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McGrath v Queensland Building and Construction Commission[2024] QCAT 393

McGrath v Queensland Building and Construction Commission[2024] QCAT 393

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

McGrath v Queensland Building and Construction Commission and Ors [2024] QCAT 393

PARTIES:

CAMERON STUART ANTHONY MCGRATH

(applicant)

v

Queensland Building and COnstruction Commission

(first respondent)

mignon hadenfeldt

(second respondent)

Damon Stevenson aka Damon Hadenfeldt aka Damon Hadenfeldt-Stevenson

(third respondent)

APPLICATION NO/S:

GAR 166-23

MATTER TYPE:

General administrative review matters

DELIVERED ON:

11 September 2024

HEARING DATE:

On the papers

HEARD AT:

Cairns

DECISION OF:

Member Taylor

ORDERS:

  1. The Tribunal Record is amended to record the name of the third respondent as being ‘Damon Stevenson aka Damon Hadenfeldt aka Damon Hadenfeldt-Stevenson’.
  2. It is declared that the building contract entered into on or about 27 June 2022 between the applicant and the second and/or the third respondent was of no effect as a result of s 14(2) and s 14(10) of Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld).
  3. It is further declared that, in the premise of the said building contract being of no effect, it could not have been, and so was not, validly terminated, on the default of the applicant, for the purposes of s 4(1)(a) of Schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld).

CATCHWORDS:

ACTS OF PARLIAMENT – OPERATION AND EFFECT OF ACTS – GENERALLY – where a homeowner entered into a contract with a contractor for the construction of certain building works – where the work under the contract was domestic building work – where there was no written contract document, dated and signed by the parties – where under statute the contract was thus of no effect – whether as a result of the contract being of no effect could cover under the Queensland Home Warranty Scheme ever have come into force

ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where a building contractor seeks review of a decision of the Queensland Building and Construction Commission to allow a claim under the Queensland Home Warranty Insurance Scheme – where there was no written contract document – where the Commission sought to have preliminary issues decided in terms of whether the contract was of no effect and whether the contract was validly terminated for the purposes of the Scheme

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACT – OTHER MATTERS – where a homeowner entered into a contract with a contractor for the construction of certain building works – where there was no written contract document, dated and signed by the parties – where the homeowner purported to have terminated the contract – whether the contract was of effect such that it could be validly terminated

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – ILLEGAL AND VOID CONTRACTS – EFFECT OF ILLEGALITY OR INVALIDITY – where a homeowner entered into a contract with a contractor for the construction of certain building works – where the work under the contract was domestic building work – where there was no written contract document, dated and signed by the parties – where the contract was thus of no effect – whether as a result of the contract being of no effect could the contract be validly terminated for the purposes of entitling the homeowner to assistance under the Queensland Home Warranty Scheme for non-completion

Queensland Building and Construction Commission Act 1991 (Qld) s 67X, s 67WA, s 67Y, s 68H, s 68I, s 86, s 86C, s 86E, s 86F, s 87, Schedule 1B s 14, Schedule 1B s 22, Schedule 1B s 25 

Queensland Building Services Authority and Other Legislation Amendment Act 2007 (Qld) s 47

Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld) s 36

Queensland Building and Construction Commission Regulation 2018 (Qld) s 25, s 30, Schedule 6 s 4, Schedule 6 s 6

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 17, s 20, s 21, s 23, s 24, s 32, s 60

The Australian Consumer Law s 60, s 62

Alcan (NT) v Territory Revenue (2009) 239 CLR 27

Body Corporate for Alto Gladstone v Queensland Building and Construction Commission & Anor [2020] QCATA 6

Cooper v McGaveston [2019] QCAT 244

Cerda v Jacob [2020] QCATA 57

Clarke v Queensland Building and Construction Commission [2020] QCAT 88

Lu v Emerson [2024] QCAT 249

Mahony v Queensland Building Services Authority [2013] QCA 323

Meridien AB Pty Ltd v Jackson (2013) 1 QdR 142

Number One Quality Homes Pty Ltd v Murphy & Anor [2020] QCAT 339

McSwan & Anor v Weaver [2023] QCAT 148

Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326

Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355

Rainbow v Turkovic & Anor [2021] QCAT 441

Samimi & Anor v Queensland Building and Construction Commission [2015] QCA 106

Scenic Tours Pty Ltd v Moore [2018] NSWCA 238

Stelzig v Ireland [2024] QCAT 237

Valve Corporation v ACCC (2017) 258 FCR 190

Zhang v Todd [2019] QCAT 208

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:

Self-represented assisted by D A Burrell

First Respondent:

Gadens Lawyers

Second Respondent:

Self-represented

Third Respondent:

Self-represented

REASONS FOR DECISION

Overview

  1. [1]
    The Queensland Home Warranty Scheme (the Scheme) is created under Part 5 of the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act).[1] It is administered by the QBCC, the first respondent in this proceeding. The terms of cover for the Scheme are those found in Schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld) (QBCC Regulations). In that role the QBCC is required to consider, in accordance with those terms of cover, claims made for assistance under the Scheme. Such assistance can be provided where building work is not completed following termination of a fixed price contract. In doing so it may allow such a claim, but only in circumstances where the contract has been ‘validly terminated’ for the purposes of the Scheme.
  2. [2]
    Mr Stevenson and/or Ms Hadenfeldt, the second and third respondents, are persons who have made such a claim. The QBCC decided that the contract purportedly between Mr McGrath, the applicant, and Mr Stevenson and/or Ms Hadenfeldt, was validly terminated having the consequences of it allowing their claim.
  3. [3]
    Under s 86(1)(i) of the QBCC Act, such a decision is a reviewable decision. Under s 87 of the QBCC Act a person affected by that decision may apply to this Tribunal for review of that decision. Mr McGrath claims to be such an affected person. By commencing this proceeding he sought review of the QBCC’s decision.
  4. [4]
    His application in that regard is confused and confusing in that he identifies therein five different decisions of the QBCC,[2] but states that he received ‘the decision’ on 31 January 2023, being the third of the five decisions he lists. That decision is that the contract had been validly terminated allowing an insurance claim under the Scheme for incomplete work.[3]
  5. [5]
    The premise of Mr McGrath’s application is that the contract was not validly terminated in the manner required so as to satisfy the requirements of the Scheme. Once again his explanation of that argument, as it is contained in his application document, is confused and confusing. I was not able to fully understood it on any reading of it. As best I could decipher some basis for his argument, it was that a Damon Hadenfeldt was the person with whom contracted, and in turn the named beneficiary of the insurance cover under the Scheme, but it was a Damon Stevenson that is said be the person the QBCC decided had validly terminated the contract. His argument continued and asserted that in some way the contract was illegal because Mr Hadenfeldt fraudulently represented to Mr McGrath that he was the owner of the land on which the building work was to be performed and that he contracted in that name as a false identity.[4]
  6. [6]
    By an order made in this proceeding on 2 June 2023, Mr Stevenson and Ms Hadenfeldt were made respondents to this proceeding. It is apparent that:
    1. Ms Hadenfeldt is Mr Stevenson’s mother;[5]
    2. that she is the registered owner of the land on which the building work was performed;[6] and
    3. as I discuss it in some detail later in these reasons, Ms Stevenson and Mr Hadenfeldt are the same person.
  7. [7]
    As this proceeding unfolded, the QBCC applied to this Tribunal to have the following questions determined on a preliminary basis (the Preliminary Issues):

Whether the building contract between the Applicant and the Second and/or Third Respondents was of no effect as a result of the operation of sections 14(2) and 14(10) of Schedule 1B of the QBCC Act.

If the building contract was of no effect, whether the contract was validly terminated on the default of the Applicant for the purposes of section 4(1) of Schedule 6 of the QBCC Regulation 2018.

  1. [8]
    By an order of this Tribunal, it was directed that those questions be determined on a preliminary basis, and by that and subsequent orders that such were to be determined on the papers, such is as permissible under s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act).[7] No party made an application for an oral hearing.
  2. [9]
    For the reasons given herein, the answer to those questions is that the contract was of no effect, and accordingly it could not have been, and was not, validly terminated. Orders were made to that effect.

