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Wright v Duke Building Pty Ltd[2017] QCATA 35

Wright v Duke Building Pty Ltd[2017] QCATA 35

CITATION:

Wright and Anor v Duke Building Pty Ltd and Anor [2017] QCATA 35

PARTIES:

Randall Wright and Sharna Wright

(Appellants)

v

Duke Building Pty Ltd

(First Respondent)

Queensland Building and Construction Commission

(Second Respondent)

APPLICATION NUMBER:

APL485-15

MATTER TYPE:

Appeals

HEARING DATE:

30 May 2016

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown

Member Howe

DELIVERED ON:

24 March 2017

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The decision of the Tribunal dated 6 October 2015 is set aside.
  2. The decision of the Queensland Building and Construction Commission of 9 May 2014 to issue Direction to Rectify 40067 to the builder is confirmed.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – Whether complaint for rectification outside prescribed period for complaint – whether Direction to Rectify by QBCC should be upheld – where errors of law – where errors of mixed law and fact – where leave to appeal granted – re–hearing – considerations for exercise of discretion to issue direction to rectify

Queensland Building and Construction Commission Act 1991 (Qld), current as at 1 December 2013, s 72

Queensland Building and Construction of Commission Act 1991 (Qld), s 19(1)

Queensland Building and Construction Regulation 2003 (Qld), schedule 1A

Queensland Civil and Administrative Tribunal Act 2009 s 28(3)(b), s 28(3)(c), s 143(2)(b), s 143(3)(b), s 147

Arnold Electrical & Data Installations P/L v Logan Area Group Apprenticeship/ Traineeship Scheme Ltd [2008] QCA 100

Cachia v Grech [2009] NSWCA 232

Dixon Projects Pty Ltd v QBSA [2009] QCCTB 2

Fontain v QBSA [2004] QCCTB 163 Small v Building Services Corp [1988] 7 BCL 109

Gary Norwood Homes Pty Ltd v (Unknown) R021-95 [1997] QBT 193

Glen Williams Pty Ltd v QBSA [2012] QCAT 127

Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388

Ireland v QBSA [1999] QBT 180

Klooster v Sticky Fingers (Qld) Pty Ltd [2011] QCATA 282

Lund v QBSA [2004] QCCTB 75

Matthews v Queensland Building Authority [2011] QCAT 345

McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577

McNab Constructions Australia Pty Ltd v Queensland Building Services Authority [2013] QSC 057

QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41

R v His Honour Judge Miller and the Builders’ Registration Board of Queensland [1987] 2 Qd R 446

Reuter v QBSA [2004] QCCTB 5

Stephenson, Peter Thomas & Christine Ann v Queensland Building Services Authority [2005] QCCTB 59

APPEARANCES:

APPLICANT:

Randall Wright and Sharna Wright appeared on their own behalf

RESPONDENT:

Brett Hughes and Vivienne Hughes appeared on behalf of the First Respondent

Cheridan Farthing, Solicitor, appeared on behalf of the Second Respondent 

REASONS FOR DECISION

Background

  1. [1]
    This is an application for leave to appeal and appeal a decision of the Tribunal made 6 October 2015 setting aside a decision of the Queensland Building and Construction Commission (the QBCC) to issue a Direction to Rectify defective building work on 9 May 2014 to the respondent builder, Duke Building Pty Ltd.
  2. [2]
    Mr and Mrs Wright wanted certain renovations carried out and extensions made to their home at Tallebudgera. They were referred by a friend to Mr Hughes, a builder. They asked him to do the work. His accountant had incorporated a limited liability company for his business use, Duke Building Pty Ltd (Duke). The contract with Mr and Mrs Wright was written up as a building contract between the Wrights and Duke. The contract was dated 2 February 2011. The Wrights identified the builder, in so far as they gave it consideration at the time, as one and the same Mr Hughes and Duke. 
  3. [3]
    Mr Hughes started work on about 1 March 2011. In June 2011 he stopped work and left the job site because the parties had fallen out over money.  The job was left incomplete.
  4. [4]
    The Wrights had plans for the work drawn up by an architect (identified as such by the parties) and the builder built to them, but they were not approved. There was no approval for the job generally. After the builder left, the Wrights complained to the QBCC about defective and incomplete building work. Their complaint was levelled against “Mr Hughes, Duke Building Pty Ltd” as the builder. QBCC issued a Direction to Rectify to Mr Hughes as the builder on 29 July 2012 but that was withdrawn because Duke was identified as the correct party. 
  5. [5]
    Another Direction to Rectify was issued on 4 March 2013 but that was also withdrawn because the Supreme Court decision of McNab Construction Australia Pty Ltd v Queensland Building Services Authority[1] was handed down on 14 March 2013 and the finding there suggested an inadequacy in the period set for Duke’s compliance and therefore the validity of the notice. 
  6. [6]
    A third Direction to Rectify was issued to Duke on 3 April 2013 (the third Direction to Rectify).
  7. [7]
    Over the intervening period from the time the builder walked off site to the issuing of the third Direction to Rectify, there were a number of applications involving the parties to the Tribunal. In earlier proceedings[2] the builder asked the Tribunal to determine whether the contract between the parties had been lawfully terminated (the first review application). The decision of the Tribunal was handed down on 2 September 2013. The Tribunal found there had been a domestic building contract between Duke and the Wrights and that it had been lawfully terminated by the owners in November 2011 consequent on the abandonment or suspension of the building work by Duke. 
  8. [8]
    Duke also applied[3] to have the decision of QBCC to issue the third Direction to Rectify set aside (the second review application).  On 15 May 2014 the Tribunal determined that the third Direction to Rectify should be set aside because as at the date of issue of the direction no certification[4] for the works existed and neither Duke nor any other contractor could lawfully rectify any of the alleged defects or incomplete work.
  9. [9]
    The decision in the first review application meant the Wrights were entitled to claim under the statutory home warranty insurance.  Mrs Wright was advised by the QBCC on 18 September 2013 that until approved plans were available no work could be done at her home by any contractor including contractors engaged under the policy of insurance.
  10. [10]
    Mrs Wright immediately contacted a certifier and the requisite approval and certified plans were obtained at approximately the end of November 2013. Whilst investigating the site the certifier noticed a number of additional defects or incomplete work additional to the items identified by the QBCC building inspector. The Wrights made a further complaint about those new defects on 22 November 2013 and the QBCC issued the Direction to Rectify dated 9 May 2014 (the fourth Direction to Rectify) to the builder in respect of those additional problems. Duke applied to the Tribunal to have the fourth Direction to Rectify set aside. The present appeal by Mr and Mrs Wright is from the decision of the Tribunal to set aside the fourth Direction to Rectify.

The appeal framework

  1. [11]
    An appeal on a question of law is as of right.[5] An appeal on a question of fact or mixed law and fact may only be made with the leave of the Appeal Tribunal.[6]
  2. [12]
    The relevant principles to be applied in determining whether to grant leave to appeal are well established and include:
    1. Is there a reasonably arguable case of error in the primary decision;[7]
    2. Is there a reasonable prospect that the applicant will obtain substantive relief;[8]
    3. Is leave necessary to correct a substantial injustice to the applicant caused by some error;[9]
    4. Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage.[10]
  3. [13]
    If an appeal is one against a decision on a question of fact only or a question of mixed law and fact, the appeal must be decided by way of rehearing with or without the hearing of additional evidence as decided by the Appeal Tribunal.[11] In deciding the appeal, the Appeal Tribunal may confirm or amend the decision or set aside the decision and substitute its own decision.[12]
  4. [14]
    The appeal raises questions of law, questions of fact and questions of mixed law and fact.

