Stevens v Queensland Building and Construction Commission
[2018] QCAT 331
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- Unreported Judgment
- Stevens v Queensland Building and Construction Commission[2018] QCAT 331
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Stevens v Queensland Building and Construction Commission[2018] QCAT 331
Stevens v Queensland Building and Construction Commission[2018] QCAT 331
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Stevens v Queensland Building and Construction Commission [2018] QCAT 331 |
PARTIES: | PATRICIA ANN STEVENS (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent) |
APPLICATION NO/S: | GAR177-17 |
MATTER TYPE: | General administrative review matters |
DELIVERED ON: | 3 October 2018 |
HEARING DATE: | 12 June 2018 |
HEARD AT: | Brisbane |
DECISION OF: | Member Allen |
ORDERS: |
|
CATCHWORDS: | ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – application to review decision to claim under statutory insurance scheme – where contractor not licensed – whether contractor fraudulently claimed to be licensed – whether contract of insurance came into existence Queensland Building and Construction Commission Act 1991 (Qld), s 69, s 86, s 87 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20, s 24 BM Farage Pty Ltd as trustee for Farage Discretionary Family Trust v Queensland Building Services Authority [2003] QCCTB 11 Cester & Anor v Queensland Building and Construction Commission [2018] QCAT 87 Derry & Anor v Peek (1889) L.R. App. Cas. 337 Jensen v Queensland Building and Construction Commission [2017] QCAT 232 Jorg v Queensland Building and Construction Commission [2016] QCAT 364 |
APPEARANCES & REPRESENTATION: | |
Applicant: | Self-represented |
Respondent: | E Ward, legal counsel for the Queensland Building and Construction Commission |
REASONS FOR DECISION
- [1]MS Stevens engaged an entity associated with Mr Zac Mar to perform building work for her at her own house and a unit owned by her daughter. She paid $60,390 for the work with the only contractual documents being Tax invoices. Mr Mar and his entities were subject to investigation by the Commission and they were eventually prosecuted. The work for Mrs Stevens was never completed and she brought a non-completion claim under the Commission’s home warranty scheme. The Commission determined in its original decision that she was not covered by the home warranty scheme as a policy of insurance had not come into force. This decision was confirmed by internal review and Mrs Stevens has now applied to the Tribunal for external review of the decision.
- [2]The Tribunal has jurisdiction upon an application being made to review a decision of the Commission to disallow a claim under the statutory insurance scheme in accordance with ss 86(h) and 87 of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) and ss 17 and 18 of the Queensland and Civil and Administrative Tribunal Act 2009 Qld (‘QCAT Act’). The Tribunal stands in the shoes of and has the same powers as the Commission in regard to the decision under review.[1] The review is determined by a fresh hearing on the merits and the Tribunal is required to make the correct and preferable decision.[2] The Commission’s role is to assist the Tribunal to make its decision including by way of providing a copy of its reasons for the decision as well as all documents that may be relevant to the Tribunal’s review of the decision.[3] The Tribunal may confirm the original decision, amend the decision or set it aside and substitute its own decision or return the matter to the Commission for reconsideration.[4]
- [3]The decision in this case is based on whether or not a policy of insurance came into force in regard to residential construction work Mrs Stevens engaged Mr Mar and or his entities to perform. The Commission was required to issue a certificate of insurance in respect of residential construction work at the time of Mrs Stevens’ claim in the ordinary course of events when the Commission accepted the appropriate insurance premium from a licensed contractor in respect of residential construction work carried out under a contract with a consumer.[5] There was also provision for a policy of insurance to come into effect in other circumstances as follows under s 69(2) of the QBCC Act:
- (a)If a consumer enters a contract for the performance of residential construction work, and-
- The contract bears the licence number of a licensed contractor and, under the licensed contractor’s license, the licensed contractor may enter into contracts with consumers to carry out residential construction work covered by the statutory insurance scheme; or
- The contract is with a licensed contractor and, under the licensed contractors licence, the licensed contractor may enter into contracts with contractors to carry out residential construction work covered by the statutory insurance scheme; or
- The contract is with a person fraudulently claiming to hold a licence under which the person may enter into contracts with consumers to carry out residential construction work covered by the statutory insurance.
