Interlink Developments Pty Ltd v Mark Kruger and Melinda Kruger - [2019] QCAT 219

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Interlink Developments Pty Ltd v Mark Kruger and Melinda Kruger [2019] QCAT 219

PARTIES:

INTERLINK DEVELOPMENTS PTY LTD ACN 095 093 208)
(applicant)

v

MARK KRUGER
and
MELINDA KRUGER

(respondents)

APPLICATION NO/S:

BDL 165-18

MATTER TYPE:

Building matters

DELIVERED ON:

7 August 2019

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member King-Scott

ORDERS:

1.   Interlink Developments Pty Ltd pay to the QCAT Trust Account the sum of $11,506.00 by way of security for costs by 4.00 pm on 30 August 2019.

2.   The proceedings are stayed until the payment of the security for costs is made or until further order of the Tribunal.

3.   The application for Miscellaneous matters by Interlink Developments Pty Ltd filed on 10 June 2019 is adjourned to a Directions Hearing to be heard after 30 August 2019.

4.   Costs of both applications are reserved.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SECURITY FOR COSTS – PROCEDURE – where the Queensland Civil and Administrative Tribunal may make an order for security for costs – where s 109 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) considered –where the Tribunal considers the financial circumstances of the parties – where the Tribunal considers the prospects of success or merits of the proceeding – where the Tribunal considers the genuineness of the proceeding – where the company has a paid up capital of $8.00 and no other apparent assets – where the company shows a significant decline in the number and value of houses built over the preceding 3 years and its principal suffering deteriorating health – where the Tribunal finds that the respondent fails to put evidence of the current state of the financial state of the company – that an order for security for costs should be made

Building and Construction Industry Payments Act 2014 (Qld)
Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018 (Qld)
Queensland Building and Construction Commission Act 1991 (Qld), s 77
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 109
Uniform Civil Procedure Rules 1999 (Qld), rule 671(a)

Greg Black Constructions Pty Ltd v Brodie and Anor [2011] QCAT 671
Ultimate Property One Management Pty Ltd v Body Corporate for the Pivotal Point Residential CTS 33550 [2017] QCAT 424

REPRESENTATION:

Applicant:

McInnes Wilson Lawyers

Respondents:

McCarthy Durie Lawyers

APPEARANCES:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

REASONS FOR DECISION

Interlink Developments Pty Ltd (‘Interlink’) formerly known as Urban Homes Pty Ltd agreed to construct a house for the respondents Mark and Melinda Kruger (who, hereafter, and meaning no disrespect, I will refer to as ‘the Krugers’) for $298,544.10.
The parties signed a Master Builders Residential Contract-Level 2 on 10 March 2016. They are now in dispute. The contract has been terminated, and on 20 July 2018, Interlink commenced proceedings in the Tribunal claiming damages comprising the Practical Completion stage…

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: [2019] QCAT 219
Decision Date: 7 August 2019

CaseChat Overview and Summary

In the matter of Interlink Developments Pty Ltd versus Mark Kruger and Melinda Kruger, the Queensland Civil and Administrative Tribunal (QCAT) addressed an application for security for costs. Interlink, the applicant, sought to ensure that the respondents, Mark and Melinda Kruger, provided a financial guarantee before proceeding with their legal action. The case centred around the financial viability of Interlink, which had a nominal paid-up capital of $8.00 and no other discernible assets. Additionally, there was evidence of a significant decline in the company’s performance over the past three years, compounded by the deteriorating health of its principal, Mr Brian Maloney.

The tribunal was tasked with assessing whether the application for security for costs was warranted. This involved examining Interlink’s financial circumstances, the merits of the proceeding, and whether the proceeding was genuine. The tribunal noted that Interlink had not provided current financial information to counter the concerns raised by the Krugers’ solicitors. Instead, Interlink relied on outdated information and its compliance with financial requirements for its builder’s licence. The tribunal found that these factors did not sufficiently alleviate the concerns regarding Interlink’s financial stability and the prospects of success of the Krugers’ claim.

