This article discusses unlicenced building work regulation under section 42 of the Queensland Building and Construction Commission Act 1991 (“QBCC Act”).

Unlicenced Building Work – QBCC Act section 42(1)

Section 42(1) of the QBCC Act stipulates that a person must not carry out (or undertake to carry out) building work unless the person holds a contractor’s licence of the appropriate class under the Ac.

A person will breach section 42(1) if they perform building work or undertake to do so (for example entering into a contract to perform the work) while unlicenced, or if they hold a current valid QBCC licence, but some of the building work they perform falls outside the scope of their particular licence.^[1]

What happens if section 42(1) is breached?

If an individual contravenes section 42(1), they are liable to be fined up to 250 penalty units (currently $35,937.50) for a first offence, and 300 penalty units (currently $43,125.00) for their second offence. For a third or later offence (or if the building work carried out is tier 1 defective work), an individual is liable for a penalty of up to 350 penalty units ($50,312.50), or up to 1 year’s imprisonment.

If a company is found guilty of the offence, the court may impose a maximum fine of an amount equal to 5 times the maximum fine for an individual.^[2]

Further, a person in breach is not entitled to any monetary or other consideration under the contract for carrying out the work,^[3] although they are not prevented from claiming “reasonable remuneration” for carrying out building work.^[4]

Claiming “Reasonable Remuneration”

In claiming “reasonable remuneration”, the person in breach of QBCC Act section 42 is not entitled to recover:^[5]

·       any more than the amount they paid in supplying materials and labour for carrying out the building work;

·       any amount for the supply of the person’s own labour;

·       any profit; and

·       any unreasonably incurred costs regarding supplying materials and labour.

Further, a person in breach of section 42 is unable to seek recovery of any disputed payment claim amounts under the Building Industry Fairness Act.^[6]

What happens to money already paid under the contract?

Because s.42(3) expressly declares that the unlicensed person is not entitled to monetary or other consideration for carrying out the work, the unlicensed person has no title to it. Consequently, if the unlicenced person receives payment for the unlicenced work, then there will be no identifiable legal basis on which they can claim to keep or retain it as against the person who paid it.^[7]  This means that the person who paid the money is legally entitled to claim it back.

‍Can the contract still be enforced by the other party?

Yes. In the case of Yongwoo Park v Betaland Pty Ltd,^[8] the builder performed unlicensed and defective building work. The homeowner had already paid the builder $6,000 of the $12,000 contract price when the contract was terminated for defective work and the failure to hold a QBCC licence.  

The Tribunal, having confirmed that the consequence of the builder’s breach of s 42(1) of the QBCC Act was that the contract was unenforceable by the builder,^[9] held that section 42 did not operate to deny the homeowner the right to enforce it against the builder.  Consequently, as the builder had failed to make out a claim for reasonable remuneration and had no right to retain the $6,000, it was required to refund that to the homeowner (as well as pay damages to cover the costs of rectifying defective building work in the sum of $17,000.00).

Need Assistance?

Unlicenced building work is unlawful, and the consequences of engaging in unlicenced building work can be severe.

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

Footnotes

^[1] Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd & Ors; Jones v Galaxy Developments Pty Ltd & Ors [2021] QCA 1, [54], citing: Sutton v Zullo Enterprises Pty Ltd [1999] QCA 417; [2000] 2 Qd R 196; Dart Holdings Pty Ltd v Total Concept Group Pty Ltd & Ors [2012] QSC 158.

^[2] Penalties and Sentences Act 1992, section 181B.

^[3] QBCC Act s 42(3).

^[4] QBCC Act s 42(4).

^[5] QBCC Act s 42(4).

^[6] Cant Contracting Pty Ltd v Cassella [2006] QCA 538, [30].

^[7] Marshall & Anor v Marshall, [1999] 1 Qd R 173, cited in Samjam Investments Pty Ltd v Chapman [2022] QCATA 86, [67].

^[8] [2017] QCAT228.

^[9] Yongwoo Park v Betaland Pty Ltd [2017]QCAT 228, [5], citing Sutton v Zullo Enterprises Pty Ltd [1999] QCA 417; [2000] 2 Qd R 196.

‍

‍

‍