Bax Investments Pty Ltd v Richards
[2020] QCAT 404
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- Unreported Judgment
- Bax Investments Pty Ltd v Richards[2020] QCAT 404
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Bax Investments Pty Ltd v Richards[2020] QCAT 404
Bax Investments Pty Ltd v Richards[2020] QCAT 404
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Bax Investments Pty Ltd v Richards & Anor [2020] QCAT 404 |
PARTIES: | BAX INVESTMENTS PTY LTD (applicant) |
| v |
| TREVOR JAMES RICHARDS (first respondent) ELLEN HANNAH RICHARDS (second respondent) |
APPLICATION NO/S: | BDL187-17 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 21 October 2020 |
HEARING DATE: | On the papers, 8 October 2020 |
HEARD AT: | Brisbane |
DECISION OF: | Member P Roney QC |
ORDERS: |
|
CATCHWORDS: | ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – costs – where a decision to refuse cover under the statutory insurance scheme was set aside – parallel or associated proceedings for debt recovery ESTOPPEL – ESTOPPEL BY JUDGMENT – ANSHUN ESTOPPEL – determination as a preliminary issue PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SECURITY FOR COSTS – where respondents applied for security for costs against a corporate applicant and abandoned the application after receipt of up to date financial information,- costs- who should pay the costs of the abandoned application for security- whether security for costs would have been ordered Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 109 Richards & Anor v Queensland Building and Construction Commission & Anor [2019] QCAT 189 Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853 Kuligowski v Metrobus (2004) 220 CLR 363 Blair v Curran (1939) 62 CLR 464 Ramsay v Pigram [1968] 118 CLR 271 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Greg Black Constructions Pty Ltd v Brodie [2011] QCAT 671 Mobile Building System International Pty Ltd v Hua [2014] QCATA 94 Ultimate Property One Management Pty Ltd v Body Corporate for the Pivotal Point Residential CTS 33550 [2017] QCAT 424 Interlink Developments Pty Ltd v Kruger [2019] QCAT 219 |
APPEARANCES: |
|
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). | |
REASONS FOR DECISION
- [1]In these Reasons I shall refer to the Respondents as Mr and Mrs Richards, and the Applicant as Bax Investments. There are two applications before the Tribunal which are required to be determined, and are determined in these Reasons.
- [2]The first arises out of a direction made by the Tribunal on 28 July 2020 in terms that there be determined as a preliminary issue (“the preliminary issue”) in the proceeding, whether the Applicant is estopped from maintaining the whole or any part of its claim for the balance of monies owed under a construction contract entered into between it and the respondents, following a decision of this Tribunal of 19 July 2019, in Richards & Anor v Queensland Building and Construction Commission & Anor [2019] QCAT 189 (the review proceeding). That was a different, but related proceeding in which the Respondents to the present proceedings, Mr and Mrs Richards, successfully brought a review proceeding against the Queensland Building and Construction Commission. The present Applicant was a second respondent to the review application.
- [3]The second matter for my determination is whether the Respondents ought pay, or on the other hand, be awarded, the costs of an abandoned application which they brought against the Applicant for orders that the Applicant pay security for costs in the present proceeding, or whether the Applicant ought recover its costs of having defended that application.
- [4]I will deal with the preliminary issue first.
- [5]Mr and Mrs Richards own a property in the rural area of Palen Creek. They signed a building contract with Bax Investments, as builder on 18 April 2016 for an extension to their home.
- [6]The contract price was $144,327.50. The construction period was to be 243 days. The owners paid a deposit of $7,954.38 on 22 April 2016. There was a delay in starting the work. Work commenced between 8 and 12 September 2016, nearly five months after signing the contract.
- [7]The contract provided that Bax could claim agreed payments at the conclusion of various stages of construction. On 20 September 2016 Bax issued an invoice for the sub-floor stage claiming $36,081.88 and on 21 November 2016 an invoice for the frame stage claiming $21,649.13. These were paid.
- [8]After some works under the building contract had been performed, on 16 May 2017, Mr and Mrs Richards terminated the builder by written notice in that regard, contending that Bax Investments had failed to carried out the works with due diligence.
- [9]Subsequently in May 2017, Mr and Mrs Richards made a claim under the insurance policy held with the Queensland Building and Construction Commission under the statutory home warranty scheme for non-completion of the building work.
- [10]On 3 July 2017, the QBCC disallowed the claim on the basis that the owners had not properly terminated the contract as required under the policy of insurance. The QBCC instead found that the owners were themselves in substantial breach of the building contract when they issued the notice to remedy breach. The QBCC held they were therefore not entitled to terminate.
