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Campbell v Queensland Building and Construction Commission[2022] QCAT 403

Campbell v Queensland Building and Construction Commission[2022] QCAT 403

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Campbell v Queensland Building and Construction Commission [2022] QCAT 403

PARTIES:

CATHLEEN MARY CAMPBELL

(applicant)

v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(respondent)

APPLICATION NO/S:

GAR273-20

MATTER TYPE:

General administrative review matters

DELIVERED ON:

6 December 2022

HEARING DATE:

21 September 2022

HEARD AT:

Brisbane

DECISION OF:

Member Lumb

ORDERS:

  1. The decision of the Respondent of 1 July 2020 to disallow the Applicant’s claim under the statutory insurance scheme lodged on 19 March 2020 is set aside and, in substitution, it is decided that the Applicant’s claim under the statutory insurance scheme lodged on 19 March 2020 is allowed.
  2. Within 14 days of the date of these orders, the parties shall file with the Tribunal, and serve on the other party, written submissions, no longer than 5 pages, on the question of costs of the Application to review a decision filed on 27 July 2020.
  3. Each party shall, within 14 days of the date of receipt of the other party’s submissions, file with the Tribunal, and serve on the other party, any written submissions in reply, no longer than 5 pages.
  4. Unless otherwise ordered by the Tribunal, the question of costs will be heard and determined on the papers, without an oral hearing.
  5. The Applicant’s application for a non-publication order is refused.

CATCHWORDS:

ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – general administrative review – applicant made claim under statutory insurance scheme in respect of incomplete work – Queensland Building and Construction Commission disallowed the claim – applicant applies to review decision – whether building contract ended within 2 years after the day the work started – when work physically started at site – whether applicant validly terminated contract – whether contractual right to terminate for delay in recommencing construction works – whether builder renounced contract by reason of defective work

Acts Interpretation Act 1954 (Qld), s 38

Queensland Building and Construction Commission Act 1991 (Qld), s 67WA, s 67WB, s 67X, s 67Y, s 71F, s 75, s 86, s 87, Part 5, Schedule 1B, s 4

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9, s 17, s 20, s 23, s 24, s 66

Queensland Building and Construction Commission Regulation 2003 (Qld), s 26B, s 26L, Schedule 2C, s 2, s 3, s 4, s 6, s 7

Australian Dream Homes Pty Ltd v Stojanovski [2016] VSCA 133

Campbell v Queensland Building and Construction Commission [2021] QCATA 34

Cherry v Steele-Park (2017) 96 NSWLR 548

Hometeam Constructions Pty Ltd v McCauley [2005] NSWCA 303

Koompahtoo Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115

Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359

Stojanovski v Australian Dream Homes [2015] VSC 404

Watego v State of Queensland and ors [2022] QCAT 341

APPEARANCES & REPRESENTATION:

 

Applicant:

Self-represented

Respondent:

Ms Coonan, Solicitor, of HWL Ebsworth Lawyers

REASONS FOR DECISION

Introduction

  1. [1]
    By an Application to review a decision filed on 27 July 2020 (the Review Application), the Applicant (Ms Campbell) applies to review a decision of the Respondent (QBCC) made on 1 July 2020 (the Original Decision) to disallow a claim[1] made by Ms Campbell under the statutory insurance scheme (the Scheme) established pursuant to the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act). Ms Campbell claimed assistance under the Scheme on the basis of incomplete work relating to a building contract (the Contract) for the construction of a new residential dwelling between Ms Campbell and the builder, Kingdom Builders Ministries Ltd (the Builder). The site of the dwelling was at Mons in the State of Queensland.
  2. [2]
    The Tribunal invited the QBCC to reconsider the Original Decision and the QBCC made a Reconsideration Decision on 5 November 2021. By that decision, the QBCC confirmed the Original Decision. By virtue of s 23(3) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act), the Review Application continues in relation to the Original Decision.
  3. [3]
    I find that the Original Decision is a ‘reviewable decision’ pursuant to s 86(1)(h) of the QBCC Act and that the Tribunal has jurisdiction to review the Original Decision pursuant to s 87 of the QBCC Act and ss 9(1), 9(2)(b) and 17 of the QCAT Act.

The review by the Tribunal

  1. [4]
    By s 20 of the QCAT Act, the purpose of the review is to produce the correct and preferable decision and the Tribunal must hear and decide the review by way of a fresh hearing on the merits.

Overview of the Scheme

  1. [5]
    The Scheme is governed by the QBCC Act and the Queensland Building and Construction Commission Regulation 2003 (Qld) (the Regulation).[2]
  2. [6]
    The Scheme is established under Part 5 of the QBCC Act.
  3. [7]
    The purpose of the Scheme is to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete.[3]
  4. [8]
    Section 67WB of the QBCC Act specifies work that is not eligible for assistance from the Scheme. That provision has no application in the present case.
  5. [9]
    The terms of cover under which a person is entitled to assistance under the Scheme are prescribed by regulation (being the Regulation).[4] The terms of cover for the Scheme (the Terms of Cover) are stated in Schedule 2C of the Regulation.[5]
  6. [10]
    The term relevant to this case is contained in Schedule 2C, s 6 of the Regulation which provides:

Application of division

This division applies to a consumer for residential construction work if—

  1. (a)
    the work is carried out under a fixed price residential contract; and
  1. (b)
    the contract ends within 2 years after the day work starts under the contract; and

Note—

See section 26L of the regulation for when residential construction work is taken to start.

  1. (c)
    the work is incomplete; and
  1. (d)
    for work for the common property for a community titles scheme if the work is, or is to be, carried out in or on a multiple dwelling in the scheme—at least half the residential units in the multiple dwelling are occupied when the contract is entered into and when it ends.

The issues for determination

  1. [11]
    There appears to be no dispute between the parties and, on the material, I find that:
    1. (a)
      Ms Campbell was a ‘consumer’ for ‘residential construction work’ as those terms are defined in s 67WA of the QBCC Act;
    2. (b)
      the work carried out under the Contract was carried out under a ‘fixed price residential contract’ as defined in s 3 of the Terms of Cover;
    3. (c)
      the work carried out under the Contract was ‘incomplete’ (see s 67WA of the QBCC Act and s 7 of the Terms of Cover);
    4. (d)
      the only contentious issue is whether the Contract ended within two years after the day work started under the Contract;[6]
    5. (e)
      this issue requires a determination of, first, the date on which work started under the Contract and, second, whether the Contract ended within two years after that date.

When did work start under the Contract?

  1. [12]
    Section 71F of the QBCC Act provides that a regulation may prescribe when residential construction work is taken to start for the purpose of Part 5 of that Act.
  2. [13]
    The Note to s 6(b) of the Regulation references s 26L of the Regulation for when residential construction work is taken to start.
  3. [14]
    Section 26L of the Regulation provides:
  1. (1)
    For section 71F of the Act, residential construction work is taken to start for the purposes of part 5 of the Act when—
  1. (a)
    if the work includes the erection or construction of a footing system or slab or the provision of sewerage or drainage on a site—the erection or construction of the footing system or slab, or the provision of sewerage or drainage, physically starts on the site; or
  1. (b)
    otherwise—work for the renovation, alteration, extension, improvement or repair of an existing building on a site physically starts on the site.
  1. (2)
    In this section—

physically starts, for residential construction work, does not include starting any of the following—