Relevant Facts and Circumstances[8]

  1. [10]
    On or about 28 June 2022, Mr McGrath, trading as Rogue Bathrooms, purportedly entered into a contract with Mr Damon Hadenfeldt under which Mr McGrath would undertake renovation works to a bathroom in a house said to have belonged to Mr Hadenfeldt. It was an oral contract.
  2. [11]
    Works under that contract were performed in part. Mr McGrath purportedly ceased the carrying out of such work on 25 August 2022.
  3. [12]
    On or about 29 August 2022, a Rogan McGrath, whom I understood to be Mr McGrath's father, made payment of an ‘insurance premium’ relative to the work, upon which the QBCC issued a policy for insurance under the Scheme.
  4. [13]
    By way of a document dated 5 October 2022, shown to have been signed by Mr Hadenfeldt as ‘owner’ and addressed to Mr McGrath, Mr Hadenfeldt purported to terminate the contract for a variety of reasons.[9]
  5. [14]
    It is apparent that shortly thereafter, a claim under the Scheme was made to the QBCC for non-completion.[10]
  6. [15]
    What then followed was, by way of a letter dated 10 November 2022 the QBCC notified Mr McGrath that it had decided Ms Mignon Hadenfeldt had not validly terminated the contract with Mr McGrath and accordingly the non-completion claim had been denied. However relatively shortly thereafter, by way of a letter dated 5 December 2022, having referenced that earlier finding of 10 November, a QBCC officer informed Mr McGrath inter-alia:

Upon further investigation, I have identified that whilst Mignon Hadenfeldt is the registered property owner, it was Damon Stevenson who accepted your contract offer to performed residential construction work, being the bathroom renovation valued at a fixed price of $28,000, and arranged for electronic funds transfer from the joint bank account held by Mignon Hadenfeldt and Damon Stevenson to Rogue Bathrooms …

…

On that basis, I have reconsidered the QBCC’s decision to decline the non-completion claim and am satisfied that Damon Stevenson falls within the definition of a ‘Consumer’ whereby Mr Stevenson entered into a contract with you for residential construction work for a fixed price. Therefore, as Mr Stevenson was a party to the contract he was able to issue the termination notice to you.

As a consequence of this reconsidered decision, the decision dated 10 November 2022 has now been revoked and a new decision has been made in its place.

Outcome :  Damon Stevenson has validly terminated the contract with you for work at [address given].

…

  1. [16]
    In the document entitled ‘Reasons for Decision’ accompanying that second decision, inter-alia the following statements appear:
  1. I have determined that by operation of sections 3, 4 and 7 of Schedule 1B of the QBCC Act the contract for the Works is a level 2 regulated contract as the Works constitute domestic building work and the contract price being $28,000, is more than the level 2 amount defined in section 45 of the QBCC Regulation which is $20,000.
  1. On this basis, the Contract is required to comply with the requirements detailed in section 14(3) of Schedule 1B of the QBCC Act and, without complying with these requirements, it will have no effect.
  1. …
  1. Despite the Contract not meeting the requirements to be enforceable, the Contractor will still be subject to the implied warranties which apply to regulated contracts, including the standard of work and the exercise of appropriate care and skill.
  1. I have received no evidence of an agreement containing terms and conditions, that was signed by the parties.
  1. As such, it is not necessary, nor possible to consider whether the Contract has been validly terminated by the Consumer under the terms of the Contract, as there is no express provision allowing this to occur because as outlined in the paragraphs 4, 5 and 6 above, the contract does not comply with the legislative requirements for a level 2 regulated contract.
  1. Therefore, it is necessary to consider the methods available at common law to terminate the Contract.
  1. [17]
    What then followed was the QBCC Officer’s consideration of the material before the Commission in terms of the question, as posed in those reasons - ‘Was the Contract validly terminated by way of acceptance of repudiation ?’, with the following statement then appearing:
  1. Based on the evidence provided to me, the Contractor has acted in ways which evince an ‘unwillingness or an inability to render substantial performance of the contract’ or an ‘intention to no longer be bound by the contract’ in the following ways:
  1. a.
    …
  2. b.
    Unlawfully suspending the Works by abandoning the site.
  1. On 5 October 2022, the Consumer accepted the Contractors (sic) repudiation by e-mail and post confirming that the Contract was terminated. I am satisfied that the Consumer has correctly issued this, and I do not reasonably believe that you did not receive the correspondence.
  1. Based on all the evidence before me, I am satisfied that the Contract has been validly terminated and considered to be ‘at an end’ as per the definition in section 4(1)(b) of Schedule 6.
  1. The claim is one for acceptance in full.
  1. [18]
    By way of a letter dated 23 December 2022, the QBCC then informed Mr McGrath that it had accepted the claim by Mr Stevenson, and provided Mr McGrath with a scope of works in terms of that which remained to be performed to complete the incomplete works.
  2. [19]
    On 29 December 2022, Mr McGrath applied to the QBCC for an internal review of the decision of 5 December 2022.
  3. [20]
    On 31 January 2023, the QBCC issued its internal review decision confirming the original decision. It did so without reconsidering the original decision, stating that it reached its internal review decision premised on s 86C(3) of the QBCC Act by which its internal review decision is deemed to have been made the same as the original decision if not made within 28 days from its receipt of the application for review or such longer period as agreed with the applicant.[11]
  4. [21]
    What followed is that by a letter dated 13 February 2023, the QBCC informed Mr McGrath that the QBCC had approved the claim for incomplete work at $56,652.64, stating therein that such was a debt that was Mr McGrath’s responsibility and the QBCC may seek to recover it from him.
  5. [22]
    On 28 February 2023, Mr McGrath then filed his ‘Application to review a decision’ in this Tribunal. Whilst he identified therein all the decisions made by the QBCC as I have referred to them in the preceding paragraphs, he expressly sought a review of the decisions of 5 December 2022, 31 January 2023, 23 December 2022, and 13 February 2023. Notwithstanding that he referred to multiple decisions, he also stated his in application the following in reference to why he thought a single decision, namely the decision of 5 December 2022, was wrong or not properly made:

The Queensland Building and Construction Commission (QBCC) is taken to have made an internal review decision that is the same as the reviewable decision dated 5 December 2023, namely that a domestic building contract has been validly terminated by a Damon Stevenson in the knowledge that the contract was terminated in the name of Damon Hadenfeldt who made false misrepresentation to Cameron McGrath as contract in the name of Damon Hadenfeldt as a false identity. The Queensland Home Warranty Statutory Insurance Scheme (Policy Number 014478457) was applied for in the name of Damon Hadenfeldt have the consequence of allowing a claim for non-completion under the Qld Home Warranty Statutory Insurance Scheme as a false identity of Damon Hadenfeldt and make claim for the reviewable decision in the name of Damon Stevenson. In relation to the false and misleading representations as a party to a contract, I respectfully say – Any contract will lose the validity attached thereto and the contract is void and is incapable of termination. …

  1. [23]
    He then continues under the heading ‘Briefly describe any other facts you think are important’ in Part C of the application document providing further commentary about illegality with reference to a number of decisions of various courts, concluding his application expressly seeking a review of the decisions of 5 December 2022, 23 December 2022, 31 January 2023, and 13 February 21023, as well as a referral to the Crime and Corruption Commission on the basis of the asserted acknowledgment by the QBCC that Damon Hadenfeldt and Damon Stevenson are the same person.
  2. [24]
    What followed was a series of interlocutory applications made in this proceeding, and directions given by this Tribunal. Of relevance to the matters that are before me decide, namely the determination of the Preliminary Issues, one of those was that given 2 June 2023 whereby Ms Hadenfeldt and Mr Stevenson were joined as respondents in this proceeding.[12]
  3. [25]
    It was then on 11 August 2023 that the QBCC made its interlocutory application for the determination of the Preliminary Issues, simultaneously providing some submissions as to why the application should be granted, as well as submissions in answering the questions as posed.
  4. [26]
    What then followed was a series of yet more Directions for the conduct of the proceeding whereby on 10 October 2023 the decision made to grant the application was expressed, and in turn requiring Mr McGrath, Mr Stevenson, and Ms Hadenfeldt to file any submissions they wished to make about the Preliminary Issues, thereafter for the Preliminary Issues to be determined on the papers without an oral hearing.
  5. [27]
    Submissions were in turn received from:[13]
    1. Mr Stevenson on 13 October 2023;[14]
    2. Ms Hadenfeldt on 11 September 2023;
    3. Mr Stevenson again on 14 September 2023; and
    4. Mr Stevenson and Ms Hadenfeldt jointly on 7 November 2023.
  6. [28]
    On 19 October 2023, the QBCC applied for directions that it be entitled to reply to those submissions. That was granted on 8 May 2024. On 22 May 2024, the QBCC filed its submissions in reply.
  7. [29]
    Whilst there was no direction given by this Tribunal for same, on 24 May 2024 Mr Stevenson filed a further submission, on that occasion expressed in the name of ‘Damon Hadenfeldt-Stevenson’.
  8. [30]
    The QBCC’s application for determination of preliminary points was thus listed before me for determination on the papers, which I did against this background of relevant facts and circumstances.

The Issues

There was no signed contract document

  1. [31]
    As I read the material before me, it was common ground that the relevant contract was a Level 2 Regulated Contract as that term is used in the QBCC Act Schedule 1B s 14, thus it was required to be in written form, dated and signed by or on behalf of each of the parties to it in satisfaction of s 14(2) therein, but that it was not. However if I am wrong about that fact being common ground,[15] on the material presently before the Tribunal I would have made a finding that such was so.

