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Seirlis v Queensland Building Services Authority[2011] QDC 107

Seirlis v Queensland Building Services Authority[2011] QDC 107

DISTRICT COURT OF QUEENSLAND

CITATION:

Seirlis v Queensland Building Services Authority [2011] QDC 107

PARTIES:

TERRY SEIRLIS

(Appellant)

AND

QUEENSLAND

 

BUILDING SERVICES AUTHORITY

 

(Respondent)

FILE NO/S:

BD2756/08

PROCEEDING:

Appeal from the Queensland Commercial and Consumer Tribunal

ORIGINATING COURT:

Queensland Commercial and Consumer Tribunal, Brisbane

DELIVERED ON:

15 June 2011

DELIVERED AT:

Brisbane

HEARING DATE:

6June 2011

JUDGE:

Jones DCJ

ORDER:

1.Leave to appeal is granted.

  1. The appeal is allowed.

3.I will hear from the parties in respect of further orders including those addressing remittal of the proceedings to the commercial and consumer tribunal and costs.

CATCHWORDS:

APPEAL FROM COMMERCIAL AND CONSUMER TRIBUNAL – whether decision of tribunal involved an error of law or excess or want of jurisdiction – whether appellant denied natural justice in tribunal proceedings – whether appellant correct party – whether appellant the insured person pursuant to certificate of insurance issued by Queensland Building Services Authority

Commercial and Consumer Tribunal Act 2003

National Companies v News Corp 52 ALR 417

Russell v Duke of Norfolk (1949) 1 All ER 109

COUNSEL:

Mr D. Ryan for the appellant

Mr G. Thomson for the respondent

SOLICITORS:

Shand Taylor Lawyers for the appellant

Queensland Building Services Authority Legal Division for the respondent

  1. [1]
    This is an appeal from a decision of a Member of the Commercial and Consumer Tribunal concerning a complaint made by the appellant in respect of defective construction works and a claim made by the appellant under a certificate of insurance issued by the respondent pursuant to the Queensland Building Services Authority Act 1991.

Background

  1. [2]
    At all material times the appellant was a director of the company C & E Pty Ltd, which is now in liquidation.  In or about 2001 C & E Pty Ltd was engaged in the development of residential units on land situated at 53 Paragon Street, Yeronga.  On 4 October 2001 the respondent, pursuant to the Queensland Building Services Authority Act 1991 (QBSA), issued a certificate of insurance providing certain insurance in respect of the residential construction work being carried out by CMC Brisbane Pty Ltd.  CMC Brisbane Pty Ltd was the contractor retained by C & E Pty Ltd to carry out the subject construction works.  During the course of argument I was advised that CMC Brisbane Pty Ltd is now also in liquidation.
  1. [3]
    On 10 February 2004 the appellant lodged a complaint form with the respondent.[1]  Under the heading “Owner” the appellant filled out his name and under the designated part of the form identified C & E Pty Ltd as being the relevant company.  Identification of the ownership of land is significant, as under the certificate of insurance “the insured” is defined as:

“Insured means

  1. (a)
     the owner of the land; or
  1. (b)
     a consumer who has entered into a contract with the contractor to have residential construction work carried out in Queensland.”

At the relevant time, C & E Pty Ltd was the registered proprietor of the land and the party that had entered into the residential construction contract.

  1. [4]
    On 31 July 2007 the respondent rejected the complaint.[2]  In its written notice the respondent referred to the definition of the insured and to the definition of the owner of land as set out in the policy, and then went on to advise:

“Unfortunately, as you are no longer the current owner of the above property and failed to provide the necessary information and documentation to BSA, we are unable to proceed with your claim under the above sections of the BSA Insurance Policy Edition 5.”

Some time between February 2004 and July 2007 the residential units constructed for C& E Pty Ltd had been onsold to third parties by that company.

  1. [5]
    Dissatisfied with the decision of the respondent, on 18 September 2007 the appellant filed a review application in the registry of the Commercial and Consumer Tribunal.  In that application, the appellant in person is identified as the applicant, no mention is made of C & E Pty Ltd.  Within the particulars of the application, the appellant also identified himself as being the person affected by the decision notwithstanding the fact that C & E Pty Ltd was both the owner of the subject land and the consumer for the purposes of the certificate of insurance.
  1. [6]
    Relevant to this appeal, under the heading “Grounds for review” the following assertions were made in the application:

“2. The decision so far as s2.2 of the policy is concerned is based on errors of mixed fact and law, in particular that the Applicant is not by definition an ‘insured’ for the purposes of the policy.