- [11]Mr and Mrs Richards applied for a review of that QBCC decision, and that review was required to be completed within 28 days but was not. It was therefore deemed that the original decision disallowing the claim was confirmed.
- [12]On 31 July 2017, prior to the commencement of the application for review in this Tribunal, Bax Investments filed its own application in this Tribunal contending that there was a domestic building dispute, and made a claim for the recovery of $34,668.42 which it says is owed to it for building work under the original contract of April 2016, and additional work performed outside of the contract. That is the present proceeding which remains on foot. The precise basis for which payment was sought is by no means clear from the terms of the Application itself, with the application elusively referring to seeking orders under specific clauses of the contract that it “agrees to terminating the contract under the condition that (it is) paid the amount of $34,668.42 as outlined in the attached documents”.
- [13]On 22 August 2017, Mr and Mrs Richards filed a response and a counter-claim in that domestic building dispute proceeding. No party suggests that the counter-claim is affected by the findings of the tribunal in the review proceeding.
- [14]The present proceeding, initiated by Bax Investments prior to the review proceeding moved forward, and on 9 October 2017 Bax Investments filed a response to the Richards’ counter-application in the building proceeding. This occurred a day before Mr and Mrs Richards brought the review proceedings which occurred on 10 October 2017.
- [15]Mr and Mrs Richards then applied to the Tribunal on 10 October 2017 under their own application to review the decision to refuse cover under the statutory scheme. In due course, the builder Bax Investments was made a Second Respondent to that application on the motion of the QBCC, not Mr and Mrs Richards. No specific relief was claimed against Bax Investments in the review proceeding.
- [16]Pending a determination of the review proceeding, on 24 January 2018 the Tribunal ordered a stay of the Bax Investments proceeding until a determination of the review proceeding. Conceptually the Bax Investments proceeding might have been joined with or heard together with the review proceeding, but it was not so ordered. The Bax Investments proceeding remained on foot, although stayed.
- [17]After that the review proceeding moved forward. On 7 May 2019 the review proceeding was heard by Member Howe of this Tribunal. On 19 July 2019, the Tribunal handed down its Reasons in the review proceeding: Richards & Anor v Queensland Building and Construction Commission & Anor [2019] QCAT 189.
- [18]After a hearing on the papers, on 6 December 2019 the Tribunal ordered that the QBCC pay Mr and Mrs Richards’ costs of the review application, in respect of which $40,000 was fixed as the amount to be paid, which comprised something less than two-thirds of the $57,206.94 which was claimed: Richards & Anor v Queensland Building and Construction Commission & Anor (No 2) [2019] QCAT 372.
- [19]In the Reasons for awarding those costs, the learned Member concluded that Mr and Mrs Richards had always had a strong case against the QBCC, and that the QBCC had afforded greater weight to the claims made by the builder about delays commencing and completing the works than ought to have been given, and in circumstances where Mr and Mrs Richards’ contentions had clear merit.
- [20]Member Howe concluded that apart from the Mr and Mrs Richards always having a strong case, the QBCC had given little consideration to the fact that the construction contract, being a standard stages contract , only allowed the builder to claim progress claims after completion of each agreed stage, and that the invoices from the builder were clearly outside the stage claims permitted under the contract.
- [21]Member Howe also concluded that the QBCC had not afforded Mr and Mrs Richards natural justice at an early stage and when had made its first decision. The Member concluded that the aged Applicants had been put to considerable expense in having their claim to insurance cover accepted and they were entitled to be paid under the policy. Member Howe concluded that it was a compelling case such that the facts overcame the usual rule that each party should bear their own costs in QCAT.
- [22]As the Reasons in the costs decision note, Bax Investments as the Second Respondent to the review proceeding, was only joined to that review proceeding late by the QBCC, and Mr and Mrs Richards did not seek costs against it. Precisely why it was joined, and what particular interest it had in the outcome of that proceeding is not identified in any specific finding in those Reasons. It may be inferred that the QBCC saw some interest in Bax Investments being bound by the outcome in the review proceeding.
- [23]As I have mentioned already, in the present proceeding, Bax Investments makes a claim for the recovery of $34,668.42 which it says is owed to it for building work under the original contract of April 2016, and additional work performed outside of the contract.
- [24]Mr and Mrs Richards contend that the outcome of the findings in the review application is that Bax Investments is estopped from recovery of $34,668.42 which it says is owed to it for building work under the original contract.
