4D Electrical Qld v Greyburn Pty Ltd - [2020] QCAT 74

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

4D Electrical Qld v Greyburn Pty Ltd [2020] QCAT 74

PARTIES: 4D ELECTRICAL QLD

(applicant)

v

GREYBURN PTY LTD

(respondent)

APPLICATION NO/S:

BDL046-19

MATTER TYPE:

Building matters

DELIVERED ON:

11 March 2020

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown

ORDERS:
1.   The proceedings are stayed for a period of three (3) months from the date of this order.

2.   4D Electrical Qld must, on or before the expiration of three (3) months from the date of this order, file in the Tribunal two (2) copies of evidence that the parties have complied with clause 26 of the contract.

3.   If 4D Electrical Qld complies with order 2, the Tribunal will make further directions to progress the proceedings.

4.   If 4D Electrical Qld fails to comply with order 2, the proceedings will be dismissed.

CATCHWORDS:
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS - where parties have entered into a building contract for the supply and installation of electrical works and performance of electrical works – where applicant alleges $37,162.40 is owing by the respondent for work it has performed – where respondent applies for the proceedings to be dismissed – where respondent claims that clause 26 of the contract required parties to participate in an alternative dispute resolution in the event of a dispute – where parties have not participated in a formal contractual arbitration process – where clause 26 of the contract has not been complied with – where the tribunal has power to dismiss proceedings where a proceeding is frivolous, vexatious or misconceived, or lacking in substance or an abuse of process under s 47 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) – whether proceedings should be stayed pending compliance by the parties with clause 26 of the contract

Commercial Arbitration Act 2013 (Qld), s 8(1)
Legal Profession Act 2004 (Qld), s 432(1)
Queensland Building Construction Commission Act 1991 (Qld)
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 3(b), s 4, s 4(c), s 6(5), s 6(9)(a), s 9(4), s 22(3), s 28(1), s 28(2), s 28(3)(d), s 47, s 51A(2), s 58, s 58(1), s 62(1) s 108(4), s 109(2)(b), s 138A(2), s 145(2),
Victorian Civil and Administrative Tribunal Act 1998 (Vic)

Batwing Resorts Pty Ltd v Body Corporate for Liberty on Tedder CTS 27241 [2011] QCAT 277
Board of Professional Engineers of Queensland v Lennox [2010] QCAT 702
Cable & Wireless plc v IBM UK Ltd [2002] CLC QB 1319
Camillo Concrete Structures Pty Ltd v Baulderstone Pty Ltd (Domestic Building) [2010] VCAT 285
De Simone v Bevnol Constructions & Developments Pty Ltd [2009] VSCA 199
Dowie v Northey & Anor [2000] VCAT 823
Downer EDI Mining Pty Ltd v Wambo Coal Pty Ltd [2012] QSC 290
Henry v The Body Corporate for La Solana CTS 456 and CTS 224 [2017] QCAT 22
Hooper Bailie Associated Ltd v…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] QCAT 74
Decision Date: 11 March 2020

CaseChat Overview and Summary

In the case of 4D Electrical Qld v Greyburn Pty Ltd, 4D Electrical sought to recover $37,162.40 from Greyburn for electrical works performed under a contract. Greyburn applied for the proceedings to be dismissed on the basis that clause 26 of the contract required the parties to participate in alternative dispute resolution before proceeding with legal action. The clause mandated that any dispute be referred to arbitration of the President of the Master Builders' Association or the Institution of Engineers, with a deposit of security for costs. The Queensland Civil and Administrative Tribunal (QCAT) had the power to dismiss proceedings under section 47 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) if they were frivolous, vexatious, or an abuse of process. The primary issue for the tribunal was whether the proceedings should be stayed pending compliance with clause 26.

The tribunal considered the legal principles established in Downer EDI Mining Pty Ltd v Wambo Coal Pty Ltd. Martin J held that a clause which required dispute resolution before legal proceedings could be initiated did not oust the court's jurisdiction, but rather made compliance with the clause a condition precedent to the enforcement of rights under the contract. If a party failed to comply with such a clause, the court could stay the proceedings to enforce the contractual dispute resolution process. The tribunal concluded that as 4D Electrical had not complied with clause 26, the proceedings should be stayed to compel compliance with the contractual dispute resolution process.

The tribunal ordered that the proceedings be stayed for a period of three months, during which 4D Electrical was required to file evidence of compliance with clause 26. If 4D Electrical complied, the tribunal would make further directions to progress the proceedings. If it failed to comply, the proceedings would be dismissed. This decision underscored the importance of adhering to contractual dispute resolution mechanisms and the tribunal's willingness to enforce such provisions to ensure fair and efficient resolution of disputes.

Orders

Orders of the court

1. The proceedings are stayed for a period of three (3) months from the date of this order.

2. 4D Electrical Qld must, on or before the expiration of three (3) months from the date of this order, file in the Tribunal two (2) copies of evidence that the parties have complied with clause 26 of the contract.

