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TLL Investment Pty Ltd v The Body Corporate for The Grange CTS 30993[2018] QCAT 12

TLL Investment Pty Ltd v The Body Corporate for The Grange CTS 30993[2018] QCAT 12

CITATION:

TLL Investment Pty Ltd v The Body Corporate for The Grange CTS 30993 [2018] QCAT 12

PARTIES:

TLL Investment Pty Ltd (Applicant)

v

The Body Corporate for The Grange CTS 30993 (Respondent)

APPLICATION NUMBER:

OCL038-17

MATTER TYPE:

Other civil dispute matters

HEARING DATE:

20 December 2017

HEARD AT:

Brisbane

DECISION OF:

Member Gardiner

ORDER DELIVERED ON:

20 December 2017

REASONS DELIVERED ON:

18 January 2018

DELIVERED AT:

Brisbane

ORDERS MADE:

UPON TLL Investment Pty Ltd giving the usual undertaking as to damages:

THE TRIBUNAL ORDERS THAT:

  1. Subject to the compliance by TLL Investment Pty Ltd with the direction in paragraph 4 below,  The Body Corporate for The Grange CTS 30993 will:
    1. (a)
      Pay to TLL Investment Pty Ltd the sum of $77,955.90 by 4.00pm on 22 December 2017.
    2. (b)
      Pay to TLL Investment Pty Ltd the sum due to it each month commencing on 15 January 2018 pursuant to the Caretaking Agreements, without set-off or deduction, until the determination of this proceeding, further order or agreement in writing of the parties.
  2. The application by TLL Investment Pty Ltd for judgement on a liquidated sum of $77,995.00 is refused.
  1. Costs of 20 December 2017 are reserved.

THE TRIBUNAL DIRECTS THAT:

  1. TLL Investment Pty Ltd must file two (2) copies in the Tribunal and give one (1) copy to The Body Corporate for The Grange CTS 30993 of an amended Application for a Complex Dispute which addresses claims and related issues made in and arising out of the miscellaneous application filed 8 December 2017 by:

12.00pm 22 December 2017.

  1. The Body Corporate for The Grange CTS 30993 must file two (2) copies in the Tribunal and give one (1) copy to TLL Investment Pty Ltd any amended response and/or counter application  by:                

4.00pm 23 February 2018.

  1. TLL Investment Pty must file two (2) copies in the Tribunal and give one (1) copy to The Body Corporate for The Grange CTS 30993 a response to any counter application by:

4.00pm 23 March 2018.

  1. The directions made by the Tribunal on 15 September 2017 are confirmed.

CATCHWORDS:

CORPORATIONS – BODIES CORPORATE OTHER THAN COMPANIES AND ASSOCIATIONS – RIGHTS AND OBLIGATIONS – where dispute between body corporate between caretaking service contractor and letting agent

EQUITY – EQUITABLE REMEDIES – INJUNCTIONS – INTERLOCUTORY INJUNCTIONS – balance of convenience – where terms of caretaking contract in dispute – where Body corporate stops paying fees under agreement – where there is a triable issue as to construction of the agreements – where applicant seeks summary judgment and mandatory interlocutory injunction requiring respondent to pay fees – whether judgment should be given  or injunction granted

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 3, s 4, s 47, s 59

Austrak Pty Ltd v John Holland Pty Ltd [2006] QSC 103 followed

Australian Broadcasting Corporation v O'Neill (2006) 80 ALJR 1672

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618

McLaren on behalf of the Edgewater Village Home Owners Committee v Capital Four Edgewater Pty Ltd [2012] QCAT 93

REPRESENTATIVES:

 

APPLICANT:

Mr Kidston of Counsel

RESPONDENT:

Mr Faulkner of Counsel

REASONS FOR DECISION

  1. [1]
    This is an application for an injunction in relation to payment of Management Fees.  As the matter was urgent, I made orders on 20 December 2017.  These are the reasons for those orders.
  2. [2]
    “The Grange” is a residential community title scheme comprising 302 townhouse lots spread over 29 acres, situated in outer Brisbane.
  3. [3]
    TLL Investment Pty Ltd is a caretaking service contractor and letting agent for the Scheme under two caretaking contractual agreements both dated 16 January 2003.
  4. [4]
    These parties are in a substantial and apparently intractable dispute over the performance of duties under the Caretaking Agreements.
  5. [5]
    The Body Corporate issued three Remedial Action Notices (RAN) in February and March 2017 and on 26 June 2017, passed a resolution authorising the termination of the Caretaking Agreements.   
  6. [6]
    On or about 8 June 2017, TLL Investment commenced proceedings in QCAT disputing that it was in default, that it failed to remedy the alleged breaches and arguing that the RAN's are invalid and a termination in reliance upon same would be unlawful.
  7. [7]
    On 7 July 2017, the Body Corporate consented to an injunction being made by the Tribunal preventing it from terminating the Caretaking Agreements until the hearing of this matter and without first giving 21 days prior written notice.
  8. [8]
    Relations between the parties deteriorated further and on 29 September 2017, the Body Corporate issued a fourth RAN demanding certain information be provided. TLL Investment responded by saying that the Caretaker Agreements did not require it to provide the requested information.
  9. [9]
    In response to this, on 15 November 2017, the Body Corporate ceased paying the remuneration payable to TLL Investment under the Caretaker Agreements. These agreements currently provide that the annual sum of $472,469.40 is required to be paid by monthly instalments of $39,372.45 including GST, in arrears, on the 15th day of each month.
  10. [10]
    The payments on 15 November and 15 December were not made by the Body Corporate and the January payment is looming.

Liquidated claim

  1. [11]
    TLL sought judgment for the two outstanding monthly amounts already overdue.
  2. [12]
    TLL submitted:
    1. There was no reason to hold it out of its money until trial and giving judgment now is consistent with the objectives in sections 3 and 4 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). 
    2. A fiscally stronger party ought not be able to use its financial muscle to the disadvantage of the weaker party to prevent the fair trial of the matter.
    3. Awarding judgment now and separating for litigating at some later date what is described as an unliquidated, unspecified, unquantified and vague set-off is an appropriate manner of proceeding for the Tribunal.
    4. Even if judgment is given now for the sums that are due, there is no reason that the Body Corporate cannot quantify any losses and seek to recover them by way of counterclaim in the final hearing.
    5. The Body Corporate rights will be adequately protected by this course.
  3. [13]
    The Body Corporate submitted:
    1. There are no relevant proceedings on foot. It has not suspended payment under the agreement based on whether or not it has a right to terminate pursuant to the RANs, the subject of the principal application.
    2. If TLL claims the Body Corporate is in breach of contract it can commence proceedings for damages or amend its current application seeking such relief. 
    3. No question is presently before the Tribunal to which this application relates.
    4. In effect, TLL seeks a summary determination of a claim for liquidated damages not properly before the Tribunal and without a hearing. 
    5. TLL seeks an order effectively for specific performance of a service contract where it fails to demonstrate performance or substantial performance of its obligations.
  4. [14]
    The Tribunal has power to make a final decision in proceedings under section 47 of the QCAT Act.  This section applies if the Tribunal considers a proceeding or part of a proceedings is frivolous, vexatious or misconceived, lacking in substance or otherwise an abuse of process.
  5. [15]
    I consider there exists a genuine triable issue between these parties as to the construction of the caretaker agreements between them, the extent of the duties and any alleged non-performance thereof.  TLL submits it is making proper performance under the contracts. The determination of that question is a matter to be ventilated on a full hearing. 
  6. [16]
    I agree with the submission of the Body Corporate that to pursue the claims for outstanding amounts, it is necessary for TLL to amend its current application to include the issues that have arisen under the fourth RAN.  Any interlocutory order would be conditional upon such an amendment to the current proceedings.