The test for when issue estoppel will arise
- [25]The submissions filed on behalf of both parties accept that the relevant test is that articulated in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853 at 935, cited by the High Court in Kuligowski v Metrobus (2004) 220 CLR 363 at 373, paragraph 21 to the effect that an issue estoppel will only arise where:
- (a)The same questions have been decided in the earlier decision between the parties;
- (b)The judicial decision that is said to create the estoppel was final; and
- (c)The parties to the judicial decision were the same parties to the proceeding in which the estoppel is raised.
- (a)
- [26]The debate before me is whether the same questions have been decided in the earlier decision between the parties as arise in the present proceeding and whether the judicial decision which was made in the review application was final in relation to those issues.
- [27]Both parties also refer to the comments by Dixon J in Blair v Curran (1939) 62 CLR 464 at 531-532 where His Honour said:
A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared… Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded.
- [28]Reference is also made to comments made by Barwick CJ in Ramsay v Pigram [1968] 118 CLR 271 at 276:
Longstanding authorities, in my opinion, warrant the statement that, as a mechanism in the process of accumulating material for the determination of issues in a proceeding between parties, an estoppel is available to prevent the assertion in those proceedings of a matter of fact or of law in a sense contrary to that in which that precise matter has already been necessarily and directly decided… The issue thus determined, as distinct from the cause of action in relation to which it arose, must have been identical in each case.
- [29]In deciding whether Mr and Mrs Richards were entitled to the benefit of the statutory insurance scheme as against QBCC, Bax Investments was not a necessary party and no relief was sought or given against it.
- [30]Member Howe made a number of findings, and made reference to a number of aspects of the evidence. Some of the evidence recited included the fact that Bax Investments had made various claims in invoices at various stages and some of these may not necessarily have been specifically available pursuant to the terms of the contract and had not been the subject of any agreed variations.
- [31]A careful reading of the Reasons of the Tribunal makes clear that the essential contest concerned the QBCC’s contention that the owners had not properly terminated the contract as required under the policy of insurance, but that instead Mr and Mrs Richards were themselves in substantial breach under the contract when they issued a notice to remedy breach and were therefore not entitled to terminate. If they were not entitled to terminate, they were not entitled to claim under the policy. The analysis that followed necessarily focused upon those precise, carefully articulated issues.
- [32]In the Reasons at [28], after analysis of the evidence, the learned Member concluded that Bax Investments had failed to proceed with due diligence as at the date of service of the notice to remedy breach by Mr and Mrs Richards. The Member concluded that the notice to remedy breach accurately identified the breach to which it referred, and was “valid”. The Member concluded that Bax Investments had failed to remedy the breach within time, and that therefore the owners were entitled to terminate the contract pursuant to its terms and which they did by written notice of 16 May 2017.
- [33]In further analysis of the evidence, under the heading “Termination under the general law” the learned Member also concluded that the owners were entitled to terminate the contract under the general law. In this context the learned Member identified that the contract provided that Bax Investments was entitled to be paid the contract price progressively under alternative methods set out in the contract. The contract was a Master Builders Residential Renovation Contract - Level 2 comprising amongst other things a schedule, appendices to the schedule and general conditions.
- [34]Member Howe made the following findings:
[31] By clause 11.6 of the general conditions Bax was entitled to be paid the contract price progressively depending:
- (a)If method A or method B is stated in item 21 of the schedule on completion of the stages set out in the applicable method in part D of the appendix to the contract.
[32] Method B was chosen by the parties. In the appendix method B provided:
Deposit 5% $ 7,216.38
Sub floor stage 25% $ 36,081.88
Frame stage 15% $ 21,649.13
Fixing stage 35% $ 50,514.63
Practical Completion 20% $ 28,865.48
Total 100% $144,327.50
[33] The owners paid the deposit, the money for the sub floor stage and the frame stage after those stages were completed. On 15 December 2016, Bax issued invoice 503 claiming $50,514.63 for the fixing stage.
[34] Under the contract, ‘fixing stage’ was defined as:
That stage of the works when, apart from minor defects or minor omissions, all the internal linings, architraves, cornices, skirtings, doors to rooms, baths, shower trays, wet area tiling, built-in shelves, built-in cabinets and built-in cupboards are fitted and fixed in position
[35] The owners disputed that the fixing stage had been completed. Indeed they considered it substantially incomplete. They refused to pay it. It was at that point that relations between owners and builder became strained. They paid $25,000 of the claim instead.