  1. (a)
    the preparation of plans or specifications for the performance of the work;
  1. (b)
    design work;
  1. (c)
    administration services;
  1. (d)
    earthmoving or excavating;
  1. (e)
    site work related to the residential construction work.
  1. [15]
    There is no dispute between the parties, and I find, that the work under the Contract included the erection or construction of a footing system. The issue is when the erection or construction of the footing system physically started on the site.
  2. [16]
    There is a definition of ‘physically starts’ in s 26L(2) and this definition operates in an exclusionary manner, that is, it specifies what work or services are not included within the scope of that definition.
  3. [17]
    The present case raises for consideration whether either of s 26L(2)(d) (earthmoving or excavating) or s 26L(2)(e) (site work related to the residential construction work) applies.
  4. [18]
    There is no definition of ‘earthmoving’ or ‘excavating’ (or any variation of those terms) or ‘site work’ in the Regulation (nor in the QBCC Act).
  5. [19]
    There are references to ‘site work’ in the QBCC Act, including in relation to work that is included as ‘domestic building work’[7] and the definition of ‘building work’.[8]
  6. [20]
    The QBCC submits that the ‘works’ should be taken to have started:
    1. (a)
      by no later than 2 January 2018 (by which time the Builder had undertaken substantial excavation works, all of which were necessary for the construction of the footing system of the dwelling);[9]
    2. (b)
      alternatively, on 6 January 2018 (having regard to the excavation of the footing system).[10]
  7. [21]
    Ms Campbell submits that the evidence demonstrates that nothing more than earthmoving, excavation or site work occurred on or before 6 January 2018 and that the work physically started after 6 January 2018.[11]
  8. [22]
    As to the evidence on this issue, Ms Campbell adduced oral evidence and tendered photographs of the site between 6 January 2018 and 12 January 2018. Ms Coonan, who appeared for the QBCC, informed the Tribunal at the hearing that Mr White (the Builder’s representative) could not recall when the footings commenced. The QBCC’s submissions on this issue were based on the evidence adduced by Ms Campbell.
  9. [23]
    Having regard to the evidence, I find that:
    1. (a)
      various photographs were taken by Ms Campbell on 6 January 2018 at and shortly after approximately 6.30 pm,[12] and the photographs depict excavated trenches;
    2. (b)
      having regard to the location of the trenches depicted and the evidence of Mr Welsh, I find that the trenches were dug in the location of the proposed footings for the dwelling to be constructed on the site;
    3. (c)
      it is not evident from any of the photographs that reinforcing had then been placed in any of the trenches;
    4. (d)
      excavation work had taken place at site by 2 January 2018
    5. (e)
      Mr Welsh (an employee of Rienmac Pty Ltd, the company then engaged by the Builder to certify the Works) attended site on 11 January 2018 in order to inspect the footing system and, at that time, reinforcing had been placed in the excavated trenches;
    6. (f)
      the pouring of the concrete for the footings must have taken place after the inspection by Mr Welsh;
    7. (g)
      the timber pegs shown in Exhibit 2(a) had been placed there by the surveyors for the purpose of marking out the site or at least the location of the proposed dwelling;
    8. (h)
      otherwise, in accordance with Ms Campbell’s evidence, the only work that had occurred out on site at the time of the inspection on 6 January 2018 was ‘excavation work’ (in my view, nothing turns on whether or not the work that was identified by Ms Campbell as ‘excavation work’ included some ‘earthmoving work’);
    9. (i)
      on the whole of the evidence, I find that the reinforcing was in situ as at 11 January 2018. There is no evidence to support a finding that it had been placed in the trenches prior to 11 January 2018. However, for completeness, having regard to the evidence of Ms Campbell, the fact that 7 January 2018 was a Sunday, the evidence of Mr Rienecker, engineer with Rienmac Pty Ltd, that he was usually given two days’ notice to carry out an inspection, sometimes more, sometimes less, and the evidence of Mr Welsh, it is unlikely that the reinforcing could have been placed in the trenches earlier than 8 January 2018.
  10. [24]
    Having regard to the evidence, for the following reasons, I find that neither the general excavation work (including any earthmoving) at the site nor the excavation of the trenches for the footing system constituted work by which the erection or construction of the footing system physically started on the site within the meaning of s 26L of the Regulation.
  11. [25]
    Section 26L necessarily draws a distinction between ‘earthmoving’ and ‘excavating’.
  12. [26]
    The Macquarie dictionary defines ‘earthmoving’ to mean:

Earthmoving adjective of or relating to machinery designed to move earth, as for a building site.

  1. [27]
    The Macquarie dictionary defines ‘excavate’ (including ‘excavating’) to mean:

Excavate verb (t) (excavated, excavating) 1. to make hollow by removing the inner part; make a hole or cavity in; form into a hollow, as by digging. 2. to make (a hole, tunnel, etc.) by removing material. 3. to dig or scoop out (earth, etc.). 4. to expose or lay bare by bigging; unearth: to excavate an ancient city. [Latin excavātus, past participle, hollowed out]

  1. [28]
    In my view, having regard to the dictionary definitions, I consider that in s 26L:
    1. (a)
      ‘earthmoving’ encompasses the moving of soil around the site, including shaping building pads, such as with the use of machinery such as graders, bobcats or the like;
    2. (b)
      ‘excavating’ encompasses digging below the surface of the site, such as with the use of an excavator or the like or physical labour.
  2. [29]
    In my view, the erection or construction of the footing system had not physically started on the site:
    1. (a)
      by 2 January 2018, because the general earthworks involved work of ‘excavating’ or both ‘excavating’ and ‘earthmoving’ withing the meaning of s 26L(2)(d); or
    2. (b)
      as at 6 January 2018, because the excavation of the trenches involved work of ‘excavating’ withing the meaning of s 26L(2)(d).
  3. [30]
    With respect to the trenches, the QBCC relies upon the evidence of Mr Welsh that the footing excavations were ‘integral’ to a footing system.[13] I accept that the excavated trenches formed a part of the footing system insofar as they were to accommodate the reinforcing and determine the depth and width of the poured footings. However, in my view, that is not the quotation posed by the definition of ‘physically starts’ in s 26L(2). The question is whether the work of excavating the trenches is ‘excavating’ for the purpose of s 26L(2)(d). I have found that it does constitute the work of ‘excavating’. I consider that this conclusion best achieves the purpose of the Scheme to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete, particularly given the strict two year limitation period provided in s 6 of the Regulation.[14] 
  4. [31]
    For completeness, I note Ms Campbell’s submission in respect of the meaning of ‘site work’ for the purposes of s 26L(2)(d):[15]

The installation of temporary support or ‘shoring’ to ensure the excavations did not collapse falls within the definition of ‘site work’. Whilst ‘site work’ is not the subject of express definition in the Act or the Regulation it is ordinarily considered to include at least:

a. soil testing;

b. works for site access;

c. surveying and set out;

d. connecting water, drainage and services,

e. preparing trenches for subfloors or holes for pilings or stumps – including     shoring,

f. construction of retaining structures, driveways, landscaping

g. work required to gain access or to remove impediments to a site.

(citations omitted)

  1. [32]
    In my view, the provisions of the QBCC Act[16] relied upon by Ms Campbell are of limited utility in determining the scope of the definition of ‘physically starts’ in s 26L(2) of the Regulation which is concerned with the type of work identified in s 26L(1) and, more broadly, with the operation of the Scheme.
  2. [33]
    In my view, the erection or construction of the footing system physically started on site when either the reinforcing was first laid in the trenches or when the concrete for the footings was subsequently poured into the trenches. I consider it unnecessary to decide between the two events given my finding that the reinforcing was laid on 11 January 2018 and that the only arguable date upon which the Contract could have ended was 7 January 2020. If the Contract ended on 7 January 2020, this must have occurred within the requisite two-year period[17] provided for by the Terms of Cover corresponding with s 6(b) of the Regulation.[18]
  3. [34]
    That leaves for determination the issue of whether the Contract ended on 7 January 2020.

Did the Contract end on 7 January 2020?

  1. [35]
    The term ‘ends’ in s 6(b) of the Terms of Cover is defined in s 2 of the Terms of Cover, for a ‘fixed price residential contract’, by reference to s 4 of the Terms of Cover.
  2. [36]
    There was no dispute by the parties, and I find, that the Contract was a ‘fixed price residential contract’ within the meaning of s 3 of the Terms of Cover.
  3. [37]
    Section 4 of the Terms of Cover provides for a number of ways in which a fixed price residential contract ends. The only one relevant to the present case is contained in s 4(1)(a), namely that ‘the contract is validly terminated on the default of the licensed contractor’ (there being no issue that the Builder was a licensed contractor).
  4. [38]
    Section 4(2) of the Terms of Cover provided:
  1. (2)
    In this section—

validly terminated, for a fixed price residential contract, does not include mutual abandonment of the contract by the parties to the contract.

