Mitchamy Developments Pty Ltd v Adams

[2010] QCAT 107

CITATION: Mitchamy Developments Pty Ltd v Adams [2010] QCAT 107

PARTIES:   Mitchamy Developments Pty Ltd

V

Michael Charles Adams & Erica Adams - Atkinson

APPLICATION NUMBER:            BD062-06

MATTER TYPE:   Building matters

HEARING DATE:   11 February 2010

HEARD AT:   Brisbane

DECISION OF:   Dr Bridget Cullen Mandikos

DELIVERED ON:   11 February 2010

DELIVERED AT:   Brisbane

ORDERS MADE: Pursuant to section 47 of the QCAT Act, paragraph 3 of the Respondent’s Amended Defence is struck out for want of jurisdiction.

CATCHWORDS: S.47 Queensland Civil and Administrative Tribunal Act 2009, jurisdiction, strike out part of response

APPEARANCES and REPRESENTATION (if any):

Applicant: Mitchamy Developments Pty Ltd

Respondent: Mr Adams & Ms Adam - Atkinson

REASONS FOR DECISION

Reasons for Decision

The dispute in this matter arises out of a domestic building contract, entered into between the Applicant, Mitchamy Developments Pty Ltd (“Mitchamy”), and the Respondents, Michael Adams and Erica Adams-Atkinson (“Mr Adams and Ms Adams-Atkinson”) in December 2004.

In summary, Mitchamy has claimed that Mr Adams and Ms Adams-Atkinson failed to pay him the full amount due under the contract, and also failed to pay him for supplementary works.  Mitchamy’s application relates to work performed at Lot 74, 12 Oceanic Court, Twin Waters.  Mitchamy’s originating application was filed in the Commercial and Consumer Tribunal (“CCT”) on 6 February 2006 and was amended on 27 June 2006. 

Since the time of Mitchamy’s filing, the CCT has amalgamated into the Queensland Civil and Administrative Tribunal (“QCAT”). QCAT now hears and decides all matters previously dealt with by the CCT: section 256 Queensland Civil and Administrative Tribunal Act 2009 (“the QCAT Act”). As this is a matter to which the transitional provisions of the QCAT Act apply, QCAT has only the functions and decision making power that existed in the CCT: section 217 QCAT Act.

Defence argument relating to set-off

In their defence, Mr Adams and Ms Adams-Atkinson, raise arguments relating to what is, in effect, a set-off. The set-off has not been pleaded as a counterclaim. Paragraph 3(iii) of the amended defence, filed 8 February 2007, reads (relevantly) as follows:

Allowing for the agreed reduction in the contract price the progress payment exceeded the percentage of the contract price to be paid for the stage. 

It is alleged by Mr Adams and Ms Adams-Atkinson that by agreement dated 4 August 2005, Mitchamy agreed to reduce the contract price for the property at 12 Oceanic Court by the amount of $40,400.00.  (Annexure 1 to the Joint Statement of Mr Adams and Ms Adams-Atkinson, dated 14 September 2006). 

It is relevant to note that Mr Adams is a real estate agent, and that the parties in this matter initially met when Mitchamy was building a display home (that is not the subject of this dispute) located at 3 Waterfront Court, Twin Waters. Mr Adams and Ms Adams-Atkinson allege that they marketed the property at 3 Waterfront Court, and that Mitchamy agreed to pay a commission to them upon “finally securing a purchaser for the home” and further that the parties agreed “that a Form 22a would not be relied upon and that it would be a financial advantage to both parties that an amount less than that required under a Form 22a (between a seller and a real estate office) be deducted from the Contract price of the building Contract.” (Pages 2-3 of the Joint Statement of Mr Adams and Ms Adams-Atkinson, dated 14 September 2006). It is this “commission” that forms the basis of the set-off particularised in paragraph 3(iii) of the Respondent’s amended defence.

Tribunal’s striking out of alleged set-off

Following a compulsory conference attended by the parties, the Tribunal exercised its initiative pursuant to s47 of the QCAT Act and ordered that paragraph 3(iii) of Mr Adams and Ms Adams-Atkinson’s amended defence was struck out for want of jurisdiction.

Section 47 of the QCAT Act provides as follows:

Dismissing, striking out or deciding if unjustified proceeding or part

(1) This section applies if the tribunal considers a proceeding or a part of a proceeding is--

(a) frivolous, vexatious or misconceived; or
(b) lacking in substance; or
(c) otherwise an abuse of process.

