QBCC debt recovery - Are you really liable?

The QBCC administers a statutory insurance scheme for the benefit of homeowners left with

defective or incomplete work. In circumstances where a valid claim under the insurance policy

conditions are made, a claim amount is paid for the rectification or completion of those works. The

QBCC has legislative powers to recover those monies from a variety of defined individuals, including

the contractor who undertook the work, a person (not necessarily licensed) who made profit from

the work and, in some cases, the director of the licenced company who was responsible for the

defects or incomplete works.

The QBCC regularly takes a broad interpretation of the legislative provisions enabling it to recover

insurance payments made under the scheme. We just received a decision from the District Court in

recovery proceedings commenced by the QBCC against our client, seeking to recovery $200,000 on

the basis that he was a director of the company who undertook the work. Some time prior to the QBCC’s involvement,

the company had gone into liquidation sometime and our client was one of three individuals pursued for the debt.

Our client was a director for a very short period of time, but resigned at the time of the works having

reached base stage, well and truly before the relevant contract was terminated and the works were

left incomplete.

The QBCC argued that even though he had resigned, our client was still a director of the company

and was therefore liable for the debt. Our client’s case was that he was not a director at the time

the work the subject of the claim was carried out and, for that reason, he was not liable to repay the

insurance debt. The Court ultimately accepted our client’s position and dismissed the QBCC’s claim.

While this decision is a great outcome for our client, it may not be applicable to every individual who

is being pursued by the QBCC. For that reason, we suggest obtaining advice as to your specific

situation should you ever receive a letter of demand from the QBCC.

Read the judgment yourself:

https://archive.sclqld.org.au/qjudgment/2021/QDC21-136.pdf