Can a Queensland Owner Lock You Out When Defective Work Is Disputed?

What is a Queensland Builders Rights?

Published by Odyssey Legal | Business & Litigation Lawyers

Queensland builders are routinely locked out of sites by property owners who dispute the quality of their work, often before the builder has had any chance to respond. What most builders do not know is that the law generally requires an owner to give the original builder a reasonable opportunity to rectify defects before engaging another contractor. If the owner refuses access without justification, their ability to recover the full cost of third-party repairs may be significantly reduced or eliminated entirely.

Your Duty to Mitigate: The Legal Principle That Protects Builders

The starting point in any defective building work dispute is the principle established in Hasell v Bagot, Shakes & Lewis Ltd (1911) 13 CLR 374, a High Court of Australia decision that remains authoritative today. The High Court confirmed that a party who suffers loss from a breach of contract is not entitled to recover losses that reasonable care on their part would have prevented. Applied to building disputes, this means an owner who refuses to allow the builder to rectify defects may not be entitled to recover avoidable losses.

This principle was applied directly in the Queensland context in Aquavista Pty Ltd v Timevale Pty Ltd [2016] QDC 235, a Queensland District Court matter heard in Maroochydore. The court confirmed that the duty to mitigate requires owners to take active, reasonable steps to avoid loss and that unreasonable action or inaction may prevent recovery of the losses that follow.

More recently, in The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067, Ball J summarised the overarching rule: an owner is not entitled to recover losses attributable to their own unreasonable conduct. The owner's obligation to mitigate is not passive - it requires positive steps, including giving the builder a genuine opportunity to come back and fix the defects.

Key point for builders: An owner who locks you out and then claims third-party repair costs against you may only be entitled to recover what it would have cost you to fix the defects - not what they actually paid someone else.

The General Rule: Owners Must Give Builders a Reasonable Opportunity to Rectify

The established legal position in Queensland, and confirmed in the Queensland Court of Appeal,  is that owners must generally give the original builder a reasonable opportunity to rectify defects before engaging a third party. This obligation arises both as an aspect of the duty to mitigate and, in some contracts, as an implied term.

The Queensland Court of Appeal confirmed this in Cassidy v Engwirda Construction Co (No 2) [1968] Qd R 159, where Hoare J held that a building owner must generally give the original contractor the opportunity to rectify defects unless there is good reason to the contrary. The same case confirmed that notice is not required where the builder has already stated they will not rectify.

In Bedrock Construction and Development Pty Ltd v Crea [2021] SASCA 66, the South Australian Court of Appeal confirmed that this obligation is consistent with the duty to mitigate and may also arise as an implied term of the building contract; meaning it applies even where the contract is silent on the point.

Most recently in Queensland, Thallon Mole Group Pty Ltd v Morton [2022] QDC 224 reaffirmed these principles and confirmed that the burden of proving the owner failed to act reasonably rests with the builder as defendant. It is for you, as the builder, to establish that the owner acted unreasonably in refusing access. The owner is not required to prove the reasonableness of their own conduct.

The Four Situations Where an Owner Can Legitimately Exclude You

Courts have identified four circumstances where an owner's refusal to allow builder access is considered reasonable. Understanding these exceptions is critical - they are the scenarios you must work hardest to avoid.

1. The Owner Has Reasonably Lost Confidence in Your Ability

Where an owner has experienced repeated failed repairs, damage caused during rectification attempts, or a standard of work that gives genuine grounds for doubt, courts accept they have reasonably lost confidence in the builder. In Woodlands Oak Ltd v Conwell & Anor [2011] EWCA Civ 254, the English Court of Appeal confirmed that an owner who, through past experience, is not satisfied a contractor would satisfactorily rectify a defect, may reasonably bring in another contractor.

This was applied in Queensland in Sun Building Services Pty Ltd v Minh & Anor [2015] QCAT 134, where QCAT confirmed that prior unsatisfactory work can justify an owner's refusal to allow the original builder back on site. It was also applied in Di Blasio, where Ball J held that whether the owner has reasonably lost confidence in the builder's willingness and ability to do the work is a directly relevant factor in assessing reasonableness.

In Oliver & Jasmine Investments Pty Ltd v White [2013] VCAT 740, the Victorian Civil and Administrative Tribunal noted that a builder who is not plainly incompetent or dangerous should generally be given an opportunity to rectify.

The implication is clear: a builder who is plainly incompetent or has demonstrated dangerous work practices can be legitimately excluded.

