Since the introduction of the Queensland Building and Construction Commission Act 1991 (QLD) (QBCC Act), there has been much confusion and ambiguity surrounding the Queensland licensing requirements for carrying out “building work”.
The notoriously complex system has been clarified by the Supreme Court in the recent decision The Trustee For Hardev Property (Dev 10) Unit Trust v Palmgrove Holdings Pty Ltd & Others [2019] QSC 208.
In this case, the developer argued that the contractor had breached section 42 of the QBCC Act by undertaking to carry out and/or carrying out the following “building work” without the appropriate licence:
- the laying of sewerage and water pipes that extended approximately 1 metre into proposed residential allotments (the sewer and water reticulation works);
- the construction of an acoustic and paling fence; and
- the construction of a retaining wall (the retaining walls).
In summary, the Court held that:
- work carried out on unregistered lots prior to subdivision, such as the sewer connection and water reticulation works, is not “works connected to a proposed building” and therefore falls within the exclusion under clause 11 of Schedule 1 of the Queensland Building and Construction Commission Regulation 2018 (Qld) (QBCC Regulation) and is not “building work”; and
- it is not an offence under section 42 of the QBCC Act to:
- enter into a contract for “building work” (under the QBCC Act) provided that the “building work” is carried out by an appropriately licensed subcontractor; and
- manage, advise, supervise, and administrator the licensed subcontractors carrying out “building work”.
Sewer connection and reticulation works
The contractor argued that it did not require a licence to carry out these works because clause 11 of Schedule 1 of the QBCC Regulation expressly excludes “work for water reticulation systems, sewerage systems or stormwater drains other than works connecting a particular building to a main of the system”.
The Court held that these works were not “building work” because at the time of entering into the contract no proposed building was identified on the plans and accordingly, it could not be said that the contractor “undertook to do works to connect a particular proposed building to a main”. Rather, the contractor undertook to provide the branch connections which would make the relevant service available to the proposed lots, which themselves had not yet come into existence.
Retaining walls and fencing
Section 8 of Schedule 1A of the QBCC Act provides that an unlicensed contractor does not contravene section 42 of the QBCC Act if the “building work” is to be carried out by an appropriately licensed subcontractor retained by the contractor.
The contractor successfully argued that two licensed subcontractors were engaged to carry out the construction of the retaining walls.
As a result, the Court held that the contractor had “not caused or allowed this work to be carried out by an unlicensed person, and therefore had not lost the benefit of s8 of Schedule 1A of the QBCC Act”.
Building work services
Finally, the developer argued that the contractor was in breach of section 42(1) of the QBCC Act by carrying out “building work services” because:
- the contractor had engaged subcontractors to construct the retaining walls, which were outside the scope of the contractor’s licence. Therefore, by doing this the contractor had allegedly administered, managed, supervised and advised (“the supervision works”) on building work outside the scope of the contractor’s licence; and
- the contractor was required to hold a licence to carry out supervision works.
The Court rejected this argument and held such supervision works “come[s] within s 8(2), being incidental to the entry into a contract with an appropriately licensed subcontractor and causing that subcontractor to carry out the work”.
Take away
When entering into a contract, contractors should carefully review the scope of works to ensure that they hold the appropriate licence to complete all the works. Contractors should either:
- obtain the relevant licence; or
- ensure that it engages appropriately licensed subcontractors to carry out the portion of the scope for which it does not hold the appropriate licence.
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