Suncorp-Metway Limited v Queensland Building Services Authority
[1998] QDC 305
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- Suncorp-Metway Limited v Queensland Building Services Authority[1998] QDC 305
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Suncorp-Metway Limited v Queensland Building Services Authority[1998] QDC 305
Suncorp-Metway Limited v Queensland Building Services Authority[1998] QDC 305
IN THE DISTRICT COURT HELD AT BRISBANE QUEENSLAND | Application No 3972 of 1993 |
[Before Robin QC DCJ]
[Suncorp-Metway Limited v Queensland Building Services Authority]
IN THE MATTER of the QUEENSLAND BUILDING SERVICES AUTHORITY ACT 1991
AND:
IN THE MATTER of a Decision of the QUEENSLAND BUILDING TRIBUNAL
AND:
IN THE MATTER of an Application by SUNCORP-METWAY LIMITED
JUDGMENT
Judgment delivered: | 16 November 1998 |
Catchwords: | Application for leave to appeal from Queensland Building Tribunal to District Court – leave granted, appeal allowed – Tribunal ordered joinder in a review sought by consumers (owners) of Queensland Building Services Authority's decision to refuse indemnity when their builder failed to complete domestic building work – Authority contended builder had been overpaid – consumers claimed that any overpayment was made by and represented a breach of duty by their bank (in tort, contract or pursuant to the Trade Practices Act) – Tribunal found bank “may be affected by the review” and ordered joinder – subsequent statement of claim revealed damages, interest and costs sought from bank – bank allowed extension of time to seek leave to appeal – bank “affected” only if made a party – whether bank should have been joined, if unwilling, simply to be bound by Tribunal findings on the overpayment issue – whether Tribunal had power to determine issues raised and grant relief claimed by consumers – Queensland Building Services Authority Act 1991 s 99(4). |
Counsel: | Mr Gynther for applicant Mr Willis for respondent |
Solicitors: | Corrs Chambers Westgarth for applicant Queensland Building Services Authority for respondent |
Hearing Date(s): | 19 & 20 October 1998 |
IN THE DISTRICT COURT HELD AT BRISBANE QUEENSLAND | Application No 3972 of 1993 |
BETWEEN:
IN THE MATTER of the QUEENSLAND BUILDING SERVICES AUTHORITY ACT 1991 | Plaintiff |
AND:
IN THE MATTER of a Decision, of the QUEENSLAND BUILDING TRIBUNAL | Defendant |
REASONS FOR JUDGMENT - ROBIN Q.C. D.C.J.
Delivered the 16th day of November, 1998
Before the court is an application by Suncorp-Metway Ltd for the following relief:
“1. An enlargement of time be granted under section 94(2) of the Queensland Building Services Authority Act 1991 within which to seek leave to appeal the decision of the Queensland Building Tribunal made on 31 July 1998 in Application No. R067-98 (“the Decision”).
- Leave be granted to appeal the Decision that it be joined as the second respondent in those proceeding.
- Leave be granted to file and serve a Notice of Appeal substantially in the form of the document marked as exhibit “MDB 5” to the Affidavit of Martin David Byres sworn on 15 September 1998.
- Shaun Timothy Eagles and Natalie Gai Eagles, the Applicants in Application No. R067-98, pay the Applicant's costs of and incidental to this application to be taxed.”
In the event, the parties represented on the application, the applicant and the Queensland Building Services Authority, made submissions sufficient to enable the appeal to be determined, should leave be granted. There was no appearance for Shaun Timothy Eagles and Natalie Gai Eagles, also respondents named in the application, who are the applicants in the Queensland Building Tribunal proceedings. In those proceedings they seek a review of an Authority determination denying them an indemnity they seek under the insurance scheme operating under the Queensland Building Services Authority Act 1991. It appears their builder, one Lazzaroni, failed to complete construction of a residence for them, and now may be bankrupt. In its statement of reasons delivered to the Tribunal, the Authority asserts that Mr and Mrs Eagles or their agents “paid to or on behalf of the builder certain moneys before they became due under the contract. Specifically the Applicants, or the Applicants' agent paid to the builder the sum of $24,332.80 in circumstances where the builder had not executed the work to prepaint stage in accordance with the contract. Pursuant to s 2.3(d) and s 7.4(a) of the Insurance Policy the Authority determined to reduce the amount of compensation payable under the policy by the amount of the pre-payment of the Applicants, or the Applicants' agent to the builder.”
The present applicant agreed to lend Mr and Mrs Eagles funds for the construction and became a mortgagee of their property. According to Mr Eagles' affidavit in the Tribunal, the mortgage was signed before any building contract was made. The affidavit says:
“7. It was a term of the mortgage that my wife and I would pay an extra fee on the mortgage to have a registered building inspector check the property before any progress payments were made by the bank.
- At the time of entering into the mortgage my wife and I paid the extra fee referred to in paragraph 7.
