Harrigan v Linton[2024] QCAT 580

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   At a directions hearing on 8 August 2024, the Tribunal made directions for the parties to show cause why the proceeding should not be either transferred to the District Court or dismissed by final order of the Tribunal (the preliminary issue). Directions were made for the parties to file written submissions and thereafter for the preliminary issue to be determined on the papers.

The background to the dispute

2. [2]
   Mr Harrigan purchased from Mr Linton a domestic residence in North Queensland. After settlement of the purchase, Mr Harrigan visited the residence. He says that he discovered numerous construction defects. Mr Harrigan complained to the QBCC. The QBCC inspected the dwelling and issued a direction to rectify to Mr Linton. Mr Harrigan says that the direction was not complied with. Mr Harrigan then commenced this proceeding.

Mr Harrigan’s claim and Mr Linton’s response

3. [3]
   Mr Harrigan says that Mr Linton was an owner-builder. He says that he was not made aware, prior to purchasing the house, that the building work was not covered by the Queensland Home Warranty Scheme (QHWS), the insurance scheme administered by the QBCC in respect of residential construction work. Mr Harrigan says that had he been made aware of this issue he would not have purchased the property. Mr Harrigan seeks the repayment of the purchase price and payment of his ‘expenses and interest on my money lost.’
4. [4]
   Mr Linton says that Mr Harrigan should have been aware that the building work was not the subject of cover under the QHWS. He says that Mr Harrigan did not inspect the property prior to purchase, either personally or by way of pre-purchase building inspection. Mr Linton says that he communicated to Mr Harrigan that he was prepared to rectify the defective items identified by the QBCC however Mr Harrigan dismissed the offer.

The submissions filed by the parties

5. [5]
   The parties have filed submissions in accordance with the Tribunal directions.
6. [6]
   I do not have the benefit of the transcript of the directions hearing at which the directions were made. I proceed however on the basis that the presiding Member made clear to the parties why the directions were being made. It is apparent from the above summary that there is a clear issue about whether the Tribunal has jurisdiction to decide the dispute.
7. [7]
   Neither Mr Harrigan’s nor Mr Linton’s submissions address the substantive issue of jurisdiction.

Consideration

8. [8]
   The Tribunal may decide a building dispute. Section 77(1) of the Queensland Building and Construction Commissioner Act 1991 (Qld) (‘QBCC Act’) provides that a person involved in a building dispute may apply to the tribunal to have the tribunal decide the dispute. The Tribunal has jurisdiction in respect of ‘tribunal work’. Sections 75 and 76 of the QBCC Act define, respectively, what is ‘tribunal work’ and what is not ‘tribunal work’. The Tribunal cannot decide building disputes in accordance with s 77(1) other than as provided for in ss 75 and 76 of the Act.^[1]
9. [9]
   A ‘building dispute’ may be a domestic building dispute, a minor commercial building dispute or a major commercial building dispute.
10. [10]
    A domestic building dispute is defined as:

1. a claim or dispute arising between a building owner and a building contractor relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work; or

2. a claim or dispute arising between 2 or more building contractors relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work; or

3. a claim or dispute in negligence, nuisance or trespass related to the performance of reviewable domestic work other than a claim for personal injuries; or

4. a claim or dispute arising between a building owner or a building contractor and any 1 or more of the following relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work—

1. an architect;

2. an engineer;

3. a surveyor;

4. a quantity surveyor;

5. an electrician or an electrical contractor;

6. a supplier or manufacturer of materials used in the tribunal work.^[2]

11. [11]
    A commercial building dispute is defined in similar terms to a domestic building dispute other than using the phrase ‘reviewable commercial work’ in place of ‘reviewable domestic work’.
12. [12]
    ‘Reviewable domestic work’ means ‘domestic building work’ as defined in s 4 of sch 1B of the QBCC Act. ‘Reviewable commercial work’ means ‘tribunal work’, other than reviewable domestic work, as defined in ss 75 and 76 of the QBCC Act.
13. [13]
    A ‘building contractor’ means:

1. generally, means a person who carries on a business that consists of or includes carrying out building work, and includes a subcontractor who carries out building work for a building contractor; but

2. for sch 1B, see sch 1B, s 1.^[3]

14. [14]
    A ‘building owner’ means:

1. generally, means a person for whom tribunal work is to be, is being, or has been carried out, but does not include a building contractor for whom tribunal work is carried out by a subcontractor; but

