The QBCC’s statutory objectives include, amongst other things, to regulate the building industry, to ensure the maintenance of proper standards in the industry and to achieve a reasonable balance between the interests of building contractors and consumers.^[1]  

The objects also provide for remedies for defective building work, as well as the provision of support, education and advice to consumers and to those that undertake building work.^[2]  

The primary enforcement method by which the QBCC responds to defective building work is to issue a direction to rectify defective or incomplete work or to remedy consequential damage to whoever is deemed to have carried out the building work.  These provisions are set out in Part 6 of the Queensland Building and Constriction Commission Act 1991 (the “QBCC Act”).

QBCC’s Rectification of Building Work Policy states that its policy is that the building contractor who carries out defective building work should be required to rectify that work.^[3]    

Who may request a direction to rectify?

A consumer^[4] may ask the QBCC to give a direction to rectify building work the consumer considers is defective or incomplete.^[5]  Likewise, the owner or occupier of a residential property adjacent to a building site may ask the QBCC to give a direction to remedy any consequential damage done to a residential property on the site or adjacent to it.^[6]

Such requests must be made within 12 months after the person becomes aware of the defective or incomplete building work or the consequential damage.^[7]

Once a complaint is submitted, the QBCC will consider the complaint and may seek to have the parties resolve the complaint between them. It may carry out an inspection and issue an assessment report.

Following a site inspection, the QBCC may issue a direction any relevant parties for any defective building work.

Issuing the direction to rectify or remedy

The QBCC may issue a direction to rectify or remedy whether or not an owner occupier has made a request.^[8]    

If the QBCC is of the opinion that building work is defective or incomplete, the QBCC has the authority to exercise its discretion to direct the person who carried out the building work to rectify the building work within a stipulated timeframe.  Notably, the identification of “who carried out the building work” is dealt with in a separate provision and is much wider in scope than the plain words that appear in that commonly used phrase (see here).

A direction to rectify or remedy may be given to more than 1 person for the same building work.^[9]      

A direction to rectify or remedy may require that a building (or part of a building) be demolished and building work be recommenced if it is necessary to do so in order to rectify building work.^[10]    

If a direction to rectify or remedy is given to a person who is not currently licensed to carry out the required work, the person must have the work carried out by a licensed contractor.^[11]    

The fact that a direction to rectify is given does not prevent the QBCC from taking additional adverse action against a person for the building work to which the direction relates.^[12]    

Time limitation on giving direction

A direction to rectify or remedy cannot be given more than 6 years and 6 months after the building work to which the direction relates was completed or left in an incomplete state unless the QBCC applies to the Queensland Civil and Administrative Tribunal (“QCAT” or “Tribunal”) and the Tribunal is satisfied that there is, in the circumstances of a particular case, sufficient reason for extending the time for giving the direction and extends the time accordingly.^[13]

General Considerations

For the QBCC to issue a direction to rectify to a person, the QBCC must be satisfied that:^[14]  

• there was “building work” involved;
• the building work was defective and/or incomplete;
• the person is responsible for that work; and
• in all the circumstances, a discretion should be exercised to issue the person a direction to rectify.

Notably, the definition of “building work” is very broad in scope, and can include classes of work not ordinarily thought of as “building work”.

In deciding whether to issue a direction to rectify, the QBCC may take into consideration all the circumstances it considers are reasonably relevant, and those circumstances may include the terms of the contract;^[15] the competing interests of the parties;^[16] the cause of the defective building work and any blameworthiness of the home owner.^[17]  

Consideration of fairness

However, the QBCC is not required to give the direction if it is satisfied that, in the circumstances, it would be unfair to the person to give the direction.

Period to rectify or remediate under direction

Previously, the period stated in the direction for compliance had to be at least 28 days, with the option of a lesser period if certain criteria were met. However, that provision was removed and the QBCC Act was recently amended ^[18] to require the QBCC to “make the direction during the prescribed period”^[19] as stated in the direction, which (at the time of writing this article) was stipulated to end 35 days from the day the direction was made.^[20]    

Thus, there is now no minimum period that the QBCC is required to allow for compliance with a direction, and there is instead a maximum period within which the person given the notice must comply with it.

Extension of time for compliance

A person given a direction to rectify or remedy may apply to the QBCC for an extension of the period for compliance with the direction.  The application must:

• be made before the end of the period stated in the direction; and
• state the reasons the extension is needed.

