MacKrell Building Trust T/A Phillip MacKrell Builder v Sterling
[2010] QCAT 630
•8 December 2010
| CITATION: | MacKrell Building Trust T/A Phillip MacKrell Builder v Sterling [2010] QCAT 630 |
| PARTIES: | MacKrell Building Trust T/A Phillip MacKrell Builder Phillip MacKrell |
| v | |
| Mark & Katrina Sterling |
| APPLICATION NUMBER: | BD462-09 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 7 December 2010 |
| HEARD AT: | Brisbane |
| DECISION OF: | Richard Oliver, Senior Member |
| DELIVERED ON: | 8 December 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The respondents have leave to amend the amended defence and counterclaim as follows: (a) Paragraphs 16(f) to (m); (b) Paragraph 17; (c) Paragraph 20(b); 20(c)(i)-(ii); (d) Paragraph 22 and 23 (e) Paragraph 26; (f) Paragraph 31 in accordance with the proposed Further Amended Defence and Counterclaim being exhibit (“BJM1”) to the affidavit of Mr Miller filed 27 November 2010. 2. The application to transfer the proceeding to the District Court of Queensland is dismissed. |
| CATCHWORDS : | Amendment to pleadings; where no explanation for delay; case management principles; sections 3, 4 and 28(3) of the QCAT Act considered; Aon Risk Services Australia Limited v Australian National University (2009) HCA 27 followed. |
APPEARANCES and REPRESENTATION:
| APPLICANT: | MacKrell Building Trust T/A Phillip MacKrell Builder |
| RESPONDENT: | Mark & Katrina Sterling represented by Mr Carrigan of counsel, instructed by Quinlin Miller and Treston solicitors. |
REASONS FOR DECISION
This proceeding is a typical building dispute in that the applicant builder is claiming $14,919.68 for monies due and owing under a building contract, and the respondents/homeowners deny any monies are owing, and counterclaim damages for the cost of rectification for defective and incomplete building work.
The proceeding was commenced with the filing of an application in the former Commercial and Consumer Tribunal on 26 October 2009 with a defence and counterclaim being filed on 17 November.
After 12 months of preparing the matter for hearing which involved active case management by this Tribunal, the respondents, on 22 November 2010 filed an application seeking leave to “file and serve a Second Further Amended Defence and Counterclaim” and a consequential direction that the application be remitted to the District Court.
The amendments sought related to claims made pursuant to a breach of section 52 of the Trade Practises Act and damages pursuant to section 87 of that Act. This proposed new cause of action is pleaded against both the first and second applicant. There are also additional claims for monies payable to the respondents by the applicants due to their unjust enrichment and for restitution. The total damages now sought in respect of these new causes of action is in the sum of $430,000.00[1].
[1] Affidavit of Brockwell Miller sworn 19 November 2010 exhibit 1 page 35
The respondents also apply to amend the claim for the cost of rectification from $50,000 to $254,550.00 in accordance with the respondent’s Scotts Schedule (which has been filed) and as pleaded in paragraph 31 of the proposed amended pleading.
The respondents neither support nor resist the applicants to amend or transfer on the basis that they would prefer finalisation of the proceeding as soon as possible and all issues ventilated. However, despite the lack of opposition, save for the amendment to increase the claim for rectification and incomplete work, I propose to dismiss the application to amend the defence and counterclaim to include new causes of action, and the matter will proceed to hearing as scheduled in March 2011.
History
The basis of the applicant’s claim arises from a written building contract entered into between the applicants and the respondents in November 2008 for the construction of a house at Lot 1422 Impeccable Circuit, Coomera Waters. The total contract price was $420,000.00.
Work commenced in or about February 2009 and by 29 August 2009 the house was completed, although there is a dispute that had reached practical completion strictly in the terms set out in the contract. In any event, the respondents took possession of the property and have continued to reside in that property since that date.
The proceeding was commenced on 26 October 2009 and in the defence filed by the respondents on 17 November 2009 they pleaded:-
“6. In order to be legally empowered to carry out the Works the applicant was required to be licensed, pursuant to the “Queensland Building Services Authority Act” 1991 (as amended) (the “QBSA Act”) and regulations there under, to hold the appropriate licence to undertake and carry out the Works being, more particularly a licence of the class “Builder Low Rise”.
7. At the time of entering into the Contract the Applicant was not so licensed and did not become so licensed until 18 February 2009 when after it held, and contains (sic) to hold a licence of the class “Builder Low Rise” being number 1158293.
In the premises, by entering into the contract the applicant contravened s42(1) of the QBSA Act.
9. In the premises the Contractor is unenforceable by the Applicant against the Respondents.”
[10] By reason of this pleading, the applicant filed an amended statement of claim including Phillip MacKrell as a second applicant on 19 March 2010 pleading he was the nominee builder for the company.
[11] There was a further amended defence and counterclaim filed by the applicant on 8 April 2010 in response to the amended statement of claim.
[12] On the commencement of the Queensland Civil and Administrative Tribunal on 1 December 2009 case management procedures were implemented and on 18 March 2010 a directions hearing was held to progress the application. At the directions hearing on 18 March 2010 it was directed that the parties file any amended pleadings and it application was listed for a compulsory conference on 9 April 2010.
