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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Harris v Queensland Building and Construction Commission & Anor  QCAT 155
Queensland Building and Construction Commission
waldermar lucjan kuczynski
General administrative review matters
8 May 2020
16 April 2019
ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – application to review a decision to disallow a claim under the statutory insurance scheme – whether a homeowner should have the benefit of a legislative scheme
PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME - claim under statutory insurance scheme for residential construction work – where false representations made that a relevant licence was held – where claim is allowed
Queensland Building and Construction Commission Act 1991 (Qld), s 67WA, s 67WC, s 68H(1)(b), s 68H(1)(c), s 68H(2), s 86(1)(h), s 87, sch 2
Queensland Building and Construction Commission Regulation 2003 (Qld), sch 2C, s 1(1), s 7(1), 7(2), s 15
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20
BM Farage Pty Ltd as trustee for Farage Discretionary Family Trust v Queensland Building Service Authority  QCCTB 11
Cester v Queensland Building and Construction Commission  QCAT 87
Grevsmuhl v Queensland Building and Construction Commission (unreported) (14 November 2018)
Jorg v Queensland Building and Construction Commission  QCAT 364
Queensland Building Services Authority v Fox  QDC 129
Stevens v Queensland Building and Construction Commission  QCAT 331
N Glen, in-house legal officer
REASONS FOR DECISION
- Julie Harris has applied to the tribunal for a review of the decision of the Queensland Building and Construction Commission (‘the Commission’) to disallow her claim under the Queensland Home Warranty Scheme (‘Statutory Insurance Scheme’).
- The decision was notified to her by letter dated 26 October 2017 (‘the original decision’). She applied for an internal review of the original decision by letter dated 17 January 2018. The Commission confirmed the original decision (‘IR decision’). The IR decision is the decision to be reviewed by the tribunal.
- Waldermar Kuczynski applied to be joined as a party to the proceeding and was so joined by directions dated 24 October 2018.
- On 17 December 2019, I made orders setting aside the decision under review and substituting a new decision that Ms Harris is entitled to claim under the Statutory Insurance Scheme. These are my reasons for that decision.
- In June 2017, on the recommendation of a plumber, Mr Thain and Ms Harris sought a quotation from Mr Kuczynski for the renovation of a partially enclosed laundry to include a new bathroom and laundry at her property at 8 Thurston Street, Greenslopes (‘the works’).
- After a meeting onsite involving Ms Harris, Mr Thain and Mr Kuczynski, under the name WK Maintenance, on 10 July 2017 Mr Kuczynski provided a quote for completion of the works for a cost of $18,846.
- Ms Harris accepted the quotation later in June and work commenced early in July 2017.
- On or about 31 July 2017, Ms Harris had the works inspected by a number of tradesmen including Mr Thain and following discussion with them concluded that the works were defective to the extent that they would need to be demolished and rebuilt.
- As a result of that advice, Ms Harris contacted the Commission who advised her that Mr Kuczynski did not hold a current QBCC license and recommended that she contact the Electrical Safety Office in relation to electrical work he had apparently undertaken.
- Ms Harris confronted Mr Kuczynski with her concerns in an email exchange between 1 August 2017 and 3 August 2017 and unsatisfied with his response made a complaint to the Commission in relation to a number of matters including his unlicensed contracting and what she considered were representations by him that he was licensed.
- On 22 August 2017, following legal advice Ms Harris gave notice terminating the contract on the basis of Mr Kuczynski’s default in not holding the appropriate licence and on 23 August 2017 lodged a complaint with the Commission for defective and uncompleted works.
- None of the matters contained in paragraphs 5 to 11 of these reasons is contested by either respondent.
The Commission’s decisions
- The internal review decision findings (which confirm the original decision) contested by Ms Harris are:
- Neither respondent raises any other reason why the Statutory Insurance Scheme should not apply in the circumstances of these proceedings.
- The QBCC Act establishes the Statutory Insurance Scheme for residential construction work.
- It is uncontested that the works in this case were residential construction work as defined in the QBCC Act.
- Section 68H(1) provides that the circumstances under which the Statutory Insurance Scheme comes into force includes:
- (b)a consumer enters into a contract for the carrying out of residential construction work with a building contractor and, at or before the time the contract is entered into, the building contractor makes a representation that would cause a reasonable person to believe that the residential construction work is covered by the statutory insurance scheme; or
- (c)a person (the defrauded person) enters into a contract for the carrying out of residential construction work with a person (the fraudulent person) fraudulently claiming to hold a licence under which the fraudulent person may enter into contracts with consumers to carry out residential construction work covered by the statutory insurance scheme.
- Cover may come into force notwithstanding (as is the case here) non-payment of the premium and without the issue of a notice of cover.
