Whalley v Queensland Building and Construction Commission [2017] QCAT 15 (20 January 2017)

Last Updated: 27 January 2017

CITATION:	Whalley v Queensland Building and Construction Commission [2017] QCAT 15
PARTIES:	Peter Whalley (Applicant)
	v
	Queensland Building and Construction Commission (Respondent)
APPLICATION NUMBER:	GAR112-16
MATTER TYPE:	General administrative review matters
HEARING DATE:	On the papers
HEARD AT:	Brisbane
DECISION OF:	Member Paratz
DELIVERED ON:	20 January 2017
DELIVERED AT:	Brisbane
ORDERS MADE:	The decision of the Queensland Building and Construction Commission made on 5 April 2016, that work under Direction to Rectify and/or Complete No 40913 had not been satisfactorily rectified, is set aside. The Direction to Rectify and/or Complete No 42267 issued by the Queensland Building and Construction Commission on 5 April 2016 is set aside. Peter Whalley, or the Queensland Building and Construction Commission, may make an application for costs consequent upon this decision, by the filing of a Miscellaneous Application together with supporting submissions, if desired.
CATCHWORDS:	INTERNAL REVIEW – Where the QBCC conducted an internal review of a decision that a Direction to Rectify had been satisfactorily rectified – Where a previous internal review had been conducted in relation to the same contract – Whether a second internal review can be conducted which concerns the same issues as the first internal review –Whether an application for Internal Review may be made orally – Whether it was appropriate for an officer who had been involved in the first internal review to conduct the second internal review – Whether the internal review was conducted fairly Queensland Building and Construction Commission Act 1991 (Qld) Queensland Civil and Administrative Tribunal Act 2009 (Qld)

APPEARANCES:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

Overview

[1] This matter concerns the validity of an internal review decision of the Queensland Building and Construction Commission (“the QBCC”).
[2] The matter has been the subject of a number of reconsiderations and decisions by the QBCC.
[3] The QBCC office in Townsville initially made a decision that a Direction to Rectify would be issued to a builder, but then replaced that with a Request to Rectify. The QBCC office in Townsville then decided that no further action would be taken.
[4] The owners sought an internal review of that decision, and a new decision was made by the Internal Review Unit that a Direction to Rectify should issue.
[5] The QBCC office in Townsville then made a decision that the Direction to Rectify had been complied with, and that no further action would be taken.
[6] An internal review of that decision was then made by the Internal Review Unit, and a new decision was made that the previous Direction to Rectify had not been complied with, and issued a new Direction to Rectify.
[7] The builder has filed an Application to Review in the Tribunal as to the last decision of the QBCC, claiming that the QBCC Internal Review Unit did not have jurisdiction to make the last decision.

The history of the Matter

[8] LG &KL Riella (“the owners’) entered into a contract^[1] with Peter B. Whalley (QBCC Licence Number 20736) (“the builder”) on 28 March 2013 to build a kit home on a site at 145 Francis Street, West End, Townsville in Queensland. The total contract price was $155,347.00.
[9] The owners purchased the kit home from Kitome Pty Ltd, which was a company unrelated to the builder.
[10] The builder commenced work on or about 11 July 2013 and completed the works on or about 10 December 2013.
[11] The owners lodged a complaint^[2] with the QBCC on 16 April 2014, listing 13 items. An Initial Inspection Report dated 14 August 2014 was made by Kevin Cameron, a QBCC Inspector based in Townsville.
[12] Mr Cameron issued a Direction to Rectify and/or complete No 40354^[3] to the builder dated 15 August 2014. The Directions were as follows:

Time period for Completion – (28) days from the date of service of this decision.

You are directed to rectify the following defective or incomplete building work within the Time period for Completion.

(1) Rectify the defective installation of the windows and doors to the exterior wall of the residence resulting in not complying with the BCA 3.5.3.6 flashings to wall openings – pertains to item 2 and 3 on the QBCC complaint form.
(2) Rectify the open gap at the intersection of the rear wall and patio roof that will result in water ingress to behind the building elements – pertains to item 4 on the QBCC complaint form.
(3) Rectify the defective installed timber door and jamb at the rear of the residence resulting in works not in a tradesmanlike finish – pertains to item 6 on the QBCC complaint form.
[13] The builder and his certifier then challenged the Direction to rectify with Mr Cameron, and Mr Cameron then issued a Request to Rectify^[4] on 28 August 2014 replacing the Direction to Rectify. The request was in the same terms as the former direction, but included a reference in Request (1) to “BCA 3.5.3.1 Application (a) and (d)”.
[14] Mr Cameron issued a Re-Inspection Report^[5] dated 24 October 2014 and 21 November 2014. In that report he noted as to the Request item (1) that “The QBCC poses to take no further action unless the windows fail and allow water penetration”.
[15] Mr Cameron sent a letter dated 21 November 2014^[6] to the owners stating that the defects were considered to be category two defects under the QBCC Board Policy ‘Rectification of Building Work’ which are defects which do not adversely affect the structural integrity or performance of the building and do not constitute a health or safety issue. He noted that the QBCC were not notified of the defects within the required time period for such a defect, and that the QBCC would not be issuing a Direction to Rectify to the builder.
[16] The builder says^[7] that he received a telephone call on 15 December 2014 from June Blaney of the Internal Review Office of the QBCC, based in Brisbane, informing him that the owners had requested an internal review and that it would take place on 22 January 2015.
[17] An Inspection Report dated 27 January 2015 to the Internal Review Unit was made by a QBCC Inspector, Mr Stephen Ferguson, based in Brisbane. He concluded that the builder had not engaged in defective building work, or no further action should be taken, as to all complaint items except as to item 3 and noted:^[8]:

Complaint Item 3.

