QBCC v Egan[2021] QCATA 126

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

What is this application about?

1. [1]
   Mr Benton undertook building work for Dr Egan. The building works comprised improvements to a building (‘the structure’) described as a shed but which Dr Egan said was a dwelling with amenities including a laundry, kitchen, toilet, shower and full power facilities. The building works included the construction of verandas, a roofed patio, and the installation of a concrete pad and pump sheds.
2. [2]
   Dr Egan claimed that the works were incomplete and defective. She complained to the Queensland Building and Construction Commission (‘QBCC’) about the works performed by Mr Benton. The QBCC investigated Dr Egan’s complaint and issued a direction to rectify to Mr Benton. Mr Benton sought a review of the decision to issue the direction to rectify. The QBCC subsequently varied the original decision and a revised direction to rectify was issued to Mr Benton. Mr Benton subsequently undertook further building work. The QBCC determined that the direction items had not been satisfactorily completed by Mr Benton. Dr Egan subsequently sought to claim under the Queensland Home Warranty Scheme. Dr Egan’s claim was denied by the QBCC on the basis that the structure was not a ‘residence’ or a ‘related roofed building’ and therefore not covered under the scheme (‘the original decision’).
3. [3]
   Dr Egan applied to the tribunal to review the original decision.
4. [4]
   The tribunal found that the structure comprised a residence and related roof buildings, set aside the decision of the QBCC denying Dr Egan’s claim and returned the matter to the QBCC for reconsideration with the direction that the items the subject of the decision under review are ‘residential construction work’ for the purposes of s 67WA of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’).^[1]
5. [5]
   Both the QBCC and Mr Benton have appealed the decision of the tribunal.
6. [6]
   The QBCC has applied for a stay of the decision. On 30 September 2021 I refused the stay application. My reasons for the decision follow.

Applications to stay 

7. [7]
   The start of an appeal does not affect the operation of the decision under appeal.^[2]  The tribunal may make an order staying the operation of a decision being appealed until the appeal is finally decided.^[3]
8. [8]
   An appeal on a question of law is as of right. An appeal on a question of fact or mixed law and fact requires the leave of the appeal tribunal.^[4] In an appeal involving a question of law, the appeal tribunal may exercise the power conferred by s 145(2) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) and grant a stay. In an appeal involving a question of fact or mixed law and fact, the tribunal may exercise the power conferred by s 58 of the QCAT Act and make an interim order staying the operation of the decision under appeal.^[5]
9. [9]
   Where an appeal involves a question of law the factors to be taken into consideration in a stay application are:

   1. (a)
      Is there a good arguable case?
   2. (b)
      Will the applicant be disadvantaged if the stay is not granted?
   3. (c)
      Is there some compelling disadvantage to the respondent if a stay is granted which outweighs the disadvantage suffered by the applicant?^[6]
10. [10]
    Where an appeal involves a question of fact or mixed law and fact, the circumstances must be exceptional before a stay will be granted pending an application for leave to appeal.^[7]

What do the parties say?

11. [11]
    The QBCC relies upon the following grounds of appeal:

    1. (a)
       Failure by the tribunal to give adequate reasons for the decision;
    2. (b)
       Error by the tribunal in finding that the ‘residential purpose’ contemplated by s 67WE and s 67WF of the QBCC Act may be satisfied where the building or structure is being unlawfully used for that purpose;
    3. (c)
       Error by the tribunal in finding that the ‘residential purpose’ contemplated by s 67WE and s 67WF of the QBCC Act may be satisfied where, after the relevant work has been completed, approval was obtained to reclassify the building or structure as a class 1a building;
    4. (d)
       Error by the tribunal in unnecessarily considering and determining questions of fact that the parties had not agitated, thereby denying the parties procedural fairness;
    5. (e)
       Error by the tribunal in finding that ‘It would be an unpalatable outcome for Dr Egan to be denied relief in respect of defective building work on the basis of incorrect advice from the same builder’;
    6. (f)
       Error by the tribunal in finding that certain evidence of Dr Egan was uncontested.
12. [12]
    The QBCC says that the parties had agreed that the determination of the proceedings below would turn upon the meaning of the term ‘residential construction work’ as it appears in the QBCC Act. Only if the building works carried out by Mr Benton fell within the meaning of ‘residential construction work’ would Dr Egan have recourse to the statutory insurance scheme.
13. [13]
    The QBCC says that the parties framed the issues for determination by the tribunal below, that the proceedings were to be determined on a question of law only and that the tribunal nevertheless proceeded to make findings of fact.
14. [14]
    The QBCC says that the tribunal failed to give adequate reasons for the decision. It says that the learned member framed the issue for determination differently to that posed by the parties and that the parties cannot know whether their submissions were understood and considered by the tribunal and on what basis the submissions may have been accepted or rejected. The QBCC says that the decision reveals no meaningful discussion or consideration of its submissions. The result, says the QBCC, is an error in failing to consider the submissions or in failing to provide adequate reasons.
15. [15]
    As to the other grounds of appeal, the QBCC says that the reasons reveal no intellectual engagement with the Commission’s submissions, nor the statutory interpretation exercise the parties had asked the tribunal to undertake.
16. [16]
    The QBCC says that it has an arguable case.
17. [17]
    The QBCC says that it will suffer detriment if the decision is not stayed:

    1. (a)
       It will be required to reconsider the original decision with the result that Dr Egan may be entitled to the reasonable cost of rectifying any defective work;
    2. (b)
       That cost will be paid from the statutory insurance scheme which is not-for-profit and funded through the payment of premiums;
    3. (c)
       Should the decision under appeal be set aside Dr Egan would not be entitled to any payment with the following consequences:

       1. Any payment made to Dr Egan would be recoverable by the Commission on the basis of unjust enrichment;
       2. The QBCC Act provides no statutory mechanism for the recovery of the payment and the amount paid would not be recoverable other than by litigation;
       3. The QBCC would be irremediably prejudiced thereby rendering the appeal nugatory.
    4. (d)
       The decision under appeal has potentially ‘profound effects’ on the scheme;
    5. (e)
       The QBCC will be required to make decisions in other matters consistent with the decision of the tribunal;
    6. (f)
       The decision under appeal presents a risk to the scheme and the QBCC’s ability to administer the scheme;
18. [18]
    The QBCC says that the balance of convenience favours the grant of the stay. In addition to the detriment it says it will suffer if the stay is not granted, the QBCC says:

    1. (a)
       Mr Benton would likely be prejudiced if Dr Egan’s claim under the scheme is successful as the QBCC would be entitled to recover from Mr Benton any payment made to Dr Egan;
    2. (b)
       Mr Benton’s interests should be considered in assessing the balance of convenience noting the function of the QBCC is to regulate the building industry to achieve a reasonable balance between the interests of consumers and building contractors;
    3. (c)
       Granting the stay may result in the withholding of a payment to Dr Egan. This is the only potential prejudice to Dr Egan noting that she has been successful in having the building reclassified and this is not a case where Dr Egan would be unable to occupy the building if the stay was granted.
19. [19]
    The QBCC says that the appeal involves questions of general importance as to the interpretation of the QBCC Act regarding the administration of the statutory insurance scheme, the application of the Act and the unlawful use of structures. If it is required to establish exceptional circumstances, the QBCC relies upon these questions of general importance and the arguments developed by it in relation to granting a stay.
20. [20]
    Dr Egan does not argue that the QBCC’s prospects of success in the appeal are poor and accepts that this may weigh in favour of the grant of a stay.
21. [21]
    As to any detriment that the QBCC may suffer as a result of the refusal to grant the stay, Dr Egan says:

    1. (a)
       any material detriment to the QBCC must be caused by the refusal to grant the stay as distinct from the consequences of the operation of the primary decision;
    2. (b)
       the QBCC has filed no evidence to support the alleged material detriment it may suffer;
    3. (c)
       any detriment will arise as a consequence of the decision under appeal rather than the refusal to grant the stay;
    4. (d)
       any ‘profound effects upon the Scheme’ as asserted by the QBCC are not matters of material detriment nor do they arise out of the refusal to grant the stay. Rather, it is in the final decision in the proceedings which may inform the future administration of the insurance scheme;
    5. (e)
       the QBCC has adduced no evidence as to the impact of the primary decision pending the determination of the appeal.
22. [22]
    Dr Egan says the following in relation to the balance of convenience considerations:

    1. (a)
       There is no evidence that a successful appeal will be rendered nugatory if the stay is not granted;
    2. (b)
       There is no evidence of the likely timeframe for the reconsideration by the QBCC of the original decision;
    3. (c)
       There remain extensive defects at the property including the defective installation of wastewater drainage;
    4. (d)
       Any further delays to the consideration of Dr Egan’s claim under the scheme amount to a compelling disadvantage which outweighs any disadvantage the QBCC may suffer if the stay is not granted.
23. [23]
    Addressing the issue of exceptional circumstances, Dr Egan says:

    1. (a)
       Other than the ground of appeal asserting a failure to provide adequate reasons, the other grounds of appeal relied upon by the QBCC raise questions of mixed law and fact for which leave to appeal is required;
    2. (b)
       Dr Egan accepts that the finding by the tribunal may have broader implications for the scheme;
    3. (c)
       Any such implications do not arise however from the refusal to grant a stay.
24. [24]
    Dr Egan says that she is entitled to the fruits of the litigation and that a stay should not be granted because immediate compliance with orders is inconvenient for the unsuccessful party.