  1. The decision is unfair to the applicant in that it denies to the applicant monetary compensation for the defective works.
  1. The decision is not a reasonable exercise of discretion in circumstances where the applicant was an insured person at the time the claim was made.”
  1. [7]
    In a pre-emptive strike the respondent, purportedly pursuant to s 126 of the Commercial and Consumer Tribunal Act 2003 (the Act), brought an application to have the appellant’s review proceedings effectively struck out.  After hearing argument, the Member of the Tribunal on 20 May 2008 decided that the appellant’s application to review should be dismissed.  It is that decision that is the subject of this appeal.  In this regard, it is to be noted that the Member made a specific finding that s 126 of the Act could not be relied on,[3] but then went on to dismiss the application and confirm the decision of the authority pursuant to ss 48 and 104 of the Act respectively.[4]

Statutory provisions

  1. [8]
    Section 47 of the Act relevantly provides:

47. Way Tribunal is to conduct proceedings

  1. (1)
    This section applies to a proceeding.
  1. (2)
    The procedure is at the discretion of the Tribunal, subject to this Act and the rules of natural justice.
  1. (3)
    The proceeding is to be conducted with as little formality and technicality and with as much speed as the requirements of this Act and a proper consideration of the matters before the Tribunal permit.
  1. (4)
    The Tribunal is not bound by the rules of evidence but may inform itself in any way it considers appropriate.” (emphasis added)
  1. [9]
    Section 48 provides:

48. Hearing on the papers

The Tribunal may decide all or part of a proceeding from a consideration of the documents filed, without the parties or witnesses appearing if—

  1. (a)
    the parties to the proceeding agree; or
  1. (b)
     the Tribunal considers is appropriate in all the circumstances.”

Section 104 provides:

104.Orders tribunal may make on review hearing

  1. (1)
    In deciding an application for review of a decision, the tribunal may—
  1. (a)
     confirm the decision being reviewed; or
  1. (b)
     set aside the decision and substitute another decision; or
  1. (c)
     set aside the decision and return the matter to the State agency that made the decision with directions that the tribunal considers appropriate.”

Section 126 provides:

126.Summary decision for respondent

  1. (1)
     The respondent against whom a proceeding is started by application in the Tribunal may at any time apply to the Tribunal under this division for a decision in favour of the respondent (also a summary decision).
  1. (2)
    The Tribunal may give the summary decision or make any other decision the Tribunal considers appropriate if satisfied—
  1. (a)
    no reasonable cause of action is disclosed against the respondent; or
  1. (b)
    the proceeding is frivolous, vexatious or an abuse of the process of the Tribunal; or
  1. (c)
    the respondent has a defence to the proceeding.”
  1. [10]
    Section 100 of the Act relevantly provides that a party to a proceeding before the Tribunal may appeal to the District Court against a decision of the Tribunal, with the court’s leave, only on the grounds of an error of law or excess, or want of jurisdiction.

The decision of the Tribunal

  1. [11]
    Notwithstanding that the application was brought under s 126 of the Act, the Member below characterised the respondent’s application in the following way:[5]

“This is primarily an application by the Queensland Building Services Authority (the Authority) challenging the right of the applicant pursuant to s 87 of the Queensland Building Services Authority Act 1991 … to bring these review proceedings.  I say ‘primarily’, because the Authority in submissions asserted that the review applications … ought be dismissed pursuant to s 126(2) of the Commercial and Consumer Tribunal Act 2003 (the CCT Act), as there is no reasonable cause of action disclosed against the Authority.  I should say that this latter assertion is the ground upon which the Authority contends the applicant is not an ‘affected person’ in terms of s 87, that is, has no standing.”

  1. [12]
    The s 87 referred to by the Member is that of the QBSA, which provides:

“A person affected by a reviewable decision of the Authority may apply to the Tribunal for a review of the decision.”

