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  4. Rainbow Builders Pty Ltd v Queensland - [2016] QCAT 415

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Rainbow Builders Pty Ltd v Queensland[2016] QCAT 415

Rainbow Builders Pty Ltd v Queensland[2016] QCAT 415

CITATION:

Rainbow Builders Pty Ltd v The State of Queensland [2016] QCAT 415

PARTIES:

Rainbow Builders Pty Ltd

(Applicant)

v

The State of Queensland through the Director General, Department of Housing and Public Works

(Respondent)

APPLICATION NUMBER:

BDL215-16

MATTER TYPE:

Building matters

HEARING DATE:

On the papers

DECISION OF:

Senior Member Brown

DELIVERED ON:

1 November 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The application for domestic building disputes is dismissed.
  2. The State of Queensland through the Department of Housing and Public Works must file in the Tribunal two (2) copies and serve on Rainbow Builders Pty Ltd one (1) copy of an itemized statement of the claim for costs and outlays identifying:
  1. the item of work;
  2. the professional fee charged;
  3. the method of calculating the charge claimed;
  4. each outlay with a supporting tax invoice, by:

4:00pm on 18 November 2016.

  1. Rainbow Builders Pty Ltd must file in the Tribunal two (2) copies and serve on The State of Queensland through the Department of Housing and Public Works one (1) copy of its submissions on costs, by:

4:00pm on 2 December 2016.

  1. The issue of costs will be determined on the papers, without an oral hearing, not before 2 December 2016.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS

PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – JURISDICTION – GENERALLY – where domestic building dispute actually a major commercial building dispute – where applicant failed to comply with s 78 and s 79 of the Queensland Building and Construction Commission Act 1991 (Qld) – whether in the absence of jurisdiction Tribunal has power to waive non-compliance – whether appropriate to transfer proceeding to Magistrates Court or dismiss application

Queensland Building and Construction Commission Act 1991 (Qld), s 75(1)(a), s 77(1), s 77(2), s 78, s 79(1), Schedule 1B, Schedule 2

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 47, s 48, Schedule 3

Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1

Atcheson, P. & N.  v Scacheri, G.R. and Skehan, G. and Geoff Skehan Constructions Pty Ltd [2006] QCCTB 152

Austcoast Builders Pty Ltd v Whitsunday Housing Company Ltd [2012] QCAT 7

Burton and Anor v Payne [2011] QCAT 680

Hope v Brisbane City Council [2012] QLAC 41

McMahon v State of Queensland [2000] QCA 483

Moreton Island Development Group v Smith Development Pty Ltd [2012] QCATA 15

Queensland Building Services Authority v Robuild Pty Ltd [2013] QCATA 238

Watkins v Queensland Building Services Authority [2013] QCAT 535

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

  1. [1]
    Rainbow Builders entered into a contract with the State of Queensland through the Department of Housing and Public Works for the performance of building work. Rainbow Builders has filed an application for domestic building disputes claiming $78,351.77 being the final payment claim under the contract together with interest thereon. The State says that Rainbow Builders’ application is for a major commercial building dispute and, in the absence of consent by the parties to the Tribunal having jurisdiction to determine the dispute, the application must be dismissed for want of jurisdiction.  The State has filed an application to dismiss the application for domestic building disputes.

The background

  1. [2]
    The parties entered into a contract on 20 March 2012 for the construction of an office and emergency accommodation comprising an office and 8 units in the form of multi-unit housing at 36 Usher Avenue, Labrador on the Gold Coast. 
  2. [3]
    The contract was entered into following a tender process. The description of the works is as follows:

Subject to the foregoing, the works generally comprise the erection and completion of Office and Emergency Accommodation Units

Office & Emergency Accommodation[1]

