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Schauer v KJ & S O'Brien Contractor Pty Ltd; Schauer v Townsville City Council; Schauer v Queensland Building and Construction Commission QCAT 37
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Schauer v KJ & S O'Brien Contractor Pty Ltd & Anor; Schauer v Townsville City Council & Anor; Schauer v Queensland Building and Construction Commission  QCAT 37
KJ & S O'BRIEN CONTRACTOR PTY LTD
TOWNSVILLE CITY COUNCIL
KJ & S O'BRIEN BUILDING CONTRACTORS PTY LTD (FORMERLY KNOWN AS KERRY JOHN O'BRIEN)
QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION
BDL170-18; BDL199-18; GAR199-18
22 February 2019
On the papers
Matters BDL170-18, BDL199-18 and GAR199-18 are
LIMITATIONS OF ACTIONS – GENERAL MATTERS – STATUTES OF LIMITATION GENERALLY – where building contract completed in 2005 – where claims against the builder commenced 2018 – where claims brought in contract and tort – where limitation periods exceeded – where interlocutory applications brought to strike out the proceedings – where admissions by owners the damage occurred more than 6 years prior to commencement of proceedings – whether the matters should be struck out as lacking in substance on interlocutory application
PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – where statutory time limit for Commission to issue direction to rectify defective building work expired – where homeowners made complaint about work outside the statutory time limit – where the QBCC had not requested the Tribunal to extend the time limit – whether the decision of the Commission not to issue a direction to rectify was reviewable in the Tribunal
Limitation of Actions Act 1974 (Qld), s 10(1)(a) Queensland Building and Construction Commission Act 1991 (Qld), s 72, s 72A(4), s 86(1)(e)
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 47
Bodycorp Repairers Pty Ltd v Holding Redlich  VSCA 17
Doolan v QBCC  QCAT 58
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Lowe v Aspley  QCATA 59
Sendall v Howe & Anor  QCATA 41
Smith v QBSA  QCAT 448
Stephens & Anor v Queensland Building and Construction Commission  QCAT 281
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
KJ & S O'Brien Building Contractors Pty Ltd (formerly known as Kerry John O'Brien):
Townsville City Council
Queensland Building and Construction Commission
Self-represented by Emma Ward
This matter was heard and determined on the papers pursuant to s 32 of theQueensland Civil and Administrative Tribunal Act 2009 (Qld).
REASONS FOR DECISION
- Mr and Mrs Schauer engaged Mr O'Brien, a builder, to build them a home at Stanton Terrace, Townsville, in about 2004. They both signed a contract dated 19 April 2004 and the builder named in the contract was K O'Brien trading as KJ & S O'Brien Building Contractors. The price of the build was $700,000. The work was completed on 11 August 2005.
- Mr and Mrs Schauer say they have subsequently discovered problems with the work.
- By application GAR199-18, filed 13 June 2018, Mr and Mrs Schauer commenced proceedings in the Tribunal against the Queensland Building and Construction Commission (‘QBCC’). They sought review of a decision by QBCC refusing to issue a direction to rectify defective building work at their home to Kerry John O'Brien. QBCC refused because when the complaint by the owners was made to them more than 6 years and 6 months had passed since the work had been completed.
- Then by application BDL170-18, filed 18 June 2018, Mrs Schauer (this time without Mr Schauer named as an applicant) commenced a domestic building dispute proceeding in the Tribunal against a respondent she named as KJ & S O'Brien Contractor Pty Ltd. In the application she refers to a contract signed 16 April 2004, which appears to be an error. The application is difficult to understand. The claim against the contractor is unclear. The issues to be litigated are not sensibly particularised.
- In that part of the application entitled Details of what you seek from the Tribunal, there is reference to the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) and reprints. Then under that part of the application entitled The reasons I consider the order/s should be made, there is mention of incomplete work; negligence and ‘unreasonable behaviour of Builder by Kerry John O'Brien towards M/S client’; construction not complying with a geotechnical report; and ‘extreme circumstances/ to give reason for our case for extending the time’. The reference to ‘M/S client’ appears to be a reference to Mr and Mrs Schauer. The document was drawn by someone else, a retired architect, assisting the applicants. He apparently has assisted them in all the other claims as well.
