Shilleto v Queensland Building and Construction Commission
[2024] QCAT 137
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- Unreported Judgment
- Shilleto v Queensland Building and Construction Commission[2024] QCAT 137
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Shilleto v Queensland Building and Construction Commission[2024] QCAT 137
Shilleto v Queensland Building and Construction Commission[2024] QCAT 137
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Shilleto v Queensland Building and Construction Commission & Ors [2024] QCAT 137 |
PARTIES: | david fintan kerr shilleto (applicant) v queensland building and construction commission matthew thomas forrester fiona forrester (respondents) |
APPLICATION NO: | GAR216-20 |
MATTER TYPE: | General administrative review matters |
DELIVERED ON: | 4 April 2024 |
HEARING DATE: | 28 March 2024 |
HEARD AT: | Brisbane |
DECISION OF: | Member Olding |
ORDERS: | The decision under review is confirmed. |
CATCHWORDS: | PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – where complaint lodged more than 12 months after consumer became aware of certain defects – where direction to rectify issued more than 12 months after completion of work – where builder claimed he had not been paid for the relevant work – whether direction to rectify should be issued Queensland Building and Construction Commission Act 1991 (Qld), s 3, s 71J, s 72 Queensland Building and Construction Commission Rectification of Building Works Policy, (1), (3) Christiansen & Anor v Queensland Building and Construction Commission [2020] QCAT 57 |
APPEARANCES & REPRESENTATION: | This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) |
Applicant: | All Building Law |
Respondents | Self-represented |
REASONS FOR DECISION
What is this case about?
- [1]The applicant, Mr Shilleto, a builder, entered into a contract to carry out building work on the home of the second and third respondents, Mr and Mrs Forrester.
- [2]A dispute arose, the Forresters complained to the Queensland Building and Construction Commission and the Commission issued a direction to rectify or complete to Mr Shilleto.
- [3]Following an internal review by the Commission, there remain 12 complaints that are the subject of the notice to rectify or complete. It is the decision of the Commission to issue a direction (‘the DTR’) relating to those complaints that is before the Tribunal for review.
Statutory framework
- [4]The Commission is established under the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’).[1] The objects of the QBCC Act, set out in s 3, include:
- to regulate the building industry –
- to ensure the maintenance of proper standards in the industry; and
- to achieve a reasonable balance between the interests of building contractors and consumers;
- to provide remedies for defective building work . . .
- [5]The Commission’s power to direct a builder to rectify work is contained in s 72 which relevantly provides:
72 Power to require rectification of building work and remediation of consequential damage
- This section applies if the commission is of the opinion that—
- building work is defective or incomplete; or
- consequential damage has been caused by, or as a consequence of, carrying out building work.
- The commission may direct the person who carried out the building work to do the following within the period stated in the direction—
- for building work that is defective or incomplete—rectify the building work;
- for consequential damage—remedy the damage.
. . .
- In deciding whether to give the direction, the commission may take into consideration all the circumstances it considers are reasonably relevant and, in particular, is not limited to a consideration of the terms of the contract for carrying out the building work (including the terms of any warranties included in the contract).
. . .
- The commission is not required to give the direction if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction.
Example for subsection (5)—
The commission might decide not to give a direction for the rectification of building work because an owner refuses to allow a building contractor to return to the owner’s home or because an owner’s failure to properly maintain a home has exacerbated the extent of defective building work carried out on the home.
. . .
- To remove any doubt, it is declared that the commission may act under this section in relation to consequential damage whether or not an owner or occupier has made a request under section 71J.
- [6]The non-exhaustive definition in Schedule 2 of the QBCC Act states that ‘defective’:
in relation to building work, includes faulty or unsatisfactory.
Issues to be resolved
- [7]The parties appear to be in agreement that the issues to be resolved are whether, in relation to each contested complaint item:
- there is a proper basis for issuing the DTR because the complaint items constitute either defective or incomplete work (QBCC Act, s 72(1)(a), s 72(3)); and
- in the circumstances, it would be unfair to Mr Shilleto for the DTR to be issued (s 72(5)).