  1. [13]
    In paragraph 3 of his decision, after making the observation that the underlying facts were largely not in dispute, the Member went on to say:

“However, I note that, in oral submissions, the applicant confirmed the indemnity he seeks under the statutory insurance scheme in respect of six (6) units in the same complex, and which he has been denied by the Authority, is namely—

  1. (i)
     a loss suffered on the sale of the subject units; and
  1. (ii)
     a loss in the form of reduced sale prices as a result of alleged defective building work.”
  1. [14]
    At pages 1 to 11 of his decision the Member sets out the respective submissions made on behalf of the parties, and then in paragraph 6, under the heading “Standing”, decides that issue in favour of the appellant:

“I would have thought that any owner, past or present, of particular premises, subject to a certificate of insurance during such ownership, has the necessary ‘standing’ to bring a review application pursuant to s 87 of the QBSA.  In any event, s 70 of the QBSA Act appears to provide the necessary authority to bring such a claim.”

  1. [15]
    It seems tolerably clear to me that if the Member had limited himself to deciding what might loosely be described as the question of “standing”, the application brought by the respondent would have been and should have been refused.
  1. [16]
    However, the Member did not limit himself to that question or issue and went on to consider whether or not the review application brought by the appellant had any substance.[6]

“The important question is whether the review application has substance.  For example, a former owner may have a limited basis upon which to frame a cause of action in any review proceedings for indemnity under the statutory insurance policy.  However, that is different to whether there is ‘standing’ to bring the review application.  Those limits are now addressed.”

  1. [17]
    The Member then went on to consider a number of matters and, in particular, the policy of the relevant statutory insurance scheme, and concluded that the appellant’s application for review ought to be dismissed. The Member said:[7]

“…  The indemnity under the statutory insurance policy and scheme is not meant as a ‘catchall’ of any loss that the applicant may have suffered as a result of a builder’s defective building work.  Moreover, and again, the indemnity is specifically directed (and limited) to having that defective work rectified.  The applicant’s claim under the policy does not seek such a result.  The applicant seeks payment of a monetary sum for a ‘loss’ he alleges he has suffered on sale of the units, a diminution in value.  That is, as the Authority submitted, commercial ‘loss’. …

While the applicant’s ‘loss’ may be a damage, in respect of which the applicant has rights against the builder, it is not indemnifyable under the statutory insurance policy.  Accordingly, any evidence that the applicant may have intended to adduce at the hearing of the review applications, particularising and otherwise quantifying the loss/damage which he claimed, would be to no avail, as my preliminary finding, as a matter of law, is that such a category of loss/damage is not recoverable under the statutory insurance policy.

While the Authority may, in a general sense, be entitled to claim the relief it claims under s 126 of the CCT Act, in this instance the requirements of that division have not been met for any determination to be made pursuant to that section.

However, given that—

  1. (i)
     there is no essential dispute as to the facts, and therefore no need for further evidence
  1. (ii)
     the parties have been provided with the opportunity to make submissions upon the applicability of the QBSA Act and the statutory insurance policy; and
  1. (iii)
     my finding, as I have noted, upon the preliminary issue as to the applicant’s claim for indemnity;

I consider it appropriate, pursuant to s 48 of the CCT Act, to decide these review applications on the documents filed, and further, pursuant to s 104 of the CCT Act, to confirm the Authority’s decision under review and to dismiss the applicant’s applications to review applicable [sic] in respect of each of the subject units.  I order accordingly.”

The order finally made was that “the Authority’s decision under review is confirmed”.

Grounds of appeal and the arguments of the parties

  1. [18]
    The notice of appeal contains 11 grounds of appeal. At the heart of those grounds is whether the decision under appeal involved an error of law and/or went beyond jurisdiction.
  1. [19]
    Notwithstanding the fact that the written submissions of the parties went into the jurisdictional issue in considerable detail, in argument before me the appeal really centred around whether or not the Member below made an error of law. That error being that in determining the substantive question about the merits of the appellant’s application in the way that he did, the Member denied the appellant natural justice.
  1. [20]
    In oral argument Mr Ryan, counsel for the appellant, made the following submission:[8]

“Our case, in a nutshell, is this:  Mr Loreish found in his decision that Mr Seirlis was an insured person within the meaning of the statutory policy.  That must mean he is an affected person entitled to appeal under s 87.  That should have been the end of it.  He should have said, ‘Well, that’s my finding, ladies and gentlemen.  We will now set down for hearing the question which remains, which is: should he succeed or not?’.”