- I believe the purpose of paying extra for the registered building inspector was to avoid the need for my wife and I to go on site to authorise the progress payments.
- Apart from the general authorisation given in the mortgage, I did not authorise or direct the bank to pay any of the progress payments.
...
- On 22 May 1998 my wife and I commenced these proceedings in the Queensland Building Tribunal for review of the BSA decision and for joinder of the bank as a party to the proceedings.”
The affidavit asserts that the Authority is fully liable, relying on estoppel said to flow from conduct of a staff member.
(Of course, the various assertions referred to above may or may not be established in the end.)
The reasons given for the Tribunal's order that “Suncorp-Metway Limited be joined as a party and be known as the second respondent in these proceedings” are before the court. They record that at a case management conference on 4 June 1998 the Eagles undertook to notify Suncorp-Metway of their application and that it was represented by solicitors at a hearing on 26th June 1998. Only the Eagles acted on the Tribunal's invitation to file written submissions. It seems a reasonable inference that Suncorp-Metway did not oppose being joined. The affidavit of Mr Byres filed in support of the application in this court states, and I accept that before the order for joinder, there was no indication by the Eagles that they would be seeking any relief against his client as part of the review proceedings in the Tribunal. On 20th August 1998, at a directions hearing, came advice of the Eagles' desire to amend their application to include claims for relief against Suncorp-Metway.
The directions made included the following:
“1. The applicant shall file in the registry two copies and deliver to the other party one copy of its amended application to include relief as against the second respondent by 4pm on 28 August 1998.
- That the second respondent indicate by letter to the Tribunal and the parties whether it intends to bring any application for joinder by 4pm on 4 September 1998.
- The second respondent shall:
- (a)File in the registry two copies and deliver to the other parties, one copy of its statements and statements of all its witnesses to give evidence at the hearing of this matter;
- (b)Attach to the appropriate statements any relevant documents and explain in that statement, their significance;
- (c)Deliver to the other parties a list of all other documents in its possession or under its control relevant to this matter by 4pm on 11 September 1998.”
I am uncertain what joinder was contemplated by paragraph 2. It may relate to an independent valuer A D Dickinson who appears to have inspected the works for Suncorp-Metway, reporting that “works to the dwelling have progressed past “pre paint” stage and have been carried out to a tradesman like standard... value of work completed to date $101,500.00 (against a) Contract Price $126,000.00”, certifying that a personal inspection had occurred, generating satisfaction that “the value of work completed to date is correct and payment to the above builder is recommended.” On the other hand, it may be that if Mr Lazzaroni was overpaid, he was to be joined, with a view to be ordered to make some repayment. (Of course, the considerations may be different if the builder has been replaced in the picture by a bankrupt estate. The builder may have made over payments in turn, to sub-contractors, for materials and/or labour required before pre-paint stage is reached, and paid for but not supplied, or taken away from the site. The point of this speculation is to illustrate the point that joinder of everyone potentially concerned might produce a very large cast list of litigants in the Tribunal, in reliance on s 99(4) of the Act. The question for the moment is whether the provision authorises and should have been used to order the joinder of Suncorp-Metway. Its position now is that it should not have been joined, its thinking having been “concentrated”, to quote its counsel, Mr Gynther, following receipt close to the Tribunal's deadline of the Eagles' statement of claim, which Mr Byres adequately summarises as claiming for the first time against his client damages pursuant to s 82 of the Trade Practices Act (on the basis of alleged misleading and deceptive conduct), also damages for breach of contract and negligence, together with interest and costs. Twenty-eight of the 40 paragraphs relate to Suncorp-Metway, the others relate to the Authority. Among the allegations are that the building inspection service arranged by Suncorp-Metway was unfit for its particular purpose, in breach of warranties arising from s 74 of the Trade Practices Act and that Suncorp-Metway failed to engage a reasonably competent person to assess the state of construction of the dwelling. There are important contractual questions raised, including, one would think, whether the restrictions contemplated in the loan agreement and mortgage upon what Suncorp-Metway should advance to the builder operate for the benefit of Suncorp-Metway, to ensure its security interest is not jeopardised, or in the interest of the borrower, or in the interests of both.
If such matters are to be litigated, Suncorp-Metway desires that this happen in a court of more general jurisdiction, rather than the Tribunal, with its relatively specialised jurisdiction. One of its objections is that the Tribunal lacks power to award costs on the review under s 99. This is said to be established by a group of Tribunal decisions collected in Stephen J Pyman, Annotated Queensland Building Services Act (2nd) 101. It was not contended in this court that costs (a kind of order not mentioned in s 95(5), in stark contrast to s 95(4)(g)) might be available in the present review. That Mr and Mrs Eagles may be doomed to disappointment in respect of their claim for costs is of little comfort to Suncorp-Metway, which would normally expect to obtain its costs of a successful defence of claims like those brought, or of successful claim for an indemnity or damages against someone further down the line. No doubt, those who want Suncorp-Metway in the review, being the Eagles and the Authority (who support the Eagles and in effect presented their case before the District Court), could provide some comfort by undertaking to pay Suncorp-Metway's costs to be assessed in some way, if it was successful in the Tribunal. That might increase the attraction of litigating in the Tribunal.