[13] At the compulsory conference further directions were made with respect to filing of statements of evidence and preparation of expert evidence and a further directions hearing was listed for 1 June 2010.
[14] On 1 June 2010 the respondent was directed to file any further amended defence and counterclaim and the party’s experts were to attend an experts conclave onsite on 16 July 2010. The conclave took place but no joint expert report was forthcoming.
[15] On 15 July 2010 the respondents’ solicitors filed further material including an expert report from Mr Sherrington assessing the total costs of rectification at $84,430.00.
[16] At the further directions hearing on 21 July 2010 directions were made for parties to file further statements and the application was re-listed for a further directions on 1 September 2010.
[17] A directions hearing was held on 20 August 2010 in which the Tribunal directed the respondents to prepare and file a Scotts Schedule, the applicants file a list of experts and a further experts conclave be reconvened on site on 15 September 2010. The conclave proceeded however it seems that the Scotts Schedule was not prepared as directed earlier and further directions were made about preparation and completion of the Scott Schedule on 15 September 2010. These latter directions were made at the conclusion of the experts’ conclave.
[18] On 5 November 2010 further directions were made for the compulsory conference to proceed on 10 November 2010 but interestingly, specific directions were made that the applicants and their legal representatives were to attend level 10 of 259 Queen Street (the QCAT premises) and the respondents and their legal representatives were to attend level 11. This demonstrates the degree of conflict that has arisen between these two parties.
[19] Matters became further complicated due to allegations that the respondents were not giving the applicant’s experts access to the premises for the purposes of completing the Scotts Schedule.
[20] The compulsory conference proceeded on 10 November 2010. The matter was not resolved nor were issues narrowed. However, quite specific directions were made giving the parties an opportunity to file further amended pleadings and finalisation of the Scott Schedule. The applicant’s were required to comply with the directions by 17 December 2010 and the respondent’s time for compliance was 2 February 2011. Subject to compliance with the directions made the proceeding was deemed ready for hearing and was listed for hearing to commence on 14 March 2011 for seven days.
[21] On 27 November 2010 the respondents solicitors filed the application to amend the pleadings and transfer matter to the District Court because of a want of jurisdiction in the Tribunal to hear the trade practices claim and the claims for equitable relief.
[22] The misleading and deceptive conduct complained of is that the second respondent made a representation by silence in not informing the respondents that the applicant was not licensed as pleaded in the first defence and counterclaim and referred to above.
[23] The proposed pleading also alleges further misleading or deceptive conduct in that the applicants sought to rely on certifications for the various stages of the building construction when they knew those certifications were false or misleading.
[24] The material I have had regard to establishes that the very facts upon which the misrepresentation by silence is relied upon, that is that the second applicant knew the first applicant was not licensed, were pleaded in the original defence filed. The facts, upon which the second misrepresentation relied upon, the certifications, came to the knowledge of the respondents on 11 March 2010. In an email from Michael Ross, the building certifier, to the respondents on that date, he states:-
“I have been advised today by Mark that he does not wish to nominate the location of the required extra brace to the upper level. Therefore this has been removed from my settled plans and remains outstanding.
I have been advised (verbally) by the engineer that they did not carry out any frame inspection on this building and do not recognise the form 16 frame inspection certificate. As stated in my earlier emails I can not issue a final for this building if the frame inspection has not been carried out.
In light of this information I feel I cannot continue with this application and will be issuing the required documentation to disengage this company from this project.”
[25] It is this information which gives rise to the further claim for misleading and deceptive conduct pleaded in paragraphs 65-79 of the proposed amended defence and counterclaim.
[26] The claim for equitable relief is also based on these facts.
[27] It is then self evident that the respondents were armed with all of the necessary facts to plead a breach of section 52 as early as November 2009 and have left it until the proceeding is all but ready for hearing to now raise this cause of action.
Discussion
[28] The objects of the QCAT Act[2] are, inter alia:-
[2] QCAT Act section 3
“(b) To have the Tribunal deal with matters in a way that is accessible, fair, just, economical, informal and quick; and
(c) to promote the quality and consistency of Tribunal decisions.”
[29] It is also the function of the Tribunal to ensure the “proceedings are conducted in an informal way that minimise cost to parties, and is as quick as is consistent with achieving justice”[3]. The Tribunal also encourages early and economic resolution of disputes if possible and engages in alternate dispute resolution processes. To achieve these outcomes, the Tribunal engages in active case management as is evident from the chronology of the Tribunal’s involvement in the management of this application.
[3] QCAT Act section 4
[30] Here there has been considerable delay in raising these new causes of action. In the affidavit in support of the application and in the respondents written submissions, there is no reason given as to why the application to amend has been made at this late stage. Counsel for the respondents submitted that the applicants had been aware as early as April 2010 that it was proposed to amend to include the section 52 claims but there is no direct evidence to support this. Importantly there is no explanation as to why it was not done at that time.
