This article discusses the Queensland Civil and Administrative Tribunal ("Tribunal") case of Smith & Anor v Queensland Building and Construction Commission [2021] QCAT 397.^[1]

Background

In August 2018, Melissa and Cameron Smith entered into a contract with Mr Chad Wallace for the construction of a pre-moulded fibre-reinforced plastic swimming pool.  Once constructed, the pool was alleged to be defective in that the pool was not level, the builder had failed to install subsoil drainage around it, and an undersized swimming pool filter cartridge that would not sufficiently keep the water clean had been installed.

The Smiths lodged a complaint with the Queensland Building and Construction Commission ("QBCC") about the alleged defects.  A QBCC building inspector later undertook an inspection of the pool on 14 January 2020 and prepared a report of that date, identifying two items of defective building work as being:

• “Item 1: installation of swimming pool defective and not in accordance with the requirements of AS 1839:1994 Swimming Pools – premoulded fibre-reinforced plastic installation, clause 7.2 Pool drainage. The builder failed to install subsoil drainage around the swimming pool.”  
• “Item 2: installation of undersized swimming pool filter cartridge which will not sufficiently keep the water clean.”

The Smiths lodged a statutory insurance claim with respect to the defective work.  However, on 27 March 2020, the QBCC determined that neither item 1 nor item 2 were covered under the Queensland Home Warranty Scheme terms of cover, and rejected their claim.  

Confused about their rights regarding review of the QBCC’s decision, the Smiths initially complained to the Queensland Ombudsman (who dismissed their complaint) and neglected to otherwise take any steps to have the decision reviewed until after they sought legal advice in March 2021 and obtained a structural engineer report as to the defects.

 Time limitation of application for review

The right to a merits review of a QBCC decision is governed by the Queensland Building and Construction Commission Act 1991 (Qld) (“QBCC Act”), which in turn states that a person affected by a reviewable decision may apply to the Queensland Civil and Administrative Tribunal ("Tribunal") for a review of the reviewable decision as provided under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”).^[2]  The QCAT Act then provides that an application to review a reviewable decision must be filed within 28 days after the applicant is notified of the decision for which review is sort.^[3] However, the Tribunal may extend the period within which a person must make a review application.^[4]

In this case, because the 28-day deadline for the filing of an application for review had lapsed, the Smiths were prevented from applying for a review of the QBCC decision to reject their statutory insurance claim unless they could convince the Tribunal to extend the application period. Consequently, the Smiths filed an application with the Tribunal to extend that time. That application was opposed by the QBCC.

Application to extend time

Section 61(1) of the QCAT Act stipulates (in part) that the Tribunal may, by order, extend a time limit fixed for the start of a proceeding by the QCAT Act or an enabling Act; or extend or shorten a time limit fixed by those Acts or the rules; or waive compliance with another procedural requirement under those Acts or the rules.  However, the Tribunal is prevented from doing so if it would cause prejudice or detriment to a party (or potential party) to a proceeding that could not be remedied by an order for costs or damages.^[5]

When a party seeks to extend the time to file an application to review a decision, the usual factors considered by the Tribunal when making its decision include:^[6]

• Whether there is a satisfactory explanation for the delay;
• The merits of the applicant’s case;
• Whether extending time will result in prejudice to any adverse party;
• The length of the delay; and
• Whether it is in the interests of justice to grant the extension.

Structural defect?

Probably the most important factor and the one receiving most attention in the written decision, was the assessment of the merits of the case.

Defect Item 1 was the alleged failure by the builder to ensure appropriate subsoil drainage around the pre-moulded swimming pool.  This was necessary to relieve conditions that may arise where the external water pressure on the walls and floor of the swimming pool exceeds the internal water pressure and where the surrounding ground level rises above the normal operating water level of the swimming pool. The result in the Smiths’ case was that due to the defective work, one side of the swimming pool had lifted.  

While it was accepted that the workmanship was defective, the key issue in this case was whether the defect was a “structural defect”.

As we have stated in previous articles, the QBCC Act can be tricky to navigate because of its extensive use of definitions for words in common usage that change their meaning to something different, often catching those unfamiliar with the QBCC Act unaware. The definition of “structural defect” as it relates to “primary insurable work” for a swimming pool, is defined in the Queensland Building and Construction Commission Regulation 2018 (Qld) (“QBCC Regulation”) to be limited to:

• a defect in the work that allows water to escape through the shell of the swimming pool; or
• a defect in the work that adversely affects the health or safety of persons who use the swimming pool.

The distinction between whether the defect was a “structural defect” as defined under QBCC legislation or not was critical, because section 19 of the QBCC Regulation stipulates that there is no entitlement to claim assistance under the Statutory Insurance Scheme where a defect in the work for the swimming pool is not a structural defect.^[8]  Further primary insurable work for the erection, construction or installation of a swimming pool that is not claimable also includes:^[9]

• surfacing of an area outside the coping for the swimming pool; or
• work associated with the erection, construction or installation of the swimming pool, including, for example, paving, supplying or installing water features, swimming pool slides, diving boards and swimming pool equipment and housings; or
• steps for the swimming pool that are not fixed structures.

In this case, the Tribunal decided that the defect was not a “structural defect” within the meaning of that defined term, as there was no evidence presented by the Smiths to suggest either that the defect constituted by Item 1 allowed water to escape through the shell of the swimming pool, or that Item 1 adversely affected the health or safety of persons using the swimming pool.

Regarding defect Item 2, the QBCC conceded that Item 2 was structural defective building work, because it considered that the installation of the undersized swimming pool cartridge filter would adversely affect the health or safety of persons using the swimming pool due to the undersized filter not sufficiently keeping the water clean.

However, the QBCC characterised the installation as being “work associated with the erection, construction, or installation of a swimming pool”, which the QBCC Regulation excludes from statutory insurance coverage,^[10] and the Tribunal accepted that characterisation.

The outcome of the case

While the Tribunal also considered and made findings regarding the other factors listed above, the application turned primarily on the factors of delay and merits, with the Tribunal deciding that the delay in filing the application had not been satisfactorily explained, and that the Smiths’ prospects of success in the proceedings would be poor.  

Consequently, the Smiths’ application was rejected, which meant that they were prevented from filing any application to review the QBCC’s decision regarding the statutory insurance claim.

Takeaways

Not only was the outcome of the process unfortunate for the Smiths, it also appears that they wasted more than a year pursuing a remedy that the Tribunal assessed they were never entitled to.  This would not have happened if the Smiths had first sought legal advice from an experienced QBCC law firm such as Law Force Lawyers.

Need Assistance?

The regulations around QBCC statutory insurance claims are complex, restrictive and nuanced.  Disputes involving defective swimming pool construction are more widespread than publicised, and can be particularly troublesome if not managed correctly.  

For practical legal advice and effective support and assistance regarding your particular circumstances, contact Law Force Lawyers by calling us on 1300 445 000, or by emailing us at info@lawforce.com.au.

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References

[1] https://archive.sclqld.org.au/qjudgment/2021/QCAT21-397.pdf

[2] QBCC Act, section 87.

[3] QCAT Act, section 33(3), section 33(4)(a).

[4] QCAT Act, section 61(1)(a).

[5] QCAT Act, section 61(3).

[6] Crime and Misconduct Commission v Chapman & Anor [2011] QCAT 229, [9].

[7] QBCC Regulation, Schedule 6, section 2 Definitions “structural defect”.

[8] QBCC Regulation, Schedule 6, section 19(a)(i).

[9] QBCC Regulation, Schedule 6, section 19(a)(ii) to (iv).

[10] QBCC Regulation, Schedule 6, section 19(a)(iii).

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