McNab Constructions Australia Pty Ltd v Queensland Building Services Authority
[2012] QCAT 681
| CITATION: | McNab Constructions Australia Pty Ltd v Queensland Building Services Authority [2012] QCAT 681 |
| PARTIES: | McNab Constructions Australia Pty Ltd (Applicant) |
| v | |
| Queensland Building Services Authority (Respondent) |
| APPLICATION NUMBER: | QR197-07 / QR023-08 / QR024-08 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | 19 October 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Sandra G Deane, Member |
| DELIVERED ON: | 13 December 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Both parties to the proceeding and all proposed parties who were present at the hearing on 19 October 2012 have leave to be legally represented in relation to the joinder application. 2. McNab Constructions Australia Pty Ltd’s joinder application is dismissed. 3. The Queensland Building Services Authority or any proposed party is to file in the Tribunal two (2) copies of and provide one (1) copy of any application for costs to McNab Constructions Australia Pty Ltd by 4.00pm 18 January, 2013. 4. McNab Constructions Australia Pty Ltd is to file in the Tribunal two (2) copies of and provide to the Queensland Building Services Authority or any proposed party making an application for costs one (1) copy of any submissions in response by 4.00pm 15 February, 2013. 5. Unless an oral hearing is requested any application for costs will be decided on the papers not before 15 February, 2013. |
| CATCHWORDS: | Review of decisions of Queensland Building Services Authority to issue directions to rectify – joinder of parties – parties whose interests may be affected by the proceedings – discretionary factors – utility of joinder considered – whether leave is necessary to withdraw an application in a proceeding as distinct from an originating application – leave not required Queensland Civil and Administrative Tribunal Act 2009, ss 3,19, 20, 24, 33, 34, 42, 43, 46, 256, 271 Queensland Building Services Authority Act 1991, s 72 QBSA v Johnston [2011] QCATA 265 Coral Homes (Qld) Pty Ltd v Queensland Building Services Authority [2012] QCATA 242 Villinger Group Ltd v Redmond [2009] QSC 60 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | McNab Constructions Australia Pty Ltd represented by Mr B E Codd of Counsel instructed by Dibbs Barker, Lawyers |
| RESPONDENT: | Queensland Building Services Authority represented by Mr B Turnbull, solicitor of HWL Ebsworth, Lawyers |
| PROPOSED PARTY: | Advance Traders Pty Ltd represented by Mr D Clothier of Senior Counsel instructed by McInnes Wilson, Lawyers Donovan Hill Architects represented by Mr D de Jersey of Counsel instructed by Thynne & Macartney, Lawyers Building Solutions Pty Ltd t/as Ritek represented by Mr S Barber and later Ms Z E Kilmartin, solicitors of Ferguson Cannon, Lawyers |
REASONS FOR DECISION
Background
The Queensland Building Services Authority issued to McNab Constructions Australia (MCA) 15 directions to rectify in respect of alleged defective building work in relation to the W4 Apartments at Teneriffe, Queensland (the Project).
The first direction to rectify was issued on 3 October 2007 and the last on 15 January 2009. The defective work relates variously to body corporate common property matters and to defects in various lot owner’s apartments. It includes matters variously relating to installation of steel brackets to stairs, staining in aggregate in driveway and pavement, water ingress, water penetration through aluminium sliding windows and water penetration.
MCA applied to the Commercial and Consumer Tribunal (CCT) for a review of each of the directions to rectify. The first application was commenced on 31 October 2007 and the last on 3 February 2009. On 8 April 2009 the reviews were consolidated.
Effective 1 December 2009 jurisdiction to determine these review proceedings transitioned to this Tribunal.
I accept MCA’s and the QBSA’s submissions that this matter is a pending proceeding within the meaning of section 256 of the QCAT Act and that pursuant to section 271 of the QCAT Act the Tribunal is to deal with the joinder under the QCAT Act or an enabling Act and only has the functions the CCT had and can only make a decision the CCT could have made.[1]
[1] QBSA v Johnston [2011] QCATA 265.
