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Queensland Building and Construction Commission v Kooner[2021] QDC 136

Queensland Building and Construction Commission v Kooner[2021] QDC 136

DISTRICT COURT OF QUEENSLAND

CITATION:

Queensland Building and Construction Commission v Kooner & Ors [2021] QDC 136

PARTIES:

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(plaintiff)

v

JAMIE JITENDER KOONER

(first defendant)

and

MICHAEL JOSEPH ROBERTSON

(second defendant)

and

AARON JOHN ROBERTSON

(third defendant)

FILE NO:

BD224/2019

DIVISION:

Civil

PROCEEDING:

Trial

ORIGINATING COURT:

DELIVERED ON:

9 July 2021

DELIVERED AT:

Brisbane

HEARING DATE:

3 and 4 March 2021

JUDGE:

Jarro DCJ

ORDER:

The claim is dismissed.

CATCHWORDS:

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – PARTICULAR WORDS AND PHRASES – GENERALLY – where the plaintiff claims indemnity for a payment made under the Queensland Building and Construction Commission Act 1991 (Qld) – where the plaintiff alleges the third defendant was the director of a company that performed incomplete building work – whether the company is a ‘building contractor’ for the purposes of s 71(1) of the Act – whether the third defendant is liable pursuant to s 111C(6) of the Act.

LEGISLATION:

Queensland Building and Construction Commission Act 1991

CASES:

COUNSEL:

R M De Luchi for the plaintiff

S Taylor for the third defendant

SOLICITORS:

Robertson Locke Litigation Lawyers for the plaintiff

Crouch Lyndon for the third defendant

  1. [1]
    The plaintiff, having obtained default judgment against the first and second defendants, seeks recovery from the third defendant for his time as a director for the company formerly known as Budget Quality Homes Pty Ltd (“BQH”), which is now deregistered, after the plaintiff paid out a policy of insurance in accordance with its statutory home warranty scheme for incomplete building work. These proceedings have been brought pursuant to s 111C(6) of the Queensland Building and Construction Commission Act 1991 (“the Act”) for the amount of $200,000 and it is claimed that liability attaches to the third defendant as a result of the liability of BQH pursuant to s 71(1) of the Act.
  2. [2]
    The principle issues for determination are:
    1. (a)
      whether BQH was the building contractor for the purposes of s 71(1) of the Act; and,
    2. (b)
      whether the third defendant is liable pursuant to s 111C(6) of the Act.
  3. [3]
    For reasons soon to be apparent, I find that BQH was a building contractor for the purposes of s 71(1) of the Act, but I do not find that the third defendant is liable pursuant to s 111C(6) of the Act.

