CITATION: | Queensland Building and Construction Commission v Grenier Developments Pty Ltd (ACN 603 049 234) & Anor [2024] QDC 6 |
PARTIES: | QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (applicant) v GRENIER DEVELOPMENTS PTY LTD (ACN 603 049 234) (first respondent) and HARSHA RAJEEWA WEERASINGHE (second respondent) |
FILE NO: | 2742/22 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court Brisbane |
DELIVERED ON: | 13 February 2024 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 8 November 2023 |
JUDGE: | Farr SC, DCJ |
ORDER: |
|
CATCHWORDS: | PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – where the first respondent was contracted to do residential building work on three separate occasions – where the second respondent was a company director of the first respondent – where the homeowners made separate complaints of defective or incomplete work – where the applicant made three separate payments under the statutory insurance scheme – where the respondent seeks a summary judgment for that debt pursuant to r 292(2) of the Uniform Civil Procedure Rules 1999 (Qld) – whether the payments made by the applicant were payments made on a claim under the statutory insurance scheme per s 71(1) of the Queensland Building and Construction Commission Act 1991 (Qld) |
LEGISLATION: | Queensland Building and Construction Commission Act 1991 (Qld) Queensland Building and Construction Commission Regulation 2018 (Qld) Uniform Civil Procedure Rules 1999 (Qld) |
CASES: | Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256 Bellgrove v Eldridge (1954) 90 CLR 613 Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Douglas v Tickner (1994) 49 FCR 507 Elderslie Property Investments No. 2 Pty Ltd v Dunn [2007] QSC 192 Equitrust Limited v Tucker & Ors (No. 2) [2019] QSC 248 Frontier Networks Pty Ltd v Philadelphia Developments Pty Ltd [2023] QSC 192 General Steel Industries Ltd v Commissioner for Railways (1964) 112 CLR 125 Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; 211 CLR 540 Howard Smith & Patrick Travel Pty Ltd v Comcare [2014] NSWCA 215 Mahony v Queensland Building Services Authority [2013] QCA 323 Namour v Queensland Building Services Authority [2014] QCA 72 Prior v South West Aboriginal Land and Sea Council Aboriginal Corporation [2020] FCA 808 Queensland Building and Construction Commission v Lifetime Securities (Australia) Pty Ltd & Anor [2014] QCA 161 Queensland Building and Construction Commission v Turcinovic [2017] QCA 77 Queensland Building and Construction Commission v Watkins [2014] QCA 172 Robert Bax & Associates v Cavenham Pty Ltd [2011] QCA 53 Samimi & Anor v Queensland Building and Construction Commission [2015] QCA 106 Singh v Varinder Kaur (1985) 61 ALR 720 SmithKline Beecham (Australia) Pty Ltd v Chipman [2002] FCA 674 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 ThoughtWare Australia Limited v IonMy Pty Ltd [2023] FCA 906 Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 54 FLR 421 Webster v Lampard (1993) 116 ALR 545 |
COUNSEL: | NM Cooke for the applicant JM Manner for the respondents |
SOLICITORS: | Gadens Lawyers for the applicant Grasso Searles Romano Lawyers for the respondents |
Nature of application
Factual background
The Law
Summary judgment
“292Summary judgment for plaintiff
the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the Court considers appropriate.”
“293Summary judgment for defendant
the court may give judgment for the defendant against the plaintiff for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”
“… the judge determining such an application is essentially called upon to determine whether the defendant to the application has established some real prospect of succeeding at a trial; if that is established then the matter must go to trial.”
“… the court must consider whether there exists a real, as opposed to a fanciful, prospect of success. If there is no real prospect that a party will be successful in all or part of a claim, and there is no need for a trial, then ordinarily the other party is entitled to judgment.”[2]
“Nowhere is the need for exceptional caution more important than is a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact. In such a case, it is essential that ‘great care’ … be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly derived of his (or her) opportunity for the trial of his (or her) case by the appointed tribunal.”
