Gebremariam & Anor v Queensland Building and Construction Commission [2024] QCAT 411

(a) has no prospects of success; and/or

(b) is misconceived and/or is lacking in substance.

(a) the factual background of the matter is uncontentious, with the parties being in broad agreement as to the facts;

(b) the decision the subject of the review application is the QBCC's decision to wholly disallow the Claim made pursuant to Schedule 6, s 64 of the QBCC Regulation;

(c) pursuant to s 64, the QBCC has no discretionary power in respect of the relevant limitation in respect of assistance under the Scheme;

(d) the QBCC was required to decline the Claim pursuant to s 64 and the Tribunal has no power to make any other order or decision given the scope of that legislation;

(e) in the circumstances, the QBCC's decision to wholly decline the claim is the only decision now open to the Tribunal in response to the Review Application and is the correct and preferable decision;

(f) the Review Application has no prospects of success, does not require a hearing, and should be dismissed.

• [16] The Applicants filed no submissions in response to the Application to dismiss the review application.

(1) This section applies if the tribunal considers a proceeding or a part of a proceeding is -

(a) if the party who brought the proceeding or part before the tribunal is the applicant for the proceeding, order the proceeding or part be dismissed or struck out; or

(b) for a part of a proceeding brought before the tribunal by a party other than the applicant for the proceeding -

(i) make its final decision in the proceeding in the applicant's favour; or

(ii) order that the party who brought the part before the tribunal be removed from the proceeding; or

(c) make a costs order against the party who brought the proceeding or part before the tribunal to compensate another party for any reasonable costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding or part.

See section 108 for the tribunal's power to order that the costs be paid before it continues with the proceeding.

(3) The tribunal may act under subsection (2) on the application of a party to the proceeding or on the tribunal's own initiative.

(4) The tribunal's power to act under subsection (2) is exercisable only by - (a) the tribunal as constituted for the proceeding; or

(b) if the tribunal has not been constituted for the proceeding - a legally qualified member or an adjudicator.

• [18] In University of the Sunshine Coast v Hickson-Jamieson,[8] Judicial Member D J McGill SC said the following in relation to s 47:[9]

The structure of s 47 is that it is first necessary to find that one of the requirements of subsection (1) applies. If that finding is made, the discretion under subsection (2) arises. The issue is not whether the applicant, or the Member, can identify a reasonable cause of action, or a case which is not fatally flawed; it is a matter for the party seeking relief under s 47 to show that the applicant's case is lacking in substance.

• [19] Section 67Y of the QBCC Act provides that the terms of cover pursuant to which a person is entitled to assistance under the Scheme are prescribed by the QBCC Regulation.
• [20] Schedule 6 of the QBCC Regulation establishes the terms of cover for the Scheme.[10]
• [21] Section 1 of Schedule 6 provides:

(1) Part 2 provides for the assistance a consumer for residential construction work is entitled to claim under the statutory insurance scheme if the work is incomplete.

(2) Part 3 provides for the assistance a consumer for residential construction work is entitled to claim under the statutory insurance scheme if the work is defective.

(3) However, the assistance provided under part 2 or 3 is subject to -

(a) any limitations stated in the part, including limitations about the time for making a claim; and

(b) the maximum amount of assistance the commission may pay for the work under part 4; and

(c) the general provisions stated in part 5; and

• [22] Division 2 of Part 5 is headed 'No entitlement to assistance in particular circumstances'. Section 64 is one of the provisions in Division 2. Save for s 63, each of the provisions in Division 2 specifies circumstances in which the consumer 'is not entitled to claim assistance'.
• [23] Section 64 provides:

(1) A consumer for residential construction work is not entitled to claim assistance in relation to the work if the consumer does any of the following without the prior written approval of the commission -

See section 67(2).

(a) a decision of the commission about the scope of works to be carried out to rectify residential construction work or reinstate built work;

(b) a decision of the commission to grant an application for an owner-builder permit.

• [24] The QBCC Regulation does not expressly define 'rectify' or 'rectifies'.
• [25] However, the QBCC Act does contain a definition of 'rectify':

rectify building work means to remedy defective building work or to complete incomplete building work.

• [26] Further, s 72 of the QBCC Act provides, relevantly:

(1) This section applies if the commission is of the opinion that -

(a) building work is defective or incomplete; or

(b) consequential damage has been caused by, or as a consequence of, carrying out building work.

(2) The commission may direct the person who carried out the building work to do the following within the period stated in the direction -

(a) for building work that is defective or incomplete - rectify the building work;

(a) it is plain that, under the QBCC Act, the term 'rectify' includes completing incomplete building work;

(b) by encompassing demolition, rectification and reinstatement in s 64, the legislature has intended to cover the field in terms of remedial work;

(c) having regard to s 67Y of the QBCC Act, s 30 of the QBCC Regulation (including the reference to 'residential construction work'), s 49 of the QBCC Regulation, and the provisions of Parts 1 and 5 of Schedule 6 of the QBCC Regulation, the legislature intended that the term 'rectifies' in s 64(1)(b) of Schedule 6 of the QBCC Regulation is to be given the same meaning as the definition of 'rectify' in the QBCC Act;

(d) the Applicants are not entitled to claim assistance if they have carried out work to complete incomplete building work, without the prior written approval of the QBCC.

• [28] Further, as submitted by the QBCC, the terms of s 64 do not provide any discretion to allow a claim for assistance if work described in the section has been done without prior written approval of the QBCC.[11]

• [29] In the present case, the operation of s 64 raises the following issues:

(a) whether the Applicants rectified the work within the meaning of s 64(1) of Schedule 6;

(b) if so, whether they did so without the prior written approval of the QBCC.