2. for sch 1B, see sch 1B, s 1.^[4]

15. [15]
    ‘Building work’ means:

1. the erection or construction of a building; or

2. the renovation, alteration, extension, improvement or repair of a building; or

3. the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage in connection with a building; or

5. any site work (including the construction of retaining structures) related to work of a kind referred to above; or

6. the preparation of plans or specifications for the performance of building work; or

1. (fa)
   contract administration carried out by a person in relation to the construction of a building designed by the person; or

7. fire protection work; or

1. (ga)
   mechanical services work; or

8. carrying out site testing and classification in preparation for the erection or construction of a building on the site; or

1. carrying out a completed building inspection; or

10. the inspection or investigation of a building, and the provision of advice or a report, for the following—

1. termite management systems for the building;

2. termite infestation in the building;

but does not include work of a kind excluded by regulation from the ambit of this definition.

16. [16]
    In Andrews v Bird^[5] I set out how the provisions of the QBCC Act, referred to above, operate:

To come within the ambit of sub-sections (a) or (b) of the definition of domestic building dispute or commercial building dispute, one of the parties to the dispute must be a ‘building contractor’ within the meaning of that term in schedule 2 of the Act. It is not contentious that Mr Bird was an owner-builder. Is an owner-builder a ‘building contractor’? In order to answer this question it is necessary to briefly examine the QBCC Act and the legislative regime relating to the regulation of the building industry and the role played by owner-builders within that regime.

The objects of the QBCC Act are set out in s 3 and include:

1. (a)
   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;

1. (b)
   to provide remedies for defective building work;

1. (c)
   to provide support, education and advice for those who undertake building work and consumers;

1. (d)
   to regulate domestic building contracts to achieve a reasonable balance between the interests of building contractors and building owners.

The focus of the QBCC Act is upon consumer protection. The Act regulates the building industry and building contractors. As I have noted, a building contractor means a person who carries on a business that consists of or includes carrying out building work. The Act deals with owner-builders in a number of specific ways and differently to building contractors. One of the responsibilities of the QBCC commissioner is to provide courses of instruction for persons proposing to carry out building work as owner-builders.^[6] The Act provides that an owner requires a permit to carry out owner-builder work on the owner’s land.^[7] Among other things, an owner applying for a permit must successfully complete an owner-builder course prescribed under the QBCC Regulation.^[8] The commissioner may grant a permit if, inter alia, the owner or a company of which the owner is or was a director has not been issued with a permit in the 6 years preceding the application.^[9] Building work carried out by a building contractor for a person who is the holder of an owner-builder permit covering the work is not eligible for assistance from the statutory insurance scheme.^[10] The commission must maintain a register of holders of owner-builder permits and must remove the particulars when the term of the permit ends.^[11]

It may be seen therefore that the way owner-builders are dealt with under the statutory regime is quite different to building contractors. One obvious difference is that the Act clearly envisages that owner-building activities by an owner will not be commonplace and certainly such activities will not be undertaken at intervals of less than 6 years. This is to be contrasted with the activities of building contractors who carry on a business that consists of or includes carrying out building work. A further notable difference is that building work carried out by a building contractor for a person who is the holder of an owner-builder permit covering the work is not eligible for assistance from the statutory insurance scheme. 

An owner-builder is not a person who carries on a business that consists of or includes carrying out building work. This much is clear on a plain reading of the definition of the term ‘building contractor’. Further, as has been outlined, the statutory regime under the QBCC Act deals with owner-builders in a quite different way to building contractors.

In Beaumont v McGill^[12] the former Commercial and Consumer Tribunal considered whether an owner-builder was a building contractor. Member Lohrisch stated:

Specifically then, what is clear from (the definition of ‘building contractor’) is that –

1. (i)
   a sub-contractor who carries out work for a building contractor is a “building contractor” by the above definition; and

1. (ii)
   an owner builder (being not otherwise the holder of a licence for building work) is not in a business that consists of or includes carrying out building work ...”. An owner-builder is conducting a one-off construction for that person’s own purposes under a special permit for that purpose, and cannot act beyond that permit/purpose.

Further, the definition of “owner” in the dictionary to the QBSA Act is restricted to “an owner of land”, although such restriction does not advance the respondent’s challenge to this Tribunal’s jurisdiction, as there is no suggestion that the applicants are not the owners of the land, upon which the construction pursuant to the contract was to be carried out.