- (a)
First tax invoice
- [4]Mrs Stevens first became aware of Mr Mar and his entities in particular Cool in Summer Pty Ltd when she viewed an advertisement in regard to airconditioning in her local paper. The ad was headed Cool in Summer Airconditioning and relevantly stated ‘All major brands supplied and installed’ and included the following details ‘BSA 1114052 and ARC L080238’. Mrs Stevens called the listed phone number and Mr Mar attended at her premises on 12 January 2016. She had discussions with Mr Mar and it was agreed that a Mitsubishi ducted airconditioning system would be installed at her daughter’s unit for an amount of $9,500.00.
- [5]Mrs Stevens entered several contracts with Cool in Summer the first was evidenced by Tax invoice 0077[6] in the name of Cool in Summer Airconditioning and included a reference to ARC No L080238. The contract was for the supply and installation of an air-conditioning unit with associated controls in the amount of $9,500. An amount of $7,500 was stated on the tax invoice to be a material payment with balance of $2,000 on completion. The tax invoice was signed by Zak Mar. Mrs Stevens stated that the payment was made by eftpos to TS Home Services, which was said by Mr Mar to be an associated company.
- [6]While work commenced in regard to the installation of the airconditioning it was not completed by Cool in Summer. Mrs Stevens ultimately paid $4,000 to a Mr Steve Askew to complete the airconditioning.[7]
- [7]Mrs Stevens, in a questionnaire in regard to her claim,[8] confirmed discussions she had with Mr Mar and that Mr Mar had said his boys would carry out the work. She said there were no discussions about whether the person/entity was licensed under the QBCC Act to carry out the work or not. She confirmed that the only licence disclosed on any correspondence or contract was ARC L0802238. She also confirmed that there were no discussions about whether the work was insured under the Act. Mrs Stevens stated that she was under the impression that Mr Mar held a licence under the Act as Zak told me of all the properties he owned/renovated in Tasmania; he tried to interest me into putting funds $75,000 into a property development. Mrs Stevens confirmed the above in her evidence at the hearing and said she had assumed Mr Mar was licensed based on his conversation about renovations in Tasmania and relying on the advertisement. Mrs Stevens also acknowledged at the hearing that she did not know what the QBCC stood for and did not know how to check building licences.
- [8]Mrs Stevens in her statement prepared for the Magistrates Court mentioned conversations she had with Mr Mar at the time the first contract was entered all of these relate to the installation of the airconditioning and there is no mention of whether or not Cool in Summer has any building licences.[9]
- [9]Mrs Stevens submitted that while there were no discussions in regard to being licensed with Mr Mar she had relied on the representation in the advertisement that he was duly licensed and that the Act does not require that there be any oral representations about being licensed.
- [10]Mrs Stevens provided a great deal of material in regard to Mr Mar’s dealings with other home owners on Bribie Island and the Commission’s investigation of those dealings and ultimate prosecution of him and one of his entities. This was to show that she had been caught up in the same fraudulent conduct as those others, some of whom had been able to get redress from the Commission or through the Courts. She also provided detail in regard to cease work notices issued by the Commission to one of Mr Mar’s associated companies MR Lifestyle Construction Pty Ltd on 22 December 2015 which was confirmed in a further email by the Commission on 8 February 2016. Mrs Stevens submitted that this was evidence of Mr Mar fraudulently claiming to hold a licence. She said she had been caught in the timeframe that the Commission was investigating Mr Mar and wished to be compensated just as the other victims had been. She also asked for her legal costs in pursuing Mr Mar in the Magistrates Court.
- [11]The Tribunal in its review jurisdiction only has power and is concerned only about the decision that is before it. That is whether or not a policy of insurance has come into force in accordance with s 69 of the QBCC Act. That is concerned with what claims were made by the person with whom Mrs Stevens entered the contract. While the material provided clearly evidences the fraudulent behaviour of Mr Mar in regard to other parties it is his behaviour and that of the entity Cool in Summer in regard to their dealings with Mrs Stevens which is in question here.
- [12]Mrs Stevens submitted that s 69(2)(a)(ii) of the QBCC Act applied as the advertisement disclosed the licence number of a registered building contractor and it appeared that the contractor was an employee of Mr Mar. The Commission submitted that only s 69 (2)(a)(iii) could apply as the contract was with an unlicensed contractor. I agree with the Commission in this case the contract was with Cool in Summer Pty Ltd as evidenced by the tax invoice and that entity was not licensed so s 69(2)(a)(ii) cannot apply.
- [13]The relevant question then in accordance with s 69(2)(a)(iii) is whether Zac Mar and/or Cool in Summer Airconditioning Pty Ltd fraudulently claimed to hold a licence under which Zac Mar and/or Cool in Summer Airconditioning Pty Ltd could enter into a contract with Mrs Stevens to carry out residential construction work covered by the statutory insurance scheme.