  1. [39]
    Ms Campbell relies, in substance, on two bases upon which she maintains the Contract was validly terminated on 7 January 2020:
    1. (a)
      first, that it was validly terminated pursuant to the terms of the Contract by reason of a breach of the warranty to carry out the works with reasonable diligence or that the Builder was in ‘substantial breach’ of the Contract, by reason of its failure to recommence construction (that is, physical activities) at the site by 26 November 2019;
    2. (b)
      second, that the Contract was validly terminated as a consequence of the repudiation or renunciation of the Contract by the conduct of the Builder based on the nature and extent of alleged defective works (described as ‘grossly defective’)[19] at the date of the purported termination.
  2. [40]
    Before addressing each of those bases, it is necessary to consider the operation of the Deed and its relationship with the Contract.

Operation of the Deed

  1. [41]
    The Deed was dated ‘October 2019’ but there appears to be no dispute that it was executed on 20 November 2019.
  2. [42]
    The Deed contained, relevantly, the following terms:

RECITALS

A. On 1 January 2018, [the Builder] and Campbell entered into a contract in writing, being the Master Builders Queensland Residential Building Contract - Level 2 (‘the contract’) for the construction by [the Builder] of a new dwelling (‘the works’) at Lot 10, 20 Heritage Place, Mons, Queensland (‘the site’).

B. On 20 May 2019, Campbell commenced QCAT Case no. BDL135-19 against [the Builder] (‘the QCAT proceeding’).

C. On 21 June 2019, [the Builder] commenced a counter-claim against Campbell in the QCAT proceeding (‘the counter-claim’).

Campbell v Queensland Building and Construction Commission [2022] QCAT 403D. On 17 September 2019, the parties agreed to resolve the QCAT proceeding, the counter-claim and all claims, actions or demands existing between them in respect of the contract and the works, upon the terms contained in this Deed (‘the terms of settlement’).

E. Upon the terms of settlement being implemented, the parties intend that the construction of the works by [the Builder] pursuant to the contract (as varied by the terms of settlement) will proceed to practical completion.

OPERATIVE

  1. The parties have agreed to resolve the issues raised in the QCAT proceeding and the counter-claim and all claims, actions and demands in relation to the contract and the works existing between them as at 17 September 2019, by executing and implementing the terms of settlement.
  1. In full and final resolution of the claims made by [the Builder] and Campbell against the other in the QCAT proceeding and the counter-claim and all claims, actions and demands in respect of the contract and the works existing between [the Builder] and Campbell as at 17 September 2019, the parties agree that:-
  1. (a)
    Campbell will pay $52,495.02 (‘the outstanding variations claim’) to the Trust Account of [the Builder]’s solicitors, Garland Waddington (Commonwealth Bank, BSB 064 420, Account no. 0000 0478) forthwith and those monies will be dealt with as follows:-
  1. (i)
    $26,247.51 will be paid to [the Builder] immediately; and
  1. (ii)
    26,247.51 will be paid to [the Builder] at the time that it recommences the construction of the works on site pursuant to the contract;
  1. (b)
    Campbell will immediately provide the engineering drawings that she holds in respect of the retaining wall to [the Builder] and [the Builder] will review those drawings and provide Campbell with a cost estimate in respect of the construction of the retaining wall in accordance with those drawings and a variation in relation to that construction to account for the landscaped walls and stairs provisional sum;
  1. (c)
    …
  1. (d)
    with a view to calculating a final Contract Sum to complete the construction of the works pursuant to the contract, [the Builder] will:-
  1. (i)
    review the further anticipated variations and the remaining provisional sum items;
  1. (ii)
    review all provisional sums and apply the provisional sum amount in the contract ($101,695.00) to calculate the balance provisional sum allowance for the remaining provisional sum items (the glass pool fencing and the pool area concrete, the landscaped walls & stairs); and
  1. (iii)
    advise Campbell of the final Contract Sum (‘the final Contract Sum’) payable by Campbell as follows:-
  1. (A)
    $23,020.36 on 31 December 2019
  1. (B)
    $23,020.36 on 31 January 2020; and
  1. (C)
    the balance $23,020.36 (+/ any adjustments in accordance with the contract) upon practical completion of the works.
  1. (e)
    …
  1. (f)
    within 14 days of [the Builder] recommencing the construction of the works pursuant to the contract, Campbell will pay the final Contract Sum into a Bank account in the joint names of [the Builder] and Campbell with a financial institution selected by Campbell and approved by [the Builder] (‘the security holding account’) and the parties will operate the security holding account generally in accordance with Clauses 11.17-11.20 of the contract and clause 2(k) of this Deed;
  1. (g)
    [the Builder] will recommence the construction of the works pursuant to the contract by no later than 26 November 2019. The parties agree that the Date for Practical Completion pursuant to the contract is extended to 21 February 2020 and the liquidated damages provisions of the contract will remain unchanged;
  1. (h)
    [the Builder] will alter the construction of the front door (Door 1018 and in the Door Schedule in drawing no. 008.1) so that it swings in, at no additional cost to Campbell;

…

  1. The parties agree that:-
  1. (a)
    this Deed may be pleaded in bar to any action, suit or demand relating to the QCAT proceeding, the counter-claim and any claims, actions or demand in respect of the contract and the works existing at 17 September 2019; and
  1. (b)
    nothing in this Deed:-
  1. (i)
    bars Campbell from claiming against and/or pursuing [the Builder] in respect of any defective or incomplete building works in existence as at the date of practical completion; or
  1. (ii)
    relieves [the Builder] of its obligations under the contract or the statutory warranties provided in Schedule 1B of the Queensland Building and Construction Commission Act 1991.

…

  1. This Deed contains the entire agreement between the parties in respect of their resolution of the QCAT proceedings, the counter-claim or any claims, actions or demands in respect of the contract or the works existing at 17 September 2019. The parties agree that the terms of settlement and this Deed will prevail over any other document other than the contract as varied by the terms of settlement and supersede and exclude all prior and other discussions, dealings, representations (contractual or otherwise), arrangements or otherwise as between [the Builder] and Campbell.

…

  1. [43]
    In my view, on a proper construction of the Deed:
    1. (a)
      the parties resolved the issues raised by Ms Campbell in the identified QCAT proceeding and the Builder’s counterclaim filed in that proceeding including ‘all claims, actions or demands in relation to the contract and the works existing between them as at 17 September 2019’;[20]
    2. (b)
      the Deed effected a variation of the Contract which continued as varied by the terms of settlement contained in the Deed;[21]
    3. (c)
      for the purposes of the Deed, ‘the works’ were defined in Recital A as ‘the construction by [the Builder] of a new dwelling’.[22]

Contractual termination

Terms of the Contract

  1. [44]
    The Contract provided, relevantly:
    1. (a)
      by clause 1, definitions including the following:

Site means that part of the Land necessary to be occupied and used by the Contractor for the construction of the Works;

Substantial Breach means a party’s failure or refusal to perform a substantial obligation under this Contract (such as, for example, the Owner’s failure to make payment on time);

Works means the whole of the work to be carried out by the Contractor under this Contract, a description of which is contained in Item 5 of the Schedule, and includes variations to the Works.

  1. (b)
    by clause 10.1:

10. CONTRACTOR’S WARRANTIES

10.1 Warranties relating to the carrying out of the Works

The Contractor warrants that the Contractor will carry out the Works:

  1. (a)
    in an appropriate and skilful way;
  1. (b)
    with reasonable care and skill;
  1. (c)
    in accordance with the Plans and the Specifications;
  1. (d)
    with reasonable diligence; and
  1. (e)
    in accordance with all relevant laws and legal requirements, including, for example, the Building Act 1975.
  1. (c)
    by clause 11.6:

11.6 Contractor to make progress claims

The Contractor is entitled to claim payment of the Contract Price progressively, at the following times:

  1. (a)
    if Method A or Method B is stated in Item 21 of the Schedule, on completion of the Stages set out in the applicable Method in Part D of the Appendix, and for the following amounts:
    1. the amount stated for the relevant Stage in Part D of the Appendix;
    2. any unpaid adjustment to the Contract Price under this Contract; and
    3. any other amount due and payable by the Owner to the Contractor under this Contract or otherwise; or
  2. (b)
    if Method C is stated in Item 21 of the Schedule, on or after:
    1. the Day in each period statement in Method C in Part D of the Appendix; and
    2. the Date of Practical Completion,

and for the unpaid value of that part of the Works carried out up to, and including, that Day, any unpaid adjustment to the Contract Price under this Contract, and any other amount due and payable by the Owner to the Contractor under this Contract or otherwise.