Facts

  1. [4]
    Some facts giving rise to the claim are uncontroversial. It is accepted that the entity known as Kooner Constructions Pty Ltd was placed into liquidation on 14 September 2018 after being registered from 10 December 2009 and having held a building licence issued by the plaintiff for approximately four years ending 21 January 2014. The first defendant was the sole director of Kooner Constructions. He was also a director of BQH between 22 September 2011 and 28 March 2012. The second defendant was a director of BQH between 12 September 2012 and 14 January 2013. The second defendant is the father of the third defendant. The third defendant was a director of BQH between 28 March 2012 and 5 September 2012. BQH held a building licence issued by the plaintiff between 3 August 2012 and 8 March 2013. BQH was deregistered on 17 February 2014.
  2. [5]
    A written contract was produced at trial showing that on or about 23 December 2011, Kooner Constructions was contracted by the homeowners to perform residential construction work at 20 Macarthur Street, Collinsville (“the building work”). It is asserted by the plaintiff that sometime between 23 December 2011 and 15 August 2012, BQH ‘‘took over the contract” from Kooner Constructions.[1]
  3. [6]
    The plaintiff has asserted that at no point after BQH “took over the contract” from Kooner, was Kooner involved in the plans or invoicing. Kooner did not receive any payments for the building work. Rather the building work was performed by BQH.[2] It is remarkable however that despite the plaintiff’s assertion that BQH ‘‘took over the contract” from Kooner Constructions sometime between 23 December 2011 and 15 August 2012, BQH only became licensed to build from 3 August 2012.
  4. [7]
    On or about 15 August 2012, BQH paid the appropriate insurance premium for the building work. I note this was at a time when the third defendant was a director of BQH, but only for really another three weeks.
  5. [8]
    The plaintiff says that on or about 16 May 2012 to 4 February 2013, BQH carried out the building work. The third defendant denies as a matter of fact that the building work commenced on 16 May 2012 by BQH and highlighted that BQH did not become licensed to conduct building work until 3 August 2012 and, having regard to the relevant invoices, the building work actually commenced in about mid-September 2012 (that is at a time after the third defendant ceased his directorship).
  6. [9]
    On 4 February 2013, BQH ceased performing the building work.
  7. [10]
    On 6 March 2013, the homeowners terminated “the Contract” pursuant to condition 27.1.[3] It was on 6 March 2013 that the plaintiff received a complaint from the homeowners in respect of the incomplete building work. It is to be noted of course that on that day, being 6 March 2013, the third defendant was not a director at that time, having ceased his directorship by 5 September 2012.
  8. [11]
    On or about 13 April 2013, the plaintiff issued a scope of works to rectify the incomplete building works. The value of the rectification costs for the incomplete building works was in excess of $200,000.
  9. [12]
    On or about 28 May 2013, the plaintiff provided to BQH a scope of works to complete the building work at the property and BQH did not dispute the scope of works.[4]
  10. [13]
    On or about 23 July 2013, the plaintiff made payment to the homeowners in the amount of $200,000 in accordance with the statutory home warranty scheme for incomplete building work.

Statutory Insurance Scheme

  1. [14]
    It was contended by the plaintiff that a statutory policy of insurance came into existence in favour of the homeowners pursuant to Pt 5 of the Act whereby the plaintiff became obliged to indemnify the owners against loss caused by a failure by both Kooner Constructions and BQH to rectify and/or complete any defective and/or incomplete building work (“the policy”).[5] It was asserted that the building work was primary building work as that term is defined in the policy.
  2. [15]
    The plaintiff says that it admitted the claim under the policy and sought tenders from appropriate licensed contractors to carry out the rectification work. The reasonable cost as determined by the plaintiff to undertake those works necessary to rectify the defects less any remaining liability of the homeowners under the building contract was no more than $200,000. The plaintiff therefore made payment on the claim in respect of the amount of $200,000.
  3. [16]
    The plaintiff contends that BQH became liable in the amount of $200,000 pursuant to s 71(1) of the Act and relevantly that the third defendant is liable for payment of the amount owed by BQH pursuant to s 111C(6) of the Act.
  4. [17]
    Therefore in order to succeed in its action against the third defendant, the plaintiff must prove that:
    1. (a)
      A valid payment was made out under the statutory home warranty scheme.
    2. (b)
      BQH was the relevant “building contractor” within the meaning of s 71 of the Act.
    3. (c)
      The third defendant, under s 111C(6) of the Act, was a director of BQH at the time when the works, the subject of the claim, were to be performed, noting that the insurance claim only relates to purported incomplete works, not defective works.
  5. [18]
    There is no dispute that a valid payment was made under the statutory home warranty scheme. What remains is the applicability or otherwise of ss 71 and 111C(6) of the Act.

Is BQH the relevant “building contractor” for the purposes of s 71 of the Act?

  1. [19]
    Section 71 of the Act provides as follows:

71Recovery from licensed contractor etc.

(1)If the commission makes any payment on a claim under the statutory insurance scheme, the commission may recover the amount of the payment, as a debt, from the building contractor by whom the relevant residential construction work was, or was to be, carried out or any other person through whose fault the claim arose.