- [35]The Member also referenced the fact that Bax Investments made claims for variations to the contract. The Reasons recite at [40] that the owners dispute that they ever requested the variations. The Member identified that none of those variations were in writing as required by law. The Reasons then recite later events which occurred between the parties in relation to the claims by Bax Investments to be paid certain sums invoiced. No finding was made as to any alternative basis for which payment for the work and variations might have been enlivened or made.
- [36]In the Reasons at [49], the Member concluded that Bax Investments had not completed the work required to entitle it to claim the fixing stage payment when it issued an invoice for that work. The work was still not done at the time the owners terminated the contract, and at that time Bax Investments was in repudiation of a fundamental obligation under the contract.
- [37]The member found that Bax Investments was in breach of the contract by demanding payment for the fixing stage and by claiming payment for part of the practical completion stage as well.
- [38]The learned Member then identified conduct by Mr and Mrs Richards which was said to constitute breaches of their own obligations under the contract.
- [39]The ultimate finding in the Reasons at [68]-[69] is that at the date of termination there was no absence of readiness and willingness on the part of Mr and Mrs Richards to complete the contract amounting to a repudiation of their obligations under the contract and that that did not prevent them from relying on breaches by Bax Investments to terminate it. It was held that breaches by the owners were trivial matters of little consequence.
- [40]It is readily apparent from a careful reading of the Reasons in the review application that the Member was not called upon and did not decide whether the builder, Bax Investments, had any cause of action at law, howsoever identified for work alleged to have been undertaken by it but not paid for. No finding was made that it was not entitled to any further payment other than that which had been made.
- [41]It may be accepted as a general principle of law that accrued rights under a contract, (including a building contract) as at the date of its termination, are not lost simply by reason of the contract having been terminated. Repudiation of a contract, if accepted by the other party brings the contract to an end and discharges both parties from further performance. However, it is established law that its effect is to discharge the parties only from further performance of obligations under the contract and not to relieve them of those that have already arisen or accrued before breach: McDonald v Dennys Lascelles Limited (1933) 48 CLR 457.
- [42]The builder was found to be in fundamental breach of and had repudiated that agreement. The Tribunal held that it had the agreement validly terminated against it. But that does not as a matter of law, necessarily preclude the making of a claim for payment of work already performed, and no finding was made to the contrary.
- [43]Adopting the formulation that I have identified already from the decisions referenced, it is clear that the same question as is to be decided in this proceeding was not decided in the review application.
- [44]Counsel for Mr and Mrs Richards contends by a rather tenuous route, that because some of the evidentiary material before the Member in the review proceeding included Invoice 547 issued in respect of the claim for variations is made in the present proceeding that the issue about payment for variations must have been decided. It clearly was not.
- [45]Counsel for Mr and Mrs Richards also contends that if the builder was entitled to be paid for the work invoiced independently of whether it completed a stage of the works under the contract, that was “an issue which would have constituted a complete defence” in the review proceeding and therefore the issue was somehow implicitly determined. It clearly was not.
- [46]The member found as follows at [66]:
The parties were casual about variations. I determine that the parties agreed to vary the contract whereby the owners would engage third party contractors to do some of the work within the scope of the contract. That concurrence did not extend to the bathroom work. There was an obligation under the contract for the builder to ensure any agreement to vary the works was in writing, and under the Act the builder faced potential penalty for that omission, but the changes to the contract were not rendered illegal, void or unenforceable thereby.
- [47]Counsel for Mr and Mrs Richards also contends that the reference by the Member in the passage above to the requirement for variations of the contract to be in writing and the failure to meet that requirement not having made the claims for variations illegal, void or unenforceable, and that oral variations are enforceable at the date of termination, and that the Applicant was unpaid for works of that kind, that the issue of the entitlement to terminate was “the very issue for decision in the review proceeding”.
- [48]I do not accept that submission either as a matter of principle or law. It does not follow that a party to a building contract who is facing repudiatory conduct by the other party is not entitled to terminate that contract in the face of that repudiatory conduct, notwithstanding that the other party may be lawfully entitled to payment of some monies under the contract or in quantum meruit or otherwise. It was not an essential part of the determination made by the Member in the review proceeding to decide whether there were any monies, howsoever claimed, due and payable to Bax Investments at the time that Mr and Mrs Richards terminated the contract.
