Roberts v Nunn
[2012] QCATA 131
•31 July 2012
| CITATION: | Roberts and Anor v Nunn [2012] QCATA 131 |
| PARTIES: | Shane Gavin Roberts Jacqueline Mary Roberts (Applicant/Appellant) |
| v | |
| Adrian Nunn trading as AL Nunn Design Construction Builders (Respondent) |
| APPLICATION NUMBER: | APL453-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | 4 April 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Hon James Thomas, AM QC, Member Michelle Howard, Member |
| DELIVERED ON: | 31 July 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Leave to appeal granted. 2. Appeal allowed and tribunal orders of 11 November 2011 in BD312-07 are set aside. 3. In lieu thereof orders are made in terms of paragraphs 4, 5 and 6 below. 4. The respondent Nunn’s claims in application BD312-07 are dismissed pursuant to section 60 of the Commercial and Consumer Tribunal Act 2003. 5. Leave is granted to the respondents Roberts to amend their counterclaim to include: “Orders Sought: 1. That the respondents (Roberts) be paid the sum of $32,484.20, from the amount held in the Queensland Master Builders Trust Account in respect of this dispute; and (2) That the applicant (Nunn) pay the costs of Roberts of and incidental to the action and the counterclaim on a reasonable basis to be assessed by a professional legal cost assessor appointed by the Tribunal.” 6(a) Unless the applicant Nunn provides to the Tribunal three copies of a defence to the owners’ amended counterclaim on before 15 August 2012 judgment be entered in these proceedings for the respondents Roberts against the applicant Nunn in the sum of $32,484.20; and in the event that such a judgment is entered, either party is at liberty to apply to the Tribunal for directions concerning the disposition of the balance of the fund. (b) In the event that the applicant Nunn files a defence in accordance with order 6(a) above, the respondents Roberts’ application for judgment on the amended counterclaim is remitted to the tribunal for determination. (c) With respect to the remitted amended counterclaim the respondents Roberts may file any witness statements and supporting submissions on or before 3 September 2012, and the applicant Nunn may file any witness statements and supporting submissions in reply by 19 September 2012. (d) All issues as to costs of the claim and counterclaim, including the costs declared in this order to be the respondents Roberts’ costs in the cause are remitted to the Tribunal for final determination. (e) Unless otherwise ordered all the above determinations will be on the papers. |
| CATCHWORDS: | Appeals and leave to appeal – domestic building dispute in Commercial and Consumer Tribunal – appeal to District Court before "commencement day”– transitional provisions – application of section 260 of QCAT Act – whether matter had to be dealt with under provisions of CCT Act – application to dismiss claim – whether section 60 of CCT Act or section 48 of QCAT Act applicable – application not dealt with by member – leave to appeal – criteria for determination of such applications – costs Commercial and Consumer Tribunal Act 2003, s 60 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr K Flehr, solicitor appeared for the applicants |
| RESPONDENT: | There was no appearance for Mr Nunn |
REASONS FOR DECISION
This is an application for leave to appeal, and if leave is granted, to appeal, against an interlocutory order. Leave to appeal is necessary if the matter is to proceed.[1]
[1] Queensland Civil and Administrative Tribunal Act 2009, s 142(3)(ii).
The litigation involves a claim by a builder (the respondent Nunn) against owners (the appellants, Mr and Mrs Roberts). It will be convenient to refer to the appellants as "the owners" and to the respondent as "the builder".
The parties are in dispute arising out of a building contract that was made in 2005. The proceedings, which commenced in the former Commercial and Consumer Tribunal in 2007 have a long and tortuous history.
The present appeal is in relation to an order made in an application dated 20 July 2011 brought by the owners to dismiss the builder’s claim. They also sought judgment on the owners’ counterclaim and costs. If successful, that application would have disposed of all existing claims between the parties in the litigation.