Strike out
“171Striking out pleadings
“… difficult to follow or objectively ambiguous or creates difficulty for the opposite party insofar as the pleading contains inconsistencies …”[13]
The insurance claim
“The purpose of the statutory insurance scheme is to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete.”
“Assistance can not be provided under the scheme to a consumer unless the consumer has suffered loss as a consequence of residential construction that is defective or incomplete.”
“53.Loss caused or contributed to by particular matters
…
“‘third party’ means a person other than:
Plaintiff’s submissions
Greenslopes project works
Yarrabilba and Bridgeman Downs project works
The defendants’ submissions
Defendant’s submissions re counterclaim
Consideration
…
‘[72] Sections 71 and 111C provides for recovery of the amount of ‘payment on a claim under the insurance scheme’ rather than the recovery of the amount of a ‘payment under the insurance scheme’. For this reason, I do not accept counsel for the appellant’s submission that the triggering circumstance on which the respondent relies does not apply.
[73] The administrative decision sought to be reviewed is one about entitlement to indemnity under the statutory policy. The appellant is a person aggrieved by that decision because, in consequence of it, a payment was made to the owners and he was exposed to recovery proceedings pursuant to s 111C. He is entitled to seek judicial review of that decision pursuant to s 20 of the Judicial Review Act 1991.’
The triggering circumstance to which her Honour was referring was the payment by the authority of the claim.
‘At the other extreme, it is unlikely that s 71 could be avoided by a building contractor disputing discretionary factual conclusions occurring as part of the professional judgment exercised by the QBSA in deciding whether and how much to pay in respect of a claim. It would not be enough to avoid the statutory liability imposed by s 71 for a defendant to point merely to any error of fact connected with the claim process. It must logically have been a factual error of such a nature that the claim was not, on the facts as correctly known, a claim under the insurance scheme or that the payment sought to be recovered was not a payment on such a claim.’
(Footnotes omitted.)
…
‘[14]’ The appellant relied upon Gotterson JA’s observation in Mahony that s 71(1) left open scope for a defence that the payment which was sought to be recovered ‘was not in fact made upon a claim made validly under the Act’. That reflects the text of s 71(1), but the extent of the matters which are thereby made justiciable in s 71(1) recovery proceedings was relevantly settled by the decision in Mahony. For the following reasons, matters upon which the appellant relied could not justify a conclusion in relation to any of the payments made by the respondent that the payment was not a ‘payment on a claim under the insurance scheme’ for the purposes of s 71(1).
…
(Footnotes omitted.)
‘[24]Neither the reasonableness of a payment made by the respondent nor the amount owing by a claimant under the insurance scheme to the contractor is made a criterion of liability under s 71(1). Those criteria would be relevant in a recovery action under s 71(1) only if they were relevant to the determination of the question whether the amount sought to be recovered by the respondent is the amount of the ‘payment on a claim under the insurance scheme’ …
‘[30] The Act contains a number of mechanisms for merit reviews of decisions made by the respondent in its administration of the statutory scheme. Those review rights are wide-ranging and extensive. It is unsurprising, against that background, that s 71(1) of the Act has been interpreted as providing the respondent with a right of recovery, as a debt, of payments made by it on a claim under the insurance scheme which is not dependent upon the respondent establishing the legal correctness of a determination by it to make that payment or any anterior step taken by it that has led to the decision to pay. It is also not enough to avoid liability for a builder to point to a mere error of fact connected with the claim process.
