AITKEN WHYTE LAWYERS BRISBANE – BUILDING AND CONSTRUCTION LAWYERS AND SOLICITORS FOR BRISBANE, QUEENSLAND
A builder can’t undertake to carry out, or carry out, building work unless it has the appropriate licence. If an unlicensed builder carries out work, the unlicensed builder is prevented from claiming payment.
Aitken Whyte Lawyers recently acted for successful plaintiffs in the District Court of Queensland.
The plaintiffs – residents in Queensland – had engaged two companies to install a roof on their new dream home. Unknown to the plaintiffs at the time, both building companies were unlicensed.
As issues with the roof arose during its installation, the plaintiffs eventually discovered the truth. Neither company had a QBCC licence to carry out building work.
Section 42 of the Queensland Building and Constructions Commission Act 1991 (Qld) (QBCC Act) includes:
(1) …a person must not carry out, or undertake to carry out, building work unless the person holds a contractor’s licence of the appropriate class…
(3) Subject to subsection (4), a person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so.
(4) A person is not stopped under subsection (3) from claiming reasonable remuneration for carrying out building work, but only if the amount claimed-
(a) is not more than the amount paid by the person in supplying materials and labour for carrying out the building work; and
(b) does not include allowance for any of the following-
(i) the supply of the person’s own labour;
(ii) the making of a profit by the person for carrying out the building work;
(iii) costs incurred by the person in supplying materials and labour if, in the circumstances, the costs were not reasonably incurred; and
(c) is not more than any amount agreed to, or purportedly agreed to, as the price for carrying out the building work; and
(d) does not include any amount paid by the person that may fairly be characterised as being, in substance, an amount paid for the person’s own direct or indirect benefit.
Sub-section 42(1) of the QBCC Act precludes a person (including a company) from either undertaking to carry out, or carrying out, building work unless it has the appropriate licence.
If an unlicenced builder carries out work, sub-section 42(3) prevents the unlicensed builder from claiming payment.
To make a claim that falls within sub-section 42(4), the unlicenced builder must adhere to specific requirements. Unlicenced builders frequently fail to prove counterclaims that falls within section 42(4). In the above mentioned case; only one of the unlicenced building companies made the counterclaim to seek to recover expenses. However, that entity could not prove at trial that it had actually incurred and paid any of the expenses.
In this case, the building companies undertook to carry out, and carried out building works (installing a roof), without the required QBCC licence. The QBCC website conveniently contains search functions to quickly find whether or not a builder holds a QBCC licence: https://my.qbcc.qld.gov.au/s/search-a-register
Yet the preclusion in sub-section 42(3) preventing the unlicenced builder from claiming payment is subject to s. 42(4) of the QBCC Act.
Sub-section 42(4) may be relied on as a ‘saving grace’ for unlicenced builders. If engaged, the unlicenced builder may recover money for any reasonable expenses incurred and paid. This can include materials and external labour sourced. This section has been likened to a ‘quantum meruit’ claim.
Courts have generally taken quite a strict view on counterclaims by unlicenced builders. In the infamous case of Cook’s Construction Pty Ltd v Stork Food Systems Aus Pty Ltd [2009] QCA 75, an unlicenced builder failed to prove its counterclaim for reasonable remuneration under s. 42(4), resulting in losses of millions of dollars to the company. The outcome was described as ‘scandalous’. This case shows the evidence needed to prove a claim under s. 42(4) must be prepared with great care.
Similarly to Cook’s Construction, the unlicensed builders’ counterclaim against our clients was dismissed. Our clients, the plaintiffs, were also successful in obtaining judgment for the entire amount of money that they had paid to the unlicensed builders.
Our clients were also successful in obtaining a costs order against the defendants.
The general rule is that costs follow the event. Rule 681 of the Uniform Civil Procedure Rules 1999 (Qld) sets out this general principle. If you are successful in obtaining orders from the Court against the opposing party, then the Court usually makes a costs order in your favour.
The Court has a discretion as to whether to award costs and on what basis any costs order should be made.
We have experience acting in building disputes. If you wish to make a claim, or you have received a claim and statement of claim, please feel free to contact us to discuss your matter with a lawyer.
When disputes arise, Aitken Whyte Lawyers can assist in providing advice and advocating for a builder or owner during any dispute such as a dispute about whether the builder is appropriately licenced and if the builder is entitled to payment for the work undertaken.
Obtaining legal advice before taking any steps which affect the legal relationship between builder and owner is highly recommended. However when this doesn’t occur, Aitken Whyte Lawyers can assist you with any disputes in QCAT or in any court.
Brisbane
Aitken Whyte Lawyers Brisbane
2/414 Upper Roma Street
Brisbane QLD 4000
