builder’s remedial work on the ceiling had been carried out. It is necessary to reproduce Mr Browning’s report in some detail:

. . .

Area’s (sic) that have previously been repaired were inspected, however, it was difficult to define any exact causes except to suggest some slight movement in the truss design. It is not uncommon for large truss roof configurations to inherit some uncontrolled movement. My inspection revealed nothing that indicated any improper practice or structural issues. Even without the allowance for expansion and contraction the overall impact on the ceiling has been less than expected ie no major cracking. . .

Timber ceiling substrates are significantly more prone to temperature or atmospheric induced movement as a result of dark colour roofs without sisalation and lack of ventilation.

Screw popping has always formed part of the defect list in both domestic and commercial projects. Despite best efforts with ongoing research unfortunately they still persist particularly with direct fixed ceilings.

In conclusion I believe the ceilings are relatively stable and not in an unsafe state . . .

  1. [22]
    It is difficult to determine what weight to give to Mr Browning’s report. His qualifications and experience are not stated, and he was not called to give oral evidence. Mr Hulme’s report describes Mr Browning as ‘a plasterboard expert’. I infer that he was engaged by the Commission either because he was known to and considered by the Commission to have sufficient experience to provide advice of the kind given, or nominated by USG Boral Products Pty Ltd for that purpose.
  2. [23]
    Mr Browning’s report that he states that his inspection ‘revealed nothing that indicated any improper practice or structural issues’. This is in contrast to Mr Hulme’s report which identifies a number of shortcomings, including control joints not being provided at 12 metre intervals in accordance with the manufacturer’s recommendations and use of incorrect and/or insufficient adhesive, and concludes that the builder’s work was defective.
  3. [24]
    I conclude that, consistent with Commission’s report given by Mr Hulme, the fixing of the plasterboard ceilings was defective and find accordingly. The Commission did not submit otherwise.
  4. [25]
    I find it difficult to accept that, at least before the remedial work was carried out, a defect in affixing plasterboard ceilings, such that plasterboards detach, or as a consequence of sagging may detach, from the trusses, is not a category 1 defect. Even accepting Mr Browning’s evidence that the ceiling was not at the time of his inspection in an unsafe state, it is notable that faulty or unsatisfactory building work is a category 1 defect, in accordance with paragraph (c) of the definition of that expression, if it ‘adversely affects the functional use of a building’.
  5. [26]
    The role of a ceiling is not solely aesthetic. It is well known that vermin may be found in a ceiling cavity along with their droppings and dust and so on. A ceiling that is detached may allow vermin or their droppings, or other materials, into the habitable areas of a house. A defect leading to that consequence would, in my view, adversely affect that functional use of a house.
  6. [27]
    Unfortunately, the evidence in relation to the defects is not altogether satisfactory for the reasons already indicated. Additionally, while a number of the aspects noted by Mr Hulme from his inspection are clearly defects - such as the failure to include adequate control joints or to use appropriate adhesives - in respect of others the position is less clear. For example, Mr Hulme observes that there are changes of direction of trusses in several locations in the main roof area, but there are ‘no trimmers evident that continue in the direction of the trusses’. However, there is no indication whether that is merely an observation or considered to be a defect.
  7. [28]
    I have considered whether to require the Commission to provide further detail in this regard, including a copy of the then applicable standard, with comparisons between the observations in the report and the requirements of the standard. However, on the view I have come to regarding the matter, I would not extend the time for making the insurance claim, whether the relevant work comprises a category 1 or category 2 defect.

When did the defect become evident?