(2)For subsection (1)—

(a)a building contractor by whom the relevant residential construction work was, or was to be, carried out is taken to include —

(i)a licensed contractor whose licence card is imprinted on the contract for carrying out the work; and

(ii)a licensed contractor whose name, licence number and address are stated on the contract; and

(iii)a licensed contractor whose name is stated on the contract for carrying out the work; and

(iv)a licensed contractor whose name is stated on an insurance notification form for the work; and

(v)a licensed contractor whose licence number is stated on the contract for carrying out the work; and

(vi)a licensed contractor whose licence number is stated on an insurance notification form for the work; and

(vii)a licensed contractor whose PIN was used for putting in place, for the work, insurance under the statutory insurance scheme; and

(viii)a building contractor by whom the work was, or was to be, carried out; and

(ix)a person who, for profit or reward, carried out the work; and

(b)a person through whose fault the claim arose is taken to include a person who performed services for the work if the services were performed without proper care and skill.

(3)The commission is subrogated, to the extent of any payment that the commission has made, or has undertaken to make, to the rights of a person to whom, or for whose benefit, the payment has been, or is to be, made in respect of the matter out of which the insurance claim arose.

(4)In a proceeding brought by the commission under subsection (1) against a licensed contractor mentioned in subsection (2)(a)(i), it is a defence for the licensed contractor to prove that—

(a)the licensed contractor’s licence card was imprinted on the contract for carrying out the work without the licensed contractor’s authority; and

(b)the licensed contractor took all reasonable steps to ensure that the licence card was imprinted on contracts only with the licensed contractor’s authority.

(5)In a proceeding brought by the commission under subsection (1) against a licensed contractor mentioned in subsection (2)(a)(ii), it is a defence for the licensed contractor to prove that—

(a)the licensed contractor’s name, licence number and address were stated on the contract for carrying out the work without the licensed contractor’s authority; and

(b)the licensed contractor took all reasonable steps to ensure that the licensed contractor’s name, licence number and address were stated in contracts only with the licensed contractor’s authority.

(6)In a proceeding brought by the commission under subsection (1) against a licensed contractor mentioned in subsection (2)(a)(iii), (iv), (v), (vi) or (vii), it is a defence for the licensed contractor to prove—

(a)for a licensed contractor mentioned in subsection (2)(a)(iii)—that the licensed contractor’s name was stated on the contract for carrying out the work without the licensed contractor’s authority; and

(b)for a licensed contractor mentioned in subsection (2)(a)(iv)—that the licensed contractor’s name was stated on the insurance notification form for the work without the licensed contractor’s authority; and

(c)for a licensed contractor mentioned in subsection (2)(a)(v)—that the licensed contractor’s licence number was stated on the contract for carrying out the work without the licensed contractor’s authority; and

(d)for a licensed contractor mentioned in subsection (2)(a)(vi)—that the licensed contractor’s licence number was stated on the insurance notification form for the work without the licensed contractor’s authority; and

(e)for a licensed contractor mentioned in subsection (2)(a)(vii)—

(i)that the licensed contractor’s PIN was used for putting in place, for the work, insurance under the statutory insurance scheme without the licensed contractor’s authority; and

(ii)that the licensed contractor took all reasonable steps to ensure the licensed contractor’s PIN was kept and used in accordance with the commission’s requirements for the keeping and use of the PIN.