The construction of the external façade of the dwelling is not in accordance with the Building Code of Australia Part 3.5.3.6 in that flashings have not been provided to openings in the external walls.

The licensee has engaged in category 1 defective building work as defined in the QBCC Rectification of Building Works Policy June 2010.

The following direction to rectify defective building work is to be issued:

The construction of the external facade of the dwelling is not in accordance with the Building Code of Australia Part 3.5.3.6 in that flashings have not been installed to the openings in the wall.

[18] Ms Blaney considered the report of Mr Ferguson, and sent a letter dated 4 February 2015 to the builder saying that^[9]:

I refer to the internal review of this matter regarding the decision made by Mr Kevin Cameron on 21 November 2014, and our discussion on 4 February 2015 regarding the outcome of review.

I have reviewed this matter and decided to issue a direction to rectify for item 3 of the complaint form and not be directed for complaint items 1, 2, 4, 5, 6, 7, 8, 9, 10, 11, 12, and 13.

[19] The builder was notified by an undated letter^[10] (which may have been the same date as a similar letter to the owners dated 6 March 2015) that a Direction to Rectify and/or Complete No 40913 was issued. The letter referred to an internal review decision of June Blaney dated 4 February 2015, reference number SF00002870 that the builder was responsible for rectifying work at the property in accordance with the list attached at page 3 (however, no list was attached - a complete copy was sent to the builder and owners on or about 13 March 2015^[11]).
[20] A letter dated 2 April 2015 from Steve Griffin, the QBCC Commissioner, to the builder, advised that the windows did not comply with deemed to satisfy requirements of the Building Code of Australia (‘BCA’). He noted the builder’s submissions that the building work had not failed and that there had not been any water ingress, and said that ‘the failure of building work to perform is only one factor to be considered in assessing whether work is defective’. The letter apologised for the oversight in not attaching the direction items on the direction notice, which he understood had been attended to with a commensurate extension of time.
[21] The builder engaged Stephen McKenzie, of SMCE (Steve McKenzie Consulting Engineer), an Engineer based in Townsville, to advise as to whether the windows did not conform to the BCA. Mr McKenzie disagreed with the view of the QBCC, and noted in a letter to the builder dated 14 April 2015 (the ‘SMCE Report’) that^[12]:

• (a) Material design/form of construction complies in that the opening is flashed for the full perimeter as well as the aluminium fin to the perimeter.
• (b) The attached diagram shows the flashing in compliance with BCA 3.5.3.6 as well as AS/NZS 2904:1995 – Damp proof courses and flashings. Note also that the glazing frame has a drainage channel to the head. I might add that the efficiency of this construction technique can be observed in that every inspection undertaken by the QBCC representative stated that there is no evidence of ingress of water or dampness at the glazing frames.

[22] The certifier for the builder, Milton Stennett, based in Townsville, sent an email on 20 April 2015^[13] to Bill Piper, the manager of the Townsville Service Centre of the QBCC, referring to the engineer’s view and arguing that the Deemed to satisfy requirements of the BCA NCC 2014 had been complied with. He noted:

I am still at a loss as to how the QBCC came to issue a Direction to Rectify and/or Complete to the building contractor when the original complaint was over the gap located at the bottom of the windows. There was, to my knowledge, no complaint over water penetration to the tops of the windows!

[23] Mr Piper sent a letter dated 21 April 2015 to the owners^[14] advising that:

I refer to the direction to rectify that was issued by QBCC and the current status of these matters based on new advice received by the engaged certifier Mr Milton Stennett dated 21 April 2015 in which he has duly advised QBCC that based on correspondence from an engineer: Mr Steven McKenzie that he has now endorsed the method as documented by the Engineer as below as an alternative solution – therefore the direction is complied with.

[24] Mr Piper concluded his letter by saying^[15]:

Therefore, based on the certifiers decision supported by the engineers advice, my determination is that no further action will be taken by QBCC and your complaint will now be closed.

That all matters in the direction are complied with.

[25] The Internal Review Office commenced a further internal review on or about 2 July 2015^[16], without any advice to the builder, or seeking any submission from him.
[26] A Review Notice was issued under cover of a letter dated 5 April 2016 to the builder by Stephen Ferguson, Senior Technical Internal Review Officer. Mr Ferguson noted that Mr Vic Riella (one of the homeowners) had submitted a review application regarding the decision made by Mr Bill Piper, Townsville Centre, that the Direction to Rectify 40913 had been complied with.
[27] Mr Ferguson decided as follows^[17]:

I have decided that the licensee has not provided compliant flashing to openings in the external wall pursuant to P2.2.2 of the Building Code of Australia and therefore work under the Direction to Rectify no 40913 has not been satisfactorily rectified.

[28] The QBCC had engaged an Engineer, John Van de Hoef, of NJA Consulting Pty Ltd, to consider the requirements for flashings above windows in domestic construction (external walls). Mr Van de Hoef produced a report dated 1 December 2015, (the ‘NJA Report’), and concluded^[18]:

Regardless of the recommendation provided in the report prepared by SCME or the opinion provided by the building certifier, on the basis of the advice of the window manufacturer, the cladding manufacturer and the Australian Window Association, it is recommended that a head flashing be provided to window in similar situations to the subject site. Any failure to install a suitable window head flashing has the direct consequences of likely voiding the warranty that may have been provided by either the window manufacturers or the cladding manufacturer in circumstances where water penetration into the dwelling is found to occur at some point in the future.

