Hill v Berghofer

[2011] QCATA 34

CITATION: Hill v Berghofer [2011] QCATA 34

PARTIES:	John Daryl Hill (Applicant/appellant)
v
Peter Day Berghofer (Respondent)

APPLICATION NUMBER: APL310-10

MATTER TYPE: Appeals

HEARING DATE:     On the papers

HEARD AT:  Brisbane

DECISION OF: Justice Alan Wilson, President

DELIVERED ON: 28 February 2011

DELIVERED AT:      Brisbane

ORDERS MADE:

1.      Leave to appeal granted.

2.     Appeal allowed.

3.      The decision made on 19 October 2010 is set aside.

CATCHWORDS : 

JURISDICTION – where claim for ascertainable sum – where claim for contribution under a guarantee – where claim equitable in nature – whether Tribunal has jurisdiction

Queensland Civil and Administrative Tribunal Act 2009, s 142(3)

Baker and Anor v Staples [1999] 1 Qd Rep 317, applied

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).

REASONS FOR DECISION

1. Mr Hill and Mr Berghofer were co-directors in a company, National Tyre & Wheel Distributors Pty Ltd, which is now in liquidation.  As directors, both gentlemen guaranteed the company’s indebtedness to another company, Harbrew Pty Ltd.

1. Harbrew sued Mr Berghofer in his capacity of guarantor and obtained judgment for $11,415, including $3,200 for costs.  Mr Berghofer paid Harbury and brought a minor debt application against Mr Hill, his co-guarantor for half, $5,705.50.

1. His application in QCAT’s Minor Civil Disputes jurisdiction, heard and determined by a Magistrate sitting as a QCAT ordinary member,[1] was successful and Mr Hill was ordered to pay $5,777.50.

   [1] QCAT Act s 171(2).

1. Mr Hill has appealed the learned Magistrate’s decision. Because this is an appeal from a Minor Civil Dispute, leave is necessary: s 142(3) QCAT Act.

1. Mr Hill says that the Magistrate, sitting in QCAT’s Minor Civil Disputes jurisdiction, did not have jurisdiction to hear Mr Berghofer’s application because a claim against a co-guarantor for contribution is an equitable claim and the tribunal has no equitable jurisdiction.

1. The Tribunal’s Minor Civil Dispute jurisdiction is to hear and decide, among other things, a claim to recover a debt or liquidated demand of money: see s 11 and the definition of ‘Minor Civil Dispute’ in Schedule 3, QCAT Act.

1. Mr Berghofer’s claim was framed as a claim for a known, precise and ascertainable sum – $5,705.50 – so it is tempting to regard it as a claim to recover a ‘debt or liquidated demand’. Neither of those terms is defined in the QCAT Act. A ‘debt or liquidated demand’ is, as the Deputy President explained in Ziegeler t/as Ziegco Pty Ltd v Recochem Incorporated [2010] QCATA 78, one where the amount is determined and, in effect, beyond dispute as to how it is calculated.[2]  If the amount depends upon assessment by the court or tribunal, it is not liquidated.

   [2]        Spain v Union Steamship Co of NZ Ltd (1923) 32 CLR 138.

1. Mr Hill now contends that his obligation, if any, to contribute as a co-guarantor cannot be categorised as a debt or liquidated demand but is, rather, a claim which is what the law calls ‘equitable’ or a ‘claim in equity’ – relevantly here, a claim requiring the court or tribunal to weigh competing claims and factors and decide for itself what amount, if anything, is payable.

1. He has referred the Appeal Tribunal to the decision of the Queensland Court of Appeal in Baker & Anor v Staples:[3]

Even so, a claim to contribution from a co-guarantor is equitable in nature, related as it is to coordinate liabilities: …

… a right to contribution will be lost or reduced where it would be inequitable to enforce it; such a proposition exemplifies the general equitable doctrine that a party “‘seeking the assistance of a court of equity … must do equity’ …”

[3][1999] 1 Qd R 317 at 327 per Fitzgerald P, Davies JA and Mackenzie J; Mahoney v McManus (1981) 180 CLR 370.

1. In the present context, these passages mean that the claim against Mr Hill was to be determined with reference to his and Mr Berghofer’s respective obligations under the guarantee, and that was not something which could automatically be calculated, for example by the use of a formula or calculation.  At first blush the notion that they should pay equal shares may not be inequitable, but it was not the only legal basis for calculating how the obligation should be shared.

1. Once this is understood, the conclusion that Mr Berghofer’s claim was ‘equitable’ and not, therefore, something which falls within QCAT’s jurisdiction to determine Minor Civil Disputes is, I think, irresistible.

1. That conclusion, and the commensurate one that the judgment should not stand, are strengthened by the various matters that Mr Hill raised at the hearing before the learned Magistrate: that Mr Berghofer failed to account to the company for other money that he had received on its behalf; that Mr Berghofer told Mr Hill that he was going to keep that money and pay the creditors on behalf of the company; and, that there are other monies yet to be brought to account.  These may all be matters that a decision-maker, exercising equitable jurisdiction in determining the claim and the amount of it, may well take into account.[4]

   [4]        Mahoney v McManus (see above) at para [14] per Gibbs CJ.

1. It is unfortunate that Mr Hill’s argument as to jurisdiction was not put to the learned Magistrate during the hearing.  The Minor Civil Dispute jurisdiction is a busy and demanding one, and Magistrates and Adjudicators are often required to make decisions in a very short time and with little assistance from the parties.  It is not surprising, with respect, that the learned Magistrate did not pick up the jurisdictional difficulties that a claim on a guarantee presented.

1. Leave to appeal should be granted, the appeal should be allowed and the decision of the learned Magistrate set aside.  Given that the tribunal has no jurisdiction in this proceeding, no further order is appropriate.