• [30] In addressing these issues, I consider that it is necessary to commence with the content of the Notification.
• [31] The QBCC's written submissions state that the Applicants were notified 'that the Claim had been accepted, and the [QBCC] would quantify the cost of completing the works under the Contract'.[12]
• [32] I consider that the submission does not fully capture the terms of the Notification.
• [33] The Notification stated the following:

(a) 'OUTCOME: Your contract has been validly terminated and your claim under the Queensland Home Warranty Scheme has progressed.

(b) 'THE NEXT STEP: Option 3 - you have elected to quantify the cost to complete the works through a Quantity Surveyor and cash settle your claim.'

(c) Under the heading 'SCOPE OF WORKS':

(i) 'a Scope of Works is a description of the building work that has been accepted. This refers to our assessment of work included in your original contract with [the Builder].'

(ii) 'The QBCC has approved the attached Scope of Works and this document is used by the Quantity Surveyor to quantify the cost to complete the incomplete residential construction work.'

(d) 'Sedgwick will assess the fair market value of the incomplete building work by engaging a Quantity Surveyor using the QBCC approved Scope of Works.'

(e) under the heading 'CLAIM APPROVAL': 'Once the loss to complete the work has been quantified, QBCC will resolve your claim by way of cash settlement in the amount of the fair market value as confirmed by Sedgwick.'

(f) In a highlighted portion near the end of the Notification:

1. ...
2. QBCC approval It is important that you do not make any arrangements to have work finished or fixed without prior written approval from the QBCC. If you do go ahead with work without written approval you may lose your right to claim under the Scheme.'

• [34] The Notification advised the Applicants that:

(a) the QBCC accepted that the contract had been validly terminated;

(b) the Claim had progressed;

(c) a scope of works had been approved; and

(d) the loss to complete the work was still to be quantified (by a Quantity Surveyor).

• [35] In relation to the work performed by ALP Building, the Applicants subsequently stated:

(a) 'We simply could not wait around for Sedgwick and QBCC to finish their long processes prior to recommencing the build as our lease is running out.'[13]

(b) 'We could not delay a build which we started using hard earnt life savings.[14]

(c) 'Due to extensive delays, we had no choice but to continue our build through another builder whilst the QBCC's lengthy cash settlement process took place. Irrespective of whether the works were continued or not, the QBCC had three reports mentioned above which clearly and thoroughly documented the remaining works. In addition to that, two of the three reports provide expert cost estimates showing the remaining value of the works at that point in time.

The build was partially completed in November 2023, enabling us to move in to save on rental and mortgage costs. As discussed in QCAT Tribunal dated 1 February 2024, there remain uncompleted works on the property, for example the exterior paint which was only half done due to high cost to paint first floor using a scaffolding system, we could not afford. Photos have been provided in Attachment 6. This is one of the outstanding work items we need to have rectified using the cash settlement.

(a) the Applicants engaged ALP Building to perform new work for the completion of the dwelling;

(b) ALP Building performed work sufficient to enable the Applicants to move into the dwelling (albeit that there was some work (as identified by the Applicants) which remained to be done to wholly complete the original work).

(a) it is plain that the work performed by ALP Building involved the completion of incomplete work at the Applicants' dwelling and, consequently, constituted rectification of the work for the purposes of s 64(1)(b) of Schedule 6;

(b) it is immaterial that the incomplete work was not wholly completed; s 64 applies if a homeowner has commenced to 'rectify' the incomplete work. I consider that the intent of the provision is that no work is to be rectified without the prior written approval of the QBCC. An alternative interpretation could lead to absurd results, for example, a homeowner could complete 99% of the incomplete work without approval yet argue that the work had not been (wholly) rectified.

• [38] The Applicants have not disputed that the QBCC did not give prior written approval for the work performed by ALP Building. I find that the Notification did not constitute approval for the purposes of s 64, and that the Applicants did not have the written approval of the QBCC to perform such work. This is reinforced by s 64(2) of Schedule 6 which provides that 'approval' does not include, relevantly, a decision of the QBCC about the scope of works to be carried out to rectify residential construction work.
• [39] In the above circumstances, the Applicants are not entitled to assistance under the Scheme by operation of s 64. The Tribunal, like the QBCC, does not have any discretion with respect to the application of s 64.
• [40] Consequently, the correct and preferable decision is to confirm the QBCC's decision. No other decision is open on the evidence. I am satisfied that the Review Application is misconceived and lacking in substance as it is doomed to fail; it is futile to continue with this proceeding.

(a) the Application to dismiss or strike out a proceeding filed by the QBCC is granted;

(b) the Application to review a decision filed on 22 September 2023 is dismissed pursuant to s 47 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

[1] Annexure 'SOR-11' to the QBCC's Statement of Reasons filed on 7 December 2023. The Notification is further addressed below.

[2] Application to review a decision filed on 22 September 2023, Annexure 1.

[3] Annexure 'SOR-16' to the QBCC's Statement of Reasons filed on 7 December 2023, page 139.

[5] Annexure 'SOR-26' to the QBCC's Statement of Reasons filed on 7 December 2023, page 265.

[6] See Annexure 'SOR-22' of the QBCC's Statement of Reasons filed on 7 December 2023.

[7] In my view, nothing turns upon this error.

[8] [2022] QCATA 54.

[11] Cronin v Queensland Building and Construction Commission [2019] QCAT 14, [54]-[55] (Member Gordon); Perry v Queensland Building and Construction Commission (no. 2) [2023] QCAT 286, [52]-[53] (Member McVeigh).

[13] Letter from Yishak Abraham to the QBCC dated 5 September 2023 forming part of the material attached to the Review Application.

[15] Witness Statements of Yishak Abraham and Sofia Haile Gebremariam filed on 18 March 2024 at page 2.