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Kim v Queensland Building and Construction Commission[2025] QCAT 217

Kim v Queensland Building and Construction Commission[2025] QCAT 217

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Kim v Queensland Building and Construction Commission & Anor [2025] QCAT 217

PARTIES:

ei kyung kim

(applicant)

v

queensland building and construction commission

(first respondent)

368 CONSTRUCTION GROUP PTY LTD

(second respondent)

APPLICATION NO/S:

GAR498-23

MATTER TYPE:

General administrative review matters

DELIVERED ON:

9 June 2025

HEARING DATE:

On the Papers

HEARD AT:

Brisbane

DECISION OF:

Member Munasinghe

ORDERS:

  1. The decision of the Queensland Building and Construction Commission, to disallow the applicant’s claim under the statutory insurance scheme (‘claim’), is set aside and substituted with the Tribunal’s decision that the claim is allowed.
  2. It is declared that the Contract between the applicant and the second respondent was validly terminated within the meaning of section 4(1)(a), Schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld).
  3. Each party must bear its own costs in the proceeding.

CATCHWORDS:

ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – PROFESSIONS AND TRADES – BUILDERS – REVIEW OF A DECISION A DOMESTIC BUILDING CONTRACT HAS BEEN VALIDLY TERMINATED – where the applicant purported to terminate a residential building contract it had entered into with the second respondent – where the applicant subsequently made a claim under the statutory home warranty scheme – where the first respondent refused the claim because it contended the applicant did not validly terminate the contract – whether the applicant validly terminated the contract, either under the contract itself or at common law – whether the contract was abandoned – where the Tribunal upheld the claim – where the Tribunal considered the First Respondent’s conduct unbecoming of an entity vested with a statutory mandate to protect consumers 

Queensland Building and Construction Commission Act 1991 (Qld), s 67Y

Queensland Building and Construction Commission Regulation 2018 (Qld), Schedule 6, s 4(1)(a)

Associated Newspapers Ltd v Bancks (1951) 83 CLR 322

Fitzgerald v Masters (1956) 95 CLR 420

King v Poggioli (1923) 32 CLR 222

Minion v Graystone Pty Ltd [1990] 1 Qd R 157

Motor Oil (Hellas) Corinth Refineries SA v Shipping Corp of India [1990] 1 Lloyd’s Rep. 391

Qline Interiors Pty Ltd v Jezer Construction Group Pty Ltd [2002] QSC 88

Ripley v McClure (1849) 154 ER 1245

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

Shevill v Builders Licensing Board (1982) 149 CLR 620

Spencer v Cali [1986] 2 Qd R 456

Stocznia Gdanska SA v Latvian Shipping Co (No.2) [2002] EWCA Civ 889

Stocznia Gdanska SA v Latvian Shipping Co (No.3) [2002] EWCA Civ 889

Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 61 CLR 286

Tropical Traders Ltd v Goonan (1964) 111 CLR 41

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)

REASONS FOR DECISION

  1. [1]
    Ei Kyung Kim (‘the applicant’) applies to the Tribunal to review a decision by the Queensland Building and Construction Commission (‘QBCC’) to disallow her claim against the statutory insurance scheme (‘scheme’).

