Zedco Constructions Pty Ltd (In liquidation) v Marvelhaven Pty Ltd
[2010] QCAT 178
•21 April 2010
| CITATION: | Zedco Constructions Pty Ltd (In liquidation) v Marvelhaven Pty Ltd [2010] QCAT 178 |
| PARTIES: | Zedco Constructions Pty Ltd (In liquidation) |
| v | |
| Marvelhaven Pty Ltd |
APPLICATION NUMBER: BN077-09
| MATTER TYPE: |
HEARING DATE: On the papers
HEARD AT: Brisbane
| DECISION OF: | Dr Bridget Cullen Mandikos |
DELIVERED ON: 21 April 2010
DELIVERED AT: Brisbane
ORDERS MADE: This matter is transferred to the QCAT President, for purposes of determining whether the matter should be transferred to the Supreme Court of Queensland, pursuant to s52 of the QCAT Act.
| CATCHWORDS : | Major commercial building dispute; jurisdiction of QCAT to hear counterclaim; s78 Queensland Building Services Authority Act 1991; transfer to courts; s 47 and s 52 Queensland Civil and Administrative Tribunal Act 2009. |
REASONS FOR DECISION
Introduction
This matter has come before me for a decision on the papers relating to the Tribunal’s jurisdiction to hear the matter. The Applicant, Zedco Constructions Pty Ltd (In Liquidation) (“Zedco”), has a claim that falls within the “commercial building dispute” definition of the Queensland Building Services Authority Act 1991 (“QBSA Act”). The Respondent, Marvelhaven Pty Ltd (“Marvelhaven”) has brought a counterclaim that exceeds $50,000.00, and does not consent to QCAT hearing the matter on this basis. A major commercial building dispute (where the claim or counterclaim is in excess of $50,000.00) can only be heard by the Tribunal if all parties consent – s78 QBSA Act.
Chronology
There is a lengthy and protracted history surrounding this matter. The parties agree that they were parties to a building contract, entered into on or about December 2003, whereby Zedco would perform certain fit out work in Cairns, for delivery to Guam, on behalf of Marvelhaven. Though now in liquidation, Zedco was in the business of shop fitting and cabinet making at the time the contract was entered into.
On 22nd July 2004, Zedco filed a claim against Marvelhaven in the Cairns Magistrates Court, seeking the sum of $46,636.10, together with interest and costs, for work and labour performed, and materials supplied.
On 9th March 2006, Marvelhaven filed an amended defence claiming rectification costs of $26,070, together with a counterclaim seeking $10,000 and an unspecified amount of damages.
On 1st December 2006, the Cairns Magistrates Court Principal Registrar advised the parties that:
“With respect to that portion of the claim referring to work performed in Queensland the Commercial & Consumer Tribunal appears to have exclusive jurisdiction. With respect to that portion of the claim referring to work performed in Queensland the Commercial & Consumer Tribunal appears to have exclusive jurisdiction. Queensland Magistrates Court would appear to have jurisdiction to hear & determine that portion of the claim referring to work performed in Guam.”
On 11th June 2008, Zedco went into liquidation.
On 14th August 2009, Zedco filed an application in the Cairns Magistrates Court to transfer the proceedings to the then Commercial and Consumer Tribunal (CCT). The return date was set for 25th August 2009.
Marvelhaven was served with the application on 19th August 2009. On the 25th August 2009, Acting Magistrate Dean transferred the matter to the CCT. There was no appearance on behalf of Marvelhaven.
On 10th September 2009, Zedco filed a claim in the CCT for $16,328.26.
On 9th November 2009, Marvelhaven filed a counterclaim in the CCT for $255,909.01 consisting of the following;
a. overpayment: $9,065.00;
b. rectification costs: $40,650.00;
c. damages due to alleged delay of $206,194.01: consisting of;
i loss of gross sale: $179,394.01;
ii travel and associated costs: $26,800.00.
The Acting Director of the CCT closed the file on 25th November 2009, as Marvelhaven’s counterclaim was in excess of $50,000.00 and Marvelhaven did not consent to the CCT hearing the matter.
On the 29th January 2010, Senior Member Oliver ordered that the question of jurisdiction relating to Marvelhaven’s counterclaim be decided on the papers. Mr Oliver ordered both parties to file and serve written submissions on the question of jurisdiction, which I have had the benefit of reviewing. The basis for Mr Oliver’s direction is readily apparent; namely that Marvelhaven’s counterclaim, filed together with its defence to the application, on 11th November, 2009, seeks damages in the amount of $255,909.01. Marvelhaven, in its submissions, indicates that this figure excludes interest and further costs yet to be particularised following expert reports.