…
‘In Lange, the builder contended at trial and on appeal that he was not liable under the insurance scheme created by Pt 5 Queensland Building Services Authority Act 1991 (Qld) because his clients were excluded from claiming under the scheme by cl 1.9 of the statutory insurance policy. I agreed, for the reasons given by Wilson AJA, that the primary judge rightly rejected that argument. My observations, on which the present appellant placed reliance at trial and in this appeal, should be understood in that context. Where the statutory insurer has made payments to those who were not entitled to claim under the Scheme, I presently remain unpersuaded that parliament intended, in enacting s 71(1) Queensland Building Services Authority Act, to allow the insurer to recover the amount of such payments from the builder.’ (citations omitted)
‘Neither the reasonableness of a payment made by the respondent nor the amount owing by a claimant under the insurance scheme to the contractor is made a criterion of liability under s 71(1). Those criteria would be relevant in a recovery action under s 71(1) only if they were relevant to the determination of the question whether the amount sought to be recovered by the respondent is the amount of the ‘payment on a claim under the insurance scheme’.
(Footnotes omitted).
“… There is an obvious distinction to be drawn between, on the one hand, a contention that a payment was ‘so unreasonable so as to make the [payment] not a payment on a claim under the insurance scheme’ and, on the other hand, the assessment of the reasonable and necessary costs of defective building work.[32] This distinction is at the forefront of the reasoning of Fraser JA relied upon by the respondent. Further, his Honour’s reasoning maintains the distinction drawn by Margaret Wilson AJA in Lange v Queensland Building Services Authority[33] between the recovery of the amount of the ‘payment on a claim under the insurance scheme’ and the recovery of the amount of a ‘payment under the insurance scheme’. What role the question of the reasonableness of a payment might play in the determination of the recovery of a payment of the first mentioned class did not require elaboration in Namour because each claim had been paid in accordance with the terms of the policy. But that issue was central to the ultimate decision in Samimi because the evidence on behalf of the authority was contradictory, it was not clear that the claim paid was one in accordance with the terms of the policy.”
Were each of the amounts paid by the plaintiff payments on a claim under the statutory insurance scheme per s 71(1) of the QBCC Act?
“A person other than –
“a person through whose fault the claim arose is taken to include a person who performs services for the work if the services were performed without proper care and skill”.
“Insofar as the appellant’s argument relied upon the suggested injustice of rendering the appellant liable to the respondent where the respondent had itself indirectly caused the loss by cancelling the company’s licence upon a ground which was wrong in fact, the suggested injustice is ameliorated by the building contactor’s power to seek review by an independent tribunal of the respondent’s decision to cancel the licence and of other decisions which might culminate in a claim against the contractor. The Act conferred jurisdiction upon the tribunal to review decisions to suspend or cancel a licence, a decision about the scope of works to be undertaken under the statutory insurance scheme to rectify or complete the relevant work, and a decision that a domestic building contract has been validly terminated having the consequence of allowing a claim for non-completion under the statutory insurance scheme. The right of review for each decision was required to be exercised within 28 days of receiving written notice of the decision. As Gotterson JA observed in Mahony, the availability of those rights of review provide a sound rationale for a legislative intention that some decisions are not to be justiciable in debt recovery proceedings under s 71(1). That is consistent with the literal meaning of s 71(1) and, as Gotterson JA also pointed out in the same passage, the defence is allowed by subsections 71(4), (5) and (6) concern different matters.”
Were the payments made on the claim so excessive that they were not reasonable and therefore not made on a claim under the statutory insurance scheme?
$197,686.54, that is an amount which is 289% greater than the reasonably estimated cost of the shortfall.
