Tyas v Queensland Building and Construction Commission & Anor [2025] QCAT 278

Mr N Congram of Counsel with him Alicia Collett and Alena Taylor in house lawyers for the Queensland Building and Construction Commission

Mr J Hitchcock of AJ & Co Lawyers for Nailed It Creations Pty Ltd

• [1] By application filed 30 June 2023 the applicants Larissa Therese Tyas and John Tyas ('Mr and Mrs Tyas' or 'consumers' or 'homeowners') seek review of the decision of the Queensland Building and Construction Commission ('Commission') made 7 June 2023 to disallow their claim under the Queensland Home Warranty Scheme ('Scheme') with respect to building work performed by Nailed It Creations Pty Ltd ('Nailed It' or 'builder' or 'contractor') at 32 Murton Avenue, Holland Park ('the site').

• [2] At the outset it is of assistance to record a short chronology.

23 December 2020 Larissa and John Tyas as homeowners enter into a Master Builders Queensland Residential Renovation Contract.

Building work commenced on 8 February 2021.

12 October 2021 work ceased but not complete.

1 November 2021 Mr and Mrs Tyas lodged a complaint with the Commission about defective/incomplete work which was subsequently closed due to lack of response to a Commission enquiry.

16 December 2021 homeowners provided with form 21 final inspection certificate.

23 December 2021 the Commission informs Mr and Mrs Tyas of requirement to advise which complaints constituted defective renovation work by 4 January 2022.

24 December 2021 homeowners make a final payment.

7 January 2022 the Commission closed the complaint case.

8 February 2022 Mr and Mrs Tyas lodged a second complaint with the Commission about defective/incomplete work.

13 June 2022 Commission site inspection takes place.

16 January 2023 Commission issues a direction to rectify to Nailed It for rectification by 20 February 2023.

13 April 2023 Commission decision to disallow insurance claim.

7 June 2023 Commissions decision notice disallowing insurance claim.

• [3] On 1 November 2021 the Commission received a complaint ('the first complaint') about building work at the site. Whilst there were 28 complaints the singular complaint relevant for the purposes of this review application was complaint number 9 which stated, "slope of the tiling on the front balcony is such that the drainage falls towards the front door resulting in ponding when it rains". On 23 December 2021 the Commission informed Mr and Mrs Tyas that complaint items were contractual or cleaning issues. If there were any that constituted defective building work, they could advise the Commission or withdraw the complaint by 4 January 2022. As no response was received by 4 January 2022 the Commission closed its file on 7 January 2022.
• [4] On 8 February 2022 the Commission received a further complaint ('the second complaint') about building work at the site. Whilst there were 41 complaint items, the two complaints relevant for the purposes of this review application were firstly ('item 2') that "the front verandah upstairs needs major repair as the fall drains towards the front door. This is causing ponding of water at the front door whenever there is heavy rain. Water is seeping through the floor into the ensuite below and at times it also floods" and secondly ('item 9') "the ceiling will require repair from the water infiltration. Also, the stained grout from wood-stained water through the ceiling needs repair".
• [5] On 23 March 2022 Mr and Mrs Tyas added a further second complaint item number 42 about the ensuite stating "water damage to the wall and cavity slider inoperable due to timber swelling (we presume)". After exchanges of correspondence and a Commission inspection on 13 June 2022 the Commission issued a direction to rectify (being item 1 on the first direction to rectify) in respect of the second complaint item 2 which effectively covered/included items 9 and 42 of the second complaint. On 26 July 2022 Nailed It sought internal review of the first direction to rectify. That resulted in the same direction to rectify being issued (the deemed direction to rectify decision).
• [6] Subsequently, in the course of October and November 2022 the Commission reconsidered its deemed direction to rectify decision. On 12 December 2022 the Commission issued its reconsidered direction to rectify decision which confirmed the deemed direction to rectify decision but in varied terms. On 16 January 2023, pursuant to the reconsidered direction to rectify decision, the Commission issued a new direction to rectify to be complied with by 20 February 2023. That direction was not complied with.
• [7] In its notification of 13 April 2023, the Commission stated that item 2 (including items 9 and 42 of the second complaint) being a structural defect would not be covered under the Scheme because notification to the Commission was not given within three months after the day Mr and Mrs Tyas became aware or ought reasonably to have become aware of the defect. Date noticed (became aware or reasonably to have become aware) was recorded as 21 October 2021 and Commission notification as 8 February 2022.
• [8] In its decision notice of 7 June 2023, the Commission gave a different reason for denying cover under the Scheme. It referred to section 59 of the Scheme's terms of cover which stated that there was no entitlement to assistance in relation to a defect if firstly the residential construction work was substantially complete and secondly the defect was apparent or ought reasonably to have been apparent to the consumer before the work was substantially complete.
• [9] The decision notice referred to the first complaint of 1 November 2021 which included the words "Front balcony- slope of the tiling on the front balcony is such that the drainage falls towards the front door resulting in ponding when it rains". Item 2 of the second complaint stated "the front verandah upstairs needs major repair as the fall drains towards the front door. This is causing ponding of water at the front door whenever there is heavy rain. Water is seeping through the floor into the ensuite below and at times it also floods". It noted that complaint items 9 and 42 were resultant damage related to the defective work identified in the (second) complaint item 2.
• [10] The decision notice went on to state "As the applicant was aware of the defect identified in the (second) complaint item 2 on or about 21 October 2021 (as per the complaint form) and no evidence has been provided that the works were rectified prior to the works being substantially complete on 16 December 2021, the limit of assistance under section 59 applies". There was no assistance forthcoming under the scheme.