  1. (d)
    by clause 11.7

11.7 Owner to make progress payments

If the Contractor gives the Owner a progress claim for a progress payment under Clause 11.6, the Owner must pay the Contractor the claimed progress payment within the period stated in Item 20 of the Schedule.

  1. (e)
    by clause 20:

20. OWNER’S RIGHT TO TERMINATE CONTRACT

20.1 Owner’s right to give notice of intention to terminate Contract

If the Contractor:

  1. (a)
    fails to proceed with the Works with due diligence or in a competent manner;
  1. (b)
    unlawfully suspends the carrying out of the Works;
  1. (c)
    refuses or persistently neglects to remove or remedy defective work or improper materials so that the progress of the Works is significantly, adversely affected;
  1. (d)
    is unable to complete the Works;
  1. (e)
    fails to effect or maintain any insurance policy required by this Contract; or
  1. (f)
    is otherwise in Substantial Breach of this Contract,

the Owner may give a written notice to the Contractor by hand, registered post or facsimile transmission:

  1. (g)
    describing each alleged Substantial Breach of this Contract by the Contractor; and
  1. (h)
    stating the Owner’s intention to terminate this Contract unless the Contractor remedies the alleged Substantial Breach or Breaches within ten (10) Business Days after receiving the Owner’s notice.

20.2 If Contractor fails to remedy Substantial Breach, Owner may terminate Contract

If the Contractor fails to remedy the Substantial Breach or Breaches set out in a notice given to it by the Owner in accordance with Clause 20.1 within the time stated in that notice, the Owner may, without prejudice to any rights or remedies, terminate this Contract by further written notice to the Contractor provided that such a notice of termination must not be given unreasonably or vexatiously and, if so given, then such purported notice of termination is void, and of no force and effect.

20.3 Owner may not terminate Contract in certain circumstances

The Owner may not terminate this Contract if the Owner is in Substantial Breach of this Contract.

20.4 Owner’s right to engage another contractor to complete the Works

If the Owner terminates this Contract in accordance with Clause 20.2, the Owner may engage another contractor to complete the Works.

  1. (f)
    by clause 21.1:

21.1 Contractor's right to give notice of intention to terminate Contract

If the Owner:

…

  1. (b)
    fails to comply with any of its obligations under Clause 11;

…

  1. (f)
    is otherwise in Substantial Breach of this Contract,

the Contractor may give a written notice to the Owner:

  1. (g)
    describing the relevant breach or breaches of this Contract by the Owner; and
  1. (h)
    stating the Contractor’s intention to terminate this Contract unless the Owner remedies the breach or breaches within ten (10) Business Days after receiving the Contractor’s notice.

The relevant correspondence

  1. [45]
    By a notice (the Notice to Remedy) sent by Ms Campbell’s solicitors to the Builder’s solicitors on 13 December 2019 (and also sent by email and personally delivered to the Builder’s business address and the Builder’s registered address), it was stated:

NOTICE OF INTENTION TO TERMINATE CONTRACT

Clause 20.1 of the Master Builders – Residential Building Contract – Level 2

TO: The Contractor, Kingdom Builders Ministries Ltd ACN 097 694 598

FROM: The Owner, Cathleen Campbell

This is a notice pursuant to clause 20.1 of the Contract.

The Owner hereby provides notice to the Contractor that the Contractor is in Substantial Breach of the Contract because the Contractor is in breach of clause 10.l(d) and/or 16.2 of the Contract.

Specifically, the Owner has the right to terminate the contract pursuant to clause 20.l as follows:

Owner’s Right to Terminate

  1. The Contractor unlawfully suspended works on 18 September 2018.
  1. The Owner commenced proceedings in the Queensland Civil and Administrative Tribunal.
  1. The Contractor counter-claimed against the Owner in those proceedings.
  1. The Contractor and Owner entered into a Deed of Settlement on 20 November 2019 to resolve that dispute.
  1. Pursuant to the Deed entered between the parties on 20 November 2019, the Contractor was to recommence the construction of the Works by no later than 26 November 2019.
  1. The Contractor has failed to recommence construction of the Works by 26 November 2019 or at all.
  1. Pursuant to clause 10.l(d) of the Contract the Contractor warranted that the Contractor would carry out the Works with reasonable diligence.
  1. By failing to recommence to commenced [sic] construction of the Works the Contractor has failed to carry out the Works with reasonable diligence and is otherwise is substantial breach of the Contract.
  1. Furthermore the Contractor has unlawfully suspended the carrying out of the Works otherwise than under clause 16 of the Contract.

In accordance with clause 20.1 of the Contract it is the Owner’s intention to terminate the Contract unless the Contractor remedies the abovementioned breaches within 10 business days.

In the event that the Contractor fails, refuses and/or neglects to remedy the breach and repudiatory conduct within the timeframe specified in this notice, the Owner intends to terminate the contract without prejudice to any other rights or remedies that are available to them.

  1. [46]
    By email sent by the Builder’s solicitors to Ms Campbell’s solicitors on 31 December 2019 (the 31 December email), it was stated:

Our client has been delayed in recommencing the works due to the refusal of your client’s nominated subcontractor (Qld Verti-Blocks) to send it an invoice for the deposit for that subcontractor’s work.

That delay has been resolved on the basis that that subcontractor will not now be completing the work; it will only be supplying the blocks, the work will be done by another subcontractor selected by our client.

On that basis, our client anticipates commencing work on site on 6 January 2020. The date for practical completion will be extended accordingly.

In relation to the establishment of the security account, we will seek out client’s instructions in relation to financial institution selected by your client.

  1. [47]
    By email sent by Ms Campbell’s solicitors to the Builder’s solicitors on 6 January 2020, it was stated:

We refer to your correspondence dated 31 December 2019.

Your correspondence outlines that your client has allegedly suffered a delay in recommencing works as a result of a subcontractor not issuing an invoice. This is a matter for your client.

Pursuant to the Deed of Settlement dated 20 November 2019 (the Deed), your client was to recommence construction of the works by no later than 26 November 2019. It has taken your client five (5) weeks since the date works were to recommence to outline a proposed solution to the alleged delay.

Pursuant to the residential building contract, your client is required to issue a written claim for an extension of time within ten (10) Business Days of becoming, or ought reasonably to have become, aware of the cause and extent of the delay. We await receipt of the claim, which we suspect is out of time.

Your letter outlines that your “client anticipates commencing work on site on 6 January 2020.” We have not received any evidence that your client has recommenced works today, approximately six (6) weeks after the recommencement date provided for in the Deed. Such ongoing delays are unreasonable. Your client is not carrying out the works diligently.

We put you on notice that your client has failed to remedy the breach outlined in our client’s Notice of Intention to Terminate Contract served on 13 December 2019 (Notice of Intention to Terminate)

If your client does not provide evidence that works have recommenced by 1:00pm on Tuesday, 7 January 2020, our client reserves the right to terminate the contract. Our client has provided the above strict timeframe:

  1. in light of your client’s extended delay in recommencing works; and
  1. to ensure our client’s right in respect of making a claim under the home warranty insurance policy is preserved.

In the circumstances, we are of the view that providing your client with such additional notice (as outlined in this correspondence) is more than reasonable.

  1. [48]
    On 7 January 2020, Ms Campbell’s solicitors sent to the Builder’s solicitors (and also sent by email and personally delivered to the Builder’s address) a notice to terminate the Contract (the Notice to Terminate) in the following terms:

NOTICE TO TERMINATE CONTRACT

Clause 20.2 of the Master Builders – Residential Building Contract – Level 2

TO: The Contractor, Kingdome Builders Ministries Ltd ACN 097 694 598

FROM: The Owner, Cathleen Campbell

This is a notice pursuant to clause 20.2 of the Contract.

