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Mackay Labour Hire Pty Ltd v J M Kelly (Project Builders) Pty Ltd[2015] QDC 196

Mackay Labour Hire Pty Ltd v J M Kelly (Project Builders) Pty Ltd[2015] QDC 196

DISTRICT COURT OF QUEENSLAND

CITATION:

Mackay Labour Hire Pty Ltd v J M Kelly (Project Builders) Pty Ltd [2015] QDC 196

PARTIES:

MACKAY LABOUR HIRE PTY LTD ACN 130813295

(plaintiff)

v

J M KELLY (PROJECT BUILDERS) PTY LTD ACN 010280412

(defendant)

FILE NO/S:

84/2013

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Mackay

DELIVERED ON:

7 August 2015

DELIVERED AT:

Mackay

HEARING DATE:

31 July 2015

JUDGE:

Smith DCJA

ORDER:

  1. The application by the defendant to strike out paragraphs 3-11, 17-25 and 31-40 of the further amended statement of claim is dismissed.
  2. The words “void pursuant to the determination by Kingham DCJ delivered 27 September 2013” are struck out from paragraphs 3 (d), 18(c) and 33 (c) of the further amended defence and counter claim.
  3. The defendant is granted leave to withdraw the admissions made in paragraphs 3, 6 (a), 7 (a), 18, 21 (a), 33, 34, 35, 36, 37 and 38 (a) of the defence filed 13 October 2014.
  4. The defendant is given leave to file and serve its counter claim dated 23 July 2015.
  5. I will hear the parties as to costs.  

CATCHWORDS:

PRACTICE AND PROCEDURE – striking out part of statement of claim – whether reasonable cause of action disclosed – whether issue estoppel prevented the plaintiff from alleging a contract with the defendant – whether admissions should be permitted to be withdrawn – whether leave should be given to permit the defendant to bring a counter claim

BUILDING CONTRACTS – whether section 42 of the Queensland Building Services Authority Act 1991 (Q) governs a claim under the Building and Construction Industry Payments Act 2004 (Q)

Building and Construction Industry Payments Act 2004 (Q) ss 5, 12, 17, 19, 100

Queensland Building Services Authority Act 1991 (Q) ss 42 schedule 2

Uniform Civil Procedure Rules 1999 (Q) rr 7, 149, 150, 171, 178, 371, 658

Australian Securities Commission v Marlborough Goldmines Ltd (1993) 112 ALR 627

Blair and Others v Curran and Others (1939) 62 CLR 464

Brodyn Pty Ltd v Davenport [2003] NSWSC 1019

Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421

Cant Contracting Pty Ltd v Casella [2007] 2 Qd. R. 13

Carl Zeiss Stiftung v Rayner & Keeler Ltd (No. 2) [1967] 1 AC 853

Castillon v P&O Ports (No 2) [2008] 2 Qd R 219

Cook’s Construction Pty Ltd v SFS 007.298.633 Pty Ltd [2009] QCA 75

David Securities Pty Ltd & Ors v Commonwealth Bank of Australia (1991) 175 CLR 353

Demir Pty Ltd v Graf Plumbing Pty Ltd [2004] NSWSC 553

Falgat Constructions Pty Ltd v Equity Australia Corporation

Pty Ltd (2005) 62 NSWLR 385; [2005] NSWCA 49

Hanson Construction Materials Pty Ltd v Norlis and others [2010] QSC 34.

Kuligowski v Metrobus (2004) 220 CLR 363

Mackay Labour Hire Pty Ltd v J M Kelly (Project Builders) Pty Ltd [2013] QDC 230

Marshall v Marshall [1999] 1 Qd R 173

Peekhrst Pty Ltd v Wallace & Anor [2007] QSC 159

PJS Development Pty Ltd v Tong [2003] QSC 337

Puerto Galera Pty Ltd v JM Kelly (Project Builders) Pty Ltd [2008] QSC 356

Reed Construction Qld Pty Ltd v Dellsun Pty Ltd [2009] QSC 263

Rigato Farms Pty Ltd v Ridolfi [2001] Qd R 455; [2000] QCA 292

Santos v Delhi Petroleum Pty Ltd [2002] SASC 272

Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd. R. 196

UI International Pty Ltd v Interworks Architects Pty Ltd [2008] 2 Qd R 158

Walton Constructions Qld Pty Ltd v Plumber by Trades Pty Ltd and Others [2012] QSC 280