2. You Are Denying the Defects Exist

A builder who refuses to acknowledge that defects exist cannot simultaneously assert a right to return and fix them. In Ryan v E J Lowe trading as Urbane Builders [2005] VCAT 2031, the Victorian Civil and Administrative Tribunal found that the owner reasonably refused the builder access where the builder had consistently refused to admit most of the defects until well into the trial. The Tribunal awarded the owner the full cost of independent rectification as a result.

Even where you genuinely dispute the cause or extent of defects, denial is not a strategy. Acknowledge the issue, offer to inspect, and engage with the process. Courts treat persistent denial as justification for the owner to proceed without you.

3. You Have Failed to Return to Site When Invited

In Upton v Hartman Construction Development Pty Ltd [2022] VCAT 224, the Victorian Civil and Administrative Tribunal rejected the builder's argument that the owner had failed to mitigate. The builder had attended site once, completed some, but not all, rectification works, and then chose not to return. The Tribunal held that the obligation to mitigate applied equally to the builder. By failing to return and complete the rectification, the builder could not reduce the owner's damages award.

If you are invited back to site and do not attend, you lose the ability to argue that you were denied a rectification opportunity. Respond to every defect notification in writing and confirm your availability to attend site.

4. Your Proposed Rectification Method Is Inadequate

In Steele & Associates Pty Ltd v Heath [2015] NSWCATAP 239, the NSW Civil and Administrative Tribunal Appeal Panel confirmed that an owner who reasonably relies on expert advice that the builder's proposed method of rectification is unsuitable is not acting unreasonably in excluding the builder and engaging another contractor. Where the builder's proposed approach would not actually fix the problem, the owner is justified in going elsewhere.

In Christopher Kerrie Gates v Crown Constructions Pty Ltd [2014] NSWCATCD 172, the Tribunal rejected the builder's submission that the owner failed to mitigate because the owner had reasonably concluded, based on expert advice, that the builder's proposed sealant solution would not fix the underlying water leak. The owner was justified in engaging another tradesperson to carry out the rectification work.

In The Owners - Strata Plan 89041 v Galyan Pty Ltd [2019] NSWSC 619, Stevenson J held that a proposed rectification scope that fell far short of what was actually required pointed strongly to the conclusion that the owners had acted reasonably in refusing the builder access.

The Burden of Proof: You Must Establish the Owner Failed to Mitigate

One of the most important practical points in defective building work disputes is this: as the defendant builder, it is your burden to prove that the owner (as plaintiff) acted unreasonably and failed to take reasonable steps to mitigate their loss. The owner does not have to prove they acted reasonably.

This was confirmed by the High Court in TC Industrial Plant Pty Ltd v Robert's Qld Pty Ltd (1963) 180 CLR 130, where the court held that it was for the defence to show the plaintiff had failed to mitigate. The burden does not fall on the plaintiff to prove they satisfied the obligation.

Brennan J confirmed the same position in Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81: the onus of proving failure to mitigate rests on the party in breach, that being the defendant builder.

In Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313, the NSW Court of Appeal confirmed that the plaintiff owner does not have to show they fulfilled the duty to mitigate. It is for the defendant builder to show they did not, and the extent to which they did not. The court further noted that because the builder is the wrongdoer, a high standard of conduct will not be required of the owner.

The Queensland District Court applied all of these principles in Thallon Mole Group Pty Ltd v Morton [2022] QDC 224, confirming expressly that the onus is on the builder (Thallon Mole) to prove the owner (Mrs Morton) acted unreasonably. It was not for the owner to prove she acted reasonably.

Practical reality: Builders who respond promptly, document their offers to rectify, and are then excluded without justification routinely reduce or eliminate damages claims against them. Builders who deny defects or go silent hand that advantage to the owner.

What to Do the Moment a Defect Complaint Arrives

Your response in the first 24 to 48 hours after receiving a defect notification can determine the outcome of any future QCAT or court proceedings. Take these steps immediately:

• Acknowledge the complaint in writing. Do not dismiss or ignore it, even where you dispute the characterisation of the defects.
• Request access to site in writing to inspect the alleged defects. Keep a copy of that request.
• Document your inspection with photographs, written notes, and dates. Bring an independent tradesperson where possible.
• Respond with a written scope of proposed rectification works and a realistic timeframe. Be specific; vague commitments will not protect your position.
• If access is refused, record that refusal in writing and confirm your readiness and willingness to rectify.
• If the owner proceeds without you, obtain your own estimate of what rectification would have cost you.
• Seek legal advice before the dispute reaches QCAT or court. Early advice significantly limits your exposure.