The learned member declined to dismiss the builder’s claim, and did not deal with either of the other claims for relief. The present application for appeal is in respect of this order. As will be later shown, the learned member rejected a submission on behalf of the owners that the claim should be struck out on the basis of an earlier "self-executing order" that had been made in the Tribunal, but, unaccountably, failed to address the owners’ wider claim for dismissal in all the circumstances of the case. Having declined to strike out the builder’s claim she did not deal with the other claims for relief (counterclaim and costs).
For reasons that will be later stated, we think that those proceedings miscarried. As the main basis of the owners’ application was not addressed it is in the interests of justice that leave to appeal be granted, and that all issues raised by the owners should be determined.
Short History of Proceedings
The builder commenced proceedings against the owners regarding a domestic building dispute in the Commercial and Consumer Tribunal (CCT) on 11 July 2007. The dispute arose under a contract for works to be completed within 164 days, which were completed 243 days late. Among the many issues in the case was the issue of liquidated damages under the contract, involving the question whether Cyclone Larry was responsible for all of that delay. The proceedings consisted of a claim by the builder for $36,089.29 (plus interest), primarily for amounts unpaid under the contract, and a counterclaim by the owners for $37,098.20, essentially for liquidated damages and defective work by the builder.
The case was heard over 4 days in February 2009. The CCT member gave his decision on 18 June 2009, having concluded that the counterclaim should be allowed only to the extent of $7,720 ($3,760 for liquidated damages and $3,960 for defects), and that $624 of the builder’s claim for variations should be disallowed. He referred to a Master Builders Association trust fund established by the owners under the contract, into which they had paid "an amount not in dispute $36,080.29". In the result he held the builder entitled to $27,736 with interest at 10% for one year, (totalling $30,509.60), and ordered that that amount be paid to the builder from the fund and that the balance be paid to the owners.
Unfortunately the learned member failed to explain how he reached those conclusions, or how the critical issues were resolved. The owners appealed to the District Court which on 25 March 2010 set aside the CCT’s decision and remitted the matter to QCAT, which had in the meantime been established.
The District Court also ordered that the builder pay the owners’ costs of the appeal. In due course (on 29 March 2011) these costs were certified and resulted in an unconditional judgment against the builder of $31,434.80. They have never been paid.
After remittal to QCAT, the proceeding was listed for a compulsory conference, initially in July 2010, and then re-scheduled to 8 October 2010. Following its conclusion, directions (dated 18 November 2010) were made for the filing of an amended application by the builder by 16 December 2010; an amended response or counter-claim by the owners by 13 January 2011; and various other directions that would bring the matter to a hearing.
The builder at no stage filed any amended application or supporting material either within the specified time or at all. Consequently none of the other directions were complied with as contemplated. However, the owners delivered an amended counterclaim on 15 April 2011, and have subsequently sought judgment upon it.
In view of the continuing inactivity of the builder the owners attempted to advance the matter, and a directions hearing was held on 1 March 2011 at which the owners’ representative orally applied for dismissal of the builder’s claim. The Senior Member presiding made directions in the following terms:
1.If the matter is not resolved and the Applicant intends to proceed with the application it will file in the Tribunal and serve on the Respondent a copy of an amended application or written advice that it intends to proceed with its original application by 4:00pm on 29 March 2011.
2.In the event that the Applicant does not comply with Order one the application will be dismissed.
3.In the event that Order one is complied with and an amended application is delivered, the Respondent will file in the Tribunal two copies and serve on the Applicant one copy of an amended response and counter application by 12 April 2011.
4.The application is listed for a Directions Hearing in Brisbane at 9:30am on 19 April 2011.
One would think that by this stage the builder was skating on thin ice, and that strict compliance would be necessary if there was to be any further prosecution of his claim. However those directions were not complied with. Instead, on 29 March 2011, the builder filed a miscellaneous application seeking an order confirming that settlement had been reached and/or orders in terms of an alleged agreement. In the alternative, he sought the striking out of the entire proceeding including the owners’ counter-application.
