Hopper & Anor v Queensland Building and Construction ...

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

PARTIES:

Hopper & Anor v Queensland Building and Construction Commission & Anor (No. 2) [2019] QCAT 212

NEIL HOPPER and JULIE HOPPER (applicants) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (first respondent)

SUCCESS HOMES PTY LTD ACN 158 083 204 (FORMERLY KNOWN AS WIDEBAY BUILDING SERVICES PTY LTD) (second respondent)

APPLICATION NO/S: GAR375-18

MATTER TYPE: Building matters

DELIVERED ON: 24 July 2019

HEARING DATE: 28 November 2018

HEARD AT: Bundaberg

DECISION OF: Member Milburn

ORDERS: 1. The decision of the QBCC dated 9 February 2017is set aside and replaced with a decision by thetribunal.

2. The tribunal allows the applicants’ claim for a non-completion under the Queensland Home WarrantyScheme in accordance with Part 5 of theQueensland Building and Construction CommissionAct 1991 (Qld).

3. Any party may make an application for costsconsequent upon this decision, by the filing of aMiscellaneous Application together withsupporting submissions, if desired.

CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – General Administrative Review – application by building owner to review a decision by the Queensland Building and Construction Commission to reject a claim by building owner – whether the building owner validly terminated a building contract – where the building contractor also purported to terminate the contract – the rights of the

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building contractor and the building owner under contract and at law – where the tribunal reviews the decision of the QBCC about valid termination of the contract by the building owner and allows a claim under the statutory scheme in favour of the building owner Queensland Building and Construction Commission Act 1991 (Qld), s 3, s 42, s 65, s 66, s 68, s 69, s 71, s 72, s 86, s 87, Schedule 2 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9, s 20, s 102 Statutory Instruments Act 1992 (Qld), s 7, s 9 Koompahtoo Local Aboriginal Land Council & Anor v Sanpine Pty Ltd & Anor (2007) 233 CLR 115 Cowen & Anor v Queensland Building and Construction Commission & Anor [2017] QCAT 416 Shevill v Builders Licensing Board (1982) 149 CLR 620 MacDonald v Queensland Building and Construction Commission [2014] QCAT 158 Stanton v Queensland Building and Construction Commission [2018] QCAT 271 Hopper & Anor v Queensland Building and Construction Commission & Anor [2018] QCAT (Member Cranwell, delivered on 21 May 2018) Botros & Anor v Freedom Homes Pty Ltd [1999] QCA 150 Mitchamy Developments Pty Ltd v Adams & anor [2010] QCAT 484 Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2012] VSC 99 Castle Constructions (QLD) Pty Ltd v Pourasad [2015] QCAT 17 Kelly v Desnoe [1985] 2 Qd R 477 Quinn Villages Pty Ltd v Mulherin [2006] QCA 433 Nina's Bar & Bistro v MBE Corporation [1984] 3 NSWLR 613 Stojanovski v Australian Dream Homes [2015] VSC 404 Perkins & Anor v Queensland Building and Construction Commission & Anor [2018] QCAT 15 Whalley v Queensland Building and Construction Commission (No 2) [2017] QCAT 188

APPEARANCES & REPRESENTATION:

Applicant: Self-represented

First Respondent: N Thirumoorthi, legal officer instructed by the QBCC

Second Respondent: No Appearance

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REASONS FOR DECISION

[1] This case concerns a review of a decision of the Queensland Building Construction Commission (the ‘QBCC’), dated 9 February 2017 (‘the Decision’), to disallow the applicants' insurance claim for a ‘non-completion’ (‘the Claim’) under the Queensland Home Warranty Scheme (‘the Statutory Insurance Scheme’) in accordance with Part 5 of the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’).

[2] The QBCC successfully applied to the tribunal to join Success Homes as a party to these proceedings pursuant to section 42 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’).1 The tribunal granted the joinder application on the basis that failing to do so may result in duplication of proceedings or estoppel. As a result of the decision, Success Homes becomes a party and is bound by or has the benefit of the tribunal’s decision is set out in section 42(a) of the QCAT Act.

[3] In 2015, Wide Bay Building Services Pty Ltd operated as a building company, trading as Success Homes (‘Success Homes’).2 On or about 20 February 2015, it contracted (‘the Construction Contract’) with the applicants (‘Mr and Mrs Hopper’), to build a new home (‘the Works’) for them on their land at Lot 1 Murdoch’s Road, Moore Park Beach, near Bundaberg. The Construction Contract was for a total price of $249,902.50 inclusive of GST,3 and was in the style of a 'Queensland Building and Construction Commission - New Home Construction Contract’, November 2013 version. It was common ground that the Construction Contract was a ‘domestic building contract’ as defined in the QBCC Act in force at the relevant time.

[4] The Claim was disallowed by the QBCC on the basis that Mr and Mrs Hopper had not properly terminated the Construction Contract following, what Mr and Mrs Hopper allege to be, a repudiation of that contract by Success Homes.4

[5] Success Homes completed a substantial amount of the Works before the parties fell into dispute. On or about 15 February 2016, the parties entered into an agreement to resolve the dispute, which included an agreement, facilitated by the QBCC in its early dispute resolution process, for Success Homes to complete the Works by 10 May 2016 (‘the EDR Agreement’).

[6] Success Homes did not complete the Works by 10 May 2016. Mr and Mrs Hopper alleged that Success Homes was in substantial breach of the contract. On 22 July 2016, they served a notice to remedy (the ‘Notice of Substantial Breach’) alleging one substantial breach of the contract, specifically ‘...failing to achieve Practical Completion by the Date for Practical Completion’. Solicitors for Success Homes disputed the basis upon which Mr and Mrs Hopper claimed the right to terminate the

1 Hopper & Anor v Queensland Building and Construction Commission & Anor [2018] QCAT

(Member Cranwell, delivered on 21 May 2018). 2 On or about 20 January 2016, Wide Bay Building Services Pty Ltd changed its name to Success

Homes Pty Ltd. 3 At pages 329 to 334 of ‘SOR-19’. 4 QBCC’s submissions, dated 28 November 2018 [2].