COUNSEL:

Mr M. de Ward for the plaintiff

Mr B. Codd for the defendant

SOLICITORS:

Macrossan and Amiet for the plaintiff

Dibbs Barker for the defendant

Introduction

  1. [1]
    This is an application by the plaintiff (document 26) for the following orders:
  1. a declaration pursuant to rule 371 of UCPR that the amended defence and counterclaim served 29 June 2015 is ineffectual to the extent that it purports to withdraw admissions in respect of which the defendant has not obtained leave of the court;
  1. an order that paragraphs 3(d), 18(c) and 33(c) of the amended defence and counterclaim served 29 June 2015 be struck out;
  1. further or alternatively to paragraph 2, an order that the references in paragraphs 3(d), 18(c) and 33(c) of the further amended defence and counterclaim served 13 July 2015 is “void pursuant to the determination by Kingham DCJ delivered 27 September 2013” be struck out;
  1. directions with respect to the further conduct of these proceedings;
  1. costs on an indemnity basis.
  1. [2]
    There is a cross-application by the defendant (document 30) for the following orders:
  1. that, pursuant to rule 171 of the UCPR, paragraphs 3-11, 17-25 and 31-40 of the plaintiff’s further amended statement of claim be struck out;
  1. that, pursuant to rule 188 of the UCPR, the defendant be given leave to withdraw the admissions made in its defence filed 13 October 2014 at paragraphs 3, 6(a), 7(a), 18, 21(a), 33, 34, 35, 36, 37 and 38(a);
  1. that, pursuant to rule 7 of the UCPR, this honourable Court extend the time for filing and service of the defendant’s counterclaim filed 23 July 2015;
  1. costs.

Background

  1. [3]
    This claim concerns the provision by the plaintiff of labour for hire to the defendant at three building sites in Mackay, namely the Mater Hospital, Captains Corner and at the Purlin Sugar Sheds.
  1. [4]
    The plaintiff provided this labour for hire and delivered invoices with respect of these projects to the defendant. The total amount of invoices delivered amounted to $288,242.54. The defendant claims it is not liable with respect to the invoices because it alleges that the plaintiff provided “building work” within the meaning of that term contained in the Queensland Building and Construction Commission Act 1991 (Q) (“QBCC Act[1]); it did not hold a contractor’s licence to carry out this building work; and by reason of s 42(3) of the QBSA Act it was not entitled to any monetary or other consideration for carrying out the building work.  Alternatively, pursuant to s 42(4) of the QBSA Act, it alleges that the reasonable remuneration it can claim is far less than that which presently is claimed.  Further in an amended defence the defendant alleges that it has overpaid the plaintiff and accordingly seeks to set off an amount of $131,178.05 being paid under a mistake of law. 
  1. [5]
    The proceedings commenced the plaintiff by way of originating application filed on 19 August 2013 (document 1), sought judgment against the defendant pursuant to s 19(2)(a)(i) of the Building and Construction Industry Payments Act 2004 (Q) (“BCIPA”) and r 658 in the sum of $258,966.09.  Kingham DCJ, on 27 September 2013, dismissed this application and ordered the matter to proceed as a claim.[2]

Chronology of events

  1. [6]
    Following is a relevant chronology of events:
  1. (a)
    statement of claim, filed 7 August 2014 (document 17);
  1. (b)
    defence, filed 13 October 2014 (document 19);
  1. (c)
    reply, filed 24 October 2014 (document 20);
  1. (d)
    request for further and better particulars of the defence, filed 8 December 2014 (document 21);
  1. (e)
    defendant’s answer to further and better particulars, filed 5 January 2015 (document 22);
  1. (f)
    amended statement of claim, filed 4 May 2015 (document 23);
  1. (g)
    amended reply, filed 6 May 2015 (document 24);
  1. (h)
    further amended statement of claim, filed 5 June 2015 (document 25);
  1. (i)
    further amended defence and counterclaim, filed 23 July 2015 (document 29).

The pleadings

Further amended statement of claim (document 25)

  1. [7]
    Turning to the further amended statement of claim filed on 5 June 2015, the plaintiff alleges the following.

