Queensland Building Corporation Commission v Kouzmenkov [2022] QDC 81

Michael Creedon |  Megan Sharkey  |  Zariyah Ahmed

Key takeout

A builder whose name and licence number is stated on a contract and certificate of insurance under the Queensland Home Warranty Scheme (Scheme) is liable to the Queensland Building Construction Commission (QBCC) regardless of whether they no longer hold a licence or are not actually completing building works.

Builders need to be aware if their licence is cancelled or allowed to lapse during building works they may still be liable to the QBCC for amounts paid under the Scheme.

Facts

The defendant, Mr Kouzmenkov (builder), held a builder low-rise licence (licence), entered into a contract to build a residential dwelling for Mr Caddle (homeowner). The builder obtained a certificate of insurance for statutory insurance under the Scheme, which identified his name and licence number on the contract.

The builder carried out works under the contract between August 2020 and January 2021.  In December 2020, the builder’s licence was cancelled.  In January 2021, the homeowner terminated the contract with the builder for, among other reasons, the builder’s failure to progress the work diligently.  The homeowner submitted a claim to the QBCC requesting completion of the works under the statutory insurance policy and rectification of defects.

The QBCC obtained a defect assessment and completion assessment report and a tender for the completion of the contract works.  Ultimately, the QBCC paid an amount under the statutory insurance policy for the completion of the outstanding works and rectification of the defects.

The QBCC commenced a claim against the builder under s71 of the Queensland Building and Construction Commission Act 1991 (Qld) (Act) seeking to recover the money it paid to have the building works completed and applied to the District Court for summary judgment of that claim.  Section 71(1) of the Act provides the QBCC may recover a payment under the statutory insurance scheme, as a debt from the builder.

The builder did not lead any evidence to defend the application brought by the QBCC, and argued that he could not possibly be liable because his licence had been cancelled in December 2020. 

Decision

Summary judgment was ordered in favour of the QBCC for the cost of completing the works under the Scheme.

Sections 71(2)(a)(ii) and (iv) of the Act make it clear that the person whose name and licence number appear on a contract and certificate of insurance, is the person liable to the QBCC in any recovery action for an amount paid under the Scheme.  The name and licence number listed on the contract and insurance scheme attract the liability to the QBCC. It is not whether the builder is licenced for the whole period of work. 

Even though the builder had not held a licence for a part of the work period, the builder was still liable to the QBCC for the amount paid to the homeowner under the scheme as it was his name listed on the contract and certificate of insurance.

The court clarified that the summary judgment application was not the place to challenge the QBCC’s decision, which lead to the making of a payment under the Scheme.  The time for such a challenge was in earlier in administrative style reviews, in accordance with the process in the Act or by appeal to QCAT.