- [8]These issues arise in a context in which the contracted works were only partially completed before relations between Mr Shilleto and the Forresters broke down. As the Chronology in the Appendix indicates, it is clear the contract had come to an end by early 2019. At that stage, no work had been undertaken and no payments made for some months.
Consideration of the issues
- [9]Mr Shilleto relied on brief submissions filed in these proceedings, along with his submissions on the internal review, but primarily on his statement dated 27 July 2021.
- [10]The Commission relied on written submissions filed in the proceedings, its statement of reasons, a statement of its building inspector and an affidavit by Mr Forrester dated 28 September 2022.
The complaint items
- [11]Mr Shilleto’s and the Commission’s written submissions addressed the complaint items in four groups relating to following alleged defects:
- detaching cornices (items 7, 10, 19 and 21 – comprising direction 2 in the original DTR that was the subject of the internal review);
- unsatisfactory strip flooring (items 11, 23 and 30 – direction 3 in the original DTR);
- shower defects (items 38-41 – direction 9 in the original DTR); and
- roofing and flashing defects (item 52 – direction 11 in the original DTR).
Some overarching issues
Timing issues
- [12]Mr Shilleto says the Commission is out of time to issue a DTR because the complaint was lodged more than 12 months after the Forresters say they became aware of the alleged defects and the DTR was issued more than 12 months after the works were completed, as per the Chronology in the Appendix to these reasons.
- [13]The first submission draws upon s 71J of the QBCC Act which relevantly states:
71J Requests for rectification of building work or remediation of consequential damage
- A consumer may ask the commission to give a direction to rectify building work the consumer considers is defective or incomplete.
- The owner or occupier of a residential property adjacent to a building site may ask the commission to give a direction to remedy any consequential damage to the property.
. . .
- Also, a request under subsection (1) or (2) must be made within 12 months after the person becomes aware of—
- for a request under subsection (1)—the building work the person considers is defective or incomplete; or
. . .
- [14]Both submissions draw upon a Rectification of Building Work policy (‘the Rectification Policy’) made by the then QBCC Board on 11 April 2014 and approved under the then s 19 of the QBCC Act with effect from 14 October 2014. This Rectification Policy, which was continued by the QBCC Act, Schedule 1, s 76 and s 57 of the Queensland Building and Construction Commission Regulation 2018 (Qld), is subordinate legislation under sections 7 and 9 of the Statutory Instruments Act 1992 (Qld).
- [15]The Policy relevantly provides:
(1) Rectification of defective building work
- It is a policy of the Queensland Building and Construction Board that a building contractor who carries out defective building work should be required to rectify that work.
- To remove any doubt, subsection (1) applies despite the building contractor failing to comply with the contracted plans and specifications for the work.
. . .
(3) Notification of defects
- It is a policy of the Board that if a consumer is seeking the assistance of the Queensland Building and Construction Commission (QBCC) to issue a direction to a building contractor to rectify defective building work, the consumer must lodge a formal complaint with the QBCC of defective building work as soon as possible but no later than within 12 months of becoming aware of the defects.
- The QBCC will then consider the issuing of direction to rectify to a building contractor:
a. for structural defective building work, within 6 years and 3 months of the building work being completed; or
b. for non-structural defective building work, within 12 months of the building work being completed.
(Emphases added.)
- [16]In respect of s 71J(4) of the QBCC Act, the Commissioner submitted that the Commission’s power to issue a DTR is not conditional upon the consumer making a complaint. On this premise, the Commission submitted that s 71J(4) does not render the decision ‘out of time’. Rather, the lodgement of the complaint outside the 12-month period is a factor to be taken into account in deciding whether a DTR should be issued.
- [17]It is not immediately clear that the Commission may issue a DTR relating to defects that have not been the subject of a complaint within 12 months of the consumer becoming aware of the alleged defect as required by s 71J(4).
- [18]On the one hand, the statutory scheme plainly contemplates consumers lodging complaints and the Commission responding with a decision whether or not to issue a DTR. That is scarcely surprising since the volume of building work undertaken in the State would make it unrealistic to envisage the Commission undertaking audits or otherwise becoming aware of defects outside of a complaints process in the usual course. And providing a time limit on complaints, and thus the prospect of a DTR issuing, could be seen as endeavouring to achieve a reasonable balance between the interests of building contractors and consumers in accordance with the objects of the QBCC Act (s 3, extracted above).