Grounds of Appeal

  1. [15]
    Mr and Mrs Wright are not experienced litigants. Their application seeking leave to appeal is in the form of a narrative and attaches a document entitled Reasons for Seeking Leave to Appeal. They subsequently filed a further document entitled Further Reasons for Leave to Appeal which appears to be in large part an elaboration of the original document. The reasons (or grounds) for an appeal are required to be stated in the application for leave to appeal or appeal.[13]  Mr and Mrs Wrights’ grounds of appeal are imprecise. There is a lack of particularity of the errors of law, errors of fact or errors of mixed law and fact alleged by them. 
  2. [16]
    Most of the Wrights’ complaints appear to relate to the weight given by the learned Member to various items of evidence in the proceeding, a failure by the learned Member to take into consideration relevant matters or that the learned Member made mistakes in understanding the evidence led.  The grounds of appeal include questions of mixed law and fact. A party may appeal to the Appeal Tribunal on a question of law without leave, but appeals on questions of fact or mixed law and fact require leave to be granted to the appellant before an appeal will be heard.[14] 
  3. [17]
    The owners complaints are numerous. In the course of the hearing the grounds of appeal became clearer:
  1. The learned Member erred in finding that Mr and Mrs Wright did not perform a licence check as to whether the builder was licensed and inferring thereby that this suggested culpability on their part or acceptance of risk of defective building work being performed.
  2. The learned Member erred in finding that Mr and Mrs Wright entered into a building contract without conditions and inferred thereby that doing so suggested culpability on their part or acceptance of risk of defective building work being performed.
  3. The learned Member erred in according inordinate time at the hearing to matters raised and finalised in earlier tribunal proceeding GAR260-12.
  4. The learned Member erred in failing to consider relevant evidence as to when the defective items the subject of the fourth Direction to Rectify became known to the appellants.
  5. The learned Member erred in failing to consider or give relevant weight to the evidence of the appellants concerning the builder’s advice to them about the availability of “as built” approvals.
  6. The learned Member erred in failing to give appropriate weight to the consumer protection aims of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).
  7. The learned Member erred in failing to consider or give relevant weight to the adverse behaviour of the builder in meeting its contractor obligations and responsibilities.
  8. The learned Member erred in excluding the evidence of the expert building inspector of the QBCC about the cost of rectification of the items of defective building work identified in the fourth Direction to Rectify.
  9. The learned Member erred in failing to consider that the items of defective building work identified in the fourth Direction to Rectify were defects of construction that existed independent of any alleged delay on the part of the appellants in obtaining certification of plans and building approval.
  10. The learned Member erred in finding that the appellants delayed obtaining certification and complaining to the QBCC about the defective items of building work which comprised the fourth Direction to Rectify.
  1. [18]
    The Further Reasons for Leave to Appeal document add potentially two additional grounds of appeal. First, that the way the hearing was conducted was “unfair, intimidating and biased”. There are no particulars given of the unfairness, intimidation or bias. Second that the Member erred in accepting evidence from Mrs Hughes that the costs of rectification were minimal.  In our opinion these additional grounds of appeal are fairly raised by the appellants in their application and fairly understandable as such to the respondents.
  2. [19]
    For the sake of completeness these further complaints should be added as further grounds of appeal 11 and 12 respectively.

The Application for Leave to Appeal

  1. [20]
    A number of the grounds of appeal can be considered together.

Grounds 1, 2 and 5

  1. [21]
    The learned Member made the following comments in the reasons under the heading “What is the ‘blameworthiness’ of the home owners?” (footnotes omitted): 

“[10] The relevant circumstances suggest culpability or at least an acceptance of risk by the home owners in not properly checking whether their builder was licensed, entering into an agreement without written conditions (apart from an overview of work and payments), proceeding with plans that were not certified or approved by Council, and not obtaining certified plans and making their current complaint to the Commission until a substantial delay of some two years and five months after the builder stopped work.”

[18] “… Although they had been informed of at least some degree of risk, Mr and Mrs Wright chose to proceed with plans that were not certified or approved. Instead, Mr and Mrs Wright chose to seek approval after completion to save time.

[19] Instructing a builder to proceed without plans that were certified or approved, means Mr and Mrs Wright accepted or at least understood the risk that the works might not comply with appropriate standards….”

  1. [22]
    During the hearing below, the parties disagreed about the terms of the building contract. The Wrights’ evidence was that Mr Hughes prepared a building contract and specifications which made the builder responsible for obtaining home warranty insurance and final building approval. Mrs Hughes for Duke maintained that the agreed contract specification omitted reference to those two items. Copies of both versions were in evidence.  The specifications were identical save for the two omissions referred to in the builder’s version.
  2. [23]
    Mrs Wright’s evidence[15] was that before the builder started work she discussed the job with Mr Hughes and he said obtaining certification for the job before commencing would delay things. She said Mr Hughes told her because the renovations would be under the existing roof they could get an “as built” approval after the job was done. There would be a $3,000 penalty for that, but he would photograph the foundation work and ensure inspections by engineers at each milestone to certify the renovations so that getting approval afterwards would be fairly straight forward. Mrs Wright said they never discussed home warranty insurance. She had never heard of it until she contacted the QBCC after the builder had left the site.
  3. [24]
    The evidence for the builder was given by Mrs Hughes, the wife of Mr Hughes, rather than by Mr Hughes himself. Her evidence was that the owner instructed the builder not to obtain certification or builder’s insurance to reduce the cost of construction.[16]  That evidence was clearly hearsay.  Mrs Hughes admitted that she was not privy to meetings between the Wrights and her husband when such things were discussed.  The hearsay issue was raised with the Member and he said he had noted it.[17] 
  4. [25]
    Mr Hughes did make a statement of evidence[18] but the statement was not admitted into evidence.[19] He did not attend the hearing. The transcript of the hearing does not reveal why his statement was not allowed into evidence.[20]  
  5. [26]
    Evidence from Mr Hughes would appear to have been critical for the builder in a number of key respects. The owners maintained that it was Mr Hughes who suggested to them they could apply for approval after the work was finished which would save time. According to the builder, Mrs Wright specifically instructed the builder not to apply for approval or home warranty insurance in an attempt to save money. The builder also knew prior to the hearing that there was a dispute over the true specifications to the contract and who had responsibility for home warranty insurance and final building approval.
  6. [27]
    Mrs Hughes’s hearsay evidence was that the Wrights were made well aware of the consequences of not obtaining certification and home warranty insurance by the architect and their bank manager.[21] The architect, Mr Moyes, did not give evidence. Mrs Hughes exhibited to her statement of evidence a letter from him addressed to Mr Hughes dated 22 March 2012 in which it was stated Mr Moyes had attended on Mrs Wright at her home and his discussions:

included the required consultants and costs which would be required to gain council approval, timeframes and the overall process to gain approval. At this point the client was concerned about the timeframe involved in engaging and finalising the documentation for approval as she was expecting a baby and indicated she required the structure built before giving birth. At this point we agreed I would prepare working drawings only and leave the approval side to herself to finalise as she was fully aware of what was required to gain building approval.[22]