Background

  1. [2]
    On 7 May 2021, the applicant entered a QBCC New Home Construction Contract (‘Contract’) with 368 Construction Group Pty Ltd (‘builder’) for the construction of a two-story house with a pool (‘works’).
  2. [3]
    Hereafter, it is convenient to describe the applicant and the builder collectively as the parties.
  3. [4]
    The date for practical completion stated in the contact was 5 February 2022.
  4. [5]
    The contract had progress payment stages, namely:
    1. base stage.
    2. frame stage.
    3. enclosed stage.
    4. fixing stage.
    5. practical completion stage.
  5. [6]
    The works commenced on or about 10 May 2021.
  6. [7]
    On 9 May 2022, at the applicant’s behest, Mr Nigel Crocker of Jim’s Building Inspections examined the works and produced a report (‘First Report’), which identified:
    1. safety hazards;
    2. non-compliance with the National Construction Code and Australian Standards;
    3. substandard workmanship;
    4. incomplete work; and
    5. suspected noncompliance with the Contract and specifications.
  7. [8]
    Suffice to say, the First Report identified numerous defects. 
  8. [9]
    On 13 June 2022, the applicant’s solicitor, MYG Legal (‘applicant’s solicitor’), wrote to the builder and requested that it promptly rectify the defects identified in the in the First Report (‘June Notice’).
  9. [10]
    On 26 July 2022, the builder’s solicitor, Saal & Associates (‘builder’s solicitor’), sent an email to the applicant’s solicitor stating the following:
    1. from early December 2021, the builder commenced experiencing issues with its working capital, but it intended to complete the remaining works.
    2. the parties had agreed to vary the Contract such that the applicant would pay subcontractors and suppliers directly for the remaining stages of the build.
  10. [11]
    In its e-mail the builder’s solicitor requested confirmation that the applicant would permit the builder to proceed with the works.
  11. [12]
    On 11 August 2022, the applicant’s solicitor sent the builder’s solicitor an email (‘August Notice’):
    1. disputing that the builder had completed works up to the enclosed stage because:
      1. the dimensions of the pool were wrong.
      2. the builder failed to provide the applicant with documentation pertaining to warranties for waterproofing work undertaken in the bathrooms, kitchen etc.
      3. the window panels of the front door, garage door etc were not enclosed.
    2. refuting assertions that the Contract was varied.
    3. noting that the builder did not fence, secure, and clean the construction site, contrary to regulatory requirements.
    4. indicating that the applicant refused to make any further payments until the builder rectified the defects identified in the First Report.
    5. indicating that the applicant was willing to give the builder “one last chance to rectify the defects”.
    6. demanding the builder satisfactorily complete rectification works in which case the applicant would consent to the builder proceeding with the fixing and practical completion stages.
    7. requesting that the builder provide the applicant’s solicitor with a “comprehensive and coherent cost plan, program to complete the works and estimated completion date”.
    8. noting that it would be necessary to vary the terms of the contract prior to the commencement of any future works. 
    9. requesting a response to its proposal no later than 5.00pm on 18 August 2022, otherwise the applicant intended to commence proceedings against the builder.
  12. [13]
    On 25 August 2022, the builder’s solicitor sent the applicant’s solicitor an email:
    1. asserting some defects do not require immediate rectification, are minor in nature and do not prevent the applicant from completing a stage of the works.
    2. insisting that the builder was prepared to attend to any defect in the that required rectification prior to proceeding to the fixing stage.
    3. insisting that the contract was varied such that the applicant was required to pay supplier and subcontractor invoices.
    4. insisting that that contract did not require the builder to provide the applicant with a cost plan.
    5. proposing that the builder would:
      1. make the site safe where required.
      2. rectify defects in the works that required rectification before moving on to the next stage i.e., the fixing stage.
      3. proceed with the remaining two stages of the works, being the fixing and practical completion stages, if the applicant continued to pay suppliers and subcontractors directly. 
  13. [14]
    On 14 September 2022, the applicant’s solicitor wrote to the builder’s solicitor (‘September Notice’):
    1. requesting that the builder adjust the depth of the pool to 1.5 meters.
    2. requesting a list of work that the builder could rectify within 2-3 weeks and a list of work that would require further time to rectify. 
    3. promising payment to the builder of $55,195 for the fixing stage if the work associated with the stage was completed to the satisfaction of the applicant’s building inspector Mr Crocker.
    4. indicating that its client was willing to “wipe the slate clean” provided the builder:
      1. acknowledged that that the applicant was not obliged to directly pay suppliers and subcontractors.
      2. gave the applicant copies of Form 16’s for the base, frame, and enclosed stages of the works.
      3. provided copies of warranties and certificates to Mr Crocker to review.
      4. rectified all defects identified in the first report prior to practical completion.
      5. nominated a new practical completion date.  
      6. paid liquidated damages in the amount of $50 per day if it could not achieve practical completion by the nominated date.
  14. [15]
    In its letter, the applicant’s solicitor also indicated that the applicant would terminate the contract if the builder did not agree to its proposals, but if the builder agreed, it would prepare a written variation document. The letter required a “timely response”.
  15. [16]
    On 10 October 2022, the applicant’s solicitor sent an email to the builder’s solicitor:
    1. indicating that if the builder did not respond to its September Notice, the applicant would assume that the builder did not intend to honour its contractual obligations.
    2. indicating that the applicant had a legal right to terminate the contract.
  16. [17]
    On 24 October 2022, the builder’s solicitor sent an email to the applicant’s solicitor proposing:
    1. that the builder would provide a list of defects that it would rectify within 2-3 weeks of a negotiated agreement and provide a list of the works required to complete the fixing stage.
    2. that the builder accepted the applicant depositing monies into trust, to be released to the builder, upon it completing the fixing stage and the applicant’s building inspector, acting reasonably, being satisfied with the work performed by the builder for that stage.
    3. that the builder would bear the costs of material and labour to reach completion of the fixing stage however the applicant must continue to pay suppliers and subcontractors directly, consistently with the agreement previously reached.
    4. that the builder would provide the applicant with all Forms 16’s in its possession, namely those certificates relating to ‘termite, waterproofing and window glazing’.
    5. that the builder agreed to rectify the defects identified in the First Report, before accepting payment for the Practical Completion stage.
