Habul v Limbada[2023] QCAT 209

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   This building dispute has a convoluted history riddled with uncertainty. There seems little doubt that Mr Habul and Mr Limbada had discussions about, and generally agreed to, Mr Habul constructing 5 detached cabins at the Yandina Caravan Park. The plans to the cabins are attached to Mr Habul’s affidavit filed on 18 December 2020. The total cost for building the five cabins was $283,500. Mr Habul contends that the contract was “a tender document dated 21 April 2019 which sets out the basis of the work”.^[1] He also asserts that there were further terms that the work would commence immediately, the construction period was 6 months and a payment of 5% deposit. Although the plans are in the tender documents there are no documents evidencing the further terms alleged. In fact, there are no other contractual documents identifying the parties to or the terms of the contract. It would however seem that all negotiations were between Mr Habul and Mr Limbada.
2. [2]
   Considerable work was carried out by Mr Habul. When it came to the issuing of invoices, he was told by Mr Limbada to issue the invoice to Yandina Caravan Park. There was no mention of a corporate entity. The invoices attached to his affidavit were in fact issued to Yandina Caravan Park.
3. [3]
   However, when, on Mr Habul’s case, the job was finished there were monies outstanding for the construction works, so he filed a claim in the Tribunal on 19 March 2020 claiming $241,149.34 being the outstanding balance of the claim which included variations.
4. [4]
   Mr Limbada, in a brief affidavit in response filed on 20 September 2021, denies he personally entered into a contract with Mr Habul. He does not contest that there was a contract to construct the cabins, it was just not with him. However, he also does not positively assert in the affidavit that he disclosed to Mr Habul that he was acting on behalf of a company at the time an agreement was reached for Mr Habul to construct the cabins. He simply asserts in paragraph 7 that he is not the owner of the Yandina Caravan Park, but one of the directors of the company that owns the caravan park acting as trustee. He does not name the company or the trust for which the company is trustee. If this is found to be the case then Mr Limbada would be acting as agent for an undisclosed principal, which has liability ramifications. I need not discuss that further because ultimately the application must be dismissed.
5. [5]
   It did eventually emerge during the course of the proceedings that the legal identity behind Yandina Caravan Park is Endeavour Investments (Qld) Pty Ltd (“Endeavour”) as trustee for the Endeavour Unit Trust. Mr Limbada and Mr Khaleel Patel are directors of the company. This information only emerged after the contract was entered into and after the construction of the cabins and invoices rendered. Given that Mr Limbada, in his initial filed material, was somewhat coy about the identity of the contracting party, and in the absence of any evidence, documentary or verbal, that he disclosed to Mr Habul that the work was to be carried out for Endeavour, there is a strong inference the contract was between Mr Habul and Mr Limbada.
6. [6]
   Despite the dispute about the identity of the contracting parties, Mr Limbada or Yandina Caravan Park and the legal identity behind that business name, contend that the work was incomplete and defective and counterclaimed against Mr Habul for the cost of rectification.
7. [7]
   Another side issue is Mr Habul’s application to joint Habul Building Group Pty Ltd as an applicant to the proceeding. This application must fail because it was incorporated after the date of the contract between Mr Habul and either Mr Limbada or Yandina Caravan Park. There is no evidence of an assignment of the contract so Mr Habul is certainly the contracting builder, trading under this building name of Habul Building Company.
8. [8]
   There is a further issue. The proceeding was commenced in the Tribunal as a domestic building dispute. Jurisdiction is conferred on the Tribunal to hear domestic building disputes under s 77(1) of the Queensland Building and Construction Commission Act 1991. The Tribunal also has jurisdiction to hear commercial building disputes under the QBCC Act. However, if a building dispute is more than $50,000 it is a major building dispute and under s 78 it can only be heard with the consent of the parties. The section provides:

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.