It is not suggested that considerations of the availability of costs if a party is successful determine whether or not the party ought to be compelled to litigate in the Tribunal. The question is to be determined under s 99(4). However, it is my view that a proper interpretation of s 99 (4) must take into account that a party, perhaps unwillingly, may find itself litigating claims usually pursued in the ordinary courts (where costs may be expected to follow the event) in a Tribunal which is precluded from providing even partial indemnity in respect of the costs of mounting a successful case.
The cases that have been referred to me include Baulderstone Hornibrook Pty Ltd v Queensland Building Services Authority (and seven other respondents), App No. R132-95, 2nd June 1997, Mr Cotterell, a decision upheld by a Judge of this court in re Baulderstone Hornibrook Pty Ltd, App No. 2936 of 1997, 22nd May 1998. The applicant had obtained ex parte an order from the Tribunal joining various respondents under s 99(4) including Beneficial Finance Corporation Ltd, which became the builder/developer's mortgagee in possession, and architects, Conrad & Gargett Pty Ltd. I note with interest that Mr Cotterell, at page 4 of his reasons, refers to the distinction which on the hearing of the present application I had suggested might exist between situations in which a person seeks to be joined (in which the authorities show it is appropriate to give a wide meaning to the notion of “a person affected”), and situations in which that person does not seek to be joined, but is sought to be brought in on the initiative of the Tribunal itself or an existing party. In that case the mortgagee and the architect, who had reserved their rights to make application for their joinder to be set aside, remained as parties to the relevant review for nine and a half months during which, it seems, attempts were made to resolve some of the issues in a co-operative manner. It was not suggested in the present case that it had become too late for Suncorp-Metway to seek similar relief. Baulderstone Hornibrook does not appear to me to be authority for the proposition that financiers or architects should not be joined under s 99(4). The outcome focused very much on whether directions could be given to persons in either category under s 72(1) of the Act, a negative answer being reached. Further, the architect had the benefit of a relevant exemption in Regulation 3A(d). There appears to be a notion underlying this decision that persons ought not to be joined unless the Act specified some kind of order that could be made against them.
Section 99(4) is:
“(4) The Tribunal may order that a person who may be affected by the review be joined as a party to the review, and may make orders against, and give directions to, the person.”
The only real argument for joinder of Suncorp-Metway, and it is a strong argument, is that it will spare Mr and Mrs Eagles from the risk of “falling between stools”, as might happen if the Tribunal determined that the builder had been overpaid. There is a possibility that in proceedings somewhere else, the Eagles may fail to establish against Suncorp-Metway that there had been an overpayment, which would presumably prove fatal to their prospects of making good whatever amount the Authority avoided having to pay in the Tribunal. (The Authority's position appears to be that, because some of the work necessary to entitle the builder to the last progress payment he received was not done, the builder should have received nothing at all, and there was over-payment in the full amount of the progress payment.) The Eagles would have other matters to establish against Suncorp-Metway such as the existence of a relevant duty in it not delegable to A C Dickinson, and a breach of duty. One cannot but have sympathy for the Eagles, consumers whom the Act was designed to protect and benefit, ensuring “the maximum level of integrity in the process of resolving disputes...(bringing) security and confidence to all sides”, according to the Minister's second reading speech. There is no suggestion in it that disputes between consumers and their finance providers are to be dealt with under the Act by the Tribunal. Indeed, it would be impossible to contend that the present dispute of that nature came within the Tribunal's power to adjudicate domestic building disputes conferred by s 95. The relevant definitions are not satisfied. Section 99(4) does not in terms limit the persons who may be joined as a party to a review to persons involved in a “domestic building dispute” as defined in s 4, or to persons involved in “building work”.
I am satisfied that, even if the Tribunal is characterised as an administrative body, its determination of the issue of over-payment of the builder would create an issue estoppel affecting the parties in the review. References to “judicial determination” or to decisions “in any Court of competent jurisdiction” in well known cases such as Blair v Curran (1939) 62 CLR 464, 531-32 and Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290, 303 notwithstanding, it is now clear that the determination of a competent administrative tribunal may create an issue estoppel binding the parties in other proceedings in which they may find themselves together. See Lambidis v Commissioner of Police (1995) 37 NSW LR 320 and Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353. Thus, there is utility in getting Suncorp-Metway joined in the review from the point of view of its being bound by a determination adverse to Mr and Mrs Eagles on the over-payment issue.