The direction to rectify or remedy is stayed while the QBCC considers the application.^[21]    

The QBCC must decide whether or not to grant the extension, and inform the applicant of the decision, within 10 business days after receiving the application.^[22]  But if the QBCC fails to do so, then it is taken to have decided to refuse the application.^[23]    

If the QBCC refuses to grant the extension, it must give the applicant written notice of the refusal.^[24]    

The QBCC may grant the extension only if satisfied it is likely to be impracticable for the applicant to comply with the direction within the period stated in the direction,^[25] but it must grant the extension if satisfied the person affected by the building work the subject of the direction has agreed to the extension being applied for.^[26]    

If the QBCC grants the extension, it must give the applicant a written notice stating the period within which the applicant must rectify the work or remedy the damage.^[27]    

Offences

The following conduct is an offence under the QBCC Act:

• delaying, without reasonable excuse, to rectify building work that is defective or incomplete, or remedying consequential damage, as required by a direction to rectify given to the person.^[28]    
• obstructing, without reasonable excuse, another person rectifying building work that is defective or incomplete, or remedying consequential damage, as required by a direction to rectify given to the person.^[29]
• failing to rectify building work that is defective or incomplete, or to remedy consequential damage, as required by a direction to rectify or remedy given to the person, subject to any extension of time granted by the QBCC.

Failure to comply with a QBCC Direction, within the time specified, may result in:

• an adverse entry of “not complied” on a contractor’s public record viewable by the public;
• up to 10 demerit points on the contractor’s licence (which is one third of the total demerit points allowed in a three-year period);
• a fine from the QBCC of $2,669, or if prosecuted in the courts, up to $166,812.50 (company) or $33,362.50 (individual);
• if an insurance claim is paid under the Statutory Insurance Scheme – payment of the amount of that claim.

Tier 1 defective work

Further provisions apply if the work is grossly deficient.  "Tier 1 defective work" means grossly defective building work that falls below the standard reasonably expected of a licensed contractor for the type of building work, and either:

• adversely affects the structural performance of a building to the extent that a person could not reasonably be expected to use the building for the purpose for which it was, or is being, erected or constructed;^[30] or
• is likely to cause the death of, or grievous bodily harm to, a person.^[31]    

A person who carries out^[32] “tier 1 defective work” will be taken not to be a fit and proper person to hold a licence, and if a licensee, will have their licence cancelled.^[33] As entitlement to hold a licence is contingent upon the person being taken to be a fit and proper person to do so, carrying out “tier 1 defective work” causes the person to be deemed a “banned individual” excluding them from entitlement to hold a licence.^[34]    

Review of the QBCC decision to issue a direction to rectify

There are three types of review that can be applied for in respect of a decision by the QBCC: an internal review conducted by the QBCC, an external merits review conducted by the Queensland Civil Administrative Tribunal (“QCAT” or “Tribunal”), and judicial review by the Queensland Supreme Court.

The QBCC Act limits the decisions reviewable by merits review to a select few, however this list of reviewable decisions includes any QBCC decision to give (or not give) a direction to rectify or remedy.^[35]    

In contrast, the determination that a person carried out “tier 1 defective work” is not a reviewable decision under the QBCC Act, meaning that the Tribunal has no jurisdiction to review the decision.^[36]    

Statutory Insurance Scheme

The purpose of the statutory insurance scheme is to provide assistance to consumers of residential construction work for loss associated with work that is defective or incomplete.^[37]    

If a direction to rectify is not complied with, then in the case of “residential construction work”^[38] covered by a Certificate of Insurance, the QBCC may arrange for defective or incomplete “residential construction work” to be rectified as a claim under the Queensland Home Warranty Scheme.

Under the scheme's policy, defective building work is described as being either "structural" or "non-structural".

The QBCC may seek tenders for carrying out building work if it is of the opinion that a person may be entitled to assistance under the statutory insurance scheme,^[39] and it may accept any tender that it considers appropriate, whether or not the tender was for the lowest cost.^[40]    

If the QBCC makes any payment on a claim under the statutory insurance scheme, it may recover the amount of the payment, as a debt, from the building contractor by whom the relevant residential construction work was (or was to be) carried out, or any other person through whose fault the claim arose.^[41]    

Note that the phrase “the building contractor by whom the relevant residential construction work was, or was to be, carried out” extends the meaning of those words far beyond just the building contractor by whom the work was (or was to be) carried out.^[42]

Likewise, the phrase “any other person through whose fault the claim arose” is defined to include any person who performed services for the work if the services were performed without proper care and skill.

