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- Unreported Judgment
MAGISTRATES COURT OF QUEENSLAND
Queensland Building and Insurance Commission v Pierce & Anor.  QMC 16
QUEENSLAND BUILDING AND INSURANCE COMMISSION
GRANT DAVID PIERCE
DORIS RENATE PIERCE
M120 of 2020
11 November 2020
10 July 2020, (further submissions received 13 August 2020)
PROFESSIONS AND TRADES – BUILDERS – STATUTORY INSURANCE SCHEME – where the defendant directors contend that in recovery proceedings by the statutory insurer under s. 111C, it is open to a director to defend the claim by challenging the legal efficacy of any step taken by the authority in the acceptance or assessment of the claim – whether the matters are justiciable in either s. 71 or s 111C recovery proceedings.
Judicial Review Act 1991 (Qld) s 20, s 43
Queensland Building and Construction Commission Act 1991 (Qld) s 71(1), s 111C
Uniform Civil Procedure Rules 1999 (Qld) r 292, r 293
Clyde Contractors Pty Ltd v Northern Beaches Dev Pty Ltd  QCA 314
Crocker v Queensland Building and Construction Commission  QSC 24
Deputy Commissioner of Taxation v Salcedo  2 Qd R 232
Kline Industries International Pty Ltd v Queensland Building and Constructions Commission  QSC 243
Mahony v Queensland Building Services Authority  QCA 323
Mahony v Queensland Building Services Authority  HCASL 93
Namour v Queensland Building Services Authority  QCA 72
Queensland Building and Construction Commission v Lifetime Securities (Australia) Pty Ltd & Anor  QCA 161
Qld Pork Pty Ltd v Lott  QCA 271
M Cooke for the Plaintiff
C E Taylor for the Defendants
Robinson Locke Litigation Lawyers for the Plaintiff
WGC Lawyers for the Defendants
- The plaintiff is, amongst other things, a statutory insurer of building works performed by building contractors governed by the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act). The defendants are directors of the building contractor, Waterfern Pty Ltd ACN 119 104 700 (‘Corporate Building Contractor’).
- The plaintiff claims money owing for rectification work it commissioned in response to a claim made by a homeowner, and approved by the plaintiff, under a statutory policy of insurance arising under QBCC Act. Neither the Corporate Building Contractor, nor the defendants, have sought a review of the plaintiff’s decisions. They are now out of time to do so.
- The plaintiff’s claim in these proceedings is made pursuant to s. 111C(6) of the QBCC Act against the defendants as directors of the Corporate Building Contractor at the time the residential construction work was carried out.
- The plaintiff applies for summary judgment under r. 292 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). The defendant likewise cross applies for summary judgment under r. 293 of the UCPR.
- There is no dispute that at the time the work was carried out the defendants were directors of a ‘building contractor’ who undertook the alleged ‘residential construction work’, and that the plaintiff approved a ‘claim’ made by a ‘homeowner’ under a ‘statutory insurance scheme’ policy within the meaning of those terms as defined under the QBCC Act.
- Both parties argue that this matter turns on the discrete issue of whether the defendants can challenge the plaintiff’s decisions to accept and then approve the claim.
- Ultimately the outcome of these proceedings really turns on:
- Whether directors liable under s. 111C of the QBCC Act, can go behind the plaintiff’s decision as a statutory insurer to approve a claim under the statutory policy of insurance; and if so
- Whether this court has jurisdiction to review the plaintiff’s decision to approve the claim.
- For the reasons set out below, I have concluded that the answer to both of those questions is: No.
- On 24 August 2015 the homeowner retakes possession of the property that is the subject of the building contract with the Corporate Building Contractor.
- On 21 March 2016 the homeowner makes a complaint to the QBCC.
- On 4 May 2016 the plaintiff served a Direction to Rectify/Complete upon the Corporate Building Contractor.
- On 27 November 2016 the Corporate Building Contractor was deregistered.
- On 23 December 2016 the plaintiff served an updated Direction to Rectify/Complete.
- On 17 July 2017 the plaintiff gave notice to the homeowner and the Corporate Building Contractor that the claim under the insurance scheme had been approved in the sum of $89,738.80 (Rectification Costs). The notice to the Corporate Building Contractor relevantly provided: “This amount can vary if we find other work is necessary to fix/finish the building work… Under Section 71 … the QBCC is entitled to recover the amount paid on the claim from you or your company.
- On 7 September 2017 the homeowner claimed a further $5,000.00 for alternative accommodation, removal and storage costs, being the maximum available under the policy (Relocation Costs). The homeowner supplied evidence that those costs would be actually be a minimum of $9,064.00.
- On 9 November 2017 the plaintiff approved the Relocation Costs in the sum of $5,000.00.