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Construction Contract and by letter dated 28 July 2016, they requested the Notice of Substantial Breach be withdrawn.5

[7] According to the information Mr and Mrs Hopper included in the Claim, the uncompleted Works stopped on 8 August 2016.6 That was not disputed at the tribunal hearing. According to the QBCC, between February 2015 and August 2016, Success Homes completed the base stage, the frame stage, the enclosed stage, and part of the fixing stage; and that payments in the amount of $157,486.49 were made under the Construction Contract before the parties, once again, fell into dispute.7 According to Mr and Mrs Hopper, Success Homes had completed the base stage, the frame stage, and the enclosed stage; but they alleged that some of the works had not been performed competently.8 Mr and Mrs Hopper were of the view that Success Homes had failed to diligently and competently complete the Works.

[8] On 10 August 2016, by notice in writing,9 Mr and Mrs Hopper served a notice terminating the Construction Contract (the ‘Notice of Termination’) upon Success Homes. In doing so they requested the builder to vacate the site and otherwise comply with its obligations on termination of the building contract. They also foreshadowed making a claim under the Statutory Insurance Scheme administered by the QBCC. The Statutory Insurance Scheme is subject to conditions, which in this case, are the Insurance Policy Conditions Edition 8, which were effective from 1 July 2009 (‘the Insurance Policy Conditions’).10

[9] By letter dated 11 August 2016,11 solicitors representing Success Homes disputed the purported termination of the Construction Contract by Mr and Mrs Hopper. Success Homes stated that the Notice of Substantial Breach did allege a failure to achieve practical completion by the due date, but it did wrongly allege that it had committed a substantial breach of the contract by ‘...unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress’. Success Homes disputed the validity of the Notice of Termination on the basis that it was entitled to extensions of time, which had the effect of extending the construction period to 487 days (which it claims expired on 29 July 2016). Success Homes argued that the Notice of Termination was delivered early and invalidly. It further argued that the actions of Mr and Mrs Hopper amount to a repudiation of the contract. Through its solicitors, Success Homes stated:

In circumstances where the Notice:

1. Articulates but one (alleged) substantial breach; and where

2. That alleged substantial breach is, in fact, not a substantial breach of the contract; and where

5 Letter from Broadley Rees Hogan solicitors. Pages 559 to 561 of the SOR. 6 Claim filed with the QBCC dated 16 2016. At page 308 of SOR-19. 7 QBCC internal review notice dated 9 February 2017, page 2. 8 Letter from Payne Butler Lang solicitors to the Internal Review Unit QBCC dated 18 October 2016. 9 Letter from Payne Butler Lang solicitors to Wide Bay Building Services Pty Ltd, dated 10 August

2016. 10 The insurance policy conditions applied to contracts for the performance of ‘residential construction

work’ 11 Letter from Broadley Rees Hogan solicitors. Pages 589 to 591 of the SOR.

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3. Your clients' have sought (without complying with clause 27 of the contract) to terminate the contract,

our client considers that your clients have repudiated the contract and our client elects to accept that repudiation and to terminate same.

[10] Alleging that Mr and Mrs Hopper had unlawfully repudiated the contract through their purported termination of it, Success Homes initiated proceedings in the Magistrates Court, claiming a debt, unpaid under the contract, in the sum of $53,294.37 or alternatively $48,852.65 in restitution upon a quantum meruit basis, based on unjust enrichment. The evidence given at the tribunal hearing was that since 2016, Success Homes has not pursued its proceedings in relation to the alleged repudiation of contract.

[11] Success Homes did not appear at the tribunal hearing, although one of its former employees, Mr Paul Ward (‘Mr Ward’), was called as a witness. From material presented by the QBCC, solicitors previously representing Success Homes acknowledged that Mr and Mrs Hopper would be entitled to terminate the contract but only if it was in substantial breach of that contract, that they had given proper notice of an intention to terminate the contract if the breach was not remedied, and the breach was not so remedied.

[12] The QBCC submitted that the main issue for the tribunal to determine is whether Mr and Mrs Hopper, by the Notice of Substantial Breach and the Notice of Termination, have properly terminated the Construction Contract with Success Homes in accordance with clauses 1.2 and 11.1 of the Insurance Policy Conditions.

[13] Clause 1.2 of the Insurance Policy Conditions provides that the QBCC is only liable to pay for loss where the contract is for a fixed price and the insured has properly terminated the contract with the contractor. The definition of ‘properly terminated’ for the purposes of the policy means lawfully terminated under the contract or otherwise at law, upon the contractor’s default which extends to but is not limited to (in the context of this litigation) any breach of the contract by the contractor. For the purposes of the Insurance Policy Conditions, in this case Mr and Mrs Hopper were the insured/owners and Success Homes was the contractor.

[14] The QBCC was not satisfied that Mr and Mrs Hopper had properly terminated the Construction Contract. The QBCC identified that Mr and Mrs Hopper and Success Homes had markedly different positions as to the circumstances surrounding the termination of the Construction Contract.

[15] Success Homes argued it was not in substantial breach of the Construction Contract and that Mr and Mrs Hopper had misconstrued and improperly interpreted the contract in determining what a substantial breach constituted. Success Homes referred to clause 27.1 of the conditions of the Construction Contract. Clause 27.1 is relevant in this case in that if Success Homes was in substantial breach of the Construction Contract, and Mr and Mrs Hopper gave a notice to it stating their intention to terminate the Construction Contract if the breach was not remedied within 10 business days from the giving of the notice and the breach was not so remedied, then, they were entitled to terminate the Construction Contract by a further written notice given to the builder. That is what Mr and Mrs Hopper purported to do, but the argument centred on whether they did so appropriately in response to a substantial breach of the contract by Success Homes.

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[16] The Construction Contract identifies what is meant by a substantial breach. Clause 27.4 of the conditions provides, in effect, that:

Substantial breach by the builder included, but was not limited to:

(i) Failing to perform the work under the Contract competently;

(ii) Failing to provide materials which comply with the Contract;

(iii) Unreasonably failing to replace or remedy defective work or materials;

(iv) Unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress:

(v) Failing to effect or maintain any insurance required by the Contract; and

(vi) Failing to hold the current, active and appropriate licence required to perform the Works.

