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- Unreported Judgment
Steve Bagnall Homes Pty Ltd v Foley QCATA 45
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Steve Bagnall Homes Pty Ltd v Foley & Anor  QCATA 45
STEVE BAGNALL HOMES PTY LTD
IAN FOLEY and BERNADETTE FOLEY
ORIGINATING APPLICATION NO/S:
10 April 2019
On the papers
Senior Member Brown
The Application for miscellaneous matters filed 19 February 2019 is refused.
APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – STAY OF PROCEEDINGS – WHEN REFUSED – where applicant ordered to pay respondents damages in proceedings for a building dispute – where applicant seeks to appeal the decision – whether applicant has an arguable case – where applicant argues adverse impact on QBCC licence - where applicant argues it may not be able to recoup payment if successful – whether the circumstances warrant the granting a stay of execution pending the outcome of the appeal.
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28, s 58, s 142, s 145
Day v Humphrey  QCA 104 (26 May 2017)
Drew v Makita (Australia) P/L  QCA 312 (9 October 2018)
Hessey-Tenny & Anor v Jones  QCATA 131 (20 September 2018)
Stone Family Trust t/as Stone Consulting v Alison Rogers  QCATA 7 (17 January 2019)
Construct Law Group
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
- Steve Bagnall Homes Pty Ltd (SBH) built a home for Mr and Mrs Foley. The parties fell into dispute. Mr and Mrs Foley subsequently commenced proceedings in the tribunal for a building dispute. On 31 October 2018 the Tribunal ordered SBH to pay to Mr and Mrs Foley $167,232.89. SBH has appealed the decision.
- SBH has applied to stay the decision below. The stay application now falls for determination.
- The start of an appeal to the Appeal Tribunal against a decision does not affect the operation of the decision or prevent the taking of action to implement the decision. However, the Appeal Tribunal may make an order staying the operation of the decision being appealed against until the appeal is finally decided.
- The relevant principles for consideration in an application to stay a decision were set out by the Appeal Tribunal in Stone Family Trust t/as Stone Consulting v Alison Rogers
A party seeking the stay order must satisfy the Tribunal that the discretion to grant a stay ought to be exercised in the circumstances of the matter. There must be sound reasons for suspending the rights that a successful party otherwise has to the fruits of the judgment obtained in its favour. The balance of convenience in the circumstances must be considered. If success on appeal would be rendered nugatory were a stay not granted, that must be balanced against the expectation of the successful party to the fruits of the judgment. In respect of a money order, a stay may be granted in circumstances where there is evidence that if the appeal succeeds, the respondent would not be able to repay the money.
- We must therefore be satisfied as to the following before the stay sought by SBH will be granted:
- (a)SBH has a good arguable case in the appeal;
- (b)SBH will be disadvantaged if a stay is not granted;
- (c)There is some compelling disadvantage to the Foleys if a stay is granted which outweighs the disadvantage suffered by SBH if a stay is not granted.
- Where an applicant’s case is at least arguable the focus of consideration necessarily shifts to questions of competing advantage and disadvantage if the stay be granted or not.
Application by Mr and Mrs Foley to file further submissions
- Before turning to the substantive stay application we will deal with the application by Mr and Mrs Foley to file further submissions.
- The Appeal Tribunal, by directions made 19 December 2018, directed SBH to file submissions in support of the stay application and for the Foleys to file submissions in response. By directions made 21 February 2019, the Appeal Tribunal extended the time for Mr and Mrs Foley to file their submissions. At that time, the Appeal Tribunal made a further direction permitting SBH to file submissions in reply.
- Mr and Mrs Foley say they should be given an opportunity to respond to SBH’s submissions in reply. We decline to make the direction sought by the Foleys. In our view, procedural fairness required SBH to be given the opportunity to reply to the Foleys’ submissions. However procedural fairness does not extend to permitting parties to endlessly respond to submissions. The procedure for a proceeding is at the discretion of the tribunal. In all proceedings, the tribunal must act fairly and according to the substantial merits of the case.
- The Appeal Tribunal acted appropriately and fairly in permitting SBH to file submissions in reply. There is no unfairness to the Foleys in not being permitted to make further submissions.
What do the parties say?
- The Application for leave to appeal or appeal identifies numerous grounds of appeal. The grounds assert, variously, errors of fact, errors of law and errors of mixed law and fact. SBH says that it has a good arguable case on appeal, that it will be disadvantaged if a stay is refused and that the balance of convenience favours the grant of a stay.
i.Good arguable case
- SBH says that the appeal puts approximately $97,412.00 of the decision sum in issue. The grounds of appeal are said by SBH to relate to approximately eight items in the reasons for decision below and should SBH be successful the decision sum will be reduced by approximately 60% to an amount in the order of $69,820.87.
- SBH limits its submissions to what it says are ‘three of the highest value items in issue on the appeal to demonstrate that it has a good arguable case.’
- The decision below, made on the papers by a differently constituted tribunal to that which heard the matter, is a lengthy one. In the original proceedings the Foleys claimed restitution in the amount of $45,865.90 and damages for breach of contract and negligence in the amount of $374,240.43. SBH counterclaimed for $4,258.03.