The learned Tribunal Member accepted Suncorp-Metway would not be bound by Tribunal findings if not made a party. I think there may be some over-estimate of the moral force of findings adverse to its interests by the Tribunal in the following passage from page 9 of the Member's reasons:
“One of the objects of the Act at section 3(c) is “to provide the efficient resolution of building disputes”. In my view that object is consistent with the object which I identify as one which is sought to be achieved by the Applicants here, namely to prevent duplicity of litigation upon the same topic. Having regard to what I find to be a compatibility of the interests sought to be achieved by the Applicants and this Act and the view expressed generally in the relevant cases, that “affect” is to be interpreted generously, I find that Suncorp is affected by this review. In my view it does have an interest in these proceedings beyond the interest which might displayed by a member of the general public. Further in my view there are matters of procedural fairness which ought properly be accorded to Suncorp, namely an opportunity to cross-examine and present submission in relation to the question which will inevitably be posed at the final hearing of this application, whether the bank negligently certified the pre-paint payment as due. Should this Tribunal make findings adverse to the interests of Suncorp in circumstances where it was not a party, its interests would be affected, in my view, by those prejudicial findings and the use or reference to them in any other litigation, even though those findings would not bind them. The effect of these findings might have some persuasive effect in the proceedings. Any judge with the conduct of proceedings against Suncorp would doubtless be made aware of any findings by this Tribunal in this application. Being human, any judicial officer could not help but have some regard or interest in any adverse findings. There is, in the event of prejudicial findings, some prospect, and not too remote a prospect, that Suncorp's interests in that separate litigation will be prejudicially affected.
Based upon the wide or generous interpretation of the term “affected persons” or similar to be found in the leading cases, I am persuaded that Suncorp's interests may be affected by the review. It is of some importance that the wording of this statute refers to “the review” and not “the decision under review”.”
The expression “person who may be affected by the review” is extraordinarily wide. Potentially anyone in the circle of any party or of the parties' representatives or of the Member may be affected by the review. Likewise, secretarial staff who prepare orders and reasons. As it happens, there is a good deal of instructive jurisprudence from Alberta, suggesting, unsurprisingly, that “affected” is wider than “directly affected”: Friends of the Athabasca Environment Association v Alberta Public Health Authority & Appeal Board (1994) 18 Alberta Law Reports (3rd) 92. A person who is indirectly affected by the result of proceedings may be held “affected” by them: re Sun Life Assurance Co of Canada and Revenue Canada Taxation (1997) 144 DLR (4th) 653, in which the Court of Appeal, in criticising another court's understanding of “affected” as too narrow, said:
“While the guarantors had no direct legal interest in the bank appeal, that appeal would certainly have an indirect effect on their legal liability under the guarantees, and it would also affect them financially.”
Sun Life was held a “party affected”, entitled to apply to set aside an order because of the significant commercial importance to it of the underlying question, which concerned the tax exempt status of a species of annuity, and because it was at risk of facing a suit if it paid certain moneys over without raising the issue of their exempt status. On the other hand, there are limits. In re Pension Fund Properties Ltd and Development Appeal Board of City of Calgary (1981) 127 DLR (3rd) 477, which concerned the entitlement of one D M Fisher to pursue a planning appeal in relation to a pedestrian mall, McDermid JA in the leading judgment said at 480:
“However, for the purposes of this judgment, I am willing to assume, as did the chairman of the Board, that Fisher was a resident of Calgary and he had visited and would visit the mall. Does this make him a person “affected” by the development permit that was issued by the Calgary Planning Commission?
The word “affected” is capable of a very large meaning: Re Clarendon Development Ltd (1965), 50 DLR (2nd) 521, 51 MPR 108, [1965-69] 4 NSR 427. Like any other word used in a statute it must take its meaning from the context of the statute in which it is used. As one member of the Board said, “...any resident of Calgary is affected by what happens on the Mall”. This may be so but only in the very broadest sense of the word. Did the Legislature intend a resident of Calgary, living some miles from the mall, for it was admitted Cherokee Dr was some mile from the mall, and who may occasionally walk there, for there was no evidence as to what use Fisher made of it, should have the right to appeal against the grant of a development permit to an owner of property, contiguous to the mall, to construct a building thereon? I find nothing in the Act which would so suggest, and much to the contrary. I am not able to lay down with precision any definition of person affected; the line separating those persons affected, whom the Act intends to have the right of appeal, from those persons affected in the broadest sense, but whom the Act did not intend to have the right to appeal, may have to be drawn slowly as the cases are decided, a method often practised in our system of case law. The line of necessity may be an arbitrary one decided by the Courts on a pragmatic basis; in using such a broad work the Legislature has made the Act difficult to administer, if no unworkable, if the word is not interpreted in a reasonable manner.