The Preliminary Issues

  1. [32]
    It is against that fact that the Preliminary Issues arise.
  2. [33]
    There are a number of other threshold issues which arise out of the relevant facts and circumstances as I have noted them herein, eg which of the QBCC’s decisions to which McGrath refers in his application is the decision to be reviewed on his singular application,[16] and moreover which of those decisions are within the jurisdiction of this Tribunal to review,[17] but those are not issues to which I need refer in addressing the narrow aspect of that which is before me, namely the two questions posed for preliminary determination.

The proper identification of the third respondent

  1. [34]
    There was however a fundamental threshold issue which I identified when reading the material, and one which I considered should be dealt with in these reasons notwithstanding that there was no application filed by a party in terms of this issue. It is the proper identification of the third respondent. It is convenient to dispose of that here, which I do in the manner contemplated by the QCAT Act s 62(1), (6) and (7)(a).
  2. [35]
    As I noted in paragraphs [22] and [23] herein, Mr McGrath asserted:
    1. Mr Stevenson represented himself, falsely, to Mr McGrath as Damon Hadenfeldt; but
    2. the QBCC’s position is that Mr Stevenson and Mr Hadenfeldt are the same person.
  3. [36]
    As I noted it in paragraph [13] herein, the document said to be a ‘Notice of Termination’ of the purported contract records Mr Hadenfeldt as the owner, and is shown to have been signed by Mr Hadenfeldt in that capacity.
  4. [37]
    The next relevant document is the document produced by the QBCC which I referred to in paragraph [15] herein in terms of its decision of 5 December 2022. It refers to Mr Stevenson as being the contracting party and the one to have issued the termination notice.
  5. [38]
    In the ‘Application for miscellaneous matters’ filed 13 October 2023, which as I noted it in paragraph [27](a) was read by this Tribunal as being Mr Stevenson’s submissions in response to the Preliminary Issues, he referred to himself as ‘Damon Hadenfeldt- Stevenson’. He did so again in his submissions dated 14 September 2023, in the joint submission with Ms Hadenfeldt dated 7 November 2023, and in his final and unsolicited submission filed 24 May 2024.
  6. [39]
    In Ms Hadenfeldt’s submissions of 11 September 2023, she refers to the ‘Third Respondent’ as “… my son, Mr. Damon Hadenfeldt-Stevenson …”.
  7. [40]
    In all respects, on my reading of the material before the Tribunal, I infer that the references to Mr Damon Stevenson, Mr Damon Hadenfeldt, and Mr Damon Hadenfeldt-Stevenson, are all references to the one person. Accordingly, given the different references in various documentation before the Tribunal, it seemed to me prudent and proper, to avoid any confusion that might arise in the future, to name him in this proceeding by way of not only Mr Damon Stevenson, but also by the other two names by which he is referred and I infer known. An order was made to that effect.

Relevant Law

This Tribunal’s jurisdiction and the QBCC’s role in this proceeding

  1. [41]
    This Tribunal is empowered with a review jurisdiction conferred on it by an enabling Act to review a decision made or taken to have been made by another entity under that enabling Act.[18] As is relevant in this proceeding, the enabling Act is the QBCC Act and the entity having made a decision is the QBCC. Under Part 7 Division 3 Subdivision 2 therein, this Tribunal is empowered to undertake a review of whatever the decision was that Mr McGrath was purporting to seek review of, subject only to such a decision being a reviewable decision.[19]
  2. [42]
    Such a review proceeding is not a traditionally adversarial process as one should expect in a commonplace civil proceeding of a claim by one party on another. But at the same time it was not an inquisitorial process such that I was required to delve into the detail. My decision turned on the material presented to this Tribunal. In that regard, the respondent was not participating in an adversarial role advocating for the correctness of the decision by its decision-maker. Its role was to use its best endeavours to help me in making my decision on the review.[20]
  3. [43]
    In fulfilling that role the respondent, via its legal representative engaged to have carriage of this matter on its behalf, raised the prospect of the Preliminary Issues to be addressed before descent into a detailed consideration of the entirety of the issues, whatever they may have been. In the circumstances of this proceeding being one within the review jurisdiction of this Tribunal, in my opinion it did so properly and accordingly the appropriate direction was given for the questions as posed to be determined as preliminary issues.[21]
  4. [44]
    For that reason, it was not necessary for me to descend into a fresh hearing on the merits for the purposes of  producing the correct and preferable decision by ultimately doing one of the following: confirming or amending the decision, setting aside the decision and substitute my own decision, or setting aside the decision and returning the matter for reconsideration by the decision-maker.[22]

The legislation relevant to the Preliminary Issues

  1. [45]
    As noted earlier herein, the Scheme is established under Part 5 of the QBCC Act. To the extent relevant to the issues before me, it is described therein in the following manner:

67X  Statutory insurance scheme

  1. ….
  1. The purpose of the statutory insurance scheme is to provide assistance to consumers of residential construction  work for loss associated with work that is defective or incomplete.
  1. ….
  1. …
  1. [46]
    There is no issue arising in this proceeding that the work in question is not residential construction work, nor in turn that it is not insurable work. Thus, prima facie, assistance should be open to Mr Stevenson and/or Ms Hadenfeldt as the purported consumers of the said residential construction work. That being so, in order to consider the Preliminary Issues, the following provisions of the QBCC Act were relevant:

Part 5 The statutory insurance scheme

s 67WA Definitions for pt 5

In this part

consumer –

  1. for residential construction work –
  1. means a person who contracts with a licenced contractor to carry out the work; and
  1. …

s 67Y Assistance available under statutory insurance scheme

The terms of cover under which a person is entitled to assistance under the statutory insurance scheme are prescribed by regulation.

68H  Cover of residential construction work

  1. Cover under the statutory insurance scheme comes into force if—
  1. a consumer enters into a contract for the carrying out of residential construction work and—
  1. the contract bears the licence number of a licensed contractor and, under the licensed contractor’s licence, the licensed contractor may enter into contracts with consumers to carry out residential construction work covered by the statutory insurance scheme; or
  1. the contract is with a licensed contractor and, under the licensed contractor’s licence, the licensed contractor may enter into contracts with consumers to carry out residential construction work covered by the statutory insurance scheme; or
  1. …
  1. Subsection (1) applies whether or not an insurance premium has been paid, or a notice of cover has been issued, for residential construction work under this part.
  1. ...

68I  Commencement of cover

  1. For residential construction work carried out under a contract with a consumer … cover under the statutory insurance scheme comes into force on the earliest of the following to happen –
  1. a licenced contractor pays the appropriate insurance premium for the work under section 68B(2);
  1. the consumer enters into the contract with a licenced contractor for the carrying out the work;
  1. a licenced contractor starts carrying out the work.
  1. …
  1. [47]
    As I noted it in paragraph [31] herein, it was common ground or if I was wrong about it being common ground I would have found it to be so, that the purported contract was a Level 2 Regulated Contract as that term is used in the QBCC Act Schedule 1B s 14. It was also common ground that it was not reduced to written form, dated, and signed for or on behalf of the parties as required by s 14(2) therein. What is relevant to that is that provided for in s 14(10) therein, such being only if the contract complies with subsection (2) does it has effect. For ease of reference I extract those provisions here:

Schedule 1B   Domestic Building Contracts

Part 2 Contracts and related documents

Division 1 The contract

14 Requirements for contract – level 2 regulated contract

  1. ….
  1. The contract must be in a written form, dated and signed by or on behalf of each of the parties to it.

…

  1. The contract has effect only if it complies with subsection (2).
  1. [48]
    The remaining relevant legislative provision is that found in the QBCC Regulations Schedule 6 wherein the ‘Terms of cover for statutory insurance scheme’ are found. Such must be read in conjunction with relevant provisions of the QBCC Act which I have already extracted earlier herein, and other provisions of the QBCC Regulations which, for ease of reference, I also extract here:

QBCC Regulation

s 30 Terms of cover – Act, s 67Y

  1. For section 67Y of the Act, the terms of cover are stated in schedule 6.
  1. The terms of cover apply to the following work—
  1. residential construction work;
  1. …
  1. The terms of cover under the statutory insurance scheme for residential construction work are the terms of cover stated in schedule 6 when—
  1. … ; or
  1. otherwise—cover under the statutory insurance scheme comes into force for the work.

Schedule 6 Terms of cover for statutory insurance scheme

s 4 When fixed price residential contract ends

  1. A fixed price residential contract ends if –
  1. the contract is validly terminated on the default of the licensed contractor; or
  1. …
  1. [49]
    With that being the relevant statutory law upon which the Preliminary Issues fell to be decided, I turned to the submissions before me.

The Submissions

Mr McGrath’s submissions

  1. [50]
    Despite a direction for the provision of submissions, Mr McGrath did not file any submissions specifically in relation to the Preliminary Issues.[23] However, notwithstanding the absence of such, as I read and understood the entirety of Mr McGrath’s material as filed, I infer that his position in terms of the Preliminary Issues would have been to some extent the same as the premise for his application. That is as I have extracted it in paragraphs [22] and [23] herein.