- There are documents attached to the application including a statement elaborating on what the applicants call incomplete work but which is really a claim about defective work the assertion being the builder failed to build in accordance with the contract specifications. In particular there is a claim that the builder did not waterproof retaining walls properly and a claim associated with negligent construction of stormwater drainage.
- Then by application BDL190-18, filed 12 July 2018, Mr and Mrs Schauer (both named as applicants this time) commenced another domestic building dispute proceeding, this time against Townsville City Council and KJ & S O'Brien Building Contractors Pty Ltd. Again, there are a lot of documents attached but the application is short on explanation as to issues for determination. There is a reference to a warranty on waterproofing products in the application and in the section entitled Details of what you seek from the Tribunal the following appears:
- Regarding the application to Townsville City Council we required conformation (sic) of builder’s culpability currently 47.7%
- Restitution as noted in documents
- All monies the Schauers are entitled to will come from TCC insurers not QBCC In regard to action against Kerry O'Brien both private and proprietary company will come from Kerry O Brien’s insurance policy for licence. The retrospectivity is ref The Woman in Gold.Maria Altman v Vienna Gallery & Government See Book 2
- It is not surprising that in matter BDL199-18, Townsville City Council has filed a response to the application and, amongst other things, states it cannot make sense of the orders sought by Mr and Mrs Schauer.
- Indeed the various respondents to the various applications have all filed separate applications to strike out actions GAR199-18, BDL170-18 and BDL199-18. There are a number of bases upon which the applications to strike out are made however the primary basis of each is that any claim against the respondents is statute-barred, meaning it is out of time. With respect to the building matters, that is, because more than 6 years have passed since any cause of action for breach of contract or in negligence accrued to the applicants and with respect to the administrative review matter, that the limitation period of 6 years and 6 months for QBCC to issue a direction to rectify has expired.
- Those strike out applications now fall for determination. If unsuccessful it will be appropriate to go on to consider applications by the parties for legal representation (by Mr and Mrs Schauer for non-legal representation) and an application by Mr and Mrs Schauer to stay all three actions pending representations they intend to make to a government Minister, apparently seeking ministerial assistance with their dispute with QBCC (what assistance is sought or could be given is not mentioned).
- Dealing first with the administrative review application.
The Application for Administrative Review GAR199-18
- The QBCC Act provides by s 72 that the Commission may direct a person who has carried out defective building work to rectify it. However by s 72A(4):
A direction to rectify or remedy cannot be given more than 6 years and 6 months after the building work to which the direction relates was completed or left inan incomplete state unless the Tribunal is satisfied, on application by the commission, that there is in the circumstances of a particular case sufficient reason for extending the time for giving the direction and extends the time accordingly.
- Section 86 of the QBCC Act sets out what QBCC decisions are reviewable by the Tribunal. Section 86(1)(e) provides that a decision to give or not to give a direction to rectify is a reviewable decision in the Tribunal, but s 72A(4) imposes a 6 year 6 month time limiton that power.
- Section 72A(4) allows QBCC to extend that 6 year 6 month time limit but only if QBCC applies to the Tribunal for an extension of time. The decision whether to apply or not to apply for an extension of time is entirely a matter within the discretion of QBCC. A decision by the Commission not to seek an extension of time is not itself a reviewable decision in the Tribunal pursuant to s 86 and the Tribunal has no power to extend the period without an application from the Commission beforehand.
- QBCC has decided not to apply to the Tribunal for any extension of time. The Tribunal will not be able to review that decision or direct QBCC about the matter. The applicants’ claim in this matter must fail.
BDL170-18 and BDL199-18
- In BDL170-18 the principal assertion against the builder appears to be that the contract specified waterproofing of retaining walls and that has failed which indicates it has not been done properly or the wrong product was used. In an attachment to the application Mr and Mrs Schauer state:
Kerry O'Brien was made aware in detail of all damages during a site visit in 2010.