- The evidence and report of the building inspector, Robert Murphy, in relation to the defective building works and incomplete residential works are uncontested and the tribunal makes findings in that regard accordingly.
- Pursuant to s 7(2), Schedule 2C of the Regulation a consumer is not entitled to claim assistance under the Statutory Insurance Scheme if:
- (a)The residential work is prohibited under the relevant laws; or
- (b)Approval required to complete the residential construction work under the relevant law cannot be obtained.
Is the applicant disentitled to claim because the works are prohibited or not capable of approval?
- It is common ground that the ceiling height of the bathroom/laundry, are non-habitable areas, is 2040mm which is less than the 2100 ceiling height required by the National Construction Code 2016 for non-habitable areas.
- That in itself does not disentitle Ms Harris from claiming under the Statutory Insurance Scheme. Section 7(2), Schedule 2C of the Regulation only disentitles an applicant if the works are prohibited or if approval cannot be obtained.
- No evidence is called by either respondent to suggest that either is the case.
- Steve Kellermeier, by affidavit affirmed on 31 July 2018 and filed in the tribunal on 1 August 2018, affirmed that:
- (a)He is an architect and under instruction from Ms Harris prepared plans for the works and drafted a performance solution report for relaxation of the ceiling height;
- (b)He received advice on 19 March 2018 from Alex Otago, BSP Brisbane Pty Ltd, certifier, confirming building approval based on those documents, subject to proof of payment of QBCC insurance.
- Ms Harris confirms that she also received a copy of that email from Alex Otago.
- I am satisfied that works are not prohibited and are capable of obtaining approval. Ms Harris is not disentitled from claiming pursuant to s 7(2), Schedule 2C of the Regulation.
Does section 68H(1)(b) or (c) apply?
- Section 68H(1) provides that the Statutory Insurance Scheme comes into force if either:
- (b)the contract makes a representation to a consumer prior to the contract that would cause a reasonable person to believe that the work is covered by the Statutory Insurance Scheme; or
- (c)a person enters into a contract with a person fraudulently claiming to hold a licence to carry out work covered by the Statutory Insurance Scheme.
- Opinions have been divided throughout these proceedings as to which subsection applies in this matter. Ms Harris’ written submission filed on 1 August 2018 concludes that both subsections apply.
- The original decision concluded that neither applied although it does not provide any reasons with respect to section 68H(1)(b).
- The IR Decision considered the ‘relevant’ section to be section 68H(1)(b) and concluded that no representation had been made that would cause a reasonable person to believe that the works were covered by the Statutory Insurance Scheme. It did not consider the effect of section 68H(1)(c).
- An internal legal advice included in the statement of reasons opines that there is no ‘fraudulent misrepresentation’ but that a reasonable person ‘may easily’ infer from the words ‘fully licenced and insured’ contained in the quotation that the works were covered by the Statutory Insurance Scheme but that was a matter for the decision maker to determine.
- The Commission’s outline of submissions prior to oral evidence provided at the hearing refer only to section 68H(1)(c) but in oral submissions, Mr Glen who appeared for the Commission submitted that section 68H(1)(b) did not apply for reasons outlined in the decision of Grevsmuhl v Queensland Building and Construction Commission (unreported) (14 November 2018) (‘Grevsmuhl’).
- In this matter Ms Harris concedes that Mr Kuczynski did not make any direct statement to her that he held an appropriate licence to undertake the works. Rather she says that she formed that view that he was licensed and insured from the quotation dated 10 June 2017 submitted to her by him.
- The quotation is headed by the business name ‘WK Maintenance’. The following appears in smaller but legible print immediately under that name:
ABN 97 421 245 485
QBSA 114 8993
- After the text of the quotation and immediately above the footer the words ‘fully licenced and insured’ are printed.
- The footer itself contains telephone numbers and an email address and the following list of services apparently provided by WK Maintenance:
General maintenance services
Solar panel cleans
Minor building works
Smoke alarm replacements.
- While it may be argued that the reference to ‘fully licenced’ is limited by the specified services, I am not of the view that people who enter in contracts of this nature can be expected to have sufficient knowledge and experience to determine whether the scopes of works are included or excluded from any particular category of licence or definition of works contained in the QBCC Act.
- I note that in the IR Decision, the decision maker considered the phrase ‘fully licenced and insured’:
… is not a representation that would cause a reasonable person to believe that the work is covered by the QHWS, because the reference is to the contractor being “fully … insured” rather than to the work being covered by the QHWS.
- I find that to be an extraordinary interpretation in the context of s 68H(1).
- The phrase must be considered as a whole in the context in which it appears. It appears in a document quoting on building work. The document also includes a reference to what appears to be a QBSA licence number.
- It would be absurd to suggest that a reference to ‘fully licenced’ refers to anything other than a licence to carry out building work. It is irrelevant to the transaction that the contractor holds any other type of licences, for example a driver’s licence.