Review proceedings are to be conducted by way of a fresh hearing on the merits with the object of producing the “correct and preferable decision”. In conducting the review, the Tribunal has the functions of the original decision maker and there is no presumption that the original decision is correct.[2]
[2]Sections 19 and 20 QCAT Act; Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58 at [9].
The Tribunal may confirm or amend the decision, set aside the decision and substitute its own or set aside the decision and return the matter to the decision maker for reconsideration.[3]
[3] Section 24 QCAT Act.
The Tribunal is limited in what orders it can make on a review application. It can only make decisions that the decision-maker could have made under the enabling legislation when the original decision was made.[4]
[4]Coral Homes (Qld) Pty Ltd v Queensland Building Services Authority [2012] QCATA 242.
On 20 September 2012 MCA filed an application to join[5] the following parties:
[5] Section 42 QCAT Act.
a) Advance Traders Pty Ltd;
b) Donovan Hill Architects;
c) Building Solutions Pty Ltd t/as Ritek;
d) Thomson Kane Hydraulic Engineering Consultants Pty Ltd;
e) Echo Tiles Pty Ltd;
f) Trimcroft Pty Ltd;
g) PJ & MA Curtain Pty Ltd;
h) Tessmann Concreting Pty Ltd;
i) JH Ward Consulting Engineer;
j) Tiling Waterproofing Services Pty Ltd;
k) Pearson Property Group Pty Ltd;
l) Strongforce Pty Ltd.
Legal Representation
To the extent leave had not previously been granted I granted both parties to the proceeding and all proposed parties who were present at the hearing leave to be legally represented in relation to the joinder application.[6]
[6] Section 43(2), (3)(b) and (d) QCAT Act.
Joinder
Substantial written submissions were made which were supplemented by lengthy oral submissions.
The Tribunal may make an order joining a party if it considers the person should be bound by or have the benefit of the decision[7], the person’s interests may be affected[8] or for another reason it is desirable that the person be joined.[9]
[7] Section 42(1)(a) QCAT Act.
[8] Section 42(1)(b) QCAT Act.
[9] Section 42(1)(c) QCAT Act.
Echo Tiles did not appear at the hearing but informed the Tribunal that it opposed the joinder application on the grounds that its defects liability period expired on 29 November 2007 and that it had received no defect notices or other notification of any rectification works in relation to the Project[10].
[10] Letters dated 9 and 15 October 2012.
Trimcroft advised that a liquidator had been appointed to it on 2 April 2012 and made no submissions in relation to the joinder.[11]
[11] Letter dated 26 September 2012.
MCA informed the Tribunal that PJ & MA Curtain Pty Ltd was in liquidation.
The QBSA submitted that there would be no utility in joining a company in liquidation. I accept that submission in respect of both companies.
MCA informed the Tribunal that Tessmann Concreting Pty Ltd had been deregistered. The QBSA submitted that there would be no utility in joining a deregistered company. I accept that submission.
MCA informed the Tribunal that it had not been able to serve JH Ward Consulting Engineer.
The QBSA submitted that as Strongforce Pty Ltd and JH Ward Consulting Engineer had not been served with the application for joinder it would not be appropriate to proceed to determine the application against those proposed parties. I accept that this is a factor to be considered but do not consider it is determinative. The Tribunal’s power to join is not dependent upon an application and may be made on the Tribunal’s own initiative.[12]
[12] Section 42(2) QCAT Act.
Tiling Waterproofing Services Pty Ltd did not appear at the hearing but attempted to email correspondence to the Tribunal on 18 and 19 October 2012. However the attachment was unable to be opened.
Thomson Kane did not appear at the hearing but provided to the Tribunal written submissions through their legal representatives, Daley Law Practice on 18 October 2012. Thomson Kane opposed the joinder, including on the basis that it contends that it is not amenable to a direction to rectify as it did not ‘carry out building work’ as work performed by an engineer in the engineer’s professional position is not building work[13] and on the basis that it had not received any prior notice of any alleged defective work since providing services in 2007.
[13] Regulation 5 QBSA Regulation.