    6. that the builder agreed to pay the applicant a limited and capped amount for accrued liquidated damages.
    7. that the builder could recommence work in the week of 24 to 28 October 2022, and achieve practical completion by 15 January 2023, if the applicant accepted its offer.
    8. that the builder would pay the applicant further liquidated damages at the rate of $50 per day if practical completion was not achieved by 15 January 2023.
  17. [18]
    On 28 October 2022, the applicant’s solicitor wrote to the builder’s solicitor (‘October notice’):
    1. again, denying that the Contract was varied such that that applicant was required to directly pay subcontractors and rejecting the proposal that the applicant pay suppliers directly for the practical completion stage.
    2. indicating the applicant would only agree to capped liquidated damages in certain prescribed circumstances.
    3. indicating that if the builder did not accept its proposal, the applicant would “exercise her full legal rights and proceed with a claim for liquidated damages”
    4. proposing that the builder pay liquidated damages in the amount of $200 per day if it could not achieve practical completion by 15 January 2023, rather than $50 per day.
    5. indicating that the applicant accepted all other proposals contained in the builder’s solicitors letter dated 24 October 2024.
    6. requiring a response to its letter no later than 5.00pm on 2 November 2022.
    7. reserving its client’s rights in all aspects.
  18. [19]
    On 2 November 2022, the builder’s solicitor wrote to the applicant’s solicitor, proposing a videoconference involving their respective clients.
  19. [20]
    On 4 November 2022, the applicant’s solicitor wrote to the builder’s solicitor confirming that a videoconference occurred where:
    1. the parties reached agreement on some issues but could not settle the following:
      1. the builder’s offer of capped liquidated damages in the amount of $4,600.
      2. an alternative offer of liquidated damages by the builder in the amount of $7,600.
      3. an agreed date for practical completion.
      4. an agreed amount of liquidated damages if the builder was unable to achieve practical completion by the agreed dated.
  20. [21]
    The above letter proposed several ‘next steps’, including the drafting of a written variation on mutually agreed terms.
  21. [22]
    On 9 November 2022, the applicant’s solicitor wrote to the builder’s solicitor:
    1. expressing disappointment that the builder had failed to comply with its oral promise to provide the applicant with a list of defects that it would attend to within 2-3 weeks and list of the works required to complete the fixing stage.
    2. indicating that, due to the builders conduct above, the applicant would no longer agree to fixed liquidated damages of $4,600.
    3. expressing hope that the builder adhered to its promises going forward.
    4. reserving the applicant’s rights in all respects.
  22. [23]
    On 11 November 2022, the builder provided the applicant with a list of work required to complete the fixing stage.
  23. [24]
    On 14 November 2022, the applicant’s solicitor wrote to the builder’s solicitor:
    1. expressing the applicant’s intention to arrange for its inspector to inspect rectification work undertaken by the builder to date.
    2. requesting a response to its emails dated 4 and 9 November.
    3. pointing out that the builder had not yet provided the applicant with an achievable practical completion date.
    4. expressing the applicant’s hope that a varied agreement could be achieved by 22 November 2022.
    5. indicating its position that the parties were bound by the terms of the present contract until they signed a varied contract.
  24. [25]
    On 15 November 2022, the applicant’s solicitor wrote to the builder’s solicitor:
    1. expressing concern that the builder had used second hand material during the construction of the house.
    2. expressing concern that wooden frames near the pool had been exposed to rain and weather for a lengthy period.
    3. dismissing the builder’s explanation for the ground and upstairs floors of the house being out of level.
  25. [26]
    On 21 November 2022, the applicant’s solicitor sent the builder’s solicitor an email indicating that it was waiting for the builder to respond to its emails dated 14 and 15 November 2022.
  26. [27]
    On 25 November 2022, Mr Crocker inspected the works (‘second inspection’) and produced a report (‘Second Report’). The Second Report identified that many of the defects identified in the First Report remained unrectified.
  27. [28]
    On 30 November 2022, the applicant’s solicitor sent the builder’s solicitor an email (‘November Notice’):
    1. indicating that it was still waiting for the builder’s response to its emails dated 14 and 15 November 2022.
    2. asserting that the builder’s avoidance and failure to respond in a timely manner breached Clause 26.4 of the contract.
    3. alleging the second inspection identified that the builder had failed to rectify the defects identified in the First Report.
    4. indicating that the applicant intended to terminate the contract unless the builder attended to defects identified in the First and Second Report by 2 December 2022.
  28. [29]
    On 2 December 2022, the applicant’s solicitor sent the builder’s solicitor purporting to terminate the contract (‘applicant’s Termination Notice’) due to the builders:
    1. failure to rectify defects such as poor paint finish, inconsistent fixing screws, poor surface preparations and substandard workmanship.
    2. failure to erect and maintain secure and adequate fencing around the pool.
    3. use of a second-hand steel support post.
    4. failure to rectify the defects identified in the first report.
    5. failure to maintain reasonable progress.
    6. failure to adhere to QBCC codes, standards, regulations, and tolerances.
    7. failure to respond to its correspondence dated 14 and 15 November 2022.
    8. failure to keep the construction site free of vegetation.
    9. failure to secure the construction site.
    10. failure to comply with workplace health and safety regulations.
    11. failure to meet practical completion by 5 February 2022.
    12. failure to pay liquidated damages in a timely manner.
  29. [30]
    The applicant’s Termination Notice also demanded that the builder pay the applicant $14,950 in liquidated damages and $10,560 for legal costs.
  30. [31]
    On 6 December 2022, the builder’s solicitor sent the applicant’s solicitor an email (‘builder’s termination notice’):
    1. contending that the applicant failed to give the builder 10 business days from the giving of notice to remedy its substantial breaches, contrary to clause 26.1(b) of the contract.
    2. contending that the applicant terminated the contract, after only one and a half days after giving the builder notice, contrary to Condition 26.1(c) of the contract.
  31. [32]
    Accordingly, the builder’s solicitor contended that the applicant wrongfully terminated the contract, and in doing so, repudiated it.
  32. [33]
    The builder’s termination notice stated that the builder elected to accept the applicant’s repudiation and terminate the contract.
  33. [34]
    On 13 January 2023, the applicant a made a Non-Completion Claim for Residential Construction Work (‘Claim’) with QBCC.
  34. [35]
    On 25 May 2023, QBCC decided to disallow the Claim because it considered that the applicant did not validly terminate the Contract at the builder’s default. Rather, it contended that the parties mutually abandoned the contract.

