By Michael Callow, Partner
In Queensland, people or companies wishing to undertake building work have an obligation to hold a Building Services Authority licence. I expect that requirement is for the protection of the public, to ensure any building work undertaken is done so by qualified trades people.
One of the consequences of undertaking unlicensed building work was highlighted in a recent action brought under the Queensland Building Services Authority Act, when an unlicensed contractor commenced a claim for an unpaid final claim.
The unlicensed contractor, Mr McCoy, reached agreement with Mr and Mrs Sloss to find a removal home to be relocated to a block of land owned by the Slosses, and to undertake the work necessary to obtain council approval, to then able the house to either be rented, or sold.
Mr McCoy successfully identified a suitable house, relocated it to the vacant block, and undertook, either by himself or with the assistance of other relevant trades people, the work necessary to satisfy council.
There was trouble in paradise however, when the budget blew out (which is probably a familiar story for people having a home built). Mr and Mrs Sloss were also “dismayed to discover” that they did not qualify for the first home owner’s grant, which they had, it would appear, factored in to contribute $21,000.00 towards the cost of the project. Consequently, when Mr McCoy delivered his last account to the Slosses they refused to pay, resulting in proceedings being commenced to recover the final claim.
Unfortunately for Mr McCoy his lack of a QBSA licence came back to haunt him.
Under the Queensland Building Services Authority Act an unlicensed person cannot recover an amount for that person’s own labour, or for any profit which would have been made by the person, for carrying out building work. There remains an entitlement for an unlicensed person to recover costs paid for material, to other people for their labour, or for other costs, but the legislation does not allow an unlicensed person to personally be rewarded for undertaking building work – the price to be paid for not being licensed.
In determining Mr McCoy’s claim, the tribunal allowed Mr McCoy to recover costs incurred in undertaking the project, including the provision of materials and labour from other people, in an amount of slightly less than $10,000.00. However, the tribunal also identified that the Slosses had paid to Mr McCoy almost $27,500.00, including GST, for his labour to which Mr McCoy was not entitled, with the end result being an order that Mr McCoy in fact pay to the Slosses approximately $17,500.00, being the difference between the two amounts.
There was no question that Mr McCoy had not performed the contract in a tradesmanlike manner, with no complaints as to the relocation and establishment of the house, however, his lack of a licence meant he received no benefit in the process. And to add injury to insult Mr and Mrs Sloss reported Mr McCoy to the Building Services Authority for being unlicensed which in all likelihood led to a fine being imposed. I expect the Slosses are not on Mr McCoy’s Christmas list!