[29] Mr Ferguson issued a new Direction to Rectify and/or Complete No 42267 dated 8 April 2016 (although it appears to be referred to by all parties as a decision of 5 April 2016) as follows^[19]:

Due date for completion – 16 May 2016

You are directed to rectify the following defective or incomplete building work by the Due date for completion:

(1) The construction of the external façade of the dwelling is not in accordance with P 2.2.2 of the Building Code of Australia in that flashings have not been provided to the wall openings.
[30] The builder filed an Application to Review the decision of Mr Ferguson in the Tribunal on 6 May 2016.

Issues in the Tribunal proceeding

[31] A Compulsory Conference was held by the Tribunal on 19 August 2016. It was directed by an Acting Senior Member that the issues which will be decided at the hearing of the application are as set out in an attached List of Issues and Agreements. That list is as follows:

List of Issues and Agreements

Preamble

The only decision under review is that of 5 April 2016 and it is challenged solely on the grounds that in reaching that decision the QBCC failed to comply with the QBCC Act or follow its internal procedures.

In this application, the decision about unsatisfactory work as expressed in the decision of 5 April 2016 is not being challenged.

Agreements

The decision under review was made by Stephen Ferguson.

It is agreed that this was an “internal review decision” and the statutory provisions in sections 85A to 86D of the QBCC Act apply to that decision.

It is accepted by the QBCC that the decision of 5 April 2016 can be reviewed in QCAT as a reviewable decision because the decision was that building work undertaken at the direction of the commission under Direction to Rectify 40913 was not satisfactorily rectified (and therefore this comes under section 86(1)(f) of the QBCC Act).

Issues

(1) Whether the QBCC failed to comply with the requirement in paragraph (a) of section 86C(4) because Mr Ferguson also made the reviewable decision which was the subject of the internal review. Mr Whalley says that the reviewable decision concerned was the decision Mr Ferguson made when making his report on file SF00002870^[20] which was relied on by the Internal Review Officer June Blaney in the decision made on internal review dated 4 February 2015^[21].
(2) In the circumstances set out in issue 1 above, whether the QBCC failed to follow its own internal review policy item 5 that internal reviews will be undertaken by a person not involved in making the original decision.
(3) Whether the QBCC failed to comply with the requirement in paragraph (b) of section 86C(4) because Mr Ferguson was in a less senior office than the person who made the reviewable decision which was the subject of the internal review. Mr Whalley says that the reviewable decision concerned was that of Bill Piper made on 22 April 2015^[22].
(4) Whether the decision of 5 April 2016 was an internal review of an earlier internal review. Mr Whalley says that the earlier internal review was the decision of Bill Piper made on 22 April 2015. If so, whether this was contrary to QBCC’s policy on internal reviews not to have two internal reviews about the same thing, or otherwise not available under the QBCC Act.
(5) Whether the decision of 5 April 2016 was not made as soon as practicable as required by section 86C(1) of the QBCC Act.
(6) Whether without the house owner’s agreement to a longer period, the decision of 5 April 2016 was made more than 28 days after the application for an internal review was made by the house owner. If so, whether section 86C(3) applies to deem that the QBCC made a decision the same as the reviewable decision.
(7) If the light of the answers to any of the issues above, whether the decision of 5 April 2016 ought to be set aside or some other order made.
[32] Directions were also made at the same time for the filing of submissions on the issues, and for the issues to be heard and finally determined on the papers after submissions were received.
[33] The QBCC filed submissions on 21 September 2016, and the builder filed submissions on 17 October 2016. This is the decision on the papers.

Submissions of the parties

[34] The submissions of the QBCC filed on 21 September 2016 take the form of a Statement by Nancy Alexander, the Manager of the Internal Review Unit. The builder’s submissions take the form of a Statement in Reply by the builder.
[35] Ms Alexander states that the second internal review was commenced after an email from the homeowners dated 23 June 2015 was received. She states that Mr Ben Farmer, an Administrative Officer employed by the Commission, telephoned the owners on her instruction and confirmed that, as per their email they were seeking an internal review of the decision made by Mr Piper^[23].
[36] She notes as to an application for an internal review that^[24]:

I note that there is no requirement for a physical application form to be completed for an internal review. It is sufficient for a prospective applicant to indicate their intention either verbally or in writing that they wish for an internal review to be carried out.

[37] The email from the homeowners made the following complaint:

Please read our letter dated 7/05/2015. The problem is not the installation of the external cladding as Bill Piper would have you believe. The problem is the windows and the lack of sealing and capping, along with doors that were planed (leaving our external doors exposed to the weather top and bottom) by Peter Whalley after they were painted and sealed to which he was also given a direction to rectify and still to this date has not complied with!

Issue (1) - Whether the QBCC failed to comply with the requirement in paragraph (a) of section 86C(4) because Mr Ferguson also made the reviewable decision which was the subject of the internal review.

[38] The QBCC submit that the first internal review decision and the second internal review decision were made by Ms Blaney and Mr Ferguson respectively, and that in neither case were the internal review applications dealt with by the persons who made the reviewable decisions, and that^[25]:

(iv) Given the Owners lodged separate internal review applications based on separate decisions made by Mr Cameron and Mr Piper respectively, Mr Ferguson was permitted under section 86C(4)(a) to make the second internal review decision.

[39] The builder submits that the process surrounding the Windows issue was a single chain of events where there was only ever one question to be decided: whether the Applicant’s installation was defective work, and that the first internal review decision was determined with the benefit of the Ferguson report, and that^[26]:

The decisions made by Stephen Ferguson within the Ferguson report were the only source of primary information considered by June Blaney in relation to the purported defects. As she had not undertaken an inspection of the dwelling herself, June Blaney had little option but to accept the decisions of Stephen Ferguson and make the First Internal Review decision accordingly. Therefore the decisions of Stephen Ferguson in the Ferguson Report are vicariously the First Internal Review Decision.