  1. [20]
    Schedule 2 of the Act defines the following relevant terms:
    1. (a)
      “building contractor” is defined as “generally, means a person who carries on a business that consists of or includes carrying out building work, and includes a subcontractor who carries out building work for a building contractor”;
    2. (b)
      “licensed contractor” means “a person who holds a contractor’s license”.
  2. [21]
    It was submitted by the plaintiff that BQH was the building contractor for the purposes of s 71 of the Act because the criteria in s 71(2)(vii), (viii) and (ix) has been satisfied. The following evidence was emphasised:
    1. (a)
      The plaintiff received notification from BQH of the contract and paid the appropriate insurance premium which required the use of BQH’s PIN and authentication of the caller’s identity.
    2. (b)
      The plaintiff issued a certificate of insurance in relation to the work, which records BQH as the contractor and notes BQH’s licence number.
    3. (c)
      BQH issued construction documents for the building work.
    4. (d)
      BQH clearly undertook to perform the building work.
    5. (e)
      BQH commenced the building work (but failed to complete it).
    6. (f)
      BQH issued invoices for the building work, and the homeowners paid those invoices.
  3. [22]
    It was submitted therefore that the evidence showed BQH was the building contractor by whom the relevant residential construction work was, or was to be, carried out.
  4. [23]
    It was highlighted on behalf of the third defendant that the plaintiff has pleaded in the amended statement of claim that BQH “took over” the Kooner contract. By the amended reply, the plaintiff has refined the allegation because of the matters pleaded in the defence, by pleading that the Kooner contract was either novated or assigned, although the plaintiff then pleads that it is uncertain and pleads no material facts to support that allegation. I agree with the proposition that BQH “took over” the work subject of the Kooner contract is an obstacle in the plaintiff’s case against the third defendant because:
    1. (a)
      there is no evidence of any deed of novation;
    2. (b)
      there is no evidence of termination of the Kooner contract;
    3. (c)
      there is no evidence of any assignment in writing; and
    4. (d)
      there is no written contract between the homeowners and BQH.
  5. [24]
    Further there is no pleading or evidence about the terms of the contract, whether oral, in writing or implied, between the homeowners and BQH. If the Kooner contract was novated to BQH, then as a matter of law that original contract would have terminated and a new contract would have been made. There is an absence of consent from all of the relevant parties in this respect. There was no evidence about any of this. If the Kooner contract was assigned, the assignment should have been in writing. As was submitted on behalf of the third defendant, even if any assignment did take place, Kooner Constructions cannot assign its obligations and liabilities. An assignor would ask to be indemnified against any breach or failure to perform by the assignee. There is no evidence of that in this case. It is unusual too that the homeowners found it appropriate to serve a notice of termination on both Kooner Constructions and BQH purportedly pursuant to the Kooner contract.
  6. [25]
    I accept that these may be valid reasons to be advanced in order to attempt to defeat the claim, however the fact remains, which the evidence has sufficiently demonstrated in my view, that there were a number of building contractors over the property for the duration of the project, namely Kooner Constructions, Des Robertson and BQH, which permit the plaintiff to seek recovery. The plaintiff is entitled to pursue each of these individuals. The first is demonstrated by the original and only written contract in evidence at trial. The second arises from evidence led at trial that Des Robertson was instrumental in the work undertaken on the project. For instance, the third defendant, who is a carpenter by trade, gave evidence that he was working on a number of sites, including the relevant building work, under the direction of his father, Des Robertson. The third defendant was only ever a director of one company, being BQH, at his father’s request. He said that he did so to assist his father at the time. Des Robertson maintained all contracts, bank accounts and issued invoices. The third defendant had no involvement in relation to these matters. When the third defendant started asking questions and seeking access to information, he was met with resistance from his father, which prompted him to remove himself as director of BQH.
  7. [26]
    BQH’s exposure to liability arises in circumstances where it is not contested that between the dates 15 August 2012 and 5 September 2012, BQH did (or was to perform) building works at the property.[6] That is consistent with the evidence given by the third defendant in that he assisted with the initial stages, more commonly referred to as the “base stage”, on 1 September 2012 after an approach by Des Robertson to assist with the project. It is also accepted by the parties that BQH held a building licence from the plaintiff from 3 August 2012. Furthermore, the certificate of insurance which was issued on 29 October 2012 identified the risk commencement period from 15 August 2012.
  8. [27]
    Therefore in accordance with s 71(1), I am of the view that the plaintiff is entitled to recover payment, as a debt, from Kooner Constructions, Des Robertson and/or BQH. The plaintiff has elected to pursue, and is entitled, to seek recovery from BQH.