Relevant Law

  1. [36]
    On the date the parties entered the Contract, the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’), current as at 1 May 2021 was in force. 
  2. [37]
    Part 5 of the QBCC Act establishes the statutory insurance scheme. Section 67X(2) of the QBCC Act provides the purpose of the Scheme is to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete.
  3. [38]
    The terms of cover under which a person is entitled to assistance under the statutory scheme are prescribed by regulation,[1] which in this case was the Queensland Building and Construction Commission Regulation 2018 (Qld) (‘QBCC Regulation’), current as at 1 May 2021.
  4. [39]
    The Terms of Cover for the Scheme are contained in Schedule 6 of the QBCC Regulation. Relevantly, s 6 of the Terms of Cover provides that a consumer is entitled to claim assistance if:
    1. the work is carried out under a fixed price residential contract;
    2. the contract ends within 2 years after the day work starts under the contract; and
    3. the work is incomplete.
  5. [40]
    In this proceeding, QBCC concedes the work was carried out under fixed priced residential contract and it was incomplete. The sole issue in dispute, is whether the contract ended within 2 years after the day work started under the contract.
  6. [41]
    Section 4 of the Terms of Cover prescribes several circumstances when a fixed price residential contract ends. The only circumstance relevant to the present proceeding, is that set out a s 4(1)(a), namely that ‘the contract is validly terminated on the default of the licenced contractor’.
  7. [42]
    Importantly, the term ‘validly terminated’, within the meaning of s 4(1)(a), does not include mutual abandonment of the contract by the parties to the contract.[2]

QBCC’s Submissions

  1. [43]
    QBCC accepts that the builder unreasonably delayed, suspended, or failed to maintain reasonable progress, thereby breaching Condition 26.4(d) of the Contract. However, QBCC contends that the applicant did not validly terminate the Contract within the meaning of s 4(1)(a) of the Terms of Cover, either under the terms of the Contract or at common law.
  2. [44]
    It submits that the November Notice is invalid because:
    1. it made no specific reference to Condition 26.1 of the Contract;
    2. it only provided the builder with 1 clear business day to comply, which falls short of the 10 days’ notice that 26.1(b) of the Contract required.
  3. [45]
    QBCC accepts that although the Contract sets out a termination regime, the parties’ common law rights to terminate, such as repudiation, are preserved. It concedes that the builder likely demonstrated repudiatory conduct by:
    1. persistently failing to progress the Works between November 2021 and the Date for Practical Completion.
    2. substantially delaying performance of the Contract and rectification defective and incomplete works identified in the First and Second report.
    3. indicating to the applicant, in its email dated 17 February 2022, that it was running out of working capital to buy materials upfront.
    4. proposing, on 22 May 2022, that the applicant pay subcontractors directly to continue the project.
  4. [46]
    However, QBCC contends that, by continuing to communicate and negotiate with the builder over a period of 10 months about rectifying the defective and incomplete works and varying the Contract (including extensions to the date for Practical Completion), the applicant waived her right to elect to terminate the Contract and/or affirmed the continued performance of the Contract.[3]
  5. [47]
    QBCC submits that the applicant positively affirmed the Contract by at least 7 November 2022, when she allowed the builder to return to the property to perform the rectification works in performance of the Contract.
  6. [48]
    QBCC argues that that applicant’s affirmation of the Contract is irrevocable. QBCC considers the applicant affirmed the Contract on or by 7 November 2022 and that no new breaches arose before the Applicant issued the Termination Notice which gave it a further right to elect to terminate the Contract at common law.[4]
  7. [49]
    QBCC points out that e-mail correspondence from the applicant’s solicitor to the builder on 23 November 2022 appears to proceed on the basis that the Contract remained on foot at that time because it acknowledged the performance of further works and sought to remind the builder of its obligations to secure the property.[5]
  8. [50]
    Additionally, QBCC submits that the builder was precluding from validly terminating the Contract on 6 December 2022 for repudiation because it was not ready, willing, and able to perform its own obligations under the Contract.[6]

