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    Is The QBCC Merits Review A Sham?

    In 2014, we reported that proposed amendments to the Queensland Building and Construction Commission Act 1991 (“QBCC Act”) represented a dramatic shift in the powers of the Queensland Building and Construction Commission (“QBCC”) against building licence holders.

    In one of the first cases of its kind in Queensland, Quinn & Scattini Lawyers recently assisted a retired tradesman who lodged an application in the Queensland Civil and Administrative Tribunal (“QCAT”) for the review of the QBCC’s decision to issue him with a Direction to Rectify for work that they claimed was defective.

    Merits Review

    Some decisions of the QBCC (such as the decision to issue a Direction to Rectify) are reviewable by QCAT – a process known as “merits review”. Merits review essentially involves QCAT replacing the QBCC as decision maker and independently making a fresh decision based on the facts and evidence. The merits review process has been a relatively cheap and accessible method for building licence holders to ensure that the QBCC has acted fairly and lawfully when issuing a Direction to Rectify. Importantly, the review is conducted independently by QCAT and not by QBCC staff.

    Removal Of The Ability To Stay A Decision

    The issue of a Direction to Rectify is the first in a series of steps which may result in the building licence holder being forced to pay the QBCC any amount the QBCC has paid under the Statutory Insurance Scheme to rectify or complete defective or incomplete work. Until recently, a licensee could apply for a “stay” of the QBCC decision until their application for merits review could be decided. A “stay” effectively paused the QBCC action until the review decision was made. This ability to pause the QBCC action until it was reviewed independently by QCAT was critical to the fairness of the process. However, an amendment to the QBCC Act was rushed through just before Christmas 2014 prohibiting QCAT from granting stays of QBCC decisions.

    Statutory Liability Is Not Dependent Upon A Valid Direction To Rectify

    So why was the ability to stay a QBCC decision during a QCAT merits review proceeding so critical to the fairness of the process?

    Under the QBCC Act, if the QBCC makes any payment on a rectification claim under the Statutory Insurance Scheme, then it may recover that amount as a statutory debt from the building licence holder to whom it issued the Direction to Rectify. But what if the QBCC had no reasonable basis upon which to issue the Direction to Rectify to start with? The Queensland Court of Appeal’s position on this issue is that:

    “It is sufficient for recovery under the section that the authority has made a payment on a claim under the insurance scheme. The statutory right to recover (i.e. from the building licence holder) 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”. (emphasis added)

    This means that, if the QBCC makes a payment on a claim under the insurance scheme, then it has a right to recover that amount from the building licence holder even if the QCAT review decision concludes that there was no basis to issue the Direction to Rectify against them.

    A Case Of Ours

    Our client, a 74 year old carpenter (now retired) was issued a Direction to Rectify in respect of works he allegedly carried out for an owner-builder six years earlier. He applied to QCAT for a merits review of the QBCC decision, primarily on the grounds that he was not the person responsible. In response to his QCAT application, the QBCC served him with a Statement of Reasons for the Decision which was 223 pages long. Critically, during this process, the QBCC Act had been amended to remove QCAT’s ability to stay the QBCC’s decision while it was being reviewed by QCAT.

    Quinn & Scattini Lawyers Are Engaged

    Overwhelmed by the QBCC’s response, our client contacted Quinn & Scattini Lawyers and requested assistance with the proceeding.

    We prepared submissions and represented our client at the initial compulsory conference. Our submissions presented a very strong case that the QBCC’s decision was misconceived and had no reasonable basis. However, the QBCC continued to progress the claim against our client even though his application to QCAT to review its decision was well advanced.

    When we challenged this, the QBCC responded that the QBCC had a new policy to progress insurance claims without waiting for QCAT review applications to be decided, and that the QBCC had, in fact, commenced and almost completed the rectification works. We immediately advised our client that the QBCC had “leapfrogged” the QCAT proceeding and that this would render any QCAT merits review decision irrelevant, because once the QBCC paid for the rectification works under the Statutory Insurance Scheme, our client would become liable for a statutory debt in that amount, even if his QCAT merits review preceding was successful and the QBCC decision to issue a Direction to Rectify against him was set aside.

    So What Happened?

    We recommended to our client that the only way to beat the QBCC was to immediately bring an application against the QBCC in the Queensland Supreme Court under the Judicial Review Act 1991. This would gazump the QBCC’s exploitation of the new amendment to the QBCC Act, enabling him to seek a stay of the QBCC’s decision to allow time for the Supreme Court to consider the legality of the QBCC’s decisions against him.

    So instructed, we quickly prepared our client’s application and filed it in the Supreme Court. The QBCC (who previously had been uncooperative and non-responsive in respect of the QCAT proceedings) immediately requested that the parties attempt to settle the proceeding.  The whole matter was settled shortly after. The outcome was a win for our client.

    How We Can Help

    Issues such as these are an example of why we strongly recommend that, when faced with a dispute with the QBCC, you should obtain competent legal advice as soon as possible.

    If you are faced with a dispute, contact our experienced lawyers in order to ensure your interests are protected.

    As one of our clients said “Invest in the best. Q&S“.

    Contact Us

    Get the best representation. Contact Quinn & Scattini Lawyers on 1800 999 529, email mail@rmolaw.com.au, or submit an enquiry below.

    We are available to meet with you at any of our local offices (Brisbane, Gold Coast, Beenleigh, Cleveland and Jimboomba) or by telephone or video-conference.

    This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.

    Commercial Litigation - Building & Construction

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