The Owner gave the Contractor a Notice of Intention to Terminate on 13 December 2019.

The Notice of Intention to Terminate:

  1. described each alleged Substantial Breach of the Contract by the Contractor; and
  1. stated that it was the Owner’s intention to terminate the Contract unless the Contractor remedies the alleged Substantial Breaches within ten (10) Business Days after receiving the Owner’s Notice of Intention to Terminate.

The Contractor was required to remedy the Substantial Breaches set out in the Notice of Intention to Terminate by 31 December 2019.

The Contractor failed to remedy the Substantial Breaches set out in the Notice of Intention to Terminate by 31 December 2019, or at all.

Pursuant to clause 20.2, the Owner hereby provides written notice to the Contractor that the Owner terminates the Contract due to the Contractor’s failure to remedy the Substantial Breaches set out in the Owner’s Notice of Intention to Terminate.

What did clause 2(g) of the Deed require of the Builder?

  1. [49]
    An important issue in this matter is whether the Builder was in breach of the Contract as at the date of the Notice to Remedy (and, if so, whether that breach was remedied).
  2. [50]
    Clause 2(g) provided that the Builder would recommence the construction of the works pursuant to the Contract by no later than 26 November 2019. Ms Campbell emphasises the word ‘construction’ in the phrase ‘recommence the construction of the works pursuant to the contract’.[23]  The QBCC refers to the definition of ‘Works’ as contained in the Contract and submits that on the proper construction of clause 2(g) there was no requirement for the Builder to recommence the physical aspects of the Works by 26 November 2019 but, rather, the Builder was required to recommence ‘the whole of the work to be carried out’ which extended to both physical and ‘non-physical’ aspects of the works by the specified date.[24]
  3. [51]
    In my view, clause 2(g), on its proper construction, required that the Builder recommence physical construction (that is, the physical aspects of construction) of ‘the works’ (as defined in the Deed) by no later than 26 November 2019.
  4. [52]
    First, as noted above, the reference to ‘the works’ in clause 2(g) is a reference to the defined term in Recital A, namely, the construction by the Builder of a new dwelling. As emphasized by Ms Campbell, the clause refers to the recommencement of the ‘construction’ of the works pursuant to the Contract. There may be greater force in the submission of the QBCC if the clause referred to ‘recommencing the Works pursuant to the contract’. In my view, the adoption of the word ‘construction’ indicates an intention that the physical construction of the dwelling recommence.
  5. [53]
    Second, the phrase ‘recommence the construction of the works pursuant to the contract’ also appears in clause 2(f) and provides the trigger for payment, within 14 days, of ‘the final Contract Sum’ into a joint bank account. When viewed objectively, I consider it unlikely that the parties intended that this trigger event would include the commencement of ‘non-physical’ aspects of the works such as the making of arrangements with subcontractors.
  6. [54]
    Third, in circumstances where there had been a dispute between Ms Campbell and the Builder in the Tribunal since 20 May 2019,[25] that the parties had agreed to resolve the dispute on 17 September 2019,[26] and that the revised date for practical completion was 21 February 2020,[27] I conclude that, as a matter of construction, it was intended that the practical completion of the works would be facilitated by the recommencement of the physical aspects of the works, that is, the physical construction, by no later than 26 November 2019. In this regard, I reject the argument of the QBCC that the short period of time between execution of the Deed and the date for recommencement provides support for a construction that clause 2(g) contemplates non-physical as well as physical aspects of the works. The Deed indicates that agreement had been reached between the parties on 17 September 2019. Further, it is plain on the face of the Deed that the recommencement of the physical aspects of the works would have been a simple matter. The Builder could have recommenced the construction of the works by altering the construction of the front door so that it swung in, as required by clause 2(h) of the Deed.
  7. [55]
    The effect of the QBCC’s argument is that the Builder would be taken to have recommenced the ‘construction’ of the works at the time when, for example, the Builder first made arrangements with a subcontractor for work to be done (regardless of when (or if) that subcontractor physically performed the work). In my view, this would not be an interpretation of the Deed that would be understood by a reasonable person in the position of the parties.
  8. [56]
    In summary, I conclude that the phrase ‘the construction of the works’ within the phrase ‘recommence the construction of the works pursuant to the contract’ meant the physical construction (or, in other words, the physical aspects of the construction) of the ‘new dwelling’[28]. That is the ‘imputed intention’ of the parties.[29]
  9. [57]
    The QBCC also made submissions in relation to the inadmissibility of extrinsic circumstances sought to be relied upon by Ms Campbell.[30] As it transpired, the material surrounding circumstances are recorded in the Deed itself (see Recitals B, C and D). For completeness, I note the discussion of the current state of the law in this context by Leeming JA in Cherry v Steele-Park.[31]

Did the Builder breach clause 2(g)?

  1. [58]
    I accept that on and from 26 November 2019 the Builder communicated with various subcontractors with a view to arranging for them to carry out work at site (referred to by the QBCC as the ‘non-physical’ aspects of the works).[32] However, I find that this did not constitute physical construction of the works or ‘physical aspects’ of the works, and I did not understand the QBCC to submit otherwise.
  2. [59]
    The evidence of Ms Campbell was that the Builder had not commenced any physical construction at site at any time up to and including the purported termination. There is no evidence that that the Builder recommenced the physical construction of the works at any time between the date of execution of the Deed and the purported termination of the Contract on 7 January 2020.
  3. [60]
    I have noted that the Builder could have carried out the alteration of the front door. Other work that remained to be carried out included (but was not limited to) that work which was the subject of the correspondence evidenced in Annexure “SOR-4”.
  4. [61]
    At paragraph 4.20 of the Statement of Reasons for the Decision, the QBCC refers to its understanding that the parties had intended for the retaining wall to be completed prior to the completion of the upper area between the dwelling and the pool and that the QBCC considered that this was likely why the Builder had chosen to focus on that portion of the Works. In correspondence from Ms Campbell’s solicitors to the Builder’s solicitors dated 6 December 2019 (Annexure “SOR-5”) reference is made to a previous email from the Builder’s solicitors dated 11 October 2019 stating that the retaining wall ‘must happen first’. Ms Campbell’s solicitors required the Builder to provide evidence that construction of the retaining wall had commenced in evidence of the date recommencement of the works occurred. This was in the context of the obligation to pay the final Contract Sum referred to earlier in that letter. I find that there is no basis to assert that Ms Campbell ever accepted that the retaining wall was to be constructed before other work. There is no basis for a finding that anything said in the correspondence impacted the Builder’s obligation under clause 2(g). On any view, the Builder could not have been under any misapprehension as to what it was required to do following the (subsequent) receipt of the Notice to Remedy.
  5. [62]
    I find that the Builder was in breach of clause 2(g) as at the date of issue of the Notice to Remedy and, further, did not remedy that breach during the period allowed by the Notice to Remedy (which I calculate to have expired on 3 January 2020) nor did it recommence physical construction of the works by the time the Notice to Terminate was given.

Sufficient identification of breach?

  1. [63]
    By the terms of the Notice to Remedy, in particular paragraphs 5, 6, 7 and 8 and the second last paragraph, I consider that Ms Campbell described the alleged breach and stated her intention to terminate the Contract unless the Builder remedied same within 10 business days, as required by 20.1 of the Contract. I consider that the breach was properly described in the Notice to Remedy.
  2. [64]
    For completeness, I find that there can be no doubt that the Builder understood what was required of it by the Notice to Remedy having regard to the 31 December email in which reference was made, by the Builder’s solicitors, to the Builder having been ‘delayed in recommencing the works’ and that ‘our client anticipates commencing work on site on 6 January 2020’.
  3. [65]
    The next issue is whether the breach of clause 2(g), and the Builder’s failure to remedy same, was a breach contemplated by clause 20.1 of the Contract.

Was the breach one contemplated by clause 20.1?

