“It’s okay, you won’t need a licence….”; another contractor falls afoul of the QBCC licensing regime
The licensing regime erected by the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) is, to quote Churchill “a riddle, wrapped in a mystery, inside an enigma”. That said, if you want to be involved in the construction industry in Queensland, it is a riddle which you need to grapple with. A recent case provides a useful illustration of some of the consequences if you do not pay careful attention to the licensing regime.
St Hilliers v Pronto
In St Hillers Property Pty Ltd v Pronto Solar Innovations Pty Ltd [2018] QSC 164, His Honour Daubney J was confronted with an unlicensed subcontractor (Pronto) who St Hilliers had engaged to carry out piledriving, pre-drilling and refuse pile remediation works. Section 42(1) of the QBCC Act relevantly provides that (subject to some limited exceptions) an unlicensed entity may not:
undertake to carry out “building work” (as that term is defined in the QBCC Act); or
carry out “building work” (again, as that term is defined in the QBCC Act).
Section 42 provides that, subject to a limited right to claim “out of pocket” expenses, a party who contravenes 42(1) is not entitled to any monetary consideration for the “building work”1. We note in passing that this is the outcome, even if only a minute amount of work falls outside of any licence which a person may hold2.
It was accepted by His Honour that Pronto did not hold an appropriate licence; and consequently, Pronto was not entitled to any monetary consideration for the “building work”. This also meant that Pronto could not take advantage of the regime set out in the Subcontractors’ Charges Act 1974 (Qld). Nor could Pronto have taken advantage of the Building and Construction Industry Payments Act 2004 (Qld).
Interestingly, Pronto’s unsuccessful defence relied upon a promise made by St Hillers, in terms “That’s okay [Pronto] won’t need a QBCC licence, it will be working under our licence and we will be signing off on the finished works.”3
In effect, Pronto was arguing that St Hilliers was aware that Pronto did not hold a licence and that this was sufficient to prevent St Hillers from relying upon section 42. As such, it would appear that such a defence is unavailable to prevent the operation of section 42.
What should you do?
First, before you tender for work, you should carry out a comprehensive review of the relevant scope of works in order to ensure that you hold the appropriate licence.
Second, if, having carried out such a review you do not hold the appropriate licence, you will need to ensure that you obtain the appropriate licence, or alternatively, you consider structuring your tender/contract to take advantage of one of the exceptions to section 42.
Third, you should ensure that your contract is appropriately drafted so as to minimise the impact of section 42 of the QBCC Act.
In any event, we suggest that you obtain legal advice at an early stage (preferably before you tender for any work).
Our team of building and construction law experts can assist you with respect to any licensing enquiries which you may have. If you are in need of legal advice, contact one of our Solicitors.