Bit of a stretch – licence conditions found to have been imposed beyond the QBCC’s power

Yesterday, the Supreme Court decided that conditions imposed on a builder’s licence by the Queensland Building and Construction Commission (QBCC) licence were void. In reaching its decision, the Court held that the QBCC did not have a general power to impose conditions on a licence as a means of compelling a builder to stop work or rectify damage caused to an adjoining site.

CDI Lawyers acted for the builder in successfully obtaining an order declaring that the conditions that had been imposed on its licence were void and of no effect.

Background

On 18 November 2019, the QBCC imposed 7 conditions on the builder’s licence. The effect of the orders was that the builder was not allowed to continue works on its site until:

  • it had demonstrated that the it had ‘made safe’ a building located on the adjoining site after movement had been recorded in the building’s foundations following excavation works and piling being carried out by the builder; and
  • the QBCC provided its agreement as to the rectification works that the builder proposed to carry out to the adjoining building.

After builder and the QBCC were unable to reach an agreement as to what rectification works should take place, the builder commenced proceedings seeking an order that the conditions were void and should be removed.

The builder’s argument

The builder argued that the QBCC did not have the power to impose conditions as a means of controlling what works could be done by the builder on its own site, or how it should carry out rectification works to the adjoining site. This was because these powers were regulated by other specific provisions of the Act, such as:

  • 108AI, which empowers the QBCC to issue a “Stop work notice”; and
  • Part 6, which empowers the QBCC to issue a “direction to rectify”.

The key difference with these powers, however, is that the QBCC is subject to more stringent preconditions before they can be exercised, such as:

  • in terms of a stop work order, being required to issue a show cause notice 5 days before issuing a stop work order; and
  • in terms of a direction to rectify, being largely limited to directing work to rectified, rather than specifying how it is to be rectified.

The builder argued that by attempting to impose conditions on the builder’s licence to achieve the same outcome as a stop work order and a direction to rectify, the QBCC was descending into the realm of supervising building work and exceeding its authority under the legislation.

The QBCC’s argument  

The QBCC argued that the legislation gave it a broad power to impose conditions on builders’ licences and that the conditions imposed served the purposes of the Act.

The QBCC argued that given the conditions had been imposed to protect the health and safety of others, then its power under the Act should be construed broadly.

Decision

Ultimately, the Court accepted the builder’s submissions and decided that the conditions were void. In doing so, it held that that the power to impose conditions on a building licence was “quite separate and distinct” to the power to be exercised under either s.108AI or Part 6 of the Act.

Crucially, Justice Flanagan held that:

“It is impermissible for QBCC to impose conditions on a licence that have the effect of either enlarging or circumventing the requirements of either Part 6 or s 108AI of the Act. To do so would undermine the powers in ss 108AI and s 72 and the requirements that attend their exercise.”

Takeaway

Until now, it was unclear the extent to which the QBCC could impose conditions on a builder’s licence as a means of regulating building work.  This power has now been clarified and serves a win for builders – confirming they are entitled to challenge conditions which have been unfairly imposed on their licence.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader’s specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

Key contacts:

Stephen Pyman – Director | Principal
Alex Tuhtan – Principal

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