The QBSA and each of the proposed parties represented at the hearing opposed the joinder application.
The Tribunal has accepted that the test that a person’s interest “may be affected” is a lower threshold than the test as it was articulated in the former tribunals dealing with such matters[14] which was formulated as “will be affected”.[15]
[14] Commercial and Consumer Tribunal and the Queensland Building Tribunal.
[15] Body Corporate for London Woolstores Apartments & Ors v QBSA[2011] QCAT 86.
Advance Traders were the developers of the Project and had engaged MCA or McNab Constructions Pty Ltd (MC)[16] under a construction management contract.
[16] The contracting entity is subject of Supreme Court proceedings.
The other parties sought to be joined were parties who performed work or provided services in relation to the Project.
The evidence before the Tribunal is that MCA did not have a contractual relationship with the other proposed parties and that Advance Traders had such a relationship with each.
MCA relies upon section 42(1)(b) as the basis for joinder and submits that upon a hearing of the review application it would be open to the Tribunal to set aside the directions to rectify to MCA and to substitute a decision to direct one or more of the proposed parties to rectify[17].
[17] Section 72 (5AA) QBSA Act.
MCA also contends that if the joinder application is refused then the Tribunal would be in some ways prejudging the outcome of the review application because it would affect the Tribunal’s ability to find that a direction to rectify ought to be given to another party who carried out building work as it would not be affording natural justice to that other party if that party was not joined.
MCA in its review applications seek orders setting aside the QBSA directions and that the Tribunal substitute directions to rectify against proposed parties.
MCA sought such orders on 31 October 2007 when it filed its first application to review and thereafter in its other review applications.
It is difficult to reconcile this fact with MCA’s decision not to apply to join such proposed parties until September 2012.
The Appeal Tribunal recently recognised that it is not difficult to reach the conclusion that in building matters all trades people or subcontractors who worked on a building may have interests which ‘may be affected’ by a review of a decision to rectify issued to the builder but that does not mean that just because a person worked on the site that they should be joined and that there must be a utility to the joinder.[18]
[18]Coral Homes (Qld) Pty Ltd v Queensland Building Services Authority [2012] QCATA 242.
In this regard a factor would be whether each of the proposed parties carried out “building work” as defined and therefore could be the potential recipient of a direction.[19] A number of proposed parties submitted that they had not carried out “building work”.[20]
[19] Section 72(1) QBSA Act.
[20] Thomson Kane; Building Solutions; Donovan Hill.
The QBSA submits that it is likely that JH Ward did not carry out building work because he was probably registered under the Professional Engineers Act 2002 and exempt under regulation 5 and therefore not capable of being given a direction to rectify.
The Tribunal has previously held that whether a proposed party ‘carried out building work’ was a potentially contentious issue too complex for an interlocutory application for joinder.[21]
[21] Body Corporate for London Woolstores Apartments & Ors v QBSA[2011] QCAT 86.
Advance Traders submitted that if it were joined the scope of evidence would be significantly broadened as evidence of Advance Traders’ knowledge would be required to allow findings to be made that it was a proper recipient of a direction to rectify under section 72(5)(g) of the QBSA Act and the Tribunal would need to determine if the amendment to section 72 to insert section 72(5)(g) applied retrospectively to create a potential liability in Advance Traders.
If the joinder was allowed these issues would need to be determined as part of the review proceeding and would add to the complexity of this matter. This is a factor against the exercise of the Tribunal’s discretion.
Another factor to be considered is that the Tribunal standing in the QBSA’s shoes is required to consider whether it would be unfair to direct a party.[22]
[22] Section 72(14) QBSA Act.
The evidence before the Tribunal is to the effect that the proposed parties have had limited and in some instances no prior notice of the defects the subject of the directions to rectify.
Given the significant period since the work was undertaken this would be a factor in favour of a finding of unfairness as it is likely that the effluxion of time will make it difficult to locate appropriate records and recollections will be less reliable.
There is, therefore, a real risk of prejudice brought about by the delay in making an application to join the proposed parties. This is a factor against the exercise of the Tribunal’s discretion.