Lastly, QBCC submits that the parties mutually abandoned the Contract, as neither party did anything to enforce the Contract after 7 December 2022 and appear to have treated it as at an end.[7]

Applicant’s Submissions

  1. [51]
    In written submissions filed in the Tribunal, the applicant contended:
    1. whilst the applicant’s intention to terminate the contract is not specifically stated in the August notice, her intention to terminate can be “implied”.
    2. it was unnecessary for the applicant to refer to the 10-day compliance period in its default notices because the builder was legally represented and it ‘goes without saying’.
    3. it was unnecessary for the applicant to refer to the 10-day compliance period in the November Notice because it was a ‘reminder notice’ and the applicant was entitled to rely on the September Notice and follow up notices and emails sent from October to November 2022. The applicant considers the 2 December deadline specified in the November Notice a final follow up of the September Notice.
    4. the builder breached essential terms of the contract, namely:
      1. it failed to comply with legislated health and safety obligations, contrary to Condition 15;
      2. it failed to achieve the Date for Practical Completion stated in the Contract, contrary to Condition 22;
      3. it did not seek an extension of time, as provided for by Condition 23;
      4. it did not pay the applicant liquidated damages, as required under Condition 24.
    5. the builder repudiated the contract by 14 November 2022, when it:
      1. ceased engaging in discussion to vary the Contract; and
      2. delayed in performing the Contract and rectifying the defective and incomplete work identified in the First Report.

 Consideration

  1. [52]
    The primary issue in dispute in this proceeding, is whether the applicant validly terminated the contract within the meaning of section 4(1)(a), Schedule 6 of the Regulation. The following questions are apposite to resolving that controversy:
    1. was the builder in default under the Contract?
    2. did the applicant validly terminate the Contract under the terms of the contract?
    3. did the applicant validly terminate the Contract at common law?
    4. did the parties ‘mutually abandon’ the Contract?

Was the builder in default?

  1. [53]
    Condition 26.4(c) of the Contract provides that a substantial breach by the contractor “includes, but not limited to unreasonably failing to replace or remedy defective work or materials”. The First and Second Reports lead me to the inescapable conclusion that that the builder’s work was defective. The findings in each report are unchallenged by either respondent.
  2. [54]
    The existence of defects first came to the builder’s knowledge on 9 May 2022 when Mr Crocker conducted his first inspection. Most of the defects remained on 25 November 2022, when Mr Crocker inspected the works for the second time. Over a period of 18 months, the builder took almost no action to remedy the defects. That was unreasonable. I am satisfied that the builder substantially breached Condition 26.4(c) of the Contract by failing to remedy his defective work.
  3. [55]
    Condition 26.4 of the Contract provides that a substantial breach by the contractor includes “unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress”. The Contract required the builder to achieve practical completion by 5 February 2022. However, by the time applicant purported to terminate the Contract on 2 December 2022, the builder had not commenced the fixing stage, or satisfactorily completed preceding stages of the works. The builder has not proffered any reasonable excuse for its delay. In the circumstances, I am satisfied that the builder breached Condition 26.4 of the Contract by unreasonably delaying, suspending, or failing to maintain reasonable progress.

Did the applicant lawfully terminate the contract under the terms of the contract?

  1. [56]
    Condition 26.1 of the Contract provides a mechanism to terminate the Contract after issuing a notice of default. It provides:
    1. if a party is in substantial breach of the Contract; and
    2. the other party gives notice to the party in breach identifying and describing the breach and stating its intention to terminate the contract if the breach is not remedied within 10 business days from the giving of the notice; and
    3. the breach is not so remedied, then the party giving notice may terminate the Contract by further written notice given to the party in breach.
  2. [57]
    In Qline Interiors Pty Ltd v Jezer Construction Group Pty Ltd [2002],[8] Muir J found that the purpose of notices of the kind contemplated in Condition 26.1, was to give party in default warning about the existence of a state of affairs which might lead to termination of the contract if default was not remedied. He opined that it would be inappropriate to infer the giving of notice in the absence of document which is plain and unambiguous.[9]
  3. [58]
    The applicant’s default notices do a fair job of describing the builder’s defects however, contrary to the requirements of Condition 26.1(b) of the Contract, they are ambiguous about her intention to terminate the contract, and the time available to the builder to avert such a termination.
  4. [59]
    Notably:
    1. the June and August Notices did not explicitly state the applicant’s intention to terminate the contract, nor did they provide 10 days’ notice for the builder to rectify alleged breaches.
    2. the September Notice stated the applicant’s intention to terminate the Contract if the builder did not “agree to its proposal”. It required a “timely response”, but did not provide 10 days’ notice for the builder to rectify alleged breaches.
    3. the October Notice did not explicitly state the applicant’s intention to terminate the Contract, nor did it provide 10 days’ notice for the builder to rectify alleged breaches.
    4. the November Notice explicitly stated the applicant’s intention to terminate the Contract, however it failed to provide the builder with 10 business day to rectify alleged breaches. Rather, the notice effectively only gave the builder with 1 day to avoid termination.
  5. [60]
    I find that the applicant’s default notices are invalid because they are imprecise and ambiguous. It follows that the applicant did not validly terminate the Contract under Condition 26.1 of the Contract.