  1. [21]
    At the heart of Mr Ryan’s submissions is that the Member erred in law in determining the merits of the appellant’s review application without giving him the opportunity to be heard and, if considered appropriate, to present evidence.  In this context, Mr Ryan referred to a number of the clauses within the insurance documentation which point to it being at least arguable that the Member’s finding that the nature of the loss suffered by the appellant was not covered was wrong.  The following clauses of the policy in particular were referred to as pointing to at least an arguable case on the part of the appellant.

Insurance policy conditions

Subject to the terms of this policy, the Queensland Building Services Authority (BSA) will pay for loss for:

  • non completion
  • defective construction …”

2.1 Payment for defective construction

  1. (a)
     subject to the terms of this policy, BSA agrees to pay the cost of rectifying defects in the residential construction work, other than for defects from subsidence or settlement referred to in Part 3 of this policy.

2.2 Amount of payment

  1. (c)
    where, in the opinion of BSA, the undertaking of remedial work is unnecessary or unreasonable, the payment will be limited to the loss in value, if any, in the residential construction work, produced by the departure from the plans or specifications or by the defective workmanship or materials.” (emphasis added)

7.1 Payment

Where BSA admits a claim under this policy, BSA may, at its own discretion, and in full discharge of its liability, do any of the following:

  1. (c)
    pay the amount of the claim to the insured.”
  1. [22]
    Mr Thomson, counsel of the respondent, contended that there is no substance in the jurisdictional issue raised by the appellant.  I respectfully agree.  Sufficient jurisdiction can be found in various parts of the Act and there is no suggestion that the Member strayed beyond the relevant factual basis underlying the proceedings.[9]  However, as provided for in s 47(2) of the Act, the parties to any proceedings in the Tribunal are expressly required to be afforded natural justice.
  1. [23]
    In paragraphs 28 and 29 of Mr Thomson’s written submissions, it is submitted on behalf of the respondent that:

“28.There was no substantive denial of natural justice, as the question of construction involved was raised by the Tribunal and debated with Ms O'Neill, who represented Mr Seirlis, at the oral hearing of the dismissal application.

  1. Even if there was a technical breach of natural justice in proceeding as the Tribunal did, it had no bearing on the outcome of the proceeding. The outcome turned on a question of construction of the policy which was not a matter of evidence but rather a point of law.  No evidence which Mr Seirlis could have led would have made any difference to the outcome.”

Mr Thomson went on further to submit that in any event the Member’s construction of the insurance policy in the light of the subject facts was clearly correct.