  1. [28]
    Mr Moyes letter of 22 March 2012 does not clarify exactly what Mrs Wright “was fully aware of” with respect to gaining building approval. She could have been “aware” that “as built” approval was possible and was being pursued on this job.
  2. [29]
    Indeed it was Mrs Wright’s evidence that she spoke to both Mr Hughes and Mr Moyes about pre-approval and “as built approval”[23] processes, and they had all discussed and been working “on the basis that we would obtain approval based on “as built” approvals”.[24]
  3. [30]
    Again, according to Mrs Hughes, the owners’ bank manager had advised them about certification. That advice and the source is referred to by the Member in his reasons for decision.[25] But the bank manager did not say anything directly to the owners. It was Mr Hughes who said he had spoken to the manager and the manager had told him they should obtain approvals.[26] According to Mrs Wright, Mr Hughes informed her that he had spoken to her bank manager and the manager had said the Wrights should protect their asset and if they tried to sell the house without approvals the council could make them knock it down and that approval was also necessary to protect the loan.[27]  
  4. [31]
    Neither the owners’ bank manager nor the architect gave evidence at the hearing. The finding by the learned Member that the owners had “been informed of at least some degree of risk” in proceeding to build with plans that were not certified or approved[28] was based on hearsay evidence attributable to the owners’ bank manager and ambiguous evidence from the architect.
  5. [32]
    The learned Member found that there were a number of factors which suggested culpability or an acceptance of risk on the part of the home owners. He also identified failing to properly check whether the builder was licensed, entering into a building contract without written conditions (apart from an overview of work and payments), not obtaining certification and delaying making the current complaint to the QBCC for 2 years and 5 months after the builder stopped work.[29]
  6. [33]
    But the owners did perform a contractor’s license search. They checked Mr Hughes’s licence. Indeed he had a contractor’s licence. It was Mr Hughes who was referred to them by a friend, not Duke. The Wrights thought Mr Hughes was the builder. It seems, according to Mrs Hughes, that the builder was similarly mistaken as to the identity of the licence holder. She gave evidence at the hearing below:

“Duke Building haven’t had a building licence.  When we renewed our licence for Duke Building, we were unaware that we would have to actually put it under Duke building, rather than the builder itself.”[30] 

  1. [34]
    Mrs Hughes refers here to her husband as “the builder”. Indeed at the hearing of the appeal Mrs Hughes conceded neither party discussed nor contemplated the necessity of Duke being licensed and neither party knew Duke should have been licensed.[31] 
  2. [35]
    The contract and specifications were prepared by the builder and were the builder’s standard form documents.[32] Mrs Wright said that she and her husband had no experience with building contracts and had no cause to suspect the documents supplied to them by the builder were not standard in the industry.[33] 
  3. [36]
    The issue of delay in Mr and Mrs Hughes complaining to the QBCC for 2 years and 5 months after the builder stopped work forms a separate ground of appeal best dealt with elsewhere in these reasons.
  4. [37]
    It is apparent from the learned Member’s reasons that his view as to the culpability of Mr and Mrs Wright was material to the formation of his view that the conduct of Mr and Mrs Wright was a significant factor in exercising the discretion to set aside the fourth Direction to Rectify. That view was informed by what we have described as the hearsay evidence attributable to the owners’ bank manager and ambiguous evidence from the architect.
  5. [38]
    It appears to us that the learned Member formed a concluded view about the culpability of, and acceptance of risk by, the home owners. The learned Member, in forming that view, failed to take into consideration relevant evidence and reached a conclusion against the weight of the evidence, without due consideration of the evidence and claims by the owners suggesting culpability on the part of the builder rather than the owners.  The evidence the learned member failed to consider include:
    1. The evidence of the owners about which party, owners or builder, had an agreed obligation under the contract to seek building approval;
    2. The  contract and specification document referred to by the learned Member as “primarily without written terms and conditions”[34] was prepared by, and proffered to the owners by, the builder;
    3. The builder had advised the owners about the availability of post construction approval subject to payment of a penalty of $3,000; 
    4. The owners disputed instructing the builder not to seek approval before starting the work to save money;
    5. The builder neglected its licensing obligations.
  6. [39]
    The learned Member observed that he need pay no regard to whether the builder advised the owners how to proceed without certification because the build proceeded at the behest of and for the benefit of the owners.[35]  We do not accept this proposition as expressed by the learned Member. First, the paid work involved in the contract was also to the financial benefit of the builder. Second, the proposition is unsupportable if the builder advised the owners that post construction approval was an available alternative to pre-construction approval.
  7. [40]
    Section 28 of the QCAT Act requires the Tribunal to act fairly and according to the substantial merits of the case. The Tribunal is not bound to by the rules of evidence or any practices or procedures applying to courts of record, other than to the extent the Tribunal adopts the rules, practices and procedures”.[36] The Tribunal may inform itself in any way it considers appropriate.[37] The Tribunal is also required to act with as little formality and technicality and with as much speed as a proper consideration of the matters before it permit.[38]
  8. [41]
    Evidence must be both relevant and have probative value in order for weight to be given to it. In the absence of an opportunity for the relevance and probity of evidence to be tested, as is the case with hearsay evidence, such evidence can be given little, if any weight. In relying as he did upon the evidence of Mrs Hughes as to what the bank manager and the architect said, the learned member erred in giving undue and unwarranted weight to what was essentially hearsay evidence in finding that the Wrights knew about the importance of obtaining approvals before the building work was carried out.
  9. [42]
    The learned Member’s reasons do not reveal how he determined that construction by a builder pursuant to plans that were not certified meant Mr and Mrs Wright accepted or understood there was a risk that the work might not comply with appropriate standards.[39] The plans were drawn by an architect recommended by the builder. The evidence at hearing was that the certified plans were in all respects the same as the plans Mr Hughes used during the course of the work save that the certifier identified a number of defects where the builder failed to comply with the Australian Building Code. There was no evidence to suggest that the plans drawn by Mr Moyes were otherwise than professionally competent and there was no evidence to suggest they were not drawn in compliance with appropriate construction standards as understood by Mr Moyes.
  10. [43]
    Had the learned Member considered all the above-mentioned factors, which we conclude were relevant factors, an entirely different conclusion about acceptance of risk and culpability of the parties was open on the evidence. Unfortunately, in the absence of any detailed reasons, we cannot ascertain what the learned Member in fact considered. The failure of the learned Member to make mention of these other considerations forces the conclusion that the Member did not take them into account. 
  11. [44]
    A failure to give adequate reasons may be an error of law. The nature and extent of the obligation to give adequate reasons will vary according to the nature of the case.[40] In this case, and in light of the significance of the matters we have raised to the final exercise of the discretion by the learned Member, we conclude that the learned Member erred in failing to provide adequate reasons for his decision. The error is one of law. 
  12. [45]
    The errors of the learned Member are of law and mixed law and fact. In our view the errors, as they relate to the evidence and the failure to take into account relevant considerations, are significant and force the conclusion that the decision is manifestly unreasonable.[41]  

Ground 3

  1. [46]
    The appellants fail to identify what matters raised and finalised in the earlier proceeding were accorded inordinate time during the hearing before the learned Member. At the hearing of the appeal Mrs Wright clarified[42] that the appellants’ complaint was that there was no appearance for Duke in GAR260-12 and Duke should not have been allowed to raise accusations and submissions “presented” in that case before the learned Member in the hearing below. She identified specifically “a lot of the things about owing money and … us spending the cash component of the contract.”
  2. [47]
    The decision in GAR260-12 was limited to a finding that a domestic building contract existed between the parties, that the contract was illegal and unenforceable by Duke who was an unregistered contractor, that Duke abandoned or suspended work under the contract which action constituted repudiation of the contract and that repudiation was accepted by the appellants with termination of the contract by their solicitors’ letter of 14 November 2011. In the decision below the learned Member refused to allow the issue of the existence of the contract or its termination to be raised afresh. He said he would allow consideration of the fairness and reasonableness of the Commission’s issue of the fourth Direction to Rectify in light of any alleged change to the plans.[43] That was correct in the circumstance. There was no issue estoppel to prevent consideration of money owing as between the parties and no great time was spent on that subject in any case.
  3. [48]
    A perusal of the transcript of the proceeding before the learned Member fails to disclose any inordinate use of the Tribunal’s time. The learned Member did not proceed on any basis other than that the contract had been validly terminated as found in GAR260-12. This ground of appeal is not made out.