• [11] Mr Tyas said the decision to disallow the insurance claim ran contrary to the intention and spirit of the QBCC Act which was there "to provide support, education, and advice for those who undertook building work, the consumers". There was no information from the Commission which he described as a cumbersome, protracted, and ineffective process. There was no mention of not being able to make a (insurance) claim if work was substantially complete, that is, final payment made. The builder Nailed It had acknowledged its defective building work.
• [12] When the first complaint was made to the Commission on 1 November 2021 there were numerous complaint items though he did not consider at that time water pooling at the front door when it rained to be a structural defect. There was no water ingress. Practical completion was only reached on 16 December 2021. Final contract payment was made on 24 December 2021when a list of outstanding defects was completed to be addressed in the defect's notification period. There was no response from Nailed It nor were defects rectified.
• [13] Mr Tyas said water ingress was first noticed on 6 December 2021 thus confirming the defect was structural. On 8 February 2022 a second complaint was made to the Commission including amongst numerous complaint items the water pooling at the front door as well as ceiling damage due to water infiltration and stained grout due to wood-stained water coming through the ceiling. Mr Tyas argued that having first noticed the structural defect on 6 December 2021 and having lodged a complaint (second) on 8 February 2022 he was within the 3-month time frame for notification for insurance purposes. He said the first site inspection by a Commission inspector occurred on 13 June 2022. Advice of disallowance of insurance claim was received on 13 April 2023. An internal review was requested in May 2023. On 7 June 2023 the Commission disallowed the insurance claim for the reason work was substantially complete on 16 December 2021 with final contract payment being made on the 24 December 2021.
• [14] Mr Tyas said the building contract required final payment to be made upon practical completion so by default the practical completion payment became the final payment. He said the Commission facilitated both himself and Mrs Tyas reaching practical completion knowing that from 1 November 2021 that the defect existed.
• [15] In cross-examination Mr Tyas agreed that he knew a defect existed on 1 November 2021 but that it was non structural with no water ingress at that time and only involving some retiling. It was only later on 6 December 2021 when there was water ingress that "we realised that the issue was more significant".
• [16] Mr Tyas was referred to the final contract invoice number 686 for $36,859.62 dated 20 September 2021. He confirmed that such invoice was intended to deal with the remaining amount that was payable under the contract. When asked how he reached a balance instead of $34,859.62, he said that arose out of his use of "Buildertrend" which was software to manage the transaction as the project progressed but could not recall the reason for the discrepancy. When asked did he deduct $3,750.00 for liquidated damages he said he did and that was how he reached a final figure of $31,112.08. He agreed that as of 20 December 2021 payment of that sum on 24 December 2021 amounted to final payment for work under the contract.
• [17] Mr Tyas was referred to the Commissions reconsidered direction to rectify decision of 12 December 2022 wherein based on information before it the Commission calculated the sum $1,997.54 was owing under the contract at that point and Mr and Mrs Tyas' reply of 14 December 2022 that the Commission had not considered the fact that they had supplied items thus reducing that sum to zero. There was also a minor sum of $141.88 interest for delayed payments under the contract assessed by the Commission. They were at pains to ensure that (final) payment was correct so as not to be in breach of the contract. It was put to Mr Tyas that if the Commission was not aware of how $1,997.54 was applied then it could not have included it in its calculations. As of 14 December 2022, Mr and Mrs Tyas considered there was no money owing under the contract despite the Commissions assessment that there was some money owing.
• [18] Mr Tyas was asked did he agree the first time he expressed the view that there was money owing under the contract was years later in submissions for the current hearing. He answered the Commission's assessment was based on its own investigation and it seemed appropriate to reference the Commission's own documentation. It was put to Mr Tyas that his statement "by default the payment for practical completion became the final payment" was acceptance that there was a final payment made under the contract. Mr Tyas answered, "yes at that time".
• [19] When asked was there any basis, other than the Commission's reconsidered decision, why he would say there was money owing under the contract he said it was based on the Commission's assessment. His position was that money owing was what the Commission found to be owing.