Did the applicant validly terminate the Contract at common law?

  1. [61]
    The Contract provides that the of right to terminate under Condition 26.1 is in addition to any other powers, rights or remedies the terminating party may have. One such remedy is repudiation of the Contract at common law.[10]
  2. [62]
    A right to terminate for repudiation will arise when a party “evinces an intention no longer to be bound by the contract or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way”.[11]
  3. [63]
    The absence of readiness and willingness to perform must relate to a condition or essential term that goes to the root of the contract.[12] The test of essentially was stated by Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd[13] as follows:

the test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such a importance the promise that he would not have entered into the contract unless he had been assured of strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor.(Citations omitted) If the innocent party would not have entered the contract unless assured of a strict and literal performance of the promise, he may in general treat himself as discharged upon any breach of the promise, however slight.

  1. [64]
    I find that the builder well and truly repudiated the Contract by the time applicant issued it with a termination notice on 2 December 2022. The builder’s conduct that I consider amounted to a repudiation of the Contact was:
    1. its persistent failure to remedy defective work;
    2. its unreasonable failure to maintain reasonable progress;
    3. its reticence to pay liquidated damages; and
    4. its inability to progress the works without the applicant paying suppliers and subcontractors directly.
  2. [65]
    The builder’s failure to maintain reasonable progress is particularly egregious. Where a defaulting party “intends to so delay performance that the promisee will be substantially deprived of the benefit of the promise, repudiation can be inferred.”[14]
  3. [66]
    The builder’s failures are not small matters; they go the very heart of the Contract. It is inconceivable that applicant would have entered the Contract had she known that her home would be riddled with defects, that its construction would be plagued by delay, and that the builder would abrogate its obligation to pay liquidated damages.
  4. [67]
    Objectively considered, I am satisfied that the builder’s conduct would cause a reasonable person in the applicant’s position to conclude that the builder was unwilling or unable to perform its substantial obligations under the contract.
  5. [68]
    QBCC concedes that the builder repudiated the Contract. However, it contends that the applicant chose to repeatedly affirm, rather than terminate the Contract, from at least 7 November 2022. I disagree. An innocent party will only have been taken to have waived a breach if it does so in clear and unequivocal terms.[15] In its emails to the builder’s representatives, the applicant’s solicitor expressly ‘reserves its client’s rights in all aspects’. The tenor of the correspondence between the parties’ legal representatives plainly indicates that the applicant was unwilling to abandon remedies available to her under the Contract until an agreement, if reached, was formalised in a written variation.
  6. [69]
    The fact the applicant provided the builder with repeated opportunities to remedy her repudiatory conduct does not give rise to an axiomatic inference that she affirmed the Contract. The applicant was entitled to reserve her position, provided she did not do so for too long.[16]
  7. [70]
    In Stocznia Gdanska SA v Latvian Shipping Co (No.2),[17] Lord Justice Rix of the England and Wales Court of Appeal (Civil Division), relevantly said:[18]

there is a middle ground between acceptance of repudiation and affirmation of the contract, and that is the period when the innocent party is making up his mind what to do”. If he does nothing for too long, there may come a time when the law will treat him as having affirmed. If he maintains the contract in the being for the moment, while reserving his right to treat it as repudiated if his contract partner persists in his repudiation, then he has not yet elected.