Under the Queensland Building and Construction Commission Act 1991 (QBCC Act), owners of residential building work can lodge complaints with the Queensland Building and Construction Commission (QBCC). The QBCC may issue a direction to rectify. Responding promptly and professionally to any QBCC involvement protects your licence and your record.

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Frequently Asked Questions - Builder Rights in Defect Disputes Queensland

Q. Does an owner have to give me the opportunity to fix defective building work before claiming repair costs against me?

Yes, as a general rule. Australian courts - including Queensland courts applying Cassidy v Engwirda Construction Co (No 2) [1968] Qd R 159 and Thallon Mole Group Pty Ltd v Morton [2022] QDC 224 - require owners to give builders a reasonable opportunity to rectify defects before engaging another contractor. If they refuse without justification, their damages claim against you may be limited to what it would have cost you to fix the defects. Exceptions apply where you have denied the defects, failed to return, or your proposed method was inadequate.

Q. Who bears the burden of proving I acted unreasonably in a defect dispute?

You do, as the defendant builder. Under the principle confirmed in Industrial Plant Pty Ltd v Robert's Qld Pty Ltd (1963) 180 CLR 130 and Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81, and applied in Queensland in Thallon Mole Group Pty Ltd v Morton [2022] QDC 224, the burden of establishing that the plaintiff (owner) failed to mitigate rests with the defendant (builder). The owner is not required to prove they acted reasonably. You must prove they did not.

Q. Can an owner claim the full cost of a third-party contractor against me if they locked me out?

Not necessarily. Courts will generally limit recovery to the amount it would have cost you to rectify the defects if the owner excluded you without justification. In Woodlands Oak Ltd v Conwell & Anor [2011] EWCA Civ 254, the English Court of Appeal awarded the owner nothing for defects where they had not given the builder an opportunity to rectify at no cost to themselves. You need documentation showing you were ready and willing to rectify and that your proposed method was adequate.

Q. The owner says they lost confidence in me. Can they use that to justify locking me out?

Yes, if that loss of confidence is objectively reasonable. Courts in Queensland - including QCAT in Sun Building Services Pty Ltd v Minh & Anor [2015] QCAT 134 - have accepted that prior unsatisfactory work, failed repair attempts, or damage caused during rectification can justify an owner's refusal to allow the original builder back on site. This is why the standard of every rectification attempt matters. Poorly executed repairs create a stronger basis for the owner to exclude you entirely.

Q. What legislation governs defective building work disputes in Queensland?

Residential building work is primarily governed by the Queensland Building and Construction Commission Act 1991 (QBCC Act), which sets out statutory warranties and the QBCC complaints process. General contract law principles - including the duty to mitigate established in Hasell v Bagot, Shakes & Lewis Ltd (1911) 13 CLR 374 - apply to both residential and commercial work. The Building Industry Fairness (Security of Payment) Act 2017 governs payment disputes, which may arise alongside defect claims.

Q. The owner rejected my proposed method of rectification and went elsewhere. Can I still limit my liability?

Potentially yes - but only if your proposed method was genuinely adequate. In Steele & Associates Pty Ltd v Heath [2015] NSWCATAP 239, the Tribunal found the owner was justified in rejecting a builder's proposed method where expert evidence supported the owner's position. If your proposal was sound and the owner rejected it unreasonably, you can challenge the quantum of their damages claim. If it was inadequate, courts will find the owner acted reasonably in engaging another contractor.

Q. A QBCC direction to rectify has been issued against me. What does that mean?

A direction to rectify from the Queensland Building and Construction Commission (QBCC) requires you to carry out specified works within a set timeframe under the Queensland Building and Construction Commission Act 1991 (QBCC Act). Non-compliance can result in disciplinary action including suspension or cancellation of your QBCC licence. You can apply for internal review of a direction, and legal advice should be obtained promptly. Compliance - even under protest - is generally preferable to ignoring the direction.

Q. Can I use BIFA to recover payment if the owner withholds money over a defect dispute?

Often yes. Under the Building Industry Fairness (Security of Payment) Act 2017 (BIFA), subcontractors and contractors in Queensland can claim progress payments and seek adjudication even where the owner is disputing defects. A defect dispute does not automatically entitle an owner to withhold payment under BIFA. Legal advice on your specific contract and circumstances is important before lodging an adjudication application, as time limits under BIFA are strict and missing them extinguishes your rights.