The QBCC’s original submissions

  1. [51]
    The QBCC made these submissions:[24]

… there is a fundamental issue in these proceedings as to whether the building contract, the subject of this proceeding, is of no effect as a result of the application and operation of sections 14(2) and (10) of Schedule 1B to the QBCC Act. ...

… if the Tribunal finds that the contract was of no effect, it could not have ended within the meaning of section 4(1)(a) of Schedule 6 of the QBCC Regulation 2018. …

A determination of these preliminary issues would lead to an early end to the review proceedings. …

  1. [52]
    As a foundation to these submissions, the QBCC cited a number of pieces of caselaw. It started with the Appeal Tribunal’s decision in Cerda v Jacob wherein it was held that a contract which did not comply with s 14(10) of Schedule 1B to the QBCC Act was of no effect, and moreover that it was void and unenforceable by either party.[25] It then referred me to similar first instance decisions of this Tribunal.
  2. [53]
    In my opinion it was not necessary for me to refer to the detail of those submissions herein when noting the submissions before me. Later in these reasons where I discuss the issues, explaining my reasoning for the decisions I reached, I refer to the caselaw which I considered relevant, such which encompassed much of that to which the QBCC referred.

Mr Stevenson’s and Ms Hadenfeldt’s submissions

  1. [54]
    It is convenient to deal with the submissions from Mr Stevenson and Ms Hadenfeldt in their entirety together. This is because, notwithstanding the multiplicity of submissions, they all contained one consistent theme. Their argument was that, notwithstanding the absence of the provisions of QBCC Act Schedule 1B s 14(2) having been satisfied, the contract was of effect regardless of the provisions of s 14(10) therein. This is said to be because of the operation of The Australian Consumer Law, such being found in Schedule 2 of the Competition and Consumer Act 2010 (Cth), the contract in issue said to be a ‘consumer contract’ for ‘services’ as provided for thereunder. They expanded that argument by submitting that, by virtue of s 109 of the Constitution of Australia, the QBCC Act Schedule 1B s 14(2) and s 14(10) are inconsistent with The Australian Consumer Law and accordingly are invalid.
  2. [55]
    Their submissions were then that either, the question posed for preliminary determination be amended to address whether the contract was of no effect as a result of the Australian Consumer Law,[26] or that the QBCC’s application for determination of the Preliminary Issues should be refused.[27]
  3. [56]
    They concluded their multiple submissions with a joint submission in which they stated this:[28]

As communicated to all parties previously, [we] (sic) have obtained independent legal advice and the contract with the Applicant complies with Schedule 6 of the QBCC Regulation 2018, further the contract in question is under the operation of Schedule 2 of the Competition and Consumer Act 2010, also referred to as Australian Consumer Law, this has been confirmed by both the ACCC (Australian Competition and Consumer Commission) and the Office of Fair Trading.

As per Schedule 6 of the QBCC Regulation 2018, the contract is NOT required to be under the operation of sections 14(2) and 14(10) of Schedule 1B of the QBCC Act.

Furthermore, the contract was validly terminated in writing to the Applicant on the 5th October 2022, as the Applicant failed to meet the Consumer Guarantees of Supplying the Service within a reasonable time as identified by the QBCC in the Statement of Reasons dated 5th December 2022 and the Applicant failed to deliver the Services with Due Care and Skill as per Schedule 2 of the Competition and Consumer Act 2010 for the purposes of section 4(1) of Schedule 6 of the QBCC Regulation 2018.

CONCLUSION

The preliminary issue raised under Direction 4(a) of the Tribunal’s directions dated 10th October 2023 is NOT relevant to this proceeding as per (sic) Schedule 6 of the QBCC Regulation 2018 clearly covers the contract which was in place with [the] (sic) Applicant.

Further, the contract was validly terminated as the Applicant failed to meet the Consumer Guarantees as was originally quoted for the Products and Services to be delivered for the purposes of section 4(1) of Schedule 6 of the QBCC Regulation 2018.

The internal review decision made by the QBCC of the 5th December should therefore be confirmed.

The QBCC’s Responsive Submissions

  1. [57]
    As it sought permission to do, the QBCC filed a relatively short submission in response to the multiple submissions from Mr Stevenson and Ms Hadenfeldt. It seemed to me apposite to simply extract the relevant parts thereof within these reasons given the succinctness with which they have met those submissions.[29]
  1. It is difficult to understand the point being made by the Second and Third Respondents in their Submissions. It appears that their argument is as follows:
  1. Consumer guarantees under … the Australian Consumer Law… applied in relation to the goods or services [which] (sic) were supplied by the Applicant to the Second and/or Third Respondent arising from the parties entering into the building contract. The Second and Third Respondents have specifically referred to guarantees in s 60 and 62 of Schedule 2 ….
  1. The application of these guarantees is inconsistent with the building contract being of no effect as a result of the operation of s 14(2) and (10) of Schedule 1B of the QBCC Act.
  1. Section 109 of the Australian Constitution applies in those circumstances to render the State law invalid to the extent of the inconsistency with the Commonwealth law. …
  1. In the event that these guarantees do apply to the goods and services provided by the Applicant to the Second and/or Third Respondent, whether or not there is an enforceable contract in existence will not affect the applicability of the statutory guarantees. …
  1. It is clear that the validity and application of the consumer guarantees is not based on the existence or otherwise of an enforceable contract between the supplier of the goods or services in question and the consumer. … the guarantees arise when a person (the supplier) supplies, in trade or commerce, services to a consumer. The application of the consumer guarantees does not depend, in any way, on there being an enforceable contract, or indeed, a contract in place. This is plain from the words used in the consumer guarantees …
  1. It follows therefore, that the operation of s 14(2) and (10) of Schedule 1B of the QBCC Act to render the contract between the Applicant and the Second and/or Third Respondents of no effect, does not in any way affect the operation and application of the consumer guarantees referred to by the Second and Third Respondent.
  1. Accordingly, there is no inconsistency between the state (sic) law … and the consumer guarantee provisions under the ACL, and the argument by the Second and Third Respondents should be rejected.

Discussion on the Issues

The Submissions from Mr Stevenson and Ms Hadenfeldt

  1. [58]
    It seemed to me convenient to start with the submissions made by Mr Stevenson and Ms Hadenfeldt. These could be disposed of with relatively minimal discussion. Put simply, they are misconceived and without substance. The application of the Australian Consumer Law in the present circumstances and in answer to the Preliminary Issues is entirely misplaced. They show an absence of understanding of the relevant legislation.
  2. [59]
    To the extent they assert that they have “obtained independent legal advice”, that advice is either wrong or is advice given to them based on facts and circumstances which they have described to the provider of that advice which are not accurate in terms of what the facts actually are. Similarly that appears to be the case in terms of their assertion of something having been confirmed by the ACCC and the Office of Fair Trading. I did not give any weight to their submission of this asserted advice or asserted confirmation.
  3. [60]
    The QBCC’s responsive submissions to which I have just referred are, in my opinion, entirely appropriate and accurate. I respectfully adopt them as part of my reasons.[30] However such is not to be read and understood as a finding by me that Mr Stevenson and/or Ms Hadenfeldt are entitled to the benefit of such consumer guarantees. I harbour some doubt as to whether they do apply to the acquisition of the said services, namely being the renovation of a bathroom. That is a matter for another forum to be determined based on evidence and legal argument which would have to be led, tested, and considered. It is not something that arose for determination by me in terms of the Preliminary Issues, nor did it arise in this proceeding as part of Mr McGrath’s originating application. Thus, it is not a matter that is presently before this Tribunal as part of this proceeding.
  4. [61]
    As to their submissions that the QBCC’s application for determination of the Preliminary Issues should be refused, such was not a submission open to be made when they each made that submission. The decision to allow the QBCC’s application had already been made.
  5. [62]
    For completeness I should also say one more thing about their argument. In their final joint submission they assert that the contract was validly terminated as a consequence of Mr McGrath having failed to meet the consumer guarantees of suppling the service within a reasonable time and failing to have delivered the services with due care and skill. In Mr Stevenson’s second submission filed 14 September 2024 he stated:

I validly terminated the Contract as the Applicant failed to meet several “Consumer Guarantees” including as referenced in the Termination Letter; Failing (sic) to carry out the contracted services with reasonable care and skill.