Mater Hospital contract

  1. (a)
    In or about November 2012, the plaintiff and the defendant entered into a contract for the plaintiff to provide the defendant with labour for hire for the Mater Hospital project in North Mackay (paragraph 3).
  1. (b)
    Between November 2012 and 30 April 2013, labour for hire was provided by the plaintiff to the defendant (paragraph 6).
  1. (c)
    Invoices totalling $95,052.65 were rendered which the defendant has refused to pay (paragraphs 8 and 9).
  1. (d)
    The amount was claimed as a debt or as quantum meruit (paragraphs 11 and 14).
  1. (e)
    Alternatively, if the work is “building work”, under s 42(4) of the QBSA Act , the amount of $84,766.64 is claimed (paragraph 14(a)).
  1. (f)
    Alternatively, the amount of $73,237.15 is claimed for materials and labour provided (paragraph 15).

Captains Corner contract

  1. (g)
    In or about April 2013, the plaintiff and the defendant entered into a contract for the plaintiff to provide labour for hire to the defendant for the Captains Corner contract in Mackay (paragraph 17).
  1. (h)
    Between 1 May 2013 and 29 July 2013, the plaintiff issued invoices totalling $171,348.10 which the defendant has refused to pay (paragraph 25).
  1. (i)
    Alternatively, a quantum meruit is sought in the amount of $171,348.10 (paragraph 28).
  1. (j)
    Alternatively, if the work was “building work”, $157,821.13 is claimed under s 42(4) of the QBSA Act (paragraph 28A).
  1. (k)
    Further or alternatively, $141,889.25 is claimed for materials and labour provided (paragraph 29).

Purlin contract

  1. (l)
    On or about 3 July 2013, the plaintiff and the defendant entered into a contract whereby the plaintiff provided labour for hire at the Purlin project in Mackay (paragraph 31).
  1. (m)
    Between 8 July 2013 and 16 August 2013, the defendant was issued a total of $23,056.79 worth of invoices which it has refused to pay (paragraph 40).
  1. (n)
    Alternatively, a quantum meruit in this sum is claimed (paragraph 43).
  1. (o)
    Alternatively, if this is “building work”, $21,724.98 is claimed pursuant to s 42(4) of the QBSA Act (paragraph 43A).
  1. (p)
    Alternatively, the cost to the plaintiff for materials and labour is $18,767.38 (paragraph 44).

Conclusion

  1. (q)
    Therefore, a total of $289,458.54, $265,009.75 or $233,893.78 is sought.

Defence (document 19)

  1. [8]
    In the amended defence filed on 13 October 2014, the defendant alleged as follows:
  1. (a)
    The works alleged in the statement of claim fall within the definition of “building work” pursuant to the QBSA Act (paragraph 1(b)).
  1. (b)
    At all material times, the plaintiff did not hold a contractor’s licence of the appropriate class (or at all) as required by s 42(1) of the QBSA Act (paragraph 1(c)).

Mater Hospital contract

  1. (c)
    Admitted the allegation in paragraph 3 of the statement of claim that it entered into a contract for the plaintiff to provide the defendant with labour for hire for the Mater Hospital project, but alleged that this was “building work” with the consequence the plaintiff was not entitled to any monetary or other consideration subject to s 42(4) of the QBSA Act (paragraph 3).
  1. (d)
    Admitted a material term of the Mater Hospital contract was that the plaintiff would provide Mater labour for hire to the defendant at the request of the defendant but says that such term constituted the carrying out of building work in contravention of the QBSA Act (paragraph 5(a)).
  1. (e)
    Admitted that between November 2012 and 30 April 2013, pursuant to the Mater Hospital contract, the defendant requested Mater labour hire from the plaintiff but says that this was in contravention of s 42(1) of the QBSA Act (paragraph 6).
  1. (f)
    Admitted paragraph 7 of the statement of claim that defendant requested further Mater labour for hire from the plaintiff but says that this was building work within the meaning of that term contained in the QBSA Act (paragraph 7). 
  1. (g)
    Admitted that the plaintiff issued the defendant the tax invoices listed in paragraph 8 of the statement of claim but alleges there was overcharging (paragraph 8).
  1. (h)
    Alleges it is not liable to pay the Mater Hospital invoices (paragraph 9).
  1. (i)
    Alleges it is not in breach of the contract as alleged in paragraph 10 of the statement of claim because it had no contractual obligation to pay that sum (paragraph 10).
  1. (j)
    Denies the claim for quantum meruit (paragraph 12) and denies that the sum sought in paragraph 14 of the statement of claim was a fair and reasonable value for the work claimed (paragraph 14).
  1. (a)
    In or about November 2012, the plaintiff and the defendant entered into a contract for the plaintiff to provide the defendant with labour for hire for the Mater Hospital project in North Mackay (paragraph 3).
  1. (b)
    Between November 2012 and 30 April 2013, labour for hire was provided by the plaintiff to the defendant (paragraph 6).
  1. (c)
    Invoices totalling $95,052.65 were rendered which the defendant has refused to pay (paragraphs 8 and 9).
  1. (d)
    The amount was claimed as a debt or as quantum meruit (paragraphs 11 and 14).
  1. (e)
    Alternatively, if the work is “building work”, under s 42(4) of the QBSA Act , the amount of $84,766.64 is claimed (paragraph 14(a)).
  1. (f)
    Alternatively, the amount of $73,237.15 is claimed for materials and labour provided (paragraph 15).

