Hartley v Bennette
[2014] QCAT 91
•18 March 2014
| CITATION: | Hartley v Bennette [2014] QCAT 091 |
| PARTIES: | Deborah Ann Hartley (Applicant) |
| V | |
| Jerry Bennette (Respondent) |
| APPLICATION NUMBER: | BDL263-13 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Gordon |
| DELIVERED ON: | 18 March 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. On the preliminary issue whether the Tribunal has jurisdiction in this matter because its only connection with Queensland is that the Applicant lives in the State, the answer is in the affirmative. 2. The Application is struck out because it is not within the Tribunal’s building jurisdiction nor is it a minor civil dispute; therefore the Tribunal has no jurisdiction to hear and determine it. 3. The Respondent’s application for legal representation is refused. |
| CATCHWORDS: | Claim in relation to sale of land situated in New South Wales – only connection with Queensland is that Applicant lives in the State - whether the tribunal has jurisdiction to hear the claim due to territorial limits – whether the correct form under the Service and Execution of Process Act 1992 (Cth) was served with the claim – whether any such irregularity was waived – whether the claim is between a trader and a consumer or for a debt or liquidated demand of money Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 5, 11, 12, 33, Schedule 3 Laurie v Carroll (1958) 98 CLR 310 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
This is a preliminary issue on the question whether or not the tribunal has jurisdiction to hear the claim bearing in mind that its subject matter (land) is in New South Wales, the law which applies to the claim is that of New South Wales, and the only connection that the parties have with Queensland is that the Applicant now resides in Queensland. The preliminary issue was directed to be heard on the papers following submissions from the parties.
The claim arises from the Applicant’s purchase from the Respondent of land at that time identified as Lot 32 Kalemajere Drive, Suffolk Park in NSW. The contract for sale was on the Law Society form 2005 Edition and was dated 5 March 2008. The contract was made before the land had been subdivided and was subject to and conditional upon registration of the Plan of Subdivision within 12 months of the contract date.[1] The completion date was 15 August 2008.
[1]This was by special condition 32.
In this claim, the Applicant says that the sale was made “with electricity, water and sewage”. The lot remained undeveloped for over three years after the sale, but then when the Applicant’s builders started to build on the lot the Applicant says it was discovered that there was no electricity supply connected to the property. The Applicant says that work was required to provide an electricity supply at a cost of $3,219.52. She claims this from the Respondent in what is effectively a claim made under the common law or under the Australian Consumer Law for damages for breach of contract, or arising from a misrepresentation.
In the Response to the claim, the Respondent says that the claim should be struck out because the tribunal has no jurisdiction to hear it. The reasons given are:-
a) The property which is the subject matter of this dispute is situated in New South Wales and not in Queensland. Also no Queensland law or regulation is or was applicable to the development of and the sale of the Lot. Instead, the law of New South Wales applied.
b) The claim was accompanied by Form 4, which is required to be given under section 51 of the Service and Execution of Process Act 1992 (Cth) in the case of interstate service. That form states that in the circumstances in a) above, the process cannot be served interstate. Therefore QCAT has no jurisdiction to hear the matter.
c) The Application has no merit because special condition 39 states:
The Vendor does not represent that the Property is fit or suitable for any particular purpose and the Purchaser can not raise any objection, requisition of claim for compensation as the suitability (or lack of suitability) of the property for any particular purpose.
In addition to this, the Respondent argues that the Application brought the claim as a building claim, and so the application is in the wrong form.
To that list needs to be added whether the Tribunal has jurisdiction to hear the claim anyway. Contrary to common belief, QCAT is not a small claims court and does not have jurisdiction over every claim for money not exceeding its prescribed limit of $25,000.
Interstate jurisdiction issue
The question here is what are the territorial limits of QCAT’s jurisdiction? Can the claim be brought against a person who has no connection with Queensland? Does the subject matter of the claim (in this case land) need to be in Queensland? If bringing the claim for breach of contract must the contract be made in Queensland?