Was the Third Defendant a Director of BQH when the Building Work Subject of the Claim Was, or Was to Have Been Carried Out?

  1. [28]
    Having been satisfied that BQH is a building contractor for the purposes of s 71(1) of the Act, I am now required to consider whether, pursuant s 111C(6)(a), the liability to pay the $200,000 attaches to the third defendant because he was a director of the company when building work, the subject of this claim, was carried out.
  2. [29]
    Section 111C of the Act provides as follows:

111CLiability of directors for amounts

(1)This section applies if —

(a)a company is convicted of an offence against a provision of this Act; and

(b)a penalty for the offence is imposed on the company; and

(c)the amount of the penalty is not paid within the time required for its payment.

(2)This section also applies if—

(a)a penalty is imposed on a company as the outcome of disciplinary action taken against the company; and

(b)the disciplinary action takes effect under section 74G; and

(c)the amount of the penalty is not paid within the time required for its payment.

(3)This section also applies if a company owes the commission an amount because of a payment made by the commission on a claim under the insurance scheme.

(4)If this section applies because of subsection(1), the liability to pay the penalty attaches to—

(a)each individual who was a director of the company when the offence was committed; and

(b)each individual who is a director of the company when the penalty is imposed.

(5)If this section applies because of subsection(2), the liability to pay the penalty attaches to—

(a)each individual who was a director of the company when the act or omission happened giving rise to the finding of the tribunal; and

(b)each individual who is a director of the company when the penalty is imposed.

(6)If this section applies because of subsection(3), the liability to pay the amount attaches to—

(a)each individual who was a director of the company when building work the subject of the claim was, or was to have been, carried out; and

(b)each individual who was a director of the company when the payment was made by the commission.

(7)A liability under subsection(4), (5) or (6) to pay a penalty or an amount applies regardless of the status of the company, including, for example, that the company is being or has been wound up.

(8)If a liability under subsection(4), (5) or (6) attaches to 2 or more persons, the persons are jointly and severally liable.

  1. [30]
    The purpose of s 111C of the Act is aimed at making directors personally liable for defective works or for incomplete works “when” that work was carried out[7] or “when” that work was meant to be completed.[8] This interpretation seems consistent with other provisions which exist under s 111C of the Act.[9]
  2. [31]
    The submission advanced by the plaintiff is that the proper construction of this section (at least in a context that assists in this case) does not appear to have been the subject of consideration by any authorities. The words of a statutory provision should be given the meaning that the legislature is taken to have intended them to have.[10] The starting point is the text of the statute. The meaning of the text may require consideration of the context, including the general purpose and policy of the provision or part and the mischief it is seeking to remedy.
  3. [32]
    It was submitted that an examination of the language and purpose of the Act, with the aim of giving meaning to all of the words used in the section, reveals the following:
    1. (a)
      textual indications such as the structure of the paragraph and the use of the word “and” is consistent with the section applying to any person who satisfies either or both of the criteria in (a) or the criteria (b), that is, it is drafted to cast the net as widely as possible;
    2. (b)
      similarly so, the use of the wording in (a) “when building work the subject of the claim was or was to have been, carried out” indicates an intention of broad application, that is to all work that has been carried out already and so work that should have been carried out but has not been carried out;
    3. (c)
      “building work” is defined in Schedule 2 to mean a number of things, including “the erection or construction of a building”, “the preparation of plans or specifications for the performance of building work”, and contract administration.
  4. [33]
    It was also submitted that a broad, rather than a restricted, application is consistent with the fact that the statutory home warranty scheme covers homeowners for defective work and incomplete work, and that section necessarily applies to payments made on both those claims. It was submitted that a broad interpretation is also consistent with the policy objectives and the legislative intention expressed at the time s 111C was introduced into the Act, which was to replace deeds of guarantee and indemnity that were previously given by company directors, namely:

