Warren v Goldberg[2018] QCATA 83

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   Mr Goldberg filed an application for a Minor Civil Dispute – Minor Debt against Mr Warren in regard to certain invoices which he claimed were due and owing by Mr Warren. The application made it clear that Mr Goldberg had engaged Mr Warren as a sub-contractor to carry out tiling works and noted that the Queensland Building and Construction Commission had provided correspondence confirming that he had participated in the Commission’s dispute resolution process and advised that he could now apply to the Tribunal.^[1]
2. [2]
   The invoices were in the form of progress claims. The first, dated 23 April 2016, was in the amount of $17,165.00 made up of $9,000 for liquidated damages, $5,125 for accommodation, $879 for materials/misc., and $2,179 for repairs/rectification labour. The second invoice, dated 29 September 2016, in the amount of $2,929.00, was for rectification of defective waterproofing.
3. [3]
   Mr Warren was required to respond to the claim.^[2] He requested and was granted an extension of time to do so. When Mr Warren did not file his response within the further time allowed, Mr Goldberg filed an application for a decision by default which was granted in his favour.^[3] It is made clear in the decision of former Senior Member Stilgoe in Tow.com.au Pty Ltd v Moffatt & Ors that:^[4]

If an applicant has satisfied the requirements for a decision in default, there can be no reason for the principal registrar to refuse to issue a decision in default. It is not for the registry to go behind the application, or to forensically examine the basis of the claim.

4. [4]
   Therefore, a decision by default does not in itself indicate that the Tribunal has considered the merits of the application.
5. [5]
   Mr Warren made application to have the decision by default set aside. In his application he stated that Mr Goldberg was seeking liquidated damages and that there were certain requirements in construction law. In regard to why he had not filed his response he stated that he had back problems and was waiting on advice from the Master Builders Association. Mr Warren also filed an affidavit setting out the history of his business dealings with Mr Goldberg.
6. [6]
   The learned adjudicator who determined the application to set aside noted Mr Warren’s grounds and his reasons for not filing the response and determined that there was no reasonable ground to set aside and no reasonable defence.
7. [7]
   Mr Warren has filed an application for leave to appeal and appeal in regard to the decision to refuse to set aside the decision by default.^[5] As the primary application is in the Minor Civil Dispute jurisdiction of the Tribunal, leave to appeal is required.
8. [8]
   Leave to appeal will ordinarily only be granted where: there is some question of general importance upon which further argument and a decision of the Appeal Tribunal would be to the public advantage; or, there is a reasonably arguable case of error in the primary decision and a reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is whether leave is necessary to correct a substantial injustice to the applicant caused by some error.
9. [9]
   Mr Warren’s grounds of appeal are that:

   1. (a)
      the application is not a Minor Civil Dispute – Minor Debt, it is a domestic building dispute seeking, amongst other things, unliquidated damages;
   2. (b)
      the Tribunal in its Minor Civil Dispute – Minor Debt jurisdiction had no jurisdiction to consider a building dispute or to make an award of unliquidated damages; and
   3. (c)
      Delivery of a default judgment for unliquidated damages by the Tribunal is conditional upon the assessment by the Tribunal of the unliquidated damages, and even if a default decision in respect of the unliquidated damages could have been ascertained, there was insufficient material before the Tribunal upon which to assess the unliquidated damages.
10. [10]
    The appeal submissions on behalf of Mr Warren note that a debt or liquidated demand was described by Justice Carmody as:^[6]

…a “sum of money that can be calculated by reference to a formula, schedule or some other yardstick”. The antitheses of a debt or liquidated demand is an amount ascertainable only by discretionary assessment such as unliquidated damages. It is the nature of the claim, rather than its prospects of success, that determine jurisdiction. The claim must in law be a debt or a liquidated amount – merely claiming a specific amount is not conclusive.