“[24]Neither the reasonableness of a payment made by the respondent nor the amount owing by a claimant under the insurance scheme to the contractor is made a criterion of liability under s 71(1). Those criteria will be relevant in a recovery action under s 71(1) only if they were relevant to the determination of the question whether the amount sought to be recovered by the respondent is the amount of the ‘payment on a claim under the insurance scheme’. The appellant argued that they were made relevant by the statutory insurance policy. The relevant provision is in cl 1.4(a), which applies where the contractor had embarked upon the contract works. In such a case, the policy limits the amount of a payment by reference to ‘[the respondent’s] assessment of the reasonable cost of completing the contract less the owner’s remaining liability under the contract (exclusive of any amount by way of liquidated damages or damages for delay) at the date of termination of the contract …’
[25]Because there is no reason to doubt that each claim was paid in accordance with the terms of the policy, it is not necessary to decide whether or to what extent these matters might be justiciable in a recovery action under s 71(1). The detailed affidavit evidence of the respondent was not challenged; the amount paid by the respondent to each owner was the cost of completing the work reduced by the amount which remained owing to the Company under the construction contract. The exhibited documents supplied detailed particulars of each claim. The cost of completing the contract work was fixed by competitive quotes. The appellant did not identify any material which suggested that there might be a reason to doubt either the amounts shown in the documentary exhibits as being owing to the Company under the contracts or that the quoted cost of completion was reasonable (beyond an unspecified complaint that the respondent had not particularised how it took into account amounts owing to the Company and whether the payments made were reasonable).”
“[38]At the other extreme, it is unlikely that s 71 could be avoided by a building contractor disputing discretionary factual conclusions occurring as part of the professional judgment exercised by the QBSA in deciding whether and how much to pay in respect of a claim. It would not be enough to avoid the statutory liability imposed by s 71 for a defendant to point merely to any error of fact connected with the claim process. It must logically have been a factual error of such a nature that the claim was not, on the facts as correctly known, a claim under the insurance scheme or that the payment sought to be recovered was not a payment on such a claim.”
“Further, all of the quotes obtained by the Commission under their set Scope of Work for the Coorparoo property were well in excess of the quote by Mr Horn. When the work was approved the price was $112,022, and that was the amount on the insurance claim. There is no obvious or compelling reason to assume that the difference points to Mr Horn’s quote being correct. Indeed, where three builders all come in with a price well in excess of the quote by Mr Horn one might be tempted to think that something has gone amiss in his calculation, and look for some substantiation of his quote. That was not present here.”
“The pleaded defence, that the payments were ‘so unreasonable so as to make the monies paid out not a payment on a claim under the insurance scheme’ is, in relation to each payment, no more than a rhetorical assertion designed to enliven an adjudication at the stage of debt recovery inconsistent with the operation of s 71(1). It should not be overlooked that, in respect of each payment the appellant seeks to recover, it was open to the respondent to apply for judicial review of the decision to make the payment on the ground now belatedly pleaded.”
“Section 71(1) of the Queensland Building and Construction Commission Act 1991 (Qld) should not be construed so as to permit a backdoor judicial review or a merits review of the appellant’s decision to make a payment under the statutory insurance scheme set up under the Act. Such an approach would be contrary to the statutory framework of the Act as interpreted by the authorities referred to by North J, especially Samimi v Queensland Building and Construction Commission and would not be consonant with notions of finality of decision making.”
Counterclaim
“An evaluation of whether a relationship between a statutory authority and a class of persons imparts a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. In particular categories of cases, some features will be of increased significance.”
Did the plaintiff act negligently and in breach of its duty of care to the first defendant in suspending and cancelling the builder’s licence?
35Imposition of conditions etc. on grant of licence
48.Cancellation or suspension of licence
The authority may suspend or cancel a licence if –
…
…
49.Procedure for cancellation or suspension
Did the plaintiff act negligently and in breach of its duty of care by failing to accept the first defendant’s offer to complete the Incomplete Works regarding the Greenslopes building project?
Orders
[1] [2005] QCA 227 at para [17].
[2] Ibid at [47].
[3] Singh v Varinder Kaur (1985) 61 ALR 720
[4] Elderslie Property Investments No. 2 Pty Ltd v Dunn [2007] QSC 192 per Daubney J at [7].
[5] Ibid, per Daubney J at [8].
[6] Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91; General Steel Industries Ltd v Commissioner for Railways (1964) 112 CLR 125 cited in SmithKline Beecham (Australia) Pty Ltd v Chipman [2002] FCA 674 at [30].