Captains Corner contract

  1. (g)
    In or about April 2013, the plaintiff and the defendant entered into a contract for the plaintiff to provide labour for hire to the defendant for the Captains Corner contract in Mackay (paragraph 17).
  1. (h)
    Between 1 May 2013 and 29 July 2013, the plaintiff issued invoices totalling $171,348.10 which the defendant has refused to pay (paragraph 25).
  1. (i)
    Alternatively, a quantum meruit is sought in the amount of $171,348.10 (paragraph 28).
  1. (j)
    Alternatively, if the work was “building work”, $157,821.13 is claimed under s 42(4) of the QBSA Act (paragraph 28A).
  1. (k)
    Further or alternatively, $141,889.25 is claimed for materials and labour provided (paragraph 29).

Purlin contract

  1. (l)
    On or about 3 July 2013, the plaintiff and the defendant entered into a contract whereby the plaintiff provided labour for hire at the Purlin project in Mackay (paragraph 31).
  1. (m)
    Between 8 July 2013 and 16 August 2013, the defendant was issued a total of $23,056.79 worth of invoices which it has refused to pay (paragraph 40).
  1. (n)
    Alternatively, a quantum meruit in this sum is claimed (paragraph 43).
  1. (o)
    Alternatively, if this is “building work”, $21,724.98 is claimed pursuant to s 42(4) of the QBSA Act (paragraph 43A).
  1. (p)
    Alternatively, the cost to the plaintiff for materials and labour is $18,767.38 (paragraph 44).

Conclusion

  1. (q)
    Therefore, a total of $289,458.54, $265,009.75 or $233,893.78 is sought.

Defence (document 19)

  1. [8]
    In the amended defence filed on 13 October 2014, the defendant alleged as follows:
  1. (a)
    The works alleged in the statement of claim fall within the definition of “building work” pursuant to the QBSA Act (paragraph 1(b)).
  1. (b)
    At all material times, the plaintiff did not hold a contractor’s licence of the appropriate class (or at all) as required by s 42(1) of the QBSA Act (paragraph 1(c)).

Mater Hospital contract

  1. (c)
    Admitted the allegation in paragraph 3 of the statement of claim that it entered into a contract for the plaintiff to provide the defendant with labour for hire for the Mater Hospital project, but alleged that this was “building work” with the consequence the plaintiff was not entitled to any monetary or other consideration subject to s 42(4) of the QBSA Act (paragraph 3).
  1. (d)
    Admitted a material term of the Mater Hospital contract was that the plaintiff would provide Mater labour for hire to the defendant at the request of the defendant but says that such term constituted the carrying out of building work in contravention of the QBSA Act (paragraph 5(a)).
  1. (e)
    Admitted that between November 2012 and 30 April 2013, pursuant to the Mater Hospital contract, the defendant requested Mater labour hire from the plaintiff but says that this was in contravention of s 42(1) of the QBSA Act (paragraph 6).
  1. (f)
    Admitted paragraph 7 of the statement of claim that defendant requested further Mater labour for hire from the plaintiff but says that this was building work within the meaning of that term contained in the QBSA Act (paragraph 7). 
  1. (g)
    Admitted that the plaintiff issued the defendant the tax invoices listed in paragraph 8 of the statement of claim but alleges there was overcharging (paragraph 8).
  1. (h)
    Alleges it is not liable to pay the Mater Hospital invoices (paragraph 9).
  1. (i)
    Alleges it is not in breach of the contract as alleged in paragraph 10 of the statement of claim because it had no contractual obligation to pay that sum (paragraph 10).
  1. (j)
    Denies the claim for quantum meruit (paragraph 12) and denies that the sum sought in paragraph 14 of the statement of claim was a fair and reasonable value for the work claimed (paragraph 14).
  1. (k)
    Denies paragraph 15 of the statement of claim namely the $73,237.15 claimed by the plaintiff for materials and labour (paragraph 15).