The builder’s application in that behalf was heard on the merits and was dismissed on 27 June 2011. It may be noted that the bringing of this application achieved the delay of attempted bankruptcy proceedings against the builder based on his non-payment of the District Court costs judgment. The subsistence of his claim against the owners has been alleged by the builder’s solicitors to be available as an offsetting claim in any such proceedings. There is also evidence that claims of impecuniosity were advanced on the builder’s behalf, followed by a threatened application by the owners’ solicitors that he provide security for costs. In this context, the non-pursuit of the original claim and the allegation that the action had been settled could be seen as a forestalling tactic. The owners’ solicitor contended before the member and before us that that application was made in bad faith, but it is not necessary to determine that in these proceedings. It is enough to infer, as we do, that the builder's application was without merit and that it was brought for tactical purposes and to achieve delay.
The owners then filed a miscellaneous application on 22 July 2011. The determination of this application is the subject of the present appeal. The application sought orders as follows:
1.That the application BD312-07 is dismissed.
2.Judgment is entered for the respondents on the respondent’s amended counterclaim filed 15 April 2011.
3.The applicant pay the respondent’s costs of and incidental to the proceedings on a reasonable basis to be assessed by a legal cost assessor appointed by the Tribunal.
There was a further non-compliance by the builder with directions orders made on 27 July 2011 and 10 August 2011 for the delivery of submissions, but those particular delays were not substantial, and submissions on the builder's behalf were delivered on 25 August 2011.
On 11 November 2011, the application was determined on the papers. The learned member made orders as follows:
1.The application to strike out or dismiss the proceedings is refused.
2.The respondents have leave to file the amended counter claim filed without leave in this Tribunal on 15 April 2011.
3.This matter is to be listed for a directions hearing on a date provided by the Tribunal.
The owners filed an application for leave to appeal and appeal from the decision of 11 November 2011. Both parties were promptly directed to file their written submissions and the application was listed for hearing on 4 April 2012.
The owners complied, but the builder has at no stage filed any submissions on the appeal.
A letter from the builder’s lawyers to the Tribunal dated 20 January 2012 advised that they no longer held instructions.
On 29 March 2012, the builder wrote to the Tribunal seeking to adjourn the hearing on the basis that he had not received the file from the lawyers who acted for him until recently. On 30 March 2012, the tribunal advised him that he could make his application for adjournment at the hearing on 4 April 2012. He emailed the tribunal on 2 April to express his dissatisfaction about the response and the way in which the matter had progressed generally and to advise that he was unable to attend the hearing for those reasons. He did not attend.
It is clear that the builder received the tribunal registry’s notifications to him of the hearing date and of his right to argue his adjournment application at the hearing. Having been satisfied that he was properly notified of the hearing and the Appeal Tribunal’s position in relation to his adjournment application, we decided that it was appropriate to proceed in the builder’s absence.
The Tribunal’s decision of 11 November 2011
The main point addressed in the reasons of the learned member was the effect of the "self-executing" or "guillotine" order of 1 March 2011, and whether that order should be interpreted as a dismissal in the light of the builder’s subsequent application for a declaration of compromise instead of presenting an amended claim or electing to proceed with the original claim. We agree that standing alone this would probably be an insufficient basis for a dismissal. However, the application was more broadly based than this. A dismissal was sought under section 48 of the QCAT Act in all the circumstances of the case, including the repeated delays by the builder and disadvantage to the owners. The written documents supporting the application and the submissions of the owners’ solicitor specifically referred to section 48, and to "four strikes" by the builder, ie four instances of failure to take steps or comply with directions causing disadvantage to the owners. He also referred to numerous authorities dealing with the subject of striking out particularly in cases involving non-compliance with curial orders.
