The QBCC was recently given guidance by a member of QCAT who considered that this guidance would be useful to “assist the Commission” when dealing with claims under the Statutory Insurance Scheme.
Member McVeigh, in King & McDonald v Queensland Building and Construction Commission [2024] QCAT 138 observed that the Statutory Insurance Scheme was to provide assistance to consumers, by Schedule 6 of the Queensland Building and Construction Commission Regulation 2018.
To obtain assistance, Member McVeigh noted that the consumer must make the claim:
For a structural defect, within three months after the day they first become aware (or ought to have reasonably become aware) of the defect; or
For a non-structural defect, within seven months after the day they first became aware (or ought reasonably to have become aware) of the defect.
Member McVeigh also noted that (relevantly for this matter) a structural defect is defined to include a defect in the work which allows water penetration of the residence.
In the dispute, the consumers had noticed that certain skylights had not been installed in accordance with recommendations on 5 May 2020, and noticed water marks in cornice on 10 August 2020 before lodging a complaint with the QBCC on 13 August 2020.
While the QBCC issued a direction to rectify in December 2020, and decided in April 2021 that the rectification work was not of a satisfactory standard, in May 2021, the Commission decided that the consumers were not entitled to assistance under the Statutory Insurance Scheme on the basis that they knew of the defect on 5 May 2020 – 3 months and 8 days before the claim was made, about 8 days after the time limit of 3 months (for structural defects) had expired. So the issue was whether or not the 3 month time limit applied from the May date.
In the Member’s reasons which noted that the Commission’s interpretation of a certain section of the QBCC regulation “was, and always had been, untenable”, the Member observed that until the morning of the hearing, the QBCC maintained that a reasonable person would have known that – as the skylights had not been installed in accordance with the manufacturer’s recommendations – they were structurally defective, despite the fact that there was not at the time any evidence that there was or might be water penetration. The Member found that it was the noticing of the water marks that constituted the consumers becoming aware of the structural defect, and they made their claim to the QBCC three days afterwards.
The Member’s decision was critical of the approach of the QBCC to the claim, and the QBCC’s continued reliance upon a decision which the Member considered had limited application, dealing with a policy in different terms to the current policy, and also omitting a qualifying sentence in the decision.
The effect of the Member’s decision was that – in the Member’s view – it took more than the knowledge that there was a defect (which later provide to be a structural defect) to trigger the shorter time period for making a claim in respect of a structural defect. What was needed was for the consumers to be objectively aware that there was a structural defect.
This however does not mean that the consumers have to know that there is a defect, and that it is a structural defect under Schedule 6 to the QBCC Regulation 2018. It is sufficient that they know that the defect has one of the characteristics of a structural defect as are set out in the Regulation, which are (as at April 2024):
(a) if the work is for a residence or related roofed building—
(i) a defect in the work that causes or contributes to deflection or movement of the footing or slab of the residence or building so the residence or building no longer complies with the building assessment provisions under the Building Act 1975 ; or
(ii) the work does not comply with a performance requirement under the Building Code of Australia, part B1 or part 2.1 for the residence or building; or
(iii) a defect in the work that causes the residence or building to be uninhabitable or not reasonably accessible; or
(b) if the work is for a swimming pool—a defect in the work that allows water to escape through the shell of the swimming pool; or
(c) if the work is on or for a residence, related roofed building or swimming pool—a defect in the work that adversely affects the health or safety of persons who occupy or use the residence, building or swimming pool; or
(d) if the work is on or for a residence or related roofed building—a defect in the work that allows water penetration of the residence or building.
For enquiries in relation to building matters, including claims on the Statutory Insurance Scheme, please contact Justin Mathews at justinm@qbmlaw.com.au