- On 21 November 2017 the plaintiff received an invoice from building consultants, which it also approved payment of in the sum of $3,412.20 (Consultants Fees). This brought the amount paid by the plaintiff under the claim to a total of $98,151.00
- On 26 November 2018 the plaintiff posted, and emailed, a letter to the defendants (the Demand):
- advising of completion of the investigation;
- payment of the insurance claim in the sum of $98,151.00;
- advising of their liability under s. 111C of the QBCC Act; and
- demanding payment of the sum of $98,151.00 by 10 December 2018.
Summary Judgment Applications
- Applications for summary judgment are governed by rr. 292 and 293 of the UCPR. The applicant bears the onus of satisfying the court of two things, namely:
- The respondent has no real prospect of succeeding on its claim or defence, as the case may be; and
- There is no need for a trial of the claim, or part of the claim.
- If an applicant establishes a prima facie case against the respondent, then it is for the respondent to establish that there is an issue to be tried or some other good reason for the matter to go to trial.
“The words ‘no real prospect of succeeding’ do not need any amplification, they speak for themselves. The word ‘real’ distinguishes fanciful prospects of success or … they direct the court to the need to see whether there is a ‘realistic’ as opposed to a ‘fanciful’ prospect of success.” 
- Per Atkinson J:
“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. These rules benefit both parties as neither faces the expense of taking a matter to trial when the result of such a trial is inevitable as there is no real prospect of one of the parties being successful. There are also obvious advantages to the administration of justice if matters that can and ought to be dealt with summarily, are so dealt with.”
- In summary “once a prima facie case has been made out entitling the applicant to judgment then an evidentiary onus shifts to the respondent” but the overall onus of proof remains with the applicant.
- As both the plaintiff and the defendants are applying for summary judgment in this case, both must establish a prima facie case in support of their respective claim and defence.
- The plaintiff’s claim is based on the defendants’ statutory liability, as directors of the Corporate Building Contractor at the relevant time, under s. 111C of the QBCC Act. The key elements of s.111C are not in dispute, namely that the plaintiff approved and paid the sum of $98,738.80 to the homeowners on the claim. The deregistration of the Corporate Building Contractor prior to plaintiff’s approval of the claim does not disentitle the plaintiff of its right to pursue the defendants under s. 111C of the QBCC Act. What is relevant is that the defendant were directors “when building work the subject of the claim was, or was to have been, carried out.” For these reasons, I find that the plaintiff has established its prima facie claim against the defendants.
- For the defendants to succeed in both responding to the plaintiff’s application and making their own summary judgment application, they need to establish a prima facie defence. They seek to do so, as already stated, by challenging the validity of the insurance claim, including the plaintiff’s acceptance and approval of it.
Can a director challenge a liability arising under s. 111C of the QBCC Act?
- The defence is premised on the proposition that this court can go behind that strict liability imposed under s. 111C of the QBBA Act to test the lawfulness of the plaintiff’s acceptance of the homeowners claim and subsequent approval of it i.e. to challenge the debt said to arise under s. 71(1) of the QBCC Act.
- In Mahony v Queensland Building Services Authority the Court of Appeal held:
“The statutory right to recover is not conditioned upon the legal quality of a determination by the authority to make the indemnity payment or of any anterior step taken by the authority that had led to the decision to pay.
That is not to say that a decision to make an indemnity payment or any anterior step is not reviewable.”
- In Queensland Building and Construction Commission v Lifetime Securities (Australia) Pty Ltd & Anor:
“…I note also that this aspect of the decision in Mahony was recently applied by this Court in Namour v Queensland Building Services Authority.
The decision in Mahony supports the view that the right to recover conferred by s 71(1) is not conditioned upon the legal quality of any step that QBCC may have taken antecedent to a decision to make payments under the scheme
The availability of merits review was regarded, first by this Court and then by Bell and Gageler JJ, as a powerful indication that steps on the part of QBCC antecedent to payment and recovery are not justiciable in such proceedings. It was not described in terms of a frame of reference for distinguishing between antecedent steps that are not justiciable and those that are.”[my emphasis]
- More recently in Crocker v Queensland Building and Construction Commission Justice Jackson considered the extent of those reviewable decisions in the context of s. 111C of the Judicial Review Act 1991 (Qld). Justice Jackson held that even on a merits review, the scope of the review would be limited because:
“…such relief could only be available if there were a relevant decision on which the liability under section 111C of the QBCCA depended that was invalid because of either a failure to accord procedural fairness or statutory unreasonableness in making the decision to issue the notice or notices of potential debts…
In my view, there is no such decision made under section 111C of the QBCCA… Liability under section 111C of the Act does not depend on the making of a demand.