Grounds 4 and 10

  1. [49]
    The learned Member found:

Mr and Mrs Wright lived in the house for a period of two years and five months before obtaining certification and approval of the plans on 21 November 2013. They complained to the Commission about the items in the Direction the next day on 22 November 2013. This suggests that although Mr and Mrs Wright did not delay once they obtained approval, the items were apparent well before then and the delay between work ceasing and Mr and Mrs Wright complaining to the Commission was because they did not obtain certification earlier.[44]

  1. [50]
    The learned Member draws an implication from the certification on 21 November 2013 and complaint to the QBCC the next day that the defective items were apparent to the home owners well before certification. The evidence of Mrs Wright was that until the certifier raised the defects as an issue, the homeowners were ignorant of their existence. Indeed the QBCC building inspector failed to notice them on prior inspections investigating defective building work at the site. The defects concerned were not apparent to the QBCC inspector who had attended the site on previous complaints by the owners. The reasons do not reveal any consideration of the certifier’s involvement in identifying the defects. We conclude that the learned Member failed to give consideration to relevant evidence or appropriate weight to that evidence. We also conclude that the inference drawn by the learned Member was not one reasonably open on the evidence.
  2. [51]
    The QBCC makes policies governing the administration of the QBCC Act.[45] One such policy is the Rectification of Building Work Policy (the policy)[46] which provides in s 3(1) that a consumer should not delay making their application for a Direction to Rectify defective building work if the delay would result in the issue of the direction being unfair or unreasonable in the circumstances. It may be unfair or unreasonable, the Policy says, to issue a direction if, for category 1 defective building work, the delay exceeds 3 months “after the defective work became apparent”. For category 2 defective work, in so far as applicable, a delay exceeding 6 months “after the building work was completed or left incomplete” may be unreasonable.
  3. [52]
    The QBCC inspector who issued the fourth Direction to Rectify identified eleven (11) category 1 defects.
  4. [53]
    The learned Member found delay by the owners in making complaint to the QBCC about the defects “well outside the prescribed periods for when it is fair for the Commission to issue a Direction”.[47] For the category 1 defects, that period was 3 months from the time the defects became “apparent”. The learned Member found that the owners were well out of time in respect of the time limits set by the policy because of their delay in obtaining certification. Such delay might be a general factor for consideration when determining the question, “is it fair to issue the Direction to Rectify to the builder?”, however it is not the triggering factor for the 3 month period that runs for Category 1 defects under the policy.  That period runs from when the defects become “apparent”.
  5. [54]
    The learned Member determined that the owners delayed in complaining to the Commission, not because they were unaware of the defects, but because they had not had plans certified.[48]  We conclude from this finding that the learned Member found the Wrights were aware of the defects but delayed complaining about them to the QBCC. The reasons make no mention of when the Wrights became aware, or should have become aware, of the defects. It is possible the learned Member’s finding was based upon an objective awareness attributable to the owners on the basis that the defects were evident to a reasonable observer throughout the period of delay. But that is conjecture. The basis of any conclusion that the owners were aware of defects but delayed in making complaint is not explained in the reasons. 
  6. [55]
    The learned Member’s reasons make no mention of the certifier’s involvement in the discovery of the defects, nor the failure of the QBCC inspector to note them during the latter’s inspections, nor the technicality, if that is an adequate description, of these failures of construction standards. Finally, the learned Member does not appear to have considered Mrs Wright’s evidence at the hearing below that she did not know she needed to obtain certification to ground a complaint to the QBCC for defective building work.[49]
  7. [56]
    The reasons do not adequately disclose the reasons for the learned Member’s conclusion that the complaint by the owners was well outside the prescribed period for complaint under the Policy. In our view, evidence concerning when the defects became apparent to the owners and apparent for the purpose of the policy was not given any, or any sufficient, weight by the Member in concluding that the owners delayed in making a complaint. The error by the learned Member is one of mixed law and fact.

Grounds 6 and 7

  1. [57]
    These grounds of appeal concern relevant factors to be taken into account when determining whether it was fair to give the Direction to Rectify. 
  2. [58]
    The learned Member observed that the discretion to issue a Direction to Rectify involves weighing up factors, both for and against its exercise; that the Tribunal must consider the competing interests of the parties; and that the blameworthiness of the home owners and the cause of the defective building work are relevant considerations. The learned Member cited Dixon Projects Pty Ltd v QBSA.[50]
  3. [59]
    In Dixon however it was also said:

(t)he balancing of the interests of the building contractors and consumers is specifically provided for in section 3 of the QBSA Act.[51] 

  1. [60]
    Whilst the discretion to issue a Direction to Rectify cannot be reduced to an examination of fault of the parties alone,[52] fault of either party may be a relevant factor along with other factors depending on the circumstances of the case.[53] 

In exercising the discretion, the Tribunal must consider the competing interests of the parties involved in their relative positions. Such things as the innocence or blamelessness of the owners are, of course, relevant. Also relevant is whether or not it can be said that the builder is in some way at fault. Clearly in those cases where the cause of the defective building works can be attributed to the builder, then the exercise of the discretion in favour (sic) of affirming the decision of the Authority to give the direction is more likely to occur.[54]

  1. [61]
    The decision in Dixon was confirmed in Matthews v Queensland Building Authority[55] where the principles to be applied were identified as:
    1. The Tribunal in exercising the discretion pursuant to s 72 stands in the position of the respondent;
    2. The Tribunal must consider the competing interests of the parties involved and factors such as the blameworthiness of the owners and the cause of the defective building work are relevant;
    3. In exercising the discretion the Tribunal must give consideration to the circumstances mentioned in the QBSA defects policy;
    4. The Tribunal must take into account all of the evidence including the circumstances raised at the Tribunal Hearing.
  2. [62]
    What is clear from Dixon and Matthews is that the Tribunal is required to take into consideration the “the whole factual matrix in its entirety”.[56]
  3. [63]
    The learned Member’s reasons do not address the entirety of the factual matrix, focussing principally upon the fault of the owners and non-expert evidence from Mrs Hughes about cost of rectification. However, the builder’s responsibility to build to requisite construction standards, the builder’s failure to obtain registration, the choice the builder made to build without approvals in place, and the evidence of the owners that they adopted the course of “as built” post-construction approval only on the advice of the builder were all relevant factors to be taken into account in the exercise of the discretion.
  4. [64]
    The learned Member referred to the interests of the owners and the builder but concluded that giving a Direction after a prolonged delay “for which the builder is not responsible” was contrary to the interests of the industry and consumers as a whole.[57]  Delay could not however be considered to the exclusion of other relevant factors. Equally contrary to the interests of the building industry is defective, unchecked, unremedied construction work.
  5. [65]
    Other factors relevant to the builder’s behaviour and fault were required to be taken into account in determining whether the issue of the Direction to Rectify was fairly given. Such an exercise was necessary both to assess the fairness of giving the Direction and also, pursuant to the general requirement imposed by s 3 of the QBCC Act, to balance the interests of the contractors and consumers.
  6. [66]
    Relevant factors concerning the builder’s culpability were not taken into consideration and in so doing the learned Member did not correctly apply the principles when reviewing the decision to issue a direction to rectify. In so doing, the learned Member erred. The error is one of mixed law and fact.