Yet further, the definition of “building owner” in the subject dictionary means a person, for whom tribunal work is to be, is being or has been, carried out, but does not include a building contractor, for whom tribunal work is carried out by a sub-contractor. I have already found that the applicant, if an owner builder, is not a building contractor, and so the exclusionary second part of the definition of “building owner” can have no application. As to the first part, it seems irrefutable that the contract, subject of these proceedings, is a contract which involves the carrying out of “tribunal work”, as that term is established by sections 75 and 76 of the QBSA Act.

There are obvious sound policy reasons why the Act deals differently with owner-builders. Firstly, owner-builders are not engaged in the ‘building industry’. Owner building is recognised as a ‘one off’ event or, at the very least, an infrequent undertaking. Secondly, an owner-builder undertakes building work on their own behalf and for their own benefit. There is no ‘consumer’ for whom the work is undertaken.

There are two limbs to the definition of ‘building contractor’ in schedule 2 of the Act. I have referred to the first limb above. The second limb of the definition provides: ‘for schedule 1B, see schedule 1B, section 1.’ However, the operative definition of ‘building dispute’ is contained in schedule 2, not schedule 1B.

There is also no evidence before the Tribunal that either or both of the respondents were otherwise the holders of a licence to undertake building work. 

It follows that neither of the respondents is a ‘building contractor’ for the purposes of sub-paragraphs (a) or (b) of the definition of domestic building dispute or commercial building dispute. 

For a building dispute to come within sub-paragraph (a) of the definitions of domestic building dispute or commercial building dispute, one of the parties to the dispute must be a ‘building owner’. There are two limbs to the definition of ‘building owner’ in schedule 2. The first limb defines a ‘building owner’ as ‘generally, means a person for whom tribunal work is to be, is being or has been carried out, but does not include a building contractor for whom tribunal work is carried out by a sub-contractor’. It is apparent from a plain reading of the text that to come within the first limb of the definition, a ‘building owner’ must have a directly proximate relationship with the building contractor who has carried out, is carrying out or is to carry out the relevant building work. The person must, in some direct way, be causative of the work or the proposed work. The second limb of the second limb of the definition of ‘building owner’ provides: ‘for schedule 1B, see schedule 1B, section 1.’ As I have previously observed however, the operative definition of ‘building dispute’ is contained in schedule 2, not schedule 1B. A subsequent purchaser of a property is not, in my view, a ’building owner’ within the meaning of that term. There does not exist, as between a subsequent purchaser and a building contractor, the necessary proximity of relationship to the performance of the building work to which I have earlier observed. Accordingly, even if the respondents, as owner-builders, are ‘building contractors’ and for the reasons set out they are not, the applicant is not a ‘building owner’ for the purposes of sub-paragraph (a) of the definitions of a domestic building dispute or a commercial building dispute.

It follows from the foregoing that the dispute between the parties does not fall within sub-paragraphs (a) or (b) of the definition of ‘domestic building dispute’ or the definition of ‘commercial building dispute’.

Does the dispute fall within sub-paragraph (d) of the definition of domestic building dispute or commercial building dispute?

A dispute for the purposes of sub-paragraph (d) of the definitions of ‘domestic building dispute’ and ‘commercial building dispute’ must be one between a building owner or a building contractor and one of a stated category of persons. Ms Andrews is not a ‘building owner’. Nor, for the reasons I have set out, are the respondents a ‘building contractor’. And it is readily apparent that the respondents do not come within any of the categories of persons in sub-paragraph (d). The dispute between the parties does not fall within sub-paragraph (d) of the definitions of domestic building dispute or commercial building dispute.

Does the dispute fall within sub-paragraph (c) of the definition of domestic building dispute or commercial building dispute?

That leaves sub-paragraph (c) of the definitions of domestic building dispute and commercial building dispute. The Tribunal considered the application of sub-paragraph (c) in Holley v Knezovic.^[13] There, the applicant was a subsequent purchaser of a home constructed by the respondent as an owner-builder. The Tribunal found that it had jurisdiction to determine the applicant’s claim in negligence on the basis that the work undertaken by the respondent was ‘domestic building work’. This finding appears to have been made in circumstances where there was no dispute as to the jurisdiction of the Tribunal and the application of sub-paragraph (c), in the context of whether the dispute between the parties was a building dispute, was not the subject of argument by the parties.