- They then refer to things such as delamination of pool pebbling and effervescence stains on the garage/pool wall and then conclude:
We can proof (sic) that the builder was shown all damages in 2010 as he was the person who has advised me, Andrea Schauer to contact Allan Church, CBS for the additional waterproofing. We did not know about this firm, and the builder did not inform us that CBS was the subcontractor for all external waterproofing during construction.
- After that, they refer to the Council’s contribution to their problems with the following rather confusing statement:
Townsville City Council initiated the circumstances which led to the builder’s default, therefore the builder’s percentage is 47.5% for rectification work….
Before we purchased lot 28 Stanton Terrace, the previous neighbour of Lot 30 constructed an open spoon drain to collect the stormwater run-off from lot 30 and adjoining TCC Castle Hill which is directly discharging all collected stormwater to our property Lot 28…
The scope of this work was solely decided by TCC engineers without any reference of engagement and acceptance…
TCC had approved that the completed building works of the new stormwater sump/drainage on Lot 30 had been carried out according to their regulations. Unfortunately, the Townsville City Council engineers had failed to include and connect the run-off stormwater of Lot 30 and adjoining TCC Castle Hill directly from the spoon drain on Lot 30 with a drainage pipe to the new stormwater sump on Lot 30, we had to pay for.
It is a fact that TCC had not followed and not upheld their own protocol: “adequate precautions are to be taken to avoid the discharge of rainwater (stormwater) on to any adjoining allotment” to ensure not to allow any illegal direction of stormwater to discharge onto an adjoining allotment.
- In so far as the Council is concerned, their involvement in this affair appears to predate, at least in part, the involvement of the builder. I note there is also mention of alleged negligent certification by an employee of Townsville City Council with respect to the dwelling and swimming pool.
- The house was finished on 11 August 2005.
- The purpose of limitation periods is to prevent a party who suffers loss or damage because of the default of another from taking too long to commence proceedings. Excessive delay is unfair because people would be subject to an indefinite threat of legal action and people should be able to arrange their affairs knowing that potential legal action will at some stage no longer be brought against them. It is a matter of public policy that disputes are resolved as quickly as possible. That may mean injustice for some plaintiffs, because for example they may not be aware of damage caused to them, however the limitation periods strive for a reasonable balance between the interests concerned.
- By s 10(1)(a) of the Limitation of Actions Act 1974 (Qld):
- (1)The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action arose—
- (a)subject to section 10AA, an action founded on simple contract or quasi-contract or on tort where the damage claimed by the plaintiff do not consist of or include damages in respect of personal injury to any person;
- A cause of action accrues when all the material facts necessary to establish the claim in a Court or Tribunal occurs. That time of accrual may be different depending on the type of actionable claim involved.
- A cause of action for breach of contract accrues when the breach occurs. Here that means any claim Mr and Mrs Schauer had against the builder for breach of the construction contract, such as not building in accordance with the specifications, arose when construction finished, or perhaps shortly after that if there was a defects liability period. The work under the contract was completed (or was left incomplete in breach of the contract, adopting the language of Mr and Mrs Schauer) in 2005. That means the limitation period in respect of any claim Mr and Mrs Schauer had against the builder (Mr O'Brien) expired in 2011.
- An action in negligence requires three things: a duty of care; breach of the duty of care; and damage sustained because of the breach. Damage is an essential requirement. It must be actionable rather than merely potential.The cause of action accrues and runs regardless of whether or not the claimant discovers the damage.
- But in the matter at hand, by the admission of Mr and Mrs Schauer, the damage was in any case well known to them by 2010, if not before. They had the builder come out to look at the damage. This means even if the limitation ran from that time when they first knew about the damage, the 6 year limitation period against the builder would have expired by 2016. Similarly in respect of any claim against Townsville City Council. The building dispute actions were all commenced in 2018.
- Apart from the limitation issue, the respondents say Mr and Mrs Schauer have not complied with the mandatory requirement under s 77(2) of the QBCC Act that the parties attempt dispute resolution before commencing proceedings and, on that basis too, the applications must be struck out.