  1. [63]
    However, there is no reference at all to such consumer guarantees as being guarantees under the Australian Consumer Law, or even a bare general reference to the Australian Consumer Law, contained in the document entitled ‘Notice of Termination of and Withdrawal from Contract’ shown as having been signed by Mr Stevenson in the name of Mr Hadenfeldt on 5 October 2022.[31] Rather, Mr Stevenson expressly raised the following issues therein:
    1. The contract did not comply with the QBCC Act Schedule 1B s 14(10), noting that the contract was only of effect it complied with s 14(2) therein;
    2. An assertion as to Mr McGrath’s failure to have completed the work within a reasonable time, such being expressed reliant on the warranty under the QBCC Act Schedule 1B s 25 that the work was to be carried out with reasonable diligence; and
    3. An assertion as to Mr McGrath having breached the warranty under the QBCC Act Schedule 1B s 22, namely that he was to have carried out the work in an appropriate and skilful way and with reasonable care and skill.
  2. [64]
    That is, Mr Stevenson and/or Ms Hadenfeldt did not approach or undertake the purported termination of a contract said to have been with Mr McGrath in any way reliant on consumer guarantees under the Australian Consumer Law.[32] Their case, at least as it appears to have been at that time, was premised entirely on the provisions of the QBCC Act Schedule 1B and the asserted breaches of warranties found therein which they assert an entitlement to the benefit of.[33] It seems to me that their later apparent reliance on the Australian Consumer Law was something they came up with when faced with the prospect of having to address the issues raised in this proceeding by the QBCC.
  3. [65]
    I should also say one thing about the last of the submissions from Mr Stevenson, those being that which he filed 24 May 2024. Whilst he seemed to have raised a further argument of asserted misleading conduct by Mr McGrath, he essentially repeated his earlier arguments asserting that “Federal Jurisdiction must be exercised in this matter.” Once again his arguments were misconceived. I gave them zero weight.

The submission from Mr McGrath

  1. [66]
    Next, I dealt with the submissions from Mr McGrath which, as I mentioned earlier, I have taken from his originating application as being that which he had to say which could be read relative to the Preliminary Issues. His argument is confused and confusing. I had extreme difficulty in being able to understand it, other than to reach a point of concluding that what it appears he is saying is that the contract was void and not capable of termination, thus not validly terminated, such that assistance under the Scheme was not available to Mr Stevenson. Whilst this is ultimately the argument that I have had to consider in reaching my decision on the Preliminary Issues, the premise upon which I did so is not that which Mr McGrath seemingly sought to advance. I did not give his argument any weight in reaching my decision.

The submissions from the QBCC

  1. [67]
    I thus turned to the QBCC’s submissions. They were of assistance to me. Firstly, as relevant to:
    1. the decisions made by the QBCC;
    2. the assistance Mr Stevenson and/or Ms Hadenfeldt, as purported consumers for the purposes of the Scheme, could obtain thereunder; and
    3. Mr McGrath’s application and so the Preliminary Issues which arise therefrom;

by reference to the legislative provisions relative to the Scheme which I have extracted earlier in these reasons it is readily apparent that there must be a contract for the carrying out of residential construction work. It is only when such exists that cover under the Scheme comes into force under s 68H of the QBCC Act, even though such cover may have commenced prior to the entry into the contract in a manner as provided for under s 68I(1)(a) or (c) therein. I return to that point shortly later in these reasons.

  1. [68]
    But critically, any such contract must be a contract which satisfies the requirement of a contract for the purposes of the QBCC Act, and more particularly as relevant in this proceeding Schedule 1B s 14 therein. In that regard, there are strict provisions found therein, in particular the two subsections thereof which I extracted in paragraph [48] herein. It is subsection 14(10) therein upon which the Preliminary Issues fell to determined.
  2. [69]
    In Cerda v Jacobs, a decision appropriately and properly identified by the QBCC in its submissions, the following conclusions were expressed as to the meaning of s 14(10) of Schedule 1B:[34]

In our view the s 13(5) and s 14(10) of Schedule 1B are clear on their face. A regulated contract that is not in writing, signed by the parties and dated is of no effect, with the consequence that the contract is void and unenforceable by either party. These minimum mandatory requirements are neither difficult for builders and building owners to comply with nor onerous in circumstances where persons contract for the performance of domestic building work. If parties contract for the performance of domestic building work without complying with these requirements they do so at their own peril and without the protections afforded by a contract or the statutory warranties implied into such contracts.

We make the following observations regarding the relevant extrinsic material. The extrinsic material confirms our view as to the ordinary meaning of the provisions.

Schedule 1B of the QBCC Act is essentially an incorporation of the now repealed Domestic Building Contracts Act 2000 (Qld) (’DBC Act’). As originally enacted, the DBC Act provided that a regulated contract only had effect if it was signed by the building contractor and the building owner. The Bill incorporating the DBC Act into the QBCC Act originally provided that a level 1 or level 2 regulated contract had effect only if the contract complied with s 13 and s 14 (respectively). These requirements were extensive, and extended far beyond the necessity for the contract to be in writing, signed and dated. In the original Bill, the contract was required to contain, among other things, the contract price or the method for calculating it, including the building contractor’s reasonable estimate; a provision stating the date for practical completion or how the date was to be determined; and a ‘conspicuous’ notice advising the building owner of the right the owner may have to withdraw from the contract under the Act.

Between the introduction of the Bill and its enactment, the requirements for a regulated contract to have effect underwent considerable revision. The Explanatory Notes to the Bill are illuminating in this regard. Under the heading ‘Achievement of the objectives’ it is stated:

The Government proposes to adopt a number of the Committee's recommendations contained in the Committee Report either in full or in part. This includes the following:

…

… It is proposed to amend proposed new sub-sections 13(5) and 14(11), QBCC Act, to provide that the contract has effect only if it complies with sections 13(2) and 14(2) from Schedule 1B, and to provide that contracts are not deemed invalid for failure to comply with all requirements of sections 13 and 14.

The Transport, Housing and Local Government Committee in its report stated:

The Committee agrees that the consequence (that the contract is deemed invalid) of non-compliance with any of the requirements of proposed new section 13 (for level 1 contracts) and proposed new section 14 (for level 2 contracts) is disproportionate, especially considering that in both the case of level 1 contracts and level 2 contracts, additional requirements may be prescribed in regulation. The Committee notes the Department’s advice that consideration will be given to removing these clauses from the Bill and supports their removal.

The Committee recommended:

… that the Minister remove proposed new 13(5) and 14(11) from Schedule 1B to provide that contracts are not deemed invalid for failure to comply with all requirements of those respective sections.

The relevant legislative history makes clear that the parliament clearly turned its mind to the minimum requirements for a valid and enforceable regulated contract and the extent to which non-compliance with the Act would result in a regulated contract being of no effect, and thus void. The legislative history also makes clear that the parliament intended a regulated contract would have effect unless it failed to meet the most basic of requirements: that it be in writing, that it be signed and that it be dated.[35]

The contract between the parties was not dated. It failed to comply with s 14(10) of Schedule 1B of the Act and was therefore of no effect. The contract was void and unenforceable by either party.

  1. [70]
    Because this is a decision of this Tribunal’s Appeal Division, I am bound to follow it.[36] As per the provisions of the QBCC Act Schedule 1B subsection 14(2), the contract between Mr McGrath and Mr Stevenson and/or Ms Hadenfeldt was required to have been in written form, dated, and signed by or on behalf of each of the parties to it. In the absence of it being so, by operation of subsection 14(10) therein the contract is of no effect. The consequence is that the parties are unable to enforce any rights or obligations arising from the agreement for the works even though the parties could show an oral contract had formed.[37] It is not that it is voidable and thus had effect as an oral contract and remained valid until such time as this Tribunal or a Court declared it to be void, but rather, as held in Cerda v Jacob, the contract was void because it was of no effect. That is, it was void ab-initio.
  2. [71]
    As a consequence, it must follow that it was simply not open for the contract to have been validly terminated on the default of Mr McGrath for the purposes of s 4(1) of Schedule 6 of the QBCC Regulations. This is because not only was there not a contract which Mr McGrath could default in the performance of, there was not a contract which Mr Stevenson and/or Ms Hadenfeldt could validly terminate.
  3. [72]
    It is on this basis that the Preliminary Issues can be determined and answered. I return to those answers later in these reasons, but in the interim I thought it appropriate to have offered the following additional comments for no other reason that to assist the parties in finalising this proceeding.