(2) The tribunal may--

(a) if the party who brought the proceeding or part before the tribunal is the applicant for the proceeding, order the proceeding or part be dismissed or struck out; or
(b) for a part of a proceeding brought before the tribunal by a party other than the applicant for the proceeding--
(i) make its final decision in the proceeding in the applicant's favour; or
(ii) order that the party who brought the part before the tribunal be removed from the proceeding; or
(c) make a costs order against the party who brought the proceeding or part before the tribunal to compensate another party for any reasonable costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding or part.
Note--
See section 108 for the tribunal's power to order that the costs be paid before it continues with the proceeding.

(3) The tribunal may act under subsection (2) on the application of a party to the proceeding or on the tribunal's own initiative.
(4) The tribunal's power to act under subsection (2) is exercisable only by--

(a) the tribunal as constituted for the proceeding; or
(b) if the tribunal has not been constituted for the proceeding--a legally qualified member or an adjudicator.

In my view, the alleged set-off argument is “misconceived,” triggering the application of subpart 1 of s47 of the QCAT Act, above. The reasons that I have made this determination are that:

1.        It is clear that the CCT, and therefore QCAT, does not have jurisdiction to hear disputes about real-estate commissions as such matters could not be considered to be “building disputes”.  It would not be possible for the Tribunal to make a determination on the set-off issue without considering the impact of the provisions relating to commissions contained in the Property Agents and Motor Dealers Act 2000 (Qld), and the Tribunal has no jurisdiction in this regard.

2.        The alleged set-off does not relate to the property that is the subject of the building dispute application (12 Oceanic Court), but relates to a different property altogether (3 Waterfront Court).  It is not necessary that the building dispute application relating to 12 Oceanic Court, and the alleged set-off agreement relating to 3 Waterfront Court be heard together, as the issues are not significantly interrelated.

Though there is not an analogous provision in the QCAT Act, it is interesting to note that the Uniform Civil Procedure Rules, applicable in the Queensland Courts, do contain a provision relating to set-offs – UCPR r173. Subsection 3 of UCPR r173(a) recognises that:

if the court considers a set-off can not be conveniently dealt with in a proceeding, the court may set aside a defence or counterclaim in the proceeding by way of set-off and may order that the set-off be dealt with in a separate proceeding.

I have concluded that there is not a sufficient nexus between the alleged set-off and the building dispute at hand to justify further consideration of the matter by the Tribunal.  The alleged set-off does not arise out of the course of the building dispute in issue; rather it relates to whether a real estate commission should be paid following Mr Adams work as a real estate agent with regard to a separate property.  Though the alleged agreement was to reduce the contract price of 12 Oceanic Court (the property that is the subject of the domestic building dispute), there are no other common factors that would warrant hearing the dispute about the real estate commission in conjunction with the domestic building dispute.

In consideration of these factors, I have dismissed the set-off aspect of Mr Adams and Ms Adams-Atkinson’s defence, and made a final decision with respect to this aspect of the defence in Mitchamy’s favour, in accordance with s47(2) of the QCAT Act. As there has been no determination on the merits with regard to the set-off issue, it is open the Mr Adams and Ms Adams-Atkinson to commence proceedings in the courts, seeking to recover the commission they allege is owed by Mitchamy following the sale of 2 Waterfront Court.

Transfer to the courts undesirable given limited nexus of set-off argument to domestic building dispute

The only alternative course for the Tribunal, which would be undesirable given that this proceeding has been before the CCT, and now QCAT, since 2006, would be to transfer this entire proceeding to the courts in accordance with s52 of the QCAT Act. At this late juncture, there having been no arguments concerning jurisdiction raised by the parties themselves, this would cause considerable additional delay for all concerned. As there is a marginal nexus only between the domestic building dispute and the set-off argument relating to a different property raised by Mr Adams and Ms Adams-Atkinson, in my view, the more appropriate course of action is to compel them to raise this argument by making a claim in the appropriate forum, in this case the Magistrates Court.

Conclusion

While it may seem a fine line, in my view, Mr Adams and Ms Adams-Atkinson’s set-off argument relates to payment of a real-estate commission for another property that is not the subject of the domestic building dispute.  As such, it should not prevent the Tribunal from hearing the domestic building before it, and is more appropriately commenced by way of claim in a separate proceeding in the Magistrates Court.

Dr Bridget Cullen Mandikos

Member