In considering how far the Legislature intended the word “affected” to extend it is relevant to consider s 82(3) of the Act:
82(3) The development appeal board shall give at least five days' notice in writing of the public hearing to
- (a)the appellant,
- (b)the development officer from whose order, decision or development permit the appeal is made,
- (c)the municipal planning commission of the municipality if it is not the development officer, and,
- (d)those owners required to be notified under the land use by-law and other person that the development appeal board considers to be affected by the appeal should be notified.
(Emphasis added.)
If Fisher was a person affected because he was a resident of Calgary and had used the mall, should the Board then have considered whether the thousands of other residents of Calgary who use the mall should have been notified? This appeal was not by an organized group of persons who might have status, but by a single individual.
As Mr Smith, a member of the Board, suggested, is a person who walks the mall occasionally any more affected by a decision than one who drives 17th Ave affected by what goes on there? Is a driver of a car on a street to be considered a person affected by the construction of a building on the street where in the course of such construction his driving is impeded by the construction?”
The appeal failed.
Examples are more easily found where the formula is “directly affected”, as the following note from Stroud's Judicial Dictionary (5th) Volume 2 p717 illustrates:
“(9) “Parties directly affected by the appeal” (R.S.C, Ord 59 r3), does not include a party who has been served by a defendant under the old Ord 16, and has obtained leave to appear at the trial: ss Re Salmon, Priest v Uppleby, 42 Ch D 351. It is doubtful whether an official receiver is a party “directly affected” by a bankruptcy appeal (Re Webber, 24 Q.B.D. 313), but where an official receiver is appealing against an order to stay proceedings, the petitioning creditor is “directly affected,” but not the other creditors, who merely appeared when the order was made (Re W L [1901] 2 K.B. 354). A bailiff assaulted by a person convicted for the assault and now applying for release pending appeal was held not to be “directly affected” by the application (Brown v Crowley [1963] 1 W.L.R 1102).”
Over and above the difficulty of defining how widely the net of those “affected” extends is an ambiguity in the use of “may be”. This produced a sharp difference of judicial opinion in a case treated at some length in Stroud Volume 3 p.1574 - 75:
“(a) Guarantee of “any balance that may be due,” construed by Pollock C.B., and Martin B. (dissenting, Bramwell B), as referring to a future balance (Broom v Batchelor, 25 LJ Ex 299). Pollock CB, said: “‘May be’ is, in my judgment, clearly future. I have been unable to find direct authority in any dictionary, but in Cruden's Concordance of the Bible, from sixty to eighty references are given, and the expression “may be” is found in various parts of the Bible, nine of ten of which have manifestly a reference to the future, and not to the past or present, and not one is necessarily future. The Concordance of Shakespeare gives no references in respect to the words “may” and “be”. But as far as I can bring my knowledge of the English language to bear upon the subject, “may be” is much oftener used with reference to the future than the past or the present.”
- (b)On the other hand, Bramwell B, said: “‘May be’ is the present tense, and, prima facie, means “now may be.” It is occasionally used in the future tense, no doubt, as, for instance, “may be due today.” or “may be due tomorrow.” I apprehend you may use it to indicate future applications; but in that case it must be understood as applied in the present tense. A thing “may be black”, or “it may be fit to eat,” or “it may be fit to cook.” If you use the words “may be”, without indicating the time, to my mind the expression applies to the present, or, more correctly, not to a question with reference to the future.”
In Ridley's Agreement, Ridley v Ridley (1911) 55 Solicitors' Journal 838, after referring to the above decision upon the construction of a promise to execute a settlement of “all my share, property or interest, as well vested or accruing, to which I may be entitled under any will or settlement”, Swinfen Eady J said:
“In my judgment this agreement to settle does not extend to or include the property to which the husband ultimately became entitled under the will of his father, nor does it extend to any property to which he might become entitled in the future. In fact, it does not include what is, in my judgment, a mere spes successions.”
I have come to the view that it is necessary to construe s 99(4) on the basis that “may be” refers to the present, and does not comprehend a potentially infinite variety of future consequences. Stroud offers some further illustrations showing that present as well as future phenomena are caught:
“(2) Semble, a testamentary gift to such members of a class as “may be born,” has a similar meaning to one where the phrase is “to be born.” In Storrs v Benbow ( 22 L.J. Ch 825), Cranworth C, said that such a gift, for children, might be interpreted in three ways - it might mean children (i) in esse at the date of the will, or (ii) that might come into being in the lifetime of the testator, or (iii) that might be born at any time. The last meaning must, generally, be rejected because “a line must be drawn somewhere, otherwise the distribution of the testator's estate would be stopped and executors would not know how to act,” and the amount required would be indefinite. The second interpretation, when expanded to include children en ventre at the death of the testator, is probably the more general meaning: “I think it clear that the expression “may be born” may include children already born; but I rather lean to the opinion - which I collect from the judgment in Early v Benbow, 2 Coll 342, to have been that of my learned brother - that the words themselves, in the absence of any context to explain them, are to be taken as words of futurity” (per Turner L.J., Townsend v Early 3 D.G.F. & J 11).