The first thing to note here is that QCAT is a tribunal which is established in Queensland and hears cases in Queensland. It was established by the Queensland Civil and Administrative Tribunal Act 2009 and its jurisdiction is purely statutory. In other words it has no inherent jurisdiction like the Supreme Court. The starting point when considering the territorial limits of QCAT’s jurisdiction is therefore to look at the QCAT Act, and the regulations and rules made under the Act. However the jurisdiction is not limited territorially in any way by the Act, regulations or rules.
Indeed, it is provided in section 5 of the QCAT Act that the Act “binds all persons, including the State and, as far as the legislative power of the Parliament permits, the Commonwealth and the other States”.
By section 11 of the Act, QCAT may hear and decide a minor civil dispute, and by section 12 that jurisdiction may be exercised if the person who is owed the money has applied to the tribunal under the Act to deal with the dispute.
Section 33 and the rules provide for manner in which applications may be made. Whilst Rule 7 requires that the application form must ask for an address for service for the applicant, there is no provision requiring it to be in Queensland. And there is nothing in the Act, regulations or rules requiring that the claim or the Respondent must have any connection with Queensland.
This contrasts with the position in the Supreme Court, District Court and Magistrates Court whose procedure is governed by the Uniform Civil Procedure Rules 1999. Those Rules contain comprehensive provisions about dealing with claims with no connection with Queensland and where the Respondent does not live in Queensland or submit to the jurisdiction of its courts.[2]
[2]See in particular Rules 35, 38 to 41, and the cross-vesting provisions applying to the Supreme Court in Rules 51 to 59.
There is a common law rule as to territorial limits which applies to a court unless there is a contrary provision, and that is the rule described by the High Court in Laurie v Carroll (1958) 98 CLR 310. The High Court held that jurisdiction over an action in personam depended upon the plaintiff being able legally to serve the writ upon the defendant. In their joint judgment, Dixon CJ, Williams and Webb JJ at 323 approved the following passage in Dicey, Conflict of Laws, 6th Edn. (1949) 172:
The service of a writ, or something equivalent thereto, is absolutely essential as the foundation of the court’s jurisdiction. Where a writ cannot legally be served upon a defendant the court can exercise no jurisdiction over him. In an action in personam the converse of this statement holds good, and wherever a defendant can be legally served with a writ, there the court, on service being effected has jurisdiction to entertain an action against him. Hence in an action in personam, the rules as to the legal service of a writ define the limits of the court’s jurisdiction.
Laurie concerned the inherent jurisdiction of the Supreme Court over a person who had gone overseas - does the rule also apply to QCAT where the jurisdiction is purely statutory? I believe the answer to this appears from the explanation of the rationale behind the rule given in Laurie at 323:-
The root principle of the English law about jurisdiction is that the judges stand in the place of Sovereign in whose name they administer justice, and that therefore whoever is served with the King’s writ and can be compelled consequently to submit to the decree made, is a person over whom the Courts have jurisdiction”, per Viscount Haldane: John Russell & Co Ltd v Cayzer, Irvine & Co Ltd (1916) 2 AC 298 at 302.
This principle would apply both to courts with inherent jurisdiction and to courts and tribunals who are given their jurisdiction by statute. Accordingly in the absence of any provision to the contrary, it appears to me that provided service can be effected interstate, QCAT has jurisdiction to hear and decide claims against a Respondent who resides outside Queensland.
It is necessary therefore to turn to the provisions which govern when proceedings commenced in QCAT can be served interstate.
The governing statute is the Service and Execution of Process Act 1992 (Cth). It is notable that the Act provides two different regimes for the service of process: one for “courts” (sections 13 to 21) and one for “tribunals” (sections 47 to 55).
