Parliament Rectifies Problems with Directions to Rectify

Under section 72 of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), the Queensland Building and Construction Commission (QBCC), is able to direct a person who carried out building work to rectify such work if it is defective or incomplete. The QBCC Act also sets out mechanisms regarding when a direction can be given and how long the QBCC must give a contractor to rectify such work. 

What needed rectifying?

Subsection 72(2A) of the QBCC Act previously provided that the QBCC must make a direction to rectify (DTR) before the end of ‘the period prescribed by regulation.’

In addition, subsection 72(4) of the QBCC Act provided that the period stated in the DTR – within which the contractor is to rectify defective building work, must be ‘the period prescribed by regulation’ unless the QBCC is satisfied that the defect would cause substantial losses, or pose a significant hazard to health, safety or the environment if rectification was delayed.

The Queensland Building and Construction Commission Regulation 2018 (Qld) (QBCC Regulation) did not prescribe either of these timeframes.

Due to the absence of timeframes being prescribed, especially in relation to the period to rectify building work, concerns were raised as to whether DTRs issued by the QBCC since 11 November 2019 (when the relevant sections of the QBCC Act above were amended) were lawful. These concerns caused the interim QBCC Commissioner to email QBCC staff in November 2021 requesting a halt to issuing any further statutory notices regarding DTRs. It is estimated that hundreds of DTRs were issued between 11 November 2019 and the halt in November 2021.

The consequences of failing to comply with a DTR within the required timeframe can be severe, and include:

• licence demerit points;
• the addition of conditions to licenses;
• the issue of  show-cause notices that can result in suspension or cancellation of a license; and
• prosecutions, fines, and other disciplinary action.

At this stage, it is unclear how action taken by the QBCC in relation to non-compliances with DTRs issued prior to the halt in November 2019 will be impacted (if at all).

What has the QBCC done to rectify this?

On 10 November 2021, the Queensland Building and Construction Commission (Rectification of Building Work) Amendment Regulation 2021 (Qld) inserted a new section 53A into the QBCC Regulation.  Section 53A provides that, for the purpose of section 72(4) of the QBCC Act, the period to be stated in a DTR within which the contractor must rectify defective building work begins on the day that the DTR is made and ends 35 days from that date. 

The effect of the insertion of section 53A into the QBCC Regulation is that there is now a prescribed timeframe in the QBCC Regulation for the purpose of section 72(4) of the QBCC Act.

Furthermore, on 24 November 2021, as part of the Justice and Other Legislation Amendment Act 2021 No. 23 (Qld), subsection 72(2A) of the QBCC Act was replaced with subsection 72(2AA) which provides that a regulation ‘may’ prescribe a period within which the QBCC must make a DTR. A new subsection 72(2A) was also inserted which provides that ‘if’ a period is prescribed under subsection 72(2AA), then the QBCC must make the DTR within that prescribed period.

This amendment to the QBCC Act replaces the original language of ‘must’, with the effect that it is no longer necessary for the QBCC Regulation to prescribe a timeframe within which the QBCC must make a DTR. Without a prescribed timeframe in the QBCC Regulation, section 72A(3) of the QBCC Act will generally apply, which provides that a DTR cannot be given more than six years and six months after the building work – to which the direction relates was completed, or left in an incomplete state. We note that the QBCC can apply to the Tribunal to extend this time if there are ‘sufficient reasons’ to do so, but this is unlikely to be a common occurrence.

What do these changes mean?

The changes provide welcome clarification in relation to the operation of the DTR regime in the QBCC Act. Importantly, contractors should be aware that if they are issued with a DTR, the timeframe for rectification stated in the DTR should generally be 35 days, unless any of the relevant conditions apply.

For further information about how these issues may affect you, please contact our team.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.