Issue 2 - Whether the QBCC failed to follow its own internal review policy item 5 that internal reviews will be undertaken by a person not involved in making the original decision

[40] The QBCC submissions do not address this issue.
[41] The builder makes a similar submission as to issue 1^[27]:

5.2 As noted in Issue 1, the process surrounding the Windows Issue was a single chain of events where there was only ever one question to be decided: whether the Applicant’s installation was defective work. The respondent should not have allocated Stephen Ferguson to the Second Internal Review as he had already dealt with this matter and made a decision on this question earlier within the Ferguson Report.

5.3 The allocation of Stephen Ferguson to the Second Internal Review was inappropriate and in breach of section 5 of the Respondent’s IRP.

Issue (3) - Whether the QBCC failed to comply with the requirement in paragraph (b) of section 86C(4) because Mr Ferguson was in a less senior office than the person who made the reviewable decision which was the subject of the internal review.

[42] The QBCC submit that Mr Ferguson was not less senior than Mr Piper^[28]:

(ii) Mr Ferguson is an AO7 Senior Technical Internal Review Officer and Mr Piper is the AO7 Manager of the Commission’s Townsville office. Mr Ferguson is not in a less senior office than Mr Piper. Mr Ferguson also has both building and technical qualifications. Therefore, as Mr Ferguson is of equal seniority to Mr Piper, and has greater qualifications, he is permitted under section 86C(4)(b) to make the Second Internal Review Decision.

[43] The builder concedes that Mr Ferguson and Mr Piper are of equal seniority within the QBCC’s organisational structure.

Issue (4) - Whether the decision of 5 April 2016 was an internal review of an earlier internal review.

[44] The QBCC notes that the first internal review decision and the second internal review decision were made by Ms Blaney and Mr Ferguson respectively, and that as the decisions were made by different employees of the Commission, that the policy was not breached.
[45] The builder submits that section 86(1) of the QBCC Act prescribes the decisions that are internally reviewable by the QBCC, and says that an internal review is not a decision that is internally reviewable.
[46] The builder also refers to the notation on the QBCC website under the heading ‘Dispute a QBCC decision” and provides relevantly^[29]:

What cannot be internally reviewed

Internal reviews cannot be conducted on certain types of issues or decisions. These include:

• Issues that have already been internally reviewed – internal reviews will not be conducted on internal review decisions. If you remain dissatisfied, you can make an application to QCAT or another relevant external review agency, such as the Queensland Ombudsman.

[47] The builder submits that the QBCC had reviewed the Windows issue in the first internal review and therefore had no jurisdiction to review the Windows issue again in the second internal review.

Issue 5 - Whether the decision of 5 April 2016 was not made as soon as practicable as required by section 86C(1) of the QBCC Act.

[48] The QBCC submits that it acknowledges that a lengthy period of time exists between the lodgement of the second internal review application on 23 June 2015 and the second internal review decision on 5 April 2016, but that such delay was agreed to by the owners.
[49] The builder submits that a period of almost 10 months to make the second review decision is not ‘as soon as practicable’ as is required and the QBCC is therefore in breach of section 86C(1) of the QBCC Act.

Issue 6 - Whether without the house owner’s agreement to a longer period, the decision of 5 April 2016 was made more than 28 days after the application for an internal review was made by the house owner. If so, whether section 86C(3) applies to deem that the QBCC made a decision the same as the reviewable decision.

[50] The QBCC submits that under section 86C(2)(b) of the QBCC Act, the Internal Review Unit is permitted to seek extensions of time from an applicant as needed in order to properly conduct the internal review process.
[51] The QBCC notes that Mr Ferguson sent an email to the owners on 17 July 2016 requesting an extension of time until 28 August 2016 to complete the review, and that subsequent to this the Commission kept in contact with the owners regularly via telephone and email to discuss additional extensions of time to complete the review.
[52] The QBCC submits that in the circumstances, the second internal review decision was made as soon as practicable with agreed extensions of time from the owners.
[53] The builder submits that the QBCC has not provided any evidence of extensions of time and that the deeming provision in section 86C(3) of the QBCC Act applies, that the QBCC is taken to have made a decision the same as the reviewable decision^[30]:

On the basis of the evidence available, the Respondent did not decide the application within the required period and there is no evidence of agreement to extensions of time with the Owners. The Respondent must therefore be taken to have made an internal review decision at the end of the required period that is the same as the decision made on or about 22 April 2016 (sic: but presumably should be 2015) by Bill Piper (i.e. that the Second Direction had been complied with by the Applicant).

Issue 7 - If the light of the answers to any of the issues above, whether the decision of 5 April 2016 ought to be set aside or some other order made.

[54] The QBCC submissions do not address this issue.
[55] The builder submits as follows^[31]:

10.1 In view of the above, the Respondent has not complied with the required process for conducting internal reviews and the applicant respectfully submits to the Tribunal it should:

- set aside the Second Internal Review Decision; and

- order the reinstatement of the decision made on or about 22 April 2016 by Bill Piper that the Second Direction had been complied with by the applicant; or

- in the alternative, make a fresh decision having regard to the proper weight that should be placed on the SMCE Report as against the NJA Report, the expert judgment given in the SMCE Report as to an Alternative Solution and the scope of works the Applicant agreed to perform under the Quotation and the Contract

Discussion

Was the internal review properly initiated?