[7] Douglas v Tickner (1994) 49 FCR 507 at [42] per Carr J, citing General Steel Industries Ltd v Commissioner for Railways at p 129 and Dey v Victorian Railways Commissioners at p 91 and Webster v Lampard (1993) 116 ALR 545 at 548; further cited with approval in SmithKline Beecham (Australia)
[8] ThoughtWare Australia Limited v IonMy Pty Ltd [2023] FCA 906 at [50] citing Prior v South West Aboriginal Land and Sea Council Aboriginal Corporation [2020] FCA 808 at [29] and Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256 at [49].
[9] (1981) 54 FLR 421.
[10] (1993) 116 ALR 545 at 548 per Mason CJ, Deane and Dawson JJ.
[11] [2023] QSC 192.
[12] Equitrust Limited v Tucker & Ors (No. 2) [2019] QSC 248 at [11] per Bowskill J.
[13] [2011] QCA 53 at [16].
[14] Section 67X.
[15] Sections 68B, 68C, 68F.
[16] Affidavit of Chris Chong Ping Sia of 14 September 2023 at para 18.
[17] Exhibit CS-12 to Affidavit of Chris Chong Ping Sia of 14 September 2023.
[18] Exhibit CS-47 to Affidavit of Chris Chong Ping Sia of 14 September 2023, p. 347
[19] Counterclaim paragraphs 13, 14(a) and 14(c).
[20] Counterclaim paragraphs 25-28.
[21] Page 26 of the Counterclaim.
[22] Or its predecessor the Queensland Building Services Authority Act 1991 (Qld).
[23] [2017] QCA 77.
[24] [2013] QCA 323.
[25] [2014] QCA 72 at [18] and [19]; Margaret McMurdo P and Douglas J agreeing.
[26] Namour v Queensland Building Services Authority [2014] QCA 72 at [24] and [25].
[27] [2015] QCA 106.
[28] Samimi & Anor v Queensland Building and Construction Commission [2015] QCA 106 at [26] and [27].
[29] At [30]-[38].
[30] Queensland Building and Construction Commission v Lifetime Securities (Australia) Pty Ltd & Anor [2014] QCA 161 and Queensland Building and Construction Commission v Watkins [2014] QCA 172.
[31] At [29].
[32] As to the latter, see Bellgrove v Eldridge (1954) 90 CLR 613 and Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 at [17].
[33] At [72].
[34] At [27].
[35] Ex HW-27 at p 278 to Affidavit of Harsha Rajeewa Weerasinghe filed 20 October 2023; see also Ex CS-6 at p 77 to Affidavit of Chris Chong Ping Sia affirmed 14 September 2023 – which is an almost identical report dated 21 November 2018.
[36] See Ex CS-13 at p 150 to the Affidavit of Affidavit of Chris Chong Ping Sia affirmed 14 September 2023.
[37] See Ex CS-16 to the Affidavit of Chris Chong Ping Sia affirmed 14 September 2023.
[38] See Ex CS-13 at p 150 to the Affidavit of Chris Chong Ping Sia affirmed 14 September 2023
[39] See Counterclaim para 24(d).
[40] Rule 7(1) Schedule 6 QBCC Regulations 2018.
[41] [2002] HCA 54; 211 CLR 540 ? as cited in Howard Smith & Patrick Travel Pty Ltd v Comcare [2014] NSWCA 215 at [38].
[42] At [150]; and as followed in Howard Smith & Patrick Travel Pty Ltd v Comcare [2014] NSWCA 215 at [39].
[43] Counterclaim para (15).
[44] Affidavit of Chris Chong Ping Sia affirmed 14 September 2023 at para (49).
[45] Affidavit of Chris Chong Ping Sia affirmed 14 September 2023 at para (50).
[46] Affidavit of Harsha Rajeewa Weerasinghe filed 20 October 2023 Exhibit HW-20.