  1. [66]
    In the Notice to Remedy, Ms Campbell asserted that the failure to recommence ‘the Works’ constituted a failure to carry out the Works with reasonable diligence (in breach of clause 10.1(d)) or was otherwise a ‘substantial breach’ of the Contract.
  2. [67]
    It is convenient to deal first with the issue of whether the failure to recommence the construction of the works was a ‘Substantial Breach’ within the meaning of the Contract.
  3. [68]
    The phrase ‘Substantial Breach’ was defined (in clause 1) to mean ‘a party’s failure or refusal to perform a substantial obligation under this Contract (such as, for example, the Owner’s failure to make payment on time)’.
  4. [69]
    Neither the phrase ‘substantial obligation’ nor the term ‘substantial’ is defined in the Contract.
  5. [70]
    In Stojanovski v Australian Dream Homes,[33] John Dixon J considered the meaning of ‘substantial breach’ in the context of a provision of a building contract which has some similarity to clause 20.1 of the Contract. However, there was no definition of ‘substantial breach’ in the Contract in question. His Honour addressed the meaning of the term ‘substantial’ and observed that the word ‘substantial’ is ‘protean’.[34]
  6. [71]
    There are, in my view, some features of the Contract (as varied by the Deed) which are material to the question of construction in the present case.[35] First, as noted above, the definition of ‘Substantial Breach’ must be read in conjunction with the Deed which comprised a compromise agreement between the parties, and the clause in question (clause 2(g)) was incorporated into the Contract by the Deed. Second, the definition of ‘Substantial Breach’ requires the determination of whether the term allegedly breached is a ‘substantial obligation’ and, if found to be a substantial obligation, a breach of same (described as a ‘failure or refusal to perform’) amounts to a ‘Substantial Breach’. That is, I consider that the issue turns on the characterisation of the obligation as being either ‘substantial’ or not substantial, rather than requiring an assessment of whether the breach of a particular term ought be characterised as ‘substantial’ in the circumstances. Third, the example in the definition provides some guidance in determining what amounts to a substantial obligation. The example stated is a failure by the ‘Owner’ to make payment ‘on time’. Such an obligation would include the obligation to pay a progress claim within the period stated in the Contract (see clauses 11.6 and 11.7). Consequently, a failure to make timely payment of a progress claim would constitute a breach of a substantial obligation under the Contract and, therefore, amount to a ‘Substantial Breach’.
  7. [72]
    Reading the Contract as a whole (as varied by the Deed) and having regard to, in particular, the matters discussed at paragraphs [53], [54] and [71] above, I am of the view that:
    1. (a)
      the obligation to recommence the construction of the works by the date specified in clause 2(g) of the Deed (or ‘on time’ to adopt the language of the definition) was a ‘substantial obligation’; and
    2. (b)
      the Builder’s failure to recommence the construction of the works by the specified date, which failure continued as at the date of the Notice to Remedy, constituted a ‘Substantial Breach’ within the meaning of the Contract.
  8. [73]
    In light of the above matters, I find that the Builder did not remedy the Substantial Breach within the time required by the Notice to Remedy (or prior to the Notice of Termination) and that Ms Campbell validly terminated the Contract on the default of the Builder. It follows that the requirements of s 6 of the Terms of Cover were satisfied and that Ms Campbell’s claim under the Scheme should be allowed.
  9. [74]
    While this makes it unnecessary to consider the other purported grounds of termination, I will address those grounds.

Failure to proceed with due diligence?

  1. [75]
    Clause 20.1 also permitted Ms Campbell to give a written notice if the Builder failed to ‘proceed with the Works with due diligence …’.
  2. [76]
    Anomalously, the Contract did not contain an express obligation that the Builder proceed with the Works with ‘due diligence’. However, clause 10.1(d) provided that the Builder warranted that it would ‘carry out’ the Works with ‘reasonable diligence’. No corresponding language is adopted in clause 20.1. I cannot identify the rationale for the difference in language. However, I am unable to discern any material distinction between the carrying out of the Works with reasonable diligence on the one hand and proceeding with the Works with due diligence on the other.
  3. [77]
    In Hometeam Constructions Pty Ltd v McCauley,[36] the New South Wales Court of Appeal considered the meaning of the phrase ‘due diligence’ in the context of building contracts and said the following:
  1. (a)
    defining the nature of the obligation to perform work with ‘diligence’ has proven ‘elusive’;[37]
  1. (b)
    whether delay is of itself sufficient to raise an inference of lack of due diligence must depend on the circumstances;[38]
  1. (c)
    you cannot have diligence in the abstract; it must be related to the objective;[39]
  1. (d)
    one of the ways in which the homeowner could have proven a lack of due diligence would have been by establishing ‘a failure to carry out a reasonable amount of work by a given time; that that period of time be measured by reference to all the work to be performed under the Contract or, in absolute terms, by reference to a lack of activity on site over a significant period that could not be satisfactorily explained’;[40]
  1. (e)
    if the facts established are capable of giving rise to an inference of lack of due diligence, the builder may discharge any evidentiary onus that may pass to it, by explaining why the work progressed at that rate.
  1. [78]
    The initial question for determining whether the Builder failed to proceed with due diligence is whether the breach of the express (substantial) obligation to recommence the construction of the works by 26 November 2019 also constituted, of itself, a failure to proceed with due diligence. In my view, whilst that obligation is a relevant consideration in assessing whether there was a failure to proceed with due diligence, I consider that the obligation to proceed with due diligence requires that a holistic assessment be made of the progress of the works and that the breach of clause 2(g) does not of itself establish a failure to proceed with due diligence.
  2. [79]
    While I consider that there is a sound argument that, as at 7 January 2020, the Builder had failed to proceed with due diligence, in the context of a contractual right to terminate, it is necessary that the failure to proceed with due diligence exist as at the date of the Notice to Remedy. Although I am satisfied that the Builder was in substantial breach of the Contract at that time because of its failure to comply with the express obligation in clause 2(g) of the Deed, I am not satisfied that Ms Campbell has established a failure to proceed with due diligence (within the meaning of clause 20.1) as at 13 December 2019. At that date, the Builder had almost 10 weeks to achieve practical completion and the Builder had commenced contacting subcontractors to carry out work at site. At that stage I do not consider the point had been reached where the Builder had failed to proceed with due diligence.
  3. [80]
    The alternative basis upon which Ms Campbell seeks to establish that she validly terminated the Contract is on the ground of repudiation (‘renunciation’).

Termination for renunciation?

  1. [81]
    The legal principles for termination of a contract for breach were discussed by the High Court in Koompahtoo Aboriginal Land Council v Sanpine Pty Ltd.[41] It was said by the plurality:[42]

... The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it (In this case, we are not concerned with the issues that arise where the alleged repudiation takes the form of asserting an erroneous interpretation of the contract. Nor are we concerned with questions of inability as distinct from unwillingness.) Secondly, it may refer to any breach of contract which justifies termination by the other party. It will be necessary to return to the matter of classifying such breaches. Campbell J said this was the sense in which he would use the word “repudiation” in his reasons. There may be cases where a failure to perform, even if not a breach of an essential term (as to which more will be said), manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements. This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.

