Builder Beware: Strict Time Frames to Review a Direction to Rectify

A Queensland Building and Construction Commission (“QBCC”) direction to rectify can have a significant impact on a builder.

Apart from the accumulation of demerit points and the potential fine, if a builder does not comply with a QBCC direction to rectify, the QBCC may approve a claim by the consumer to rectify defective building work under the Queensland Home Warranty Statutory Insurance Scheme (“Statutory Insurance Scheme”) (if applicable). If the QBCC makes a payment under the Statutory Insurance Scheme, the QBCC may recover the amount paid, as a debt, from the builder. Further, up until 10 November 2017, the QBCC could only issue a direction to rectify within 6 years and 3 months from the date the building work was completed or left in an incomplete state. Through legislative amendments which took effect on 10 November 2017, the time limit for the QBCC to issue a direction has been extended to 6 years and 6 months.

Review of a QBCC Decision

An affected party (the builder or the consumer) may apply for internal review to the QBCC for review of a decision or apply to the Queensland Civil and Administrative Tribunal (“QCAT”) for external review.

QBCC ‘reviewable decisions’ are found in section 86 of the Queensland Building and Construction Commission Act 1991, and include a decision:

1. to give a direction to rectify or remedy or to not give a direction to rectify or remedy;
2. that rectification work carried out in response to a direction to rectify is not of a satisfactory standard; and/or
3. about the scope of works to be carried out under the Statutory Insurance Scheme to rectify defective or incomplete building work.

Decision to issue direction to rectify must be challenged at first instance

On an application to review a decision that rectification work carried out in response to a direction to rectify is not satisfactory, or a decision about the scope of works to be carried out under the Statutory Insurance Scheme, the builder is not able to argue that the original work the subject of the original direction to rectify was not defective.

QCAT has long held the view that applications to review those decisions cannot be a de facto review of the original decision to issue a direction to rectify. If the builder wishes to argue that the original work was not defective, then an application to review the original decision to issue a direction to rectify must be made within the time limit permitted (i.e. 28 days of being notified of the decision).

Strict 28-day time limit to apply for review in QCAT

If the period of 28 days since the date the QBCC gave written notice of a direction to rectify has passed and the QBCC has:

1. started disciplinary action;
2. served a notice advising a claim under the Statutory Insurance Scheme has been approved; or
3. served an infringement notice for failing to comply with a direction;

the builder’s review rights will have been forfeited. This means the builder will have no opportunity to claim that the building work was not defective.

Further, a review of a decision about the scope of works to be carried out under the Statutory Insurance Scheme must be made within 28 days of being served with the decision, otherwise the builder’s right of review is also lost.

No stay of decision

If that isn’t bad enough, QCAT cannot stay any of the decisions mentioned above. That means, the consequences of the decision continue to have effect even when an application to review a decision is under way.

For example, in respect of a decision that rectification work is not of a satisfactory standard, the QBCC will continue to rectify the building work under the Statutory Insurance Scheme, irrespective of whether the builder contests the decision and notwithstanding an application to QCAT to review the decision has been made and not yet decided.

How to protect yourself

1. If you are notified that a consumer has made a complaint regarding building work you performed, attend the QBCC inspection. This is the best time for you to have your say.
2. If the QBCC determines that the building work you performed is defective, either rectify it or review it. It is important to recognise that if you review the decision either through an application for internal or external review, the QBCC will proceed to rectify the work under the Statutory Insurance Scheme. This could mean that you could face a substantial rectification bill if the works are insurable works and you are unsuccessful in your review.
3. If you are issued with a direction to rectify and you do not agree with its contents, it is important that you seek legal advice immediately. There are options available to dispute a direction to rectify, however you must act within specific time-frames.

Active Law’s construction team are very experienced in all aspects of construction law including statutory compliance and reviews of QBCC decisions, as well as all other aspects of law affecting the construction industry. The construction team at Active Law can swiftly identify your rights and obligations and can ensure you make the best submission possible in your circumstances. Active Law’s Paul Hick is an experienced construction lawyer with 35 years of construction experience. He is also a senior adjudicator under security of payment legislation in numerous states around Australia. Formerly employed with the QBCC, Active Law’s Emma Ward, has invaluable insight into QBCC process and legislation.

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.