[17] In support of its argument that Success Homes had failed to perform the work diligently or unreasonably delayed, suspended or fail to maintain reasonable progress of the Works, Mr and Mrs Hopper produced a timeline summary, which was not challenged in any way by the QBCC or Success Homes. The tribunal accepts the accuracy of the timeline put forward by Mr and Mrs Hopper as follows (although it does not record what work was done in August 2016):

(1) contract signed 20 February 2015;

(2) invoice issued for deposit from builder 8 April 2015;

(3) plans to the certifier 13 May 2015 (documents and insurances etc were not supplied by the builder);

(4) certification fee paid by the owners 7 June 2015 which should have been paid by the builder;

(5) deposit paid to the builder 10 June 2015;

(6) QBCC builder insurance not paid until 24 July 2015;

(7) full certification 14 August 2015;

(8) 21 September 2015 builder commenced work on the house which should have been within 21 days after certification;

(9) September 2015, builder performed only three days actual work;

(10) October 2015, builder performed 9 days actual work;

(11) November 2015, 6 days actual work performed by builder;

(12) December 2015, no work performed by builder;

(13) January 2016, 11 days actual work;

(14) February 2016, 2 days' work;

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(15) March 2016, 1 day actual work;

(16) April 2016, approximately 13 days' work;

(17) May 2016, 12 days' work;

(18) June 2016, 10 days' work;

(19) July 2016, 7 days' work.

[18] The tribunal finds that there were significant delays on the part of Success Homes throughout the term the Construction Contract. During the contract term of 243 days, there were only 74 days of actual work. There were two periods where there was nearly two months of no actual work. Lack of progress of the Works was an issue from the commencement of the Construction Contract. The tribunal notes that the deposit was not paid until 2 months and 2 days after the builder provided an invoice for the deposit but there is no evidence to suggest that this was a prerequisite to Success Homes progressing the Works. In the circumstances, the builder is tasked with the responsibility for progressing the Works and if the Works were not completed in a timely fashion, the tribunal expects that the builder would provide clear evidence as to the reasons for the delay. Success Homes failed to file any material in the proceeding, or appear at the tribunal hearing, to assist the tribunal in its deliberations.12 The tribunal is entitled to, and does, draw an adverse inference against Success Homes. The tribunal notes that a period of approximately five months passed between the date of contract and the date of commencement of on-site works. Success Homes has not provided sufficient evidence to satisfy the tribunal that this, and other, delays were not occasioned by its own failure to progress the Works in a satisfactory manner. The tribunal notes that site works commenced a mere nine days before the date for practical completion as stipulated in the Construction Contract.13 That is, physical works commenced on 21 September 2015 and the original date for practical completion was 30 September 2015.

[19] By reference to its solicitor’s correspondence (made available to the tribunal by the QBCC), Success Homes argued that factually, given its ‘entitlement’ to extensions, it was not in breach, but even if it was, it was not a substantial breach. That is, the Notice of Substantial Breach was void because the breach was not a substantial breach of the Construction Contract, either as articulated in clause 27.4 of the contract or at all. Through its solicitors, it argued that practical completion was not due until 29 July 2016, because of three extension of time requests.14 As such, Success Homes argued that the Notice to Remedy Breach, served on 22 July 2016, was invalid. It argued that if the alleged substantial breach was unfounded, then it must follow that the purported termination of the contract must fail and amounts to a repudiation. Success Homes argued that by its solicitors’ letter dated 11 August 2016, that it accepted the ‘repudiation’ by Mr and Mrs Hopper, and it terminated the Construction Contract.

[20] Therefore, both Mr and Mrs Hopper and Success Homes claimed to validly terminate the Construction Contract due to the repudiation of it by the other party. The tribunal

12 However, the tribunal was able to ascertain the position of Success Homes by reference to

correspondence from its former solicitors. That correspondence was produced as part of a bundle of documents presented to the tribunal by the QBCC.

13 The tribunal notes that as a result of an EDR agreement, the date for practical completion was extended until 10 May 2016.

14 Page 560 of the SOR.

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must determine whether either of the parties has validly terminated the contract as that will have a direct bearing on the claim made by Mr and Mrs Hopper for their claim for compensation under the Statutory Insurance Scheme.

[21] Mr and Mrs Hopper did lodge the Claim with the QBCC. In rejecting the Claim, the QBCC accepted the position of Success Homes and formed the view that Mr and Mrs Hopper did not lawfully terminate the contract. Mr and Mrs Hopper requested an internal review of the initial QBCC decision, which resulted in the same conclusion; that is, the Decision. They then requested an external review before this tribunal. This external review takes the form of a merits review. Success Homes was added as a second respondent. In short, Mr and Mrs Hopper urge the tribunal to set aside the Decision. Mr and Mrs Hopper say the tribunal would come to that conclusion if it finds that they, and not Success Homes, had lawfully terminated the contract. They properly conceded that the QBCC is only liable to pay for the loss where the insured has properly terminated the contract with the contractor.15

[22] Through their solicitors,16 Mr and Mrs Hopper did concede that the effect of clause 27 is that an owner may terminate the contract if the contractor is in substantial breach of the contract and notice is given to the contractor to remedy the breach and the breach is not remedied. They further accepted that clause 27.4 of the contract deals with the issue of substantial breaches, but argued that the clause must be read in conjunction with clause 27.2 of the contract which provides that:

The right to terminate under this condition is in addition to any other powers, rights or remedies the terminating party may have.

[23] As a result of the complaint by Mr and Mrs Hopper to the QBCC, the QBCC did direct rectification of some, but not all of the building work. In doing so, the QBCC rejected the submissions of Mr and Mrs Hopper regarding the legal effect of the Notice of Substantial Breach and the Notice of Termination. That is, that the QBCC was of the view that the failure by Success Homes to reach practical completion by the due date was not, on its own, a substantial breach of the contract.17

[24] Mr and Mrs Hopper argued that practical completion was more than two months overdue when the notice was given and at that time the builder had only reached the ‘enclosed’ stage. They disputed that Success Homes delivered any ‘Extension of Time Claim’ forms as asserted by the builder. They argued that in those circumstances (having only reached the enclosed stage two months after the practical completion date) the builders conduct amounted to a substantial breach under clause 27.4 namely, ‘unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress’. The solicitors for Mr and Mrs Hopper argued18 that while they have relied on the substantial breach being the failure to achieve practical completion by the date for practical completion, this does not prevent them from relying on other grounds to terminate the contract. By way of example, they referred to Botros & Anor v Freedom Homes Pty Ltd [1999] QCA 150 at paragraph 8 McPherson JA said:

15 Letter from Payne Butler Lang solicitors to the Internal Review Unit QBCC dated 10 October 2016. 16 Ibid. 17 Mitchamy Developments Pty Ltd v Adams & anor [2010] QCAT 484 and Dura (Australia)

Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2012] VSC 99. 18 Letter from Payne Butler Lang solicitors to the Internal Review Unit QBCC dated 10 October 2016.

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As the tribunal member correctly observed, termination of a contract can as a matter of law later be justified on any sufficient ground available to a party claiming to terminate a contract even if that specific ground was not relied on at the time of termination.