- (3)A covenant to insure buildings which “may be erected,” held to include those then standing (Sims v Castiglione [1905] W.N. 112).
In my opinion, Suncorp-Metway is unaffected by the review, unless it is made a party. That it is or will be affected once a party may be conceded; this does not justify the joinder. I would reject any argument for joinder that “pulled itself up by its own boot straps” in this way.
In my respectful opinion, Mr Cotterell has raised an important point, noted already, in the distinction he thought (and I think) must be drawn in logic and common sense between those who want to be joined in a review under s 99(4) and those who do not, who are brought into or kept in the review against their wishes. No one would be surprised at the indulgent, welcoming attitude established in the cases towards those who wish to be heard in some controversy. The Eagles' written submissions appear to have placed before the Tribunal leading cases such as Tooheys Limited v Minister for Business and Consumer Affairs (1981) 36 ALR 64 and Right to Life Association (NSW) Inc v Department of Human Services and Health (1995) 128 ALR 238. Brennan J's dictum as President of the Administrative Appeals Tribunal in re McHatton & Collector of Customs (NSW) (1977) 1 ALD 67, 70 quoted at page seven of the Member's reasons for decision, is a reminder that where a decision could not affect somebody directly, there most be some evidence to show the person's interests are in truth affected. As his Honour picturesquely put it in distinguishing between persons directly and persons indirectly affected, “Across the pool of sundry interests, the ripples of affection may widely extend.” The Member referred to Big Country Developments Pty Ltd v Australian Community Pharmacy Authority (1995) 132 ALR 379, which denied the status of “person aggrieved” to a shopping centre owner complaining of the decision of the Pharmacy Authority to permit a pharmacist tenant to relocate. The headnote records that Lindgren J held:
“Parliament cannot have intended that any financial interest adversely affected by a decision will fall within s 3(4) of the Administrative Decisions Judicial Review Act. The applicant's interest in the retention of the pharmacy at its shopping centre and the non-establishment of a pharmacy at the other nearby shopping centre was not intended to serve the public interest in the restructuring of the pharmacy industry in Australia. Its interest was not coincident with, or embraced by, the interests served by the legislation. Rather, the applicant sought to obtain a windfall benefit as a by-product of the advent of restructuring.”
This approach may be prove useful in the application of s 99(4).
A decision that Suncorp-Metway could not be joined under the provision on its own application, if it wished to achieve some generally binding determination upon the overpayment issue, would be a silly one, and I think a wrong one, once it was able to demonstrate existing or threatened proceedings by the Eagles complaining of its over paying the builder. It will be said that there ought to be no distinction between a discretion to join on such an application and a discretion to join on the Eagles' application, or of the Tribunal's own motion. I do not agree. I think the position taken by a party faced with joinder is of considerable importance. It ought to be a factor meriting serious consideration when the Tribunal determines how its discretion should be exercised. More than that, it bears on whether the discretion arises. The cases tend to show that great respect is accorded to the asserted views of would-be participants in litigation who claim they are affected by it. Only the most outlandish claims, or claims which the courts find vitiated by some ulterior motive, appear to fail. In many instances, those eager litigants are properly held “affected” (a fortiori they “may be” affected if that expression contemplates possible future events); it makes good sense to treat such persons as “affected”. It is otherwise if the view that they are (or “may be”) affected is reached by someone else, particularly someone else with opposed interests. No one is likely to officiously seek to be joined in proceedings under a regime such as s 99 (in which the Tribunal may “make orders against” him, nothing being said about orders in favour of him). Granted that there may be exceptional cases, a person claiming to be affected should be treated as affected. Where a prospective party resists joinder, in my view, there must be clear evidence that person is presently affected by the review, as a person directly affected by a possible outcome would be. Pointing to possibilities wholly for the future will not suffice.
It is unfortunate the Tribunal Member was not informed of the Eagles' full intentions (as ultimately spelled out in “amended attachment ‘A’” to their application). The Member had no reason to apprehend that anything more was intended than to get Suncorp-Metway bound by the determination of the over-payment issue. I cannot understand how the Tribunal could grant the relief now sought against Suncorp-Metway. Its powers on the review are to “confirm, annul, vary or reverse the decision subject to the review”, which concerns the Authority's liabilities. I would not be willing to accept that the power to “make consequential orders and directions” extends to determining questions of duty and liability and pronouncing a judgment as between mortgagor and mortgagee based on contract, tort and the Trade Practices Act. I have been quoting s 99(5) which, it seems to me, sets out the Tribunal's powers on review. It would be an unacceptable case of “the tail wagging the dog” to look for such powers against a party joined in the review, who was not involved in the decision subject to the review.