[56] The QBCC submit that the review application was properly initiated, despite there being no formal application by the homeowners. There is a requirement in Section 86B(b) that an internal review application must ‘be lodged at an office of the commission’.
[57] The word ‘lodged’ is routinely used, and understood, to mean the physical lodging of a written document at an office where it is formally received and usually date and time stamped; or lodged electronically whereby a typed form is created. For example, applications are ‘lodged’ in this way in the Tribunal on an everyday basis.
[58] There is no definition in the QBCC Act of the expressions ‘lodged’ or ‘lodged at an office’.
[59] The word ‘lodge’ has been defined as ‘to bring (a charge or accusation) against someone’^[32]. In any specific jurisdiction, the method of lodgement would be expected to be provided for by Rules.
[60] The addition of the words ‘at an office of the commission’ suggests that something more than just bringing a complaint in a vague and unrecorded way is required, but that the request for an internal review must be formally lodged.
[61] In this matter, no written or typed application for internal review was lodged at an office of the commission at all. It appears that the Internal Review Unit were prepared to accept an apparent request over the telephone to conduct an internal review as sufficient.
[62] The email from the homeowner which is relied upon does not ask for an internal review in clear words – rather, it complains about the interpretation of the matter in the decision, makes what appear to be allegations of improper conduct by a QBCC officer, and makes demands for the insurance policy to be applied, whilst saying to the QBCC that ‘if this is not fixed by the end of July’ that the homeowners would be left with ‘no choice’ but to pursue the issue in the media.
[63] The complaint that the homeowner makes in the email is as to matters that are wider than the decision that was made, which related to flashings to the openings in the external walls, and raises new issues as to the painting of the tops and bottoms of doors after they were planed.
[64] In the absence of the lodging of a written or typed request for internal review it is not possible to identify clearly what is being sought to be reviewed. Even if an application for review can be ‘lodged’ orally over a telephone, the question arises as to certainty of the application. How is another party to know what the part of a decision is to be reviewed when there is no written record of the application?
[65] The QBCC says on its website as to applying for an internal review as follows:

How to apply for an internal review

An internal review application should be made within 28 calendar days after receiving the original decision. There is no particular form for an internal review, however you can send us information online.

Your application should contain the following information:

• Your name and best contact information
• What decision you would like to have reviewed (including the original case reference number, usually at the top right hand side of the decision letter you received)
• The date of the decision (i.e. the date at the top of the decision letter or when you received the decision)
• Who made the original decision (usually the person whose name is at the end of the decision letter)
• Why you are unhappy with the decision
• What you would like to occur
• Whether you have been to QCAT about the matter (please provide the QCAT reference number)
• Any new information you think will help explain why the decision should be changed e.g. new expert reports you have received, facts or circumstances that you have not advised us of that may change the decision
• If your application is being made outside the 38 day calendar period, reasons for the delay in making your applications.

Applications for an internal review can be made:

• Online
• At a Service Centre
• By writing to us at Queensland Building and Construction Commission, GPO Box 5099, Brisbane Qld 4001

[66] When the ‘online’ button on the website is selected, a standard form (Reference Code: HKS89G) opens up, which is then completed by typing, which would produce a written form when printed by the QBCC.
[67] The QBCC website therefore requires an application to be made in writing either online or by post. It is unclear what would occur at a service centre.
[68] The ‘lodging’ of an application to review by telephone does not record the details indicated as required by the QBCC website, or make them available for viewing by another party.
[69] The significance of certainty of the application to review is demonstrated in this matter. Presumably the second review was of the decision of Mr Piper that the Direction to Rectify had been complied with, however Mr Ferguson appears to have interpreted his role as reviewer differently, as he describes it as “the review of Mr Pipers decision to deem the works at your property as not defective”^[33].
[70] The ‘lodging’ of the application to review orally by telephone in this matter does not accord with the outline given on the QBCC website as to lodging such an application, and is not certain. I am not satisfied that the lodging of such an application orally is in accordance with section 86B(b) of the QBCC Act.
[71] I am not satisfied the application to review in this matter was properly ‘lodged at an office of the commission’, and consider that proper regard has not been had to the provisions of Section 86B(b) of the Act as to the lodging of an application for review. I do not consider that the application for internal review was sufficiently certain, and do not consider that a review was properly initiated in this matter.

Was the second review decision fairly conducted?

[72] Mr Ferguson was instrumental in the review process of the first internal review decision. Ms Blaney relied upon his report in making her decision. He was reconsidering as decision maker in the second decision, the very issues as to whether there was defective work and the application of the BCA which he had previously considered as adviser to the first decision maker, albeit with additional information from Mr Van de Hoef.
[73] The very point of Section 86C(4)(a), in requiring that the review application must not be dealt with by the person who made the reviewable decision, is that a new, independent mind be brought to the issue.
[74] Further, the Internal Review Policy published by the QBCC, dated January 2016, provides as to its Purpose in paragraph 2 that:

Internal review is a mechanism for customers, including consumers and building contractors, who are concerned that a decision was not made correctly, to have the decision reviewed and their concerns addressed by an independent review officer.

[75] The second review should not have been assigned to Mr Ferguson. To any external observer, he would not be seen to be bringing an independent mind to the matter, and would not be seen as ‘an independent review officer’.
[76] A review process requires, just as much as any Administrative Review process, that justice not only be done, but ‘be seen to be done’. Further, the QBCC Internal Review Policy provides at paragraph 5 that “All decisions must provide for natural justice to all affected parties”.
[77] In the second review Mr Ferguson obtained a report from Mr Van de Hoef and based his decision upon that report. The report of Mr Van de Hoef was not shown to the builder, and the builder was not given an opportunity to respond to it, before the second decision was made.
[78] The builder states that he was not advised of the undertaking of the Second Internal Review, and that he received no correspondence from the QBCC after receiving the decision of Mr Piper on 22 April 2015, until he received notice of the Second Internal Review Decision on 8 April 2016^[34]:

7. On 22 April 2015 Peter Whalley Homes received correspondence from the QBCC claiming that the first internal review decision had been reviewed and overturned and another direction to rectify had been issued. This decision was made on or about 5 April 2016 after the QBCC conducted a second internal review. This was the first correspondence Peter Whalley Homes Pty Ltd had received from the QBCC since 22 April 2015.