- [19]On the other hand, the power under s 72 to issue a DTR is not expressly limited to defects about which a complaint has been lodged. That, it might be thought, is consistent with the objects of the QBCC Act not being limited to protecting individual consumers but extending to ‘the maintenance of proper standards in the industry’: s 3(a)(i), extracted above.
- [20]The waters are further muddied by s 72(8). This provision – stated to be ‘[t]o remove any doubt’ – declares that the Commission may act under the section in relation to consequential damage ‘whether or not an owner or occupier has made a request under section 71J’.
- [21]As the italicised phrase (my emphasis) in the previous paragraph highlights, s 72(8) is limited to the power to issue a DTR in relation to consequential damage. It says nothing about the circumstance where the Commission acts in response to a request from a consumer in relation to defective or incomplete work.
- [22]Whether the Parliament should be taken to have not extended s 72(8) to where the Commission acts in response to a complaint because it was intended DTRs could not be issued outside the 12-month period or because no clarification to avoid doubt was considered to be required is unclear.[2]
- [23]I consider the better construction to be that a DTR may be issued in response to a consumer request outside the 12-month period at the discretion of the Commission. It seems a bridge too far to infer Parliament intended to limit the Commission’s power in this way when it has not expressly provided such a limitation in s 72. An inference to that effect would leave the Commission powerless to act where failure to meet the 12-month deadline, even by, say, one day, occurs for reasons beyond the consumer’s control, such as serious illness or other impairment. A construction unfettered by such an inference leaves the Commission, and the Tribunal on review, with a discretion to deal with those and other cases where it is appropriate for a DTR to be issued even though the complaint is made more than 12 months after the consumer becomes aware of the defect or incomplete work.
- [24]In respect of s 3 of the Rectification Policy, the Commission referred to the decision of the Tribunal in Christiansen & Anor v Queensland Building and Construction Commission.[3] There, the Tribunal accepted that the Rectification Policy, although constituting subordinate legislation, has the status of a guideline. As such, the Tribunal determined, the Policy does not bind the Tribunal but is to be taken into account in determining whether the power to issue a DTR should be exercised.
- [25]As the Tribunal went on to observe:
[43] Doubtless, in my view, regard should be had to the Rectification Policy. The important role of policy in fostering consistency in administrative decision-making has long been recognised, provided of course that the policy ‘guides but does not control the making of decisions’; is consistent with the relevant Act; and does not distort decision-making such as by precluding consideration of relevant matters or requiring consideration of irrelevant circumstances.
[44] The requirement for timely complaints contained in the Rectification Policy has obvious merit. Timeliness in pursuing such matters is important so that action can be taken while memories are fresh and records still available. The setting of a deadline also allows QBCC and the builder to move ahead once the 12 month period has elapsed, without the constant concern that a late complaint may be pursued.
. . .
[47] Accordingly, it will be relevant to consider whether the formal complaint was made within 12 months of [the owners] becoming aware of the defects. If it was made later than that, I should have regard to the policy position of the Rectification Policy which, in effect, is not to issue a direction to rectify in such a situation. However, it is still open to the Tribunal to not apply the policy and to decide to issue a direction to rectify.
- [26]The Commission drew attention to the final sentence indicating the Tribunal may still decide a DTR should issue even though a complaint is made outside the 12-month period.
- [27]The Commission did not draw attention to the Tribunal’s observation at [41] that:
The current section 71J(4) of the QBCC Act, which imposes a legislative deadline for a complaint to be made – 12 months after the consumer became aware of the defect – had not been inserted into the Act at the time relevant in this case.
- [28]That raises the prospect of the Policy being, on one view of the interaction between s 71(4) and s 72, impermissibly inconsistent with the QBCC Act. On the view I have taken above regarding the construction of s 72, this issue does not arise.
- [29]Accordingly, I approach this matter on the basis that the complaint being lodged outside the 12-month period is not fatal to the issue of a DTR but is a factor to be taken into account in deciding whether, as a matter of discretion, that should occur.
