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Murphy v Number One Quality Homes Pty Ltd QCATA 128
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Murphy & Anor v Number One Quality Homes Pty Ltd  QCATA 128
NUMBER ONE QUALITY HOMES PTY LTD
1 November 2021
22 June 2021
Justice Daubney, President
The application for leave to appeal or appeal filed 2 October 2020 is dismissed
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – FROM INTERLOCUTORY DECISIONS – LEAVE TO APPEAL – where primary proceedings involve a building dispute – where applicant withdrew from a building contract – where applicant submitted that whether the withdrawal was valid ought be determined as a preliminary issue – where decision of Senior Member of the Tribunal refused request – where applicant seeks leave to appeal that interlocutory decision – where preliminary issue involves questions of law and fact including whether estoppel arises in the face of a statute – where leave to appeal only granted if it is necessary to correct a substantial injustice and there is a reasonable argument of error – whether the applicant should be granted leave to appeal
Queensland Building and Construction Commission Act 1991 (Qld), schedule 1B, s 35(3)
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Day Ford Pty Ltd v Sciacca  2 Qd R 209
House v The King (1936) 55 CLR 499
In Re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318
Maritime Electric Co v General Dairies Limited  AC 610
McDonald v Queensland Police Service  QCA 255
M J Arthurs Pty Ltd v Isenbert  QDC 85
Number One Quality Homes Pty Ltd v Murphy & Anor  QCAT 339
Pickering v McArthur  QCA 294
QUYD Pty Ltd v Marvass Pty Ltd  1 Qd R 41.
Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495
River Gum Homes Pty Ltd v Meridian Pty Ltd  QCA 293
Tepko Pty Ltd v Water Board (2001) 206 CLR 1
APPEARANCES & REPRESENTATION:
W LeMass (counsel) instructed by Clinton Mohr Lawyers
M White (counsel) instructed by Butler McDermott Lawyers
REASONS FOR DECISION
- This is an application for leave to appeal or appeal against an interlocutory decision made by a Senior Member of the Tribunal. As the decision in question was not the Tribunal’s final decision in the proceeding, leave to appeal is required. The decision made on 14 July 2020 was, in effect, to refuse an application by the present applicants (“the Murphys”) for orders that stated questions be separately determined as preliminary issues in the primary proceeding. Reasons for that decision were published on 7 September 2020.
- The present respondent, which is the applicant in the primary proceeding, is a builder, Number One Quality Homes Pty Ltd (“Number One”).
- The following summary of the primary proceeding by the Senior Member is sufficient for present purposes:
 While noting that the tribunal is not a pleadings jurisdiction, the parties have approached the preparation of the application, response and counter application and reply generally in the form of pleadings.
 Number One has filed an application for domestic building disputes and an amended application. The Murphys have filed a response, an amended response and a further amended response. Number One has filed a reply and answer to the amended response and a reply and answer to the further amended response and counter application.
 The following issues do not appear to be contentious:
- (a)A cost plus contract was entered into between the parties pursuant to which Number One undertook building work for the Murphys;
- (b)The building works commenced on 31 July 2017 and were substantially complete by 16 May 2018;
- (c)The Murphys took possession of the dwelling on or around 10 June 2018;
- (d)The Murphys paid to Number One a total of $651,440.32 under the contract.
 The following issues are in dispute:
- (a)On 3 October 2018 the Murphys withdrew from the contract on the basis that Number One had failed to provide the Murphys with:
- (i)A copy of the signed building contract; and
- (ii)A copy of the consumer building guide;
- (b)Number One engaged in misleading and deceptive conduct in representing to the Murphys that the sum of $462,000.00 would ‘more than cover the cost’ of constructing the dwelling;
- (c)Number One undertook unapproved variation works;
- (d)The building work undertaken by Number One was defective.
 A compulsory conference was conducted in May 2019. The tribunal subsequently made directions for the parties to file their statements of evidence including expert evidence. There have been significant ongoing delays in the progress of the litigation.
 At a directions hearing on 30 April 2020 the Murphys submitted that the question of whether they had validly withdrawn from the contract be determined as a preliminary issue. The Murphys were directed to file submissions including framing the preliminary issue for determination.
- The directions made by the Senior Member on 30 April 2020 included the following:
- Daniel Murphy and Judith Murphy must file in the Tribunal two (2) copies and give to Number One Quality Homes Pty Ltd one (1) copy of submissions in relation to the determination of a preliminary issue, by:
4:00pm on 18 June 2020.
- The submissions in accordance with direction 4 must address the following:
a. The proposed preliminary issue to be determined;
b. Why the preliminary issue should be determined;
c. If the determination of the preliminary issue involves the determination of a question or questions of fact:
i. The question or questions of fact to be determined;
ii. The submissions must be accompanied by any statements of evidence to be relied upon;
d. Any other matters.