  1. [24]
    I, with respect, consider that there is force in the reasoning and conclusions reached by the Member about the construction of the policy. However, as Mr Ryan correctly pointed out, on the face of the policy the decision at the very least is not without controversy.  On balance, I am not prepared to accept that the decision of the Member on this point was so clearly correct that the appeal ought to be dismissed on that basis.
  1. [25]
    As to whether the appellant, as the Member contended, had the opportunity to make appropriate submissions, requires consideration of the proceedings below. From my reading of the transcript, the construction of the insurance policy as to damages was raised to varying degrees on a number of occasions.[10]  However, it is also tolerably clear that representatives for both parties pointed out to the Member that the purpose of the hearing was to determine whether the appellant was an affected party under the scheme.[11]
  1. [26]
    The requirements of natural justice are not inflexible and may depend on various factors including the nature of the case, the nature of the inquiry, the subject mater of the case and the rules governing the tribunal deciding the case.[12]  In this case, the consequences for the appellant are not insignificant.  The task of construing the insurance policy is a largely technical one and not without controversy. And the tribunal is expressly required to follow the rules of natural justice.[13]
  1. [27]
    On balance, I have reached the conclusion that there probably has been a denial of natural justice in this case. The appellant was not afforded sufficient clear notice or warning of what the Member was intending to do and, accordingly, was not given sufficient opportunity to be heard or otherwise present his case in an appropriate way.
  1. [28]
    Ordinarily this would be a sufficient reason to determine the appeal in the appellant’s favour. However, Mr Thomson developed a further argument which was again essentially to the effect that even if the reasoning of the Member was wrong, the decision to dismiss the appellant’s review proceedings was nonetheless correct and, on that basis, the appeal should be dismissed.
  1. [29]
    This attempt to defend the ultimate decision below centres around the issues of who was the owner of the land and/or the consumer at the relevant times for the purposes of the insurance policy.
  1. [30]
    The general thrust of this argument was to the effect that the appellant’s application for review was doomed to failure because at the relevant time he was neither the owner of the land nor the consumer who entered into a contract with a contractor for construction works. The evidence is that C & E Pty Ltd was both the registered proprietor of the land and the entity that entered into the relevant construction contract.  According to Mr Thomson, this was “the fly in the ointment” for the appellant.[14]
  1. [31]
    At first blush Mr Thomson’s argument on these issues appears compelling.[15]  However, even this aspect of these proceedings is not without some confusion.
  1. [32]
    It would appear that the appellant recognised that it was necessary to have C & E Pty Ltd joined in the proceedings in the Tribunal.  At least one of the reasons for having C & E Pty Ltd and another company, Ties Group Pty Ltd, joined as parties in the proceedings is because on 2 June 2008 C & E Pty Ltd entered into a deed of assignment with Ties Group Pty Ltd, whereby the firstmentioned company agreed to assign its rights to any claim under the policy to the secondnamed company.[16]
  1. [33]
    It was common ground in the appeal to this court that I should not deal with the application to join the aforesaid companies. That is, if the appeal were allowed, the joinder issue would be a matter for the Tribunal to deal with, and if the appeal is dismissed, then the joinder application would probably become redundant. Notwithstanding this, certain material concerning the joinder application was referred to during the course of this appeal and, in particular, the relevant outline of argument of Mr A. Evans, then counsel for the appellant.  In Mr Evans’ submissions it is asserted that:

“During the course of the proceedings before the Tribunal no issue of substance was raised with respect to Seirlis’s standing and the parties proceeded as if he was C & E.

In the light of the conduct of the respondent in this respect, and in the light of it maintaining that the notice to Seirlis was notice to C & E, it is submitted that it would be estopped from denying that in conducting the proceedings in his own name Seirlis was in actuality conducting the proceedings for and on behalf of C & E, albeit in his own name and without power to do so (see s 471A of the Corporations Act).

With respect to the latter point the liquidator’s position expressed in his latter of 13 May 2009 … indicates that he has ratified the actions of Mr Seirlis to act on behalf of C & E.”

  1. [34]
    I was not directed to the letter dated 13 May 2009.  However, one of the exhibits to the affidavit of the appellant filed 2 June 2011 is a letter addressed to the appellant from Vincent’s Chartered Accountants.  It relevantly provides:

“As liquidator and on behalf of the above company (C & E Pty Ltd in liquidation), I hereby adopt, approve and ratify all that has been done by you in making (the relevant applications) to the Commercial and Consumer Tribunal and in lodging the District Court notice of appeal subject to leave No. BD2756/08.

Further, as liquidator and on behalf of the above company, I hereby authorise you to prosecute that appeal in the District Court to its conclusion.”

  1. [35]
    Mr Thomson argued strongly that the respondent could not be estopped, in circumstances where it is responsible for the management of a statutory scheme of insurance, from taking issue with who or what entity is the “insured” for the purposes of the policy.
  1. [36]
    There is considerable force in that argument. However, it appears that the Member in fact treated the appellant as if he was the “insured” for the purposes of the policy or, at the very least, that he was acting as the insured’s agent in some way.
  1. [37]
    In dealing with the respondent’s outline of argument below, the Member was made aware that C & E Pty Ltd was the registered owner of the subject property.[17]  It is not clear, at least insofar as the material to which I was referred is concerned, that the Member was also aware that the relevant contracting party was C & E Pty Ltd and not the appellant.  In this context, though, the Member did observe that the person making a claim under the insurance scheme, being an owner of the relevant property, may not necessarily also be the person in a contractual relationship with the building contractor.[18]
  1. [38]
    I have already referred to paragraph 6 of the Member’s decision.  In paragraph 19 the Member also went on to say:

“Further, in my view, a claimant who is an ‘insured’ (as this claimant is) under a statutory insurance policy is ‘a person affected’ in terms of s 87 … Indeed, the policy itself uses the terminology of ‘insured’ rather than ‘owner’ in s 7 of the policy, s 7 referring to how, in the Authority’s discretion, the authority will direct a payment under the policy.”

