Written by: Rachel Gallacher, Litigation Solicitor
Dealing with insurance for defective construction work? Hold on before you start fixing things yourself!
A recent case, Perry v Queensland Building and Construction Commission (no. 2) [2023] QCAT 286, sheds light on a crucial aspect of insurance claims. It emphasises the importance of seeking legal advice from a Litigation Lawyer before you attempt any rectification work on faulty construction.
The Case in a Nutshell
In the Perry case, a property owner hired a contractor for roofing work. Unfortunately, the completed job turned out to be defective. The property owner then submitted a claim under the Statutory Insurance Scheme, seeking coverage for the costs of fixing the issues. However, the claim was rejected by the Queensland Building and Construction Commission (QBCC), citing Section 61 of the Terms of Cover.
What’s Section 61 About?
Section 61 of the Terms of Cover allows QBCC to reject a claim if the contractor performing the work didn’t have the required insurance at the time they were hired. In Perry’s situation, the rejection happened because the contractor lacked the necessary insurance when they did the roofing work.
The Review Application
Undeterred by the rejection, the applicant sought to challenge the QBCC’s decision by applying to the Queensland Civil and Administrative Tribunal (QCAT) for a review of the disallowed claim. During this process, the applicant took an additional step by engaging another contractor to carry out the rectification work.
The Section 64 Dilemma
The pivotal question before the tribunal was whether the applicant’s act of carrying out rectification work without obtaining prior written approval would also preclude their claim under Section 64 of the Terms of Cover.
Section 64 Explained
Section 64 states that if the QBCC has already refused an applicant’s claim, any rectification work done without the board’s prior written approval won’t be covered under the Statutory Insurance Scheme. In simpler terms, if you go ahead with repairs without authorisation, you might lose your chance to claim compensation for those expenses.
The Tribunal’s Ruling
The tribunal, in its decision, clarified that Section 64 only applies to rectification work conducted before the QBCC makes a decision to refuse the claim. In this case, since the rectification work was carried out after the claim had already been rejected, Section 64 did not preclude the applicant from seeking coverage for the rectification expenses.
Implications
When it comes to dealing with insurance claims for defective construction, a Litigation Lawyer can be your best ally. Before you take any steps to fix the issues yourself, it’s essential to seek professional advice. Contact our Litigation team today to get tailored advice and avoid costly mistakes!
Disclaimer:
The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.