Grounds 8 and 12

  1. [67]
    Two statements of evidence of Mr BJ Luckan, the QBCC building inspector, were filed in the proceeding. Neither referred to estimated costs of rectification of the items referred to in the fourth Direction to Rectify.  The learned Member was not advised by any party, including Mr and Mrs Wright, that Mr Luckan would or could give evidence about costs of rectification. The QBCC proposed to call Mr Luckan but neither Mrs Hughes nor the Wrights had any questions for him.[58] 
  2. [68]
    The learned Member noted during the hearing below that any new evidence from Mr Luckan not in his filed statements of evidence would not be received because leave had been refused to allow a statement by Mr Hughes to be admitted into evidence.[59] 
  3. [69]
    There are no pleadings in the Tribunal and the issues for determination are often to be discerned from a perusal of written statements of evidence. Apart from the assertions of Mr and Mrs Wright in their document entitled Reasons for Seeking Leave to Appeal, there is no evidence that Mr Luckan was able to say something about costs of rectification, or that he intended to do so. The learned Member queried the QBCC representative at the hearing whether there was evidence of the cost of rectification, but he said he was unable to assist. The representative made no reference to Mr Luckan giving evidence about that issue. Accordingly, the learned Member made no error in his decision to limit Mr Luckan to the evidence given in his filed statements of evidence.
  4. [70]
    As to the ground of appeal concerning the Tribunal’s acceptance of evidence from Mrs Hughes about costs of rectification of the defective building work in the Direction to Rectify being minimal, though this complaint has been added as an additional ground of appeal, and the complaint clearly made in the documents supporting the Application for Leave to Appeal, care must be taken not to visit on a respondent party a judicially attractive question of law which the notice does not fairly raise.[60] 
  5. [71]
    In the circumstances the issue fairly raised, should be limited to simply whether the Member was entitled to receive the evidence.
  6. [72]
    As stated, the Member had enquired whether there was any evidence of costs of rectification but was not assisted in that regard by any party. The Tribunal is not bound by the rules of evidence. The evidence in question was able to be given, however the weight to be attached to such evidence is an entirely different issue, which is not fairly raised from the application material.
  7. [73]
    This ground of appeal is not made out.

Ground 9

  1. [74]
    There was no evidence before the learned Member that delay had increased the costs of rectification.[61] The defects were found by the certifier to be failures to comply with minimum building standards. The learned Member found:

Regardless of whether Duke or Mr and Mrs Wright were contractually responsible to obtain certification and approval, or the outcome of the review of the previous Direction, Mr and Mrs Wright have a duty to mitigate their loss and obtain certification and approval of their plans in a timely manner to ensure any Direction is issued in a timely manner, so the Builder can comply in a timely manner. They did not and have therefore not acted reasonably.[62] 

  1. [75]
    Duty to mitigate loss is a principle requiring a party who suffers loss caused by a breach of contract or tort to take reasonable action to minimise the loss sustained or risk reduction of the amount of the award of damages being paid by the other party to the contract or the tortfeasor. It is difficult to understand how that doctrine applies to the matter at hand. There was no such obligation under the contract. There is no such obligation to be discerned in the rectification Policy save the broad requirement that a direction to a contractor be fair in the circumstances. 
  2. [76]
    The finding by the learned Member is a curious one given loss minimisation was not a relevant factor nor indeed was such a finding reasonably open on the evidence. Delay on the part of the owners, if there was any, was relevantly a factor to be taken into account when determining whether it was fair to issue the fourth Direction to Rectify. 
  3. [77]
    It appears that the learned Member may have taken an irrelevant consideration into account, namely the possibility of minimisation of loss, in concluding the owners acted unreasonably in delaying obtaining certification and in making a finding of fact that delay had increased the cost of rectification.  The learned Member appears to have erred in doing so. Reliance upon this irrelevant consideration does not however render the decision of the learned Member manifestly unreasonable.

Ground 11

  1. [78]
    The basis of this ground of appeal seems to be that Mrs Wright felt intimidated during the proceedings below, and the same questions were put to her repeatedly despite her response remaining constant, principally concerning her evidence about “as built” approval and delay.
  2. [79]
    A perusal of the transcript of the hearing confirms that Mrs Wright was questioned repeatedly, mostly by the learned Member, about her understanding that approval before construction commenced was necessary and that the owners delayed obtaining certification. The questioning was perhaps unusual, and it was somewhat repetitive, however perusal of the transcript of the proceedings also reveals no element of bullying or coercion was involved and indeed the learned Member acted in a courteous manner throughout, as indeed did all before the Tribunal. That Mrs Wright felt intimated by the proceedings is not a unique complaint. Hearings are serious affairs and often uncomfortable experiences for most people not well versed in the law and hearing procedure.
  3. [80]
    This ground of appeal is not made out.

Leave to Appeal

  1. [81]
    The Appeal Tribunal will not lightly interfere with the decision of the primary decision maker. That Members of the Appeal Tribunal have a different point of view on certain issues is not enough. There is often more than one admissible point of view possible on the evidence.  Particularly in the case of discretionary decisions, the approach in appeals is one of caution and restraint.[63] Suspected or discernible error on the part of the primary decision maker must be shown. Generally there should be sufficient doubt raised as to the correctness of the decision under appeal as to justify the grant of leave. If a reasonable argument exists that there is an error to be corrected and an appeal is necessary to correct a substantial injustice to the appellant, then leave will usually be granted.[64] There may be additional factors according to the circumstances of the case, such as the importance of the issue proposed to be raised on appeal.[65]
  2. [82]
    We have found errors of fact, errors of law and errors of mixed law and fact. There is, in our view, a likelihood that an appeal against the learned Member’s decision would succeed and a decision in the appellants favour given on appeal. It appears a substantial injustice has been suffered by the appellants to the extent that they are responsible to bear the costs of defective work attributable to the failures of the respondent to build to minimum construction standards. Leave to appeal should be granted.

The re-hearing

  1. [83]
    An appeal against a decision on a question of fact or a question of mixed law and fact must be decided by way of rehearing, with or without the hearing of additional evidence as decided by the Appeal Tribunal.[66] An appeal conducted by way of rehearing means there is a fresh decision made concerning the issues between the parties, not a correction of the decision made by the Tribunal below. The Appeal Tribunal determines the legal rights and obligations of the parties as at the date of rehearing.  The Appeal Tribunal is free to consider new circumstances and admit further evidence. It reviews the evidence before the primary decision maker and reaches its own conclusion.
  2. [84]
    The issue between the parties is effectively the fairness of the decision of the QBCC to issue the Direction to Rectify of 9 May 2014. The initial application made by the builder was to have that Direction set aside.
  3. [85]
    In rehearing the matter the learned member’s primary findings of fact are adopted other than where those findings have been challenged or where there is doubt as to the findings made. We have formed our own views on the evidence, consistent with the principles applicable in appeals by way of rehearing on the record of proceedings before a primary tribunal.[67]
  4. [86]
    The background and much of the relevant evidence pertinent to the matter is set out above in the consideration of the application for leave to appeal. Some additional commentary on the dealings and relationship between the homeowners and the builder and the evidence at hearing is necessary.

Direction to Rectify

  1. [87]
    As at the date of the application to review the decision of the QBCC to issue the fourth Direction to Rectify to the builder, the relevant provisions of the QBCC Act provided:

72  Power to require rectification of building work

  1. (1)
    If the commission is of the opinion that building work is defective or incomplete, the commission may direct the person who carried out the building work to rectify the building work within the period stated in the direction.
  2. (2)
    In deciding whether to give a direction under subsection (1), the commission may take into consideration all the circumstances it considers are reasonably relevant, and in particular, is not limited to a consideration of the terms of, including the terms of any warranties included in, the contract for carrying out the building work.

  1. (8)
     A direction cannot be given under this section more than 6 years and 3 months after the building work to which the direction relates was completed or left in an incomplete state unless the Tribunal is satisfied, on application by the commission, that there is in the circumstances of a particular case sufficient reason for extending the time for giving a direction and extends the time accordingly.

(14)   The commission is not required to give a direction under this section to a person who carried out building work for the rectification of the building work if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction.[68]

  1. [88]
    Section 72(1) of the QBCC Act concerns the identification of defective building work, not fault attribution. The terms of s 72(2) are clear, namely that the Commission may take into consideration all circumstances it considers relevant, not only the terms of the contract.[69] The initial question to be determined by the Commission is simply whether or not faulty or unsatisfactory building work has been identified. If the answer is yes, that leads to the question, is it reasonable in all the circumstances, to direct someone to rectify it? That requires the exercise of a discretion by the Commission whether it is appropriate in the circumstances to that person, here the builder, to do that work. 
  2. [89]
    The certifier engaged by the owners in November 2013 identified defective building work. The Commission agreed. Having identified defective building work, the Commission exercised its discretion and directed the builder to rectify the work.
  3. [90]
    There does not appear to be any valid challenge to the existence of defective building work. 

