Kruse v Sunland Homes Pty Ltd
[2023] QCAT 331
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- Unreported Judgment
- Kruse v Sunland Homes Pty Ltd[2023] QCAT 331
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Kruse v Sunland Homes Pty Ltd[2023] QCAT 331
Kruse v Sunland Homes Pty Ltd[2023] QCAT 331
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Kruse v Sunland Homes Pty Ltd [2023] QCAT 331 |
PARTIES: | SANDY D KRUSE (applicant) v SUNLAND HOMES PTY LTD (respondent) |
APPLICATION NO/S: | BDL213-22 |
MATTER TYPE: | Building matters |
DELIVERED ON: | 25 August 2023 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Senior Member Brown |
ORDERS: | The application for miscellaneous matters filed 15 December 2022 is refused. |
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where the respondent brought an application to dismiss the proceeding under s 47 of the QCAT Act – where the respondent argues the applicant has no cause of action in negligence against the respondent because the applicant is not vulnerable – whether the applicant is vulnerable – where the applicant purchased the townhouse sometime after it had been constructed by the respondent – where there is water ingress from the window installed by the respondent – whether a pre-purchase inspection report would have identified the alleged defective building work PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where the respondent brought an application to dismiss the proceeding under s 47 of the QCAT Act – where the respondent argues the applicant failed to comply with section 77(2) of the QBCC Act – whether the applicant had complied with section 77(2) of the QBCC Act before commencing the proceeding – where the respondent is a subsidiary of the party named in the original QBCC complaint – whether the steps taken by the parties were sufficient to satisfy the QBCC that participation in the dispute resolution process had been achieved Queensland Building and Construction Commission Act 1991 (Qld), s 77(2) Queensland Civil and Administrative Act 2011 (Qld), s 47 Brookfield Multiplex Ltd v Owners Corp Strata Plan 61288 (2014) 254 CLR 185 Bryan v Maloney (1995) 182 CLR 609 Chan v Acres [2015] NSWSC 1885 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 Simons & Ors v Dowd Lawyers Pty Ltd [2020] QCAT 348 |
APPEARANCES & REPRESENTATION: | 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]The applicant, Ms Kruse, lives in a townhouse built by the respondent, Sunland Homes Pty Ltd. The applicant says that the building work undertaken by the respondent is defective. Specifically, the applicant says that a window was not properly installed, the consequence being that the window permits water penetration into the dwelling.
- [2]The respondent has applied to dismiss the proceeding. The application for dismissal falls to be determined.
The power of the Tribunal to dismiss a proceeding
- [3]By s 47 of the Queensland Civil and Administrative Act 2011 (Qld) (‘QCAT Act'), the Tribunal may dismiss a proceeding, or part of a proceeding, if the Tribunal is satisfied that the proceeding or part thereof is frivolous, vexatious or misconceived; lacking in substance; or otherwise an abuse of process.
- [4]As the Tribunal has observed on numerous occasions, the power to dismiss a proceeding found in s 47 is akin to a summary judgement power. Judicial Member, the Hon Peter Lyons QC, explained the operation of s 47 in Simons & Ors v Dowd Lawyers Pty Ltd :[1]
[33] The focus of s 47 of the QCAT Act is (at least for the most part) the case put forward by a party to a proceeding, whereas the focus of s 48 is the conduct of a party to a proceeding. The respondent particularly relied upon the provisions of s 47, which require the Tribunal to consider whether the applicants’ application is frivolous, vexatious, or misconceived; or lacking in substance. The respondent, in essence, contended that the applicants’ case had too low a prospect of success to warrant its continuance.
[34] Section 47 is found in Division 1 of Chapter 2, Part 5 of the QCAT Act. That division is headed “Early End to Proceeding”. Its purpose seems to me to be broadly similar to rr 292 and 293 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”), found in Chapter 9, which is entitled “Ending Proceedings Early”. With respect to those rules, in Deputy Commissioner of Taxation v Salcedo McMurdo P said:
Nothing in the UCPR ... detracts from the well established principle that issues raised in proceedings will be determined summarily only in the clearest of cases.
[35] In that context, her Honour quoted the following passage from the judgment of Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde:
Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.