In other words, the declaration for non-liability that is sought is nothing more or less than a claim for declaratory relief as to non-liability for a debt. Whether or not the application is liable for the debt depends on the application of the statute and whether the statutory conditions under section 111C(3) and subsection (6) that create that liability are met, but does not depend on any administrative decision reviewable on an application in this Court for judicial review of an administrative decision.”[my emphasis]
- The parties also brought the decision in Kline Industries International Pty Ltd v Queensland Building and Constructions Commission  to the attention of the court after the reservation of this decision. It relates to a merits review under both the QBCC and JR Acts. It may have been relevant to a court determining an application for review, had such an application been brought in the appropriate forum. However, it neither seeks to alter the law on, nor is it relevant to, the questions for determination by this court on these applications. Accordingly I don’t propose to give it any weight for the purposes of these proceedings.
- For these reasons I find that the defendants have both failed to establish a prima facie defence to support the making of their own summary judgment application, and have necessarily also failed to establish a need for a trial in answer to the plaintiff’s application for summary judgment.
- Strict liability for the debt accrues against the directors under the QBCC Act. The plaintiff has established a prima facie case against the defendants.
- The defendants have not made application to review the decisions that found the liability under s. 71(1) and, by implication therefore, s. 111C of the QBCC Act. It would be contrary to the legislative regime set out under the QBCC Act for this court to allow these proceedings to be used to conduct a quasi-review of the administrative decisions that underpin the directors’ liability or to otherwise subvert the time limits imposed by the JR Act.
- Accordingly I grant the plaintiff’s application for summary judgment and dismiss the defendant’s cross application.
- The plaintiff’s summary judgment application is granted.
- Judgment for the plaintiff against the defendants in the sum of $98,151.00, together with interest thereon pursuant to s. 58 of the Civil Liability Act 2003 (Qld).
- I dismiss the defendants’ summary judgment application.
- I direct that within 21 days of the publication of these reasons the parties are to file and serve written submissions on the issues of costs and interest, if not agreed, together with draft orders.
 Transcript received 2 September 2020.
 Now deregistered.
 Subsections 111C(3) and 111C(6) of the QBCC Act.
 Defence filed 3 February 2020 at  – .
 Defence filed 3 February 2020 at  and [5(a)].
 Defence filed 3 February 2020 at [14(b) & (c)].
 Defence filed 3 February 2020 at .
 Defence filed 3 February 2020 at [5(b)].
 Defence filed 3 February 2020 at .
 Affidavit of C Sia filed 7 May 2020 at [24(b)].
 Affidavit of C Sia filed 7 May 2020 at [24(d)].
 Defence filed 3 February 2020 at [7(b)] and , noting that the defendants deny the validity of the notice given that the Corporate Building contractor was deregistered by the time it was issued.
 Affidavit of C Paul filed 7 July 2020 at . See also Affidavit of C Sia filed 7 May 2020 at [24(i)].
 Affidavit of C Paul filed 7 July 2020 at . See also Affidavit of C Sia filed 7 May 2020, Exhibit ‘CS5’ - QBCC Insurance Policy Conditions Version 8.
 Affidavit of C Sia filed 7 May 2020 at [24(j)].
 Affidavit of C Sia filed 7 May 2020 at [24(k)].
 Affidavit of C Paul filed 7 July 2020 at .
 Clyde Contractors Pty Ltd v Northern Beaches Dev Pty Ltd  QCA 314, Williams JA at .
 Deputy Commissioner of Taxation v Salcedo  2 Qd R 232.
  1 All ER 91.
 Salcedo supra at .
 Salcedo supra at .
 Qld Pork Pty Ltd v Lott  QCA 271 Jones J at .
 Defence filed 3 February 2020 at [14(b)]
 See s. 111C(6) of the QBCC Act
 Sections 86 and 87 of the QBCC Act set out those decisions that are, and are not, reviewable.
 Sections 20 and /or 43.
 Mahony v Queensland Building Services Authority  QCA 323 at  –  per Gotterson JA, with whom McMurdo P and Douglas J concurred.
 Queensland Building and Construction Commission v Lifetime Securities (Australia) Pty Ltd & Anor  QCA 161 at  –  per Gotterson JA, with whom McMurdo P and Lyons J concurred.
 Namour v Queensland Building Services Authority  QCA 72 at  – .
 Mahony v Queensland Building Services Authority  HCASL 93 (13 May 2014).
 Crocker v Queensland Building and Construction Commission  QSC 24.
 Crocker supra Jackson J at p. 3 lines 20 to 46.
 Kline Industries International Pty Ltd v Queensland Building and Constructions Commission  QSC 243.
- Published Case Name:
Queensland Building and Insurance Commission v Pierce & Anor.
- Shortened Case Name:
Queensland Building and Insurance Commission v Pierce
 QMC 16
11 Nov 2020