- Section 77 provides:
- (1)A person involved in a building dispute may apply, as provided under the QCAT Act, to the Tribunal to have the Tribunal decide the dispute.
- (2)However, the person may not apply to the Tribunal unless the person has complied with a process established by the commission to attempt to resolve the dispute.
- There is a notice from QBCC dated 28 March 2018 addressed to Mrs Schauer only referring to her complaint about building work performed by Kerry John O'Brien and confirming she had participated in a dispute resolution process as required. Mr Schauer is not mentioned either as a party or as taking part.
- There is no mention in the notice of referral of a dispute with Townsville City Council or KJ & S O'Brien Building Contractors Pty Ltd being involved.
- In so far as the claim has now extended to those entities (leaving aside the further problem for Mr and Mrs Schauer that KJ & S O'Brien Building Contractors Pty Ltd was not an incorporated entity when the building work was done), s 72 required a dispute resolution process to be undertaken with them too. It has not and therefore the claims brought against them in BDL170-18 and BDL199-18 are premature and must be struck out as against them.
- In respect of Mr Schauer, none of the claims brought by him as an applicant can proceed given he has never undertaken any dispute resolution process before filing his applications in the Tribunal.
- By s 47(1) of the QCAT Act, if the Tribunal considers a proceeding is frivolous, vexatious or misconceived, lacking in substance or otherwise an abuse of process, the Tribunal may order the proceeding be dismissed or struck out.
- In General Steel Industries Inc v Commissioner for Railways (NSW)Barwick CJ said:
Although I can agree with Latham C.J. in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings (1949) 78 CLR, at p 84, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed Tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim.
- Ending claims early based on limitation periods has been the subject of comment in the High Court in Wardley Australia Ltd v Western Australiawhere it was said that it was undesirable for limitation of action questions to be decided in interlocutory proceedings in advance of a hearing of the action ‘except in the clearest of cases’.
- The matter before me, I conclude, is one of those clear cases however. Mr and Mrs Schauer have no prospects of successfully resisting the limitation of actions defence claimed by all respondents to the building dispute actions.
- Mrs Schauer’s claims in BDL170-18 and BDL199-18 must be struck out as against Townsville City Council and KJ & S O'Brien Building Contractors Pty Ltd because of failure to comply with s 72 QBCC Act. All Mr Schauer’s claims must be dismissed for similar failure as against all respondents.
- Further, the builder in these matters must be only Mr O'Brien. In so far as there are corporate defendants joined, on the one hand, one does not exist and, on the other, it was not in existence earlier than 2009 and had no involvement in the construction of the home in Townsville.
- The appropriate order is that all three applications are dismissed. Because of that, it is not necessary to consider the applications for representation or the stay of all three actions pending submissions by Mr and Mrs Schauer to a Minister.
- Given the early stage of terminating proceedings and no legal representatives were given leave to act for any party, it is appropriate that there be no order as to costs.
Previously 6 years 3 months.
Stephens & Anor v Queensland Building and Construction Commission  QCAT 281; and see Smith v QBSA  QCAT 448, ; Doolan v QBCC  QCAT 58, ; Lowe v Aspley  QCATA 59, ; Sendall v Howe & Anor  QCATA 41, .
First attached document dated 13 June 2018 page 4 and 9.
Review of the Limitations of Actions Act 1974 (Qld), Information Paper, Queensland Law Reform Commission, April 1997, 2-3.
s 10AA concerns defamation actions.
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 .
Bodycorp Repairers Pty Ltd v Holding Redlich  VSCA 17 .
1964] HCA 69; (1964) 112 CLR 125.
175 CLR 514.
- Published Case Name:
Schauer v KJ & S O'Brien Contractor Pty Ltd & Anor; Schauer v Townsville City Council & Anor; Schauer v Queensland Building and Construction Commission
- Shortened Case Name:
Schauer v KJ & S O'Brien Contractor Pty Ltd; Schauer v Townsville City Council; Schauer v Queensland Building and Construction Commission
 QCAT 37
22 Feb 2019