Section 111C provides that directors of a company are personally liable for the debts of the company owed to the authority for offences, disciplinary actions or insurance claims. The aim of this provision is to replace the deeds of guarantee and indemnity currently required by the authority from all directors of a company who is licensed.[11]

  1. [34]
    If the provision was intended to act like a guarantee, it was submitted therefore that it is relevant to note that a guarantor cannot avoid making good on his or her indemnity in respect of the principal debtor by proving that there was no fault on their part. The guarantee makes the guarantor liable for the principal’s liabilities until such time as the guarantee expires or is withdrawn.
  2. [35]
    An obvious practical problem with the construction pressed by the third defendant, as was submitted by the plaintiff, is that a director would be able to avoid liability under s 111C(6) by resigning as director immediately prior to ceasing the building work; a deliberate avoidance of liability which could be organised and carried out quite easily. It was submitted that this could not have been the intention of the legislature because:
    1. (a)
      It would severely impede the plaintiff’s ability to manage the statutory home warranty scheme and the plaintiff would be liable to indemnify homeowners in many cases without recourse to recovery of those amounts. The scheme would become financially unworkable.
    2. (b)
      The objective of s 111C(6) is to put in place effectively a director’s guarantee for the company’s liability to the plaintiff. That purpose would be subverted if s 111C(6) only applies to directors who remain at the time the works became incomplete or were discovered to be incomplete.
  3. [36]
    I accept the proposition that it is important that, and by the wording of the legislation, it was intended to cast the net as widely as possible to ensure that directors of companies are unable to avoid liability for relevant work. That relevant work is the subject of, what I consider, to be the claim as it relates to the work for which payment under the statutory home warranty scheme has been met.
  4. [37]
    In the present instance, payment was made after the plaintiff conducted its investigations relevant to the incomplete building work. The incomplete building work has been evidenced in the form of the inspection document which formed part of Exhibit 1.[12] Tenders were sought to complete the incomplete building work. That ultimately prompted a payout of $200,000 to the homeowners pursuant to the statutory home warranty scheme.
  5. [38]
    However, I am not persuaded on the evidence that the relevant work the subject of the claim, to which ultimately led to the payout, related to work which was performed at a time when the third defendant was a director of BQH because the inspection document identifies the incomplete works, more particularly as the “fixing stage”, “stormwater from DWG to Kerb installed”, “sewer rough-in reached” and “landscaping”.[13] The evidence has not demonstrated that these matters were to have occurred at the time the third defendant was a director. On the evidence led at trial, I am unable to reach the view that these works formed part of any contract that was on foot at the time the third defendant was a director of BQH. Instead these works were works to be carried out after the third defendant’s resignation as director of BQH because they were incomplete works.[14] I do not accept the plaintiff’s contention that the incomplete works that the plaintiff paid out under the policy were simply limited to those works that formed part of the contract dated 23 December 2011.[15] In that respect, the director’s liability is fixed only by reference to the liability of the building contractor and not the third defendant in the present instance.[16]
  6. [39]
    The plaintiff has submitted that in relation to a non-completion claim, a person who was a director during the construction period of the insured building works (including when the building work was commenced, continued and/or ceased) is a person who would meet the criteria in s 111C(6)(a) of the Act. On the face of it, that is not an unreasonable submission to advance however one needs to closely examine the circumstances of each individual case and the legislative purpose for attaching liability, given the objectives of the Act, as prescribed in s 3, are:

(a)To regulate the building industry —

(i)to ensure the maintenance of proper standards in the industry; and

(ii)to achieve a reasonable balance between the interests of building contractors and consumers…

