In the recent case of Queensland Building and Construction Commission v Smith [2024] QDC 101, the Queensland Building and Construction Commission (QBCC) sought to recover amounts it had paid under the home warranty statutory insurance scheme (Scheme) from a director of a deregistered building company. The preliminary legal issue was whether the former director could be held liable for amounts paid by the QBCC under the Scheme after the company’s deregistration. The court held that the former director could indeed be liable for those amounts despite the company’s deregistration.
The QBCC relied on sections 71 and 111C of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) to pursue the director personally for amounts paid under the Scheme. While section 71(1) allows the QBCC to recover amounts from the building contractor (company) responsible for the relevant work, section 111C imposes liability for amounts paid under the Scheme upon individual directors at the time (1) the residential construction work was, or was to be, carried out and (2) at the time the payment was made by the QBCC.
The court examined the effect of a company’s deregistration under section 601AD of the Corporations Act 2001 (Cth), which typically extinguishes a company’s liabilities. However, section 111C(7) of the QBCC Act specifies that a director’s liability applies regardless of the company’s status, including deregistration. The court concluded that the Scheme intended for directors to be liable for unpaid amounts even if the building company was deregistered at the time the QBCC made the payment under the Scheme.
In our experience, QBCC debt recovery claims are difficult to defend, given the long line of court decisions in this area. If you require advice in respect of a QBCC claim against you, please do not hesitate to contact our team on (07) 3139 1874 or email us at info@constructlaw.com.au.
This article is provided for general information and educational purposes only and should not be taken to be legal advice. Each set of facts is different and therefore you should obtain specific legal advice.