- The Foleys’ claim for restitution related to what they asserted were payments made to SBH for payments in excess of the adjusted contract price for prime cost and provisional sum items and other credits, and a refund for the practical completion stage payment paid but not due. The claim for damages was in respect of defective and incomplete work.
- We will set out briefly the grounds of appeal relied upon by SBH in support of the stay application.
- The first ground of appeal relates to asserted error by the learned member in construing the contract. In the proceedings below, the Foleys asserted that all windows installed were required to have a grey tint. SBH argued that tinting was only required to be applied to one window. The ground of appeal relates to the learned member’s construction of the contract and, specifically, the specifications. In its grounds of appeal, SBH says that the learned member erred in taking into consideration the subjective intention of the parties in construing the contract and, specifically, in construing the contract as contended for by the Foleys. In response, the Foleys say that the learned member was entitled to make the finding she did regarding the meaning of the contract on the basis that it was supported by the evidence.
- The second ground of appeal relied upon by SBH relates to the findings by the learned member that the roofing product installed did not comply with the Building Code of Australia. In making this finding, the learned member made a number of other findings including a finding as to the physical location of the property. The errors asserted by SBH relate to questions of fact and whether the evidence supported the learned member’s findings. In response the Foleys say that the evidence before the tribunal was clear and there was no error.
- The third ground of appeal relates to a finding by the learned member that SBH failed to install downpipes in accordance with approved rainwater design plans. SBH says that the learned member assessed damages for rectification of the downpipes where the evidence did not support such a finding. SBH says that the evidence of the experts was that the necessity for the rectification works allowed by the learned member could only be determined after a certifier had inspected the constructed works and determined whether the works were compliant. SBH says that there was no evidence that the Foleys had sought the required certification. The Foleys say that SBH’s expert gave evidence that the stormwater drainage had not been constructed in accordance with the approved plans and the learned member was entitled to make the impugned finding.
- In an application such as this it is quite often difficult to undertake a detailed assessment of the prospects of success of the appeal. As Keane JA (as he then was) observed in Drew v Makita (Australia) P/L:
As is often the case, on an application for a stay, the Court to whom the application is made can do no more by way of preliminary assessment of the prospects of the defendant's appeal than to determine whether the appeal is arguable, at least in the sense that the defendant's prospects are not so poor as to relieve this Court of the need to concern itself to ensure that the appeal not be rendered nugatory by the refusal of the stay. See Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685.
- As has been noted, SBH has limited its submissions to three grounds of appeal. The grounds involve questions of law and questions of fact. Insofar as the grounds of appeal involve questions of fact or mixed law and fact, leave to appeal is required. The power of the Appeal Tribunal to order a stay under s 145(2) of the QCAT Act is not available where an application for leave to appeal is required and has been applied for, but has not yet been granted. The Appeal Tribunal may however exercise the powers conferred by s 58(1) of the QCAT Act and make an interim order in the proceeding, including an order staying the operation of the decision under appeal, if it is satisfied that such an order is in the interests of justice.
- In respect of the first ground of appeal, SBH places reliance on the following passage from the reasons in support of its submission that the learned member took into consideration the subjective intention of the parties in construing the contract:
 Mr Foley gave evidence that he specifically requested tinted glass for the glazing.
- The passage relied upon is a statement by the learned member about the evidence. The passages from the reasons relevant to the member’s findings about the matters the subject of the ground of appeal are found at  to  and . The submission that the learned member took into consideration the subjective interpretation of the parties in construing the contract is, in our view, unpersuasive. Similarly, it seems to us certainly arguable that it was available to the learned member to take the view she did in relation to the meaning of the relevant part of the specifications.
- The second ground of appeal relied upon by SBH raises consideration of whether the evidence supported the relevant findings by the learned member. Whether the interpretation of the Building Code of Australia (‘BCA’) was properly a matter for expert evidence and whether the Foleys discharged the burden of proof in relation to the location of the residence and the application of the BCA in the context of the location of the residence are matters that, in our view, raise arguable issues in the appeal.
- We are satisfied that the third ground of appeal also raises an arguable case of error. While it may have been uncontroversial that the drainage works had not been performed in accordance with the approved plans, the evidence of the experts in the joint report was that ‘(the Foleys’ expert) allows for a rectification cost of $14,720.00 if the installation is deemed non compliant by the certifier’. Despite there being no such certification in evidence, the rectification cost opined by the Foleys’ expert was awarded.
ii.Disadvantage to the parties
- SBH says that it will be disadvantaged if the stay is not granted:
- (a)SBH will be forced to sell real property in order to meet the decision sum;
- (b)There will be an adverse impact upon SBH’s QBCC licence;
- (c)SBH may not be able to recoup the balance of the decision sum from the Foleys.
- The Foleys say that SBH has already paid to them $69,820.87 leaving a balance payable in respect of the decision sum of $97,412.02. They say that the affidavit of Mr Bagnall makes no reference to the current financial position of SBH and the assertions contained in the affidavit are not supported by any evidence. The Foleys refer to a number of properties owned by SBH, or Mr Bagnall and his wife personally, and say that the onus is upon SBH to demonstrate that it should not be required to pay the balance of the decision sum. The Foleys also refer to the failure by SBH to offer any explanation as to why, given its position as a property owner, and with trading revenue of between $2 million and $3 million ‘for each of the last two financial years’, it cannot borrow the funds required to pay the balance of the decision sum.