The Member was properly conscious that there has been criticism of proceedings in the Tribunal because appropriate use was not made of s 99(4) to join parties, in particular, in one case, the builder. See Queensland Building Services Authority v Matthew Troy Carey, Appeal No. 1209 of 1997, 20th June 1997, Judge Brabazon QC, pages 7 and 19 of his Honour's reasons. No one seems to have thought to involve the builder, or his trustee, if he is bankrupt, in any way here, although he may be shown to be the undeserving recipient of a substantial over-payment. I do not think it is right, nor has the Tribunal said it is right, for the Eagles to pursue in the Tribunal the important claims they do now pursue.
There was no contest from the Authority to Suncorp-Metway's application for further time to make application for leave to appeal under s 94(2). It is obvious that Suncorp-Metway moved expeditiously once apprised of the Eagles' true goals in the review. The necessary extension of time to enable the application to be brought is granted. There should be leave to appeal. It is rather odd to find the Member giving reasons explaining why it is in Suncorp-Metway's interests to be joined as a party. This is probably explicable in terms of its lack of contribution at the hearing before the Member and afterwards. It may be appropriate to visit Suncorp-Metway with costs consequences for its failure to consider its situation fully enough in the first place. That “standing by” ought not to lead to refusal of leave to appeal, if the appeal, as it seems to me, is one which ought to succeed. It is a very strong thing to require the applicant in this court, a stranger to the building industry, to respond to litigation in the Tribunal which the ordinary courts would try, in the usual course. They offer the attraction (from the applicant's point of view at least) of a power to award costs. There is a public interest in having a District Court examination of the proper scope of s 99(4). For those reasons it is appropriate to grant leave to appeal.
The appeal should be allowed. The Tribunal's order of 31st July 1998 that the present applicant be joined as second respondent in the review should be set aside, and with it all directions given in the Tribunal involving the present applicant.
The parties will have the opportunity to make submissions as to other orders that ought to be made.
It is to be hoped that the parties in this application and appeal are able to devise some efficient means of resolving the overpayment issue by an agreement or by participation in some process whose outcome all agree to accept - and not only them, perhaps, because it is plain that others may need to be brought in as well. For what it is worth (and it may be worth little, as I have an imperfect understanding of the full facts), it seems to me that it might be advisable to clarify whether the appropriate monetary amount to cover the nine items the Authority claims are “outstanding”, from the point of view of construction reaching pre-paint stage, really amount to $24,332.80, which I take to be the full amount of the last progress payment the builder received. I do not intend to pronounce on whether, if the Authority succeeds on any of those items, it is entitled to penalise the Eagles in an amount corresponding with the whole progress payment. Whatever the legal position, there may be scope for a practical solution here in terms of the cost of the work Mr Lazzaroni has left for others to do. The Eagles, who I was informed lack the financial resources to permit them to be represented on the application, will not be interested in running a test case. It may that the monetary amount really in issue tarns out to be considerably smaller than the sum I have mentioned, and that all parties involved can reach some compromise they are willing to live with, and avoid disproportionate trouble and cost in the future. I have had occasion to read the Minister's second reading speech seeking enlightenment that may be found there as to the meaning of the Act. The Eagles, as consumers, are getting rather less than the protection the Minister may have contemplated; however, there is nothing in the speech to suggest that the Act was intended to bring within its purview willy nilly persons whose contact with any activity in the building industry is wholly indirect.
After the foregoing reasons had been prepared, the Court of Appeal set aside the District Court decision mentioned at pp6 - 7, in Baulderstone Hornibrook Pty Ltd v Beneficial Finance Corporation Limited, App No. 5499 of 1998, 6 November 1998. There appears to have been no appeal against the setting aside of joinder of the architect. Beneficial Finance Corporation Limited, as the judgments in the Court of Appeal make clear, went beyond being a mere lender with security, or even the paymaster of the builder. When the original builder, assumed to have been also the developer, got into difficulties, Beneficial went into possession and entered into contracts itself for the completion of relevant building work and tiling in particular (deficiencies in which allegedly permitted water penetration some considerable time afterwards). Baulderstone Hornibrook was brought in as manager by the mortgagee in possession, no doubt because of its expertise in the building industry. It was the mortgagee in possession, rather than the manager, which entered into contracts with relevant firms for building work to be done, and which paid for the work. The Authority issued the manager a direction to carry out rectification work. Pincus JA, who wrote the leading judgment considered it “clear” that Beneficial was “a person who ... carried out the building work” within s 72(2)(d) of the Act. Therefore, his Honour said, “The principal question in the case...whether under s 72...the Authority may direct the mortgagee to rectify certain building work” must be answered affirmatively. His Honour said at page five:
“It was contended that there was no procedure under which the mortgagee could be ordered to do anything about defective work and so it could not be “a person who may be affected by the review” within the meaning of 99(4). The correctness of this submission depends on the scope of s 99(5) of the 1991 Act which reads as follows:
“On an application for review, the tribunal may confirm, annul, vary or reverse the decision subject to the review and make consequential orders and directions”.
