Manwin v Queensland Building Services Authority

[3] The direction to rectify required attention to the following six matters:**

"1. Surface finish to terrazzo to bathroom and toilet flooring is cloudy and unsatisfactory.

2. Polyurethane floor finish has been applied over painted skirting boards in various locations.

3. Paint to front veranda and stairs has lifted, bubbled and is unsatisfactory.

4. Paint overspray from garage post is on pebble-crete driveway and requires removing.

5. Timber packer to two-way door to be finished similar to timber flooring.

6. Paint overruns are evident to front security door screens."

**[4] The appellant argued before the tribunal that he had rectified one of the six, and that further attempts to rectify were frustrated by an inability to obtain access to the premises. This was investigated by the tribunal, which accepted the evidence of the homeowner that there had been no contact from the appellant. Accordingly, the tribunal proceeded on the basis that if there had been difficulty obtaining access it must have been because the appellant had sent subcontractors to the site without making arrangements in advance with the homeowner for this to occur at a particular time.

[5] The tribunal found that this approach was unreasonable and that the failure to gain access on a particular occasion when subcontractors had been sent to the site without notice was not indicative of a general inability to do so. The tribunal regarded this as not providing a reasonable excuse for failing to comply with the direction. Such an approach was, with respect, plainly correct. Obviously in circumstances where a direction to rectify has been issued and there is a period of some weeks allowed to carry it out, the homeowner cannot be expected to be waiting around available to provide access at any time during that period if someone turns up without notice to do some work. A builder in these circumstances is under an obligation to make contact in advance with the homeowner and make arrangements for a mutually convenient time for the work to be done. I would entirely endorse the approach adopted by the tribunal in this respect.

[6] The tribunal found that five of the six items had not been attended to; accordingly the appellant had failed to comply with the direction to rectify in all respects, and this amounted to a failure to comply for the purpose of the 1991 Act, so that proper grounds had been established for taking disciplinary action. In such circumstances, pursuant to s 107 of the 2003 Act the tribunal was entitled to impose a penalty on the appellant, and by subsection (3), "make an order directing [the appellant] to pay compensation to someone else who has suffered loss or damage because of the act or omission that resulted in the disciplinary action." The tribunal found that after the failure to comply with the direction the respondent arranged for another contractor to do the work, and that other contractor charged $6,750 for doing the work.[3] Accordingly, this was a loss which the respondent had suffered, and the tribunal ordered that the appellant pay compensation in respect of that loss.

[7] The notice of appeal, which was prepared by lawyers for the appellant who were subsequently given leave to withdraw, relied on two grounds: the tribunal had made a mistake in law in failing to take into account the evidence and submissions of the appellant with respect to the excessive remuneration paid for the rectification work, and the tribunal had acted outside its jurisdiction in finding that two of the items on the direction to rectify were items for which the appellant was responsible, as those items did not fall within the scope of the work that the appellant had contracted to perform. It is clear, however, from paragraph 50 of the reasons, that the tribunal was aware that the appellant was challenging the cost of the rectification work, and arguing that the quotations received by the respondent were excessive.

[8] The tribunal approached the matter on the basis that what mattered was what the respondent had had to pay to get other builders to carry out the rectification work. The appellant submitted that the work required to be carried out was quite minor, and the amount charged for the rectification work was substantial, particularly in comparison with the total amount of the contract, which was only of the order of $21,000. However, it is unsurprising that the cost of having rectification work of this nature done specifically and separately by another builder would be much greater than the cost of doing the equivalent work as part of a larger job, and I expect as well that it is commonplace that building rectification costs are relatively high for the work done.

[9] The scope of works document referred to five items, which appear to correspond to the first five items in the direction to rectify; it is not apparent what happened to the paint overruns on the front security door screens. It is apparent from Exhibit BH-3 that the quotation accepted was the lowest of the four received. The process by which the respondent seeks tenders for this sort of work is closely regulated by ss 73 and 74 of the 1991 Act, and it has not been shown that there was any failure to comply with the requirements of those provisions. There could not be a duty to mitigate loss which was inconsistent with the requirements of the Act. The amount of the tender price, together with GST, was the amount paid to the successful tenderer who became the rectifying builder; this was the amount of $6,750.

[10] Subject to a separate issue which I shall deal with later, I consider that the tribunal did not make any error of law in the circumstances of this case in proceeding on the basis that the amount of the respondent's loss was what it had actually cost the respondent to get someone else to do the rectification work the subject of the direction to rectify. This ground of appeal therefore fails.

[11] The second ground raised the issue of whether the tribunal had jurisdiction in these proceedings to punish the appellant in respect of the failure to comply with items 4 and 6, on the basis that these were matters for which the appellant was not responsible. That depends on the structure of the 1991 Act, and the interrelationship between that Act and the 2003 Act.