  1. [29]
    Given the unsatisfactory nature of the evidence regarding the defects, I first consider whether the time for making the insurance claim should be extended by assuming, in the applicants’ favour, that the relevant work comprises a category 1 defect being a defect in the fixing of the plasterboard. As a lesser time for making a claim applies for a category 2 defect, it follows that if an extension of time is not appropriate if the defect is a category 1 defect nor will it be appropriate for a category 2 defect.
  2. [30]
    Subject to any further time the Commission may allow, clause 2.5 of the insurance conditions required a claim to be made ‘within three months of that defect first becoming evident (in the opinion of the BSA)’. In my view, that required the Commission (and now the Tribunal standing in the Commission’s shoes) to form an opinion as to when, objectively, it would be concluded that the defect first became evident, rather than when it in fact became known to the applicants.
  3. [31]
    It is unlikely, in my view, that the intention of the clause would be for the time limits to depend upon a subjective assessment of a claimant’s state of mind. That would be inconsistent with the clause vesting in the Commission the formation of the relevant opinion. Further, the requirement for an objective assessment is consistent with the drafter’s use of the passive voice; if it had been intended that the defect must be evident to a particular person, it would be expected that the person would be identified in the clause, rather than merely leaving when the defect became evident to the opinion of the Commission. Clearly, it was not intended that the time limit would not run until it actually became evident to the Commission.
  4. [32]
    Additionally, I do not take the clause to require the precise nature of the defect to be evident. The policy would be practically unworkable if the time for lay consumers to exercise their rights were to run from the time the technical nature of a defect became evident. It is, in my view, sufficient if the consequences of a defect are evident, such that objectively it would be concluded that the work is defective in the sense indicated in the definition of a category 1 defect. Again, it seems unlikely that the drafter intended that the practical application of the time limit would depend upon the technical knowledge of the owner.
  5. [33]
    In any event, in this case evidence indicating when the defect became evident is provided by the applicants.
  6. [34]
    In that regard, Mr Jackson asserted in submissions that the applicants did not know in 2010 that the ceiling would ‘fall in’, as he described it, in 2014. I take this to be a submission that the applicants were not aware of the full extent, nature or consequences of the defects, because that was not evident until the partial collapse of the ceiling in 2014.
  7. [35]
    I accept that the mere fact that it was evident from the handover that screws were popping through the plasterboard may not, in itself, amount to evidence of a defect in the fixing of the plasterboard being evident. That popping screws were evident from handover does not therefore mean, as the Commission seems to assume, a defect in the fixing of the plasterboards was evident from that date.
  8. [36]
    However, the evidence went further than that. It established that the applicants were aware of a bulge appearing in the ceiling by 29 April 2009. By 12 July 2012, they notified the builder that the ceiling in the big lounge room was dropping. At least from that date, although the applicants may not have known the particular way or ways in which the work was defective, the existence of a defect must have been evident. The applicants were asserting that the ceiling was dropping and that work was defective and should be rectified.
  9. [37]
    Standing in the shoes of the Commission, I am, for these reasons, of the opinion that the defect in the fixing of the plasterboard was evident at least from 12 July 2012.

Should the time for claiming under the insurance policy be extended?

  1. [38]
    Under clause 2.5 of the policy conditions, assuming in favour of the applicants that the defect was a category 1 defect, the claim was required to be made within three months of 12 July 2012 at the latest.
  2. [39]
    The applicants made their complaint almost 3 years later on 22 June 2015.
  3. [40]
    The insurance policy is in force by virtue s 67X of the Queensland Building and Construction Commission Act 1991 (Qld).[1] Thus, the policy conditions are in the nature of delegated legislation.
  4. [41]
    Under the policy conditions, there are no express criteria against which the Commission, and now the Tribunal standing in its shoes, is to consider whether to exercise the discretion to extend the time for claiming under the policy. Where legislation confers a discretion which is apparently unconfined, the factors to be considered when exercising the discretion are unconfined except in so far as there may be found in the subject matter, scope and purpose of the statute an implied limit on the factors to which the decision-maker may have regard.[2]
  5. [42]
    The objects of the Act include ‘to provide remedies for defective building work’.[3] Expressed at that level of generality, this object provides little guidance on factors relevant to when to exercise the discretion to extend the time for making a claim under the statutory insurance scheme.
  6. [43]
    Under s 67X of the Act, the purpose of the scheme is stated to be ‘to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete’. Again, that provides little guidance regarding when the discretion to extend should be exercised.
  7. [44]
    In considering matters of this kind, the Tribunal has previously taken into account the explanation offered for the delay in making the claim and any prejudice to the Commission.[4]