It will be recalled that the Authority's decision which came to the Tribunal for review was a direction that the manager carry out rectification work. There are, as it seems to me, at least two ways in which the mortgagee might be affected by the review. First, if the Authority's direction to the manager is upheld and it is obliged to expend money on rectification, that might give rise to a right indemnification under the general law against its principal, the mortgagee. Secondly, reversal of the Authority's direction that the manager rectify the defects might be based on the ground (being one of those in fact relied on by the manager) that the works were carried out for the mortgagee as principal; the argument would no doubt be that, as a matter of discretion, the direction to rectify should be varied by requiring the work to be done by the principal (the mortgagee) rather than the manager. It should be added that these possibilities were not explored in detail before us, nor need they have been; it was enough for the manager's purposes to contend that the mortgagee was a person who “may be”, not “would be”, affected by the review.”
The first and second possibilities canvassed in the passage are readily appreciated. The reference to a right of indemnification under the general law causes me particular concern. It may be taken as an indication that any litigant in the Tribunal is entitled to bring in any person under s 99(4) against whom it has a claim to indemnity (or contribution, or, perhaps, damages for some loss or injury consequential upon the Tribunal's determination of the principal dispute) - whatever the nature or circumstances of the asserted entitlement to claim such relief. I have reached the view that his Honour's statement should be understood in the context in which it was made, in which Beneficial was found to have carried out the relevant building work and for reward, as a principal, so as to be amenable to a direction to rectify, in relief of Baulderstone Hornibrook. Beneficial (unlike Suncorp-Metway here) is revealed as a person against whom the Authority might make determinations, issue directions and so forth. It was, in my view, engaged in the building industry, in a way in which Suncorp-Metway has not been alleged to be. Thomas JA agreed with Pincus JA's reasons, saying for himself:
“This case raises the question whether a mortgagee in possession who engages a builder and others to perform works on a building may later be called on by the Queensland Building Services Authority to remedy defective work.
...
When such a mortgagee proceeds to make fresh building arrangements with existing and additional contractors and sub-contractors in order to enhance the property which it wishes to sell, or indeed where it seeks to be a profit sharer in a venture which requires further building work to be performed in order to enhance the project, one can readily see that the mortgagee might become a person who for profit or reward directly or indirectly caused the further works to be carried out.”
Byrne J expressed his reasoning more narrowly:
“Joinder under s 99(4) of the 1991 Act was therefore appropriate on the footing that the mortgagee “may be affected by the review” because it might yet be the subject of a rectification direction under s 72.”
The passage of Pincus JA quoted above appears to indicate that “may be” in s 99(4) is construed as future tense, rather than present tense, necessitating revision of my view expressed above. Nothing in the Court of Appeal judgments, however, establishes that the “ripples of affection”, for purposes of s 99(4), go beyond persons potentially subject to determinations affecting them or directions made against them by the Authority, pursuant to its various powers in the Act, or orders made against them by the Tribunal under s 95. Suncorp-Metway is in neither category. I am not persuaded that s 99 is intended to bring in, at review stage, others who potentially could be indirectly affected by what happens in a review. There may remain, in my view, good reason for allowing s 99(4) to be used by persons wishing to be joined who can show they “may be affected”.
(Counsel were invited to make further submissions in light of the Court of Appeal decision. Mr Willis, for the Authority, supplied lengthy written submissions on Saturday 14th November, which have not persuaded me from the view expressed above. It seems unnecessary to wait for Mr Gynther. Mr Willis identified in Pincus JA's reasons passages which supported the joinder as appropriate -
- (a)under s 99(4), because Suncorp-Metway might be affected in the future, this depending on mere “possibilities”; and
- (b)on the basis of convenience - as to which his Honour said:
“an issue raised by the manager was whether the mortgagee, rather than the manager should be responsible for rectification and it seems on the face of it convenient that both parties interested in that question should be joined before the Tribunal.”
I am not at all sure his Honour was setting out to create an independent ground for joinder. Only those in respect of whom the Tribunal is given jurisdiction by its statute may be joined. Mr Willis is right that the narrower statements of Thomas J A and Byrne J do not preclude a wide view being taken of s 99(4). Convenience no doubt is a factor, and a strong one here, in determining that any discretion whether or not to join Suncorp-Metway should be excused positively. Tending the other way are its wishes, fuelled by the punitive aspect of the “no costs” regime on a review. Mr Willis' submission throughout claims affection on the basis of issue estoppel (favourable or unfavourable), which, as noted above, will arise only if Suncorp-Metway is joined. If it is not joined, then Suncorp-Metway will not be affected by the review except that, in a certain event, the Eagles might decide to pursue it. This seems to me to be too remote for s 99(4) purposes.)