- The objective of the Act is to provide protection for consumers in respect of building works and the system of licencing and the statutory insurance scheme contained in the QBCC Act are critical to that objective. While a member of the public cannot be expected to have an intricate knowledge of the workings of the Act the system of licencing and the Statutory Insurance Scheme itself are widely known.
- In my view, the only reasonable interpretation of the phrase is that Mr Kuczynski is both licensed to undertake the work and that the works will be covered by the Statutory Insurance Scheme.
- It is uncontroversial that the representation is contained in a quotation which ultimately formed the basis of a contract between the parties and accordingly was clearly made to Ms Harris before the contract was entered.
- Ms Harris gave evidence in cross-examination that she was aware of the Statutory Insurance Scheme although she did not know what it was called at the time and no doubt before these proceedings the complexities of it. Throughout her evidence and submissions she has taken the reference to ‘fully insured’ to relate to the Statutory Insurance Scheme and in my view that is the most reasonable interpretation.
- Mr Kuczynski says in respect of the quotation and the contract itself:
- (a)It was disclosed by him to Ms Harris that because of the ceiling height the works were ‘non-conforming’;
- (b)The non-compliant works could not be insured;
- (c)That inclusion of a QBSA number and the words ‘fully licensed and insured’ were an oversight;
- (d)He was fully licenced and insured to undertake the minor works that he usually undertook for real estate agents.
- In cross-examination he acknowledged:
- (a)That he held a licence restricted to signs until 4 February 2013 and had not held a licence since that date;
- (b)That the reference to the QBSA 114 8993 was a reference to the approval cancelled on 4 February 2013;
- (c)That he was ‘licenced’ to undertake building work up to $3300 and this was the first occasion he had exceeded that limit.
- He also asserted in cross-examination that the reference to ‘fully insured’ referred to public liability insurance.
- While I accept on the balance that there was no intention on Ms Harris’ part to have the works approved it does not follow that they were as a consequence incapable of being approved or insured or that Ms Harris would accept defective or incomplete works.
- In Grevsmuhl, Member Kanowski found that the applicant in that case had no knowledge of the Statutory Insurance Scheme until well after the work had been completed and that no representation was made by the contractor in that case that would have caused a reasonable person to believe that the work was covered by such a scheme.
- That is not the case here.
- I find in this case that Ms Harris did have knowledge of the Statutory Insurance Scheme and that a representation contained in the quotation that the contractor was ‘fully licenced and insured’ can be reasonably interpreted as a representation that the works were covered by the Statutory Insurance Scheme.
- Only a ‘consumer’ has the benefit of s 68H(1)(b) and that term is defined in s 67WA of the QBCC Act as a person who contracts with a licensed contractor.
- Licenced contractor is defined in Schedule 2 as a person who holds a contractors licence. Part 2 of the Terms of Cover however, provides that ‘a licenced contractor includes a building contractor who at or before the time of the contract…is entered into makes a representation mentioned in s 68H(1)(b) of the Act’. On the basis of my findings above, Ms Harris is not precluded from relying on that section.
- For completeness, it is also my finding that Ms Harris has the benefit of s 68H(1)(c).
- The Commission’s written submissions in respect of this section suggests that the tribunal should apply the 2005 decision of McGill DCJ in Queensland Building Services Authority v Fox rather than following what has been considered to be the leading case, the 2003 decision in BM Farage Pty Ltd as trustee for Farage Discretionary Family Trust v Queensland Building Service Authority.
- A series of subsequent decisions on the point have failed to consider or apply Fox but rather have continued to consider and apply Farage.
- The tribunal’s decision in Farage, Cester and Stevens applied the test prescribed in Derry v Peek to the effect that fraud is proved where a false representation is proved to be made knowingly or without belief in its truth or recklessly without caring whether it be true or false. A false statement made carelessly and without reasonable ground for believing it to be true, if made in the honest belief that it is true is not fraudulent.
- McGill DCJ rejected such a construction:
I do not accept that construction of the subsection. In my opinion it is obvious that it was intended to apply in circumstances where a claim has been made to a consumer that the contractor had a licence when in fact he did not have a licence. There was I think no reason for the legislature to distinguish between a situation where the contractor was acting with deliberate dishonesty in the matter, and one where the contractor was operating under a misunderstanding of the position. That would be a strange distinction to adopt in consumer protection legislation. In my opinion these provisions are remedial legislation, and therefore in the event of ambiguity, should be given a wider rather than a narrower interpretation.