[79] The decision of Mr Ferguson was based on the NJA report. The builder was not given an opportunity to make submissions on the NJA report before the decision was made.
[80] As it transpired, the builder does take significant issue with the report of Mr Van de Hoef, and has raised these in his submissions in this application. The builder disputes that the report of Mr Van de Hoef was made after an inspection of the property, and says it was made without regard to the plans^[35]:

7.7 On the basis that the SMCE Report was prepared following an inspection of the Dwelling and the NJA Report was merely a desktop review, the Respondent’s error that an inspection had been carried out by NJA must affect the decision making process undertaken during the Second Internal Review, including the weight that should be placed on the NJA Report as against the SCME Report.

7.8 The approved building plans were not even considered as part of the NJA Report. NJA could not have made its findings on an informed basis given that it was not privy to such plans.

[81] The failure to advise the builder of the commencement of the Internal review,(the result of which affects him directly), and to give him the opportunity to respond to the new material, being the report of Mr Van de Hoef, is unfair and is a breach of natural justice.
[82] The ‘Internal Review Policy’ of the QBCC provides at Clause 5 that ‘An internal review will be undertaken by a person who was not involved in making the original decision and who is of an equal or more senior level to the person who made the original decision’^[36].
[83] The expression as to a person who was ‘not involved’ is a wide expression, and is not confined to the decision-maker. Mr Ferguson was involved in the initial decision-making process, as it was it his report that Ms Blaney relied upon in making her decision. His appointment as the second internal reviewer was therefore not in compliance with Clause 5 of the QBCC policy.
[84] The assigning to, and conduct of, the second review by Mr Ferguson, when it was inappropriate and injudicious for him to do so, together with the failure to give the builder any notice of the review or opportunity to make submissions, results in breaches of natural justice, and breaches the policy of the QBCC.
[85] The second review process was therefore flawed in its inception, and in its execution, and cannot be seen to be fair and just.
[86] Further, the QBCC should consider whether it is fair to issue a Direction to Rectify in any event. Section 72(5) of the QBCC Act provides:

72 Power to require rectification of building work and remediation of consequential damage.

(5) The commission is not required to give the direction if the commission is satisfied that, in the circumstances, it would be unfair to the person to give the direction.

[87] The ‘Rectification of Building Work Policy’ of the Queensland Building Services Board also requires consideration of the fairness of a Direction to Rectify^[37]:

[1] Rectification of defective building work

(1) It is a guideline policy of the Queensland Building Services Board that a building contractor who carries out category 1 or category 2 defective building work should be required to rectify that work, unless in the circumstances rectification is unfair or unreasonable.

[88] The builder states that he was not contracted to install flashing to the windows as he only agreed to erect the Kit Home as supplied by the owners, and that ‘anything beyond the works listed on the Quotation is beyond the scope of the Contract’^[38].
[89] The builder further says that the Kit Home supplier says that it has never supplied flashings for the top of a window, and these are not regularly installed^[39]:

I have since phoned Kitome and spoke to a Carissa Armstrong about window head flashings and she told me they had never supplied them to any home they have sold and have never had a complaint about water ingress into their homes.

[90] The QBCC is able to consider matters beyond the contract in considering whether to issue a Direction to Rectify. Section 72(3) of the QBCC Act provides:

72 Power to require rectification of building work and remediation of consequential damage.

(3) In deciding whether to give the direction, the commission may take into consideration all the circumstances it considers are reasonably relevant and, in particular, is not limited to a consideration of the terms of the contract for carrying out the building work (including the terms of any warranties included in the contract).

[91] It is arguable that a builder, acting in a proper manner, should have installed window flashings, despite their not being supplied in the kit, or being included in the Contract. It has been held that ‘a builder cannot be excused from the responsibility to comply with manufacturers or regulatory body specifications simply because the architect’s drawings were wrong’^[40]. That responsibility is tempered by consideration of each case, as to whether the builder’s work is defective, and whether the manufacturers standards, regulatory body specifications, or provisions of the Building Code of Australia can be readily referred to^[41].
[92] The issue of the responsibility of the builder to install the flashings is therefore open to dispute, and the question then arises in the circumstances, as to whether it is fair to order the builder to rectify an alleged defect that arises from the design and manufacture of a Kit Home, and which the manufacturer says has never been an issue.
[93] A question of fairness also arises as to the almost one year time period that elapsed between the date the builder was advised by Mr Piper that the QBCC would take no further action, and the date of Mr Ferguson advising that a new Direction to Rectify was issued. In that intervening period, the builder may have altered his financial position, or business conduct, on the basis of the decision of Mr Piper.
[94] It is notable that the legislation anticipates that an internal review will be completed within 28 days^[42] in the normal course of events, unless an extension of time is allowed.
[95] Mr Ferguson did not seek submissions from the builder as to whether the builder suffered any detriment by the elapsed time of almost one year, or as to whether it was fair to issue a Direction to Rectify after that time.
[96] The decision of Mr Ferguson failed to consider a relevant element of the ordering of a Direction to Rectify, being whether it was fair to issue a Direction, which was an arguable issue in this matter, and the decision is unsatisfactory on that basis as well.

Was the second review as to the same issues as the first review?

