Peterson Management Services Pty Ltd (ACN 094 234 474) as trustee for the Peterson Family Trust v Body Corporate for the Rocks Resort Community Title Scheme 9435 (No. 1)
[2014] QCAT 541
•4 August 2014
| CITATION: | Peterson Management Services Pty Ltd (ACN 094 234 474) as trustee for the Peterson Family Trust v Body Corporate for the Rocks Resort Community Title Scheme 9435 (No. 1) [2014] QCAT 541 |
| PARTIES: | Peterson Management Services Pty Ltd (ACN 094 234 474) as trustee for the Peterson Family Trust (Applicant) |
| v | |
| Body Corporate for the Rocks Resort Community Title Scheme 9435 (Respondent) |
| APPLICATION NUMBER: | OCL190-10 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Favell |
| DELIVERED ON: | 4 August 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Application Dismissed. 2. Costs are reserved. |
| CATCHWORDS: | Application to amend pleading – timing of amendment – matters to be taken into account – costs |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
History
Peterson Management Services Pty Ltd was appointed the caretaking services contractor for the Rocks Resort Community Title Scheme 9435 pursuant to two contracts, the first titled “Caretaking Agreement” and the second “Maintenance Agreement” both entered on 12 September 2003.
The relationship between the parties has been subject to dispute and in 2010 the Rocks Resort served Peterson Management with a number of Remedial Action Notices[1] requiring the company to remedy the alleged breaches or carry out the duties which are alleged not to have been carried out.[2] The failure to comply with a RAN is required before the Rocks resort may take action to terminate the services of Peterson Management under the agreements[3].[4]
[1]Body Corporate and Community Management (Accommodation Module) Regulation 2008 s 129.
[2]Body Corporate and Community Management Act 1997 Schedule 2.
[3]Body Corporate and Community Management (Accommodation Module) Regulation 2008 ss 129(1).
[4]Peterson Management Services Pty Ltd v Body Corporate for the Rocks Resort CTS 9435 (Unreported, QCAT, Member Allen, 26 September 2013), [1].
Peterson Management made an application to the Tribunal on 22 December 2010 for relief including declarations as to the validity of the notices and that the company had complied with them and damages for breach of duties which were alleged to be owed by the Rocks Resort to Peterson Management under the Body Corporate and Community Management Act 1997, the Accommodation Module and the agreement. It is noted that at the time of Peterson Managements application the Rocks Resort had taken no action to terminate either of the agreements in reliance on the notices. However, it is clear from correspondence that Rocks Resort had reserved its rights to initiate the termination of the agreements.[5]
[5]Ibid [2].
The application filed by Peterson Management consisted of many hundreds of pages and the Rocks Resort considered that it did not raise issues which should be subject to hearing. As a result the Rocks Resort made an application to the Tribunal on 22 July 2012 to have the application of Peterson Management dismissed or struck out. Rocks Resort had not at the time it filed its application dismiss/strike out, filed a defence to the application.[6]
[6]Ibid [3].
The application to dismiss/dismiss was to be heard by the Tribunal on 10 September 2012. On that day the hearing was adjourned with directions that the application to dismiss/strike out be heard with a new application from Peterson Management to amend the application and to join any further parties as respondents. The directions also provided an opportunity for Rocks Resort and any other parties to be joined to provide any submissions in response to the new applications with Peterson Management to provide submissions in reply.[7]
[7]Ibid [4].
Peterson Management filed and gave its application in accordance with s 62 of the QCAT Act to amend the application on 14 December 2012, following a contested application to extend time, and submissions were filed by both parties in accordance with the directions of 10 September 2012. There was no application to join further parties to the application. The application to amend the original application and the adjourned application dismiss/strike out were heard on 5 March 2013. The Tribunal notes that a direction was made at the hearing to enable Rocks Resort to file submissions in reply to the oral submissions at the hearing made for Peterson Management. Following the filing of those submissions a request was made by Peterson Management to file submissions in reply. The Tribunal determined that submissions should close on the filing of Rocks Resorts submissions and considered that there was nothing in those submissions which affected the decision of the Tribunal for which Peterson Management required a right of reply and no submissions in reply from Peterson Management were ordered.[8]
[8]Ibid [5].
