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Queensland Judgments

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Authorised Reports & Unreported Judgments
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The Trustee For Hardev Property (Dev 10) Unit Trust v Palmgrove Holdings Pty Ltd & others  
Unreported Citation: [2019] QSC 208
EDITOR'S NOTE

The applicant contended that the respondent was not entitled to payment because the respondent did not hold a licence as required by the Queensland Building and Construction Commission Act 1991. However, Lyons SJA found that two exemptions applied in this case, with the result that there had been no breach disentitling the respondent to payment. The first exemption applied to sewerage and water reticulation works, so long as they were not for a “particular building”. Because the works were preparatory and prior to a subdivision, her Honour concluded that they were not for a “particular building”. The second exemption applied where the work was to be carried out by an appropriately licensed person. Her Honour concluded that it was sufficient that the respondent’s director had deposed to an intention to hire a licensed subcontractor; it was not necessary for the contract to specifically provide that work requiring a licence would be carried out by a licensed person.

Lyons SJA

23 August 2019

Background

The applicant (as principal) and the respondent (as subcontractor) entered into a contract for the provision of water and sewerage services and some retaining wall and fencing works. [4]. The respondent had obtained an adjudication decision in its favour under the Building Industry Fairness (Security of Payment) Act 2017. [1]. In this proceeding, the applicant sought relief by alleging that the decision was void for jurisdictional error. [1].

The parties agreed that the only question for the court was whether the respondent had breached s 42 of the Building and Construction Commission Act 1991 (“QBCC Act”) by carrying out, or undertaking to carry out, building work without holding an appropriate licence. [2]. That section provided that if a person carried out building work unlawfully (e.g. without a licence where required), the person was “not entitled to any monetary or other consideration for doing so”. [11]. The respondent did not hold a licence of any kind. [2].

Whether a licence was required

Sewerage and water reticulation works

In relation to the contracted sewer connection and water reticulation works, the question was whether this was “building work” requiring a licence. Lyons SJA noted that reg 5 and Sch 1 of the Queensland Building And Construction Commission Regulation 2018 excluded certain works from the definition of “building work”, including for (at [25]):

“(1)  Construction, extension, repair or replacement of a water reticulation system, sewerage system or stormwater drain, other than works connecting a particular building to a main of the system or drain.” (Underlining added.)

The respondent contended that this exemption applied. The applicant, however, contended that branch connections which would extend into proposed residential allotments were not excluded, because they were “works connecting a proposed building to a main”. This submission focused on the word “particular” (underlined above), suggesting that it meant “single, or individual”. [26]. However, Lyons SJA rejected this submission, concluding that it “cannot be said that the works connect a particular proposed building to the relevant main”. [28]. That was because a plan of subdivision had not yet been registered creating particular lots for the buildings. [18], [28]–[31]. Accordingly, “at the time of the contract … no proposed building was identified, and it cannot be said that the respondent undertook to do works to connect a particular proposed building to a main”. [30]. Her Honour considered this view to be consistent with the legislative intention to “exclude works associated with the subdivision of land” from “building work” requiring a licence. [32].

Retaining walls and fencing

In relation to this work, affidavit evidence of the respondent’s director indicated that “it was his intention, in accordance with what he described as the respondent’s invariable practice, that any works requiring a QBCC licence would be carried out by a person or persons with the appropriate licence”. [38]. In that regard, s 8 of Sch 1A to the Act provides that a person will not contravene s 42 where, relevantly, the work is “not residential construction work or domestic building work” and “is to be carried out by a person … who is appropriately licensed to carry out building work of the relevant class”. [14].

Lyons SJA accepted that the first part of this exemption was satisfied; it was not residential or domestic work, because it was work that needed to be carried out prior to a subdivision and was not connected with a dwelling or residence. [54]. In relation to the second part of the exemption, the applicant submitted that this would only apply “where there is an agreement or acknowledgment in the contract that the work is to be carried out by a person licensed to carry it out” (in other words, that the director’s expressed intention was not sufficient). [40]. Lyons SJA rejected that submission, finding that there was nothing in the language to indicate that the exemption could only apply in that circumstance. Further, the significant consequences arising from a breach of s 42 “tell rather strongly against the submission”. [41]. The intention to have the works carried out only by an appropriately licenced person was sufficient in the circumstances. [44]–[47]. Her Honour also noted that the contract prohibited the respondent from carrying out work requiring a licence unless it held the required licence (in effect requiring it to engage a licensed person where it did not hold the required licence). [47]. Accordingly, her Honour concluded that the respondent had not lost the benefit of the exemption, and was therefore not in breach of s 42 of the QBCC Act. [47]–[48].

Her Honour further held that the exemption in s 8 Sch 1A QBCC Act extends to supervision, management and administration by a head contractor (ordinarily defined as “building work” requiring a licence), so long as the subcontractor is appropriately licenced. To conclude otherwise would deprive the exemption of effect. [49]–[53].

The applicant having failed to establish any breach of the QBCC Act by the respondent, the application was dismissed. [57].

W Isdale