Mandatory injunction

  1. [17]
    This Tribunal has previously determined that section 59 of the QCAT Act allows the granting of injunctions whenever it is just and convenient to do so and that the power is not limited to prohibitive injunctions.[1]
  2. [18]
    Guidance is provided to this Tribunal by the decision of his Honour Justice Chesterman in Austrak Pty Ltd v John Holland Pty Ltd.[2]   In that matter, the applicants sought to have the return of funds paid to the respondent by a third party pursuant to unconditional undertakings.
  3. [19]
    Having considered the matter, his Honour said:

[36]  The first point is that the order sought is of a mandatory interlocutory injunction which courts are notoriously reluctant to pronounce. The respondent has called upon the undertaking and been paid. The applicant seeks an order that the respondent reimburse it the money it had to pay HSBC consequent upon HSBC’s payment to the respondent to honour the undertaking. Because all that is involved is a payment of money, damages are said to be adequate as a remedy.

[37]  It is true that mandatory interlocutory injunctions are rare but I take the relevant principles to be those which appear in the judgment of Hoffmann J in Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670 at 80. Having referred to a decision of the Court of Appeal in which it had been said that the court is far more reluctant to grant a mandatory interlocutory injunction than a prohibitory one and that ‘in a normal case’ the court must feel a high degree of assurance that at a trial it would appear that the injunction was rightly granted, his Lordship said:

‘But I think it is important … to distinguish between fundamental principles and … “guidelines”, ie useful generalisations about the way to deal with the normal run of cases falling within a particular category. The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the “wrong” decision, in the sense of granting an injunction to a party who fails to establish his right at the trial … or … in failing to grant an injunction to a party who succeeds … at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been “wrong” in the sense I have described. The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle.

…

… [T]he features which justify describing an injunction as “mandatory” will usually also have the consequence of creating a greater risk of injustice if it is granted rather than withheld … The question of substance is whether the granting of the injunction would carry that higher risk of injustice which is normally associated with the grant of a mandatory injunction. … If it appears to the court that, exceptionally, the case is one in which withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a “high degree of assurance” about the plaintiff’s chances of establishing his right, there cannot be any rational basis for withholding the injunction.’

[38]  The authors of Equity Doctrines and Remedies, 3rd ed, Meagher, Gummow and Lehane, thought that (at para 2178):

‘… a judge hearing an application for an interlocutory mandatory injunction must apply exactly the same tests as he would in a case of an application for an interlocutory prohibitory injunction, not some different or more exacting test; … but in the application of the normal test, often, but not always, the fact that the relief sought is mandatory will tilt the balance of convenience in the defendant’s favour.’

[39]  Similar orders to those sought by the applicant have been made in the past. In CS Phillips Pty Ltd v Baulderstone Hornibrook Pty Ltd (unreported, Supreme Court of New South Wales, 26 October 1994, No. 55040/1994) Giles J ordered the defendant to repay to the plaintiff an amount equal to the sum it had obtained by calling upon a bank guarantee provided by the plaintiff in return for the plaintiff providing a replacement guarantee. The order was made pending trial. Giles J said (BC9403175 at 29):

‘If the orders sought … be made Baulderstone will not suffer the loss of its security, but will still hold bank guarantees … and the orders will effectively restore the status quo … The balance of convenience in these respects favours the making of the orders, and in the circumstances the fact that the interlocutory orders sought are mandatory orders is not of great consequence. Although Baulderstone would be required to act to its detriment, it would still have its security and if its position was ultimately upheld would only be delayed in calling for payment.’

[40]  A similar order was made by Byrne J in Walter Construction Group Ltd v Secretary, Department of Infrastructure (unreported Supreme Court of Victoria, 6 June 2000, No. 4637/00). His Honour said (at [14] to [15]):

‘The balance of convenience is indisputably in favour of [the plaintiff]. Its construction manager … deposed as to the adverse commercial consequences of the calling up of the bank undertakings.  Counsel for [the defendant] accepted that, if the undertakings were reinstated, his client’s position would not be jeopardised. It will have substitute undertakings … In the event that it should hereafter appear that [the defendant] is entitled to call upon these undertakings, any other losses can be adequately protected by an undertaking as to damages.