[25] Thomas JA agreed and said at paragraph 2 of his reasons:

It is true that the ground found to justify the builder's termination was not that relied on at the time and that the member found that the ground which had been relied on was not sustainable. There is however clear authority that the termination of the contract can be justified on any sufficient ground available even if that specific ground was not relied on at the time of termination.

[26] Mr and Mrs Hopper argued that in making its decision, the tribunal should consider the specific contractual provisions in addition to any other powers, rights or remedies that they may have. That is, that the tribunal must also consider the common law. In Castle Constructions (QLD) Pty Ltd v Pourasad [2015] QCAT 17, it was accepted the parties' common law right to terminate the contract was not excluded. At paragraph 89, the learned acting senior member said:

At common law, if one party renounces his or her liabilities under a contract demonstrating an intention to no longer be bound or to fulfil it in a manner substantially inconsistent with its obligations, then an innocent party is entitled to accept the repudiation and terminate that contract. All of the circumstances relevant to performance may be taken into account in deciding whether there has been a repudiation.

[27] At paragraph [110-9385] Halsbury's Laws of Australia (LexisNexis), the learned authors state:

Where a promisor is guilty of unreasonable delay, or there is gross and protracted delay by a promisor, or there is delay in performance for a period of time which is so long as to frustrate the commercial purpose of the contract, a right to terminate may arise, either because the breach has had serious consequences for the promisee or because the delay amounts to a repudiation of obligation on the part of the promisor.

[28] The argument advanced by Mr and Mrs Hopper was that they had the right to terminate the Construction Contract if Success Homes was in serious breach of an intermediate term of the contract and that if the practical completion date was not an essential term, it was an intermediate one. They argued that the builder was in serious breach of that term, given that the ‘enclosed stage’ only had been reached at the time of termination and practical completion was more than two months overdue. Their solicitors also argued that it should be noted that the EDR Agreement, signed on 15 February 2016, included an agreement by the builder to complete the dwelling by 10 May 2016. The tribunal is of the view that it is not restricted to considering the question of whether the obligation to fulfil the contract by the practical completion date was an essential term or not. The issue is broader, in that the tribunal may consider the delay is generally in the context of clause 27.4 of the Construction Contract.

[29] In part, Mr and Mrs Hopper argue that Success Homes was overdue in building their home because the builder was completing other building projects in priority to theirs.

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Neither the QBCC nor Success Homes produced any evidence to counter that argument.

[30] In addition to the alleged breach of contract by the builder in failing to complete the Construction Contract as required, Mr and Mrs Hopper allege that Success Homes failed to perform the Works competently, particulars of which are set out below, which they said, in October 2016,19 constituted a substantial breach pursuant to clause 27.4 (a) of the contract:

i) No pre-slab cut or preparation - the site was poorly prepared and substantial further costs were incurred which could have been avoided if levels had been taken and site preparation cut done prior to commencing foundations;

ii) the slab exposed aggregate was of extremely poor quality - hollows of approximately 8mm and cracks — this was recognised in the QBCC mediation process;

iii) slab level heights are incorrect;

iv) sub slab plumbing trenching, with roots and grass within the profiled area;

v) builder not wanting to build in brick, as quoted, over one area of the house despite the fact that the house was engineered for all ground conditions and placement by an engineer;

vi) three slab cuts due to incorrect under slab plumbing;

vii) owners had installed temporary drainage to prevent erosion which the builder removed;

viii) rooms constructed to the incorrect dimensions;

ix) feature posts constructed with untreated pine timber instead of steel -builder quoted on five steel posts clad in hardwood and installed untreated pine frame still to be clad in hardwood;

x) breezeway not constructed in accordance with the plans - too small;

xi) erosion caused by builder — the builder failed to have due regard to site drainage- unattended concrete slag formed gutters concentrating water runoff and caused erosion;

xii) the builder failed to install downpipes when roof went on; thus, ignoring erosion;

xiii) further erosion caused by builder digging a hole;

xiv) the gutter was installed prior to house cladding and it abutted a wall — no allowance was made for the cladding and the builder/cladder just clad around the gutter allowing the gutter to penetrate into the wall;

xv) doors do not lock — lock up stage had been paid by clients but internal graffiti occurred during July school holidays;

19 Ibid.

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xvi) verandah double door opens itself if shaken by the wind;

xvii) one wall out of parallel with ceiling and not plumb;

xviii) bi-fold window will not fold up as designed due to incorrect installation;

xix) holes in gyprock;

xx) breezeway frontal not to plan — too narrow;

xxi) defective roof construction;

xxii) no jamb for external door;

xxiii) louvres - unable to lock;

xxiv) gyprock broken when moulding;

xxv) no skylights as per plan;

xxvi) failing to supervise the Works properly.

[31] Mr and Mrs Hopper filed a separate complaint to the QBCC with respect to defects.20 Further, Mr and Mrs Hopper allege that the individual with whom they had engaged, namely Mr Ward, had held himself to be a builder but in fact he was a permanently excluded individual pursuant to the QBCC Act. Section 56AC (6) relevantly provides that a company is an excluded company if an individual who is an influential person for the company is an excluded individual for a relevant event. Furthermore, they argue, s 43 of the QBCC Act provides that the company must ensure that any building work carried out is personally supervised by the company's nominee or an officer or employee of the company who holds a relevant licence. As a result, Mr and Mrs Hopper suggest that Mr Ward supervised the Works and, in those circumstances, Success Homes breached the Act.

[32] Mr and Mrs Hopper urged the tribunal to accept that they were not restricted to the reasons stated in the Notice of Termination and they were entitled to terminate the contract because:

i) Success Homes was in breach of 27.4(d) of the contract by unreasonably failing to perform the work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress; and/or

ii) Success Homes had repudiated the contract; and/or

iii) Success Homes was in serious breach of an intermediate term of the contract; and/or

iv) Success Homes was in breach of the Act because the work was not supervised by a person referred to in s 43; and/or

v) Success Homes failed to perform the Works competently.

20 QBCC decision on 20 March 2017 to direct rectification under section 72 of the QBCC Act, then

reviewed internally with a decision made by June Blaney 28 July 2017.

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[33] As a decision-maker under section 21 of the QCAT Act, the QBCC has the responsibility of using its best endeavours to assist the tribunal in producing the correct and preferable decision.