  1. [71]
    Here, the applicant’s ability to make up her mind was delayed because the builder failed to respond to proposed variations to the Contract that applicant’s lawyers raised an email to the builder’s lawyers on 4 November 2022. At that point in time the parties had not yet agreed to an appropriate sum of liquidated damages or a revised date for practical completion. The issue of whether the Contract would continue, on varied terms, or whether it would end, was not settled.  In those circumstances, it cannot reasonably be contended that the applicant affirmed the contract.
  2. [72]
    Further, in my view, the applicant’s repeated pleas to the builder to remedy its breaches were extensions of time, rather than affirmations of the Contract. In Tropical Traders Ltd v Goonan (1964)[19] it was held that the granting of an extension of time, far from constituting an election to affirm the contract, was the announcement of an intention to refrain from electing either way. The full court of the Queensland Court of Appeal adopted similar reasoning in Spencer v Cali [1986][20] when it held that an extension of time for performance under a contract does not by itself destroy a provision that time is of the essence but is only a qualified and conditional waiver of the original stipulation and constitutes no more than a promise not to elect to rescind before the extended time.
  3. [73]
    I reject QBCC’s submission that applicant affirmed the Contract on or by 7 November 2022 and that no new breaches arose which gave her a further right to elect to terminate the Contract at common law. Where the repudiatory breach is a continuing one, the right to accept it can be exercised at any time while the breach continues.[21] In a case of sustained failure to proceed with due diligence, acceptance is possible after a delay provided the continuation or repetition of the breach is repudiatory in character.[22] Such is the case here because the builder continued and compounded its repudiatory conduct on each and every day that it did not  achieve practical completion, pay liquidated damages, or rectify its defective work. If the Tribunal accepted QBCC’s submission on this point, it would lead to the absurd outcome that upon the applicant affirming the Contract, it could not terminate the Contract no matter how long the builder took to complete the works.
  4. [74]
    Even if the builder did not repudiate the Contract for the reasons I have expressed above, it surely did so when it purported to terminate the Contract on 6 December 2022. The builder was not entitled to terminate the Contract for repudiation because it was not ready willing and able to perform its own obligations under the contract. As QBCC correctly identifies its own submissions, wrongful termination of the performance of a contract generally constitutes a repudiation.[23]
  5. [75]
    It matters not that that that the applicant sought to terminate the Contract pursuant to Condition 26 rather than for the builder’s repudiation. In Botros v Freedom Homes Pty Ltd,[24] McPherson JA relevantly held that “termination of a contract can as a matter of law later be justified on any sufficient ground available to a party claiming to terminate a contract even if that specific ground was not relied on at the time of termination”.[25]  

Did the parties abandon the contract?

  1. [76]
    A finding that a contract is abandoned is a matter of fact to be inferred from an objective assessment of the conduct of each party.[26] A Court must be convinced that the intention of the parties is to abandon enforcement of the rights and obligation conferred by the contract.[27] The fact that that applicant made a claim under the Scheme is not consistent with it abandoning its rights under the contract. The parties did not walk away from the contract. Rather, it is obvious from their conduct, that each respectively believed that the Contract was validly terminated.
  2. [77]
    In all the circumstances, I am satisfied that the that the contract was validly terminated under the Terms of Cover. It follows that the Contract ended within 2 years after the day work started on the Contract and therefore the applicant was entitled to claim assistance under the Scheme. QBCC was not entitled to reject the applicant’s claim.
  3. [78]
    I propose the following orders:
    1. The decision of the Queensland Building and Construction Commission to disallow the applicant’s claim under the statutory insurance scheme (‘claim’), is set aside and substituted with the Tribunal’s decision that the claim is allowed.
    2. It is declared that the Contract between the applicant and the second respondent was validly terminated within the meaning of section 4(1)(a), Schedule 6 of the Queensland Building and Construction Commission Regulation 2018 (Qld).
    3. Each party must bear its own costs in the proceeding.
  4. [79]
    I am compelled to comment briefly on QBCC’s conduct in administering the statutory insurance scheme in respect of this applicant. It would seem to me that the unfortunate predicament the applicant found herself in is precisely the type of situation that the scheme is intended to remedy. QBCC’s refusal of her Claim on narrow pedantical grounds, in the face of such egregious and obviously repudiatory conduct by the builder, is unbecoming of an entity vested with a statutory mandate to protect consumers.

Application of the Human Rights Act 2019 (Qld)

  1. [80]
    The Tribunal must apply the Human Rights Act 2019 (Qld) (‘HR Act’) when reviewing the decisions of a ‘public entity’.[28] QBCC is a public entity. Section 58 of the HR Act provides that it is unlawful for a public entity to act or make a decision in a way that is not compatible with human rights[29] or in making a decision, to fail to give proper consideration to a human right relevant to the decision.[30] A decision is compatible with human rights if it does not limit a human right, or limits a human right only to the extent that is reasonably justifiable in accordance with s 13 of the HR Act.
  2. [81]
    I consider s 24(2) of the HR Act is potentially relevant to the decision the Tribunal must make when reviewing the QBCC’s decision. It provides that a person must not be arbitrarily deprived of the person’s property. In this instance, my decision has the effect of preserving the physical integrity of the applicant’s property. Accordingly, the decision is compatible with human rights. 

Footnotes

[1]  QBCC Act s 67Y.

[2]  QBCC Regulation sch 6 s 4(2).

[3]  QBCC’s Outline of Submissions, 5.56(b).

[4]  Ibid 5.60.

[5]  Ibid 5.56(d).

[6]  Ibid 5.64.

[7]  Ibid 5.66.

[8]  QSC 88.

[9]  Ibid, [28] (Muir J).

[10]  See Condition 26.2 of the Contract.

[11] Shevill v Builders Licensing Board (1982) 149 CLR 620, 625-626.

[12] Associated Newspapers Ltd v Bancks (1951) 83 CLR 322, 339-340.

[13]  (1938) 61 CLR 286.

[14] Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623.

[15] Motor Oil (Hellas) Corinth Refineries SA v Shipping Corp of India [1990] 1 Lloyd’s Rep. 391.