- Number One Quality Homes Pty Ltd must file in the Tribunal two (2) copies and give to Daniel Murphy and Judith Murphy one (1) copy of submissions in response, by:
4:00pm on 25 June 2020.
- The submissions in response must address the following:
a. Whether Number One Quality Homes Pty Ltd agrees or disagrees:
i. With the framing of the preliminary issue;
ii. That the preliminary issue is appropriate for determination;
b. Those matters referred to in direction 5(b), 5(c) and 5(d).
- Pursuant to those directions, the Murphys then filed written submissions by which they submitted that the Tribunal should determine the following preliminary issue:
Did the [Murphys] withdraw from the building contract that they entered into with [Number One] dated 26 September 2017, pursuant to Schedule 1B, s 35(3) of the Queensland Building and Construction Commission Act 1991 (Qld), on 3 October 2018? If so, are the [Murphys] entitled to a refund from [Number One] of $28,373.92?”
- The submission in support of these matters being determined as preliminary issues was, in brief, that it was uncontentious that:
- (a)Number One had not supplied the Murphys with either a complete copy of the relevant building contract or the Consumer Building Guide;
- (b)the Murphys accordingly had a statutory right to withdraw from the building contract;
- (c)the Murphys exercised that right to withdraw;
- (d)Number One, as a matter of law, could not raise an estoppel against the exercise of that right of withdrawal; and
- (e)it was clear on the evidence already filed that this left a balance of $28,373.92 to be refunded to the Murphys, being the difference between the amount they had paid to Number One and the total of Number One’s itemised “out of pocket expenses reasonably incurred” prior to the withdrawal.
- It was submitted for the Murphys that, if resolved in their favour, determination of these proposed preliminary issues would dispose of Number One’s claim without the need for an anticipated two-to-three-day hearing, and that it would also resolve the Murphys’ counterclaim on the basis that, if they were awarded the refund of $28,373.92, they would otherwise abandon the balance of their counterclaim.
- The Murphys’ application for these matters to be determined separately as preliminary issues was opposed by Number One, not least on the basis that investigation of whether or not an estoppel was available to be relied upon by Number One would itself involve a factual enquiry which was not amenable to summary determination as a preliminary issue.
- After stating the background and the questions which had been proposed for preliminary determination, the Senior Member then set out the relevant statutory framework under the Queensland Building and Construction Commission Act 1991 (“QBCC Act”), particularly by reference to the provisions in Schedule 1B of the QBCC Act relating to domestic building contracts. It is not necessary to repeat the Senior Member’s recitation of the legislative scheme, and sufficient to note that s 35(3) of Schedule 1B, which was central to the Murphys’ argument, provides:
If 5 business days have elapsed from the day the contract was entered into and the owner has not received from the building contractor a copy of the signed contract and, for a level 2 regulated contract, the consumer building guide, the owner may withdraw from the contract.”
- In approaching the question as to whether there should be a separate determination of the proposed preliminary issues, the Senior Member drew guidance from authorities concerning the conduct of curial proceedings, including Reading Australia Pty Ltd v Australian Mutual Provident Society. He also invoked observations which had been made by Kirby and Callinan JJ in Tepko Pty Ltd v Water Board. Whilst dissenting as to the outcome on the appeal in that case, their Honours made general observations in obiter dicta concerning the appropriate caution which ought be adopted when considering whether or not to order a separate hearing on preliminary issues. Their Honours noted that the “attractions of trials of issues rather than of cases in their totality, are often more chimerical than real” and said:
Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question.
- It was not suggested by the present applicants either that the Senior Member incorrectly stated or misapplied these relevant principles.
- The Senior Member’s consideration of the application commenced with the observation that, contrary to the Murphys’ submissions, the determination of the questions which had been proposed as the preliminary issues involved questions of both law and fact.
- He then amplified that by examining the core proposition advanced by the Murphys on the proposed separate question, namely that as a matter of general principle an estoppel will not ordinarily arise in the face of a statute. The Senior Member considered at some length the authority on which the Murphys placed significant reliance, namely M J Arthurs Pty Ltd v Isenbert (“M J Arthurs”).
- He also considered a number of decisions in the Supreme Court of Queensland which highlighted the vagaries associated with the task of determining whether, in the circumstances of a particular case, an estoppel may be raised against the operation of a statute. These included the decision of the Court of Appeal in Day Ford Pty Ltd v Sciacca, in which the Court cited the proposition that in deciding whether an estoppel might be set up against the operation of a statute “the Court should first of all determine the nature of the obligation imposed by the statute, and then consider whether the admission of an estoppel would nullify the statutory provision”.