The applicants’ submissions

  1. [45]
    Mr Jackson’s submissions on why the time for claiming should be extended contained two aspects.
  2. [46]
    First, Mr Jackson said that when the applicants contacted the Commission they were told that they should first try to resolve the matter with the builder. The difficulty with this submission is that on Mr Jackson’s evidence the first contact with the Commission did not occur until February 2014. While the advice from the Commission to try to resolve the matter with the builder is relevant to the delay between the first contact with the Commission in February 2014 and the making of the claim on 22 June 2015, it does not explain the delay in contacting the Commission. The delay between the defect becoming evident, which I have found occurred at the latest by 12 July 2012, and the contact with the Commission, is essentially unexplained.
  3. [47]
    Secondly, Mr Jackson submitted more generally that the applicants had been let down as consumers. That is undoubtedly so, but it does not provide a basis for extending the time for making an insurance claim. The insurance scheme is there to protect consumers, but as with other insurance policies, it requires claims to be made in a timely way.
  4. [48]
    The applicants have been aware of difficulties with the house from the handover in 2009, and specifically the issues with the ceiling that are the subject of the claim since at least 2012, but did not contact the Commission until 2014 and did not make a claim until 2015. It is regrettable that the applicants, no doubt in the hope that the builder would remedy the defects, did not seek to exercise their legal rights until some years after the issues with the house emerged, but that is the reality of the matter.

The Commission’s submissions

  1. [49]
    The Commission submitted that the delay in making the claim is unexplained. For the reasons indicated above, I accept there was an extended period of delay which is not explained.
  2. [50]
    The Commission also submitted that it would suffer prejudice if the time is extended because the builder is now in liquidation and the Commission would be unable to recover any amount paid under the policy from the builder.
  3. [51]
    In making this submission, the Commission cited earlier decisions in which the fact that a builder had gone into liquidation before an insurance claim was made was held to constitute sufficient prejudice to the Commission to warrant declining to extend the time for making a claim under the statutory insurance scheme.[5] However, the position here is different. The builder was not in liquidation when the applicants first sought a Direction to Rectify, which application was treated as the insurance claim.
  4. [52]
    Nevertheless, there would be prejudice to the Commission if the Tribunal were to now extend the time for making the insurance claim. While I consider this factor to be of less weight when, as here, the claim was made before the builder went into liquidation, it is still a relevant consideration. A claim made within the time provided for under the policy could have been processed, and any amount paid under the policy potentially recovered by the Commission from the builder, before the builder went into liquidation. There is now no possibility of that occurring if the owners’ substantially late claim were to be accepted.

Consideration

  1. [53]
    In view of the long delay in making the insurance claim; the unexplained delay in contacting the Commission after the defect became evident; and the prejudice to the Commission, in my view this is not an appropriate case to extend the time for making the claim. Regrettably, the owners are left without a remedy, but this is the result of their failure to exercise their rights in accordance with the terms of the policy. The time limit is provided for under the policy terms, which have been created in the manner laid down by Parliament. An appropriate basis on which to extend the time has not been established.

Conclusion

  1. [54]
    It follows that the Commission’s decision to wholly disallow the insurance claim must be confirmed.

Footnotes

[1] All references to statutory provisions are references to this Act.

[2] Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] 162 CLR 24.

[3] Section 3.

[4] See, for example, Mansoor & Rezaee v Queensland Building Services Authority [2011] QCAT 53.

[5] Mansoor & Rezaee v Queensland Building Services Authority [2011] QCAT 53; Little v QBSA (2006) QCCTB 195.

Close

Editorial Notes

  • Published Case Name:

    Jackson & Ors v Queensland Building and Construction Commission

  • Shortened Case Name:

    Jackson v Queensland Building and Construction Commission

  • MNC:

    [2018] QCAT 290

  • Court:

    QCAT

  • Judge(s):

    Member Olding

  • Date:

    31 Aug 2018

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
Little v QBSA (2006) QCCTB 195
2 citations
Jump To
Cite 1 - (2006) QCCTB 195
Cite 2 - (2006) QCCTB 195
Mansoor & Rezaee v Queensland Building Services Authority [2011] QCAT 53
3 citations
Jump To
Cite 1 - [2011] QCAT 53
Cite 2 - [2011] QCAT 53
Cite 3 - [2011] QCAT 53
Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24
2 citations
Jump To
Cite 1 - (1986) 162 CLR 24
Cite 2 - (1986) 162 CLR 24

Cases Citing

Case NameFull CitationFrequency
Ahmet v Queensland Building and Construction Commission [2022] QCAT 4173 citations
Delfino v Queensland Building and Construction Commission [2024] QCAT 752 citations
Frame v Queensland Building and Construction Commission [2024] QCAT 632 citations
King and McDonald v Queensland Building and Construction Commission [2024] QCAT 1382 citations
Messaoudi v Queensland Building and Construction Commission [2021] QCAT 1242 citations
Small v Queensland Building and Construction Commission [2025] QCAT 2702 citations
Tyas v Queensland Building and Construction Commission [2025] QCAT 2782 citations
1

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