• [20] There was no dispute that Mr and Mrs Tyas were consumers, that the work was residential construction work and that the work was defective. There are two issues.
• [21] Firstly, whether notification of the defect at site initially stated as "slope of the tiling on the front balcony is such that the drainage falls towards the front door resulting in ponding when it rains" was a structural defect that was required to be the subject of a claim for assistance by Mr and Mrs Tyas within three months of them becoming aware (or ought reasonably to have become aware) of the defect in the work pursuant to section 16(3)(a) of schedule 6, Terms of cover for statutory insurance scheme, Queensland Building and Construction Commission Regulation 2018 ('QBCC Regulation').
• [22] Mr and Mrs Tyas became aware of the defect as they perceived it on 21 October 2021. The Commission considered the 1 November 2021 complaint items were about contractual and cleaning issues. If Mr and Mrs Tyas believed there was defective renovation work that needed to be articulated by response on or before 4 January 2022. As there was no response from Mr and Mrs Tyas, the complaint case was closed on 7 January 2022.
• [23] Mr Tyas in evidence said he first noticed front balcony/front door water ingress on 6 December 2021, causing ceiling damage and stained grout. On 8 February 2022 Mr and Mrs Tyas lodged a second complaint which when added to incorporated all three elements. He argued he was within time.
• [24] Mr and Mrs Tyas were aware of the defect on 21 October 2021 that led to the complaint of 1 November 2021. Insight into the exact nature of the defect was not necessary.[1] It was serious enough for a complaint to be made on 1 November 2021. Though not accepted as such by the Commission initially (no response/no follow through) the same complaint was made on 8 February 2022 incorporating consequential ceiling and stained grout damage. The words "ought reasonably to have become aware of the defect in the work" are there for a reason. They denote a commonsense perception that if a defect is not attended to it could or would cause/lead to further damage. That is exactly what happened here. It is not a case of waiting for consequential damage to occur perforce of an existing defect, whether structural or not, then contending that the three-month time limit ought to be calculated from that point.
• [25] Nor can the 1 November 2021 complaint be relied upon to ground a claim within time. Mr and Mrs Tyas did not proceed with that complaint. They did not carry through with that complaint despite opportunity. It was a non-event. Rather they made a second complaint (thereby at the least impliedly and the Tribunal finds overtly abrogating the first complaint). That became the singular complaint for consideration, and it was out of time (21 October 2021 or at least late October 2021 through to 8 February 2022 exceeds three-month limit).
• [26] Secondly, section 59 of the QBCC Regulation states that a consumer is not entitled to assistance in relation to a defect if firstly the residential construction work is substantially complete and secondly the defect was apparent, or ought reasonably to have been apparent, to the consumer before the work was substantially complete. If both conditions of section 59 are not met there is no entitlement to claim assistance.
• [27] With respect to substantial completion the question is whether the final payment made on 24 December 2021 evidenced substantial completion or was there still money owing under the contract as stated by the Commission on 12 December 2022. Mr and Mrs Tyas made what they thought was final payment on 24 December 2021 because they thought they were contractually liable and because they did not want to jeopardise their prospects of making an insurance claim.
• [28] Mr and Mrs Tyas did not necessarily contest final payment of $36,859.62 but rather adjusted that sum in accord with the Buildertrend assessment down to $34,859.62. A further adjustment for liquidated damages of $3,750.00 (about which there was apparently no argument) was made making for a final payment of $31,112.08.
• [29] The Commission on the other hand calculated that the sums $1,997.54 and $141.88 were owing under the contract based on information provided by Mr and Mrs Tyas, Nailed It, and the Buildertrend summary. Although there was an assertion that the Commission's calculations did not take into account items supplied by Mr and Mrs Tyas it was not taken further. Opportunity having been afforded to all parties and particularly Mr and Mrs Tyas to provide input it is fair to say the Commissions calculations are acceptable. That being so it cannot be construed that final payment had been made. It cannot be said that the residential construction work was substantially complete. The first leg of section 59 disentitlement is avoided.
• [30] With respect to the second leg of section 59 the Tribunal reiterates its finding that Mr and Mrs Tyas were aware of the defect as early as 21 October 2021 well before it could have been discerned that the work was substantially complete. As the defect was apparent and because both legs of section 59 need to be avoided to establish a claim, section 59 here operates to disentitle an insurance claim.

• [31] The decision of the Queensland Building and Insurance Commission made 7 June 2023 disallowing a claim under the Queensland Home Warranty Scheme is confirmed.

[1] Jackson & Ors v Queensland Building and Construction Commission [2018] QCAT 290, [32].