  1. [4]
    The plans contained in the contract drawings indicate that the building works involved the construction of four separate buildings.[2] Building 1 is a single storey unit/office comprising an office, a meeting room, a kitchen, a laundry and a bathroom with an external staff patio and drying area. Building 2 is double storey with four accommodation units. Building 3 is double storey with two accommodation units. Building 4 is single story with two accommodation units. Building 1 is identified as a class 5 building.[3] A class 5 building is an office building used for professional or commercial purposes.[4]
  2. [5]
    Rainbow Builders says that:
    1. the works reached practical completion on 12 August 2013;
    2. the defects liability period expired on 11 August 2014;
    3. on or before 14 October 2014, the State failed to pay to Rainbow Builders all outstanding amounts due and payable under the contract.[5]

The statutory framework

  1. [6]
    The Tribunal has jurisdiction to hear and determine building disputes.[6] A building dispute may be a domestic building dispute, a minor commercial building dispute or a major commercial building dispute.[7]
  2. [7]
    Relevant to this dispute, a domestic building dispute means a claim or dispute arising between a building owner and a building contractor relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work.[8]
  3. [8]
    Reviewable domestic work means domestic building work.[9] Domestic building work includes the erection or construction of a detached dwelling.[10] A detached dwelling means a single detached dwelling or a duplex.[11]
  4. [9]
    A minor commercial building dispute means a commercial building dispute where neither the claim nor the counterclaim exceeds $50,000.[12] A major commercial building dispute means a commercial building dispute where either the claim or the counterclaim exceeds $50,000.[13]
  5. [10]
    Relevant to this dispute, a commercial building dispute includes a claim or dispute arising between a building owner and a building contractor relating to the performance of reviewable commercial work or a contract for the performance of reviewable commercial work.[14] Reviewable commercial work means tribunal work other than reviewable domestic work.[15]
  6. [11]
    Tribunal work is defined[16] and includes the erection or construction of a building.[17] A building is defined.[18]
  7. [12]
    A party to a domestic building dispute may apply to the Tribunal to have the Tribunal decide the dispute provided they have first complied with a process established by the Queensland Building and Construction Commission to attempt to resolve the dispute.[19]
  8. [13]
    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.[20] An application to start a proceeding for a major commercial building dispute must be accompanied by the written consent of all parties to the dispute.[21]
  9. [14]
    The application by the State seeks orders that the application for domestic building disputes by Rainbow Builders be dismissed.
  10. [15]
    Section 47(1) of the Queensland Civil and Administrative Act 2009 (Qld) provides:

47 Dismissing, striking out or deciding if unjustified proceeding or part

  1. (1)
    This section applies if the tribunal considers a proceeding or a part of a proceeding is—
  1. (a)
    frivolous, vexatious or misconceived; or
  1. (b)
    lacking in substance; or
  1. (c)
    otherwise an abuse of process.
  1. (2)
    The tribunal may—
  1. (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
  1. (b)
    for a part of a proceeding brought before the tribunal by a party other than the applicant for the proceeding—
  1. (i)
    make its final decision in the proceeding in the applicant’s favour; or
  1. (ii)
    order that the party who brought the part before the tribunal be removed from the proceeding; or
  1. (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.

...

  1. (3)
    The tribunal may act under subsection (2) on the application of a party to the proceeding or on the tribunal’s own initiative.
  1. (4)
    The tribunal’s power to act under subsection (2) is exercisable only by—
  1. (a)
    the tribunal as constituted for the proceeding; or
  1. (b)
    if the tribunal has not been constituted for the proceeding—a legally qualified member or an adjudicator.
  1. [16]
    A proceeding means a proceeding before the Tribunal.[22] A final decision of the Tribunal in a proceeding means the Tribunal’s decision that finally decides the matters the subject of the proceeding.[23]
  2. [17]
    Section 47(2)(a) of the QCAT Act empowers the tribunal to strike out or dismiss a proceeding or part of a proceeding brought by an applicant. It is a summary judgement power and requires the exercise of a discretion by the tribunal. In exercising the discretion it is necessary to consider whether it is either necessary or appropriate to do so in the circumstances.[24]
  3. [18]
    Section 48(1)(b) of the QCAT Act provides that the tribunal may dismiss or strike out a proceeding in circumstances where an applicant acts in a way that unnecessarily disadvantages another party to the proceeding by not complying with the QCAT Act, an enabling Act or the rules. The QBCC Act is an enabling Act.