(citations omitted)

  1. [82]
    I consider that, with respect to any defective work existing as at 17 September 2019, there is a constructional question of whether the Deed had the effect of discharging the Builder from any liability for such defective work save as expressly provided for in the Deed (as submitted by the QBCC)[43] or whether the Deed operated to preclude Ms Campbell from pursuing any outstanding defective work until the date of practical completion. Reading the Deed as a whole, including, in particular, clauses 1, 5 and 7, I consider that the latter construction is to be preferred. Pursuant to clause 5(b)(i), the parties agreed that nothing in the Deed barred Ms Campbell from claiming against or pursuing the Builder in respect of any defective or incomplete building works in existence as at the date of practical completion. I consider that this provision applied to any defective works in existence as at the date of practical completion regardless of whether or not they existed as at 17 September 2019. I consider that it could be an uncommercial construction of the Deed that, at completion, Ms Campbell could be left with a residential home containing defective work.[44] 
  2. [83]
    However, I also consider that the effect of clauses 1, 5 and 7 of the Deed was to preclude Ms Campbell from claiming against, or pursuing, the Builder in respect of any defective or incomplete works prior to the date of practical completion (being 21 February 2020 as provided for in clause 1(g) of the Deed). In my view, in resolving the existing disputes, the parties agreed that the Builder would recommence construction of the works by 26 November 2019 and would be given until 21 February 2020 to complete the dwelling, including rectifying any defective work.
  3. [84]
    With respect to the defective work, the evidence included an expert report from Mr Martin Helisma dated 24 February 2020 (the report). The report was based on three inspections carried out by Mr Helisma on 21 November 2019, 22 January 2020 and 12 February 2020. I note that the first inspection occurred prior to the date that the Builder was obliged to recommence the construction of the works.
  4. [85]
    I accept that each of the defects (and the nature of the defects) identified by Mr Helisma existed as at 7 January 2020.
  5. [86]
    With respect to Item 10 of the defects (being ‘Timber Framing Defects and Departures from the Approved Design’), Mr Helisma stated that ‘the departures from the engineer design are yet to be assessed to determine if the work is competent and satisfies the requirements of the NCC BCA 2016 and the referenced standard AS1684’. Mr Helisma also noted that any further assessment may require invasive investigation to allow certification to be obtained. A subsequent inspection was undertaken by Mr Welsh (in company with Mr England, a building certifier) which inspection required removal of a portion of the plasterboard ceiling. It was determined by Mr Reinecker that the joist connection was still insufficient and further modification would be required to allow the frame stage of the building to be considered satisfactory, and that until such additional work had been carried out a Form 16 for the frame stage could not be issued.
  6. [87]
    If the operative date for determining whether there was renunciation on the part of the Builder by reason of the defects was the date for practical completion, I would have been satisfied that the nature and extent of the defects exhibited conduct which would have conveyed to a reasonable person, in the situation of Ms Campbell, renunciation the contract as a whole. However, the issue of renunciation is to be determined as at 7 January 2020 (being the date the Notice to Terminate was given). 
  7. [88]
    Although the ground of contention is plainly arguable given the nature and extent of the defects, I am not satisfied that the existence of those defects, as at 7 January 2020, amounted to a renunciation of the Contract. First, as noted above, the parties had resolved their dispute on the basis that the Builder would have until 21 February 2020 to bring the works to a state of practical completion. Second, as at 7 January 2020, there was still a period of slightly in excess of six weeks until the date of practical completion and arrangements for subcontractors to perform work at site had been made. Third, with respect to the framing issue, Mr England gave evidence that the extent of the works required to enable a Form 16 to be provided was a matter for an engineer. As the QBCC submits, it was a requirement that the Builder provide a Form 16 in order to achieve practical completion. In my view, as at 7 January 2020 it cannot be concluded that the Builder could not have provided a Form 16 by the date of practical completion. To find otherwise would require speculation, particularly in the absence of expert evidence that it could not have been obtained by then.
  8. [89]
    For completeness, I reject the QBCC’s submission that regard can be had to the Builder’s conduct subsequent to the purported termination to assess whether the Builder had renounced the Contract as at 7 January 2020.[45]  In my view, an assessment of the issue of renunciation turns on the Builder’s conduct up to and including 7 January 2020.
  9. [90]
    I also note that Ms Campbell relies, in part, on alleged repudiatory conduct occurring after the Deed.[46]  Given that no physical construction work was performed between the execution of the Deed and the date of the Notice to Terminate, the submission must relate to work performed after 7 January 2020 (pursuant to a direction to rectify by the QBCC). Whilst the well-known principle espoused in Shepherd v Felt & Textiles of Australia Ltd[47] permits a party to justify the termination of the contract based on conduct of which it was not aware at the time of termination, that it is a different matter from seeking to rely upon subsequent conduct to justify a prior termination. In my view, it is not permissible for Ms Campbell to rely upon any conduct occurring after 7 January 2020 in order to justify the purported termination. 
  10. [91]
    In my view, the Builder’s conduct did not amount to renunciation of the Contract as at 7 January 2020.

Summary of findings

  1. [92]
    In summary, I find that:
    1. (a)
      the residential construction work under the Contract is taken to have started no earlier than 11 January 2018;
    2. (b)
      on the proper construction of the Deed, the Builder was required (by clause 2(g)) to recommence the physical construction of the ‘works’ (as defined in the Deed) by 26 November 2019;
    3. (c)
      the obligation under clause 2(g) was a substantial obligation within the meaning of the definition of ‘Substantial Breach’ in the Contract;
    4. (d)
      the Builder failed to recommence the physical construction of the works by:
      1. 26 November 2019 (being the latest date required by clause 2(g) of the Deed); or
      2. 13 December 2019 (being the date of the Notice to Remedy);
    5. (e)
      as at 13 December 2019 the Builder was in ‘Substantial Breach’ of the Contract for the purposes of clause 20.1;
    6. (f)
      the breach was properly described in the Notice to Remedy;
    7. (g)
      the Notice to Remedy required the breach to be remedied by 3 January 2020;[48]
    8. (h)
      the Builder did not remedy the breach by 3 January 2020 (or by the time the Notice to Terminate was given);
    9. (i)
      Ms Campbell validly terminated the Contract on the default of the Builder on 7 January 2020;
    10. (j)
      although it does not affect the outcome of this matter:
      1. by 13 December 2019 the Builder had not failed to proceed with due diligence as provided for by clause 20.1(a) of the Contract;
      2. the conduct of the Builder, insofar as the existing defective work was concerned, did not amount to renunciation of the Contract as at 7 January 2020.
  2. [93]
    I find that, for the purposes of s 6(b) of the Terms of Cover, the Contract ended within 2 years after the day work started under the Contract (and that ss 6(a) and 6(c) were also satisfied).
  3. [94]
    For the above reasons, I conclude that the correct and preferable decision is that the decision of the QBCC of 1 July 2020 to disallow Ms Campbell’s claim under the Scheme which was lodged on 19 March 2020, should be set aside and, in substitution, it be decided that Ms Campbell’s claim under the Scheme lodged on 19 March 2020 be allowed.

Non-publication order

  1. [95]
    By an Application for miscellaneous matters filed on 16 September 2022, Ms Campbell sought, relevantly, a non-publication order in respect of the reasons for decision.
  2. [96]
    The Tribunal may make a non-publication order pursuant to s 66 of the QCAT Act. That provision provides:
    1. (1)
      The tribunal may make an order prohibiting the publication of the following other than in the way and to the persons stated in the order –
      1. the contents of a document or other thing produced to the tribunal;
      2. evidence given before the tribunal;
      3. information that may enable a person who has appeared before the tribunal, or is affected by a proceedings to be identified.
    2. (2)
      The tribunal may make an order under subsection (1) only if the tribunal considers the order is necessary –
      1. to avoid interfering with the proper administration of justice; or
      2. to avoid endangering the physical or mental health or safety of a person; or
      3. to avoid offending public decency or morality; or
      4. to avoid the publication of confidential information or information whose publication would be contrary to the public interest; or
      5. for any other reason in the interest of justice.
    3. (3)
      The tribunal may act under subsection (1) on the application of a party to the proceeding or on its own initiative.
    4. (4)
      The tribunal’s power to act under subsection (1) is exercisable only by –
      1. the tribunal as constituted for the proceeding; or
      2. if the tribunal has not been constituted for the proceeding – a legally qualified member or an adjudicator.
  3. [97]
    In Watego v State of Queensland and ors,[49] Member Gordon said the following in relation to non-publication orders under s 66 (in the context of a decision in respect of a complaint under the Anti-Discrimination Act 1991 (Qld)):[50]

In this complaint, deciding whether or not to make a non-publication order under section 66 of the QCAT Act, or under section 191 of the ADA, requires balancing the competing human rights of a fair hearing which normally requires a public hearing and publicly available judgments, and the importance of open justice, with (in this case) the right not to have privacy unlawfully or arbitrarily interfered with, and a right not to have reputation unlawfully attacked. Subject to those considerations, section 66 enables the tribunal to make a non‑publication order in the interests of justice, and section 191 of the ADA allows the tribunal to preserve the anonymity of a person if it is necessary to protect (amongst other things) the privacy or any human right of the person.