- [14]A fraudulent claim will only be relevant if it is made up to the time of the formation of the contract[10] As to what constitutes a fraudulent claim the law in regard to fraud has been relied upon by previous tribunals and both parties have cited decisions[11] which supported that the law as stated in the matter of Derry v Peek (1889) L.R. App. Cas. 337, should apply. The House of Lords held in Derry v Peek held that:
…fraud is proved when it is shown that a false representation has been made knowingly, or without belief in its truth, or recklessly, without caring whether it be true or false. A false statement made through carelessness and without reasonable ground for believing it to be true may be evidence of fraud, but does not necessarily amount to fraud. Such a statement, if made in the honest belief that it is true, is not fraudulent and does not render the person making it liable to an action in deceit.
- [15]I note that the case of Derry v Peek concerned an action in deceit in regard to a representation made in a company prospectus and the claim was only unsuccessful because it was held that the company directors had an honest belief that the representation was true. The fact that the representation was made to the world at large in a company prospectus was not considered to be an issue going to whether or not the representation could be considered fraudulent.
- [16]The Commission submitted that having regard to the dictionary definition of fraud as ‘deceit or trickery’, in circumstances where there was no deceit evinced by the representation, a fraudulent claim cannot be made out. The Commissioner submitted that Mrs Stevens did not place any reliance on the reference to ‘BSA 1114052’ at the time of entering into the contract with Zac Mar and/or Cool in Summer Airconditioning Pty Ltd as the Applicant was not aware of what the BSA or QBCC represented.
- [17]It is clear that fraud is one of the elements of deceit at law, the other elements being an intention on the part of the representor that the claimant should act upon the representation and actions by the claimant in reliance upon the representation that were induced by the representation.[12] This was also made clear in Derry v Peek:
In an action of deceit it is the duty of the plaintiff to establish two things: first, actual fraud… and secondly, he must establish this fraud was an inducing cause to the contract.[13]
- [18]Therefore a fraudulent claim may be made by way of an advertisement and there is no requirement that the party subject to the fraudulent claim must show reliance on the fraudulent claim to enable a certificate of insurance to come into force.
- [19]The advertisement mentioned above that led to Mrs Stevens contacting Mr Mar had a BSA licence reference and an ARC licence reference. The Commission submitted that the ARC licence reference is irrelevant as it is not a licence that is issued by the Commission. A copy of the relevant licence in the name of Mark Beard is annexed to Mrs Steven’s statement received 16 September 2017[14] and on its face it shows that it is an Australian Government Department of Environment licence. I am satisfied that the use of the ARC licence could not form proof that a person was fraudulently claiming to hold a licence in accordance with s 69(2)(a)(iii) of the QBCC Act.
- [20]The advertisement by Cool in Summer also disclosed BSA Licence 1114052. Mrs Stevens had noted in her non-completion claim form that Zak Mar used Michael Russell’s building licence BSA 1114052.[15] The Commission confirmed that a QBCC open builder licence was held by a Michael Russell with that licence number.[16] I note that the advertisement used the term BSA which indicated the former name of the QBCC. The contract for the installation of airconditioning was evidenced by a tax invoice No 0077 in the name of Cool in Summer as described above. While the tax invoice did not include the BSA licence number the contract was with the entity who made the fraudulent claim that it was licensed in the original advertisement.
- [21]I am satisfied having regard to the fact that the licence number used in the advertisement was that of a licensed builder and the contract was with the entity disclosed in the advertisement, Cool in Summer and was in respect of the type of building work disclosed in the advertisement that the requirements of s 69(2)(a)(iii) of the QBCC Act are satisfied in regard to the first contract entered by Mrs Stevens with Cool in Summer and that a policy of insurance came into force in respect of the contract evidenced by tax invoice 0077.
Second tax invoice
- [22]There were two other contracts entered by Mrs Stevens with Cool in Summer, these were in respect of the installation of air-conditioning at her home and renovation work at her home and at her daughter’s unit. The work in respect of the first contract is set out in Cool in Summer tax invoices No. 0084 dated 27 January 2016 as follows:
Supply and fit 12.5 kw ducted reverse cycle air conditioner to home
And 8 zones to home and patio $10,000.00
Fit ceiling fans (supplied by P Stevens)
Enclose the patio with the installation of sliding door and two sliding windows;
Paint inside of the property including walls, ceilings and skirting;
Replace kitchen bench with a laminated top, new sink, tile splash back and new hardwood window architraves to be fitted.