On 5 March 2013, the Tribunal ordered as follows:
a) The application to dismiss the claims in respect of damages for breach of contract and breach of statutory duty is granted.
b) The application to dismiss/strike out in respect of the other parts of the claim is refused.
c) Leave is granted to Peterson Management Services Pty Ltd to file two (2) copies in the Tribunal and give to the Body Corporate for Rock Resort CTS 9435 one (1) copy of a further amended application which incorporates the claims in respect of:
i)The validity of eight remedial action notices,
ii)Compliance with eight remedial action notices, and
iii)Reimbursement of the sum of $15,006.20 on or before 4.00pm on 30 October 2013.
d) The Body Corporate for Rock Resort CTS 9435 must file two (2) copies in the Tribunal and give to Peterson Management Services Pty Ltd one (1) copy of its response to the amended application on or before 4.00 on 29 November 2013.
e) The application to dismiss/strike out under s 48 of the Queensland Civil and Administrative Tribunal Act 2009 is refused.
Costs
f) Peterson Management Services Pty Ltd must pay the amount of $4,128.53 to the Body Corporate for Rock Resort CTS 9435 for costs and disbursements as assessed in respect of the hearing of the Tribunal on 27 November 2012 on or before 4.00pm on 11 October 2013.
g) The costs in respect of the applications to dismiss/strike out and amend are reserved.
In a directions hearing on the 3 June 2014, the Tribunal made various directions including listing this matter for hearing in Brisbane on 4, 5, 6, 7 and 8 August 2014.
Included in those directions was an order that the body corporate for the Rocks Resort must file and give to Peterson Management Services Pty Ltd a copy of an amended application and submissions in support of a notice to produce documents to be issued to Francis Peterson of Peterson Management Services Pty Ltd by 10 June 2014. Directions were made as to any response to the amended application. Further directions concern the filing of any further statement of witnesses, any expert reports and any documents upon which Peterson Management wish to rely in response to material filed by the body corporate in respect of relief sought in the counter application by 4 July 2014.
It was also ordered that the body corporate file and give to Peterson Management any further statement of witnesses, any expert reports, any documents upon which it wishes to rely in response to the material filed by Peterson Management in respect of the relief sought in the application by 4 July 2014.
An expert’s conclave was listed for the 15 July 2014 and the parties were to have exchanged a list of witnesses required for cross examination by the 11 July 2013 [sic]. The reference to 2013 is clearly a mistake as the directions were made on the 3 June 2014. It should read 11 July 2014.
Peterson Management was required to file in the Tribunal and give to the body corporate a hearing plan by the 18 July 2014 and the parties were required to file a consolidated matrix of pleadings and evidence by 18 July 2014.
On 19 June 2014 an application for miscellaneous matters was filed. It sought leave to file an amended counter application.
On 20 June 2014 the Tribunal directed that Peterson Management file and serve submissions in response to that application by 4 July 2014 and directed that the application for miscellaneous matters would be determined on the papers without an oral hearing.
In support of its application the respondent submits that the proposed amendments to the counter application are insignificant and minor in nature and do not affect the orders sought by the respondent, the quantum claimed or add any additional cause of action. It submits that the amendments seek to provide further particularisation of the already pleaded cause of action and to flesh out the existing issues as pleaded at paragraphs [63] – [68] as follows:
False, Misleading or Misrepresentations
64. On or about 19 November 2002, John Mahoney of Mahoney Lawyers solicitor for the applicant, wrote to the applicant discussing new caretaking, letting, security and maintenance agreement. The applicant subsequently circulated the said correspondence to all Lot owners by including it in the explanatory notes for the annual general meeting dated 22 November 2002. The said corresponded relevantly stated:
(a) ‘…whilst there was a different language utilised the agreements are for all practical purposes the same as the existing agreement.’