[97] Was the essential issue that was being considered in the second review in essence the same issue as considered in the first review? The builder submits this is the case, and refers to it in his submissions as ‘the window issue’.
[98] The first reviewable decision was that made by Mr Cameron and concerned the flashings to wall openings. The second reviewable decision was that made by Mr Piper and also centred upon the flashings to wall openings.
[99] Whilst the decision of Mr Cameron has a different initial appearance in its question (Should a Direction to Rectify be issued) from the question in the subsequent decision of Mr Piper (Was the Direction to Rectify complied with), in order to answer both questions it was necessary to consider, as indeed both Ms Blaney and Mr Ferguson successively did, whether the BCA was complied with, and whether there was defective work.
[100] Significantly, Mr Ferguson himself expressed in his email to the owners^[43] that his role was to review whether there was defective work.
[101] Therefore, while the two decisions appear to be of a different nature as submitted by the QBCC, on closer examination it becomes apparent that it is in fact the same substantive issue being considered in each review, as the builder submits. This is the question raised by Issue 4.
[102] Section 86E(b) of the QBCC Act provides that a reviewable decision for external review includes an internal review decision. The remedy for a party who is dissatisfied with a review decision is to bring an application to review the review decision in the Tribunal.
[103] In this matter there was disagreement between Mr Cameron and Mr Piper of the Townsville office, and Ms Blaney and Mr Ferguson of the Internal Review Unit, as to the proper consideration of the BCA.
[104] The builder was advised of a definite decision on 21 April 2015 that the QBCC would take no further action as to defective work in relation to the flashings to external openings, only to be told on 5 April 2016, almost a year later, that the QBCC had, unbeknown to him, reviewed the matter again, and had come to the opposite conclusion.
[105] There is no provision in the Act for a second internal review of the same decision, and it would be extraordinary for such a provision to exist. The saying of ‘only one bite at the cherry’ is applicable in Administrative Review, and encompasses the principle that a decision is final, subject only to rights of Appeal. If that were not the case, parties would be subject to an endless regime of internal review by a decision-making body.
[106] Once the QBCC clothes its officers with authority to make decisions, those decisions cannot be subject to repetitive review by other arms of the same body. The industry and the public are entitled to certainty of decision making, and to be able to act in confidence on a decision.
[107] The second review was therefore not available under the QBCC Act.

Issues as to the timeframe of the second review decision

[108] The QBCC submit that the second review decision was made as soon as practicable, however no explanation is given as to why the initial extension to 28 August 2015, was required. The email sent by Mr Ferguson to the owners on 17 July 2015 merely says as follows^[44]:

As discussed, I have been assigned the review of Mr Pipers decision to deem the works at your property as not defective and withdraw the DTR.

To complete the review, which includes legislative and certification issues, I respectively request an extension to the review time to 28 August 2015.

[109] No explanation is given as to why further time from Mr Ferguson’s initial requested extension date of 28 August 2015 until the second review decision date of 5 April 2016 (a period of over 7 months) was taken. Presumably this time was taken to obtain and consider the report of Mr Van de Hoef, which was dated 3 December 2015, but no details are provided.
[110] In the absence of any explanation, I cannot be satisfied that the review decision was made as soon as practicable.
[111] The QBCC submit that the 10 month period to make the second review decision was authorised by the owners. Section 86C(2) of the QBCC Act provides as follows:

86C Internal review decision

(2) For subsection 91) the required period is –

(a) 28 days after the internal review application is made; or

(b) a longer period agreed to by the applicant.

[112] The QBCC Act does not specifically require an extension of time to conduct the internal review to also be approved, or submissions be sought from, other concerned parties. This is a surprising omission, as it is a basic principle in applications for extension of time before the Tribunal or Courts in other matters that whether any prejudice or detriment to another party would be caused, is a factor to be considered^[45].
[113] It is entirely conceivable that delay in completing an internal review may cause prejudice or detriment to another party, for example where the other party has relied upon the decision and takes subsequent steps or commitments in reliance upon it.
[114] An issue as to natural justice also arises where a review decision is delayed, where that decision may affect the rights or obligations of another party, but that other party is not given an opportunity to make submissions on the proposed extension.
[115] In this matter, the builder was not consulted as to any of the purported agreed extensions. The builder was not granted natural justice in the granting of the extensions.
[116] Whilst the builder says that there is no evidence that the owners agreed to the extensions of time for the review, Ms Alexander states that the owners agreed to the extensions. I am not in a position in an on the papers decision to assess the credibility of Ms Alexander’s evidence, but see no basis to question it.
[117] I am not satisfied therefore that a basis exists for me to conclude that the owners did not agree to extensions of time, and that the deeming provision is activated, such that the review decision is deemed to be the original decision.

Determinations as to issues 1 to 6

[118] Issue 1 has to be determined that there was no breach of s 86C(4), as Mr Ferguson was not the maker of the decision being reviewed in either review.
[119] Issue 2 is determined that the QBCC failed to follow its internal review policy in Clause 5 in appointing him as the second internal reviewer, as Mr Ferguson was ‘involved’ in making the first review decision.
[120] Issue 3 is determined that the QBCC did not fail to comply with the requirements of section 86C(4) as to the appointment of a less senior officer to conduct the review, because whether Mr Ferguson was a less senior officer than Mr Piper is not in dispute.
[121] Issue 4 is determined that the second internal review was a review of issues that had already been internally reviewed, and the second internal review was not available under the QBCC Act.
[122] Issue 5 is determined that I am not satisfied that the decision of 5 April 2016 was made as soon as practicable.
[123] Issue 6 is determined that section 86C(3) does not apply to deem that the QBCC made a decision the same as the reviewable decision.