Captains Corner contract

  1. (l)
    Admits paragraph 17 of the statement of claim which alleges that the plaintiff and the defendant entered into a contract for the plaintiff to provide the defendant with labour for hire in relation to rectification works the defendant was undertaking at Captains Corner but says this was “building work” in contravention of s 42(1) of the QBSA Act (paragraph 18).
  1. (m)
    Admits paragraph 19(a) of the statement of claim that the plaintiff would provide the Captains Corner labour for hire to the defendant at the request of the defendant but says that this was building work within the meaning of that term contained in the QBSA Act (paragraph 20(a)).
  1. (n)
    Admits paragraph 20(a) of the statement of claim i.e. that during the month of April 2013 pursuant to the contract the defendant requested Captains Corner labour for hire from the plaintiff but says that this was building work in contravention of s 42(1) of the QBSA Act (paragraph 21).
  1. (o)
    Admits paragraph 21 of the statement of claim that from on or about 1 May 2013 to 29 July 2013 the defendant requested further Captains Corner labour for hire from the plaintiff but says this was building work in contravention of s 42(1) of the QBSA Act (paragraph 22).
  1. (p)
    Admits paragraph 22 of the statement of claim that between 1 May 2013 and 29 July 2013 the plaintiff issued the defendant with weekly invoices with respect to Captains Corner but says there was overcharging (paragraph 23).
  1. (q)
    Alleges that it was in breach of the Captains Corner contract because it had no contractual obligation to pay the sum (paragraph 25 of defence).
  1. (r)
    Denies the quantum meruit (paragraph 29).
  1. (s)
    Denies the other claims brought by the plaintiff (paragraphs 29, 30, 31 and 32 of defence).

Purlin contract

  1. (t)
    Admits paragraph 31 of the statement of claim in which it is alleged that on or about 3 July 2013 the plaintiff and the defendant entered into a contract for the plaintiff to provide the defendant with labour for hire in relation to rectification works the defendant was undertaking for the Purlin rectification project at sugar sheds between July 2013 and August 2013 at Mackay but says that this was building work in contravention of s 42(1) of the QBSA Act (paragraph 33).
  1. (u)
    Admits paragraph 32 of the statement of claim that the Purlin contract was partly oral and partly in writing (paragraph 32).
  1. (v)
    Admits paragraph 35(a) of the statement of claim that the material term of the contract was that the plaintiff would provide Purlin labour for hire to the defendant at the request of the defendant but says that this was building work pursuant to the QBSA Act (paragraph 37).
  1. (w)
    Admits paragraph 36(a) of the statement of claim that the defendant requested Purlin labour for hire but says this was building work in contravention of s 42(1) of the QBSA Act (paragraph 38).
  1. (x)
    Admits paragraph 37 of the statement of claim i.e. between 8 July 2013 and 16 August 2013 the plaintiff issued the defendant weekly invoices with respect to the Purlin labour but says there was overcharging (paragraph 39).
  1. (y)
    Denies it is obliged to pay on the Purlin contract (paragraphs 40, 42, 43, 44, 45, 46).

The reply (document 24)

  1. [9]
    In the plaintiff’s amended reply the following is pleaded:
  1. (a)
    Alleges the plaintiff only ever provided labour hire services as distinct from “building work” (paragraph 1(b)(ii)).