- [49]Counsel for Mr and Mrs Richards argues that since the Member had rejected the proposition that Mr and Mrs Richards were in substantial breach of the contract in failing to pay for variations it must have been a necessary part of the conclusions of the Member that they did not need to have paid for those variations and they were not obliged to pay for them. I do not accept that submission. That a party is not in substantial breach of a building contract in failing to pay for variations does not mean that it has been held that there was any obligation then or even now to make a payment for the work so varied.
- [50]It follows that I hold that Bax Investments is not issue estopped from maintaining the whole or part of its claim for the balance of monies owed under the contract and in respect of which it claims in the present proceeding.
- [51]The determination of this preliminary issue does not involve an analysis of the extent to which, if any, subsidiary findings made in that other proceeding bind the parties in this proceeding, save to the extent that they have the effect of estopping the applicant from maintaining the whole or any part of its claim for the balance of monies allegedly owed under the construction contract.
“Anshun” estoppel
- [52]The submissions for Mr and Mrs Richards also raise an issue which does not appear to have been answered in any submissions on behalf of Bax Investments. Reliance is placed upon so called “Anshun” estoppel. The relevant principles arise from the decision of the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 and are well known and have been often applied.
- [53]The test laid down is one of reasonableness. A party cannot raise a claim or issue in subsequent proceedings if that claim or issue is so connected with the subject matter of the first proceeding that it is unreasonable for them not to have raised it in the first proceedings (Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28, at [22]).
- [54]This is distinct from the principles of res judicata and “issue estoppel”, which apply where a party attempts to re-litigate a matter that has already been decided. Accordingly applying Anshun, a party can lose the right to litigate a matter that has never before been raised. Further, even if res judicata, issue estoppel or Anshun estoppel do not arise, the courts have cautioned that an attempt to litigate an issue or matter resolved in litigation may amount to an abuse of process (Tomlinson, at [25]).
- [55]It is to be noted that this is not a case where Bax Investments has sought to commence a proceeding after an earlier proceeding arguably has concluded. This proceeding was commenced before the review proceeding and stayed.
- [56]The contention made for Mr and Mrs Richards that there was an “opportunity to assert an entitlement to be paid for variations” is not borne out by anything identified in the Reasons of the Tribunal for deciding that the homeowners were entitled to claim under the insurance scheme.
- [57]Even if the relevant principle can be said to apply to earlier commenced proceedings undetermined, I do not agree that it was unreasonable for Bax Investments not to pursue its money claims in the review application, in circumstances where it already had proceedings on foot in this Tribunal and was only joined to the review application late and only then by the QBCC.
- [58]It follows that I hold that Bax Investments is not estopped under the principles in Port of Melbourne Authority v Anshun Pty Ltd from maintaining the whole or part of its claim for the balance of monies owed under the contract and in respect of which it claims in the present proceeding.
- [59]I order that the costs in respect of the determination of the preliminary issue be reserved.
Costs of the security for costs application
- [60]On 20 March 2020, Mr and Mrs Richards, the Respondents, filed an application in this matter against Bax Investments seeking that it pay an amount by way of security for costs in the proceeding.
- [61]In that regard, reliance was placed upon the power under s 109 of the QCAT Act to provide security for costs. The amount sought was an amount of $59,600 plus GST.
- [62]The principles which are to be applied when an application under s 109 for security is made, have been the subject of analysis and consideration in a number of persuasive authorities in this Tribunal, including Greg Black Constructions Pty Ltd v Brodie [2011] QCAT 671 at [6], Mobile Building System International Pty Ltd v Hua [2014] QCATA 94 at [9], Ultimate Property One Management Pty Ltd v Body Corporate for the Pivotal Point Residential CTS 33550 [2017] QCAT 424 at [32] and Interlink Developments Pty Ltd v Kruger [2019] QCAT 219 at [19].
- [63]Directions orders which were in place at the time the application for security for costs was filed required any such application to be filed at or about the date when it was so filed. Conceptually, were Mr and Mrs Richards or their legal advisers not satisfied with the state of their enquiries concerning the capacity of Bax Investments to meet any costs order that the Tribunal might make against it in the proceeding or on the basis they were unsure of what was the true state of affairs concerning any of the relevant discretionary considerations set out in s 109(4) of the QCAT Act, they might have applied for an extension of time in which to file the application but they did not.
- [64]As is evident from the affidavit of John Broadley, the solicitor for Mr and Mrs Richards sworn and filed 20 March 2020 in support of that application, at the time by which that application was required to be filed and affidavit material in support provided, and despite there being a body of correspondence requesting information to show that Bax Investments had the capacity to meet an adverse costs order against it, Mr and Mrs Richards and their legal advisers were not satisfied with the financial information that they had been provided by Bax Investments.