Any concerns which I might have had as to the appropriateness of mandatory injunctions of the kind here sought were dispelled upon my reading of the judgments in New South Wales where this course had been adopted.’

[41]  In my opinion the balance of convenience favours the injunction. The risk of injustice is greater if the injunction is withheld than if it were granted. If the order is made the parties will be restored to their former position in which they disputed whether the respondent could demand payment on the undertaking without first establishing that the applicant’s performance of its contract had been defective.  Damage to the applicant’s reputation will be minimised. The respondent will be protected by the issue of a replacement undertaking which it can call upon as soon as it establishes that the applicant’s performance of the contract was defective or that, regardless of that determination, the oral contract made between Messrs Douglas and Chudacek accords with the latter’s evidence. The act required to comply with the injunction can be quickly and readily performed and will not prejudice the respondent for the reasons earlier identified. The effect of the order will be to preserve the status quo ante.

  1. [20]
    As Justice Chesterman guides, the starting point for an application for an interlocutory mandatory injunction is the application of exactly the same normal tests as in a case of an application for an interlocutory prohibitory injunction. But in the application of the test, often, but not always, the fact that the relief sought is mandatory will tilt the balance of convenience in the defendant’s favour.
  2. [21]
    In Australian Broadcasting Corporation v O'Neill,[3] Gummow and Hayne JJ,[4] with whom Gleeson CJ and Crennan J agreed,[5] said that it is sufficient for a plaintiff seeking an interlocutory injunction to show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending a trial.
  3. [22]
    Their Honours adopted a proposition stated in Beecham Group Ltd v Bristol Laboratories Pty Ltd[6] to the effect that:

How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the order the plaintiff seeks.

  1. [23]
    TLL submits that its case is much stronger than that of a minimal threshold of potential success and that the balance of convenience overwhelmingly lies in favour of TLL.  TLL says it has a finance facility with its banker with a balance of approximately $3.01 million used to acquire the rights the subject of the Caretaking Agreements and the Manager’s Lots, which is secured by a mortgage over the real property and a personal guarantee from its director.  It says that continued withholding of the remuneration will result in financial ruin for the company and likely its director.
  2. [24]
    TLL says it cannot meet its obligations to its banker without being paid the remuneration it is entitled to pursuant to the Caretaking Agreements.  TLL says the caretaking agreements have a further 10 years to run.
  3. [25]
    The matter is set for a long final hearing in the tribunal in August of 2018.  If the Body Corporate refuses to pay the caretaker any fees until that time, the submission lead to the strong possibility that TLL, starved of income, will not be in a position to argue its case before this tribunal at the hearing – assuming that it has not gone into liquidation by then in any event.
  4. [26]
    The Body Corporate submits it will suffer significant financial hardship if it is ordered to make payment under the agreement in circumstances where services are not being rendered.  It alleges a loss of a sum of nearly $500,000.00 if the injunction is granted, being payment to outside contractors for work it alleges is not being undertaken by TLL.
  5. [27]
    The Body Corporate has withheld two monthly payments amounting to $78,744.90 and another is due in mid-January 2018.  Despite submissions that substantial amounts of money have already been spent on outside contractors by the Body Corporate to undertake duties it says TLL is not completing, the only amount put into evidence of these monies was an amount of $789.00 which TLL conceded could be allowed as a set off against the current outstanding payments.
  6. [28]
    The fact and/or degree of such allegations are matters for the final hearing of this dispute.
  7. [29]
    The granting of the mandatory injunction would preserve the status quo between these parties.  Any loss to the Body Corporate is capable of being recovered from TLL either under the damages undertaking or at the final hearing of this matter. 
  8. [30]
    As relied on by his Honour Justice Chesterman above:[7]

If it appears to the court that, exceptionally, the case is one in which withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a “high degree of assurance” about the plaintiff’s chances of establishing his right, there cannot be any rational basis for withholding the injunction.