Additional Comments

  1. [73]
    Whilst that was sufficient to dispose of the Preliminary Issues, as I referred to it earlier in these reasons in a Footnote to paragraph [51], the QBCC did not explain in its material how the decision on the Preliminary Issues would lead to an early end to the review proceeding, and as I mentioned therein I said I would return to that issue. I also mentioned in paragraph [67] herein that I would return to the issue of when cover under the Scheme comes into force. They are related. In terms of both I do so here because it seemed to me that it should be of assistance to Mr McGrath, Mr Stevenson, and Ms Hadenfeldt, to understand the consequences of my findings and decision on the Preliminary Issues. These comments also deal with, at least in part, the joint submission made by Mr Stevenson and Ms Hadenfeldt that the QBCC’s decision of 5th December should be confirmed. I explain herein why that could not be so.
  2. [74]
    The consequences of my decision on the Preliminary Issues was not something I was required to make any decision about or express in any Order. To the extent this proceeding was before me it was solely to have decided the Preliminary Issues. But in my opinion, it should be observed that my decision on the Preliminary Issues should be read as being fatal to the case for assistance under the Scheme by Mr Stevenson and/or Ms Hadenfeldt, and if assistance has already been given and the purported claim is or has been paid out, such would also be fatal to any effort the QBCC makes to recover same from Mr McGrath. This is because of the following facts and circumstances.
  3. [75]
    There was no written contract. But it is apparent from a reading of the material before this Tribunal it could be found that  the parties entered into an oral contract, following which Mr McGrath started carrying out work and later paid, or caused to be paid, an insurance premium relative to the Scheme.[38] Each of the subsequent two actions were sufficient for the purposes of cover under the Scheme commencing as provided for under QBCC Act s 68I(1)(a) and (c). However, notwithstanding it may be said to have ‘commenced’ at that time, any such commencement predating the date on which the requisite effective contract was entered would cease retrospectively if a contract which was effective for the purposes of cover did not exist. This is because cover could never come into force in the manner provided for under the QBCC Act s 68H. That being so, to the extent it may be said cover had already commenced under s 68I, such does not give it otherwise permanent prospective effect. It still ultimately required an effective contract to exist.
  4. [76]
    In my opinion it may readily be said that the drafting of s 68H and s 68I of the QBCC Act is somewhat cumbersome, and even ambiguous, in terms of its references in both sections to when cover ‘comes into force’. It seems to me that a redrafting of these sections, or at least s 68I, is warranted. On my reading of the Act as presently drafted, the proper construction of these two sections when read together is that s 68H is the leading provision whereas s 68I is the subordinate provision. Such terms in reference to statutory construction are found in the reasoning of the High Court in Project Blue Sky v Australian Broadcasting Authority:[39]

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. … the process of construction must always begin by examining the context of the provision that is being construed.

…. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other".

Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

  1. [77]
    It is also apposite to refer to joint judgement of the High Court in Alcan (NT) v Territory Revenue wherein the following was stated in terms of statutory construction:[40]

This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. …. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.

  1. [78]
    Such was a foundation upon which the Queensland Court of Appeal embarked upon a task of statutory interpretation in Meridien AB Pty Ltd v Jackson wherein Muir JA made this observation:[41]

…. The court’s role is one of construction not legislation. …

The limits within which the courts must operate in straining the language of a statute in order to ensure that the legislative purpose is not thwarted were explored in the reasons of McHugh J in Newcastle City Council v GIO General Ltd, where, after referring to a statement by Brennan CJ and himself in IW v City of Perth, his Honour said:

“Nevertheless, when the purpose of a legislative provision is clear, a court may be justified in giving the provision ‘a strained construction’ to achieve that purpose provided that the construction is neither unreasonable nor unnatural. If the target of a legislative provision is clear, the court’s duty is to ensure that it is hit rather than to record that it has been missed. As a result, on rare occasions a court may be justified in treating a provision as containing additional words if those additional words will give effect to the legislative purpose. In Jones v Wrotham Park Estates, Lord Diplock said that three conditions must be met before a court can read words into legislation. First, the court must know the mischief with which the statute was dealing. Second, the court must be satisfied that by inadvertence Parliament had overlooked an eventuality which must be dealt with if the purpose of the legislation is to be achieved. Third, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect.”

  1. [79]
    These two sections were introduced into the QBCC Act as part of the substantial amendments made via the Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld) s 36. The explanatory notes for the preceding Bill explain these provisions in the following manner:

New section 68H (Cover of residential construction work) contains provisions for the terms of insurance cover which are prescribed by regulation and the circumstances under which cover comes into force.

New section 68I (Commencement of cover) contains provisions for the different commencement date of the insurance cover for residential construction depending on the type of contract and whether additional cover is provided.

  1. [80]
    Similar provisions were previously found in the earlier version of the QBCC Act, namely at s 69(2) (for s 68H) and s 69A(2) (for s 68I). The latter of those two, s 69A(2), was introduced into the Act under s 47 of the Queensland Building Services Authority and Other Legislation Amendment Act 2007 (Qld) which commenced on 21 December 2007. It was at that same time that Schedule 1B was introduced into the QBCC Act with the inclusion of s 14(10) therein, the premise for which was as discussed by the Appeal Tribunal in Cerda v Jacobs to which I referred earlier herein at paragraph [69]. However, it seems to me that when making these amendment to the legislative regime which had previously existed, the drafters of the legislation, and thus parliament, inadvertently overlooked the consequences of the contract being of no effect in terms of the operation of what became the new s 68H and s 68I in the QBCC Act.
  2. [81]
    What the amendments did was to make s 68H the leading provision, it establishing  the premise upon which cover comes into force, whereas the subordinate provision found in s 68I establishes the premise when cover which has, or is yet to, come into force is deemed to have commenced such which can predate the date on which the cover comes into force. As such, with the introduction of the earlier s 69A(2) which became s 68I, it seems to me that the mischief parliament intended to remedy was a circumstance where the relevant premium may be paid, or the relevant work may have commenced, before the contract is entered into, thus leaving a period of time when cover may not have been in force. But the remedy of that mischief was complicated when the amendments were made in the creation of Schedule 1B. In my opinion it leads to a result that, in the circumstance the relevant contract being of no effect, cover under the Scheme could never come into force in the manner provided for by the leading provision which is s 68H. This is so regardless of whether it could be said it had otherwise commenced under s 68I.
  3. [82]
    It is here that I suggest the redrafting of the legislation is necessary to correct the position that, on my reading of the legislation, appears to be the outcome of a situation where a contract is of no effect. In the absence of same, there remains an ambiguity in the legislation as to when cover ‘comes into force’. It also gives rise to a potential limitation on a person being able to seek assistance under the Scheme, for example a subsequent consumer who had purchased the work once completed.[42] That subsequent consumer should not be disadvantaged if the original consumer, that being the person who purportedly contracted to have the work carried out, failed to ensure the contract was of effect. Such disadvantage would arise if the contract were of no effect and as such insurance under the Scheme never came into force. It might be that the proper construction of these provisions is to, in the circumstance of the contract being of no effect, limit only the ability for the original owner to seek assistance, alternatively limit it only to the ability to seek assistance for non-completion being lost but whilst retaining an entitlement to assistance for defective work, the latter not requiring the contract to have been validly terminated.
  4. [83]
    But as I noted it earlier, such are not issues for me to have decided in this proceeding nor make any orders about. There was no requirement for me to descend into a consideration of the provisions that might ultimately require a ‘a strained construction’, in the manner discussed by McHugh J in Newcastle City Council v GIO General Ltd as noted by Muir JA in Meridien AB Pty Ltd v Jackson which I referred to in paragraph [78] herein, to be given the relevant provisions. These are issues left for a different proceeding. Moreover, it is not for this Tribunal to correct the legislation. It is for parliament
  5. [84]
    Alternatively, if I am wrong about that interpretation and the cover did come into force  on the occurrence of that provided for under QBCC Act s 68I(1)(a) and (c) regardless of the fact that the contract was of no effect and thus a contract was never entered into, Mr Stevenson and/or Ms Hadenfeldt could never have been entitled to assistance under the Scheme for non-completion in the manner provided for under the QBCC Regulations s 7(1). This is because they could never have validly terminated the contract thus resulting in the contract coming to an end, such being the pre-requisite under QBCC Regulations Schedule 6, s 6(a) and (b) read together with s 4(1).
  6. [85]
    What ultimately that means is that, consistent with that which I stated in paragraph [70] herein, such being that the parties, as relevant here Mr Stevenson and/or Ms Hadenfeldt, were unable to enforce any rights arising from their asserted agreement with Mr McGrath, that unavailability of rights extending to rights that they would have otherwise had under the Scheme had the contract been of effect. That is, they were never entitled to assistance under the Scheme. That being so, the claim made by Mr Stevenson and/or Ms Hadenfeldt for such should never have been approved by the QBCC, and moreover there is simply no basis for the QBCC to be able to recover anything from Mr McGrath to the extent it may already have paid out the claim. This is because in all respects it is a claim, and a payment, not properly made within the Scheme or in accordance with the terms of cover.[43]

Conclusion

  1. [86]
    It is apposite to return once again to the decision of this Tribunal’s Appeal division in Cerda v Jacob to which I referred in paragraph [69] herein, in particular that part extracted therein in terms of the learned Members’ stated view of s 14(10) of Schedule 1B, namely:[44]

These minimum mandatory requirements are neither difficult for builders and building owners to comply with nor onerous in circumstances where persons contract for the performance of domestic building work. If parties contract for the performance of domestic building work without complying with these requirements they do so at their own peril and without the protections afforded by a contract or the statutory warranties implied into such contracts.