The QBSA submits that there would be no utility in joining the proposed parties as the QBSA’s and therefore the Tribunal’s power to direct rectification must be exercised within 6 years and 3 months of the work being completed and that this period will expire prior to the scheduled hearing date of this matter.
MCA submits that provided a party is joined prior to the expiration of the period in section 72(8) of the QBSA Act the time limit on issuing a direction applies to the time when the original decision of the QBSA was made and not when the Tribunal makes its decision standing in the QBSA’s shoes. MCA was unable to direct the Tribunal to any authority supporting this submission.
The QBSA made submissions in relation to the differences arising from the powers in relation to review applications between the CCT and QCAT given these applications for review were commenced in the CCT. The QBSA submits that this difference has the consequence that to the extent section 24(2)(b) of the QCAT Act results in QCAT’s decision being backdated to the date of the original decision it does not apply because the CCT did not have a similar provision.
If the QBSA’s submission was ultimately accepted by the Tribunal this would affect the utility of joining the proposed parties given the significant period of time which has expired since the work was performed.
MCA submits that natural justice requires a party who may be affected by a review proceeding be joined because a review decision can’t be reviewed.[23] This submission suggests that the Tribunal’s discretion to join is illusory. Such a submission is against the weight of authority that the discretion is real.
[23] Section 24(2) QCAT Act.
Joining a party to a proceeding other than by consent is a decision not to be made lightly.
The Tribunal has previously accepted that an application for joinder is a 2 stage process. The Tribunal must be satisfied that one or more of the criteria set out in s 42(1) is satisfied and then the Tribunal is required to exercise its discretion.[24]
[24] Comfortable Homes Pty Ltd v QBSA [2001] QBT 61.
Even if I was persuaded that each of the proposed parties (which were not in liquidation or de-registered) did fall within the terms of section 42(1) of the QCAT Act the matter of joinder is clearly a matter for the Tribunal’s discretion.[25]
[25]Coral Homes (Qld) Pty Ltd v Queensland Building Services Authority [2012] QCATA 242.
The exercise of such discretion is similar to the exercise of the Court’s discretion to give leave to file a third party notice[26]. The Supreme Court[27] and the Court of Appeal[28] have considered that discretion and have described it as requiring a balancing exercise between the risk of multiple proceedings, increased costs and possible inconsistent findings if a party is not joined and the principle of a party not being delayed or inconvenienced by another party attempting to offset its liability.[29]
[26] Rule 194 Uniform Civil Procedure Rules 1999.
[27] Villinger Group Ltd v Redmond [2009] QSC 60.
[28] MGM Containers Pty Ltd v Wockner [2006] QCA 502.
[29] Phonesivorabouth v Tops Services Pty Ltd (1992) 106 FLR 471.
The Court of Appeal[30] acknowledged that it is appropriate to consider:
a) the extent of the delay in applying for leave and whether a satisfactory explanation was provided;
b) whether the joinder would unduly complicate the hearing in view of the complexity of issues required to be determined and having regard to the additional length of the hearing and therefore the increased costs;
c) whether there would be further delay to the trial if the joinder were allowed;
d) whether the party seeking to join another could bring separate proceedings against that party and whether the issues to be determined between those parties are different to the issues in the primary dispute.
[30] MGM Containers Pty Ltd v Wockner [2006] QCA 502 at [20] and [28].
In addition to these matters it is appropriate to have regard to the objects in section 3 of the QCAT Act.[31]
[31] Mackay v QBSA [2010] QCAT 381.
MCA tendered a chronology. It relevantly demonstrates that the High Court dismissed MCA’s application for special leave to appeal on a preliminary point[32] on 12 August 2011 and that its application for joinder was filed over a year later on 20 September 2012.
[32]Relating to whether the QBSA had power to issue MCA directions to rectify under s 72(1) QBSA Act.
This is a significant period of delay in itself and more so having regard to the fact that the first application for review was filed on 31 October 2007.
