QBBC Insurance Recovery Reigns Supreme

If you perform building work which is covered by the QBCC’s statutory insurance scheme then you must take every opportunity to challenge decisions made by the QBCC which may result in a payment under that scheme. 

Examples where payments might be made from the QBCC’s insurance scheme are:

• Your work is defective
• You have not complied with a direction to rectify defective work
• The value/scope of work required to rectify defective work

A recent case highlights this need.

QBCC v Turcinovic

A builder carried out defective work at 6 residential sites in Brisbane. The builder did challenge some of the QBCC’s decisions regarding defects and successfully argued to reduce the scope of work required to rectify those defects.

The QBCC made payments under its insurance scheme for rectification work which was carried out by other builders at these sites.

QBCC then filed a claim against the builder to recover the amounts paid out under its insurance scheme.

The builder successfully resisted judgment based on the fact there were considerable differences between what a quantity surveyor said was the value of the rectification work and what the QBCC paid out under its insurance scheme.

The Queensland Court of Appeal found that the difference between the QS’ valuation and what the QBCC paid under the scheme was not a valid reason to prevent judgment against the builder.

The Court found that the builder could have exercised his review rights earlier. The fact that he had not meant that he had no prospect of successfully challenging the QBCC’s right to recover the payment after monies were paid out under the insurance scheme.

The builder was ordered to pay QBCC in excess of $200,000 plus interest and legal costs.

Lessons

If you are served with a direction to rectify defective works, you must seek a review within 28 days if you disagree with the direction.

If you fail to do so, and the work is not rectified, QBCC will deal with the defects by paying out under the insurance scheme. Tenders will be called for rectification work and those works will be performed by someone else. The amount of the money paid out under the QBCC’s insurance scheme will then be a debt due to QBCC by you.

You are also able to challenge the scope of the defect rectification works.

Note also that company directors can be personally pursued for debts owed by the company to the QBCC.

Please do not hesitate to contact John Carey of our office if you have any queries.