In the matter before me, the difference is crucial. This is because a tribunal process can only be served interstate in certain circumstances. Section 50 provides that a tribunal process may be service interstate, but only in the circumstances set out in section 48:-
48 Application of Division
This Division applies with respect to a proceeding that concerns:
(a)real property within the State in which the tribunal is established; or
(b)a contract, wherever made, for the supply of goods or the provision of services of any kind (including financial services) within that State; or
(c)an act or omission within that State; or
(d)the carrying on of a profession, trade or occupation within that State; or
(e)a pension or benefit under a law of that State; or
(f)the validity of an act or transaction under a law of that State.
If sections 48 and 50 apply in this case, then the Respondent cannot be served with the proceedings. None of the conditions can be satisfied.
In contrast, section 15 of the Act which applies to courts, permits service of process interstate without any such conditions.
Do sections 48 and 50 apply to QCAT? Or does section 15 apply? This depends on whether QCAT is a tribunal or a court for the purposes of the Service and Execution of Process Act.
In Li v Medical Board of Australia (No 1) [2013] QCAT 595 Judge Alexander Horneman-Wren SC, Deputy President of QCAT decided that QCAT was a “court” and not a “tribunal” for the purposes of the Service and Execution of Process Act.[3] This allies with previous decisions that QCAT is a “court of a State” for the purposes of the Constitution,[4] and that QCAT is a “court” within the meaning of the National Credit Code.[5]
[3]See paragraph [12] of the decision.
[4]Owen v Menzies & Ors [2012] QCA 170.
[5]Capital Options (Aust) Pty Ltd v Batchelor [2013] QCAT 493.
Therefore section 15 of the Service and Execution of Process Act 1992 (Cth) applies to QCAT and not section 48 of the Act. This means that the restrictions imposed by section 48 do not apply in this case, and that service upon the Respondent in this case was permitted by section 15.
It follows that if service has been properly effected upon the Respondent in this case, there is no territorial impediment to QCAT’s jurisdiction to hear it.
Was service properly effected upon the Respondent?
Sections 16 (applying to courts) and 51 (applying to tribunals) of the Service and Execution of Process Act 1992 (Cth) require the correct form as prescribed to be sent by an applicant to a respondent who resides outside Queensland when serving the application form. Form 4 is prescribed for tribunals, Form 1 is prescribed for courts. The difference between the two forms reflects the differences in the Service and Execution of Process Act 1992 (Cth) between interstate service permitted in the case of tribunal claims and court claims. Form 4 informs the Respondent that there has to be a connection with the State or Territory in which the tribunal is situate and if there is not, then jurisdiction can be challenged. Form 1 does not refer to the need for such a connection (because this is not a requirement in the case of court process).
Unfortunately at the time of these proceedings, QCAT was still providing Form 4 to applicants who intended to serve a respondent interstate instead of with Form 1 which was the form required in accordance with the decision in Li.
When the wrong form is sent to a respondent then the service is ineffective. This is by section 16 of the Service and Execution of Process Act 1992 (Cth) :-
16 Information to be provided
Service is effective only if copies of such notices as are prescribed are attached to the process, or the copy of the process, served.
It has been held that the requirements of interstate service under section 15 are mandatory[6]. Therefore if the wrong form is used this would have to be remedied by re-service using the correct form, unless it is possible to say that the statutory requirement has been waived by a respondent.
[6]For example, In the matter of 8D Pty Ltd [2013] NSWSC 1297 and Johnson v Alexander [2002] NSWSC 824.
There is some difference of opinion as to whether a respondent may waive compliance with section 15. In Elan Copra Trading Pty Ltd v J K International Pty Ltd (2005) 56 ACSR 416 this was said not to be possible, and the same view was taken in Marlan Financial Services Pty Ltd v New England Agricultural Traders Pty Ltd [1999] VSC 435 at [46]. The reasoning was that it would have the effect of conferring jurisdiction on the court when none exists. But in Queensland there appears to be a different view. In Roladuct Spiral Tubing Pty Ltd v C & P Trading Pty Ltd [1993] QCA 342 the Court of Appeal found that the defendant had waived an irregularity of service because there was no form served under the Act, by arguing the substance of an application in court. And Judge Robin QC in Beyfield Pty Ltd v D F R S Mechanical (Aust) Pty Ltd [2011] QDC 150 accepted that a waiver of irregularity by non service of the form was possible although it had not happened in that particular case.