  1. [87]
    A similar observation, but one with a more expansive point being covered, was made in this Tribunal at first instance in Clarke v Queensland Building and Construction Commission:[45]

More to the point, level 2 regulated contracts are significant contracts. The statutory requirement for them to be in writing, dated and signed by or on behalf of both parties is there for a self-evident reason – to minimise disputes, of which the current matter is an example, about the terms of such contracts. There is obviously a consumer protection element to the evident policy of the legislation, but there is also a broader public interest in the minimisation of disputes the resolution of which, through publicly-funded mechanisms such as the Commission’s and Tribunal’s review processes, comes at a cost to the general public. It is prudent for owners entering into significant arrangements with builders to ensure they have a written contract signed by both parties and dated. Parliament’s plain intention is that owners or builders who fail to observe that requirement do so at their peril.

  1. [88]
    Such comments are apposite to the present circumstances before me concerning Mr Stevenson’s and/or Ms Hadenfeldt’s conduct, and in turn that of the QBCC’s officers. It is unfortunate that the QBCC’s officers who were involved in the earlier decision making processes made decisions that ultimately led to the circumstances Mr McGrath found himself in, such which resulted in him making his application for review to this Tribunal. Either they were not aware of, or otherwise not properly informed, of the status of the law at the time they respectively made their decisions. They should have been. Had they been this entire proceeding should have been avoided. That is not to say Mr McGrath’s conduct is to be excused. As a QBCC licensee he failed to meet his statutory obligation to ensure that the contract met the requirements of the QBCC Act Schedule 1B. The consequences for him of that are as provided for in the legislation, such being a matter for the QBCC.
  2. [89]
    All that being said, for the reasons I have given herein, the questions posed by the QBCC for determination as the Preliminary Issues can be readily answered in the affirmative, namely:
    1. the contract was of no effect;
    2. thus the contract was not validly terminated for the purposes of s 4(1) of Schedule 6 of the QBCC Regulations.
  3. [90]
    Orders were made to that effect such being expressed as declarations in the manner provided for under s 60 of the QCAT Act.
  4. [91]
    Finally, and for completeness, I considered it necessary for me to also make the following short observations.
  5. [92]
    Notwithstanding the earlier conduct of its officers to which I have just referred being entirely inconsistent with the law, it was proper and appropriate for the QBCC to have raised these issues as ones to be determined as preliminary issues. The orders I have made are such that it should now lead to an end to the proceeding commenced by Mr McGrath’s application for review.
  6. [93]
    It is now a matter for the parties as to the manner in which they deal with the proceeding so as to bring it to a prompt conclusion. There was no requirement, nor even a proper basis, for me to give final orders in the originating application in the manner contemplated by s 23 of the QCAT Act which empowers this Tribunal to invite the QBCC to reconsider the decision, or s 24 of the QCAT Act, which empowers this Tribunal to confirm or amend the decision, set-aside the decision and substitute its own decision, or set-aside the decision and return the matter to the QBCC for reconsideration together with any directions the Tribunal considered appropriate. One of the reasons for this is the absence of clarity as to what decision is that Mr McGrath seeks to be reviewed, and to what extent Tribunal is seized of jurisdiction to conduct the requisite review. These are threshold issues which I saw as arising on the material before this Tribunal to which I referred in paragraph [32] herein. Before any final orders could be made in line with s 23 or s 24 of the QCAT Act, preliminary matters would need to be dealt with in that regard and relevant orders made. Hopefully, given the orders I have made in terms of the Preliminary Issues, the parties will find themselves in a position to dispose of this proceeding without further steps needing to be taken before the Tribunal.

Footnotes

[1]The reference to it by that name is as provided for under s 67X of the QBCC Act and in turn s 25 of the QBCC Regulation.

[2]Namely 10 November 2022, 5 December 2022, 31 January 2023, and 13 February 2023 being listed under Part B of his application document. The last three of those are listed together with a decision of 23 December 2022 under Part C of his application document.

[3]A copy of the Decision Notice appears as part of Annexure E to the originating application document. It is an internal review decision which affirms an earlier QBCC decision of 5 December 2022.

[4]See that stated in Part C of Mr McGrath’s originating application document under the heading ‘State briefly why you think the decision is wrong or not properly made’, and in the document entitled ‘Submission’ accompanying the application.

[5]This fact is found in a submission from Ms Hadenfeldt filed 11 September 2023.

[6]This fact is found in a decision document from the QBCC dated 5 December 2022.

[7]See Directions of 10 October 2023 and 8 May 2024.

[8]These ‘facts’ have been sourced from within the documents annexed to Mr McGrath’s Application for Review to this Tribunal. I have not made any positive finding as to the accuracy and truth of that which is stated therein, not needing to have done so. To the extent of the Preliminary Issues to be decided, I proceeded on what was common ground as evidenced in Mr McGrath’s material, namely that the contract was not reduced to writing in a manner which satisfied the requirements of s 14(2) of Schedule 1B of the QBCC Act.

[9]It is not necessary to identify those reasons herein, save only to say that one of them was for failure to have completed the work within a reasonable time.

[10]A copy of that claim is not within the material before this Tribunal.

[11]There is nothing in the material before me to show whether the QBCC sought an agreement with Mr McGrath for additional time, and if it did whether Mr McGrath did not agree. On my reading of the Decision Notice of that decision, I infer that the QBCC did not seek any such agreement.

[12]There is confusion in the Tribunal Record in this regard. In that Direction Mr Stevenson is named as the second respondent, and Ms Hadenfeldt is named as the third respondent. However, as all subsequent Directions were formulated, and submissions in satisfaction thereof as relevant were received, Ms Hadenfeldt was named as the second respondent and Mr Stevenson named as the third respondent. I have thus continued with that latter formulation of the parties’ respective identifiers.

[13]Mr McGrath did not file any submissions in response to the Direction for same.

[14]That which is read as Mr Stevenson’s submissions of 13 October 2023 was filed by him as an ‘Application for miscellaneous matters’, but by a Direction issued 21 November 2023 that application was taken to be his submissions in response to the Preliminary Issues.

[15]There is some suggestion in the submissions from Mr Stevenson and Ms Hadenfeldt that the proper formulation of the contract is one under the Australian Consumer Law and as such the reference to it being a Level 2 contract is unwarranted. However as I discuss it briefly later in these reasons, in the Notice of Termination document issued to Mr McGrath by Mr Stevenson, it was expressly stated that the contract was a Level 2 regulated contract as that term is used in the QBCC Act Schedule 1B. I also pause here to observe that in his final submission filed 24 May 2024, Mr Stevenson stated that “The termination letter was drafted by a specialise principal solicitor for Building and Construction law and was served on the Contractor on the 5th October 2022 …”, such being a reference to that Notice of Termination. As such it is readily apparent to me that Mr Stevenson accepted that the contract was a Level 2 contract.

[16]There must be a separate review application filed in respect of each decision sought to be reviewed. See Body Corporate for Alto Gladstone v Queensland Building and Construction Commission & Anor [2020] QCATA 6,[74]. Associated with this is an issue of the extent to which an application for extension of time in which to file an application for review may have been required.

[17]The 23 December 2022 and the 13 February 2023 decisions are decisions which would be beyond the jurisdiction absent any approval of an extension of time for the former. See QBCC Act s 86F(1)(c) and s 86F(1)(a) respectively.

[18]QCAT Act s 17.

[19]QBCC Act s 86E and s 86F.

[20]QCAT Act s 21(1).

[21]Contrast Number One Quality Homes Pty Ltd v Murphy & Anor [2020] QCAT 339, referred to by the QBCC in its submissions accompanying its application. As noted therein, that part of the decision of the learned Senior Member’s reasoning therein which provides useful guiding principles in approaching whether it is appropriate to determine preliminary issues in tribunal proceedings, such principles presumably adopted by this Tribunal when the decision was made to proceed with a determination of the Preliminary Issues, in that matter the Tribunal declined to proceed on a preliminary determination given the extent the issues required a determination of both questions of law and fact, such which were “matters on which the evidence will be tested at a hearing.”. Such is not that which arises in this proceeding. Herein it is simply a matter of law given the common ground that there was no signed contract document as required by QBCC Act Schedule 1B s 14.

[22]In that regard consider Chapter 2 Division 3 of the QCAT Act, and more particularly s 20 and 24(1) therein.

[23]See Tribunal Direction 5 of 10 October 2023.

[24]These are as contained in Annexure A to its Application for Miscellaneous Matters filed 11 August 2023 – see para’s 18 to 20 therein. Whilst it makes that last submission, it does not explain how the early end to the review proceeding would arise. I return to that issue later and touch on it briefly in these reasons under the heading ‘Additional Comments’.

[25]Cerda v Jacob [2020] QCAT 57,[30].

[26]Mr Stevenson’s submission of 13 October 2023.