Tiles to be laid in master bedroom (tiles to be supplied by P Stevens)
Drummy tiles in the lounge room to be replaced;
Replace bottom skirting and architraves in hallway and bathroom;
Front of patio to have grates installed; and
Tile patio (tiles to be extra)
Material payment $24,000
Total $44,000
- [23]Mrs Stevens stated[17] that she had conversations with Mr Mar prior to entering this contract as follows:
While at the rental property earlier in the month Mrs Stevens said “some of the tiles were chipped and that she had not liked the small shower recess.” He replied “My boys can get in here and do all that, rip up the tiles, redo the bathroom and toilet area and put in new laundry and kitchen benchtop with new sink and stove/oven and new splashback. We can make it look really good, improve the value of the property.”
On 27 January 2016 Mrs Stevens first discussed airconditioning her home with Mr Mar and it was agreed that would be done for $10,000.00. Mr Mar returned on 28 January 2018 and she showed him her 3 bay shed and the outdoor area. She said she need shelves to organise the articles in the shed. She also showed Mr Mar the patio and said “this patio leaks when it rains heavily. I would like to fix that and enclose the patio.” He looked at the roof and said he could fix the fall of the roof and that some drainage would need to be put in to take the water away. He also said she should get the work set out in tax invoice 0084 done. They then agreed on a cost.
- [24]Mrs Stevens also noted in the statement that she had checked with the ASIC database on 18 January 2016 and found a current registration for the company and then believed the company was valid. As this does not relate to any representation by Mr Mar about holding a building licence it does not assist Mrs Stevens.
- [25]Mrs Stevens added in a police statement that Mr mar had stated the had ‘25 rental properties in Tasmania and that he was interested in developing some units in Ningi and raised the possibility of her being financially involved.’[18]
- [26]Mrs Stevens in the questionnaire for possible insurance claim in regard to the second contract stated she had discussed problems with leak into patio and Mr Mar had said he could fix call of that as he was a roofer. That she had indicated all of eh work she wanted done and he indicated that his boys could do the jobs, and that he had renovated many properties in the past (owning some 29 properties in Tasmania. There were no discussions about whether the person/entity was licenced under the QBCC Act and the only licence reference was the ARC Licence L080238. She said she was under the impression that the entity was licensed because of all the properties he (Mr Mar) owned/renovated and his plans to develop 3 units on Bribie.
- [27]While in her review application Mrs Stevens stated that Mr Mar led me to believe that he held a licence to oversee/carry out building and refrigeration work though she later in the same application states in regard to why she had work completed that: ‘at that stage early 2016, I did not even know what the QBCC stood for let alone its rules and regulations.’ This was confirmed at the hearing where as mentioned above she also said that there were no discussions about BSA licences with Mar.
- [28]Mrs Stevens paid $24,000 at the time the tax invoice was created and a further amount of $17,000 after she visited a Bunnings and Beaumont Tile store with Mr Mar. It does not appear that any of the work in respect of invoice 84 has been performed and the contract was terminated by letter on 22 April 2016.
- [29]In the case of Cester & Anor v Queensland Building and Construction Commission the Home Owners did not rely upon any positive false representation that the builder was appropriately licensed and they assumed that he was for various reasons. It was held that there was no deliberate deception on the part of the builder and that a contract of insurance did not come into existence. This makes it clear that the fraudulent claim must be made by the person you are contracting with and it is not sufficient that the home owner makes assumptions.
- [30]While Mr Mar may have indicated that he and his team could perform building work and that he had renovated properties in another state that does not amount to him fraudulently claiming that his entity Cool in Summer held a license to enter into contracts with consumers to carry out such residential construction work covered by the statutory insurance scheme. The only positive representation in that regard is contained in the Cool in summer ad mentioned above. That ad relates only to the supply and installation of airconditioning and the representation made by that ad must be limited to the work which is set out in the ad.
- [31]I note that the work covered by invoice 0084 did include work in respect of the installation of airconditioning and I am satisfied that the requirements of s 69(2)(a)(iii) of the QBCC Act are satisfied in regard to the second contract entered by Mrs Stevens with Cool in Summer in so far as it relates to the supply and installation of air-conditioning and that a policy of insurance came into force in respect of that part of the contract as evidenced by tax invoice 0077.