Given the evidence, the tribunal concluded that an order for security for costs was appropriate. The tribunal directed Interlink to pay $11,506.00 to the QCAT Trust Account by 4:00 pm on 30 August 2019 and stayed the proceedings until this payment was made. The tribunal also adjourned Interlink’s application regarding the filing of statements of evidence to a future directions hearing. The costs of both applications were reserved for a later determination.

Orders

Orders of the court

1. Interlink Developments Pty Ltd pay to the QCAT Trust Account the sum of $11,506.00 by way of security for costs by 4.00 pm on 30 August 2019.

2. The proceedings are stayed until the payment of the security for costs is made or until further order of the Tribunal.

3. The application for Miscellaneous matters by Interlink Developments Pty Ltd filed on 10 June 2019 is adjourned to a Directions Hearing to be heard after 30 August 2019.

4. Costs of both applications are reserved.

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

The amount claimed by way of security for costs is not excessive in view of the potential overall costs involved.Conclusion I have reservations about Interlink’s ability to meet a costs order for the following reasons:(a)There is reasonable evidence that its financial position has changed in recent times which is apparent by the decline in the work performed and value of work performed;(b)The declining health of Interlink’s principal Mr Brian Maloney which obviously is linked with the change in the performance of the company;(c)The evidence provided by Interlink of its financial position being that it has satisfied the financial requirements of its builder’s licence and the results of the ASIC search is dated and insufficient to allay concerns raised by the declining performance of the company and Mr Maloney’s health. (d)The suspected lack of succession planning for the company;(e)The failure of Interlink to rebut the concerns expressed by the solicitors for the Krugers by submitting more current financial information. In the exercise of my discretion I intend to direct Interlink to pay to the QCAT Trust Account the sum of $11,506.00 by way of security for costs by 4.00pm on 30 August 2019. I further direct that the proceedings be stayed until the payment is made. In respect of the claim by Interlink that the Krugers comply with the directions to file their Statements of evidence, I adjourn the application for consideration at a Directions Hearing to be listed at a date after 30 August 2019. I reserve the costs of the two applications.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Interlink Developments Pty Ltd v Mark Kruger and Melinda Kruger [2019] QCAT 219
PARTIES:	INTERLINK DEVELOPMENTS PTY LTD ACN 095 093 208) (applicant)
v
MARK KRUGER and MELINDA KRUGER (respondents)
APPLICATION NO/S:	BDL 165-18
MATTER TYPE:	Building matters
DELIVERED ON:	7 August 2019
HEARING DATE:	On the papers
HEARD AT:	Brisbane
DECISION OF:	Member King-Scott
ORDERS:	1. Interlink Developments Pty Ltd pay to the QCAT Trust Account the sum of $11,506.00 by way of security for costs by 4.00 pm on 30 August 2019. 2. The proceedings are stayed until the payment of the security for costs is made or until further order of the Tribunal. 3. The application for Miscellaneous matters by Interlink Developments Pty Ltd filed on 10 June 2019 is adjourned to a Directions Hearing to be heard after 30 August 2019. 4. Costs of both applications are reserved.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SECURITY FOR COSTS – PROCEDURE – where the Queensland Civil and Administrative Tribunal may make an order for security for costs – where s 109 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) considered –where the Tribunal considers the financial circumstances of the parties – where the Tribunal considers the prospects of success or merits of the proceeding – where the Tribunal considers the genuineness of the proceeding – where the company has a paid up capital of $8.00 and no other apparent assets – where the company shows a significant decline in the number and value of houses built over the preceding 3 years and its principal suffering deteriorating health – where the Tribunal finds that the respondent fails to put evidence of the current state of the financial state of the company – that an order for security for costs should be made Building and Construction Industry Payments Act 2014 (Qld) Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018 (Qld) Queensland Building and Construction Commission Act 1991 (Qld), s 77 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 109 Uniform Civil Procedure Rules 1999 (Qld), rule 671(a) Greg Black Constructions Pty Ltd v Brodie and Anor [2011] QCAT 671 Ultimate Property One Management Pty Ltd v Body Corporate for the Pivotal Point Residential CTS 33550 [2017] QCAT 424
REPRESENTATION:
Applicant:	McInnes Wilson Lawyers
Respondents:	McCarthy Durie Lawyers
APPEARANCES:	This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).