  1. [31]
    I am satisfied the balance of convenience favours the injunction. Without an injunction, the risk is that great injustice may be caused to TLL because of the financial ramifications of non-payment of the caretaking fees. 
  2. [32]
    In my view, the risk of injustice is greater if the injunction is withheld than if it were granted.
  3. [33]
    The Body Corporate has adopted a unilateral course of failing to make regular payments which it is contractually bound to make.  It has done so without seeking any entitlement to do so, for example by bringing an application for a declaration that it is not required to make further payments. 
  4. [34]
    By adopting this unilateral course, the Body Corporate has exposed itself to a claim for breach of contract by TLL.
  5. [35]
    I do not consider it is appropriate to give judgment under s 47 of the QCAT Act against the Body Corporate for the payments for the months of November 2017 and December 2017 which it has not made, as that is a final order, and there may be bases to not make such an order that will only be determined on a final hearing of the matter.
  6. [36]
    However, I do not consider the Body Corporate has adopted an appropriate course by unilaterally breaching its contractual obligations.  TLL should be put back in the position in which it would be under the contract.  This can be achieved by an order, in the form of a mandatory injunction, that the Body Corporate pay the missed payments to TLL by a prompt specified date, which I will make 22 December 2017.
  7. [37]
    I will allow as part of these missed payments the one time offset of the amount of $789.00 claimed by the Body Corporate.
  8. [38]
    I will further order that the Body Corporate continue to make the usual monthly payments in full, under the contract until final hearing and determination of the matter.
  9. [39]
    As a prerequisite to re-instatement of payments, TLL must amend by 12pm on 22 December 2017 its Application for a Complex Dispute to address claims and related issues made in and arising out of the miscellaneous application filed 8 December 2017.
  10. [40]
    I will further order this injunctive relief is subject to TLL giving an undertaking as to damages, which I will describe as “the usual undertaking”.  TLL will pay to the Body Corporate any damages that it has caused to it consequent upon the making of this order, in the event it is found on the final hearing and determination of the matter, that the Body Corporate was not liable to make the payments for the period of the proceedings.
  11. [41]
    The directions of the learned member given on 15 September 2017 are confirmed.

Footnotes

[1] McLaren on behalf of the Edgewater Village Home Owners Committee v Capital Four Edgewater Pty Ltd [2012] QCAT 93, [14].

[2] [2006] QSC 103.

[3] (2006) 80 ALJR 1672.

[4] Ibid, 169.

[5] Ibid, 1682 – 1683.

[6] (1968) 118 CLR 618, 622.

[7] Austrak Pty Ltd v John Holland Pty Ltd [2006] QSC 103, [37] (see paragraph 19 of these reasons).

Close

Editorial Notes

  • Published Case Name:

    TLL Investment Pty Ltd v The Body Corporate for The Grange CTS 30993

  • Shortened Case Name:

    TLL Investment Pty Ltd v The Body Corporate for The Grange CTS 30993

  • MNC:

    [2018] QCAT 12

  • Court:

    QCAT

  • Judge(s):

    Member Gardiner

  • Date:

    18 Jan 2018

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
Austrak Pty Ltd v John Holland Pty Ltd [2006] QSC 103
3 citations
Jump To
Cite 1 - [2006] QSC 103
Cite 2 - [2006] QSC 103
Cite 3 - [2006] QSC 103
Australian Broadcasting Corporation v O'Neill (2006) 80 ALJR 1672
3 citations
Jump To
Cite 1 - (2006) 80 ALJR 1672
Cite 2 - (2006) 80 ALJR 1672
Cite 3 - (2006) 80 ALJR 1672
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
2 citations
Jump To
Cite 1 - (1968) 118 CLR 618
Cite 2 - (1968) 118 CLR 618
Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670
1 citation
Jump To
Cite 1 - [1987] 1 WLR 670
McLaren on behalf of the Edgewater Village Home Owners Committee v Capital Four Edgewater Pty Ltd [2012] QCAT 93
2 citations
Jump To
Cite 1 - [2012] QCAT 93
Cite 2 - [2012] QCAT 93

Cases Citing

Case NameFull CitationFrequency
TLL Investment Pty Ltd v The Body Corporate for the Grange (No 2) [2018] QCAT 4442 citations
1

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