[34] It was common ground that if Mr and Mrs Hopper were successful in the tribunal proceedings then:

a) Their insurance claim for non-completion of residential construction work would be assessed under the Statutory Insurance Scheme in accordance with the terms and conditions of the Insurance Policy Conditions; and

b) If an insurance claim was approved, the Commission may seek to recover the amount paid to Mr and Mrs Hopper under the Statutory Insurance Scheme from Success Homes as a debt.21

[35] The issues in dispute between Mr and Mrs Hopper and Success Homes are whether Success Homes was in substantial breach of the Construction Contract for any, or all, of the following:

a) The alleged delay in progressing the Works and whether there were extensions of time which extended the practical completion date;

b) Whether the alleged delays were contributed to by Mr and Mrs Hopper;

c) Whether Success Homes performed the Works competently, given the defects identified by Mr and Mrs Hopper and the QBCC;

d) Whether the failure of Success Homes to ensure the Works were supervised by their nominee amounts to a substantial breach of the Construction Contract; and

e) Whether Mr and Mrs Hopper or Success Homes repudiated the Contract.

[36] In evidence at the tribunal hearing, Mr Hopper explained that although the contract was signed in February 2015, work did not commence until September 2015. He attributed the delay to the failings of Success Homes. That is, the builder took no appreciable action for several months and there was a delay in providing certification.

[37] The QBCC referred to the correspondence of the former solicitors for Success Homes in stating that Success Homes submitted three extension of time requests to Mr and Mrs Hopper. The tribunal was invited to find that Mr and Mrs Hopper had therefore breached clause 14.5 of the Construction Contract, because they did not respond to the extension of time requests.22 The tribunal rejects that approach. At the tribunal hearing, when asked about the extension of time requests, Mr Ward was unsure as to whether the extension forms had been given to the owners. Vaguely, Mr Ward gave evidence of recalling that he gave one form to Mr Hopper. He was unconvincing in the detail he provided as to the reasons for the extension of time claims and unconvincing as to whether the claim forms had been provided to Mr and Mrs Hopper. The evidence of Mr and Mrs Hopper in this regard was to the effect that the extensions

21 QBCC Act, s 71(1), s 71(3). 22 Page 560 of the SOR.

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of time allegedly sought by Success Homes were ‘fabricated and unsigned’23 and they did not receive the extension of time applications.24 The tribunal accepts the evidence of Mr and Mrs Hopper in this regard. The material available to the tribunal showed that the claim forms were not signed by the owner or owner’s representative by way of acknowledgement of receipt, or acceptance of the extension claimed in each instance. A building contractor must provide extension of time claim forms to owners within 10 business days of the contractor becoming aware of the cause and extent of the delay or when the contractor reasonably ought to have become aware of the cause and the extent of the delay. If a claim for an extension of time is made, it is incumbent upon the contractor to seek out the response to the extension of time claim by the owner. The owner should be given a clear opportunity to agree with the extension of time claim, reject the extension of time claim or reject part of the extension of time claim. In any event, there should be at least an acknowledgement of receipt of the claim. The claims did not include any acknowledgement of receipt by the owners and therefore no owners’ response to the claims requested by the builder. That is particularly significant in this case where Success Homes seeks to justify its position in relation to what it says is the date for practical completion. The tribunal draws an adverse inference against Success Homes for its failure to produce evidence of having served the extension of time claim forms and even if one or more of the forms were served, the tribunal draws an adverse inference against Success Homes for its failure to seek an acknowledgement of receipt. Prior to, and during, the tribunal hearing neither Success Homes nor QBCC produced any substantial evidence contrary to the allegations of Mr and Mrs Hopper that the extensions of time claimed by Success Homes were never made. In light of failure to produce such evidence, the tribunal prefers the evidence of Mr and Mrs Hopper in this regard as to the issue of delay. The tribunal determines as a finding of fact, particularly given the equivocal evidence of Mr Ward, that Success Homes did not serve the any extension of time claim forms on Mr and Mrs Hopper and as a result the tribunal does not accept the submission by Success Homes, through its solicitors correspondence, that the date of practical completion was extended until 29 July 2016. Regardless, the extension of time claim forms included vague and unspecified causes for the delay in achieving practical completion. Success Homes referred to ‘failure to return selection list on time’, ‘changes to internal walls, electrical layout, studio bench et cetera’ and ‘failure to finalise kitchen design on time’ as the reasons for a claimed total of 82 days. The material provided to the tribunal does not include any substantiation behind these alleged claims and at the tribunal hearing Mr Ward was not able to provide detail as to the basis upon which these claims were made. One alleged extension of time claim related to the ‘failure to finalise kitchen design on time’, where Success Homes claimed a period of 40 days, however the cabinetmaker responsible for the preparation of the kitchen was not called to give evidence.

[38] Given the tribunal’s finding of fact in relation to the purported extension of time applications, it follows that practical completion remained as 10 May 2016, as agreed by Mr and Mrs Hopper and Success Homes in the EDR Agreement. The suggestion by Success Homes that practical completion was not due until 29 July 2016, because of the extension of time requests, is rejected. As such the Notice to Remedy Breach, served on 22 July 2016, by representatives for Mr and Mrs Hopper to representatives of Success Homes was valid.

23 Tab 1 of Applicants' Material. 24 At page 438 of the SOR.

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[39] The tribunal finds that the Works were far from completed when the owners purported to terminate the Construction Contract on 10 August 2016. The building construction was relatively modest. The home to be constructed was a low set dwelling which appears to be unremarkable in terms of complexity. The tribunal is of the view that Success Homes delayed the process of the Works unreasonably to the point where Mr and Mrs Hopper were justified in terminating the agreement.

[40] The tribunal forms that view based on the delay in completing the works by the date for practical completion being 10 May 2016. Whilst the tribunal acknowledges that clause 27 of the contract conditions does not specifically refer to failure to complete the works to achieve Practical Completion by the Date for Practical Completion, Mr and Mrs Hopper were nevertheless entitled to terminate the contract given that they had appropriately alleged a substantial breach of the contract by Success Homes in the Notice of Substantial Breach. The tribunal finds that the Notice of Substantial Breach was valid, and it did comply with clause 27 of the conditions of the contract. In any event, the Notice of Substantial Breach was sufficient to justify termination of the contract at common law given the substantial breach of its obligations by Success Homes. Given the tribunal’s conclusion, the tribunal need not go further to consider whether Mr and Mrs Hopper had an entitlement to terminate the contract for other reasons. Although not expressly stated in the Notice of Termination, it is clear to the tribunal that Success Homes had unreasonably failed to perform the work required of it in a reasonable time and had failed to maintain reasonable progress. Therefore, it unreasonably failed to perform the work diligently and was subject to unreasonable delay, justifying the actions taken by Mr and Mrs Hopper.