[12] Under s 71A of the 1991 Act, a consumer who wants the respondent to direct rectification of building work must apply in writing and pay the prescribed fee. Section 72(1) provides that if the respondent is of the opinion that building work is defective or incomplete, it may direct the person who carried out the building work to rectify the building work within the period stated in the direction. That confines the power of the respondent to issue a direction to a person who carried out the building work that in the opinion of the respondent is defective or incomplete, so that it would certainly be a ground to challenge the validity of a direction that the person who received it was not the person who carried out the building work in question.[4] By subsection (10) a person who fails to rectify building work as required by a direction commits an offence under the Act. By subsection (15) a direction need not be complied with if a proceeding for a review of the authority's decision is started in the tribunal and the tribunal orders a stay of the decision.

[13] By s 86 of the 1991 Act, the tribunal may review, among other things, a decision to direct rectification or completion of "tribunal work". Section 75 defines "tribunal work", which includes the renovation, alteration or repair of a building, so that the work in question here was tribunal work.[5] Subsection 86(2) provides in paragraph (b) that a decision to direct rectification of tribunal work by a building contractor and any finding by the authority in arriving at the decision may not be reviewed by the tribunal if 28 days have elapsed between the time when the direction to rectify was served on the building contractor, and the contractor did not within that time apply to the tribunal for a review of the decision, and the respondent has started a disciplinary proceeding against the contractor, or served a notice advising that a claim under the statutory insurance scheme has been approved in relation to tribunal work stated in the direction. That exclusion began to operate in this case before the disciplinary proceeding from which this appeal was brought was commenced in the tribunal.[6] It seems to follow from that provision that, if the appellant wanted to challenge the scope of the work required under the direction to rectify, that application to the tribunal had to be commenced before that exclusion began to operate. Plainly the appellant did not do that.

[14] In addition, paragraph (c) provides that the tribunal may not review "a decision about the scope of works to be undertaken under the statutory insurance scheme to rectify or complete tribunal work if 28 days have elapsed since the decision was served on the building contractor and the contractor has not within that time applied to the tribunal for a review of the decision." Section 88 in Division 4 then provides for the respondent to apply to the tribunal to conduct a proceeding to decide whether proper grounds exist for taking disciplinary action against a person. Section 89 provides that proper grounds exist for taking disciplinary action if a licensee does a number of things, one of which is "(j) The licensee fails to comply with a direction of the authority to rectify or complete tribunal work ... ."

[15] The respondent submitted, and the tribunal found, that the effect of s 86 was that it was no longer open to the tribunal, in the proceeding the subject of this appeal, to review the decision of the respondent to issue the direction to rectify, or to review the scope of the work required under the direction; in effect that it was not open to the tribunal to decide that the appellant was not obliged to do some of the work the subject of the direction to rectify, because that work involved rectification or completion of something which was not part of the building work the appellant had undertaken to complete. That seems to be the effect of s 86, and I was told there have been a number of earlier decisions of the tribunal to the same effect.

[16] It also appears that this was deliberate so far as the legislature was concerned. Section 86 of the 1991 Act was formerly s 104 of the Queensland Building Tribunal Act. The explanatory note to the bill for that Act, which was introduced in 1999, provided in relation to clause 104(2) that it listed decisions which were not reviewable, and continued:**

"In respect of the authority's power to direct rectification of building work, access to the tribunal's review jurisdiction is progressively inhibited, such that an application later in time cannot review all previous decisions, but only the most recent."

**[17] Accordingly in my opinion there was no error of law or excess of jurisdiction involved in the tribunal's decision that it was not open to the appellant in the proceeding the subject of this appeal to dispute that he was liable to do all of the rectification work referred to in the direction to rectify. That appears to be the effect of the legislation. I appreciate that this may produce a result which may be thought unfair, if a person is subject to a direction to rectify which requires work to be done which was not part of the building work undertaken by that person, and the person who receives the notice does not appreciate that it is essential, if that issue is to be raised on a review by the Tribunal, that it be raised promptly, but that appears to be the result of a policy decision taken by the legislature, and it is not something that either the court or the tribunal can change. There was therefore no error of law or excess of jurisdiction in this respect by the tribunal.

[18] The appellant disputed that he was responsible in relation to item 1, although it was part of the building work that he undertook to do some work on the terrazzo floors. He said the floors were quite old, and that he had only contracted to do limited work, and what the rectification required involved producing a superior standard of finish, involving a greater degree of renovation work than he had originally contracted to perform. That it seems to me is clearly a matter as to the content of the direction to rectify, and the scope of the work included in that direction, and accordingly it was a matter which the tribunal was prohibited by s 86(2) from reviewing in the proceeding the subject of this appeal. The appellant also disputed his responsibility to rectify item 4, on the ground that the paint that was on the driveway was red paint and none of the work that he had done involved any use of red paint. The situation is the same, however, in my opinion as in relation to item 1.