JURISDICTION OF THE TRIBUNAL
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 (“QCAT Act”). As the present application was filed with the former CCT, the cumulative effect of Sections 244 and 245 of the QCAT Act result in the application being classed as a “pending proceeding”, with the result that QCAT has jurisdiction to deal with the matter, subject to the matters raised by Marvelhaven.
The quantum of Marvelhaven’s counterclaim, seeking $255,909.01, means that it falls within the definition of a “major commercial building dispute” as that term is used in the QBSA Act:
A “major commercial building dispute” is a “commercial building dispute where either the claim or counter claim exceeds $50,000”.
Section 78 of the QBSA Act confers QCAT with jurisdiction to hear major commercial building disputes by consent of the parties:
“A major commercial building dispute may be decided by the tribunal only if the tribunal is satisfied all parties to the dispute consent to it doing so.”
In this matter, Marvelhaven has not consented, as indicated in paragraph 12 of its conditional counterclaim.
In the event that QCAT determines that it does not have jurisdiction to hear Marvelhaven’s counterclaim, s52 of the QCAT Act provides that the matter may be transferred to a more appropriate form:
52 Transfer to more appropriate forum
(1)If the tribunal considers the subject matter of a proceeding or a part of a proceeding would be more appropriately dealt with by another tribunal, a court or another entity, the tribunal may, by order, transfer the matter to which the proceeding or part relates to the other tribunal, the court or the other entity.
(2)If the tribunal considers it does not have jurisdiction to hear all matters in a proceeding, the tribunal may, by order, transfer the matter or matters for which it does not have jurisdiction to—
(a) a court of competent jurisdiction; or
(b) another tribunal or entity having jurisdiction to deal with the matter or matters.
(3)The tribunal may make an order under subsection (2)(a) even though the proceeding has previously been transferred from a court to the tribunal under section 53.
(4)If the tribunal transfers a matter to another tribunal, a court or another entity (the relevant entity) under this section—
(a) a proceeding for the matter is taken to have been started before the relevant entity when it was started before the tribunal; and
(b) the tribunal may make the orders or give the directions it considers appropriate to facilitate the transfer, including an order that a party is taken to have complied with the requirements under an Act or other law for starting a proceeding before the relevant entity.
(5) An order under subsection (4)(b) has effect despite any other Act or law.
(6) The tribunal may act under this section on the application of a party to the proceeding or on its own initiative.
(7) The tribunal’s power to act under this section is exercisable only by a judicial member.
(8) In this section — proceeding includes a process for the consideration of a matter.
Marvelhaven has made some submissions in relation to s53 of the QCAT Act. I do not propose to address these submissions, for the reason that s53 is the applicable provision in circumstances where a court has transferred a matter to QCAT. For purposes of this matter, s52 of the QCAT Act is the relevant provision.
There are several factors, Marvelhaven submits, that suggest this matter should be transferred in its entirety:
a. the counterclaim in inextricably linked to the claim of Zedco;
b. if the matter were to be split, the court and tribunal would be dealing with an artificially separated matter in circumstances where the counterclaim straddles the same factual and legal issues;
c. there would be a duplication in two different forums, causing further costs to the parties;
d. the court and tribunal may make rulings that are in conflict with each other, raising difficult questions of res judicata.
Marvelhaven has drawn my attention to the decision of former CCT Member Lohrisch in JAG Interiors (Queensland) Pty Ltd v Body Corporate for K Tower Community Titles Scheme 4018 (BN091-08) (“JAG”). In JAG, Member Lohrisch expressed his view that when considering the question of a counterclaim within the context of s78 of the QBSA Act, it would be proper for the CCT to consider the following matters:
5. The conditional defence (and, indeed, a supporting declaration of Michael Stephens) contained no particularity as to the allegation of unlicensed work, it becoming apparent that the applicant held a license, but not, according to the respondent’s allegation, of a class which entitled it to perform the actual work subject of, and relevant to, the applicant’s claim.
6. In my view, particularly in respect of an allegation such as this, such particularity, (rather than simply a bald assertion) was necessary to enable this Tribunal to arrive at the conclusion that the counter-claim was legitimate and not spurious or without any substance in law, and was not simply an abuse of process, raised only for the purposes of frustrating the applicant and denying it the right to proceed with its claim in the Tribunal. If such was the case then, in my view, there would not be any counter-claim in law in terms of section 78.
The tribunal then went on to consider some factual evidence relating to a decision of the adjudicator to flesh out the nature of the counterclaim and then continued:
8 …I am merely to decide whether the claim is genuine or has sufficient substance such as to have a valid basis in law.
Marvelhaven’s counterclaim
Marvelhaven’s counterclaim, which seeks losses resulting from the alleged six-month delay in completing the building works, is vague. Considering the history of this matter, the suggestion by Zedco that Marvelhaven is attempting to achieve strategic advantage in making its counterclaim, appears to have some validity. This application, and the timing of it after some years of disinterest on the part of Marvelhaven, does suggest a degree of “strategic posturing”.