Mater Hospital

  1. (b)
    Adopts the admission in the defence at paragraph 3(a) of the agreement concerning the Mater Hospital contract (paragraph 3(a)).
  1. (c)
    Adopts the admission in paragraph 5(a) of the defence i.e. a term of the agreement was that the plaintiff would provide labour for hire to the defendant (paragraph 5(a)).
  1. (d)
    Joins issue with the allegations as to s 42 of the QBSA Act (paragraphs 5(b)-(d)).
  1. (e)
    Adopts the admission made in paragraph 6 of the defence i.e. the defendant requested labour for hire (paragraph 6(a)).
  1. (f)
    Denies any entitlement to set off (paragraph 6(b)).
  1. (g)
    Adopts the admissions made in paragraph 7(a) of the defence i.e. the defendant requested further work and services from the plaintiff (paragraph 7(a)).
  1. (h)
    Adopts the admission by the defendant in paragraph 8 of the defence, namely the admission that the plaintiff issued the invoices pleaded (paragraph 8(a)) but otherwise joins issue.
  1. (i)
    Joins issue with paragraphs 9, 10, 11, 12, 14, 15, 16 and 17 of the defence (paragraphs 9, 10, 11, 12, 14, 15, 16 and 17).
  1. (j)
    Alleges that the defendant is deemed to have admitted paragraph 13 of the statement of claim or alternatively joins issue (paragraph 13).[3]

Captains Corner

  1. (k)
    Adopts the admission made in paragraph 18 of the defence i.e. the admission the parties entered into an agreement whereby the plaintiff was contracted to supply the defendant with resources but otherwise denies it was “building work” (paragraph 18).
  1. (l)
    Adopts the admission made in paragraph 20(a) of the defence i.e. the admission that a term of the contract was that the plaintiff would provide labour for hire at the request of the defendant (paragraph 20(a)) but otherwise joins issue with paragraph 20 of the defence.
  1. (m)
    Adopts the admission made in paragraph 21(a) of the defence i.e. the defendant requested labour for hire from the plaintiff for Captains Corner but denies it was building work (paragraph 21(a)).
  1. (n)
    Adopts the admission made in paragraph 22(a) of the defence i.e. the defendant required further work and services from the plaintiff and this was provided (paragraph 22(a)).
  1. (o)
    Adopts the admission made in paragraph 23(a) of the defendant i.e. the plaintiff issued tax invoices to the defendant (paragraph 23(a)).
  1. (p)
    Joins issue with paragraphs 24, 25, 26, 27, 28, 29, 30 and 31 (paragraphs 24-31).

Purlin contract

  1. (q)
    Adopts the admissions made in paragraph 33(a) of the defence i.e. the admission by the defendant that the parties entered into an agreement whereby the plaintiff was contracted to supply resources to the defendant but denies it was “building work” (paragraph 33(a)).
  1. (r)
    Adopts the admission made in paragraph 34 of the defence.  The purported admission is to paragraph 32 of the statement of claim i.e. the Purlin contract is partly oral and partly in writing (paragraph 34).[4]
  1. (s)
    Adopts the admission in paragraph 35 of the defence. The purported admission is to paragraph 33 (paragraph 35).[5]

Purlin contract

  1. (t)
    Adopts the admission in paragraph 36 of the defence (paragraph 36).[6]
  1. (u)
    Adopts the admission in paragraph 37 (a) of the defence but denies the remainder of the sub-paragraph (paragraph 37).[7]
  1. (v)
    Adopts the admission in paragraph 38(a) of the defence i.e. the defendant requested the plaintiff for the provision of work but denies the allegation it was building work (paragraph 38(a)).
  1. (w)
    Adopts the admission made at paragraph 39 of the defence i.e. the plaintiff issued the defendant with tax invoices (paragraph 39).
  1. (x)
    Joins issue with paragraph 40-48 of the defence (paragraphs 40-48).

Striking out of the statement of claim

  1. [10]
    It is first convenient to deal with the defendant’s application to strike out paragraphs 3-11, 17-25 and 31-40 of the further amended statement of claim. This application is brought under r 171.  This rule enables a court to strike out a pleading or part thereof if inter alia it discloses no reasonable course of action or defence.
  1. [11]
    In respect of striking out a claim, in UI International Pty Ltd v Interworks Architects Pty Ltd[8] Keane JA noted that a statement of claim must show how legal “obstacles [raised] may be surmounted.”  
  1. [12]
    Associated with this application is that the plaintiff seeks an order to strike out paragraphs 3(d), 18(c) and 33(c) of the amended defence and counterclaim or alternatively the Court should strike out that part of the defence alleging that the contract was void by reason of the decision of Kingham DCJ.