[36] The language used in s 47 is not identical to the language used in the UCPR. However, the expressions “frivolous, vexatious or misconceived” suggest a high threshold must be crossed before the Tribunal can exercise its powers under this section. No doubt the expression “lacking in substance” is not to be confined in its operation to cases which are frivolous, vexatious or misconceived. However, it is to be read with the expression “otherwise an abuse of process” found in s 47(1)(c). In my view, the language of s 47 of the QCAT Act indicates that a party who invokes it on the basis that the opponent’s case is weak, faces at least as high a hurdle as a party applying for summary judgment under rr 292 and 293 of the UCPR; and that the principles in the passages quoted above are accordingly relevant. (footnotes omitted)
- [5]I respectfully adopt the approach of Judicial Member Lyons. I would add the additional observation. It is not appropriate to summarily dismiss a proceeding in circumstances where there is dispute as to the true facts of the case particularly in circumstances where the relevant factual findings will be central to the determination of the dispute between the parties.
What do the parties say?
- [6]The respondent relies upon two grounds in support of the application to dismiss the proceeding:
- The applicant has no cause of action against the respondent; and
- The applicant failed to comply with the requirements of s 77(2) of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’) before commencing the proceeding.
- [7]Before further considering the parties’ submissions, it is appropriate to say something about the background to the dispute.
- [8]The applicant purchased the townhouse some time after it had been constructed by the respondent. The townhouse, one of twelve in a development on the Gold Coast, was built in 2013-2014. The applicant purchased the townhouse in 2021. In February 2022 the applicant became aware that the window, the subject of the dispute, was leaking. The applicant notified Sunland Maintenance of the issue. The applicant says Sunland Maintenance is a subsidiary of, and part of, the larger Sunland group of companies. This is not disputed by the respondent. A test of the window conducted by Sunland Maintenance in March 2022 confirmed water penetration. Sunland Maintenance advised the applicant that it would not take any further action to address the issue. The applicant complained to the QBCC. A building inspection arranged by the QBCC revealed that the subject window had not been properly installed by the respondent.
Does the applicant have an arguable case?
- [9]The respondent says that it did not owe to the applicant a duty of care. The respondent says that the applicant is unable to establish that she was ‘vulnerable’, the cornerstone of any claim in negligence against the respondent. The respondent says that the applicant was made aware of a previous leak at the property prior to purchasing the townhouse and that the alleged leak would have been reasonably identifiable on a building inspection report. It follows, says the respondent, that the applicant is not ‘vulnerable’ as the defect in the window would have been discoverable on inspection before purchasing the townhouse.
- [10]The applicant says that after signing the contract of sale and prior to the settlement of the purchase of the townhouse she received a text message from an employee of Sunland Maintenance stating that the property had ‘not had many defect reports. There was a roof leak and Bedroom 1 leak reported in 2018. Sunland installed some extra flashings and there has been no further reports of water ingress since’.[2] It was not until February 2022, says the applicant, that she became aware of the issues relating to the subject window.
- [11]The respondent relies upon the decisions of the High Court in Bryan v Maloney, Woolcock Street Investments Pty Ltd v CDG Pty Ltd, and Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 in support of its submission that the absence of vulnerability on the part of the applicant means that respondent does not owe to the applicant a duty of care as a subsequent purchaser of the property.