  1. [40]
    I accept as was submitted on behalf of the third defendant that on this issue, the plaintiff has contended that incomplete work is not divisible and thus any director who was in office for the life of the term of the contract is liable for incomplete work. In my view such an approach does not accord with the intent of the legislation which seeks to make directors liable for works the subject of the specific claim. Furthermore, on the evidence led at trial, the works under the original written contract can be easily divisible into the various stages and the works which are the subject of the claim are clearly identifiable pursuant to what was deemed ultimately to be incomplete works which led to the statutory home warranty scheme to cause payment. Relevantly they relate to the “fixing stage”, “stormwater from DWG to Kerb installed”, “sewer rough-in reached” and “landscaping”, all of which were meant to have been completed after the third defendant’s cessation of his directorship with BQH[17] and importantly not at a time when the third defendant was a director. I am not persuaded the third defendant was an individual in office as director when the works the subject of the claim were meant to have been completed. That approach, in my view, is consistent with the plain reading of the earlier subsections of s 111C, particularly subsections (4) and (5) which attribute liability to each individual director when an offence was committed or when a penalty was imposed.
  2. [41]
    The plaintiff’s position is essentially that any person who was ever a director whilst any work was undertaken is strictly liable under s 111C(6). In my view, given the circumstances of the present matter, such a construction of the legislation as the plaintiff contended, would exceed the objective of the legislation. To that end, and as was submitted on behalf of the third defendant, it could not have been the intention of the Parliament for liability to be attached to former directors who had absolutely no involvement or had long departed since the complained acts or omissions. It is also inconsistent with my interpretation of the provisions of s 111C. In the present matter, the third defendant was only the director of BQH for an insignificant period of time. During that insignificant period of time, BQH only performed works to the “base stage”. There has not been any complaint about the “base stage” works and it is therefore difficult to see how or why the plaintiff should succeed against the third defendant in those circumstances. In this respect I note that a break-down of the relevant claims resulting in the insurance payout were as follows[18]:
    1. (a)
      Complaint items numbers 1, 2, 3 and 5 are all “global” contractual issues with respect to the entire dwelling and are not determinative to the payment under the statutory home warranty scheme.
    2. (b)
      Complaint item number 6 related to incomplete work which was to occur during the “fixing stage”. The evidence has not demonstrated that the third defendant was a director at that time.
    3. (c)
      Complaint item number 4 related to work which was to be performed as a part of “additional works” after the fixing stage. Again, the evidence has not demonstrated that the third defendant was a director at that time. Indeed he ceased his involvement as a director prior to then.
  3. [42]
    As such there are factual nuances peculiar to this matter which inform the construction of the legislation on this occasion. It appears to me based on the evidence that the third defendant was not a director of the company when building work, the subject of the claim, was carried out. In my view, the building work, the subject of the claim, based on the evidence, related to the scope of works relevant to effect the insurance payment. The relevant work the subject of the scope of works involved matters which occurred at a time when the third defendant was not a director of the company. Again, my view is assisted from the earlier provisions of s 111C(4) and (5) as the liability attaches when the offence, penalty or building work the subject of the claim was carried out.
  4. [43]
    Furthermore, I am not satisfied that liability should be attached in the present instance because the third defendant was a director for a short period of time, the actual work that he performed on the site was limited to no more than one week where he did the “base stage” which importantly was not the subject of the relevant building work which is the subject of the claim which effected the insurance payout. That is not to detract from any proclaimed ignorance a director may attempt to avow when conducting the business of a building contractor to perform residential construction work for the purposes of the Act, but the circumstances of this case, based on the statutory construction of the legislation do not permit recovery against the third defendant.
  5. [44]
    The scope of work for which the plaintiff sought tenders for in order to undertake the rectification works which were the subject of the claim and inevitably led to the insurance payout, involved matters which post-dated the third defendant’s directorship from BQH. I am not persuaded that liability can be attached to the third defendant for the amount claimed.
  6. [45]
    I further note the majority of the claim appears to relate to works which did not form part of the original Kooner contract. In the absence of a variation, it is necessary to consider the question of what work was actually included within the contract. In the absence of the variation or the terms of the new contract, it is unclear to me that the plaintiff paid for works which actually formed part of the particular contract. These associated difficulties affect the prosecution of the claim because, as indicated the factual nuances of this matter included no direct assignment of the contract from Kooner Constructions to the entity BQH. It is also unclear to me as to the scope of works of the contract and whether it was varied in law sufficient for me to find, to the requisite standard, that the third defendant was a director of BQH “when” the building work the subject of the claim was, or was to have been, carried out.
  7. [46]
    The object of the legislation includes to regulate the building industry to achieve a reasonable balance between the interests of building contractors and consumers. The object is not achieved, nor would there be a reasonable balance in the present instance if the third defendant were liable, particularly in circumstances where:
    1. (a)
      The third defendant was only a director for a period of approximately one month after BQH became licensed to build. He was only a director for a three week period after insurance was paid regarding the building work.
    2. (b)
      Termination of the work was made on 6 March 2013, yet the third defendant was only a director of BQH for approximately six months between 28 March and 5 September 2012.
    3. (c)
      The work was terminated six months after the third defendant ceased directorship with BQH.
    4. (d)
      It is unclear who was a director at the time the work was terminated because the second defendant, Des Robertson, was director of BQH between 12 September 2012 and 14 January 2013.
    5. (e)
      The scope of works was issued at the time (being 13 April 2013) the third defendant had long departed as a director of BQH.
    6. (f)
      I am not satisfied the third defendant received any significant benefit for his role as a director of BQH, the subject of the plaintiff’s payment in respect of the claim pursuant to the statutory home warranty scheme.
    7. (g)
      The third defendant had no association with Kooner Constructions, the original party to the only written contract in existence.
    8. (h)
      The third defendant was not a director of BQH when any building work was performed in relation to the project, namely invoices 39, 42, 43, 47, 50, 52 and 53.
  8. [47]
    It is for those reasons that I am not satisfied that the third defendant was a director of BQH when the building work the subject of the claim was, or was to have been carried out, and nor should liability be attached to him. The claim is therefore dismissed. If necessary I will hear from the parties as to costs.