Third tax invoice
- [32]The third tax invoice relates to work to be performed at the rental unit and was negotiated on 2 February 2016. Mrs Stevens was concerned that she had gone over budget and initially wished to cancel the work to be performed at her house. The work is set out on Cool in Summer Tax invoice 0085[19] as follows:
Jackhammer all tiles in unit.
Grind all floor areas except bedrooms
Fully renovate bathroom
Supply and fit new toilet
Supply and fit electric cook top and oven
Supply and fit new laminated kitchen top and sink
Supply and fit new trough
Supply and lay floor tiles
Supply and fit new splash back (vivid white)
INV 84 and 85 $62,890
Less $41,000
$21,890
Balance owing $21,890
$6,890 paid 2/2/16
Balance $15,000
- [33]The following conversation is said to have taken place in regard to the work in tax invoice 0085:[20]
Mrs Stevens said she wanted the following work to be done to the property and Mr Mar said “Yes, this no problem we can do that”
Mrs Stevens asked “How much will it cost to do all that work?”
Mr Mar said words to the effect of “We will combine the previous work quoted on invoice #84 with the new work you want done. We can do all work under both invoices for $62,890. You have already paid for $41,000 so the balance will be $21,890 owing. We will require $6,890 upfront and $15,000 on completion.
Mrs Stevens said words to the effect of “Yes, I would like to proceed with that work”
- [34]On 2 February 2016 Mrs Stevens paid $5,000 from her credit card and transferred $1,890 from her daughter’s home loan at the end of the meeting to make up the amount of $6,890 asked for by Mr Mar. Mrs Stevens made a further payment of $5,000 which was requested by Mr Mar on 8 February 2016 as she had seen that work was underway
- [35]Ultimately, the work at the unit except for the kitchen was completed by others at additional cost to Mrs Stevens. Mrs Stevens terminated the contract set out in tax invoice 0085 on 22 April 2016.
- [36]There were no new claims made in regard to being licenced made by Mr Mar between the second and third contracts. Therefore the position in regard to the work set out in the third invoice is the same as that in the second invoice. As the work set out in invoice 0085 is in respect of residential construction which for which there were no fraudulent claims made that the person holds a licence to perform such work the requirements of s 69(2)(a)(iii) are not satisfied and there is no policy of insurance in force in regard to tax invoice 0085.
- [37]The decision which is the Tribunal is reviewing is only in regard to whether or not there is a policy of insurance in respect of the work which was contracted to be performed for Mrs Stevens and for which she has paid money. This decision is not determinative of her entitlement under her claim. That will need to be determined by the Commission having regard to the terms of the insurance policy conditions.
Order
- [38]The Tribunal makes the following order:
- (a)The decision of the Commission made on 7 June 2017 is set aside;
- (b)A policy of insurance came into force in respect of the residential construction work set out in Cool in Sumer tax invoice No 0077 in accordance with s 69(2)(a)(iii) of the Queensland Building and Construction Commission Act 1991 (Qld);
- (c)A policy of insurance came into force in regard to the airconditioning supply and installation residential construction work and that work only set out in Cool in Summer tax invoice No 0084 in accordance with s 69(2)(a)(iii) of the Queensland Building and Construction Commission Act 1991 (Qld); and
- (d)A policy of insurance did not come into force in respect of the balance of the work in Cool in Summer tax invoice No 0084 and in respect of the work in tax invoice 0085 in accordance with s 69(2) of the Queensland Building and Construction Commission Act 1991 (Qld).
- (a)
Footnotes
[1]QCAT Act, s 19.
[2]QCAT Act, s 20.
[3]QCAT Act, s 21.
[4]QCAT Act, s 24.
[5]QBCC Act, s 68B and s 69(1).
[6]Exhibit 1, p 73.
[7]Exhibit 1, p 84.
[8]Exhibit 1, p 174.
[9]Exhibit 1, p 79-80.
[10]Jorg v Queensland Building and Construction Commission [2016] QCAT 364, [52].
[11]BM Farage P/L as trustee for Farage Discretionary Family Trust v QBSA [2003] QCCTB 11, [49]; Cester & Anor v Queensland Building and Construction Commission [2018] QCAT 87, [26].
[12]Tresize v National Australia Bank (2005) 220 ALR 706, [38] (Sundberg J).
[13]Derry v Peek (1889) L.R. App. Cas. 337, p 373.
[14]Exhibit 2.
[15]Exhibit 1, 62.
[16]Exhibit 8.
[17]Exhibit 1, p 80.
[18]Exhibit 1, p 103.
[19]Exhibit 1, p 72.
[20]Exhibit 1, p 82.