Unfortunately the reference to section 48 of the QCAT Act seems to have been based on an erroneous understanding of the transitional provisions applicable to the relevant proceedings. The assumption was made that QCAT’s usual powers and procedures (including section 48) applied to the continuation of matters not yet completed in a former tribunal such as the Commercial and Consumer Tribunal. We have not had the benefit of submissions from either party on this point, and neither was this issue addressed before the member, although we note that in respect of submissions concerning the disposition of the counterclaim the builder's solicitor submitted that the relevant directions and proceedings needed to be considered in the light of the requirements of the former legislation, that is to say, the Commercial and Consumer Tribunal Act 2003 (“the CCT Act”).
Having considered this question we are of the view that the member was bound to "deal with the matter under the former act [ie the CCT Act] as if it were still in force"[2] (our interpolation). Plainly the appeal from the CCT decision had been started before the "commencement day" of QCAT (1 December 2009), and at that time the appeal had not been finally dealt with. It follows that sections 259 and 260 of the QCAT Act applied.
[2] QCAT Act, s 260(3)(b).
Section 260 of the QCAT Act provides:
(1)This section applies to an appeal to which section 258 or 259 applies.
(2)The court's decision in the appeal must be dealt with in the way the court's decision would have been dealt with under the former Act if it were still in force
(3)If the court's decision in the appeal is to remit the matter to the former Tribunal with or without directions –
(a) the court must remit the matter to QCAT; and
(b) QCAT must deal with the matter under the former Act as if it were still in force.
(4)for subsection (3) –
(a) QCAT has, and only has, the functions of the former Tribunal; and
(b) QCAT can, and can only, make a decision the former Tribunal could have made in relation to the matter under the former act.
(5)for subsections (2) to (4), the former act, and other relevant laws, continue to have effect as if they were still in force.
It seems clear then that the matter had to be dealt with under the former Act, and that any tribunal function (such as dismissing or striking out relevant proceedings) would need to be performed in accordance with the powers and limitations of that Act. A similar conclusion is also reached if the matter is considered in the light of sections 269(a) and 271 of the QCAT Act.
The relevant Act, the CCT Act, contains a provision, section 60, which confers upon the Tribunal the power of dismissal of an applicant's claim if the applicant "is acting in a way that unreasonably disadvantages another party to the proceeding". The discretion to make such an order is not limited or assisted by the inclusion of any legislative criteria, other than by the four examples of situations which would justify its use as mentioned in subsection 1 –
(1)This section applies if the Tribunal considers a party to a proceeding is acting in a way that unreasonably disadvantages another party to the proceeding, including by –
(a) not complying with a direction or order of the Tribunal without reasonable excuse; or
(b) asking for an adjournment as a result of not complying with a direction or order of the Tribunal; or
(c) vexatiously conducting the proceeding; or
(d) causing an adjournment.
That section however is plainly the forerunner of section 48 of the QCAT Act which spells out criteria for the exercise of such a discretion in considerably more detail.
The learned member did not advert either to section 48 of the QCAT Act or section 60 of the CCT Act in her reasons. To the extent to which she adverted to "the interest of justice" in para [13] of the reasons, we are unable to agree with the member’s conclusions that all parties had contributed to the delay, that there was no particular disentitling conduct, and that she was "unable to identify any greater fault by one party or the other". Having determined that the builder’s claim should stand, the learned member apparently found it unnecessary to deal with the owners’ claims for judgment on the counterclaim and for costs. It is unnecessary to further analyse the member’s reasoning. The failure to deal adequately with the owners’ claim for dismissal and her apparent misapprehension of the conduct of the parties in the conduct of the litigation are the basis of our decision to grant leave to appeal and to set aside the orders that were made.
Despite the legal error of the owners’ solicitor in referring to the wrong section, he clearly was seeking a dismissal based on the builder's conduct of the litigation, and the law permitted such a claim to be made. We appreciate the difficulty confronting the member in such a situation, but the fact remains that the proceedings were conducted erroneously, and miscarried.
There remains, however, the difficult task of determining the appropriate orders that should have been made.
