Smith Developments Pty Ltd v Moreton Island Development Group

[2010] QCAT 615

CITATION: Smith Developments Pty Ltd v Moreton Island Development Group [2010] QCAT 615

PARTIES:	SMITH DEVELOPMENTS PTY LTD
v
MORETON ISLAND DEVELOPMENT GROUP

APPLICATION NUMBER:            REO020-10 AND BDL031-09                  

MATTER TYPE: Building Dispute Re-opening

DECISION ON THE 
PAPERS OF: Ms Anne Forbes

DELIVERED ON:   6 December 2010

DELIVERED AT:   Brisbane

ORDERS MADE:  1.     The respondent’s application to reopen the proceeding is dismissed.

CATCHWORDS :  Building dispute – compulsory conference – failure of Respondent to attend – final orders made - Application to reopen proceedings –no reasonable excuse –Application dismissed – QCAT Act ss72, 137.

REASONS FOR DECISION

1. In December 2009 the Applicant, Smith Developments Pty Ltd [“Smith”] filed application BDL031-09 in this tribunal seeking orders that the Respondent, Moreton Island Development Group [“Moreton”] pay approximately $150,000 due to it under a domestic building contract.  Smith had built a house for a joint venture of the Moreton companies. Moreton defended the claim alleging certain defective work.

1. On 13 August 2010 a Member of the tribunal presided over a compulsory conference. Smith attended, but there was no appearance by or on behalf of Moreton.  Before the conference commenced the tribunal received a facsimile letter from Moreton’s solicitors seeking leave to withdraw and stating that they were unable to act without instructions from their client.  The member contacted the solicitors by telephone and was told that Moreton knew that a compulsory conference was to proceed that day, and that so far as the solicitors knew, one of Moreton’s representatives would attend.

1. However, the conference proceeded in the absence of Moreton. Pursuant to section 72 of the Queensland Civil and Administrative Tribunal Act 2009 [“the Act”], and satisfied that Moreton received due notice of the conference, the member made a final order against Moreton in the amount of $194,478.63.

1. Moreton now applies to have that decision reopened. Division 7 of the Act permits a proceeding to be reopened after a hearing (including a compulsory conference), if the applicant establishes one of the two “reopening grounds” in section 137. Only one of those grounds is apposite to the present application, namely that the applicant “had a reasonable excuse for not attending the hearing”’

1. Each party has made written submissions, as required by section 139.  Moreton has tendered three affidavits while Smith relies on the narrative of its director in its Response and Counter Application.

Submissions of Moreton

1. In summary, Moreton’s reasons for its non-attendance are that:

·        its lawyers, Creevey Russell Lawyers [“CRL”], withdrew because they had not received final instructions;

·        Moreton’s representatives did not attend because they believed that CRL would attend;

·         Final instructions were not received by CRL because of a “breakdown in communication” in which a number of “honest errors” were made. 

1. Moreton’s submissions are supported by three affidavits:

2. Mr Dan Creevey, principal of CRL affirms that:

·        Moreton’s representatives are Mr Lester Ehrich, architect, and Mr John O’Neil, director of one of the Moreton companies.

·        Ehrich and O’Neil conferred with CRL on 28 July 2010 to prepare for the forthcoming compulsory conference and gave the solicitor incomplete instructions that day.  Before the clients left, CRL scheduled a further conference for 10 August 2010 when it was intended that Moreton’s instructions would be finalised. 

·        Ehrich advised CRL that he [Ehrich] was unable to attend the compulsory conference at QCAT.

·        Following the meeting on 28 July 2010 CRL sent an email to Ehrich and O’Neil confirming the appointment for the further meeting to be held on 10 August 2010.

·         Neither Ehrich nor O’Neil kept the appointment with CRL who was unable to make telephone contact with O’Neil. The next day CRL sought urgent instructions from its clients by email.  CRL did not receive a response.

·        CRL advised the member on 13 August 2010 that it had not received final instructions so it could not represent Moreton. At the same time it gave the member the contact details for Moreton’s representatives.

·        O’Neil did not contact CRL until 27 Sept when he received notice of the order.

·        O’Neil stated to CRL that he thought the solicitors had attended the compulsory conference and that he had given final instructions to CRL on 28 July 2010.

1. Mr John O’Neil, a Moreton company director,  affirms that:

   ·He attended CRL’s office on 28 July 2010 with Ehrich to discuss preparation for the compulsory conference on Aug 13 2010. He believed they had given full instructions, and that Ehrich was to attend a further conference with CRL before the compulsory conference.

   ·He was aware that CRL was to finalise an affidavit at the next meeting. He received a draft of the affidavit but did not note the final line of the email confirming time and date of the conference, but he believed that Ehrich alone was to attend the conference on behalf of Moreton and that he [O’Neil] was not needed.

   ·He was not aware of the tribunal’s orders until he received them on  27 Sept 2010.

1. Mr Lester Ehrich, architect, affirms that:

·        He attended a meeting with CRL on 28 July 2010 to discuss the compulsory conference for 13 August 2010.  He thought he had given CRL final instructions and thought that CRL were going to appear for Moreton at the compulsory conference. He told CRL that he would not be able to attend as he had an engagement in another State that day.