- [12]In Bryan v Maloney the High Court stated, referring to the duty of care owed by a builder of a domestic dwelling to a subsequent purchaser of the property:
It is obviously foreseeable by such a builder that the negligent construction of the house with inadequate footings is likely to cause economic loss, of the kind sustained by Mrs Maloney, to the owner of the house at the time when the inadequacy of the footings becomes manifest. When such economic loss is eventually sustained and there is no intervening negligence or other causative event, the causal proximity between the loss and the builder's lack of reasonable care is unextinguished by either lapse of time or change of ownership.[3]
- [13]Subsequently, in Woolcock Street Investments Pty Ltd v CDG Pty Ltd[4] and Brookfield Multiplex Ltd v Owners Corp Strata Plan 61288[5] the High Court determined that proximity is not the test in determining the liability of a building contractor to a building owner. The guiding consideration is ‘vulnerability’ and whether a building owner is capable of protecting themselves from the consequences of a building contractor’s lack of reasonable care. Gageler J stated in Brookfield Multiplex:
[t]he continuing authority of Bryan ... should be confined to a category of case in which the building is a dwelling house and in which the subsequent owner can be shown by evidence to fall within a class of persons incapable of protecting themselves from the consequences of the builder’s want of reasonable care. Outside that category of case, it should now be acknowledged that a builder has no duty in tort to exercise reasonable care, in the execution of building work, to avoid a subsequent owner incurring the cost of repairing latent defects in the building.[6] (underlining added)
- [14]Crennan, Bell and Keane JJ explained the distinctions between the situation in Brookfield Multiplex and that in Bryan v Maloney in the following terms:
The material distinctions between the present case and Bryan v Maloney lie, first, in the detailed prescriptions of the D&C contract between the appellant and the developer, in contrast to the simple obligation in Bryan v Maloney between the builder and the original owner to exercise reasonable skill and diligence in the construction of the dwelling; and, secondly, in the express promises in cll 32.6 and 32.7 of the sales contracts, in contrast to the situation in Bryan v Maloney, where there was no promise as to quality given to Mrs Maloney when she acquired the dwelling.[7]
- [15]
At the risk of over-simplifying what is a complex question, the authorities make it clear that the question, whether a defendant owes a plaintiff a duty of care to prevent the plaintiffs’ suffering economic loss, depends in the first instance on whether the plaintiff is relevantly “vulnerable” to the defendant’s acts and omissions. In this context, “vulnerable” does not mean only that the plaintiff is susceptible to harm as a result of the defendant’s acts or omissions. There is the added requirement that the plaintiff must be unable (perhaps, “reasonably” unable) to take steps to protect itself from that risk of harm.[9]
- [16]The question of vulnerability is one of fact and requires an examination of, among other things, the nature of the events giving rise to the building work.[10] The respondent asserts that the applicant was not vulnerable on the basis that the issue with the window was known to the applicant before she purchased the property and that she had the opportunity to protect herself from loss occasioned by defective building work by having a pre-purchase building inspection undertaken.
- [17]The respondent says that a leak or water damage at the property would have been reasonably identifiable at the time of purchase by obtaining a building and pest report.[11] The result, says the respondent, is that the applicant could have taken steps to protect herself by, inter alia, negotiating the contract price with the vendor commensurable with the cost to repair or rectify the leaking window.[12]
- [18]There are a number of observations to be made regarding the case as presently articulated by the parties. Firstly, there is no evidence before the Tribunal about the circumstances in which the townhouse was constructed and specifically who the parties were to the original building contract and the details of the contract. Secondly, the contract entered into by the applicant for the purchase of the townhouse is not before the Tribunal. It is therefore not possible, at least at this point in time, to form any view as to whether and to what extent the ‘material distinctions’ as referred to in Brookfield Multiplex are present relating to both the original building contract and the contract of sale entered into by the applicant. Nor is it clear whether, prior to purchasing the property, the applicant arranged for a pre-purchase building inspection report. As I have observed previously,[13] pre-purchase building inspections are, typically, of limited benefit to purchasers. Generally, the inspection is non-invasive and, unless a concealed defect manifests in a way apparent on visual inspection, the defect will usually remain concealed. The applicant says that she was aware of a water ingress issue; however, before finalising the purchase of the property, she was informed by a representative of the respondent that after a roof leak and a leak in the window of bedroom 1 were reported in 2018, which were remedied by the installation of additional flashing by the respondent, there had been no further reports of water ingress.
- [19]There is a factual dispute as to whether a pre-purchase building inspection would have identified the alleged defective building work. There is also a factual dispute as to what the applicant was told about the townhouse before completing the purchase and whether the applicant was entitled to rely upon the information she received from the respondent’s employee regarding water ingress to the property and the steps taken by the respondent to remediate this issue. There is an obvious factual dispute about whether and to what extent at the time of purchasing the townhouse, the applicant was able to take steps to protect herself from the building issues that eventuated. These matters are part of the factual matrix relevant to the determination of the issue of whether the applicant was ‘vulnerable’ within the scope of the application of Bryan v Maloney as explained by the High Court in Woolcock and Brookfield Multiplex.
- [20]Given the nature and extent of the factual disputes between the parties to which I have referred, it could not be said that this is a clear case in which there is no triable issue.
- [21]It follows that the summary determination of the applicant’s claim is not appropriate.
Section 77(2) Queensland Building and Construction Commission Act
- [22]As the Tribunal has held on numerous occasions, s 77(2) of the QBCC Act is a substantive and not a procedural provision.
- [23]Before commencing a proceeding for a building dispute in the Tribunal, a person must comply with a process established by the QBCC to attempt to resolve the dispute. Of course, if there is no such process established by the QBCC in respect of a particular dispute, the provision is not engaged.