[16] Stocznia Gdanska SA v Latvian Shipping Co (No.2) [2002] EWCA Civ 889, [87].

[17]  Ibid.

[18] Stocznia Gdanska SA v Latvian Shipping Co (No.3) [2002] EWCA Civ 889.

[19]  111 CLR 41, 10.

[20]  2 Qd R 456.

[21] Ripley v McClure (1849) 154 ER 1245.

[22] Stocznia Gdanska SA v Latvian Shipping Co (No.2) [2002] EWCA Civ 889, [87].

[23]King v Poggioli (1923) 32 CLR 222.

[24]  [2000] 2 Qd R 377.

[25]  See also Shepherd v Felt Textiles of Australia Ltd (1931) 45 CLR 359, 377-378; Minion v Graystone Pty Ltd [1990] 1 Qd R 157, 162.

[26]  Jason Harris and Christopher Croese, Contract Law in Context (CCH Australia, 2015) 7-250.

[27] Fitzgerald v Masters (1956) 95 CLR 420.

[28] PIM v Director-General, Department of Justice and Attorney-General [2020] QCAT 188; Re Kracke v Mental Health Review Board [2009] VCAT 646, [291]; PJB v Melbourne Health [2011] VSC 327.

[29]  HR Act s 58(1)(a).

[30]  Ibid s 58(1)(b).

Close

Editorial Notes

  • Published Case Name:

    Kim v Queensland Building and Construction Commission & Anor

  • Shortened Case Name:

    Kim v Queensland Building and Construction Commission

  • MNC:

    [2025] QCAT 217

  • Court:

    QCAT

  • Judge(s):

    Member Munasinghe

  • Date:

    09 Jun 2025

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
Associated Newspapers Ltd v Bancks (1951) 83 CLR 322
2 citations
Jump To
Cite 1 - (1951) 83 CLR 322
Cite 2 - (1951) 83 CLR 322
Botros v Freedom Homes Pty Ltd[2000] 2 Qd R 377; [1999] QCA 150
1 citation
Jump To
Cite 1 - [2000] 2 Qd R 377
Fitzgerald & Anor v Masters (1956) 95 CLR 420
2 citations
Jump To
Cite 1 - (1956) 95 CLR 420
Cite 2 - (1956) 95 CLR 420
King v Poggioli (1923) 32 CLR 222
2 citations
Jump To
Cite 1 - (1923) 32 CLR 222
Cite 2 - (1923) 32 CLR 222
Kracke v Mental Health Review Board & Ors [2009] VCAT 646
1 citation
Jump To
Cite 1 - [2009] VCAT 646
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 C.L R. 623
1 citation
Jump To
Cite 1 - (1989) 166 C.L R. 623
Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286
2 citations
Jump To
Cite 1 - (1938) 61 CLR 286
Cite 2 - (1938) 61 CLR 286
Minion v Graystone Pty Ltd [1990] 1 Qd R 157
2 citations
Jump To
Cite 1 - [1990] 1 Qd R 157
Cite 2 - [1990] 1 Qd R 157
PIM v Director-General, Department of Justice and Attorney-General [2020] QCAT 188
1 citation
Jump To
Cite 1 - [2020] QCAT 188
PJB v Melbourne Health and Anor (Patrick's case') [2011] VSC 327
1 citation
Jump To
Cite 1 - [2011] VSC 327
Qline Interiors Pty Ltd v Jezer Construction Group Pty Ltd[2009] 2 Qd R 566; [2002] QSC 88
1 citation
Jump To
Cite 1 - [2002] QSC 88
Ripley v McClure [1849] 154 ER 1245
2 citations
Jump To
Cite 1 - [1849] 154 ER 1245
Cite 2 - [1849] 154 ER 1245
Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359
2 citations
Jump To
Cite 1 - (1931) 45 CLR 359
Cite 2 - (1931) 45 CLR 359
Shevill v Builders' Licensing Board (1982) 149 CLR 620
2 citations
Jump To
Cite 1 - (1982) 149 CLR 620
Cite 2 - (1982) 149 CLR 620
Spencer v Cali [1986] 2 Qd R 456
1 citation
Jump To
Cite 1 - [1986] 2 Qd R 456
Stocznia Gdanska SA v Latvian Shipping Co (No.2) [2002] EWCA Civ 889
5 citations
Jump To
Cite 1 - [2002] EWCA Civ 889
Cite 2 - [2002] EWCA Civ 889
Cite 3 - [2002] EWCA Civ 889
Cite 4 - [2002] EWCA Civ 889
Cite 5 - [2002] EWCA Civ 889
The Kanchenjunga [1990] 1 Lloyd’s Rep 391
2 citations
Jump To
Cite 1 - [1990] 1 Lloyd’s Rep 391
Cite 2 - [1990] 1 Lloyd’s Rep 391
Tropical Traders Ltd v Goonan (1964) 111 CLR 41
1 citation
Jump To
Cite 1 - (1964) 111 CLR 41

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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