Major factors favouring dismissal of the builder’s claim
Five years have elapsed since commencement of proceedings with no effective progress, including over two years since remittal to QCAT with no forward movement – not even an election to proceed – by the builder. In the context of cases that come before courts and tribunals in which one party seeks a remedy against the other on the basis of excessive delay or improper conduct in the prosecution of litigation, the time factor is by no means at the upper end of the spectrum, but it is still relatively substantial.
There have been repeated floutings of the tribunal’s orders designed to bring the matter to a determination. There are many instances of inactivity where it may be inferred that any sincere litigant would have taken the next step. Since March 2010 the builder seems to have been more interested in achieving delay than bringing the matter back on.
The builder's affairs appear to be in disarray following a parting of the ways between him and his solicitors. Against the background of earlier claims of impecuniosity on his part, and his non-payment of a District Court judgment in excess of $30,000, and the tactical manoeuvring following a clear warning sounded by the so-called guillotine order, there is no reason to believe that the extending of a further opportunity to present his case would achieve anything other than further delay and expense to the owners. There is no basis for any belief that matters will get better, nor is there any offer of future compliance.
No defence has been offered or response made to the amended defence and counterclaim over an extended period. There has not even been a clear election to proceed with the original claim.
The uncontradicted material[3] contains a concession by the builder's solicitor during the directions hearing on the 19 April 2011 before Senior Member O'Callaghan that if the Tribunal did not find that matter to have been settled as claimed, then "the application would be struck out." The builder seems to have changed ground when convenient to do so in the litigation.
[3] Affidavit of K G Flehr, July 2011 filed in relevant “Miscellaneous Application” para 5.
Despite the clear opportunity to do so the builder has made no submissions to us on this appeal.
At an early stage in the dispute the owners paid a substantial sum (in excess of $30,000) into an MBA trust account to cover the builder’s claim and to abide the result of the proposed litigation. They are out-of-pocket to this extent while the matter drags on. Also, they claim to be living in unsatisfactory premises as a result of the builder’s failures, and find it difficult to remedy the situation until their final rights are known. We cannot determine whether the unsatisfactory condition of the premises is or is not the fault of the builder, but it remains a fact that until determination of their rights the owners are in a disadvantaged state.
The legal costs have obviously been substantially increased from the necessity of taking additional steps that would otherwise have been unnecessary. The quantum of the certified costs of the District Court appeal suggests that the documentation has been substantial, and that the level of legal cost has been high.
The submission of the owners is that the proceeding has not progressed since it was remitted from the District Court because of the builder’s refusal to take any positive step to enable the matter be determined, resulting in delay, unnecessary legal costs, financial disadvantage, uncertainty and anxiety.
The objects of the CCT Act, which are stated in section 4 of that act, enjoin the Tribunal to deal with matters in a way that is "just, fair, informal, cost efficient and speedy". Section 47 deals with the "way tribunal is to conduct proceedings". It includes –
(2) The procedure is at the discretion of the tribunal, subject to this Act, and the rules of natural justice.
(3) The proceeding is to be conducted with as little formality and technicality and with as much speed as the requirements of this Act and a proper consideration of the matter is before the tribunal permit.
(4) The tribunal is not bound by the rules of evidence, but may inform itself in any way it considers appropriate.
…
The High Court of Australia observed in Aon Risk Services Australia Ltd v Australian National University, that ‘resolution of disputes serves the public as a whole, not merely the parties to the proceedings’.[4] Aon concerned an application for adjournment of a hearing and for orders allowing substantial amendments to pleadings of the applicant, ANU, at a late stage in the proceeding. In allowing the appeal and refusing the amendments, the High Court clarified any misconception that case management considerations and questions of proper use of court resources are to be discounted or given little weight.
[4]Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 217.
Under section 60 of the CCT Act (and now under s 48 of the QCAT Act), if the tribunal considers that a party is acting in a way that unnecessarily disadvantages another party, including by not complying with tribunal orders or directions,[5] it has discretion to do certain things. If the party causing the disadvantage is the applicant, it can dismiss the applicant’s claim.
[5] CCT Act, s 60(1)(a).