Application to strike out

9. [9]
   Mr Limbada has filed an application to summarily dismiss Mr Habul’s claims on several grounds. Firstly, he is not the proper respondent to the claim for the reasons set out above. Secondly, the claim is not a domestic building dispute because it involves multiple detached dwellings on a commercial caravan site. Thirdly, on an argument that if in fact Habul Building Group Pty Ltd was the builder, there could be no enforceable contract because the company did not exist at the time of the agreement. I have already addressed this issue. Fourthly, if the Habul Building Group Pty Ltd was joined as an applicant the application would fail because the Company did not engage in a dispute resolution process as required by s 77(2) of the QBCC Act. Once again, the latter argument is otiose because the Company could not be the contracting party
10. [10]
    In response to the application, Mr Habul, through his solicitors’ submissions, concedes that that this is a commercial building dispute.^[2] There is no evidence that the consent of the respondent, or whoever the proper respondent is, was ever obtained before commencing the proceeding. Mr Habul submitted that he would seek the consent of Mr Limbada. However, Mr Limbada submits no consent was ever sought from him or Endeavour, instead the application to strike out was made on the grounds that there was no consent.
11. [11]
    This then leads to one conclusion. As the application is in respect of a commercial building dispute, and as no consent was sought from Mr Limbada or Endeavour either before or after the proceeding commenced, the Tribunal cannot be satisfied the parties consented to it deciding the dispute. Furthermore, given that Mr Limbada has applied to strike out on those very grounds, Mr Habul’s application must be dismissed. This does not mean to say that Mr Habul does not have a valid and enforceable claim against Mr Limbada or indeed Endeavour, it just cannot be prosecuted in the Tribunal. Clearly, he has undertaken building work to the advantage of Mr Limbada or Endeavour, and they have the benefit of that without payment to Mr Habul, less any proven cost of rectification.

Costs

12. [12]
    Mr Limbada applies for costs. The Tribunal can make an order for costs under s 77(3)(h) of the QBCC Act. The awarding of costs is discretionary, and unlike the Uniform Civil Procedure Rules, they do not necessarily follow the event.
13. [13]
    If a costs order is to be made, s 107(1) of the QCAT Act requires the Tribunal to fix the costs if possible. The total costs claimed are essentially indemnity costs in the sum of $21,341.65 including GST.
14. [14]
    Mr Limbada relies on a Calderbank offer of settlement made in correspondence by his solicitors of 18 November 2021. Failure to accept an offer made under the Calderbank principles can expose a party to an indemnity costs order. The offer here is based on the contentions referred to in paragraph 9 above. Although it is asserted that the dispute is not a “domestic building dispute”, Mr Limbada does not contend it is a commercial building dispute to which s 78 of the QBCC Act applies. It was only when Mr Habul conceded that the dispute was a commercial building dispute in December 2021 that it became obvious that the Tribunal lacked jurisdiction unless the parties consented to the matter proceeding. Before that, the main issue in dispute, as is apparent from Mr Limbada’s response to the application is that he was not a contracting party. That issue remains to be determined in another forum if Mr Habul pursues his claim.
15. [15]
    I am of the view that in the circumstances, Mr Limbada is entitled to some costs. Given the way the application was conducted and the obtuse defence as to the identity of the respondent party in circumstances where there was clearly a contract with either Mr Limbada or Endeavour, which induced Mr Habul to proceed with the construction of the cabins, this is not a case where indemnity costs should be ordered. In any event the QCAT Act makes no distinction between indemnity costs and standard costs. The only reference to the type of costs order that could be made is in Rule 86 of the QCAT Rules which refers to “reasonable costs” when considering formal offers to settle.
16. [16]
    Reasonable costs are akin to standard costs. As Mr Limbada has not provided an assessment of standard costs, I propose to take a broad-brush approach^[3] and allow $15,000 inclusive of GST which is about 70% of the costs claimed.
17. [17]
    The orders of the Tribunal are that:

1. The application filed on 19 March 2020 is dismissed.
2. The Applicant pay the Respondent’s cost fixed in the sum of $15,000.