MCA asserts that an explanation for its delay was because:
a) it pursued its appeal rights, as it was entitled to do;
b) the QBSA had filed applications for some parties to be joined[33] but had either not pursued the application or in the case of the application filed 16 May 2012 it had purported to withdraw the application the following day.
[33]25 March 2010 and 16 May 2012 – applications to join Advance Traders Pty Ltd and McNab Constructions Pty Ltd.
I accept Mr Turnbull’s explanation that he misunderstood the QBSA’s instructions and this caused the filing and subsequent ‘withdrawal’ of the joinder application in May 2012.
MCA contends that the QBSA cannot withdraw its applications for joinder without leave. It is clear that the QBSA does not wish to press a joinder application.
The QBSA submits that:
a)if it does not wish to pursue an application it ought not be forced to do so;
b)leave is only required to withdraw an originating application rather than an application within a proceeding;
c)to the extent the Tribunal requires it to seek leave to withdraw the applications, it applies for leave.
The QBSA had not pursued its 2010 joinder application for a very long time. I accept the QBSA’s submission that the impact of the passage of time since it filed an application for joinder in 2010 has affected its view about the appropriateness of joining Advanced Traders and MC.[34]
[34] Section 72(8) QBSA Act.
Section 46 of the QCAT Act provides that if the Tribunal gives leave an applicant may withdraw its application or referral before the matter is heard and decided. Section 46 is contained within Part 5 of the QCAT Act, which is headed “Preliminary dealings with proceeding”. It is contained within Division 1 entitled “Early end to proceeding”.
The QCAT Act provides in Part 3 how to start proceedings. These include making an application[35] and referring a matter.[36]
[35] Section 33.
[36] Section 34.
In these circumstances I find that the preferred construction of section 46 is that it refers to the early disposal of a proceeding and not an application within a proceeding.
I therefore find that the QBSA does not require leave to withdraw its applications for joinder.
In any event the QBSA only sought to join 2 proposed parties not the numerous proposed parties MCA seeks to join and clearly had not pressed for joinder.
In my view no satisfactory explanation is provided as to why MCA did not file a joinder application during the period 12 August 2011 to 16 May 2012 or during the period 17 May 2012 until 20 September 2012. This is a factor against the exercise of the Tribunal’s discretion.
MCA elected to pursue its appeal processes rather than make an early joinder application. This is an election of its making and does not lessen the potential prejudice the delay may cause the proposed parties.
I consider that joining the proposed parties would further complicate the proceedings and would significantly lengthen the hearing and the cost of the proceedings. This is a factor against the exercise of the Tribunal’s discretion.
On 13 September 2012 the hearing in this matter was set down to commence on 8 July 2013 for 5 days. If the proposed parties were joined that hearing date would almost certainly be required to be vacated so that the proposed parties could properly respond to the proceedings, including the seeking of expert opinions. In many respects the proceeding would have to start again. This is a factor against the exercise of the Tribunal’s discretion.[37]
[37] Bach v Majestic Pools & Landscapes Pty Ltd [2010] QCAT 581.
The Supreme Court final hearing of the contractual dispute between Advance Traders and MCA and MC in relation to the Project is scheduled to commence on 29 April 2013 for a period of 8 weeks and the decision in that matter would be likely to be reserved as at 8 July 2013. Advance Traders submitted that if joined it would apply to the Tribunal for the review proceedings to be stayed until the Supreme Court proceedings had been determined (including on appeal) on grounds there was a risk of duplication of effort, conflicting findings of facts and issue estoppel. The potential for a successful stay is a factor against the exercise of the Tribunal’s discretion.
If the proposed parties were joined the review hearing would take significantly more than 5 days. There would be additional delay in scheduling an appropriate block of time for a more complex and lengthy hearing. These factors are factors which weigh against the exercise of the Tribunal’s discretion.
In the circumstances I find that that even if each proposed party (which is not in liquidation or de-registered) is a party to which section 42(1) applies it would not be appropriate to exercise my discretion in favour of joinder.
The QBSA and some of the proposed parties sought to be heard on the issue of costs. It is appropriate to make directions about submissions on costs.
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