The manner of operation of these sections does not at this stage appear to have been considered by the Court of Appeal or any other court of authority.
Factors that may influence the exercise of the discretion are legion. They include the extent of the disadvantage caused to the other party and the extent to which such disadvantage can (or cannot) be compensated by an order for costs. They include the capacity of the party to understand and act on the tribunal’s orders and directions;[6] and whether the party causing the disadvantage is acting deliberately. Importantly, underlying such an exercise is the consideration that, to deprive a party of a determination on the merits is not to be lightly undertaken.
[6] Cf QCAT Act, s 48(3)(b).
There is at least some analogy between the exercise of statutory powers conferred by section 60 of the CCT Act, (and now under sections 47 and 48 of the QCAT Act) and the exercise by courts of the power of dismissal for want of prosecution under the Uniform Civil Procedure Rules 1999. When a discretion to dismiss is conferred upon a tribunal in such broad general terms it is at least instructive to observe the circumstances in which courts have been prepared to terminate litigation short of a trial on the merits. One such case is Hollyander Pty Ltd v Mike O’Regan & Associates Pty Ltd[7], a Supreme Court decision involving dismissal of both a claim and counter claim for want of prosecution under the Uniform Civil Procedure Rules 1999. There had been in that case significant delays in progressing both the claim and the counter-claim. Recognising that its discretion was unfettered and that it should take into account all of the relevant circumstances of the particular case, factors considered by the court included delay with no satisfactory explanation; the prejudice caused by delay; the claimant’s prospects of success; disobedience of court orders; and how far the litigation had progressed.
[7] [2011] QSC 164.
We observe that the present circumstances reveal a very strong case of inexcusable lack of prosecution, and consider that the builder’s claim would have little difficulty in qualifying for dismissal on that ground in a court. This observation, however, is made merely in an attempt to consider the exercise of powers under section 60 against a wider background. They afford a very limited analogy, and there are many points of distinction to be observed, including the differences between a court and a statutory tribunal designed to fast track disputes of certain kinds. The statutory tests are of course those that must be applied.
Resolution of issues
Three separate questions arise in this proceeding:
(i)Issue (i): should the application by the builder be dismissed?
(ii)Issue (ii): should final orders be made in favour of the Roberts in respect of their counter-application or otherwise? And
(iii)Issue (iii): should an order for costs in favour of the owners be made?
Issue (i) (Builder’s Claim)
We have set out in paragraphs [34] to [49] above the major considerations on this issue.
The builder has been conducting these proceedings for some years and was legally represented until 20 January 2012. Further, given the Tribunal’s order 2 of 1 March 2011, he was on notice that if his non-compliance continued his application would be dismissed.
In effect, the builder has failed to act responsibly, carefully and with due diligence to prosecute his case since the matter was remitted to QCAT by the District Court.
The builder has failed to make any response to the owners’ amended counter-application filed in April 2011, notwithstanding the pendency of the owners’ miscellaneous application filed in July 2011. There is no material to suggest that he wishes or intends to litigate his claim.
The builder’s non-compliance has caused prejudice by way of unnecessary stress, cost and inconvenience to the owners.
We conclude that substantial delays have been occasioned by the non-compliance of the builder with the Tribunal’s directions without reasonable excuse and that he caused unnecessary disadvantage to the owners. The stage has been reached where it is in the interests of justice to terminate any further prosecution of the builder’s claim. We consider that the only effective way to end the long-running disadvantage to the owners is to make a final decision in their favour under s 60 of the CCT Act.
We allow the appeal in this respect, and re-exercise the discretion under s 60 of the CCT Act to make orders dismissing the builder’s application.
Issue (ii) (Counterclaim)
The owners sought orders in terms of their amended counter-claim filed 15 April 2011, as, in effect, an application for summary judgment. The builder had not filed any pleading in response to the amended counter-claim at the time when submissions were made in the present application, and, it may be noted, still has not done so at the time of the hearing of the present appeal in April 2012.