11. [11]
    Mr Goldberg’s application is seeking damages both liquidated and unliquidated. The Tribunal in considering a building dispute can, under the enabling Act, award damages.^[7] The Tribunal cannot award unliquidated damages under its minor civil dispute jurisdiction and cannot issue a decision by default for unliquidated damages.^[8] A Tribunal decision by default for unliquidated damages is conditional on assessment by the Tribunal of the unliquidated damages.^[9] If the application was not progressed under the correct jurisdiction, this should have been clear to the Tribunal at first instance because of the correspondence from the Commission as mentioned above.
12. [12]
    The decision in Howard v Smith is noted in the context of it being for the Tribunal to consider jurisdiction even where it is not raised by the parties and if there is an arguable doubt about jurisdiction the adjudicator should refuse to make an ex parte order.^[10]
13. [13]
    It is submitted for Mr Warren in regard to leave to appeal that the granting of the decision by default by the Tribunal involved a plain misunderstanding of the circumstances in which a decision of that kind could be made under s 50 of the QCAT Act.^[11] That the Tribunal’s failure to consider the jurisdictional issue is an error of law that has resulted in a substantial injustice to Mr Warren and must be corrected. That it is a question of law whether the facts before the decision maker properly fell within s 50 of the QCAT Act.^[12]
14. [14]
    Mr Goldberg made submissions that, as there was a delay between the decision and the application for leave to appeal and appeal, there should have been an extension of time application. This was not pursued as time ran from when Mr Warren received a copy of the reasons for the decision and he was within time.
15. [15]
    Mr Goldberg also notes that there is no appeal allowed against a decision to set aside a default decision under s 51 of the QCAT.^[13] Clearly in this case the decision was to refuse the application to set aside the default decision and so there is no prohibition in regard to Mr Warren’s appeal.
16. [16]
    Mr Goldberg submits that Mr Warren was a subcontract Tradesman Tiler contracted to carry building work for Mr Goldberg and had agreed to pay the specific sums charged for what is described as Liquidated damages (being the costs charged for the delay in carrying out the works) and the amount due to fi the defects. Invoices were issued for these sums and they remain unpaid. This is clear evidence of a debt being due which the Tribunal has jurisdiction to deal with as Minor Civil Dispute – Minor Debt claim, provided always that the requirements that the requirements of  s 77(2) of the QBCC Act has been met and a letter to that effect was attached to the claim. He submits that if the Tribunal is not convinced that that sum sued upon is a debt then it is a liquidated sum.
17. [17]
    Mr Goldberg submits that the jurisdiction of the Tribunal is set out in:

    1. (a)
       Section 12 of the QCAT Act, specifically 12(4)(a), for a claim for a debt or liquidated demand of money, a person to whom the debt is owed or money is payable; or
    2. (b)
       Section 12(4)(c), for a claim arising out of a contract between 2 or more traders – any of the traders.

He notes that a debt is an ascertained amount of money and that:^[14]

…whenever the amount to which the plaintiff is entitled ... can be ascertained by calculation or fixed by any scale of charges, or other positive data … it is liquidated…

It was noted that the basis of the claim was a particular award.