[41] The evidence before the tribunal is that Mr and Mrs Hopper had reached the stage of engaging a builder, Mr Maxwell Charles Land (‘Mr Land’), to provide a quotation to complete the incomplete works. Mr and Mrs Hopper engaged Mr Land to complete the works by contract dated 2 May 2017 for a contract price of $87,500.

[42] The tribunal makes a finding of fact that Success Homes was in substantial breach of the Construction Contract due to its failure to achieve practical completion by the date for practical completion as required by clause 13.1 of the Construction Contract. The tribunal determines as a finding of fact that Success Homes was in serious breach of an intermediate term of the Contract i.e. the date for Practical Completion. Mr and Mrs Hopper did not delay or obstruct Success Homes in the progress of the Works.

[43] The tribunal rejects arguments advanced by representatives of Success Homes that Mr and Mrs Hopper were in breach of clause 27.3(c) of the Construction Contract by reason of their (alleged) failure to return selection list on time,25 changes to internal walls, electrical layout, studio bench etc.,26 and failure to finalise kitchen design on time.27 Mr Ward gave vague and unconvincing evidence in relation to the alleged failures by Mr and Mrs Hopper to cooperate with Success Homes in the provision of selections and alleged changes. In any event, if there was a delay the tribunal makes a finding of fact that it did not affect the dates by which Success Homes undertook the Works.

25 Page 564 of the SOR. 26 Page 565 of the SOR. 27 Page 566 of the SOR.

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[44] The tribunal finds that Mr and Mrs Hopper did not repudiate the Construction Contract by their purported termination. It follows that Success Homes could not have accepted the actions of Mr and Mrs Hopper as a repudiation when it purported to terminate the construction Contract on 11 August 2016. The tribunal determines that the purported termination of the Construction Contract by Success Homes on 11 August 2016 had no effect at law.

[45] Success Homes failed to diligently perform works and therefore the tribunal finds that Success Homes failed to perform works competently. Undertaking and completing work in a timely fashion is an integral aspect of performing work competently. The tribunal accepts the findings of the QBCC that there were defects in the Works and acknowledges that the QBCC did recognise some work as defective.28 But given the findings of the tribunal, it is unnecessary to determine whether such failure by Success Homes amounts to a substantial breach of the Construction Contract.

[46] The tribunal finds that Mr and Mrs Hopper were entitled to rely on the breach of clause 27.4 of the Construction Contract by Success Homes, namely, unreasonably failing to perform the work diligently, or unreasonably delaying, suspending or failing to maintain reasonable progress, although that ground was not raised in the Notice to Remedy Breach.29 The tribunal finds that Success Homes repudiated the Construction Contract by its conduct.30

[47] The tribunal is of the view that the delay in the works by Success Homes was of inordinate length and a common law right to terminate did arise in the circumstances.31 in Castle Constructions (Old) Pty Ltd v Pourasad [2015] QCAT 17 [89], this tribunal stated that:

At common law, if one party renounces his or her liabilities under a contract demonstrating an intention to no longer be bound or to fulfil it in a manner substantially inconsistent with its obligations, then an innocent party is entitled to accept the repudiation and terminate the contract.32 All of the circumstances relevant to performance may be taken into account in deciding whether there has been a repudiation. A party that is in breach of a contract may still accept repudiation by the other party, provided that it has not itself repudiated the contract.33 However, a party cannot take advantage of its own non-compliance with the contract.34 If there is a causal relationship between the breach by the party purporting to terminate and the default of the other party, a presumption operates that a party cannot take advantage of their own default to terminate.35

[48] In Mitchamy Developments Pty Ltd v Adams & Anor,36 it was held failure to reach practical completion by the date for practical completion does not, in itself, amount to a substantial breach of contract.

28 At page 438 of the SOR. 29 Botros & Anor v Freedom Homes Pty Ltd [1999] QCA 150, applied. 30 Ibid. 31 Adopting an approach contemplated as possible by the tribunal in Castle Constructions (Old) Pty Ltd

v Pourasad [2015] QCAT 17 [85]. 32 Shevill v Builders Licensing Board (1982) 149 CLR 620. 33 For example, see Kelly v Desnoe [1985] 2 Qd R 477. 34 Quinn Villages Pty Ltd v Mulherin [2006] QCA 433. 35 Nina's Bar & Bistro v MBE Corporation [1984] 3 NSWLR 613. 36 Mitchamy Developments Pty Ltd v Adams & Anor [2010] QCAT 484.

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[49] It is a question of degree as to whether success Homes was in substantial breach of the contract by unreasonably failing to perform the work diligently and unreasonably delaying, suspending or failing to maintain reasonable project progress for the works. That is contemplated in clause 26 of the contract. The tribunal determines that upon being served the Notice of Default, Success Homes had an opportunity to at least attempt to perform the works diligently and maintain reasonable progress. It failed to do so, and it failed to provide any reasonable indication of an intention to do so. In those circumstances, given that there had already been an agreement struck at early dispute resolution, Success Homes had evidenced a clear intention not to perform the work to maintain reasonable progress for the works. Therefore, it failed to perform the Works diligently. In the circumstances, the tribunal finds that it would be unreasonable to expect Mr and Mrs Hopper to have waited any longer in the hope that Success Homes would have changed its behaviours to the point where it would make reasonable progress. The evidence clearly indicates that the allegations made by Mr and Mrs Hopper against Success Homes were supported. It is not a case where Mr and Mrs Hopper would have been adequately compensated through liquidated damages. Mr and Mrs Hopper have established to the satisfaction of the tribunal that the delay by Success Homes was established through a lack of activity on the property over a significant period and that no satisfactory explanation has been provided by Success Homes for the delays.37 The delays occasioned by Success Homes affected a critical path in the completion of the Works. The delay by Success Homes was not a short delay and did lead to important time consequences and therefore the tribunal finds it to be a substantial breach of the Construction Contract.38

[50] In determining that Success Homes was in substantial breach of the contract, the tribunal identifies primarily, its delay in diligently performing the terms of the contract and evaluates that breach in the context of the nature and the consequences of the breach.39

[51] I adopt the approach of Acting Senior Member Browne (as the Senior Member then was) in Cowen & Anor v Queensland Building and Construction Commission40 in that regard:

It is settled law that if there is conduct by one party which evinces an unwillingness or an inability to render substantial performance of the contract, such conduct may be described as repudiatory breach of contract. An innocent party is entitled to accept the repudiation and terminate the contract [Shevill v Builders Licensing Board (1982) 149 CLR 620, 625-626].