The reported judicial view in Queensland is therefore that failure to serve the form under the Act is an irregularity which can be waived by a respondent. Equally, the irregularity arising from failure to serve a Form 1 instead of a Form 4 must also be something which can be waived.
Has the irregularity been waived in this case? The Respondent makes his argument in response to the claim based on the contents of the form that he did receive with the papers, that is Form 4. His point is that Form 4 on its face says that he could not properly be served with the QCAT claim. He is not aware that the wrong form was used.
Although the Respondent has challenged QCAT’s jurisdiction based on Form 4, at the same time he applied for permission to be legally represented in these proceedings. He is not limiting his request for representation to the preliminary issue. Instead he is asking for leave to be represented in the proceedings as a whole, and this must include any consideration of the claim on the merits should it proceed. This is inconsistent with any challenge based on irregularity of service and is therefore a waiver of any such irregularity.
It follows that service upon the Respondent has been effected. In turn under the Laurie v Carroll principle, QCAT has jurisdiction over this claim.
The next question would be whether QCAT is a forum conveniens for the hearing of the claim, but it is necessary to consider whether QCAT could hear the claim anyway.
Is the claim within QCAT’s jurisdiction anyway?
The claim is not within QCAT’s building jurisdiction, which was how it was brought. This is because QCAT’s building jurisdiction which derives from section 77 of the Queensland Building and Construction Commission Act 1991 (Qld), provides a remedy only for an applicant “involved in a building dispute”. A building dispute in this context would be a claim or dispute arising between a building owner and a building contractor about building work.[7] The claim in this case is not about building work nor is it between a building owner and a building contractor.
[7]Schedule 2 of the 1991 Act.
The claim can be cast as a claim made under the common law or under the Australian Consumer Law for damages for breach of contract, or arising from a misrepresentation.
As a claim under the common law, a contract justiciable in QCAT would need to be identified.
The claim under the Australian Consumer Law might conceivably be based on the guarantees implied on the supply of services[8] or as a claim for loss and damage because of a false representation.[9] Such claims can be brought in QCAT if within QCAT’s minor civil dispute jurisdiction.[10]
[8]Which is widely defined to include an interest in real property, and would apply in this case provided the interest in real property was supplied in trade or commerce and was of a kind ordinarily acquired for personal, domestic or household use or consumption.
[9]This would be a contravention of section 30 which covers a false representation made in trade or commerce in connection with the sale of land, where that representation concerns characteristics of land or the existence of a facility associated with land.
[10]Section 236 permits a claim to be brought if a person suffers loss or damage because of a contravention of these provisions and by section 50(1)(a) of the Fair Trading Act 1989 such claims can be brought in QCAT if they are within its minor civil dispute jurisdiction.
Either way, QCAT would only have jurisdiction if the claim was a “minor civil dispute”.
Minor civil dispute is defined in Schedule 3 of the QCAT Act 2009. The claim is not one between a trader and a consumer as defined, or between traders, so the question arises whether it is a claim to “recover a debt or a liquidated demand of money” which would be within QCAT’s jurisdiction.
The claim is not one for debt. A debt must be distinguished from a claim for damages. This is a claim for damages.
Is this a claim for a liquidated demand of money? What is a liquidated demand of money?
These words have been construed over many years in the courts, since they come from many earlier statutes. They are not given a restricted meaning. For example in Spain v Union Steamship Co of New Zealand Ltd (1923) 32 CLR 138 at 142, a case often cited in QCAT appeals on this question, the High Court considered a claim by the master of a vessel against his employers for £63 18s legal expenses which he had paid to his lawyers who had represented him in a Marine Court hearing and in a preliminary inquiry following the running aground of his vessel in the Bass Straits. The claim was based on an Award which provided that an employer had to pay “any reasonable expenses of an employee incurred in the service or in the interests of the employer”. It was argued by the employer that this was not a claim for a “debt or a liquidated demand of money” as was required by the court process which the employee had followed. All five justices roundly rejected this submission. Knox CJ and Starke J approved a passage from Odgers Pleading and Practice stating that “whenever the amount to which the plaintiff is entitled ... can be ascertained by calculation or fixed by any scale of charges, or other positive data, it is ... liquidated”.