- His Honour also considered that the applicant’s due diligence enquiries or lack thereof is irrelevant:
It was submitted on behalf of the applicant that it was irrelevant whether the respondent had acted diligently in making enquiries as to the licence status of the contractor. I agree that that was irrelevant. So long as the requirements of paragraph (c) were satisfied, any absence of diligence on the part of the consumer is in my opinion irrelevant. If the contractor falsely claimed to be licensed in respect of the relevant work, the fact that the consumer might have been more diligent in investigating that claim, and that if that diligence had been applied would have determined that the contractor was not in fact licensed, would be irrelevant to the operation of the statutory provision.
- The attraction of both of those propositions is illustrated by the original decision. That decision found, in effect, that the contractor was fraudulently claiming to hold a licence of a builder restricted to special structures (shade sails and signs) which would not in any event entitle the contractor to enter into contracts for residential construction with cover by the Statutory Insurance Scheme. I cannot see how any consumer, without expert knowledge or assistance, could be expected to reach that conclusion.
- For the reasons articulated by McGill DCJ, I am of the view that the preferable interpretation of s 68H(1)(c) is that set out in Fox, however I do not believe that such interpretation would have produced different outcomes in Farage, Jorg, Cester or Stevens or produces one in this case.
- In both Farage and Cester the applicant sought to rely on the contractor’s silence as being a fraudulent representation. At the very least Fox requires ‘a claim’ that a licence was held. In Stevens and Grevsmuhl the tribunal accepted that a reference to a QBSA licence in an advertisement in the former case and in a quotation in the later by the contractor was sufficient to establish a fraudulent claim.
- I do not accept in this case that the inclusion of the QBSA number and the phrase ‘fully licenced and insured’ were inadvertent. Rather I find that their inclusion in the quotation was intentional and that Mr Kuczynski knew them to be false at the time because:
- (a)He acknowledged in cross-examination that his licence was specific to signs and had been cancelled for more than four years before the quotation was given;
- (b)He had been conducting minor building works for real estate agents in the intervening period believing he did not require a licence;
- (c)When confronted by Ms Harris in respect of the issue he responded by email:
Firstly to clear up registration and insurance questions, yes our QBCC registration has lapsed and it is due now for renewal and will be up and should be on the website once again by this week, early next week.
- (d)The assertion was repeated in subsequent invoices and on the WK Maintenance webpage;
- (e)Mr Thain, who recommended Mr Kuczynski to Ms Harris, provided a statement dated 9 May 2018 to the tribunal stating he was told by Mr Kuczynski that he was licensed with a ‘certification 4 in building and construction’. Mr Thain was not required for cross-examination.
- Accordingly, I am satisfied that Mr Kuczynski represented to Ms Harris that he was the holder of a licence pursuant to the QBCC Act and that the works would be insured under the Statutory Insurance Scheme prior to the contract being entered and that all relevant times he knew those representations to be false.
 Application to review a decision filed 15 February 2018.
 Tribunal Directions dated 24 October 2018, Direction 1.
 Queensland Building and Construction Commission Act 1991 (‘QBCC Act’), s 68H (1)(b).
 Queensland Building and Construction Commission Regulation 2003 (‘the Regulation’), sch 2C, s 7.
 QBCC Act, s 67WA, s 67WC, sch 2.
 Ibid, s 68H(1)(b)-(c).
 Ibid, s 68H(2).
 The Regulation, sch 2C, s 1(1), Part 3, Terms of cover.
 Ibid, sch 2C, s 1(1), Part 2, Terms of cover.
 The Regulation, s 7(1).
 Ibid, s 15.
 QBCC Act, s 86(1)(h).
 Ibid, s 87.
 QCAT Act, s 20.
 National Construction Code 2016, vol 2, cl 3.8.2.
 Affidavit of Julie Harris filed 1 August 2018, 7.
 Statement of Reasons filed 19 April 2018, 105.
 Ibid, 127.
 Ibid, 118, 123 - 124.
 Affidavit of Julie Harris filed 1 August 2018, 1; Statement of Reasons filed 19 April 2018, 96.
 Queensland Building Services Authority v Fox  QDC 129 (‘Fox’).
 Statement of Reasons filed 19 April 2018, 127 – 128.
 Affidavit of Waldermar Kuczynski filed 8 February 2019, .
 Ibid, .
 Ibid, .
  QDC 129.
  QCCTB 11, (‘Farage’).
 Jorg v Queensland Building and Construction Commission  QCAT 364; Cester v Queensland Building and Construction Commission  QCAT 87; Stevens v Queensland Building and Construction Commission  QCAT 331; Grevsmuhl v Queensland Building and Construction Commission (unreported) (14 November 2018).
 Fox, .
 Fox, .
 Affidavit of Julie Harris filed 1 August 2018.
- Published Case Name:
Julie Harris v Queensland Building and Construction Commission and Waldermar Lucjan Kuczynski
- Shortened Case Name:
Harris v Queensland Building and Construction Commission
 QCAT 155
08 May 2020