- [65]The material shows that for more than four weeks before the application for security was filed on behalf of Mr and Mrs Richards, their solicitors had been requesting comprehensive financial information of both a historical, and contemporaneous nature concerning the financial affairs of Bax Investments. The evident purpose of those requests was to identify its capacity at that time and in the future to meet any adverse costs order. Correspondence passed between the parties on this issue on 18 February 2020, 26 February 2020, 9 March 2020, 10 March 2020, 12 March 2020 and 18 March 2020.
- [66]It is common ground that only after the application and supporting material were filed, did Bax Investments actually produce any contemporaneous financial information which would accurately indicate its present capacity to meet any adverse costs order and also as to the precise nature of its assets and liabilities.
- [67]There can be no doubt that Bax Investments had certainly provided historical evidence of its financial position, but without the more detailed and current information that was eventually set out in an affidavit filed on behalf of Bax Investments in resistance to the application by Leanne Ebbstein on 3 April 2020, it was not clearly evident. In that regard the affidavit of Leanne Ebbstein showed there was valuable equity held in a body of real estate parcels, cash held at a bank, receivable trade creditors, and the willingness of lenders who had lent to the company , but who were associated family members, not to call upon the related party loans for a period of 12 months from the date when that affidavit was sworn.
- [68]In short, the position is that despite pressing requests for detailed financial information which was not immediately forthcoming, and certainly not forthcoming in an up to date character or in its entirety, Bax Investments put the Richardses in a position where they reasonably felt it necessary to bring an application for security for costs.
- [69]Counsel for Bax Investments submits that the abandonment of the application by Mr and Mrs Richards after they were provided with the Ebbstein affidavit material which gave a better picture of the financial position of Bax Investments ought lead to Bax Investments recovering the costs of the security for costs application because:
- (a)Mr and Mrs Richards brought their application knowing they did not have the evidence they wanted as to the Applicant’s current financial position;
- (b)Mr and Mrs Richards knew that they risked that the company’s financial position may have changed between the end of the 2019 financial year and the bringing of the application; and
- (c)Mr and Mrs Richards brought the application knowing that they had to discharge the onus of proving that the proceeding is an appropriate one for an order for security and they brought it in circumstances in which it was not for Bax Investments to prove that it was not impecunious.
- (a)
- [70]At the heart of the submissions for Bax Investments is the proposition to be found in paragraph 17 of Counsel’s outline, that Mr and Mrs Richards’ submissions “are based on a misapprehension that the Applicant was under a positive obligation to volunteer to the Respondents extensive financial information” and in respect of which there is and was “no such obligation”.
- [71]It is correct to say that there is nothing, per se, in s 109 of the QCAT Act that requires the provision of that information. However, there is an overriding obligation on all parties in this Tribunal to facilitate the just and expeditious resolution of the real issues in any proceeding, and the parties are required to proceed in a way which is expeditious. If a party threatened with an application for security for costs decided to provide information which is incomplete, and by implication raises concerns on the part of the other parties as to their bona fides in relation to the information that has been provided, or legitimately raises concerns that that other party may not be able to meet a costs order in the present, or in the foreseeable future, then the risk that necessarily presents is that that other party will bring an application in a timely way in accordance with the directions of the Tribunal and not postpone it until the provision of more up to date or more accurate information.
- [72]A party who is invited repeatedly to provide up to date and complete information about its financial circumstances but does not do so, cannot be later heard to complain that costs were unnecessarily incurred in bringing an application where it is by their own conduct that it has become necessary to bring it at the relevant time. The application was abandoned once the true position was set out in the affidavit of Ms Ebbstein.
- [73]Whilst it may also be said that there was certainly material which had been provided to the solicitors for Mr and Mrs Richards which cast doubt upon whether there was any real merit to the application, it was not unreasonable to bring the application at the time and its subsequent abandonment was appropriate.
- [74]In the circumstances, in the exercise of my discretion I consider that the appropriate order is that there be no order in relation to the costs of the application for security, and therefore that each party will meet their own costs in that regard.
- [75]In respect of the preliminary application, it is declared that the Applicant is not estopped from maintaining the whole or any part of its claim for the balance of monies owed under a construction contract made between the Applicant and the Respondents by reason of the decision of this Tribunal dated 19 July 2019.
- [76]The costs of the preliminary application are reserved.
- [77]I decline to make any order in relation to the costs of any of the parties in respect of the respondents’ application for security for costs, and therefore each party will meet their own costs in that regard.