However, the submissions on behalf of the builder made it plain that judgment on the counterclaim was resisted. They contended that even if the builder’s claim was dismissed, it did not necessarily follow that judgment on the counterclaim should be granted. This seems correct, as different issues are involved in the respective claims, and there has been different conduct by the parties in relation to their conduct of the respective claims. The builder had filed a reply to the defence and counterclaim on 5 December 2007, and that situation remained when the District Court remitted the matter to QCAT. As far as we can see, that position would remain until an order was made striking out the builder's defence to the counterclaim or until judgment upon it was granted on some recognisable basis. The delivery of the fresh counterclaim on 15 April 2011 amended the former counterclaim and invited a fresh response.
The relevant statutory provisions are sections 33 and 125 of the CCT Act. Section 125 deals with the topic “summary decision” in favour of litigants who had delivered a defence and counterclaim. Regulation 10A of the Commercial and Consumer Tribunal Regulation 2003 prescribes claims under the Queensland Building Services Authority Act 1991 and the Domestic Building Contracts Act 2000 as matters for which a summary decision may be made.
In the circumstances we do not think that the requirements of section 125(2)(b) were satisfied. In their submissions on this application the owners sought leave to amend their application to include additional orders, including orders for disposition of the trust fund. Once again unfortunately the member did not deal with these requests. The fact remains, however, that further steps need to be taken before the owners could obtain final relief on the counterclaim.
We do not have before us on appeal any witness statements or submissions addressing the merits of the amended counter-application. Although there was undoubtedly material filed before the CCT hearing, it was not relied upon by their legal representatives in support of their application for judgment on the counterclaim. Furthermore, formal amendment of the counterclaim and a final opportunity to the builder to defend it would seem to be necessary before it would be safe to grant judgment essentially on the basis of default of pleading by the builder.
It is unfortunate that despite the builder's failure to provide any defence to a counterclaim received by him more than a year ago, further litigation is still required before the matter can be concluded. The builder must however be afforded one final opportunity of responding to the counterclaim and to the owners’ claim for disposition of the fund.
We see the present situation as one of those rare occasions where it is appropriate to make a self-executing order for judgment upon the non-occurrence of specified conditions. Such an order should be made only in “extreme circumstances”, for instance, “where it appears that no other order would move the party in default into action”.[8] The present circumstances meet this requirement.
[8]Rankin v Agen Biomedical Ltd (1999) 2 Qd R 433, 438; KGK Constructions Pty Ltd v East Coast Earthmoving Pty Ltd [1985] 2 Qd R 13.
Obviously the most important matter to the parties at this stage is the disposition of the monies currently held in the Queensland Master Builders trust fund in relation to these proceedings. The money was paid into the fund by the owners in 2007 in compliance with the contract, the moneys apparently representing instalments for stages including practical completion. The proposed amendments to the orders sought by the owners seek payment to them of $32,484.20 of the monies held in trust. The amended counter-application refers to a total of $36,080.29 being held in trust, and there were no submissions as to what should be done with the balance.
The details concerning the fund stated in paragraph 8 above will need to be verified and updated. For example we do not know the amount originally paid in or whether the fund has been increased by increments.
The tribunal has jurisdiction over the disposition of the fund. Clause 11.19 of the general conditions of the contract specifically entrusts to “the Tribunal” any “dispute between the parties as to the entitlement to the security account money”. The Tribunal is defined in the contract as the Commercial and Consumer Tribunal.
Despite our dismissal of the builder’s claim in this litigation the builder’s right to defend the counterclaim has not been taken away, and he may still have a possible claim to whatever balance remains in the fund after payment of the amount established by the owners under their counterclaim. The original CCT member stated in para [116] of his judgment that "the [owners] paid an amount not in dispute $36,080.29 into the Master Builders Association Trust Account", and the submissions of the owners’ solicitors upon this appeal seem to be of similar effect, as their clients’ claim upon the fund is limited to the amount they can establish upon their counterclaim ($32,484.20). If the original member was correct in finding the owners entitled to only a small part of the counterclaim, the builder could still, in theory at least, show a prima facie entitlement to a major part of the fund. However other submissions may be available to the owners to the effect that even if the builder is prima facie entitled to any such moneys they should be applied towards satisfaction of the District Court judgment debt. These are all matters to be resolved in the further hearing that we will direct below under the heading “Orders”.