·        He was aware that CRL was to send an affidavit to O’Neil by email.  He thought O’Neil would attend a further meeting with CRL as he [Ehrich] was unavailable. He made an honest mistake.

·        He was unaware of the tribunal decision until 27 September 2010. He had had difficulties contacting CRL.

Submissions of Smith

1. The submissions of Smith’s principal (Bradley Smith) consist of a chronology of attempts to resolve the long running dispute.  He states that:

·        He is a builder and contracted to build a dwelling for Moreton in 2006 but the latter refused to pay the final instalment of the contract price and took the dispute to the Building Services Authority [“the BSA”] with a litany of alleged defects.

·        He performed remedial work on the dwelling at his own expense. In an earlier application QCAT set aside some of the directions of the BSA and Smith made a further demand on Moreton for payment before filing application BDL031-09.

·        An earlier compulsory conference was held on 12 July 2010. Smith travelled from Toowoomba where he resides but neither Moreton nor its legal representatives attended.

·        He attended the second compulsory conference on 13 August 2010, again travelling from Toowoomba.  He has spent large amounts trying to recover payments to which he is entitled.

·        Moreton has wilfully delayed proceedings and is taking advantage of the tribunal.

Is there a reasonable excuse?

1. At an aborted compulsory conference on 12 July 2010 presiding Member McGrath made directions that both parties attend in person with their legal representatives (if any) at the next compulsory conference on 13 August 2010.  The case manager dispatched the pro-forma notice, which describe the ambit and purpose of a compulsory conference and contain this warning:

“If you fail to appear at the compulsory conference, the conference may proceed and the person presiding over the conference may make orders in your absence.”

1. Moreton does not contend that its representatives were unaware of the notice or what was expected of them. 

1. Both parties have filed extensive material in support of and in response to the substantive claim. 

1. One excuse for the failure of Moreton’s solicitor to attend is the absence of “final instructions” for an affidavit.  It is somewhat difficult to understand the need for an affidavit for a compulsory conference, but in any event neither CRL nor its client has given details of the proposed affidavit, or the respect or respects in which the instructions were incomplete. 

1. The deponents Ehrich and O’Neil say that each of them thought that the other was to attend a further meeting with CRL before 13 August 2010 and yet both say, inconsistently, that they had already given full and final instructions to CRL.  O’Neil claims that he did not scroll to the bottom of CRL’s email sent shortly after the meeting of 28 July 2010 and therefore failed to notice the reminder about the next appointment. 

1. CRL states that after Ehrich or O’Neil missed the scheduled appointment in its office on 10 August, it was unable to obtain a response from either of them to its emails sent the next day.  On 13 August CRL gave the presiding member Moreton’s telephone contact details but does not explain why it did not use that method of contacting them two days’ earlier.

1. Recently Member Howard allowed a proceeding to be reopened, being satisfied that a party who sought to attend a compulsory conference in error on the day after the scheduled date had a reasonable excuse for his non-attendance.[1] That party made every attempt to rectify the mistake as he had been eager to discuss matters at the conference.

   [1] NJ King Pty Ltd v Bramwell Properties Pty Ltd [2010] QCAT 555

1. In contrast, the President, in an application for leave to appeal in a minor civil dispute where the party had failed to attend the hearing having misread the hearing date, had this to say in refusing leave:

[9] The question is whether or not that is a ‘reasonable excuse’. The incorrect reading of a plainly notified date does not, I think, qualify.  QCAT has statutory obligations to deal with matters in ways that are accessible, economical and quick: s 3(b). …

[10] That statutory regime places obligations upon parties themselves: to take care in their dealings with Tribunal matters, and to act in their own best interests. QCAT’s resources for the resolution of disputes serve, as the High Court has recently observed ‘…the public as a whole, not merely the parties to the proceedings’: Aon Risk Services Australia Limited v Australian National University [2009] 239 CLR 175, at 217, para [113].

1. And further:

[12] In the context of the legislation and the demands upon public resources like those which fund QCAT it is not unreasonable to impose, upon a party, an expectation and an obligation that it will ensure it acts in its own best interests, or accept the consequences; and that mistakes like those made here, while attracting sympathy, can no longer prevail over statutory and practical constraints on available resources for dispute resolution.

[13] When these matters are appreciated, it will be seen that a party’s own fundamental error in misreading a document cannot be categorised as a ‘reasonable excuse’ for the purpose of revisiting proceedings which were otherwise correctly and legitimately brought to an end.[2]

[2] Breezeway Developments Pty Ltd v v ADG Hydraulics Pty Ltd [2010] QCATA 69

1. Both Ehrich and O’Neil claim to have believed that CRL would represent Moreton in their absence, but neither offers an explanation why they, or one of them, did not attend in person, as Mr McGrath expressly ordered. Neither offers an explanation why, as principals of Moreton, they did not maintain communication with each other pending an important step in the proceeding. At the relevant time the Moreton group of companies was conducting a building development project.   Neither of its representatives can be characterised as unsophisticated persons.  Moreton was facing a substantial claim and could reasonably be expected to do everything necessary to protect its interests.  It manifestly failed to do so.

1. Moreton has not satisfied me that it has a reasonable excuse for its non attendance at the compulsory conference. Orders made at the conference were properly entered. Moreton’s application to reopen the proceeding is dismissed.