- [30]I adopt the same approach in respect of whether the DTR may issue even if more than 12 months have passed since the works were completed. I note that Mr Shilleto’s submission in this regard is inconsistent with his assertion that the works were incomplete rather than defective. However, I have determined that the works were relevantly completed and thus defective for the reasons set out in relation to each item below.
Outstanding payments?
- [31]The building contract provided for a contract price of $489,000. Mr Forrester stated he had paid $263,255 to Mr Shilleto and paid a total of $101,659.59 directly to suppliers when relations broke down. Mr Shilletto’s statement indicated approximately $275,000 had been paid but alleged a further amount of $10,000, or possibly $36,000, remains payable.
- [32]The evidence in this regard is unsatisfactory. Mr Shilleto stated in his statement that the owners ‘had not paid me for the works that I carried out and still owe me the amount of $10,000’.[4] Neither Mr Shilleto’s statement nor his submissions filed in the Tribunal draw attention to any specific evidence regarding what work this amount is said to relate to or how the claimed amount reconciles with the work undertaken and payments made. There is, for example, no invoice or progress claim documentation in evidence specifying the work said to have been undertaken.
- [33]Later, at paragraph [49] of his statement, Mr Shilleto says:
At the time the Owners asked me to discontinue with the project, I had requested payment of $10,000 which still has not been paid, and was also entitled to invoice $26,000 which I did not invoice for at that time, but am now reconsidering my legal options.
- [34]There is also an assertion in Mr Shilleto’s written submissions at [12(f)] that the owners still owe approximately $36,000.
- [35]Again, these assertions are not supported by any evidence detailing the basis on which the amounts are said to be payable. It not apparent that the further $26,000 has been formally claimed by way of an invoice or otherwise.
- [36]The Tribunal may only make factual findings on the basis of the evidence before it. In the circumstances outlined above, I am unable to reach a state of satisfaction that Mr Shilleto is owed any specific amount by the Forresters. Accordingly, I do not take into account Mr Shilleto’s assertion that it is unfair for the DTRs to issue on the footing that he is owed money by the Forresters.
- [37]Mr Shilleto also claims that no amount was charged or paid for the works to which the alleged defects relate. The Tribunal does not have before it a reconciliation of payments made against payments due or copies of invoices describing the work undertaken for which payments had been made. It is also unclear why Mr Shilleto would not have sought to claim payment for work he has undertaken.
- [38]In respect of the cornices and strip flooring issues, Mr Shilleto also submitted that, in their response to his submission on the internal review, the owners have ‘not refuted’ his statement that he had not charged or been paid for the work. It is certainly the case that the owners’ response does not explicitly challenge that assertion in respect of the two categories. Nor do they explicitly concede that they were not charged for these items, although the response relating to the strip flooring (at [64]) on one reading challenges the entirety of the relevant, identically numbered, paragraph in Mr Shilleto’s submission.
- [39]This issue of whether Mr Shilleto had charged for or been paid for these items of work comes down to this: From the schedule of payments provided by Mr Forrester, it is apparent that most of the payments made were in round figures e.g. $50,000, $25,000 etc. Further, those payments do not align with the schedule of payments provided for in the contract, presumably because of changes to the scope of works as the project proceeded. In those circumstances, it is only the builder who is or should be capable of demonstrating how the progress payments were calculated, including the work to which each payment is said to relate. However, there is no evidence before the Tribunal by way of progress claims, invoices or otherwise setting out the work for which each payment was charged and made.
- [40]Accordingly, on the basis of the evidence before the Tribunal, I am not able to be satisfied that I should make a finding that Mr Shilleto has not charged for or been paid for the relevant works.
The cornices issue
- [41]The DTR states that:
The installation of the cornices are (sic) defective and unsatisfactory and have not been finished in accordance with [the relevant standards] in that the adhesion of the cornices to the walls and ceilings have (sic) failed and workmanship does not meet a reasonable standard of construction expected of a competent holder of a contractor’s licence for the relevant class.