  1. [39]
    In my view, when fairly read, consistent with his approach in paragraph 6, the Member’s reference to “owner” in paragraph 19 is not indicative of a mistake about who was the owner at the time the policy was entered into, but is a reference to the fact that the appellant was no longer the owner of the property when the claim was made.
  1. [40]
    While I am not in a position to offer any final view as to why the Member seemed to proceed on the basis that the appellant in person was the “insured” for the purposes of the insurance policy, it seems to me that he might have been led into that approach by the submissions made by the parties and, in particular, by Ms King who represented the respondent.  The respondent’s submissions below are redolent with references to the appellant in person being at least at one time the insured under the scheme.  For example, there is reference to the fact that “the applicant no longer owned the properties” and “did not at the time of filing his review applications, own the properties”.[19]
  1. [41]
    Notwithstanding the fact that I consider there to be some force in the submissions made by Mr Thomson on this issue, in circumstances where the Member below has, in apparent knowledge of the real facts, proceeded on the basis that the appellant was the insured under the insurance policy. I am not prepared to dismiss the appeal on this basis either.  It is, in my view, appropriate for the Tribunal to address and deal with these issues, including any argument about estoppel.
  1. [42]
    For the reasons given, I give leave to appeal and find that the decision under appeal involved an error of law, namely that the Member did not afford the appellant natural justice in dealing with his application for review in the manner that he did. Accordingly, the appeal will be allowed.

Orders

  1. Leave to appeal is granted.
  1. The appeal is allowed.
  1. I will hear from the parties in respect of further orders including those addressing remittal of the proceedings to the Commercial and Consumer Tribunal and costs.

Footnotes

[1] Exhibit TS4.

[2] No explanation was provided as the delay between the lodging of the complaint and the rejection.

[3] Para 27 of Reasons For Decision (RFD).

[4] Para 28, RFD.

[5] Para 1, RFD.

[6] Para 7, RFD.

[7] Paras 25-28.

[8] Transcript 1-8 L5-12.

[9] See, for example, ss 48, 126 and 104.

[10] With Ms King, for the respondent, at p 5 L 43 and with Ms O'Neill, for the appellant, at pp 8-9 of the transcript.

[11] Ms King at p 2 L25; Ms O'Neill at p 8 L20, p 9 L32, p 13 L14, p 14 L15.

[12] Russell v Duke of Norfolk (1949) 1 All ER 109 at 118, cited with approval by Gibbs CJ in National Companies v News Corp 52 ALR 417 at 427.

[13] Section 47.

[14] Appeal transcript 1-17 L25.

[15] Written submissions of Mr Thomson at paras 8-15.

[16] Refer to affidavit of appellant filed 4 November 2009 at para 10.

[17] Para 2.2, RFD.

[18] Para 8, RFD.  See also at paras 2.5, 4.1, 4.7 and 4.11.

[19] See para 2.3, RFD.

Close

Editorial Notes

  • Published Case Name:

    Seirlis v Queensland Building Services Authority

  • Shortened Case Name:

    Seirlis v Queensland Building Services Authority

  • MNC:

    [2011] QDC 107

  • Court:

    QDC

  • Judge(s):

    Jones DCJ

  • Date:

    15 Jun 2011

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Russell v Duke of Norfolk (1949) 1 All ER 109
2 citations
Securities Commission v News Corporation Ltd (1984) 52 ALR 417
2 citations

Cases Citing

Case NameFull CitationFrequency
Seirlis v Queensland Building and Construction Commission [2018] QCAT 2912 citations
Seirlis v Queensland Building and Construction Commission [2020] QCATA 372 citations
Seirlis v Queensland Building Services Authority (No. 2) [2011] QDC 1343 citations
1

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