65. The said correspondence:
(a) contain statements which are clearly false, misleading and/or contain misrepresentations;
(b) contain statements which were clearly calculated to generate support from Lot owners, given the pending vote at the general meeting;
(c) contain statements which acted to induce Lot owners to vote in favour of the applicants general meeting motions; and
(d) contain false and misleading statements and or misrepresentations of the true circumstances/fact.
66. On or about 22 November 2012, the applicant wrote to all Lot owners within the scheme, discussing the pending general meeting and motion to enter into new caretaking, letting, security and maintenance agreement with the applicant. The said correspondence relevantly stated:
(a) Frequently asked Questions
Question: Will I vote for or agent the agreements cost owners more money?
Answer: No
Question: Will increasing the agreements add value to the management rights?
Answer: No. Management rights are sold to an accepted industry formula that calculates the value. Net profit x multiple factor (presently 4.5) + unit value.
Question: If the agreements are extended are Peterson Management Services tied to the Rocks for a period of time?
Answer: Yes.
The Act provides for large monetary penalties if management rights are sold within three years of upgrading agreements.
Question: Are Peterson Management Services asking for an extension of agreements in order to sell?
Answer: No. Most definitely not, we are asking for extensions in order to stay. Why would we spend 4,000 dollars [sic] if we intended to sell.
Question: What length of time are management rights’ agreements for new buildings that we see at, or nearing completion.
Answer: Twenty-five years is the industry standard.
Question: What future do you see for Peterson Management Services at the Rocks Resort?
Answer: Everything progressing as planned, we believe there is a wonderful future for Joel. This includes marketing throughout Australia and overseas promoting the accommodation prospects of the Rocks. The hard yards have been done and now work will continue having gained two years in valuable experience in this exciting industry.
67. The said correspondence:
(a) contained statement which was false, misleading and/or misrepresentations;
(b) contained misleading statements which were clearly calculated to generate support from Lot owners;
(c) contained misleading statements which were designed to induce Lot owners into supporting the application in the general meeting motions; and
(d) contained false and misleading statements and/or misrepresentations of the true circumstances/facts.
68. The application has, by circulating the Mahoney Lawyers’ letter and sending the Letter of 22 November 2012:
(a) breached the caretaking code of conduct;
(b) breached the agreements;
(c) has been and is grossly negligent in its performance or non-performance of the duties under the agreements; and
(d) has committed a gross misstatement in its performance or non-performance of the duties under the agreements.
Defamatory and Scandalous Matter
On 9 May 2014 the Tribunal dismissed an application for miscellaneous matters dated 2 April 2014.
That application was to amend and include an additional claim into the response and counter-claim submitted by the respondent on the 20 December 2013.
That application in part sought to rely on the letter of 19 November 2002 from Mahoney Lawyers which was said to represent to owners that the new agreements were the same as existing agreements. The application made specific reference to the statement which is now contained in the proposed paragraph [64].
The allegations sought to be made by the amendments sought in the 2 April 2014 miscellaneous application were that the statements made in the Mahoney advice letter were knowingly and fraudulently and/or mistakenly and/or negligently made.
Now in the application under present consideration the allegations are that the Mahoney Lawyers’ letter and the letter of the 22 November 2002 constituted a breach of the caretaking code of conduct, breach of the agreements, gross negligence and gross misconduct by the applicant.
In considering whether it is appropriate for the Tribunal to exercise its discretion to allow an amendment to the counter application the Tribunal accepts that the following matters are relevant:[9]
a) the extent of delay in seeking leave and its associated costs;
b) the point the litigation has reached;
c) the prejudice to the applicant listed in the proceedings if leave is granted;
d) the prejudice to other litigants and the efficient use of court resources;
e) the applicant’s explanation for the delay;
f) the nature and importance of the amendment to the applicant; and
g) the need to maintain public confidence in the judicial system.