The owners’ evidence

  1. [91]
    Mr and Mrs Wright both filed statements of evidence. They both gave evidence under oath at the hearing. Their evidence is that they wanted to undertake renovations on their home and rebuild the deck.  Mr Hughes was referred to them by a mutual friend. Mr Hughes came out to see them and told them he was a licensed builder working “under a company Duke Building”. According to Mrs Wright they believed the builder was Mr Hughes. Mrs Wright searched the QBCC website and found Mr Hughes’s name listed as a licensed contractor.
  2. [92]
    Mr Hughes suggested at the second meeting with the Wrights that they contact his architect Mr Moyes about plans. They talked about council approval.  Mr and Mrs Wright wanted the renovations done quickly. Mrs Wright was expecting a child four months hence.  Mr and Mrs Wright say Mr Hughes told them getting council approval before starting the work would hold up the work. It would create some issues with the timeframe of the works. Mr Hughes suggested that because the renovations were under the existing roof they could get an “as built” approval as opposed to getting approval before starting the work. Mrs Wright said she had never heard of “as built” approval before. Mr Hughes told them there would be a $3000 penalty or fine for getting “as built” approval as opposed to prior approval.
  3. [93]
    The timing of the renovation was important to Mr and Mrs Wright because they had the baby on the way and were willing to pay an extra $3000 to have the renovations completed in time. Mr Hughes told them he would make sure he took photographs of the foundations and had inspections by engineers at each milestone to certify the renovations so that getting approval after the renovations were finished would be fairly straight forward.
  4. [94]
    The parties never discussed statutory home warranty insurance. Mrs Wright says she had never heard of that until she contacted the QBCC in or about September or October 2011.
  5. [95]
    Subsequently Mr Hughes told Mrs Wright that he had spoken to their bank manager about council approval. Mr Hughes told her that the manager said they had to protect their asset and if they tried to sell the house without approvals the council could require them to knock it down.  According to Mr Hughes the manager also said they needed to get council approval to protect their loan.
  6. [96]
    Mrs Wright told Mr Hughes that they wanted to go ahead with “as built” approval and they wanted him to take photographs and have inspections done. According to Mrs Wright the parties never discussed who would be responsible for the actual application for council approval at the end of the work.
  7. [97]
    Also according to Mrs Wright on 2 February 2011 Mr Hughes provided them with a building contract plus specifications and a payment schedule.  The cost of the work was $145,500. Mrs Wright expressed some misgivings about the milestones and payments noted in the contract.  They did not reflect what was actually going to be done. They did not include landscaping or excavation which was mentioned in the contract.  Mr Hughes replied with words to the effect “It’s just what you normally do.  It’s based on building a house.”
  8. [98]
    Mrs Wright says they signed the contract on 22 February 2011. They handed it back to Mr Hughes. The contract specifications attached to the contract noted at item 1c under the heading Pre-Construction Services the notation “Home Builders Insurance”. At item 14h under the heading “After Completion” the specifications bore the notation “Final Building Approval by Council”. The evidence of Mr and Mrs Wright is Mr Hughes never returned a copy of the contract to them, signed or otherwise.
  9. [99]
    Mr Hughes started work. According to Mrs Wright he asked for payments sporadically. The requests for payment did not match the stages or amounts set out in the contract.
  10. [100]
    Mrs Wright gave birth on 10 May 2011. 
  11. [101]
    In late May 2011 the parties fell out about a cash component for the work.  According to Mrs Wright, Mr Hughes said the job had cost him $25,000 to $35,000 because he priced the renovation based on a cash component.  Mrs Wright’s evidence is that a cash component was never mentioned to them.
  12. [102]
    Duke Building Pty Ltd did not complete the work under the contract. The Wrights disputed amounts claimed by the builder. The builder left the site with the work incomplete. The Wrights consulted solicitors. By letter dated 14 November 2011 the solicitors sent a letter to Duke Building Pty Ltd terminating the contract.

The builder’s evidence

  1. [103]
    Mrs Hughes represented Duke Building Pty Ltd at the hearing below.  She attended as Director of the company. Mr Hughes was not a Director of the company and did not attend at the hearing to give evidence. Mrs Hughes filed statements of evidence and gave evidence under oath. At the hearing a statement of evidence by Mr Hughes was not accepted into evidence by the learned Member. The transcript does not disclose the basis of rejection. 
  2. [104]
    Mrs Hughes’ evidence was mostly hearsay in so far as it purported to give evidence about the on-site dealings between Mr and Mrs Wright and Mr Hughes. 
  3. [105]
    The transcript shows[70] the following exchange between the learned Member and Mrs Hughes concerning the different versions of the specifications, with Mrs Hughes saying she altered the original:

(Member) So is it your evidence, Mrs Hughes, that, initially, those two items were included in the specifications but then subsequently removed? ---Yes.  What happens is I have a – a template, and I delete or add, as applicable, to each specification, so I go through what we’d agree to and delete it or add it.

So perhaps if you can tell us what happened? --- Well, when writing up the specifications, it was agreed that, no, they didn’t want BSA insurance and no, they weren’t going to get it certified.

Who … said that to you? The second respondents.

Who - - - ? --- The - - -

-- - said that to you? --- The second respondents.

Who, both of them or one of them or - - -?--- Sharna and Randall Wright passed this on to Brett Hughes during a meeting.

How do you – were you present then?---No. I wasn’t.

All right. So who told you there were to be changes?---Brett Hughes.

  1. [106]
    According to Mrs Hughes, the reason why approval/certification was not obtained before construction was because Mrs Wright wanted to cut the cost of construction from the outset. It was Mrs Wright who asked the builder not to obtain home warranty insurance nor certification.
  2. [107]
    The evidence of Mrs Hughes was that both Mr and Mrs Wright were clearly made aware of the consequences of not obtaining certification and home warranty insurance not only by her husband, Mr Hughes, but also by the architect Mr Moyes and by their bank manager.
  3. [108]
    Duke Building stopped work because the owners would not pay. The Wrights owed the builder upwards of $25,000 under the contract.

The contract specifications

  1. [109]
    The parties offered different versions of the contract and specifications.  The builder’s version of the specifications was identical to the owners save items 1c and 14h concerning home warranty insurance and council approval were missing. Mr and Mrs Wright say until Mr Hughes filed a witness statement in earlier proceedings[71] in the Tribunal they had never seen the version of the specifications relied on by the builder. A copy of that earlier statement by Mr Hughes was not tendered in evidence before the learned Member below. The statement of evidence of Mrs Hughes of 20 July 2015 exhibits a letter from solicitors acting for the QBCC which notes for her information that the statements of evidence filed in earlier proceedings[72] did not form part of the builder’s evidence in the hearing below. The builder was therefore on notice about this aspect of the evidence.
  2. [110]
    Mrs Hughes claimed the specifications relied on by the owners was an erroneous template copy of her standard document which perhaps had been accidentally forwarded to them by email. The owners had, according to Mrs Hughes, advised Mr Hughes that those standard items were to be deleted from the specifications to save money. Mr Hughes had told her that and she had amended the specifications accordingly.  The owners deny any such request or discussion on their part. They maintain their copy of the specifications shows what was agreed.