In Koompahtoo’s case the High Court said that repudiatory conduct may be described as conduct of a party which ‘evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations’ [Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115, 44]. The High Court said the test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. In Koompahtoo’s case the High Court said

37 See Dura (Aust) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99. 38 Ibid [442]-[444]. 39 See Stojanovski v Australian Dream Homes [2015] VSC 404. 40 [2017] QCAT 416, [35-36].

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there may be cases where a failure to perform, even if not a breach of an essential term, manifests unwillingness or inability to perform.

[52] As noted by Member Howard (as the senior member then was) in MacDonald v Queensland Building and Construction Commission,41 the courts have considered the common law right to terminate a contract is only excluded when the contract contains a clear intention to exclude it. In the Construction Contract, there is no specific exclusion of the common law right to terminate the contract. Clause 22 of the contract provides that the builder may, without prejudice to any other rights or remedies, terminate the contract by further written notice to the owner. In the matter of McDonald, Member Howard noted that the use of the words ‘or exercise any other right or remedy’ indicated an intention to preserve the operation of common law rights in addition to contractual rights. I respectfully adopt that approach. Therefore, as a matter of contractual construction, the contract did not exclude either party from exercising any common law right to terminate.

[53] The tribunal finds that Mr and Mrs Hopper were entitled to terminate the Construction Contract given that Success Homes was in substantial breach of the contract and that appropriate notice was given to Success Homes to remedy the breach and that the breach had not been remedied. Even though Mr and Mrs Hopper initially only relied upon the failure by Success Homes to reach practical completion it does have legal justification to rely on any or other specific grounds to terminate the contract even though that specific ground was not relied upon at the time of termination.

[54] Repudiation requires a clear indication of the absence of readiness and willingness to perform the contract.42 The tribunal determines that Success Homes repudiated the contract. As result of this repudiation, the tribunal is satisfied that Mr and Mrs Hopper did act within their legal right to accept the repudiation and elect to terminate the Construction Contract. Given my finding that Success Homes breached the contract to the point where it repudiated the contract, which was accepted by Mr and Mrs Hopper, I need not consider whether Success Homes breached an ‘essential term’ of the contract. I find that Success Homes breached the contract, which was sufficient under the contract and at common law to provide appropriate grounds for termination. In Koompahtoo Local Aboriginal Land Council & Anor v Sanpine Pty Ltd & Anor,43 the High Court dealt with the entitlement of a party when faced with a breach or breaches of a non-essential term justifying termination. Applying that law to the current case, I am satisfied that there have been sufficient serious breaches of (at least) non-essential terms justifying termination by Mr and Mrs Hopper. These breaches ‘go to the root of the contract’. The breaches by Success Homes have deprived Mr and Mrs Hopper of a substantial part of the benefit for which they contracted.

[55] By entering into the EDR Agreement the Construction Contract has, in effect, been varied and Mrs Hopper were unable to reasonably rely on the original terms of the Contract with respect to the date for practical completion. However, the tribunal is entitled to consider the factual circumstances that led to the parties participating in the EDR process and arriving at the EDR Agreement. The tribunal determines that at the time the parties entered into the EDR Agreement, Success Homes had already been

41 [2014] QCAT 158. 42 Shevill v Builders Licensing Board (1982) 149 CLR 620. 43 (2007) 233 CLR 115.

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unreasonably delaying progress of the Works. The tribunal accepts that as a result of the agreement, Mr and Mrs Hopper conceded to Success Homes the opportunity to progress the works with a view to obtaining practical completion by 10 May 2016,44 however Success Homes continued to unreasonably delay progress of the works after that date.

[56] The tribunal determines as findings of fact that the delays were occasioned by Success Homes in an unacceptable manner. The tribunal determines that Success Homes did not make extension of time requests or at least did not do so appropriately, and the tribunal determines that Mr and Mrs Hopper did not cause delays in the Works reaching practical completion.

[57] The tribunal determines therefore that Success Homes was in breach of clause 27.4(d) as alleged by Mr and Mrs Hopper, and its delays did amount to a repudiation of the Construction Contract.

[58] Given that finding, the tribunal need not consider whether the defects in the works by Success Homes, as established by the QBCC, amounted to failure to perform the Works competently such as to give rise to a right to terminate the contract. For the same reasons, the tribunal need not consider whether the alleged breach of section 43 of the QBCC Act in relation to the failure of the nominee of Success Homes to supervise the Works did occur, and if it did, whether that was sufficient to lawfully enable Mr and Mrs Hopper to terminate the Construction Contract.

[59] Mr and Mrs Hopper did lawfully terminate the Construction Contract. It follows that Success Homes has therefore failed to complete the Construction Contract in accordance with the law.

[60] The role of the tribunal in this hearing is to review the Decision of the QBCC.45 The tribunal is to ‘produce the correct and preferable decision’.46 The tribunal does so by way of a fresh hearing on the merits.47 The tribunal may:

a) confirm or amend the Decision; or

b) set aside the Decision and substitute its own decision; or

c) set aside the Decision and return the matter to the QBCC for reconsideration, with the directions the tribunal considers appropriate.48

[61] In arriving at its decision, the tribunal acknowledges that the law relevant to this dispute included the QBCC Act current as at 1 January 2015, and the Queensland Building and Construction Regulation 2003 (Qld) (‘the QBCC Regulations’) current as at 1 January 2015.49 The QBCC Act establishes the Statutory Insurance Scheme and comprises sections 67X to 71AC (inclusive). Part 11 of Schedule 1 of the QBCC Act sets out the transitional provisions for the Queensland Building and Construction

44 The date stipulated in the EDR Agreement for practical completion. 45 QBCC Act, s 86(1)(h) and s 87; and the QCAT Act, s 9. 46 QCAT Act, s 20(1). 47 Ibid, s 20(2). 48 Ibid, s 24(1). 49 That is because the Construction Contract was entered into on 20 February 2015.

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Commission and Other Legislation Amendment Act 2014 (Qld) (‘the Amendment Act’).