(citations omitted)

  1. [98]
    In my view, none of the subsections 66(2)(a) to (d) has application in the present case.
  2. [99]
    With respect to s 66(2)(e) of the QCAT Act, Ms Campbell contends that the Builder made many ‘claims’ about her which she asserts were false and misleading and it is implicit in her reasons for the application that she is concerned that this would impact the respect in which she is held in her local community and her local church. Ms Campbell does not identify the specific claims which she is concerned about. In any event, I consider that there is nothing in these Reasons which would justify the making of a non-publication order. I also observe that, ordinarily, the making of contradictory statements by the other side (without more) would not of itself demonstrate that it was in the interests of justice to make a non-publication order. As noted by Member Gordon, the importance of open justice and publicly available judgments are material factors to weigh against any competing factors which may call for a particular non-publication order. In the present case, I am of the view that it is not in the interests of justice to make a non-publication order as sought by Ms Campbell and the application is refused.

Orders

  1. [100]
    In accordance with the above reasons, the formal orders, pursuant to s 24(1) of the QCAT Act, are:
  1. the decision of the Respondent of 1 July 2020 to disallow the Applicant’s claim under the statutory insurance scheme lodged on 19 March 2020 is set aside and, in substitution, it is decided that the Applicant’s claim under the statutory insurance scheme lodged on 19 March 2020 is allowed;
  2. within 14 days of the date of these orders, the parties shall file with the Tribunal, and serve on the other party, written submissions, no longer than 5 pages, on the question of costs of the Application to review a decision filed on 27 July 2020;
  3. each party shall, within 14 days of the date of receipt of the other party’s submissions, file with the Tribunal, and serve on the other party, any written submissions in reply, no longer than 5 pages;
  4. unless otherwise ordered by the Tribunal, the question of costs will be heard and determined on the papers, without an oral hearing;
  5. the Applicant’s application for a non-publication order is refused.

Footnotes

[1]The claim was made by a ‘Non-completion Claim Form’ lodged on 19 March 2020.

[2]I accept the submissions of the QBCC that the applicable reprint of the Regulation is the one current as at 1 November 2017, being the one in force at the date the insurance policy was entered into in respect of the works carried out by the Builder.

[3]QBCC Act, s 67X(2).

[4]QBCC Act, s 67Y.

[5]See s 26B(1) and s 26B(3) of the Regulation.

[6]See s 6(b) of the Terms of Cover.

[7]QBCC Act, s 4(7)(a), s 4(9)(c).

[8]See paragraph (e) of the definition.

[9]Respondent’s Closing Submissions, paragraph 4.11.

[10]Respondent’s Closing Submissions, paragraphs 4.14-4.19.

[11]Submissions in Reply, paragraphs 2.11-2.12.

[12]Exhibit 2.

[13]I understood Mr Welsh’s evidence to be to the effect that the excavation was an ‘essential’ part of the footing system but, in my view, nothing turns on which term was used.

[14]Cf Riley v Queensland Building and Construction Commission [2019] QCAT 21, [15]. That case is distinguishable from the present case in that it involved a renovation rather than a new build, a matter which Member Hughes considered to be material: see [16].

[15]Submissions in Reply, paragraph 2.8 (and footnotes 2, 3 and 4). Ms Campbell referred to the following provisions of the QBCC Act: definition of building work; s 75(e), and Schedule 1B, s 4(9)(c).

[16]See also Multiplex Constructions Pty Ltd v Rapid Contracting Pty Ltd (in liq) & Anor [1999] QCA 306, [6]-[9] where the phrase ‘site work’ in the QBCC’s predecessor legislation was given an expansive operation.

[17]Calculated in accordance with s 38 of the Acts Interpretation Act 1954 (Qld).

[18]Cf Respondent’s Closing Submissions, paragraphs 4.21-4.22.

[19]Submissions in Reply, paragraph 3.1.

[20]Deed, Recitals B, C and D, and clause 1.

[21]Deed, Recital E and clause 7.

[22]In my view, this definition supersedes the definition of ‘Works’ contained in the Contract: cf the Respondent’s Closing Submissions, paragraphs 4.28 and 4.29.

[23]Submissions in Reply, paragraphs 3.5-3.7.

[24]Respondent’s Closing Submissions, paragraph 4.29.

[25]Deed, Recital B.

[26]Deed, Recital D.

[27]Deed, clause 2(F).

[28]See Item 5 of the Schedule to the Contract and Recital A of the Deed.

[29](2017) 96 NSWLR 548, [46], Gleeson JA agreeing, [1].

[30]Respondent’s Closing Submissions, paragraphs 4.30-4.35.

[31](2017) 96 NSWLR 548, [57]-[85], Gleeson JA agreeing.

[32]See a copy of the various correspondence comprising Annexure “SOR-4” to the Statement of Reasons for the Decision.

[33][2015] VSC 404. An application for leave to appeal that decision was refused: Australian Dream Homes Pty Ltd v Stojanovski [2016] VSCA 133.

[34]At [45].

[35]I consider these features also distinguish this case from the case relied upon by the QBCC: Campbell v Queensland Building and Construction Commission [2021] QCATA 34.

[36][2005] NSWCA 303,

[37]At [170].

[38]At [169].

[39]At [177] and the cases cited therein.

[40]At [181].

[41](2007) 233 CLR 115.

[42]At [44] per Gleeson CJ, Gummow, Heydon and Crennan JJ.

[43]Respondent’s Closing Submissions, paragraphs 4.46-4.48.

[44]In any event, I could not be satisfied that the defective work identified by Mr Helisma (as discussed below) was the subject of dispute in the QCAT proceeding.

[45]Respondent’s Closing Submissions, paragraph 4.68(d).

[46]Submissions in Reply, see e.g. paragraphs 4, 4.12.

[47](1931) 45 CLR 359, 377-378.

[48]Having regard to the definition of ‘Business Day’ in clause 1 of the Contract.

[49][2022] QCAT 341.

[50]At [258].

Close

Editorial Notes

  • Published Case Name:

    Campbell v Queensland Building and Construction Commission

  • Shortened Case Name:

    Campbell v Queensland Building and Construction Commission

  • MNC:

    [2022] QCAT 403

  • Court:

    QCAT

  • Judge(s):

    Member Lumb

  • Date:

    06 Dec 2022

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
Australian Dream Homes Pty Ltd v Stojanovski [2016] VSCA 133
2 citations
Jump To
Cite 1 - [2016] VSCA 133
Cite 2 - [2016] VSCA 133
Campbell v Queensland Building and Construction Commission [2021] QCATA 34
2 citations
Jump To
Cite 1 - [2021] QCATA 34
Cite 2 - [2021] QCATA 34
Cherry v Steele-Park (2017) 96 NSWLR 548
3 citations
Jump To
Cite 1 - (2017) 96 NSWLR 548
Cite 2 - (2017) 96 NSWLR 548
Cite 3 - (2017) 96 NSWLR 548
Hometeam Constructions Pty Ltd v McCauley (2005) NSWCA 303
2 citations
Jump To
Cite 1 - (2005) NSWCA 303
Cite 2 - (2005) NSWCA 303
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115
2 citations
Jump To
Cite 1 - (2007) 233 CLR 115
Cite 2 - (2007) 233 CLR 115
Multiplex Constructions Pty Ltd v Rapid Contracting Pty Ltd (in liquidation) [1999] QCA 306
1 citation
Jump To
Cite 1 - [1999] QCA 306
Romark Design Constructions Pty Ltd v Queensland Building and Construction Commission [2019] QCAT 21
1 citation
Jump To
Cite 1 - [2019] QCAT 21
Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359
2 citations
Jump To
Cite 1 - (1931) 45 CLR 359
Cite 2 - (1931) 45 CLR 359
Stojanovski v Australian Dream Homes Pty Ltd [2015] VSC 404
2 citations
Jump To
Cite 1 - [2015] VSC 404
Cite 2 - [2015] VSC 404
Watego v State of Queensland [2022] QCAT 341
2 citations
Jump To
Cite 1 - [2022] QCAT 341
Cite 2 - [2022] QCAT 341

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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