- [24]It is not in dispute that the applicant complained to the QBCC about the leaking window before commencing the proceeding. The complaint identified ‘Sunland Group Qld’ as the responsible party. The applicant wrote a letter to the QBCC presumably accompanying the complaint in which she refers to ‘Sunland’ as the building contractor.[14] The QBCC decided that it would not direct ‘Sunland Group Limited’ to rectify the complaint items on the basis that the named company did not carry out the building work. The applicant sought internal review of the decision. When seeking the internal review, the applicant identified ‘Sunland Homes Pty Ltd’ as the builder. Sunland Group confirmed that Sunland Homes Pty Ltd was the builder. It seems that all relevant parties were aware of the true state of affairs as to the identity of the builder well before the QBCC issued the letter to the applicant on 31 May 2022 stating that the applicant had ‘participated in the QBCC’s dispute resolution as prescribed by legislation and your case has now been finalised’.
- [25]I infer from the foregoing, and the various documents on the Tribunal record including the parties’ submissions filed in respect of the present application, the following:
- The applicant did not know the identity of the builder of the dwelling when she lodged her original complaint with the QBCC;
- When she lodged her complaint with the QBCC the applicant identified Sunland Group Qld or simply ‘Sunland’ as the builder;
- Subsequent to the applicant lodging her complaint with the QBCC, Sunland Group confirmed that ‘Sunland Homes Pty Ltd’ was the builder; and
- Sunland Homes Pty Ltd is a subsidiary of, and controlled by, Sunland Group.[15]
- [26]I consider it somewhat disingenuous for the respondent to now assert that the applicant failed to identify the correct entity as the builder when she made her complaint to the QBCC with the result that she has not complied with the requirements of s 77(2) of the QBCC Act. I am satisfied that the applicant sought to ascertain the correct identity of the builder before lodging her complaint with the QBCC. The respondent is a subsidiary of, and controlled by, Sunland Group. Sunland Group apparently had full knowledge of the applicant’s complaint and identified the respondent as the builder, as did the QBCC. Before the complaint process was finalised, the correct identity of the builder had been ascertained. Sunland Group had full knowledge of the dispute. The QBCC was satisfied that the dispute resolution process had been complied with. It is to be assumed that the QBCC was satisfied that Sunland Group had also participated in the dispute resolution process given that Sunland Group wholly owns the respondent. This is not a case where a similarly named but different and unrelated building contractor has been named by a building owner in a complaint to the QBCC. The complaint process inextricably linked the interrelated entities being Sunland Group and the respondent.
- [27]I am satisfied that the QBCC in issuing the letter to the applicant stating that it was satisfied that the applicant had participated in the dispute resolution process, did so with the full understanding of the correct identity of the builder. It should be observed that the letter from the QBCC to the applicant referred to the decision not to issue a direction to rectify to Sunland Group. This is of course a different matter to the participation by the parties in a dispute resolution process for the purposes of s 77(2). I am satisfied that in referring to participation by the applicant in the dispute resolution process, the QBCC was satisfied that the correct builder had ultimately been named and that, notwithstanding the original complaint did not name the respondent, the subsequent steps taken by the parties were sufficient to satisfy the QBCC that participation in the dispute resolution process, as it related to the dispute between the applicant and the respondent, had been achieved.
- [28]I would also note that the respondent has placed before the Tribunal no evidence in the form of a letter or otherwise from the QBCC in support of its contention.
Conclusion
- [29]The application for miscellaneous matters is refused.
Footnotes
[1] [2020] QCAT 348.
[2] Applicant’s submissions at [8].
[3] (1995) 182 CLR 609.
[4] (2004) 216 CLR 515.
[5] (2014) 254 CLR 185.
[6] Ibid at para [185].
[7] Ibid at para [136].
[8] [2015] NSWSC 1885.
[9] Ibid at [150].
[10] The Owners – Strata Plan No 51077 v Meriton Apartments Pty Ltd [2014] NSWSC 1761.
[11] Response at 29(b).
[12] Ibid at 29(e), 30 and 31.
[13] Smith & Anor v Peter Bell Homes Pty Ltd [2022] QCAT (unreported).
[14] Applicant’s letter to QBCC, 7 May 2022.
[15] Sunland Group Limited Annual Report 2022 at page 42.