[31] This is particularly troublesome, when directions were made about filing amended pleadings on 18 March 2010 and in fact an amended defence was filed on or about 8 April 2010. This amended pleading did not include the trade practises claim and limited the damages payable to $50,000.00 for rectification work together with some other incidental items.
[32] The proposed amendments are substantial and they increase the counterclaim significantly. Without descending to the merits of the counterclaim, I express some reservations as to whether or not the claim for unjust enrichment and restitution could be made out in circumstances where the respondents have continued to live in the property since August 2009, and if their claim for damages for rectification work is successful, it is difficult to see how they have sustained loss to the extent claimed. This does not of course deal directly with the lack of certification but once again, this would sound in damages for breach of contract because it is obviously the builder’s obligation to obtain certification for the various stages and this loss could be quantified even if it means removing all sheeting to inspect the frame.
[33] Having said that, this application to amend is not being decided on the substantive merits of either party’s respective causes of action, but on case management principles having regard, in particular, to what the High Court said in Aon Risk Services Australia Ltd v Australian National University[4]. I am obviously conscious of the fact that if these amendments are allowed, and the matter is transferred to the District Court on the basis that this Tribunal does not have jurisdiction to deal with the matters under the Trade Practises Act[5] or to give the equitable relief in restitution and unjust enrichment, it will necessitate a pleading in response, disclosure under the Uniform Civil Procedure Rules, and further evidence. The work undertaken to date in this Tribunal will not be wasted however, the parties will be put to further considerable expense and delay in circumstances where, compliance by the directions recently made, the application can proceed to the allocated hearing dates and be concluded.
[4] (2009) HCA 27
[5] although I expressed some doubt about this because sections 164 and 28(3)(b) of the QCAT Act provides that the Tribunal is a court of record
[34] The Tribunal hearing will be conducted by a tribunal member generally experienced in building disputation and, to the benefit of the parties, unlike the courts, the hearing, in keeping with the obligations contained in section 28(3) of the QCAT Act will be conducted with little formality and technicality and the Tribunal will not be bound by the rules of evidence. This is obviously to the advantage of the parties. This will result in a decision about the disputed items of rectification and be a more economical and informative process. If the only benefit of this hearing is a determination of factual issues then that must also be to the advantage of the parties in the long term. If the respondents, based on those findings of fact wish to then pursue a Trade Practises Act claim against the first applicant, and the second applicant as a person liable under section 87 Act, then that again must result in an advantage to the respondents and cost savings. This alone would not be a sufficient basis to refuse the amendment but it is a factor to be taken into account proceeding has progressed as far as it has I preparation for hearing.
[35] Given the objects of the QCAT Act and how the Tribunal is required to carry out its functions,[6] the Tribunal must be careful not to fall into the same trap as that identified by the Chief Justice in Aon[7]:-
“Save for the descending judgement of Lander J in the Court of Appeal, the history of these proceedings reveals an unduly permissive approach at both trial and appellant level to an application that was made late in the day, was inadequately explained, necessitated the vacation or adjournment of the dates set down for trial, and raised new claims not previously agitated apparently because of a deliberate tactical decision not to do so. In such circumstances, the party making the application bears a heavy burden to show why, under a proper reading of the applicable rules of court, leave should be granted.”
[6] Section 4(c)
[7] Supra paragraph 4
[36] I am conscious that there are no applicable rules of court here however, directions are made to ensure that all parties articulate their claims at a very early stage so they can participate in dispute resolution, experts can meet in conclave and prepare joint reports, all to ensure the speedy resolution of the dispute and consequential savings in legal costs.
Conclusion
[37] As indicated I have come to the conclusion that the application to amend the defence and counterclaim to include the trade practises claim and the equitable relief should be refused. I do so in reliance on what the High Court has said in Aon and, having regard to the QCAT Act and the functions of this Tribunal.
[38] I am particularly mindful of the following:
a)There is no satisfactory, or any, explanation for the delay in raising the new causes of action, particularly when the facts relied upon were first pleaded in the original defence, and the respondents became aware of the certifications in March 2010
b)The Tribunal has actively case managed this application and given the parties opportunity to amend pleadings at a very early stage but that opportunity was not availed of.
c)Hearing dates have been allocated.
d)The parties, in particular the applicants will be put to considerable delay and expense in having to reply to the proposed amendments and if transferred to the District Court, there will be significant cost implications and the need for compliance with the UCPR whereas here, the process is one of little informality and technicality and the Tribunal is not bound by the rules of evidence[8].
[8] Section 28 QCAT Act
[39] Therefore the Tribunal will make the following directions:
The respondents have leave to amend the following paragraphs in accordance with the proposed further amended defence and counterclaim as annexed to the affidavit of Mr Miller as follows:
a) Paragraph 16(f) to (m) being the building defects.
b) Paragraph 17 to amend damages from $50,000.00 to $254,555.00
c) Paragraph 20(b) and paragraph 20(c)(i)-(iv)
d) Paragraphs 22 and 23 dealing with the prime cost items and cost set out in paragraph 22 and 23
e) Paragraph 26 dealing with building certification
f) Paragraph 31 to amend the damages claimed from $50,000.00 to $254,555.00.
The application to transfer the proceeding to the District Court is dismissed.
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