Issue (iii) (Costs)
The owners’ application for costs of the proceedings was not discussed or decided by the Tribunal member.
QCAT's usual restrictive approach to the awarding of costs (cf QCAT Act, section 100) does not apply in litigation concerning domestic building disputes such as the present[9], and in any event the approach to costs under the former legislation governing the Commercial and Consumer Tribunal, as interpreted by the Court of Appeal[10], was less restrictive than the current regime.
[9]Queensland Building Services Authority Act 1991, s 77(1)(h); Lyons v Dreamstarter Ltd [2011] QCATA 142.
[10]Tamawood Ltd v Paans [2005] QCA 111 “.. If orders for costs were not made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves..”
However, the owners’ claim for costs is somewhat weakened by the circumstances that both their application for dismissal and their appeal were made on an incorrect basis and that this may have contributed to the miscarriage of the proceedings below. This affects both questions of costs in relation to the proceedings before the member and in relation to this appeal.
Furthermore, it is premature to determine any issue of costs relating to the counterclaim. In these circumstances we think it best to leave all questions of costs of the proceedings on both claim and counterclaim to the member who determines the remaining proceedings between the parties. Obviously, in view of the dismissal of the builder’s claim it would not be appropriate for him to be awarded any costs on it. As it presently stands, we are of the view that so far as the claim is concerned consideration might be given to the making of a proportional order for costs in favour of the owners.
So far as the costs of this appeal are concerned it has succeeded at least in part, but not on the basis contended for below or here. We propose to order that the owners’ costs of the appeal be regarded as owners’ costs in the cause. This will mean that if the member who finally disposes of the matter sees fit, such costs may be included in any order is made in favour of the owners for costs.
Orders
We propose to order:
1.Leave to appeal granted.
2.Appeal allowed and tribunal orders of 11 November 2011 in BD312-07 are set aside.
3.In lieu thereof orders are made in terms of paragraphs 4, 5 and 6 below.
4.The respondent Nunn’s claims in application BD312-07 are dismissed pursuant to section 60 of the Commercial and Consumer Tribunal Act 2003.
5.Leave is granted to the respondents Roberts to amend their counterclaim to include: “Orders Sought: 1. That the respondents (Roberts) be paid the sum of $32,484.20, from the amount held in the Queensland Master Builders Trust Account in respect of this dispute; and (2) That the applicant (Nunn) pay the costs of Roberts of and incidental to the action and the counterclaim on a reasonable basis to be assessed by a professional legal cost assessor appointed by the Tribunal.”
6(a)Unless the applicant Nunn provides to the Tribunal three copies of a defence to the owners’ amended counterclaim on before 15 August 2012 judgment be entered in these proceedings for the respondents Roberts against the applicant Nunn in the sum of $32,484.20; and in the event that such a judgment is entered, either party is at liberty to apply to the Tribunal for directions concerning the disposition of the balance of the fund.
(b)In the event that the applicant Nunn files a defence in accordance with order 6(a) above, the respondents Roberts’ application for judgment on the amended counterclaim is remitted to the tribunal for determination.
(c)With respect to the remitted amended counterclaim the respondents Roberts may file any witness statements and supporting submissions on or before 3 September 2012, and the applicant Nunn may file any witness statements and supporting submissions in reply by 19 September 2012.
(d)All issues as to costs of the claim and counterclaim, including the costs declared in this order to be the respondents Roberts’ costs in the cause are remitted to the Tribunal for final determination.
(e)Unless otherwise ordered all the above determinations will be on the papers.
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