[19] One of the matters raised by the appellant at the hearing was that he did not receive the letter advising that the matter had been referred to the insurance division, and enclosing the scope of works to be undertaken.[7] He said that if he had received that letter he would have gone to extreme lengths to perform the direction including parts not his responsibility. That, however, does not mean that he was not liable.

[20] The letter of 25 February 2004 enclosed a copy of the "scope of works" prepared for rectification under the statutory insurance scheme, and gave notice of the intention to do that work and if necessary to recover the amount of any payment under s 71.[8] It was sent by post to the address of the appellant in the records kept by the respondent. That was a permissible method of service pursuant to s 109A(1) of the 1991 Act. Accordingly, pursuant to s 39A of the Acts Interpretation Act 1954 the document is taken to have been served at the time at which the letter would be delivered in the ordinary course of post unless the contrary was proved. That means relevantly served when the letter would be delivered to the post office box,[9] not the time when it would be actually received by the appellant.

[21] All that the appellant was able to give evidence of was that he did not received the letter, but it is well established that non-receipt is not proof of non-delivery.[10] What matters on the authorities is whether there is proof that it was not delivered to the post office box, not whether it was actually received by the appellant.[11] That letter advised of a decision which was subject to review by the tribunal pursuant to s 86(1)(g), but only if the appellant applied for a review of that decision within 28 days after it was served: subsection (2)(c). It would have been open at that point for the appellant to apply to the Tribunal to review the scope of works, on the ground that it was too extensive given that part of the work required to be done under the direction to rectify had been completed by him. However, that was not done. No such review was applied for.

[22] None of the maters raised by the appellant suggest that there was any error of law or excess of jurisdiction by the Tribunal. One matter that concerned me on the heading of the appeal was that the tribunal found that the appellant failed to comply with the direction to rectify in all respects other than in respect of Item 3: reasons para 37. The tribunal said this amounted to a failure to comply within the meaning of s 90(1)(e) of the 1991 Act (para 37), but I think this was a slip on the part of the tribunal, since s 90 is concerned with a failure to comply with a direction to rectify tribunal work on the part of a person who is not a licensee, and paragraph 1 of the reasons referred to a breach alleged by the respondent against the appellant of s 89(j) of the 1991 Act, which is concerned with a failure on the part of a licensee to comply with a direction of the authority to rectify tribunal work.

[23] Exhibit 2 shows that the appellant was a licensee, his statutory declaration Exhibit 4 was to the same effect (paragraph 1) and the respondent's affidavit Exhibit 1 paragraph 8 was to the same effect. Nevertheless, the finding in paragraph 38 of the reasons that proper grounds had been established for taking disciplinary action against the appellant on the basis that he failed to comply with the direction to rectify was justified, though under s 89 rather than s 90. The relevant failure was a failure to comply with the direction of the authority to rectify tribunal work, that is, a failure to do everything necessary in order to comply with the direction to rectify.

[24] Section 88 of the 1991 Act permitted the respondent to apply to the tribunal "to conduct a proceeding to decide whether proper grounds exist for taking disciplinary action against a person under [division 4]." Section 91 of the 1991 Act gives certain powers to the tribunal if it decides that proper grounds exist for taking disciplinary action, but not requiring a payment to the respondent. However, by s 107(3) of the 2003 Act: "The tribunal may make an order directing the person to pay compensation to someone else who has suffered loss or damage because of the act or omission that resulted in the disciplinary action." My concern during the hearing was that the omission that resulted in the disciplinary action in the present case was the failure to comply with the direction to rectify, which on the findings of the tribunal was a failure to comply with the direction other than in respect of Item 3.

[25] On the face of it subsection (3) only authorises an order to pay compensation in respect of loss or damage suffered because of the failure to comply with the items in the direction other than Item 3. Presumably part of the work done by the other builder was Item 3 in the scope of works document attached to Mr O'Halloran's affidavit, which was "allow to sand smooth the veranda flooring and front stairs to ensure all lifting paint is removed. Prime any bare timber. Allow to repair and repaint all affected surfaces as per the manufacturer recommendations. Apply an anti-slip finish to stairs as per the relevant BCA requirements." So part of what the rectifying builder was tendering for, and presumably therefore what he charged and was paid for, included this work, which related to rectification work which the tribunal did not find the appellant had not already done.