[9]Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (Aon).
That application in part sought to rely on the letter of 19 November 2002 from Mahoney Lawyers which was said to represent to owners that the new agreements were the same as existing agreements.
The applicant resists the application for leave to amend partly on the basis that the connection between the pleaded facts and the pleaded legal consequence is unclear. It contends that none of the pleaded legal consequences can as a matter of law arise from the pleaded facts in any event.
It also relies on a submission that the application is a ‘re-hashing’ of the 2 April 2014 application and accordingly the application is an abuse of process.
It also submits that the body corporate should be refused leave to amend on the principles pronounced by the High Court in Aon. It submits that Aon is authority for the propositions:
(a) there is no right to amend, whether on payment of costs as compensation or otherwise;
(b) costs are not a panacea for prejudice;
(c) the discretion is informed by the modern court rules, namely the just and expeditious resolution of the real issues in dispute at a minimum expense;
(d) any delay in bringing the application must be adequately explained;
(e) there is a distinction between minor amendments and those which raise an entirely new cause of action or factual matrix;
(f) justice requires consideration of the prejudice caused to the opponent, the court and others litigants as users of the court’s finite resources; and
(g) justice includes the stress, cost and inconvenience that litigation imposes on all litigants, corporate or personal, and witnesses until a litigation concludes one way or another.
In the present circumstances, this matter has been subject of numerous directions it having been commenced in 2010. A trial has been set down commencing on the 4 August for five days.
Peterson Management contends that if the proposed amendments were allowed to be made it would be an unavoidable consequence that:
(a) the applicant will need to plead in reply;
(b) both parties will need to put on further evidence responding to the amendments;
(c) the expert conclave schedule will likely be affected as its scope may change; and
(d) the trial will almost certainly be vacated.
The applicant body corporate in this application seeks to address the matters accepted as arising from the decision in Aon.
It contends that although there has been a delay of five and a half months since the counter application was filed on the 20 December 2013, the impacts and effects of the amendments are so minor in nature to render the length of delay a null and void issue. I do not accept that to be the case.
It submits that there would be no need to vacate the hearing dates. In my view allowing an amendment at this late stage given the various directions already made would require that Peterson Management given the opportunity to respond to the changes and it would be likely that further witness statements would be required.
The body corporate submits that it is not seeking to amend its cause of action or add an additional cause of action. In my view it is seeking to add a different incident of the breaches which were formerly set out in paragraph [66] of the counter-application.
In my view, taking all of the relevant circumstances into account and the relevant matters to be exercised in exercising the discretion of the Tribunal the application should be dismissed.
The applicant Peterson Management seeks indemnity costs in respect of this application.
It submits that the Tribunal has recognised the jurisdiction and appropriateness of awarding costs in cases of abuse of process or similar.[10] It says that is so notwithstanding the strong indication against costs intended by the legislature which is enunciated in Part 6, Division 6 of the QCAT Act. It points to the statement made by the President (Allan Wilson J) in Ralacom which endorsed the Colgate-Palmolive[11] bases of awarding indemnity costs when His Honour said:[12]
i) the fact that proceedings were commenced or continued in wilful disregard of known facts;
ii) the making of allegations which ought to never been made;
iii) the undue prolongation of a case by groundless contentions;
iv) evidence of particular misconduct which that causes loss of time to the court and other parties;
v) prudent refusal of an offer to compromise.
[10]Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No. 2) [2010] QCAT 412 (Ralacom).
[11](1993) 118 ALR 248.
[12]Ralacom [58].
Peterson Management contends that because the application is ‘largely a re-agitation of an application previously heard and dismissed’ any cost order should be indemnity costs.
As was ordered in the decision of the Tribunal delivered on the 26 September 2013, the Tribunal considers that it is appropriate a question of costs be determined once the application has been finally heard and costs in regard to this application will be reserved. The cost of this application and the previously reserved question of costs will be determined after the determination of the hearing.
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