Consideration 

25. [25]
    It may be accepted that the QBCC has a good arguable case on appeal. This is not disputed by Dr Egan. I therefore do not propose to consider this factor further.
26. [26]
    Grounds of appeal 1 and 4 involve questions of law. The remaining grounds appear to involve questions of fact or questions of mixed law and fact.
27. [27]
    I start from the basis of the test to be applied in a stay application as set out by the Court of Appeal in Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd:^[8]

Judgments are not to be treated as provisional only; a successful party is entitled to the fruits of its judgment; courts are not disposed to delay the enforcement of court orders; the fundamental justification for delaying enforcement is to ensure that orders which ultimately might be made are fully effective; and the question ultimately is whether the applicant for a stay would be prejudiced irretrievably if the stay were not granted and the appeal ultimately upheld.

28. [28]
    Although the ‘fruits of judgment’ in a merits review proceeding are generally of a different nature to those enjoyed in a civil claim, it cannot be doubted that Dr Egan was successful in the proceedings below and is entitled to the benefits of that success.
29. [29]
    The result of the decision under appeal would appear to be this: the QBCC will be required to reconsider the original decision on the basis that the items of work, the subject of the decision under review, are residential construction work. Dr Egan may, depending upon the decision made, be entitled to the reasonable cost of rectifying any defective work at the property.
30. [30]
    If the QBCC decides to accept Dr Egan’s claim under the statutory insurance scheme, steps will be required to be undertaken to determine the scope of the necessary rectification works.  Of course, there may be a dispute about that scope of works.
31. [31]
    These are steps which will undoubtedly take time.
32. [32]
    I do not accept the QBCC’s submission that the decision, if not stayed, will have profound effects upon the statutory insurance scheme. The QBCC says that it ‘would be rightly criticised should it make other decisions in different matters which go against … the reasons (for decision) and (the) interpretation of (residential construction work).’ It is open to the QBCC to make such decisions as it considers appropriate pending the outcome of the appeal. The QBCC is at liberty to make decisions in particular cases consistent with its stated position. I do not accept the submission that the QBCC would be ‘rightly criticised’ for making decisions inconsistent with the decision the subject of the proceedings below. Until such time as the appeal tribunal has determined the issue, the QBCC is at liberty to continue to apply the interpretation of the statute consistently with its position below and in these appeals. 
33. [33]
    The QBCC offers no detail as to the number of claims which may be affected by the decision. Rather, there is the mere the assertion that the decision presents a risk to the scheme and the ability of the QBCC to administer the scheme ‘in the way it intends and as was argued before the Tribunal.’ In the absence of such evidence or indeed any detail at all being provided it is difficult to place much, if any, weight on the submission by the QBCC.
34. [34]
    I also do not accept the QBCC’s submission that it would be irremediably prejudiced if Dr Egan receives the benefit of a payment from the scheme in circumstances where the appeal is successful. The QBCC acknowledges that while there may be no legislative mechanism for the recovery of any payment made, there is the possibility litigation may be pursued. It follows that the QBCC submission that the appeal would be rendered nugatory is rejected.
35. [35]
    The QBCC refers to the prejudice the builder might suffer if the claim by Dr Egan is accepted and recovery of any payment made is sought by the QBCC from the builder. The builder has not applied to stay the decision under appeal. It was open to him to do so. I place little weight on this submission.
36. [36]
    The original decision was made over two years ago. Dr Egan is entitled to have her claim progressed, consistent with the decision under appeal. The QBCC has failed to establish that it will be irretrievably prejudiced if the stay were not granted, and the appeal ultimately upheld. On the other hand, Dr Egan says that there remain significant defects requiring rectification. These circumstances weigh in favour of refusing the stay.
37. [37]
    On balance, I am not persuaded that it is appropriate to grant the stay. The application to stay the decision is refused.
38. [38]
    For the sake of completeness, I would add the following. If the QBCC is of the view that there are similar matters pending before it and that the decision of the appeal tribunal in the current appeals is sought as a matter of urgency, the QBCC may apply for an expedited hearing of the appeals. Obviously the QBCC would be required to place before the appeal tribunal appropriate evidence to support any such application.