[27]Ms Hadenfeldt’s submission of 11 September 2023 and Mr Stevenson’s submission of 14 September 2023.

[28]Joint submission dated 7 November 2023 but filed 5 December 2023. Emphasis shown in bold and also in CAPITALS is as it appears in the original.

[29]QBCC’s submissions filed 22 May 2024, para’s 1 to 5. In terms of that stated in para 1(a) therein, the QBCC helpfully extracted the two guarantees referred to, namely ‘s 60 – Guarantee as to due care and skill’ and ‘s 62 – Guarantee as to reasonable time for supply’. For brevity in these reasons I have not extracted those here. In support of that which was stated in paragraph 2 therein, the submissions provided an extensive extract from the NSW Court of Appeal decision in Scenic Tours Pty Ltd v Moore [2018] NSWCA 238, [155] to [163] which, once again for brevity in these reasons, I have not extracted it here. Emphasis in bold is as it appears in the original.

[30]Notwithstanding that the decision in Scenic Tours Pty Ltd v Moore [2018[ NSWCA 238 referred to by the QBCC was reversed on appeal to the High Court in Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326, the relevant parts of the reasons of the Court of Appeal to which the QBCC refers were not disturbed on appeal to the High Court. It may also be noted that as held in Valve Corporation v ACCC (2017) 258 FCR 190,[106], the consumer guarantee provisions are therefore capable of application whether or not there is a contract.

[31]See Mr McGrath’s originating application – Annexure C.

[32]Once again I note Mr Stevenson’s submission contained in his final submission filed 24 May 2024 that the Notice of Termination was prepared by a specialist solicitor for building and construction law. If that were so and a reliance was to be placed on the consumer guarantees under the Australian Consumer Law it would be expected that such would have been identified by that specialist solicitor and a reference to them appear in the document. The absence of same is indicative of the entire misconceived bases for his arguments.

[33]I pause here to make this observation of such a case. If that were their case and thus the basis upon which they asserted an entitlement to terminate the contract, and so say they validly terminated it for the purposes of being entitled to assistance under the Scheme, their case would have been misconceived. As I discuss it later in these reasons, the contract with Mr McGrath was of no effect, a position seemingly acknowledged, albeit possibly not understood, by Mr Stevenson given the content of his purported Notice of Termination. However in circumstances where the contract was of no effect, it meant that there was not a regulated contract between the parties and accordingly to the extent any reliance may have been placed on implied warranties as provided for under the QBCC Act Schedule 1B in the absence of any express warranties given in a contract, those warranties did not apply and accordingly Mr Stevenson and/or Ms Hadenfeldt had no entitlement to the relief such which otherwise would ordinarily be afforded a home-owner. See Zhang v Todd [2019] QCAT 208, [23]. See also a similar findings in Cooper v McGaveston [2019] QCAT 244, [80] to [83]. Both of these decisions were appropriately referred to by the QBCC in its submissions accompanying its application for determination of the Preliminary Issues.

[34]Cerda v Jacob [2020] QCATA 57,[24] to [31]. Footnotes omitted. My emphasis.

[35]In my opinion there is a drafting error in this passage, such which can be discerned when reading the entirety of the reasons to the extent I have extracted them here. This sentence must be read as saying either “a regulated contract would not have effect unless it failed to meet the most basic of requirements” or “a regulated contract would have effect only it failed to meet the most basic of requirements” the relevant amended word shown here in italics.

[36]Such arises from the doctrine of stare-decisis.

[37]This is as I stated it in McSwan & Anor v Weaver [2023] QCAT 148, [22], one of the cases to which the QBCC referred in its submissions, wherein I cited as an example – Smart v Berry (Building and Property) [2016] VCAT 540,[27]-[34] considering equivalent Victorian legislation. I repeated the same conclusion, albeit on different factual scenarios, in Stelzig v Ireland [2024] QCAT 237,[33] and Lu v Emerson [2024] QCAT 249,[36]. See also Rainbow v Turkovic & Anor [2021] QCAT 441,[39] and cases referred to therein, another decision properly referred to by the QBCC in its submissions.

[38]Whilst I have expressed this opinion, I need not have and thus did not make any definitive finding about those facts and circumstances.

[39]Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355,381 and 382;[69] and [70]. Footnotes omitted.

[40]Alcan (NT) v Territory Revenue (2009) 239 CLR 27,46-47,[47] per Hayne, Heydon, Crennan and Kiefel JJ. Footnotes omitted.

[41]Meridien AB Pty Ltd v Jackson (2013) 1 QdR 142,163,[35].

[42]See the definition of ‘consumer’ for the purposes of the Scheme as given in s 67WA of the QBCC Act.

[43]See Mahony v Queensland Building Services Authority [2013] QCA 323, [37] and Samimi & Anor v Queensland Building and Construction Commission [2015] QCA 106, [31] and [36].

[44]Cerda v Jacob [2020] QCATA 57,[24]. My emphasis.

[45]Clarke v Queensland Building and Construction Commission [2020] QCAT 88,[27]. My emphasis, both bold and via underlining.

Close

Editorial Notes

  • Published Case Name:

    McGrath v Queensland Building and Construction Commission and Ors

  • Shortened Case Name:

    McGrath v Queensland Building and Construction Commission

  • MNC:

    [2024] QCAT 393

  • Court:

    QCAT

  • Judge(s):

    Member Taylor

  • Date:

    11 Sep 2024

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
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27
2 citations
Jump To
Cite 1 - (2009) 239 CLR 27
Cite 2 - (2009) 239 CLR 27
Body Corporate for Alto Gladstone v Queensland Building and Construction Commission [2020] QCATA 6
2 citations
Jump To
Cite 1 - [2020] QCATA 6
Cite 2 - [2020] QCATA 6
Cerda v Jacob [2020] QCATA 57
3 citations
Jump To
Cite 1 - [2020] QCATA 57
Cite 2 - [2020] QCATA 57
Cite 3 - [2020] QCATA 57
Christiansen v Queensland Building and Construction Commission [2020] QCAT 57
1 citation
Jump To
Cite 1 - [2020] QCAT 57
Clarke v Queensland Building and Construction Commission [2020] QCAT 88
2 citations
Jump To
Cite 1 - [2020] QCAT 88
Cite 2 - [2020] QCAT 88
Lu v Emerson [2024] QCAT 249
2 citations
Jump To
Cite 1 - [2024] QCAT 249
Cite 2 - [2024] QCAT 249
Mahony v Queensland Building Services Authority [2013] QCA 323
2 citations
Jump To
Cite 1 - [2013] QCA 323
Cite 2 - [2013] QCA 323
McSwan v Weaver [2023] QCAT 148
2 citations
Jump To
Cite 1 - [2023] QCAT 148
Cite 2 - [2023] QCAT 148
Meridien AB Pty Ltd v Jackson (2013) 1 Qd R 142
2 citations
Jump To
Cite 1 - (2013) 1 Qd R 142
Cite 2 - (2013) 1 Qd R 142
Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326
2 citations
Jump To
Cite 1 - (2020) 268 CLR 326
Cite 2 - (2020) 268 CLR 326
Natalie Cooper v Daniel Murray McGaveston [2019] QCAT 244
2 citations
Jump To
Cite 1 - [2019] QCAT 244
Cite 2 - [2019] QCAT 244
Number One Quality Homes Pty Ltd v Murphy & Anor [2020] QCAT 339
2 citations
Jump To
Cite 1 - [2020] QCAT 339
Cite 2 - [2020] QCAT 339
Project Blue Sky v Australian Broadcasting Authority (1998) 194 C.L.R 355
2 citations
Jump To
Cite 1 - (1998) 194 C.L.R 355
Cite 2 - (1998) 194 C.L.R 355
Rainbow v Turkovic [2021] QCAT 441
2 citations
Jump To
Cite 1 - [2021] QCAT 441
Cite 2 - [2021] QCAT 441
Samimi v Queensland Building and Construction Commission [2015] QCA 106
2 citations
Jump To
Cite 1 - [2015] QCA 106
Cite 2 - [2015] QCA 106
Scenic Tours Pty Ltd v Moore [2018] NSWCA 238
2 citations
Jump To
Cite 1 - [2018] NSWCA 238
Cite 2 - [2018] NSWCA 238
Smart v Berry [2016] VCAT 540
1 citation
Jump To
Cite 1 - [2016] VCAT 540
Stelzig v Ireland [2024] QCAT 237
2 citations
Jump To
Cite 1 - [2024] QCAT 237
Cite 2 - [2024] QCAT 237
Valve Corporation v ACCC (2017) 258 FCR 190
2 citations
Jump To
Cite 1 - (2017) 258 FCR 190
Cite 2 - (2017) 258 FCR 190
Zhang v Todd [2019] QCAT 208
2 citations
Jump To
Cite 1 - [2019] QCAT 208
Cite 2 - [2019] QCAT 208

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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