- In relation to the Murphys’ contention to the effect that the decision in M J Arthurs was a complete and definitive answer to the estoppel point, the Senior Member said:
 The Murphys say that the decision of McGill DCJ in M J Arthurs Pty Ltd compels the conclusion that Number One’s argument in relation to the estoppel issue must fail. There are a number of points to be made about this submission. Firstly, M J Arthurs is a decision of a single District Court judge and not binding upon the tribunal notwithstanding its persuasiveness. Secondly, M J Arthurs dealt with the DBC Act which does not apply in the present case despite the similarity in the relevant legislative provisions. Thirdly, the statements by McGill DCJ in the judgement might be seen as somewhat equivocal at least insofar as his Honour proceeded to deal in some detail with the inadequacy of the plaintiff’s pleading relating to the alleged estoppel. Relevantly, his Honour also found that the plaintiff had not relied upon any evidence relevant to an estoppel and the general inadequacy of the evidence on the issue of estoppel.
- He then turned to consider the circumstances of the present case, and said:
 In my view it is at least arguable that the provisions of Part 5 of schedule 1B are significantly confined, or predominantly confined, to the homeowner and building contractor. The QBCC Act may be distinguished for example from the legislative provisions considered in Roberts v Australia and New Zealand Banking Group Ltd, which the Court of Appeal found formed ‘part of an elaborate scheme with a broad public orientation, embracing its financial viability and flow-on features like CTP insurance premium levels. Tightly regulating the circumstances in which claims may be pursued in court cannot be characterized as of concern only, or even primarily, to the parties immediately affected.’
 Whilst the QBCC Act may be considered consumer legislation, the main object of which is to protect consumers from incompetent or dishonest builders, the objects of the Act also include achieving a reasonable balance between the interests of building contractors and building owners by regulating the building industry and domestic building contracts.
 If the interpretation I have posited is open, then Number One may be able to establish on a contested hearing that the Murphys were experienced in building construction projects and that Number One acted to its detriment in undertaking the construction work absent the provision of a copy of the signed contract and consumer building guide to the Murphys. Had the Murphys requested the documents at an earlier point in time, Number One could have done so. It follows that Number One may have an argument that it would be unconscionable for the Murphys to resile from the position that there was on foot an enforceable contract pursuant to which Number One undertook building work. Number One may therefore be entitled to assert that the Murphys should be estopped from denying that they waived compliance with the requirements of the QBCC Act to receive a copy of the contract and the consumer building guide.
 The proposed preliminary issue requires the determination of the statutory construction issue to which I have referred and, if the issue is determined in Number One’s favour, a (presumably) contested hearing to determine whether, as a matter of law and fact, an estoppel arises.
 This of itself raises the very real prospect that the determination of the preliminary issue will give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of the final hearing and result in overlap between the evidence adduced on the hearing of the preliminary issue and at the final hearing. There is also the very real possibility that this will lead to the prolongation rather than the shortening of the proceedings. (emphasis added)
- The Senior Member noted a number of further points which he considered weighed against making an order for separate determination of preliminary issues, including:
- (a)there was, in truth, no real agreement between the parties as to the relevant facts;
- (b)the proposed preliminary issue, as framed, would compel a conclusion about a refund in the stated sum of $28,373.92 without any allowance for a hearing as to the actual amount of any refund due;
- (c)despite the Murphys’ contention that, if successful on the refund point they would effectively abandon the rest of their counterclaim, that dispute remains pleaded;
- (d)in short, even if the first of the proposed preliminary issues was found in the Murphys’ favour, there would still be a dispute about what was owed to the Murphys as a consequence.
- The decision of the Senior Member concluded:
 All of the foregoing leads me to conclude that the litigation will not be shortened or the cost to the parties minimised by the determination of the preliminary issue.
 I am not persuaded that it is just and convenient to determine the preliminary issue. The tribunal declines to determine the preliminary issue.
- It is clear that, by these conclusions, the Senior Member intended to convey that he was refusing the Murphys’ application to have the questions they had proposed determined as separate preliminary issues.
- In advancing the present application before this Appeal Tribunal, the Murphys’ arguments were premised on an assertion that the Senior Member had “declined to determine, as a preliminary issue, whether the Murphys had validly withdrawn from the relevant building contract because he found that it was arguable that the Murphys were estopped from doing so”.
- That assertion, however, wrongly characterises the decision made by the Senior Member. The Senior Member was not engaged in determining the merits of the proposed preliminary questions. The Senior Member’s decision was as to whether the proposed questions ought be entertained for determination as separate preliminary issues.