[62] Section 65 of Schedule 1 of the QBCC Act establishes the continuation and finalisation of matters under the former part 5 of the QBCC Act. In this case, relevant rights, privileges or liabilities were required, accrued or incurred by the parties and those rights or privileges have not been exhausted nor has any liability been released.50 Existing policies of insurance that came into force under former part 5 of the QBCC Act continue in force.51 Despite the replacement of part 5 by the Amendment Act, the former part 5 continues to apply to a contract for residential construction work if the contract was entered into before the replacement day.52 Policies of insurance are statutory instruments that are subordinate legislation.53 In this case, the Policy of Insurance came into force because Mr and Mrs Hopper54 entered into a contract for the performance of residential construction work with Success Homes, being a licensed contractor (to enter into contracts with consumers to carry out residential construction). The tribunal finds that the Construction Contract was covered by the Statutory Insurance Scheme.55 The tribunal is satisfied that the QBCC received payment of an insurance premium as soon as practicable after the Construction Contract was entered into with Success Homes.56 The tribunal is satisfied that the QBCC did issue a certificate of insurance in respect of the Works on 24 July 2015.57 The tribunal is satisfied that the Works are covered by a policy of insurance under the Statutory Insurance Scheme.58 The tribunal is satisfied that Mr and Mrs Hopper, being people claiming to be entitled to indemnity under the Statutory Insurance Scheme, have given notice of the claim to the QBCC in accordance with the QBCC Regulations. The tribunal is satisfied that the Works are residential construction work as defined in section 10 of the Regulations.59

[63] The tribunal considers Clause 1.1 of the Insurance Policy Conditions, which states that:

Subject to the terms of this policy, the QBCC agrees to pay for loss suffered by the Insured in the event of the contractor failing to complete the contract for the residential construction work.

[64] Clause 1.2 of the Insurance Policy Conditions states that:

50 QBCC Act, s 65(1). 51 Ibid, s 66(1). 52 Ibid, s 66(2). 53 Statutory Instruments Act 1992 (Qld), s 7 and s 9. 54 Mr and Mrs Hopper are consumers as defined in Schedule 2 of the QBCC Act to mean ‘a person for

whom building work is carried out but does not include a building contractor for whom building work is carried out by a subcontractor’.

55 QBCC Act, s 69(2)(a). 56 That is, fulfilling the requirements of the QBCC Act, s 68(1A)(a). 57 That is, fulfilling the requirements of the QBCC Act, s 69(1). 58 That is, fulfilling the requirements of the QBCC Act, s 68(3). In any event, in accordance with

section 69(3) of the QBCC Act, a policy of insurance will come into force in the terms stated in the Board's policies (meaning the Insurance Policy Conditions) irrespective of whether or not an insurance premium has been paid or a certificate of insurance has been issued.

59 Section 10 of the QBCC Regulations defines residential construction work as primary building work or associated building work, for the purposes of Schedule 2 of the QBCC Act.

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The QBCC is only liable to pay for loss under this Part when the contract is for a fixed price and the Insured has properly terminated the contract with the contractor.

[65] Given the tribunal findings, the QBCC must pay for loss suffered by Mr and Mrs Hopper given that Success Homes has failed to complete the Construction Contract. The tribunal is satisfied that the Construction Contract was a contract60 for a fixed price61 and that Mr and Mrs Hopper properly terminated the contract with Success Homes. The tribunal is satisfied that Mr and Mrs Hopper were the ‘insured’, and Success Homes was a ‘contractor’, as per the definitions of ‘insured’ and 'contractor' in clause 11.1 of the Insurance Policy Conditions.

[66] The tribunal finds that Mr and Mrs Hopper lawfully terminated the Construction Contract based on a breach of that contract by Success Homes and at common law. The tribunal determines as finding of fact that Success Homes was in substantial breach of the Construction Contract because it failed to perform the work under the Construction Contract competently by unreasonably failing to perform the Work diligently or unreasonably delaying, suspending or failing to maintain reasonable progress.62 The tribunal determines as a finding of fact that Mr and Mrs Hopper did provide appropriate notice to Success Homes to remedy the breach and Success Homes did not remedy the breach. The tribunal finds that Success Homes had repudiated the Construction Contract by its conduct. The tribunal finds that Mr and Mrs Hopper did have the right to terminate the Construction Contract at the time of issuing the Notice of Termination. In coming to its conclusion, the tribunal determines that Success Homes was in substantial breach because of its general delay in the rate of progress of the construction activities, not simply by reference to the date for practical completion.63

[67] The decision of the QBCC dated 9 February 2017 is set aside and replaced with a decision by the tribunal. Therefore, Mr and Mrs Hopper are prima facie entitled to claim under the Statutory Insurance Scheme.

[68] The tribunal allows Mr and Mrs Hopper’s Claim under the Statutory Insurance Scheme in accordance with Part 5 of the QBCC Act.

[69] One of the objects of the QBCC Act is to regulate domestic building contracts to achieve a reasonable balance between the interests of building contractors and building owners.64

[70] I turn to the question of costs. The QBCC sought to reserve its right with respect to costs pending the tribunal delivering a decision in respect of the review application.65 At the tribunal hearing, Mr and Mrs Hopper did not challenge that position, nor did they call upon the tribunal to make a costs order in their favour, if successful. The tribunal does have a discretion to award costs in administrative review matters to a

60 As per the definition of 'contract' in clause 11.1 of the Insurance Policy Conditions. 61 As per the definition of ‘fixed price’ in clause 11.1 of the Insurance Policy Conditions. 62 Refer to clause 27.4 of the Construction Contract. 63 Mitchamy Developments Pty Ltd v Adams & Anor [2010] QCAT 484 and Dura (Australia)

Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2012] VSC 99. 64 QBCC Act, s 3(b). 65 QCAT Act s 102, referred to in the QBCC’s submissions, dated 28 November 2018 [74(2)].

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successful applicant. However, the tribunal must consider whether the usual position in s 100 of the QCAT Act should be displaced. This is, whether the interests of justice require a costs order to be made.66 The tribunal is of the view that this is a matter that requires further consideration if called upon to decide whether the circumstances of this case meet the level required to overcome the strong contra-indication against awarding costs contained in s 100 of the QCAT Act. Mr and Mrs Hopper, the QBCC or Success Homes may make an application for costs consequent upon this decision, by the filing of a Miscellaneous Application together with supporting submissions, if desired.67

66 Perkins & Anor v Queensland Building and Construction Commission & Anor [2018] QCAT 15. 67 Adopting an approach used by Member Paratz, referred to in Whalley v Queensland Building and

Construction Commission (No 2) [2017] QCAT 188.