In the counterclaim, Marvelhaven alleges that they would have commenced trading and sales earlier, had the works been completed on time, and say they have sustained losses in the amount of US$20,000 per month, for a six-month period, resulting in damages of US$120,000 for delay. Marvelhaven converts the US Dollar figure to Australian Dollars, as of the date of loss, at $179,394.01.
Additionally, by reason of the alleged six-month delay, Marvelhaven alleges it has incurred expenses in making additional trips to and from Guam, and in extending the term of appointment of its Project Manager. It is alleged that:
- the extension of the Project Manager’s contract cost $10,000;
- an additional three trips to and from Guam at $2,000 per flight resulted in loss of $12,000;
- additional hotel accommodation for Marvelhaven’s director and project manager at $200 per night for 4 nights, times three trips, resulted in loss of $4,800.
Lack of particularity in counterclaim
In my view, the particularity of Marvelhaven’s counterclaim is problematic, and would not be sufficient to survive the pleadings process contemplated by the Uniform Civil Procedure Rules 1999 (“UCPR”). However, while the UCPR will apply if this matter is transferred, it does not apply in the Tribunal. For example, Marvelhaven has indicated that it “expects it would have realised sales”, indicating that its counterclaim is based on estimated figures, and not upon actual losses. Considering this matter dates back to 2003-2004, it is not unreasonable to think that actual sales figures substantiating this loss would be available.
In an effort to determine the legitimacy of Marvelhaven’s claim, on 17 March 2010, I ordered Marvelhaven to produce further affidavit material particularising the delay aspect of its counterclaim and identifying the methodology employed to quantify its losses. Marvelhaven has complied with this request, and filed an affidavit of Werner Reimann, dated 31 March 2010, which provides some additional detail. With respect, Mr Reimann’s affidavit provides little detail in the way of explaining its loss, and the figures appear to be, for lack of a better term, “guesstimates”. For example, Mr Reimann asserts that “cabinets and shelves had to be rewired by local contractors at a cost to the Respondent of $20,000.00”. I find it surprising that all of the figures estimating loss are round figures, and would have thought Marvelhaven would have substantiating receipts, or credit card/bank invoices. This does not appear to be the case. The level of detail is minimal.
In QCAT, parties are not expected to comply with the pleading process in the same way that is contemplated by the UCPR, in particular, UCPR r149. I do not consider that the material facts of the counterclaim have been properly pleaded; however, I do not consider that section 47 (of the QCAT Act), extends far enough that I may dismiss Marvelhaven’s breezily drawn counterclaim.
Section 47 (of the QCAT Act) provides as follows:
47 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.
While Marvelhaven’s counterclaim may not, as presently constructed, survive the pleadings process in the courts, at this juncture, being a Tribunal, I decline to dismiss these portions of Marvelhaven’s counterclaim.
Considering the length of time that this dispute has been running, this result is somewhat unsatisfactory. That said, there is enough information before me to suggest that Marvelhaven’s claim is not an abuse of process, even if based upon “guesstimates,” and Marvelhaven should be allowed the opportunity to have the matter heard. It is clear that Marvelhaven’s counterclaim arises out of the same events and contractual matrix as Zedco’s initiating application. As a consequence, I consider that it would be favourable, and necessary, for the application and counterclaim to be heard together. As s52 of the QCAT Act provides that transfer can be authorised by a judicial member of the Tribunal only, I forward my reasons to His Honour, Justice Wilson, for his consideration in signing a transfer Order.
Zedco has argued that Marvelhaven is estopped from disputing jurisdiction, as it did not respond to Zedco’s application in the Cairns Magistrates Court to transfer the matter to the CCT. The applicant argues that in not responding, Marvelhaven consented to the jurisdiction of the CCT, and should now be estopped from making a counterclaim of this quantum.
With respect, at this juncture, I do not consider Marvelhaven’s failure to respond to the transfer application to be relevant to the issue of jurisdiction. The reason for this is that Marvelhaven is entitled to make its counterclaim at any point within the applicable limitations period. I do, however, consider this to be a matter that would be highly relevant to the awarding of costs, particularly as Marvelhaven would have been aware of its counterclaim at the point in time when it did not respond to Zedco’s application to transfer the matter to the CCT. Section 52 of the QCAT Act, in my view, enables the Courts to consider the costs implications of the parties’ actions pre-transfer.
Order
This matter is transferred to the QCAT President, for purposes of determining whether the matter should be transferred to the Supreme Court of Queensland, pursuant to s52 of the QCAT Act.
0
0
0