R & D Veterinary Services Pty Ltd v Streamlined Veterinary Solutions Pty Ltd - [2016] QCATA 114

CITATION:

R & D Veterinary Services Pty Ltd v Streamlined Veterinary Solutions Pty Ltd [2016] QCATA 114

PARTIES:	R & D VETERINARY SERVICES PTY LTD (Applicant/Appellant)
v
STREAMLINED VETERINARY SOLUTIONS PTY LTD (Respondent)
APPLICATION NUMBER:		APL080-16

MATTER TYPE:

Minor civil dispute

HEARING DATE:

12 July 2016

HEARD AT:

Brisbane

DECISION OF:

Justice Carmody

DELIVERED ON:

19 July 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

THE APPEAL TRIBUNAL ORDERS THAT:

1. Leave to appeal is refused.

CATCHWORDS:

APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where the applicants were ordered to pay an amount owing under a contract – where the applicants claim the contract provides for compulsory external assessment when there is a dispute under the contract – whether the tribunal failed to take into account relevant considerations – whether leave to appeal should be granted.

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – CROSS-CLAIMS: SET-OFF AND COUNTERCLAIM – SET-OFF – WHAT MAY BE SET-OFF – EQUITABLE SET-OFF – where the applicant’s potential claim for an equitable set-off was not properly raised or considered in the first instance.

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 142(3)(a)

Forsyth v Gibbs [2008] QCA 103

Hawes v Dean [2014] NSWCA 380

HP Mercantile Pty Ltd v Dierickx [2013] NSWCA 479

APPEARANCES and REPRESENTATION:

APPLICANT Pieter de Wet.
RESPONDENT Dr. Andrew Morris.

REASONS FOR DECISION

The parties are collaborative animal research companies in dispute over the payment of fees.
The respondent (SVS) was set up in 2013 to research novel vaccines and immunotherapies. Dr. Sharon de Wet and Dr. Andrew Morris were senior researchers and half owners of SVS.
In 2014, Dr. de Wet and her husband, Pieter, (the R&D directors) formed R&D to conduct a sperm selection project at its Karana Downs premises using equipment leased from SVS.
On 30 June 2014 and 30 September 2014, SVS invoiced R&D for user fees totalling $37,041.85 for the 15 months from 1 June 2013 and 30 September 2014 (tax invoices 6 and 7). R&D made a part payment of $17,916.90 in December 2014.
On 12 November 2015, SVS started minor debt proceedings in QCAT to recover $25,000[1] of the alleged $28,960.41 unpaid balance of tax invoices 6 and 7, relying on an agreement evidenced in an email trail between the parties in June 2014.
[1]The limit of QCAT’s monetary jurisdiction.
On 2 February 2016, R&D served SVS with tax invoice number 160201 for facility costs for the use of the Karana Downs premises between 13 February 2013 and September 2014 in the amount of $23,385.05 plus 2% interest “as per clause 7.2 of the Service Agreement” (SA).
The SA is dated 1 January 2015. According to the R&D directors, it was entered into “to regulate” the (business) relationship between SVS and R&D.
Under the terms of the SA, R&D provided scheduled facilities and specified services and SVS supplied the research and other equipment for the project.
Invoices for estimated facility and user fees are exchanged monthly and adjusted annually at…

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: [2016] QCATA 114
Decision Date: 19 July 2016

CaseChat Overview and Summary

The applicants, R&D Veterinary Services Pty Ltd, sought leave to appeal a decision of the tribunal which ordered them to pay an amount owing under a contract. The respondents, Streamlined Veterinary Solutions Pty Ltd, opposed the application for leave to appeal. The dispute arose from an agreement between the parties regarding a facilities fee, and the applicants argued that the tribunal failed to take into account relevant considerations when it ordered payment without referring the disputed invoices to an expert for determination.

The legal issues before the court were whether the tribunal failed to consider the applicants' equitable set-off claim and whether leave to appeal should be granted. The applicants argued that the tribunal should have referred the disputed invoices to an expert for determination as per the agreement, and that the doctrine of equitable set-off should have been considered. The respondents argued that the applicants had not properly raised or considered their potential equitable set-off claim in the first instance, and that the tribunal's decision should not be interfered with.

The court found that the tribunal did not fail to consider the applicants' equitable set-off claim as it was not properly raised or considered in the first instance. The court also found that there was no arguable justification for appellate interference, and that leave to appeal should be refused. The court emphasised that leave to appeal a minor civil dispute decision is discretionary and intended to ensure that finite judicial administrative resources are not wasted on unmeritorious cases. The key role and function of the appeal tribunal is to correct error and avoid substantial injustice.

The tribunal ordered that leave to appeal be refused.

Orders

Orders of the court

THE APPEAL TRIBUNAL ORDERS THAT:

1. Leave to appeal is refused.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

And at 1-16:1:“…it’s almost to the point where we’re being asked to pay him for the privilege of supplying them with a large amount of equipment.” The decision As is evident from 1-19:10-15 of the record of proceedings, the tribunal approached the resolution of the dispute on the mistaken assumption that SVS was claiming under the 2015 SA: “…this… hearing is about this one particular matter, which is the invoices outstanding to September 2014 – I find for (SVS) who has abided by the agreement and there appears to be no agreement at this stage or no attempt at agreement with regard to having an expert intervene to decide or to help the parties agree to a facilities fee. So the application will be granted and I’m going to order that (R&D) pay $25,000 to (SVS).”The application for leave R&D propose to appeal on the ground that the tribunal “…should not have issued an order against (it)” but “should have directed that the (three) disputed invoices be referred to an expert for determination pursuant to clauses 6, 7 and 14 of the agreement”. As this tribunal has repeatedly said, leave to appeal a minor civil dispute decision is not just for the asking. The decision whether to grant or refuse leave is discretionary.[2] It is intended to ensure that finite judicial administrative reasons are not wasted on unmeritorious cases. The key role and function of the appeal tribunal is to correct error and avoid substantial injustice. [2]Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 142(3)(a). The only arguable justification for appellate interference, it seems to me, is the tribunal’s alleged failure to consider and apply the equitable set-off doctrine,[3] even though R&D admittedly did not file a cross-claim or directly ask the tribunal to do so.[3]See 4.1, 4.1(a)&(h) in R&D’s submissions filed 18/4/2016. A set-off is a competing demand or claim used by respondents to reduce or extinguish legal liability for a debt. It is aimed at stopping an applicant from recovering money owed to him when he is indebted to the respondent and unjustly refuses to pay. It is not that the claim is denied or worth less, but that it should be abated. There must be some equitable ground for protecting the respondent from the unconscionability of making him or her pay a debtor who will not reciprocate. What is needed is an equity (such as fraud or inseparability) that impeaches the other party’s demand “in the sense that it makes it positively unjust that there should be recovery without deduction”.[4][4]Martin Van Der Walt, ‘The Clarification of Equitable Set Off’ (1998) 72 Australian Law Journal 516, 520. Three examples of equitable set-off were given by Emmett JA in HP Mercantile Pty Ltd v Dierickx.[5] The first is where a mortgage in favour of a solicitor as security for fees is given and the client has a cross-claim for unprofessional work. The second is where a builder has a progress payment claim under a building contract against an owner with a claim for damages for breach of warranty. The third case involves a lender who fails to provide promised funds for the completion of a development project that consequently fails, leaving the borrower with no capacity to repay the original loan.[6] Another would be rival claims by a landlord and tenant over mutual breaches of a shop lease.[5][2013] NSWCA 479.[6]Hawes v Dean [2014] NSWCA 380 [64].

Ratio Decidendi

Legal Principle Established

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