A useful contrasting situation was posed by Knox CJ and Starke J. They said the Award made it clear what amount should be ordered to be paid once liability was found, so the claim was for a liquidated demand of money. But if the Award had been less precise so that there was some room for argument about the figure to be awarded, and it had to be assessed, it might not be a liquidated demand of money.
It is sufficient if there is a formula for the court to follow, even if the data to be applied to the formula needs to be proved. So for example Barrett J in Rothenberger Australia Pty Ltd v Poulsen (2003) 58 NSWLR 288 at 297, considered that where a contract states that upon breach the seller may recover from the purchaser any deficiency on resale together with expenses of resale, this was a debt or liquidated demand of money.
And in Solar Energy Australia Group Pty Ltd v Bannink [2013] QCATA 100 an appeal decided by Justice Alan Wilson President, the data for the formula was contained in minutes of the company which recorded the agreement reached between the Applicant who had done work for the company and what he should be paid for it. Despite there being a number of versions of the minutes, which would have to be considered and one of them approved, this was a claim for a debt or liquidated demand of money.
This is to be contrasted with Solahart Mackay & Ors v Summers [2013] QCATA 113 another appeal heard by Justice Alan Wilson President which was a claim for payment for work done, which involved an assessment of fair recompense for work and labour done having regard to mistakes and errors of the worker. That was not a claim for a debt or a liquidated demand of money.
In the instant case, the Applicant claims the sum of $3,219.52. Part of this money is represented by a statement provided by the main contractor on site when she came to build the house on the lot. The main contractor has listed the costs involved in providing electricity to the lot.
The main contractor has listed four invoices paid to sub-contractors. The sub-contractors’ invoices are attached to the claim. They are for excavation work, plant hire, cable location, installation of conduits, and connections. There is 11% builder’s margin added and the total of that bill is $2,588.52 including GST. The information on the bills supplied is very clear.
How the claim then rises to $3,219.52 is not clear at all. The Applicant refers in her claim to the elements within the main contractor’s calculation of $2,588.52 and then adds another element which is not in that calculation described as “Deborahs Nails – Staff Costs”. This appears to be some sort of claim for management costs or possibly reimbursement of staff wages expended on dealing with the consequences of the alleged breach of contract.
The first question is whether the main contractor’s calculation is clear enough so that a claim based upon it is a “liquidated demand of money”. The answer to that is somewhat borderline and might in a suitable case be answered in an Applicant’s favour to try to avoid a overly technical approach (in so far as possible bearing in mind the lacunas in QCAT’s small claims jurisdiction). If the answer to the first question is “yes” then the second question is whether the claim overall is for a liquidated demand of money. I have to answer that second question firmly in the negative. In adding the claim “Deborahs Nails – Staff Costs”, the Applicant will require the Tribunal to assess the proper amount to allow for that part of the claim. That clearly requires an investigation into something which is not already assessed and therefore liquidated.
Conclusion
In the circumstances, having decided that the tribunal does have jurisdiction to deal with the claim and therefore disagreeing with the Respondent’s submissions in that respect I have to strike it out on other grounds – that it is outside QCAT’s minor civil dispute jurisdiction.
The other possible option, to transfer the matter to the Magistrate’s Court[11] is not appropriate in this case because of the applicable rule as to venue applying to that court which would not be satisfied.[12]
[11]As was done in another case where QCAT had no jurisdiction: J F Hodge Pty Ltd v Brown [2013] QCATA 36.
[12]Rule 35 of the Uniform Civil Procedure Rules 2009.
For the sake of completeness I refuse the Respondent’s application for legal representation on the grounds solely that this is now not required.
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