Conclusion

Provisions of the QBCC Act relating to residential building work deal with the regulation of “building work” that is defective or incomplete or which has caused consequential damage to a residential property on the site or adjacent to it.

The scope of those provisions is much wider than what the plain words would suggest, due to extended scope and meaning given to commonly used and understood terms such as “building work” and “carried out”, making the provisions tricky to navigate by members of the public and less experienced practitioners.

If you are issued with a Notice to Rectify or Remedy, it is important to immediately seek competent legal advice regarding your options and potential liability.

Law Force specialises in resolving domestic building disputes and disputes with the QBCC, and remains ready to step in to assist you with your dispute.

Footnotes:

[1] QBCC Act section 3.

[2] QBCC Act section 3.

[3] Rectification of Building Work Policy clause (1).

[4] "Consumer" generally, means 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. Please note that this term has a different meaning under Part 5 of the QBCC Act dealing with the statutory insurance scheme.

[5] QBCC Act section 71J(1).

[6] QBCC Act section 71J(2).  See section 71H for the definition of “consequential damage”.

[7] QBCC Act section 71J(4).

[8] QBCC Act section72(8).

[9] QBCC Act section 72A(1).

[10] QBCC Act section 72A(2).

[11] QBCC Act section 72A(3).

[12] QBCC Act section 72A(5).

[13] QBCC Act section 72A(4).

[14] Hiettecorp Pty Ltd ATF Hiette Unit Trust v Queensland Building and Construction Commission [2018] QCAT 105, at [7].

[15] Doolan v Queensland Building and Construction Commission [2017] QCAT 58, [13].

[16] Stephenson v Queensland Building Services Authority [2005] QCCTB 59, [40].

[17] Duke Building Pty Ltd v Queensland Building and Construction Commission & Ors [2015] QCAT 397, [9]; R v His Honour Judge Miller and the Builders’ Registration Board of Queensland; ex-parte Graham Evans & Co (Qld) Pty Ltd [1987] 2 Qd R 446.

[18] Amended under the Building Industry Fairness (Security of Payment) Act 2017, section 281.

[19] QBCC Act section 72(2A).

[20] Queensland Building and Construction Commission Regulation, regulation 53A.  

[21] QBCC Act section 72B(9).

[22] QBCC Act section 72B(3).

[23] QBCC Act section 72B(8).

[24] QBCC Act section 72B(7).

[25] QBCC Act section 72B(4).

[26] QBCC Act section 72B(5).

[27] QBCC Act section 72B(6).

[28] QBCC Act section 72C(1).

[29] QBCC Act section 72C(2).

[30] The example given is: “A building is constructed and due to substandard building work all or a significant part of the building requires demolition or substantial reconstruction.”

[31] The example given is: “A fire protection contractor installs fire protection equipment that does not meet the requirements of the Building Code of Australia for the equipment. In the event of fire, the noncompliance is likely to result in the death of, or grievous bodily harm to, a person.”

[32] See QBCC Act section 67AB(2) for the meaning of “carries out”.

[33] QBCC Act section 67AH.

[34] QBCC Act Part 3D Banned Individuals.

[35] QBCC Act section 86(1)(e).

[36] Bloomer Constructions (Qld) Pty Ltd v Queensland Building and Construction Commission [2016] QCAT 374, [24].

[37] QBCC Act section 67X(2). Note that the reference here is to “residential construction work” and not “building work”

[38] See also QBCC Act section 67WB “Work not covered under the statutory insurance scheme”, and s 68 regarding persons not entitled to assistance under the statutory insurance scheme. A direction to rectify and remedy applies to “building work” as defined by the QBCC ACT.  In contrast, provisions relating to the Statutory Insurance Scheme apply only to “residential construction work” covered by a Certificate of Insurance.

[39] QBCC Act section 71A(1).

[40] QBCC Act section 71A(2).

[41] QBCC Act section 71(1)

[42] QBCC Act section 71(2).  

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Disclaimer – Reliance on Content

The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.