In Paddy v Bennett^[14] I considered the scope of sub-paragraph (c) and held:

Sub-paragraph (c) must be construed to give effect to the provision in the context of the QBCC Act as a whole and particularly the objects of the Act. It was not the intention of the legislature, as observed by McPherson JA, to invest the Tribunal with jurisdiction over all claims in negligence for property damage or economic loss of any kind. Such claims must be related to the performance of building work. In my view, it could not have been the intention of the legislature to confer upon the Tribunal jurisdiction for claims relating to building disputes where there was not a nexus between the parties, or a party, to the dispute and the building industry. Construing sub-paragraph (c) in this way is consistent with the language and purpose of all the provisions of the QBCC Act. Such a construction also recognises that a claim or dispute in negligence, nuisance or trespass relating to building work may involve a building contractor or one of the stated persons referred to in sub-paragraph (d) of the definitions of domestic building dispute and commercial building dispute, and a person who does not fall within the definition of a building owner. A neighbouring lot owner, or a subsequent purchaser of a property on which building work has been carried out, may be a party to a dispute within the meaning of sub-paragraph (c). What is required for the dispute to fall within sub-paragraph (c) is that a party to the dispute is one of the persons referred to in sub-paragraphs (a), (b) and (d), other than a building owner. To expand the application of sub-paragraph (c) beyond this would be inconsistent with the objects and provisions of the Act to which I have referred.

The views that I expressed in Paddy v Bennett are reinforced by my observations as to the very different way in which owner-builders and building contractors are dealt with under the QBCC Act. I do not depart from my findings in Paddy v Bennett. I would add that the construction I prefer is consistent with the approach of the common law to the duty of care owed by building contractors generally in a domestic building setting. The relationship of a professional builder to a building owner for whom work is undertaken is an established category of relationship where a duty of care is owed. This duty may, in appropriate circumstances, be one that it owed to a subsequent purchaser of a property.^[15] An owner-builder is not a professional builder.

It follows that the present dispute does not fall within sub-paragraph (c) of the definition of ‘domestic building dispute’ or ‘commercial building dispute’.

17. [17]
    The present case is directly analogous with Andrews. Mr Linton was not at any time a ‘building contractor’ within the meaning of that term in sch 2 of the QBCC Act. The dispute between the parties is not a dispute between a building owner and a building contractor. Nor, given that Mr Linton is not a ‘building contractor’, is the dispute a claim or dispute in negligence, nuisance or trespass within the meaning of sub-paragraph (c) of the definitions of domestic building dispute or commercial building dispute. Accordingly, the dispute the subject of the proceeding is not a ‘building dispute’ as that term is defined in the QBCC Act. The Tribunal does not have jurisdiction to decide the dispute.
18. [18]
    I would add the following in relation to Mr Harrigan’s assertion it was not disclosed to him, before he entered into the contract to purchase the property, that the building work was covered by the QHWS. Section 47 of the QBCC Act provides:

47 Warnings

1. If—

1. building work is carried out on land by a person who is not licensed to carry out that building work; and

2. the land is offered for sale within 6 years after completion of the building work;

the vendor must, before the contract of sale is signed by the purchaser, give the prospective purchaser a notice containing details of the building work and a warning in the form required by regulation.

2. If a notice is not given as required by this section, the vendor will be taken to have given the purchaser a contractual warranty (which operates to the exclusion of any inconsistent provision of the contract of sale) that the building work was properly carried out.

19. [19]
    As s 47(2) makes clear, any cause of action arising out of a breach of the section is one for breach of the sale contract. Breach of the section does not give rise to a right of action by a purchaser against an owner-builder as a building dispute within the jurisdiction of the Tribunal.^[16]

Transfer to the District Court

20. [20]
    The Tribunal directions required the parties to address the possible transfer of the proceeding to the District Court.
21. [21]
    If the Tribunal considers it does not have jurisdiction to hear all matters in a proceeding, the Tribunal may order the transfer of the proceeding to a court of competent jurisdiction.^[17]
22. [22]
    Mr Harrigan’s claim is for an amount in excess of $400,000. The claim is within the jurisdiction of the District Court. However the way in which the claim is framed in this proceeding does not make it amenable to transfer to the District Court where formal pleadings are required. The application for domestic building disputes filed by Mr Harrigan is not in a form which would constitute an adequate pleading. This is a relevant consideration in exercising the discretion to transfer the proceeding.^[18] 
23. [23]
    The appropriate order is that the proceeding is dismissed. If Mr Harrigan wishes to commence a further proceeding he may do so in the appropriate court and in the appropriate form.