- SBH says that the Foleys will suffer no disadvantage if the stay is granted. It says that none of the rectification works are required to be performed urgently and that no rectification works have been carried out to date.
- Other than what is set out below, SBH does not expand upon its submission regarding the adverse effect upon its QBCC licence if the stay is not granted. In making this observation in their submissions, the Foleys say, among other things, that it is not clear what the adverse impact is said to be.
- As to the impact of not granting the stay upon its QBCC licence, the highest SBH puts the risk of such an impact is ‘theoretical’. SBH says that there is a risk that the QBCC will commence disciplinary action against it or Mr Bagnall if the decision sum is not paid. This submission, somewhat curiously, appears to be based upon the premise that if the stay is not granted the balance of the decision sum will not be paid. We note that SBH does not submit that it can not, or will not, pay the decision sum if the stay is not granted. We do not accept that there is any demonstrated disadvantage to SBH in this regard.
- Again, SBH does not expand upon its submission that there is a risk it will not be able to recoup the balance of the decision sum from the Foleys. In response, the Foleys say that they have a substantial asset in the form of the subject property in respect of which there is presently no money owed. In any event say the Foleys, SBH has offered no evidence to support its submission.
- The Foleys say that they have already suffered disadvantage as a result of SBH’s breach of contract and/or negligence and they will suffer disadvantage if the stay is granted. They say, inter alia: that the dispute began in 2010 and that it was not until 2018 that the decision of the Tribunal was given; that they have been forced to live in an incomplete and defective house for 8 years; that they cannot sell the property without undertaking the necessary work required for a certificate of occupancy; that the cost of rectification works will continue to increase; that the granting of the stay will further delay the undertaking of rectification work, selling the property and purchasing a residence in a retirement village; and that they will be forced to incur interest if they draw down on an available loan facility to undertake the necessary works on the residence.
- We do not accept that SBH has demonstrated a real risk that it will be unable to recoup the balance of the decision sum from the Foleys. We accept the submissions by the Foleys that they have a substantial asset in the form of the subject property in respect of which no monies are owed. SBH points to no potential for impecuniosity on the part of the Foleys that may give rise to an inability to recover from the Foleys the decision sum.
- Finally, SBH refers to the ‘real prospect’ and the ‘potential’ for real property to be sold by it to meet the balance of the decision sum. There is no evidence before us as to the current financial position of SBH. There is no evidence about the specific properties. We are not satisfied that SBH has established any disadvantage.
iii.Balance of convenience
- SBH says that the balance of convenience favours the grant of the stay. It says that it acknowledges the presumption that the Foleys should have the benefit of the decision below but says that the disadvantages it would suffer (referred to in its submissions) displace that presumption. The Foleys say that the balance of convenience does not favour the grant of the stay. They too refer to the matters raised in their submissions.
- In summary, and for the reasons we have set out, we are not satisfied that the balance of convenience favours the grant of the stay. Firstly, we are not persuaded that SBH has established that it will suffer a significant disadvantage if required to pay the balance of the decision sum. Secondly we are not persuaded that SBH has established there is a real risk of the decision sum not being recoverable from the Foleys in the event the appeal is successful. Thirdly we are not persuaded that there is any substance in the submission by SBH that its licence status will be adversely impacted if the stay is not granted.
- The application is refused.
Foley v Steve Bagnall Homes Pty Ltd  QCAT 458 (31 October 2018). Referred to as ‘the decision sum’ in the applicant’s submissions, a nomenclature we adopt in these reasons.
 Application for miscellaneous matters filed 19 February 2019.
Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), s 145(1).
 Ibid, s 145(2).
  QCATA 7 (17 January 2019)  (citations omitted).
Day v Humphrey  QCA 104 (26 May 2017).
Hessey-Tenny & Anor v Jones  QCATA 131 (20 September 2018), Daubney J, President.
 QCAT Act, s 28(1).
 Ibid, s 28(2).
Foley v Steve Bagnall Homes Pty Ltd  QCAT 458 (31 October 208) .
 Ibid,  – .
 Ibid,  – .
 Ibid  – .
  QCA 312 (9 October 2018).
 QCAT Act, s 142(3)(b).
Hessey-Tenny & Anor v Jones  QCATA 131 (20 September 2018) .
 Ibid, .
 ‘GT’ is a reference to the Foleys’ building expert.
 Affidavit of Steve Bagnall filed 21 December 2018 in BDL090-15.
 In the submissions on costs in the proceedings below, SBH asserted that its financial position was a relevant consideration under s 102(3)(e) of the QCAT Act.
 At .
- Published Case Name:
Steve Bagnall Homes Pty Ltd v Ian Foley and Bernadette Foley
- Shortened Case Name:
Steve Bagnall Homes Pty Ltd v Foley
 QCATA 45
Senior Member Brown, Member King-Scott
10 Apr 2019