[26] After further consideration, however, it seems to me that on the true construction of the legislation this does not matter. Section 107(3) refers to the loss or damage suffered, and the respondent has in fact paid out the full amount of $6,750 under the insurance claim. That was done after a decision as to the scope of works had been taken and served on the appellant. It appears to follow clearly enough from s 86(2)(c) that, if there was to be any dispute undertaken as to the scope of the works under the statutory insurance scheme to rectify the tribunal work, it had to be raised with the Tribunal at that time rather than later in the course of disciplinary proceedings. That appears clear enough from the section and the explanatory note, and would also be consistent with the general scheme of the legislation.

[27] If a person in the position of the appellant wants to argue about the scope of the works to be done under the claim, requiring that argument to occur before the work is done and paid for avoids the risk that work would be paid for under the statutory insurance scheme which ultimately proved not to have been properly paid for under that scheme. This was obviously a legislative attempt to avoid a situation where a payment was made under the insurance scheme which could not then be recovered in disciplinary proceedings.

[28] The present case really serves as a good example of the legislative scheme. If the appellant had objected to the scope of the works on the basis that it included work which he had already rectified, and appealed to the tribunal, presumably the tribunal would have found, as it ultimately did find, that he had already rectified Item 3 in the direction to rectify, and on that basis the scope of the works ought not to include Item 3, which it seems to me was essentially to carry out Item 3 in the direction to rectify. In that situation, tenders would only have been called in respect of the balance of the items in the scope of the works, and presumably the amount paid out under the statutory insurance scheme would have been less, but the lesser amount would have been recoverable from the appellant. It seems clear enough that the intention was that any such challenge to the scope of the works had to occur at that time. It is I think therefore reasonable to interpret the legislation as a whole on the basis that the loss or damage suffered by the respondent is quantified simply by reference to the amount that has in fact been paid out under the statutory insurance scheme in accordance with the scope of works decided earlier under the Act.

[29] It follows that in the present proceeding before the tribunal there was no power in the tribunal to consider whether all of the work should have been done under the insurance scheme, or to apportion the amount paid to the rectifying builder so as to exclude the amount paid for redoing the work covered by Item 3 in the direction to rectify. I appreciate that perhaps this is not the more natural interpretation of s 107(3) of the 2003 Act, but it seems to me that any other interpretation would not give proper effect to the clear legislative intention in s 86 of the 1991 Act. The two pieces of legislation were obviously intended to work together. It also means that the amount the appellant ultimately has to pay is almost certainly more than would have been the case if he had applied for a review of the decision as to the scope of works in a timely way. Nevertheless, it seems to me clear that in the proceeding subject to this appeal there was nothing the tribunal could do about that, and that there is nothing I can do about it either.

[30] It follows that no basis has been shown to interfere with the decision of the tribunal in this matter. Accordingly, leave to appeal is refused, with costs.**

[2] The facts are taken largely from the reasons of the Tribunal, and the affidavit of Moulton which was Exhibit 1 in the Tribunal.

[3] Quantification of the claim was provided by an affidavit of Mr O'Halloran which became Exhibit 3 before the tribunal. Paragraph 5 said that the respondent received four quotations for the rectification of the defective items.

[4] Subsection (5) contains an extension of the concept of the person who carried out the building work; for present purposes it is sufficient to note that if any work was carried out by a subcontractor of the appellant, he would be treated for the purposes of the section as having carried out that work. See also subsection (11).

[5] There is nothing in the exclusions in s 76 which would apply to this work.

[6] When the letter of 25 February 2004 was served on the appellant.

[7] The outline of argument actually refers to the letter of 24 February not having been received, but this letter, a copy of which was in the material filed by the appellant in the Tribunal, was not one which gave notice of the decision as to the scope of the works, which was what matters; that letter was sent the following day, 25 February. Whether the appellant received the letter of 24 February was irrelevant. I will assume the submission was directed to the letter of 25 February.

[8] The letter also advised of a right to appeal to the tribunal against the decision as to the scope of the works to be undertaken to rectify or complete the work: Exhibit BAH-1 to the affidavit of O'Halloran, made Exhibit 3. The appellant apparently did receive a letter sent by the respondent to him at the same address the previous day, as it was included in the bundle of material tendered by him to the tribunal: Exhibit 5 document 8.

[9] The postal address in the records was a post office box: Exhibit 1, Affidavit of Moulton, Exhibit WM-1.

[10] Fancourt v Mercantile Credit Ltd (1983) HCA 25; (1983) 154 CLR 87 at 95-96; Cheong v Webster, ex parte Cheong [1986] 2 Qd R 374 at 377.

[11] That is because, under s 109A(1), it was served by being sent by post to that address.