- [42]The inspector’s report attributed the alleged defect to ‘the lack of, incorrect application of, incorrect product of adhesive used for the cornices’.
- [43]Mr Shilleto maintained in his statement at [71] that the downstairs cornices had only been temporarily secured in place because it was intended they would be completed properly once the upstairs work was completed. This was said to be because of the arrangement that the owners would live in the downstairs area while the upstairs work was being completed. On this basis, Mr Shilleto argued that the work was incomplete rather than defective. He did not deny that if, contrary to his submission, the work was complete, it was not of a satisfactory standard. In any case, that seems clear from the inspector’s report which was not challenged in that respect.
- [44]The explanation provided by Mr Shilleto is not inherently improbable and I might have been inclined to accept it but for the evidence provided by the QBCC inspector’s report that the cornices had been painted. Mr Shilleto did not respond to this aspect of the evidence other than to note that a further coat would be required when the upstairs work had been completed. It seems unlikely that incomplete work would be painted when the work required to fix the cornices properly would inevitably damage the paintwork. In any case, the inspector’s report indicated the cornices were coming away from the wall in various places.
- [45]Against an exercise of the discretion is the lodging of the complaint and the issue of the DTR outside the respective 12-month periods. To issue a DTR in those circumstances would be inconsistent with the legislative provisions outlined earlier.
- [46]However, this is mitigated by the Forresters having lodged an earlier complaint. For reasons that are unclear, communications regarding that complaint appear to have failed to reach their destination and the Commission’s complaint file was closed due to apparent inaction. Further, Mr Shilleto has not identified any specific prejudice that would arise from the complaint being considered out of time.
- [47]Nor is it a case where it would be unfair to issue a DTR because the owners did not allow Mr Shilleto to return to the site. On Mr Shilleto’s evidence, the relevant work was at his intended standard pending completion of the upstairs work. There is no evidence that he was, at the time the contract came to an end, wishing to return to the site to work on the cornices.
- [48]Having regard to the factors outlined above, I am not satisfied it would be unfair to require Mr Shilleto to remedy this work. Given the earlier complaint, the relatively short exceeding of the 12-month periods and the absence of any identified prejudice, I am persuaded this is a case where, it is appropriate to issue a DTR despite the timing issues. The work is defective and it is appropriate, and otherwise in accordance with the Policy, that it should be rectified. A DTR should issue in respect of these defects.
The strip flooring issue
- [49]The DTR describes the alleged defect in this way:
The installation of the timber strip flooring has not been done in accordance with the QBCC’s Board Policy ‘Rectification of Building Work’ in that the splitting finish achieved does not meet a reasonable standard of construction expected of a competent holder of a contractor’s licence for this field. QBCC Standards and Tolerances Guide Section 14 Floor stipulates adequate gaps are required for a solid strip flooring of this nature to minimize shrinkage or board separation.
- [50]Mr Shilleto repeated his submission regarding timing and payment issues. For the reasons outlined above, I do not accept that the Commission or the Tribunal on review is precluded from deciding a DTR should issue on this ground.
- [51]In his statement at [73], Mr Shilleto maintained that the flooring was incomplete and he had been prevented by the owners from arranging for a further top coat of finish to be applied. However, the identified defect is not in the painting but in the installation of the timber flooring. The inspector’s report indicated movement and shrinkage separation were evident, boards had started to split and the gaps between the boards were not ‘consecutive’ which I take to mean the gaps were not consistent. Self-evidently, a final coat of finish would not remedy such defects.
- [52]As noted, Mr Shilleto also maintained that he had not been paid for this work. It would not be surprising if Mr Shilleto had not claimed payment for the flooring before the required final coat of finish had been applied. However, why, if the owners have not paid any amount for this (it is to be expected) costly work, Mr Shilleto has not since sought to recover payment is not explained. I note also that the schedule attached to Mr Forrester’s affidavit lists a payment by the Forresters in the amount of $10,000, directly to the supplier, for ‘Timber floor downstairs’.
- [53]For the same reasons indicated in respect of the cornices issue, I am persuaded that, on the evidence before the Tribunal, it would not be unfair for a DTR to issue, notwithstanding the timing issues. The work is defective and it is appropriate that, in accordance with the Policy, the builder be required to rectify it.