What do the parties say?

  1. [19]
    The State says that the works under the contract were not domestic building work as the contract was for the construction of an office and multi-unit housing and not the construction of a detached dwelling or building work on an existing home.
  2. [20]
    The State says that the application by Rainbow Builders is for a major commercial building dispute. It says that there is no evidence of written consent as required by s 79(1) and s 79(2) of the QBCC Act having been sought or obtained by Rainbow Builders. The State says that in the absence of the required consent the Tribunal must dismiss the application by Rainbow Builders.
  3. [21]
    The State does not consent to the dispute being heard by the Tribunal.
  4. [22]
    Whilst their submissions are in some respects confusing, I understand Rainbow Builders to be saying:
    1. The QBCC has no jurisdiction to resolve disputes relating to commercial contracts and that this is “implicit consent” for the contract to be treated as domestic building work;
    2. The Tribunal should adopt a less strict interpretation of what is a minor commercial building dispute, that the threshold of $50,000 was set “some time in the past” and that “an allowance should be made for inflation”;
    3. Rainbow Builders considers a major commercial building dispute as one involving a claim of more than $150,000;
    4. If the application is one for a major commercial building dispute, the State’s actions in lodging a complaint with the QBCC for defective work should be seen as implicit consent under ss 78 and 79 of the QBCC Act that the tribunal have jurisdiction in respect of the dispute;
    5. That a consent can be sought at the compulsory conference scheduled in the proceeding.

Discussion

  1. [23]
    The dispute between the parties relates to an amount Rainbow Builders says is payable by the State under the terms of a contract for the construction of four separate buildings comprising an office building, a building containing four accommodation apartments, and two buildings each containing two accommodation apartments. At least two of the buildings are not a “detached dwelling” within the meaning of that term in the QBCC Act. Accordingly, the building contract is not one for the performance of reviewable domestic work. The application by Rainbow Builders is not, therefore, in respect of a domestic building dispute.
  2. [24]
    The building work carried out by Rainbow Builders was the erection or construction of a building. As such, it is tribunal work. As the building work, being tribunal work, is not reviewable domestic work, it is reviewable commercial work. The dispute between the parties is one relating to a contract for the performance of reviewable commercial work. Accordingly, the dispute is a commercial building dispute.
  3. [25]
    The amount claimed by Rainbow Builders is for an amount of $57,750 plus interest. As the claim exceeds $50,000, the dispute is therefore a major commercial building dispute. The tribunal may decide a major commercial building dispute if the tribunal is satisfied all parties to the dispute consent to it doing so. The State has not, and does not, consent to the tribunal deciding the dispute.
  4. [26]
    The former Commercial Consumer Tribunal considered ss 78 to 81 of the (then) Queensland Building Services Authority Act 1991 (Qld) in Atcheson, P. & N.  v Scacheri, G.R. and Skehan, G. and Geoff Skehan Constructions Pty Ltd.[25] Atcheson involved a major commercial building dispute. The requirement for the filing of a consent as required by s 79(1) of the QBSA Act had not been complied with.
  5. [27]
    The tribunal held that the “consent” referred to at s 78 had no existence independent of ss 79, 80 and 81 such that the consent of the parties, actual or implied, could override the requirements of s 79 and thereby enliven the jurisdiction of the Tribunal.
  6. [28]
    The approach in Atcheson was approved in Burton and Anor v Payne[26] and Austcoast Builders Pty Ltd v Whitsunday Housing Company Ltd.[27] In Austcoast the Tribunal adopted the interpretation in Atcheson of ss 78 and 79 of the QBSA Act citing with approval the following passage (set out here in full):
  1. The matter of the Tribunal’s enlarged jurisdiction is not solely dependent upon the consent simpliciter of the existing parties to an application. It is a matter, upon which the Tribunal must be satisfied, after undertaking a particular procedure, including a pre-hearing conference, as set down in section 79.
  1. The written "consent" must be filed with the application (as with the first requirement or limb of section 73 in the Eyres’ decision). However, in this instance (unlike section 73 in Eyres), there is no other alternative form of consent permitted in sections 78, 79 and 81, whether with the approval/leave/satisfaction of the Tribunal or otherwise.
  1. Even if, in this instance, consent can be implied from the conduct of these parties subsequent to the filing of the process, such that may, in ordinary circumstances, give rise to an estoppel of the type referred to in Eyres, that does not have the effect of providing a resultant enlarged jurisdiction in the Tribunal, as the consent required for that enlarged jurisdiction was consent prior to the commencement of the proceedings.[28]
  1. [29]
    Section 78 of the QBCC Act makes plain that the tribunal only has jurisdiction to decide a major commercial building dispute if all parties to the dispute consent to it so doing. Section 79 of the QBCC Act provides the mechanism by which such consent must be provided and the content of the consent. I agree with the reasoning and conclusions in Atcheson, Burton and Austcoast in relation to the operation of ss 78 and 79.
  2. [30]
    The consent of all parties to the dispute is required before the tribunal may decide a major commercial dispute. The State of Queensland does not consent. No consent was filed when the application by Rainbow Builders was filed. The application by Rainbow Builders therefore falls at the first hurdle. The Tribunal does not have jurisdiction to decide the dispute.
  3. [31]
    Section 61(1)(c) of the QCAT Act empowers the tribunal to waive compliance with a procedural requirement under the QCAT Act or an enabling Act. Section 78 of the QBCC Act may be considered as one that:

… defines and limits the jurisdiction of the Tribunal…It is not merely a procedural rule that may be relaxed under section 61 of the QCAT Act. It is a mandatory, substantive rule of law and a condition of jurisdiction.[29]

  1. [32]
    In Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia, the High Court held:

When the legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised, and the conditions and restrictions which must be observed [in so doing], it excludes the operation of the general expressions … which might otherwise have been relied on or the same power.[30]

  1. [33]
    The Tribunal is, by s 78 of the QBCC Act, given the power by the legislature to decide a major commercial building dispute. That section, together with s 79 of the QBCC Act, prescribes the mode in which that power can be exercised, and the conditions and restrictions which must be observed in so doing. The specific conferral of that power excludes the operation of general expressions contained in the QBCC Act or the QCAT Act.[31]
  2. [34]
    It is a condition of the Tribunal having jurisdiction to decide a major commercial building dispute that all parties to the dispute consent to it so doing, and that such consent be in writing and filed with the application to start the proceeding. These requirements go to the right of a party to commence a proceeding for a major commercial building dispute in the Tribunal.
  3. [35]
    In Hope v Brisbane City Council[32] the Land Appeal Court of Queensland was required to consider the competence of an appeal filed, but not served, within the time prescribed in the Land Court Act 2000 (Qld). By s 64 of the Land Court Act 2000 (Qld), a party to a proceeding in the Land Court may appeal against a decision of the Land Court. By s 65 (1) of the Act, the appeal is required to served on specified parties within 42 days after the date of the order of the Court. The Land Court held that the provisions of s 65 were not merely procedural in effect. The right created by s 64 was immediately limited by s 65(1) which imposed a condition which was of the essence of the new right. The Land Appeal Court held that it was a condition of the institution of an appeal that there be compliance with s 65. A failure to do so meant that there was no valid appeal. The Court considered the general power conferred upon it by the Act to, among other things, “make an order the Land Appeal Court considers appropriate”.[33] The Court held that a prerequisite to the exercise of the power under s 57 of the Act was that the Land Appeal Court have jurisdiction before it may exercise those powers.
  4. [36]
    The exercise by the Tribunal of the powers under s 61 of the QCAT Act requires a proceeding to have been validly commenced. The absence of jurisdiction means that the proceedings have not been validly commenced. Accordingly, even if the State consented (and it does not) to the Tribunal having jurisdiction to decide the dispute, s 61 of the QCAT cannot be used to cure the fundamental defect in a proceeding commenced in the absence of compliance with ss 78 and 79 of the QBCC Act.
  5. [37]
    By section 52(2) of the QCAT Act, the Tribunal may, if it considers it does not have jurisdiction to hear all matters in a proceeding, transfer the matter or matters for which it does not have jurisdiction to a court of competent jurisdiction or another tribunal or entity having jurisdiction to deal with the matter or matters.
  6. [38]
    Section 52 specifically refers to the Tribunal lacking jurisdiction to hear a matter. In this regard, s 52 is not unlike s 85 of the District Court Act 1967 (Qld) which expressly extends the scope of proceedings capable of transfer from that court to include proceedings “in which a District Court has no jurisdiction.” As the Court of Appeal observed in McMahon v State of Queensland[34]:

… I favour a broad construction of s 75 which gives the Supreme Court the power to direct litigants to the correct or most convenient court irrespective of error in the initiating proceeding. Counsel for the appellant drew attention to s 85(1) of the District Court Act 1967 which expressly extends the scope of proceedings capable of transfer from that court to include proceedings "in which a District Court has no jurisdiction". That of course puts the matter beyond doubt for transfer orders from that court…[35]

  1. [39]
    Despite the proceeding having been commenced in the absence of the Tribunal’s jurisdiction, it is nevertheless open to the Tribunal to order the transfer of the matter to the Magistrates Court if such an order is considered appropriate. The State says that if the application by Rainbow Builders is not dismissed, the Tribunal is obliged to refer the parties to arbitration by operation of s 8 of the Commercial Arbitration Act 2013 (Qld).
  2. [40]
    Having determined that the Tribunal does not have jurisdiction to decide the application, the only order the Tribunal can make, other than dismissing the application, is to transfer the matter to another court or entity. There is no court or entity identified by the State to which the matter can be transferred to give effect to what the State says are the relevant arbitration provisions contained in the building contract.
  3. [41]
    In light of the quantum of the claim by Rainbow Builders the appropriate jurisdiction for the determination of the dispute is the Magistrates Court. In my view it is not appropriate to make an order transferring the proceeding to the Magistrates Court. The matter is at a very early stage. No response has been filed by the State. The application filed by Rainbow Builders is not in a form that complies with the Uniform Civil Procedure Rules 1991 (Qld) or could otherwise be considered a competent pleading. The appropriate course of action is for Rainbow Builders to commence a fresh proceeding in another Court, to enable it to properly plead its case. The State will then have the opportunity to file a defence which may or may not raise the issues ventilated by the State in this proceeding regarding the referral of the dispute to arbitration.  

Conclusion and orders

  1. [42]
    In circumstances where a proceeding or part of a proceeding is frivolous, vexatious or misconceived; lacking in substance; or otherwise an abuse of process the Tribunal may order that the proceeding or part be dismissed or struck out.[36] Where the Tribunal considers a party to a proceeding acts in a way that unnecessarily disadvantages another party to the proceeding by not complying with the QCAT Act, an enabling Act or the rules, the Tribunal may dismiss or strike out the proceeding.[37]
  2. [43]
    The application was commenced by Rainbow Builders in circumstances where there was no attempt by it to comply with ss 78 and 79 of the QBCC Act. The Tribunal does not have jurisdiction to decide the dispute the subject of the application. For the reasons given the application should be dismissed pursuant to s 47 and s 48 of the QCAT Act.
  3. [44]
    The State seeks costs. I will make directions for the filing of submissions as to costs.

Footnotes

[1]Specification at p 203, clause 1.1.1.