The architect and the bank manager

  1. [111]
    The architect’s letter says nothing more than Mrs Wright was fully aware of what was required to gain building approval. What “building approval” constituted is not explained in the letter. It could well be the “as built” approval procedure Mrs Wright said she discussed with both Mr Hughes and Mr Moyes. Mr Moyes’s evidence is of little value in determining the credibility issues between the owners and builder.
  2. [112]
    Similarly with respect to the reference to the bank manager’s advice, it offers little persuasive assistance to establish the owners’ knowledge of approval processes.
  3. [113]
    The Tribunal is not bound by the rules of evidence and may inform itself in any way it considers appropriate and act with as little formality and technicality as the requirements of the QCAT Act, an enabling Act or the rules, and a proper consideration of the matter before the Tribunal permits.  However the Tribunal must observe the rules of natural justice.[73]  Having said that, the value of sworn evidence as opposed to unsworn evidence should not be discounted out of hand simply because the Tribunal is entitled to consider both. It will always depend on the circumstances of each case. Further, in any weighing exercise of tested against untested evidence, the loss of opportunity to challenge or explore an opponent’s contradictory evidence, particularly where the evidence goes to credibility, should not be lightly discounted. One should ask: why has a party not been given the opportunity to test the evidence?
  4. [114]
    The sworn evidence of the owners is that Mr Hughes suggested to them they could apply for “as built” approval after construction to save time.  There was no direct sworn or unsworn evidence tendered at hearing by Mr Hughes to contradict that. The only evidence given on behalf of the builder refuting that advice is hearsay evidence from Mrs Hughes. 
  5. [115]
    One is left somewhat puzzled by the failure of Mr Hughes to appropriately file a statement of evidence in the proceeding. He did not attend the hearing below to make himself available for examination on issues that were obviously solely within his own knowledge concerning the dealings with the owners. Neither Mr nor Mrs Hughes attended the previous related hearing.[74] A subsequent application by Mr and Mrs Hughes to reopen that proceeding was refused.
  6. [116]
    A copy of Mr Hughes’ unsigned statement of evidence, which may be the statement not admitted at the hearing below, is contained in exhibit 1.  Mr Hughes’ absence at the hearing where evidence of his discussions with the owners was pivotal to the builder’s case, and where the builder ought reasonably to have known of its importance, suggests the builder recognised his evidence or his testing at hearing might not assist the builder’s case. Such an inference is drawn. In the circumstances, the unsigned, unsworn document referred to as a statement of evidence of Brett Raymond Hughes dated 25 August 2015 should not be considered at this rehearing either. 
  7. [117]
    The evidence of the owners, on the other hand, was sworn and tested at hearing by both Mrs Hughes and the learned Member. In the circumstances, we conclude the sworn evidence of the owners is to be preferred in all respects to the evidence presented at hearing by the builder. We find that it was Mr Hughes who suggested to the owners that a post-construction approval process was available to them, that the proposed course might be adopted to save time, and that the contract specifications disclosed it was the builder’s responsibility to obtain both home warranty insurance and building approval. 
  8. [118]
    Having said that, insofar as the owners knew they would have to pay a “penalty” of $3,000 if approval after construction was sought, we conclude that both owners and builder were aware that the process was available but not appropriate. Given the experience of Mr Hughes as a contractor, however, his culpability, if that is the appropriate word, in advising on and pursuing that course and building without the requisite approval in place must be recognised when balancing his behaviour against that of the owners. He was an experienced contractor. They were inexperienced homeowners, new to construction.
  9. [119]
    The owners did fail to search and ascertain the licensing status of Duke Building Pty Ltd as contractor. They did search for Mr Hughes’ name, however, and the search confirmed he was a licensed contractor.  According to Mrs Wright, it was Mr Hughes, not the company, that had been referred to them by a friend as a competent builder. Mrs Hughes admitted even the builder did not know the company had to be separately licensed with QBCC. In these circumstances, one cannot conclude that the owners’ search of the wrong contractor name was unreasonable in the circumstances or suggestive of risking poor construction work. 
  10. [120]
    The evidence is that the defects in the building work identified in the fourth Direction to Rectify were first noticed by the certifier in or about November 2013. The QBCC building inspector had not noticed them on his attendance at the premises prior to that, nor had the owners. The defects were described by the QBCC in the proceeding below as requirements for the builder’s work to achieve a minimum standard for building approval.[75]   
  11. [121]
    A builder is not excused from compliance with specifications of a regulatory body, such as the Australian Building Code, simply because an architect’s drawings are wrong.[76] Accordingly, Duke cannot complain that it is unreasonable or unfair for it to perform work under the certifier’s plans simply because they are different to those drawn by Mr Moyes. In any event, we conclude the only differences in the plans are those items required to be done to ensure the work complies to building standards.   
  12. [122]
    The QBCC Rectification of Building Work Policy provides in s 3(1) that a consumer should not delay making their application for a Direction to Rectify defective building work if the delay would result in the issue of the direction being unfair or unreasonable in the circumstances. It may be unfair or unreasonable, the Policy says, to issue a direction if, for category 1 defective building work, the delay exceeds 3 months “after the defective work became apparent”.  For category 2 defective work, a delay exceeding 6 months “after the building work was completed or left incomplete” may be unreasonable.
  13. [123]
    The word “apparent” is not defined in the Policy. The meaning of that word should be taken in its ordinary sense and in the context in which the word appears. The Oxford Dictionary Online defines “apparent” as “clearly visible or understood; obvious”. 
  14. [124]
    In Lund v QBSA[77] the Tribunal refused to issue a direction to rectify because it found the defects concerned were apparent well before and outside the notification periods in the rectification policy extant at that time. The Tribunal concluded there that the word “apparent” meant apparent to the reasonable observer. 
  15. [125]
    A similar requirement to notify defects within a limited time exists with respect to home warranty insurance.  Under the relevant home warranty insurance policy the time for lodgement of a claim for insurance cover in respect of category 1 defects must be made to the QBCC within 3 months of the defect becoming “evident”. We conclude that the different words have the same effective meaning under both policies, and are of interchangeable use. In Reuter v QBSA[78] the claim by the owners was said to be out of time under home warranty insurance. The QBSA argued the defect had been evident for some considerable time, far greater than the prescribed 3 month period. The tribunal found the test as to whether a defect was evident under the insurance policy was objective rather than subjective. 
  16. [126]
    The Tribunal said in Reuter:

I have the benefit of the evidence of Mr Stuart, who was … there for the purpose of carrying out a pre-purchase building inspection. I accept Mr Stuart’s evidence that the defect was not evident to him. I found Mr Stuart to be an experienced and knowledgeable builder. He demonstrated understanding of design principles, construction methods and the requirements of the Australian Standards in respect of pre-purchase inspections. I find that if the defect was not evident to Mr Stuart it was not objectively evident. Accordingly the exclusion in clause 7.2 does not apply.[79]