- The arguments otherwise advanced by the Murphys on the present application largely replicated the submissions made before the Senior Member about the non-availability of an estoppel in the context of the QBCC Act and the weight to be afforded to the authority of the decision in M J Arthurs. In other words, the Murphys’ argument went to the substance of the issues sought to be ventilated under the proposed preliminary questions.
- However, the Murphys’ submissions did not, with respect, address the true issue for present purposes, namely why they ought be granted leave to appeal against the exercise by the Senior Member of the discretion to refuse to refer the proposed questions for a separate preliminary hearing.
- The Senior Member’s decision was clearly interlocutory. It was a procedural decision, which did not involve any final determination with respect to the rights of the parties. It has long been accepted that appellate courts keep a “tight rein” on attempts to appeal against rulings on practice and procedure. In Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc, Gibbs CJ, Aickin, Wilson and Brennan JJ noted that there was no issue that appellate courts exercise particular caution in reviewing decisions relating to practice and procedure. Their Honours did not, however, consider it necessary to lay down rigid and exhaustive criteria for where such an appeal might lie, but adopted the following statement of Sir Frederick Jordan in In re: the Will of F.B Gilbert (dec.):
… I am of opinion that, … there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.
- Their Honours also noted that the question of injustice flowing from the order appealed will generally be a relevant and necessary consideration.
- By s 142(3)(a)(ii) of the QCAT Act, the Murphys require leave to appeal in the present case. Such leave will usually only be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.
- In QUYD Pty Ltd v Marvass Pty Ltd, a real estate agent had sued a vendor in the District Court seeking recovery of commission. The vendor raised a defence that a form of appointment required by the Property Agents and Motor Dealers Act 2000 (Qld) had not been signed. The defendant vendor applied for summary judgment against the plaintiff agent on that basis. The application for summary judgment was refused, with the defendant ordered to pay the plaintiff’s indemnity costs of the application. The unsuccessful defendant sought leave to appeal. The Court of Appeal refused such leave. Fraser JA, with whom McMurdo P and Philippides J agreed, said:
Numerous authorities establish that leave to appeal will usually be granted only where there is a reasonable argument that the primary judge erred and an appeal is necessary to correct a substantial injustice to the applicant caused by that error. The refusal of the defendant’s application for summary judgement did not determine any substantive rights. The defendant remained free to repeat and elaborate upon its arguments at trial. Accordingly, if the primary judge erred that error was not productive of any substantial injustice. That is a sufficient basis to dispose of the application for leave to appeal against the refusal of the defendant’s application for summary judgment.
- Those observations are directly apposite to the present case. The Senior Member’s decision did not determine any substantive rights. The Murphys remain free to repeat and elaborate on the estoppel versus statute arguments at the final hearing. Accordingly, even if the Senior Member erred, that error was not productive of substantial injustice, and on that basis alone the present application for leave to appeal ought be dismissed.
- In any event, however, I am not at all persuaded that appellable error in the exercise of the discretion not to order a separate hearing has been demonstrated. The Senior Member stated and applied the legal principles which guide the exercise of the relevant discretion. He identified the competing arguments. He weighed the relevant considerations. On a House v The King basis, it cannot be said that the Senior Member committed an error in the exercise of the relevant discretion. The fact that another Member, or indeed this Appeal Tribunal, may have exercised the discretion differently is not enough to establish appellable error.
- A fortiori in a case such as the present where, in considering the exercise of this particular discretion, the Senior Member gave weight to there being disputed questions of fact which were not amenable to the proposed procedure of determination of separate preliminary issues.
- Accordingly, the Murphys have not established that they ought have leave to appeal against the interlocutory decision of the Senior Member made on 14 July 2020.
- The application for leave to appeal or appeal filed 2 October 2020 is dismissed.
Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”), s 142(3)(ii).
Number One Quality Homes Pty Ltd v Murphy & Anor  QCAT 339.
Ibid, (and omitting footnotes and citations).
(1999) 217 ALR 495.
(2001) 206 CLR 1.
 QDC 85.
 2 Qd R 209.
Maritime Electric Co v General Dairies Limited  AC 610, 620.
Applicants’ submissions, .
River Gum Homes Pty Ltd v Meridian Pty Ltd  QCA 293, .
(1981) 148 CLR 170.
(1946) 46 SR (NSW) 318, 323.
Pickering v McArthur  QCA 294, ; McDonald v Queensland Police Service  QCA 255, .
 1 Qd R 41.
Ibid,  (and omitting footnotes and citations).
(1936) 55 CLR 499.
- Published Case Name:
Murphy & Anor v Number One Quality Homes Pty Ltd
- Shortened Case Name:
Murphy v Number One Quality Homes Pty Ltd
 QCATA 128
Justice Daubney, President
01 Nov 2021