The shower issue
- [54]The DTR described this alleged defect as follows:
The installation of the unenclosed shower floor element described within the complaint item has not been done in accordance with the [applicable standard] in that the fall to the shower floor has allowed water to discharge outside the shower area, restricted water to reach the drainage channel waste and left an unacceptable amount of water to pool. The overall finish achieved to the floor, drainage channel gate and grouting does not meet a reasonable standard of construction expected of a competent holder of a contractor’s license for the relevant class.
- [55]Mr Shilleto also asserted that the works were not ‘fully finished’ and had only been taken to a ‘usable standard’ so the owners could move downstairs. However, the works included grouting which is consistent with the shower floor being installed. In any case, at least in relation to the defect relating to the fall, significant re-working of existing work would be required to rectify the work.
- [56]For the same reasons outlined in respect of the cornices, on the evidence before the Tribunal, I would confirm the decision to issue a DTR in respect of this item.
The roofing and flashing issue
- [57]The DTR describes these alleged defects in this way:
[T]he installation of the metal roofing, associated flashing and cappings are (sic) structurally defective. Unsatisfactory workmanship has allowed leaks to develop and rain water has been allowed to enter the building which will adversely affect the structural performance, functional use and may affect the health and safety of the dwellings (sic) occupants. The finished rooves do not meet a reasonable standard of construction expected of a competent holder of a contractor’s license for the relevant class and have failed to meet the requirements of the [applicable standard].
- [58]Mr Shilleto maintains that this work was not complete. In particular, he said in his statement that the ‘upper roof was still to be removed to fit the new roof beams and then the roof would have been finished and the flashings installed’.
- [59]However, the QBCC inspector’s report points out that the build was at a stage where the owners were continuing to live in the house. I also note that, according to Mr Shilleto’s evidence, work was being undertaken in the upstairs area which would be at risk of water damage from water entering the building. Even if further works were to be undertaken in relation to the roof – and I note the inspector did not take issue with some of the gutters and downpipes not being installed at that stage of the build – the ‘multiple leaks’ identified by the inspector establishes that the work was defective.
- [60]Accordingly, for the reasons outlined in respect of the cornices, I conclude it is appropriate for the builder to be required to rectify the defects.
Disposition of the application for review
- [61]As I have concluded that, on the basis of the evidence before the Tribunal, it is appropriate for a DTR to issue in respect of each of the four categories of defects, the decision under review must be confirmed.
Appendix - Chronology
Date | Event |
23 January 2018 | Building contract entered into. |
1 September 2018 | Complaint items noticed by owners. |
19 September 2018 | Last payment under contract made. |
29 November 2018 (7-30 am) | Owner advises builder not to attend premises and to communicate by email. |
21 January 2019 | Owner advises builder ‘I believe this brings an end to the contract.’ |
28 February 2019 | Owner advises builder ‘that as of today’s date the 28th day of February 2019 I no longer require your building services. Fiona and I evoke our common law right to terminate the aforementioned contract for the reason of continual and substantial breaches of the contract.’ |
26 June 2019 | First complaint lodged by owners. |
25 September 2019 | Second complaint (to which these proceedings relate) lodged by owners. |
17 March 2020 | QBCC inspector completes report. |
23 March 2020 | Decision to issue original DTR in accordance with inspector’s report and DTR issued. |
17 April 2020 | Builder applied for internal review of original decision. |
29 May 2020 | Internal review decision to issue DTR relating to four categories of complaints. |
23 June 2020 | Application to review decision to issue DTR filed by builder. |
Footnotes
[1] The Commission advised that it is the version of the QBCC Act applicable from 1 January 2020 that is relevant to this case.
[2] For completeness, I note that the Explanatory Statement to the bill for the Building Industry Fairness (Security of Payment) Act 2017, which introduced the 12-month limit, casts no light on Parliament’s intention, merely reproducing, in the commentary on clause 280, the terms of subsection (4).
[3] [2020] QCAT 57.
[4] Statement of D Shilleto filed 27 July 2021, [45c.].