18. [18]
    Mr Goldberg submitted that: the debt is not a sum for an unliquidated amount or unliquidated damages but a certain sum which is due and owing; is liquidated as it shows the cost of the repair to be a precise and liquidated amount as detailed in the claim being the sum of money due to the respondent to fix the appellants defects; and further, the sum of money due for the late finish of the work incurred by Mr Warren was pursuant to the building contract and calculated strictly in accordance with the formula contained therein.
19. [19]
    Mr Goldberg submitted that if the claim is not for a debt or liquidated demand of money then it is a trader-trader dispute on the basis that it is incontrovertible that a Builder and a Sub Contract Tiler are traders, having regard to the definition of trader in the Dictionary of the QCAT Act.
20. [20]
    Mr Goldberg submitted that not all disputes relating to the payment for domestic building work are domestic building disputes. If the dispute is over the payment of unpaid invoices, in this case between 2 traders, and it is within the minor civil dispute jurisdiction, namely $25,000, then as long as the requirements of s 77(2) of the QBBC Act are met, a party can apply to the Tribunal in its minor civil dispute jurisdiction under s 12 of the QCAT Act.
21. [21]
    On the above basis, Mr Goldberg submits leave to appeal should be refused as there is no question of general importance upon which further argument, and a decision of the Appeal Tribunal would be to the public advantage. There is no reasonably arguable case of error in the primary decision and no reasonable prospect that Mr Warren would obtain further substantive relief and it is not necessary to correct a substantial injustice to Mr Warren.
22. [22]
    It is clear that in granting the decision by default the Tribunal was satisfied that the elements necessary for that decision were met in terms of an application to recover a debt or liquidated demand having been made with a failure of the respondent to respond and the amount due or part thereof being outstanding. As mentioned above it was not for the principal registrar or their delegate to go behind the application and determine the merits of it.
23. [23]
    When an application to set aside the decision by default is made this is one which is at the discretion of the Tribunal. The considerations to be taken into account in the exercise of that discretion were discussed by Justice Wilson in Garland and Anor v Butler McDermott Lawyers,^[15] though in that case he did not feel the need to canvas all of the considerations. His concern was that the initial application had not been compliant with the Tribunal forms and for that reason the appeal was allowed, the decision by default was set aside and the application was dismissed. Justice Wilson noted that the question whether or not the respondent has a good defence may be the most important of these factors.
24. [24]
    It is also clear from the decision of Dr Forbes in Howard v Smith that even where the respondent otherwise lacks an excuse for not responding to an application, the failure to consider a jurisdictional issue is an error of law that may result in injustice.
25. [25]
    While there are issues ultimately about whether or not the application was properly a minor civil dispute or building dispute, the provisions of s 50 of the QCAT Act in regard to a decision by default are only available where the application is for a debt or liquidated demand of money. The Tribunal does not have jurisdiction to make a default decision if the application is not for a debt or liquidated demand and it would be an error of law for the Tribunal to make an order under s 50 of the QCAT Act in those circumstances.
26. [26]
    Mr Goldberg has provided evidence of invoices in support of his claim and states that Mr Warren has agreed to pay those invoices so that the amounts claimed constitute debts. This is in the context of Mr Goldberg being a building contractor and Mr Warren his subcontractor and the amounts claimed being related to rectification costs in respect of work performed by Mr Warren for Mr Goldberg. These are not invoices for services provided by Mr Goldberg to Mr Warren as one would expect when an invoice or progress claim is issued. Clothing the claims as an unpaid invoice does not of itself convert it to a claim for a debt.
27. [27]
    While an amount is claimed for liquidated damages as mentioned by Mr Warren there is no contract provided setting out the event which would trigger the entitlement to the damages nor dates for which they have been calculated.
28. [28]
    Mr Goldberg submitted that if it was not a minor debt claim then it would be a trader-trader claim. If it was not a claim for a debt or liquidated demand then a decision by default was not available under s 50 of the QCAT Act and so that does not assist him.
29. [29]
    It is clear from listening to the learned adjudicator’s decision that she did not give consideration to whether the application was one which could be made subject to a decision by default under s 50 of the QCAT Act. She noted the issues raised by Mr Warren in regard to the requirements for liquidated damages not being met and found that he had no valid defence.
30. [30]
    I am satisfied that there is a reasonable arguable case of error in the learned adjudicator’s decision as she did not consider the question of whether the application was in respect of a debt or liquidated demand which would constitute an error of law and leave to appeal should be allowed.
31. [31]
    This is not a question about whether the Tribunal had jurisdiction to determine the application as, if it was not properly a minor civil dispute, then it would be a building dispute for which the Tribunal also has jurisdiction.
32. [32]
    The jurisdictional question is a question of law and an appeal on a question of law is an appeal in the strict sense and requires a consideration of the material before the learned adjudicator and their reasons to determine if they were subject to an error.^[16] The Tribunal may confirm or amend the decision, or set it aside and substitute its own decision, or set it aside and return it to the Tribunal for reconsideration.
33. [33]
    The claims here are in the context of a building contractor and a tiling sub-contractor and issues in regard to alleged defective work performed by the tiling subcontractor. By necessity these claims involve questions of liability in regard to whether the work was defective, and then an assessment of the amount damages in respect of any defective work where liability is found. The claiming of a specific amount in accordance with an invoice is not conclusive. While there is an amount styled as liquidated damages there is no insufficient material to support this claim. Only the invoice, an email and a copy of some text messages is provided. There is no contract setting out the entitlement to the liquidated damages or details of the period for which it is calculated. The amount for the liquidated demand also represents less than half of the amount claimed.
34. [34]
    I am not satisfied that the application is in respect of a debt or liquidated demand and therefore the appeal must be allowed and the decision by default set aside as the Tribunal did not have jurisdiction to make such a decision under s 50 of the QCAT Act.
35. [35]
    Mr Warren had submitted that the application should be dismissed in that case. Clearly though, the Tribunal may still have jurisdiction to hear it as either a trader-trader dispute or a building dispute for which the Tribunal has jurisdiction.^[17] I note that a building dispute includes a claim or dispute between two or more contractors relating to the performance of reviewable domestic work or a contract for the performance of reviewable domestic work, which describes the dispute here.
36. [36]
    Mr Goldberg acknowledges that he is required to have complied with s 77(2) of the QBCC Act before he is able to lodge his application. In so doing he is acknowledging that the application is in respect of a building dispute and therefore it should be lodged as such in the Tribunal.
37. [37]
    The Tribunal’s jurisdiction in regard to trader-trader minor civil disputes is one of the Tribunal’s original jurisdictions in accordance with s 10, s 11, s 12 and the definition of Minor Civil Dispute in Schedule 3 of the QCAT Act. There is no requirement that there be any compliance with s 77(2) of the QBCC Act before a trader-trader dispute can be filed in the Tribunal. That requirement is contained in the QBCC Act which is an enabling Act for the purposes of s 10 of the QCAT Act.
38. [38]
    The fact that s 77(2) of the QBCC Act must be complied with before a dispute between two building contractors can be filed in the Tribunal means that the jurisdiction in respect of that dispute is under the QBCC Act and not the minor civil dispute jurisdiction of the Tribunal. This ensures that the additional time and resources necessary to properly determine the dispute are available. Whereas, the minor civil dispute jurisdiction by its nature does not allow for all of the necessary processes in respect of such things as expert evidence.
39. [39]
    The application is transferred to the Tribunal’s building list.