Footnotes

[1] Amended Statement of Claim at [2]. In my view this allegation as pleaded is unsatisfactory. Not unsurprisingly it was the subject of a non-admission in the Further Amended Defence.

[2] Amended Statement of Claim at [3].

[3] The “Contract” has not been precisely defined in the pleadings. It is unclear whether it relates to the original contract between Kooner Constructions and the homeowner, or a new contract with BQH, namely the contract allegedly “[taken] over… from Kooner”.

[4] Amended Statement of Claim at [11] and [12].

[5] Amended Statement of Claim at [5].

[6] See Notice to Admit Facts and Notice Disputing Facts, 15.

[7] In the case of defective work.

[8] In the case of incomplete work.

[9] See for instance s 111C(4) and (5) of the Act.

[10] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384, [78].

[11] Explanatory Note, Queensland Building Services Authority Amendment Bill 1991 (Qld) p 28.

[12] Exhibit 1, pages 147 – 155.

[13] Exhibit 1, page 150.

[14] Further Amended Defence at [10(c)].

[15] Reply at [11].

[16] See generally Namour v Queensland Building Services Authority [2015] 2 Qd R 1 at 8, [19] (Fraser JA).

[17] Exhibit 1, page 150.

[18] Exhibit 1, pages 148 – 149.

Close

Editorial Notes

  • Published Case Name:

    Queensland Building and Construction Commission v Kooner & Ors

  • Shortened Case Name:

    Queensland Building and Construction Commission v Kooner

  • MNC:

    [2021] QDC 136

  • Court:

    QDC

  • Judge(s):

    Jarro DCJ

  • Date:

    09 Jul 2021

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
Namour v Queensland Building Services Authority[2015] 2 Qd R 1; [2014] QCA 72
1 citation
Jump To
Cite 1 - [2015] 2 Qd R 1
Project Blue Sky v Australian Broadcasting Authority (1998) 194 C.L.R 355
1 citation
Jump To
Cite 1 - (1998) 194 C.L.R 355

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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