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Flanagan v Kennedy QCATA 144
Flanagan v Kennedy  QCATA 144
On the papers
Senior Member Stilgoe OAM
5 October 2016
APPEAL – LEAVE TO APPEAL – PROCEDURE – CIVIL PROCEEDING IN STATE AND TERRITORY COURTS – JOINDER AND CAUSES OF ACTION AND OF PARTIES – PARTIES – where claim against company under consumer law – where company had no assets – where applicants applied to join direction director of company – where tribunal joined director – whether tribunal had grounds to join director – whether tribunal correctly exercised its discretion to join direction director – whether grounds for leave to appeal
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 42
Dearman v Dearman (1908) 7 CLR 549
House v The King (1936) 55 CLR 499
Lovell v Lovell (1950) 81 CLR 513
Comfortable Homes Pty Ltd v QBSA  QBT 61
Coral Homes (Qld) Pty Ltd v Queensland Building Services Authority (No 2)  QCATA 242
APPEARANCES and REPRESENTATION (if any):
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
- William and Isabella Kennedy imported a 42ft Aspire through Australis Motor Yachts Pty Ltd. Brett Flanagan is the sole director and shareholder of that company.
- Mr and Ms Kennedy were not happy with the condition of the yacht when it arrived. They filed a claim against Australis for the cost of rectifying certain defects. When they found out that Australis had no assets, they applied to join Mr Flanagan as a party. The tribunal ordered that Mr Flanagan be joined as a party.
- Mr Flanagan wants to appeal that decision. Because this is an appeal from a decision of the tribunal in its minor civil disputes jurisdiction, leave is necessary. Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.
- Mr Flanagan says the tribunal erred in law in deciding to join him as a party. He says there is no basis on which he can be personally liable to Mr and Ms Williams Kennedy. He says the tribunal did not apply s 42 of the QCAT Act correctly.
- Section 42 of the QCAT Act allows the tribunal to add a party to a proceeding if it considers that:
- The person should be bound by, or have the benefit of a decision of the tribunal;
- The person’s interests may be affected by the proceeding; or
- For another reason, it is desirable that the party be joined as a party.
- The tribunal’s decision to join a party is discretionary but it cannot exercise that discretion unless it is satisfied that one of the criteria set out in s 42 applies.
- I am not satisfied that Mr and Ms Williams Kennedy established that Mr Flanagan should be bound by a decision against Australis, or that his interests may be affected. It is, however, arguable that it may be desirable to join him as a party, as that is a threshold that is ‘easily crossed’. Therefore, the tribunal was required to exercise its discretion to decide whether he should be joined as a party.
- Where the appeal relates to the exercise of a discretion, the appeal tribunal will not interfere unless it can be shown that the tribunal acted upon a wrong principle, or made mistakes of fact which affected the decision, or was influenced by irrelevant matters. Just because the appeal tribunal might have exercised the discretion differently is not a basis for changing the decision: it must be shown that the decision is plainly unjust or unreasonable, and involved a clear misapplication of the discretion.
- Mr and Ms Williams Kennedy reasons for joining Mr Flanagan were brief. Their application cited ‘based on the opinion of legal counsel’. Their brief submissions cited the fact that Australis had only $3,000 in the bank and Mr Flanagan was residing in temporary premises. In effect, they want to join Mr Flanagan because they think Mr Flanagan has the capacity to pay damages, whereas the company does not.
- The financial situation of the company is not, in itself, a reason to add a director of the company as a party to the proceeding. In their application to join Mr Flanagan, Mr and Ms Williams Kennedy did not otherwise state the basis of their claim against him personally.
- In their submissions on appeal, Mr and Ms Williams Kennedy say that Mr Flanagan has altered material facts to secure a sale, misled them about the condition of the vessel, and promised to rectify the defective work but failed to do so. None of these matters was raised before the tribunal in a way which would enable it to accept that Mr and Ms Williams Kennedy might have a claim against Mr Flanagan personally; they did not provide particulars of the claim and the tribunal had no evidence to support this claim. Further, at least some of the relief sought against Mr Flanagan is not within the jurisdiction of the tribunal.
- It is not desirable to join a party to a proceeding if the applicant has not articulated a proper claim against the party, there is no discernible claim against that party, and the joinder seems to be a purely economic decision. The tribunal’s exercise of discretion in this case was clearly misapplied. Leave to appeal should be granted, the appeal allowed and the decision of 29 April 2014 is set aside.
 Amended by order of the Tribunal 24 October 2016
 QCAT Act, s 142(3)(a)(i).
 Pickering v McArthur  QCA 294 at .
 Comfortable Homes Pty Ltd v QBSA  QBT 61.
 Coral Homes (Qld) Pty Ltd v Queensland Building Services Authority (No 2)  QCATA 242 at .
 House v The King (1936) 55 CLR 499, at 504.
Lovell v Lovell (1950) 81 CLR 513.
- Published Case Name:
Flanagan v Kennedy
- Shortened Case Name:
Flanagan v Kennedy
 QCATA 144
Senior Member Stilgoe OAM
24 Oct 2016