[2]Contract drawings.

[3]Addendum 1 to contract documents.

[4]Building Code of Australia.

[5]Application for domestic building disputes.

[6]Queensland Building and Construction Commission Act 1991 (Qld), s 77(1).

[7]QBCC Act, Schedule 2.

[8]ibid.

[9]Ibid.

[10]QBCC Act, Schedule 1B, s 4(1)(a).

[11]QBCC Act, Schedule 1B, s 1.

[12]Ibid.

[13]Ibid.

[14]QBCC Act, Schedule 2.

[15]Ibid.

[16]Ibid.

[17]QBCC Act, s 75(1)(a).

[18]QBCC Act, Schedule 1B and Schedule 2.

[19]QBCC Act, s 77(1) and (2).

[20]QBCC Act, s 78.

[21]QBCC Act, s 79(1).

[22]QCAT Act, schedule 3.

[23]Ibid, schedule 3.

[24]Moreton Island Development Group v Smith Development Pty Ltd [2012] QCATA 15.

[25][2006] QCCTB 152.

[26][2011] QCAT 680.

[27][2012] QCAT 7.

[28]Op cit 21 at [38].

[29]Queensland Building Services Authority v Robuild Pty Ltd [2013] QCATA 238.

[30](1932) 47 CLR 1.

[31]Watkins v Queensland Building Services Authority [2013] QCAT 535.

[32][2012] QLAC 41.

[33]See ss 55 and 57 Land Court Act 2000 (Qld).

[34][2000] QCA 483.

[35]Op cit at [18].

[36]QCAT Act, s 47(1) and (2).

[37]QCAT Act, s 48(1) and (2).

Close

Editorial Notes

  • Published Case Name:

    Rainbow Builders Pty Ltd v The State of Queensland through the Director General, Department of Housing and Public Works

  • Shortened Case Name:

    Rainbow Builders Pty Ltd v Queensland

  • MNC:

    [2016] QCAT 415

  • Court:

    QCAT

  • Judge(s):

    Senior Member Brown

  • Date:

    01 Nov 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1
2 citations
Jump To
Cite 1 - (1932) 47 CLR 1
Cite 2 - (1932) 47 CLR 1
Atcheson, P.&.N. v Scacheri, G.R. and Skehan, G. and Geoff Skehan Constructions Pty Ltd [2006] QCCTB 152
2 citations
Jump To
Cite 1 - [2006] QCCTB 152
Cite 2 - [2006] QCCTB 152
Austcoast Builders Pty Ltd v Whitsunday Housing Company Ltd [2012] QCAT 7
2 citations
Jump To
Cite 1 - [2012] QCAT 7
Cite 2 - [2012] QCAT 7
Burton and Anor v Payne [2011] QCAT 680
2 citations
Jump To
Cite 1 - [2011] QCAT 680
Cite 2 - [2011] QCAT 680
Hope v Brisbane City Council [2012] QLAC 41
2 citations
Jump To
Cite 1 - [2012] QLAC 41
Cite 2 - [2012] QLAC 41
McMahon v State of Qld[2002] 1 Qd R 195; [2000] QCA 483
2 citations
Jump To
Cite 1 - [2000] QCA 483
Cite 2 - [2000] QCA 483
Moreton Island Development Group v Smith Development Pty Ltd [2012] QCATA 15
2 citations
Jump To
Cite 1 - [2012] QCATA 15
Cite 2 - [2012] QCATA 15
Queensland Building Services Authority v Robuild Pty Ltd [2013] QCATA 238
2 citations
Jump To
Cite 1 - [2013] QCATA 238
Cite 2 - [2013] QCATA 238
Watkins v Queensland Building Services Authority [2013] QCAT 535
2 citations
Jump To
Cite 1 - [2013] QCAT 535
Cite 2 - [2013] QCAT 535

Cases Citing

Case NameFull CitationFrequency
Bebendorf v Uebergang [2018] QCAT 1322 citations
1

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