Submissions

  1. [13]
    The defendant submits:
  1. (a)
    Kingham DCJ conclusively determined that the plaintiff carried out “building work” in contravention of s 42 of the QBSA Act;
  1. (b)
    this Court is bound by that decision;
  1. (c)
    the decision of Kingham DCJ constitutes an issue estoppel and in the absence of an appeal the facts cannot be further litigated;
  1. (d)
    an analysis of the BCIPA leads one to the conclusion that it was a final claim concluded by her Honour
  1. [14]
    The plaintiff submits:
  1. (a)
    there is no issue of estoppel in this case;
  1. (b)
    all that Kingham DCJ did was to dismiss an application on the material before the Court;
  1. (c)
    paragraph [28] of the judgment in particular is relied upon as is the fact her Honour ordered the matter proceed as a claim.
  1. (d)
    the application before her Honour was bought pursuant to Part 3 of the BCIPA and a BCIPA payment claim is not a final determination.

The law – issue estoppel

  1. [15]
    In Blair v Curran[9] Dixon J held at p 531 that a judicial determination which disposes once and for all the issues cannot afterwards be raised by the same parties.
  1. [16]
    At p 532 his Honour stated:

“Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order… the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue… Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation.”

  1. [17]
    In Australian Securities Commission v Marlborough Goldmines Ltd[10] the High Court noted that the doctrine of issue estoppel does not apply where the application was in the nature of an interlocutory proceeding and did not decide the question.
  1. [18]
    In Santos v Delhi Petroleum Pty Ltd[11] Lander J at [397]-[400] said:

“… in order to determine whether an issue estoppel arose it was necessary to determine whether there had been a final determination of the issue and it was therefore necessary to determine the character of the first order. If it did no more than dismiss the application on the material before the Court then no issue estoppel could arise… [399] There is no reason in principle, why an issue might not be finally determined on interlocutory proceedings. Some interlocutory proceeding do finally dispose of the parties’ rights… [400] The question is not answered by reference to whether the application is interlocutory or otherwise but by reference to the order itself and whether it amounts to a final determination such that it is not only impractical to bring the issue before the Court but impermissible. There must be a final judgment on the issue before the Court. That does not mean that an issue which has been resolved on an interlocutory application cannot give rise to an issue estoppel. It may be if the resolution of the issue finally determines that issue between the parties.” (my underlining)

  1. [19]
    In Castillon v P&O Ports (No 2)[12] the plaintiff applied to extend the limitation period.  The application was dismissed by the District Court on the basis that the plaintiff had within his means of knowledge, prior to 27 November 2001, all material facts of a decisive character.
  1. [20]
    A second application was made with new evidence. Holmes JA and Wilson J held that the original District Court decision disposed of the issue once and for all.[13]
  1. [21]
    As to this decision I consider it different to the instant case. In Castillon the original decision by the District Court was one which finally disposed of the rights of the parties. Holmes JA at [50] adopted the approach taken by Lord Guest in Carl Zeiss Stiftung v Rayner & Keeler Ltd (No. 2)[14]i.e. whether there was a final judgment.
  1. [22]
    His Lordship said:

“The requirements of issue estoppel still remain 1. That the same question has been decided 2. That the judicial decision said to create the estoppel was final and 3. That the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised.”[15]

  1. [23]
    Her Honour noted at [55] that there should be caution in “coming to the conclusion that an estoppel had been created by a decision given in an interlocutory context.”
  1. [24]
    Indeed Lord Reid in Carl Stiftung at page 918 noted that he thought it unsurprising that the House of Lords in another case did not find issue estoppel where there was a final judgment but in a summary procedure. 
  1. [25]
    The High Court in Kuligowski v Metrobus[16]adopted Lord Guest’s approach i.e. inter alia the decision must be a final one.
  1. [26]
    After considering the above authorities it seems that the key issue to be determined is whether the decision of Judge Kingham was final.