  1. [127]
    Similarly, here we conclude the test as to whether the defects concerned were apparent is objective. The owners never noticed the defects. The QBCC building inspector, Mr Luckan, who attended to investigate the owners complaints, was an experienced builder with good qualifications and long experience. He did not notice the defects. As in Reuter, we conclude that if the defects were not apparent to Mr Luckan, they were not objectively apparent prior to the certifier’s observations of them.  Accordingly, the owners’ complaint here was within time under the Rectification of Building Work Policy.
  2. [128]
    All the aforementioned factors must be taken into account to determine whether it was fair to issue the direction to rectify of 9 May 2014 to the builder. 
  3. [129]
    We have found that under the contract it was the builder’s responsibility to obtain both home warranty insurance and building approval/certification. The builder failed to do that.
  4. [130]
    Both builder and owners agreed to do the building work first, then seek building approval. Both understood there was a certain element of wrongdoing associated with that course, hence the penalty of $3,000 which would have to be paid. However, the builder, through Mr Hughes, was an experienced contractor, and should have known better. His culpability in the affair is much more marked than the owners. We have found that it was his suggestion to adopt the course of post contract approval.
  5. [131]
    Further, the builder was not a licensed contractor. The search by the owners for Mr Hughes’ name was understandable in the circumstances given their limited experience. They did make a search however, and they did find his name. The builder’s lack of registration was a far more significant default than the owners incorrect name search. The penalties provided for at s 42 of the QBCC Act flowing from the lack of licensing attest to that.
  6. [132]
    The defects listed in the fourth Direction to Rectify were first noticed by the certifier. They were not objectively apparent to the owners prior to that. As such, taking into account the short time between their attention being drawn to the defects and their complaint to the QBCC, the Wrights were within time to make complaint as stipulated by the Rectification of Building Work Policy.
  7. [133]
    There was delay by the owners in obtaining certification after termination of the contract, however their evidence is that they left the matters associated with rectification and completion with the QBCC. There is no reason to doubt that this was the case. There is nothing unusual in defects in building work coming to the attention of home owners years after final approval. Indeed the Rectification of Building Work Policy provides a complaint period of up to 6 years and 3 months for structural defects from when the work was completed. The delay generally between the time the builder left the site and the discovery of the items of defective work by the certifier does not make it unfair for the direction to rectify the defects being given the builder. On balance, the conduct of the builder in this matter is far more blameworthy than that of the owners. 
  8. [134]
    It is not unfair to require the builder to rectify the defects discovered by the certifier and noted on his amended architectural drawings. A builder’s compliance with defective drawings which do not comply with the specifications of regulatory bodies is no excuse for a builder not to be required to build in compliance with those requisite specifications. In such cases the builder has an obligation to raise issues of non-compliance with the erring architect. The builder however remains primarily responsible for defective building work.[80] 
  9. [135]
    There is no sufficient evidence to ascertain what the cost of the rectification work is in this matter. The hearsay evidence of Mrs Hughes, who has never visited the site, and has no trade qualifications, deserve no weight. The absence of evidence of cost does not make a direction to rectify unfair in the circumstances however.
  10. [136]
    Finally, it should be recognised that a Direction to Rectify defective building work is issued for a number of reasons. The object of the governing legislation includes regulation of the construction industry, not only by striking a reasonable balance between the interests of the building contractor and owner as consumer, but also to maintain proper standards. The behaviour of the builder here was unsatisfactory. The contractual documents were inadequate and inaccurate[81] and the suggestion by the builder to the owners to proceed without building approval was wrong. The issue of a Direction to Rectify in the circumstances of this case may prevent similar problems with other contractors in the future.
  11. [137]
    Accordingly, on balance, we conclude it was not unfair on the part of the QBCC to issue the direction to rectify of 9 May 2014 to the builder.
  12. [138]
    We order the decision of the learned Member below be set aside and in lieu thereof it be ordered that the decision of the QBCC of 9 May 2014 to issue Direction to Rectify 40067 to the builder be confirmed.

Footnotes

[1]  [2013] QSC 057.

[2]  GAR260-12.

[3]  GAR154-13.

[4]  Whilst the reference by the parties and the learned Member in his decision is to certified plans, I take the expression certification to encompass building approval generally.

[5]  QCAT Act, s 142(1).

[6]  Ibid s 142(3)(b).

[7] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.

[8] Cachia v Grech [2009] NSWCA 232 at [13].

[9]  Op cit 5.

[10] Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 at 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 at 578, 580.

[11]  QCAT Act, s 147(1) and (2).

[12]  Ibid s 147(3).

[13]  Ibid s 143(2)(b).

[14]  Ibid s 142(3)(b).

[15]  Further Statement of Evidence of Sharna and Randall Wright, GAR187-14 at [13-14], [18].

[16]  Ex 2 at [5].

[17]  T1-30 L42.

[18]  Respondent’s Appeal Submissions, Exhibit 1, A, document 6.

[19]  T1-11 L21-30.

[20]  Ibid.

[21]  Respondent’s Appeal Submissions, Exhibit 2, A at [6] and Exhibit 4 at [5].

[22]  Respondent’s submission for leave to appeal, Attachment D.

[23]  Further Statement of Evidence of Sharna and Randall Wright, GAR260-12, Exhibit 7 at [106(l)].

[24]  Ibid at [108(b)] and [111] – [113].

[25]Duke Building Pty Ltd v Queensland Building and Construction Commission & Ors [2015] QCAT 397 at [15].

[26]  Ibid at [19].

[27]  Further Statement of Evidence of Sharna and Randall Wright, GAR260-12, Exhibit 7 at [19].

[28]  Reasons for decision at [18].

[29]  Ibid at [10].

[30]  T1-21 L34-37.

[31]  Appeal transcript at page T1-60 L7.

[32]  T1-119 L31.

[33]  Appeal Transcript at page T1-15 L10.

[34]  Reasons for decision at [18].

[35]  Reasons for decision at [17].

[36]  QCAT Act, s 28(3)(b).

[37]  Ibid s 28(3)(c).

[38]  Ibid s 4(c).

[39]  Reasons for decision at [19].

[40] Jimenez v Sternlight Investments t/a LJ Hooker Alexandra Hills [2010] QCATA 29.

[41]Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24.

[42]  Appeal Transcript at page T1-40.

[43]  T1-8 L21-40.

[44]  Reasons for decision at [13].

[45]QBCC Act 1991 (Qld) s 19(1); The Policies are statutory instruments – Statutory Instruments Act 1992 (Qld) s 7.

[46]QBCC Regulation 2003 (Qld), schedule 1A.

[47]  Reasons for decision at [22].

[48]  Ibid at [21].

[49]  T1-51 L15.

[50]  [2009] QCCTB 2.

[51]  Ibid at [26].

[52] Gary Norwood Homes Pty Ltd v (Unknown) R021-95 [1997] QBT 193 setting out reasons for decision by His Honour Judge Forno QC (unreported) in referring the matter back to the Building Tribunal to exercise its discretion as to whether or not a Direction to Rectify should be issued against the builder.

[53] Stephenson, Peter Thomas & Christine Ann v Queensland Building Services Authority [2005] QCCTB 59 at [27].

[54]  Ibid at [40].

[55]  [2011] QCAT 345.

[56] Ireland v QBSA [1999] QBT 180 at page 21.

[57]  Reasons for decision at [26].

[58]  T1-31 L34 and L42.

[59]  T1-11 L21-30.

[60] Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119 citing Rana v Repatriation Commission [2011] FCAFC 124.

[61]  T1-101 L13.

[62]  Reasons for decision at [24].

[63]Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47 at [72].

[64]Arnold Electrical & Data Installations P/L v Logan Area Group Apprenticeship/ Traineeship Scheme Ltd [2008] QCA 100 at [5].

[65] Klooster v Sticky Fingers (Qld) Pty Ltd [2011] QCATA 282 at [12-14].

[66] QCAT Act (Qld) s 147.

[67] Cairns Regional Council v Carey [2012] QCATA 150.

[68] QBCC Act, current as at 1 December 2013, s 72.

[69] R v His Honour Judge Miller and the Builders’ Registration Board of Queensland [1987] 2 Qd R 446 at 458 per Derrington J.

[70]  T1-25 L34 – T1-26 L6.

[71]  GAR260–12.

[72]  Ibid. 

[73]  QCAT Act (Qld), s 28(3).

[74]  GAR260-12.

[75]  T1-90 L32.

[76]Fontain v QBSA [2004] QCCTB 163 at [19] citing Small v Building Services Corp [1988] 7 BCL 109.

[77]  [2004] QCCTB 75 at [52].

[78]  [2004] QCCTB 5.

[79]  Ibid at [98]; and see Sorrentino v QBCC [2015] QCAT 313.

[80] Glen Williams Pty Ltd v QBSA [2012] QCAT 127 at [16].

[81]  The nominated stages of work bore no relationship to the work to be done.

Close

Editorial Notes

  • Published Case Name:

    Randall Wright and Sharna Wright v Duke Building Pty Ltd and Queensland Building and Construction Commission

  • Shortened Case Name:

    Wright v Duke Building Pty Ltd

  • MNC:

    [2017] QCATA 35

  • Court:

    QCATA

  • Judge(s):

    Senior Member Brown, Member Howe

  • Date:

    24 Mar 2017

Appeal Status

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