3. If 4D Electrical Qld complies with order 2, the Tribunal will make further directions to progress the proceedings.

4. If 4D Electrical Qld fails to comply with order 2, the proceedings will be dismissed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The contract provided at clause 26:ARBITRATIONa. In the event of any dispute arsing hereunder or in any way in connection with the Works, whether before or after the completion or determination hereof, then either party shall give to the other notice in writing by certified mail of such dispute. At the expiry of seven (7) days from the date of receipt of such notice by the Principal Contractor or the Sub-Contractor as the case may be such dispute (unless settled) shall be and is hereby referred to the Arbitration of the President of the Master Builders’ Association or the Institution of Engineers or, in the event that neither are able or willing to act, by an arbitrator appointed in accordance with the provisions of the appropriate Act of the State of Queensland.b. The party serving notice of dispute and demand for Arbitration pursuant to the proceeding sub-clause shall provide evidence that they have deposited with the Secretary of the Master Builders’ Association or the Institution of Engineers of the State of Queensland the sum of $5,000.00 or, in the event of the dispute being in connection with the valuation of a claim, charge or debt between the parties hereto, ten (1) percent of the amount in dispute, whichever is the greater, by way of security for costs of Arbitration proceedings, and this shall be applied as directed by the Arbitrator.c. Neither party shall be entitled to commence or maintain any legal action upon the dispute or difference until such matter has been referred or determined as hereinbefore provided and then only for the amount of relief to which the Arbitrator by this award finds either party is entitled. The cost of the submission, reference and award, and the apportionment thereof shall be in the discretion of the said Arbitrator.d. Any submission to arbitration under this clause shall not relieve either party of any of its obligations under this Contract Agreement. In Downer EDI Mining Pty Ltd v Wambo Coal Pty Ltd (‘Downer’),[1] Martin J considered an application for a stay of proceedings as a result of non-compliance with a pre‑proceedings mandatory dispute resolution clause in a contract. Martin J observed that the clause in question did not purport to oust the jurisdiction of the court, rather it made compliance with its terms a condition precedent to the commencement of proceedings. [1][2012] QSC 290, [7]-[10]. His Honour referred to Straits Exploration v Murchison, where it was held:[15] Prior to the conclusion of the expert determination procedure - that is, prior to the making of a determination - any party to a contract containing such a clause remains free to sue upon the contract, unless the contract itself makes compliance with some form of dispute resolution procedure a condition precedent to the enforcement of rights under the contract. In relation to the latter type of contract, the effect of the clause is not to invalidate an action brought in breach of it, but to provide a defence and to "postpone" but "not annihilate the right of access to the court". … Where a contract contains a dispute resolution clause, and a party who has not first proceeded in accordance with that clause sues on the contract, the court has, however, a jurisdiction to stay the proceeding so as, in a practical sense, to force the party to fall back upon the contractual procedure. [2] [2](2005) 31 WAR 187, [15].

CITATION:	4D Electrical Qld v Greyburn Pty Ltd [2020] QCAT 74
PARTIES:	4D ELECTRICAL QLD
(applicant)
v
GREYBURN PTY LTD
(respondent)
APPLICATION NO/S:	BDL046-19
MATTER TYPE:	Building matters
DELIVERED ON:	11 March 2020
HEARING DATE:	On the papers
HEARD AT:	Brisbane
DECISION OF:	Senior Member Brown
ORDERS:	1. The proceedings are stayed for a period of three (3) months from the date of this order. 2. 4D Electrical Qld must, on or before the expiration of three (3) months from the date of this order, file in the Tribunal two (2) copies of evidence that the parties have complied with clause 26 of the contract. 3. If 4D Electrical Qld complies with order 2, the Tribunal will make further directions to progress the proceedings. 4. If 4D Electrical Qld fails to comply with order 2, the proceedings will be dismissed.
CATCHWORDS:	CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS - where parties have entered into a building contract for the supply and installation of electrical works and performance of electrical works – where applicant alleges $37,162.40 is owing by the respondent for work it has performed – where respondent applies for the proceedings to be dismissed – where respondent claims that clause 26 of the contract required parties to participate in an alternative dispute resolution in the event of a dispute – where parties have not participated in a formal contractual arbitration process – where clause 26 of the contract has not been complied with – where the tribunal has power to dismiss proceedings where a proceeding is frivolous, vexatious or misconceived, or lacking in substance or an abuse of process under s 47 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) – whether proceedings should be stayed pending compliance by the parties with clause 26 of the contract Commercial Arbitration Act 2013 (Qld), s 8(1) Legal Profession Act 2004 (Qld), s 432(1) Queensland Building Construction Commission Act 1991 (Qld) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 3(b), s 4, s 4(c), s 6(5), s 6(9)(a), s 9(4), s 22(3), s 28(1), s 28(2), s 28(3)(d), s 47, s 51A(2), s 58, s 58(1), s 62(1) s 108(4), s 109(2)(b), s 138A(2), s 145(2), Victorian Civil and Administrative Tribunal Act 1998 (Vic) Batwing Resorts Pty Ltd v Body Corporate for Liberty on Tedder CTS 27241 [2011] QCAT 277 Board of Professional Engineers of Queensland v Lennox [2010] QCAT 702 Cable & Wireless plc v IBM UK Ltd [2002] CLC QB 1319 Camillo Concrete Structures Pty Ltd v Baulderstone Pty Ltd (Domestic Building) [2010] VCAT 285 De Simone v Bevnol Constructions & Developments Pty Ltd [2009] VSCA 199 Dowie v Northey & Anor [2000] VCAT 823 Downer EDI Mining Pty Ltd v Wambo Coal Pty Ltd [2012] QSC 290 Henry v The Body Corporate for La Solana CTS 456 and CTS 224 [2017] QCAT 22 Hooper Bailie Associated Ltd v…