Determination of Issue 7

[124] I have found that the second review process was not properly initiated; should not have been conducted by Mr Ferguson; was not fairly conducted; and failed to consider the issue of whether it was fair to issue a Direction to Rectify in the circumstances. The decision of Mr Ferguson therefore cannot stand.
[125] The builder has requested in the Application filed in the Tribunal that the Tribunal set aside the decision of Mr Stephen Ferguson dated 5 April 2016, and affirm the decision of Mr Bill Piper dated 21 April 2015; or alternatively invite Mr Ferguson, the decision maker, to reconsider the decision^[46].
[126] I will set aside the decision of Mr Ferguson, and the Direction to Rectify issued by him.
[127] The decision of Mr Piper has not been brought to the Tribunal to be reviewed. I therefore make no order as to the decision of Mr Piper, but note that the internal review decision which set it aside, having now itself been set aside, the decision of Mr Piper remains in force.
[128] The builder has applied for costs in its Application to Review. The rule in the Tribunal is that each party usually bears their own costs, unless the interests of justice require otherwise^[47].
[129] Costs will normally only be awarded for professional costs. The builder was not formally represented in the proceedings, but may have incurred legal costs and outlays in the course of the proceedings which possibly may be considered.
[130] No submissions have been made by either the builder or the QBCC as to costs. The parties may discuss the aspect of costs if they are being pursued, and an application for costs, together with supporting submissions, may be made by either party.

Order

[131] I order that:

• (a) The decision of the Queensland Building and Construction Commission made on 5 April 2016, that work under Direction to Rectify and/or Complete No 40913 had not been satisfactorily rectified, is set aside.
• (b) The Direction to Rectify and/or Complete No 42267 issued by the Queensland Building and Construction Commission on 5 April 2016 is set aside.
• (c) Peter Whalley, or the Queensland Building and Construction Commission, may make an application for costs consequent upon this decision, by the filing of a Miscellaneous Application together with supporting submissions, if desired.

---

^[1] Statement of Reasons of QBCC filed 7 July 2016, p 28.

^[2] Statement of Reasons of QBCC filed 7 July 2016, p 36.

^[3] Statement of Reasons of QBCC filed 7 July 2016, p 116.

^[4] Statement of Reasons of QBCC filed 7 July 2016, p 119.

^[5] Statement of Reasons of QBCC filed 7 July 2016, p 124.

^[6] Statement of Reasons of QBCC filed 7 July 2016, p 28.

^[7] Statement of Reasons of QBCC filed 7 July 2016, p 162.

^[8] Statement of Reasons of QBCC filed 7 July 2016, p 154.

^[9] Statement of Reasons of QBCC filed 7 July 2016, p 169.

^[10] Statement of Reasons of QBCC filed 7 July 2016, p 156.

^[11] Statement of Nancy Alexander filed 21 September 2016, para 10.

^[12] Statement of Reasons of QBCC filed 7 July 2016, p 183.

^[13] Statement of Reasons of QBCC filed 7 July 2016, p 186.

^[14] Statement of Reasons of QBCC filed 7 July 2016, p 190.

^[15] Statement of Reasons of QBCC filed 7 July 2016, p 192.

^[16] Statement of Nancy Alexander filed 21 September 2016, para 14.

^[17] Statement of Reasons of QBCC filed 7 July 2016, p 232.

^[18] Statement of Reasons of QBCC filed 7 July 2016, p 202.

^[19] Statement of Reasons of QBCC filed 7 July 2016, p 241.

^[20] Statement of Reasons of QBCC filed 7 July 2016, p 147 to 155.

^[21] Statement of Reasons of QBCC filed 7 July 2016, p 169 to 175.

^[22] Statement of Reasons of QBCC filed 7 July 2016, p 193.

^[23] Statement of Nancy Alexander filed 21 September 2016, para 14.

^[24] Statement of Nancy Alexander filed 21 September 2016, para 15.

^[25] Statement of Nancy Alexander filed 21 September 2016, para 21(a)(iv).

^[26] Applicant’s Statement in Reply filed 17 October 2016, para 4.2.

^[27] Applicant’s Statement in Reply filed 17 October 2016, para 5.2.

^[28] Statement of Nancy Alexander filed 21 September 2016, para 21(b)(ii).

^[29] www.qbcc.qld.gov.au/defective-work-disputes/dispute-qbcc-decision.

^[30] Applicant’s Statement in Reply filed 17 October 2016, para 9.6.

^[31] Applicant’s Statement in Reply filed 17 October 2016, para 10.1.

^[32] Collins Concise Dictionary of the English Language (Australian Edition), William Collins Sons & Co Ltd, 1982.

^[33] Statement of Reasons of QBCC filed 7 July 2016, p 21.

^[34] Statements of Evidence for the Application filed on 20 July 2016, para 7.

^[35] Applicant’s Statement in Reply filed 17 October 2016, paras 7.7 and 7.8.

^[36] Applicant’s Statement in Reply filed 17 October 2016, Attachment p 19.

^[37] Statement of Reasons of QBCC filed 7 July 2016, p 24.

^[38] Applicant’s Statement in Reply filed 17 October 2016, para 7.10.

^[39] Statement of Reasons of QBCC filed 7 July 2016, p 162.

^[40] Fontain v QBSA [2004] QCCTB 163, applied in Glen Williams Pty Ltd v Queensland Building Services Authority [2012] QCAT 127.

^[41] Imperial Homes (Queensland) Pty Ltd v Queensland Building and Construction Commission [2014] QCAT 042 at [63].

^[42] Queensland Building and Construction Commission Act 1991 (Qld), s 86C(2)(a).

^[43] Statement of Reasons of QBCC filed 7 July 2016, p 21.

^[44] Statement of Reasons of QBCC filed 7 July 2016, p 21.

^[45] For example Section 61(3) Queensland Civil and Administrative Tribunal Act 2009 (Qld).

^[46] Application to review a decision filed 6 May 2016, Annexure 1 p 4.

^[47] Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102.