Analysis of the legislation

  1. [27]
    Section 12 of the BCIPA provides:

“From each reference date under a construction contract, a person is entitled to a progress payment if the person has undertaken to carry out construction work, or supply related goods and services, under the contract.”

  1. [28]
    Section 17(1) of the BCIPA relevantly provided:

17 Payment claims

  1. (1)
    A person mentioned in s 12 who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment (the respondent).”
  1. [29]
    Section 19 of the BCIPA relevantly provided:

19 Consequences of not paying the claimant if no payment schedule

  1. (1)
    This section applies if the respondent –
  1. (a)
    becomes liable to pay the claimed amount to the claimant under s 18 because the respondent failed to serve a payment schedule on the claimant within the time allowed by the section; and
  1. (b)
    fails to pay the whole or any part of the claimed amount on or before the due date for the progress payment to which the payment claim relates.
  1. (2)
    The claimant—
  1. (a)
    may—
  1. (i)
    Recover the unpaid portion of the claimed amount from the respondent as a debt owing to the claimant, in any court of competent jurisdiction;

...

  1. (iv)
    if the claimant starts proceedings under sub-section (2)(a)(i) to recover the unpaid portion of the claimed amount from the respondent as a debt–
  1. (a)
    judgment in favour of the claimant is not to be given by a court unless the court is satisfied of the existence of the circumstances referred to in sub-section (1); and
  1. (b)
    the respondent is not, in those proceedings, entitled –
  1. (i)
    to bring any counterclaim against the claimant; or
  1. (ii)
    to raise any defence in relation to matters arising under the construction contract.”
  1. [30]
    It has been held that s 42 of the QBSA Act affects a person’s entitlement to access the BCIPA.[17]Section 42 of the QBSA Act relevantly provided:

42 Unlawful carrying out of building work

  1. (1)
    A person must not carry out, or undertake to carry out, building work unless that person holds a contractor’s licence of the appropriate class under this Act.

  1. (3)
    Subject to subsection (4), a person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so.
  1. (4)
    An unlicensed person who carries out, in the course of employment, building work for which that person’s employer holds a licence of the appropriate class under this Act does not contravene this section.
  1. (5)
    An unlicensed person who holds an owner-builder permit does not contravene this section by carrying out building work permitted by the permit.
  1. [31]
    In Marshall v Marshall[18]McPherson JA held that s 42 had two limbs namely:
  1. (a)
    prohibiting an unlicensed person undertaking to carry out building work; and
  1. (b)
    prohibiting an unlicensed person from carrying out building work.[19]
  1. [32]
    The purpose of the Parliament introducing the BCIPA was to ensure quick adjudication so that builders could be paid progress payments quickly and not in determining ultimate rights.  The ultimately correctness of the progress payment could be argued later.[20]
  1. [33]
    In Peekhrst Pty Ltd v Wallace & Anor[21]Douglas J said at [16]:

“The Act provides what has been described as a ‘fast track interim progress payment adjudication vehicle’…

[17] As Einstein J went on to say in Brodyn[22] at [14]:

‘What the legislature has provided for is no more or no less than an interim quick solution to progress payment disputes which solution critically does not determine the parties’ rights inter se. Those rights may be determined by curial proceedings, the court then having available to it the usual range of relief, most importantly including the right to a proprietor to claw back progress payments which it had been forced to make through the adjudication determination procedures. That claw back route expressly includes the making of restitution orders.’” (my underlining)

  1. [34]
    I note s 100 of the BCIPA makes it clear that payment claims under Part 3 of the Act do not affect any right that a party to a construction contract has under the contract and do not affect any civil proceedings arising under the construction contract and allows the court in civil proceedings to make orders it considers appropriate. Also of course relevant is s 5 of BCIPA which provides that the Act does not limit a claimant’s entitlements or remedies the claimant may have under a construction contract.
  1. [35]
    Statements made in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd[23]are to similar effect.
  1. [36]
    It also seems clear from the decision of Cook’s Constructions Pty Ltd v SFS 007.298.633 Pty Ltd[24] that the effect of section 42 (3) of the QBSA Act is to “sterilise any claim which might otherwise be made under a contract or under the common law by an unregistered builder.”  
  1. [37]
    I note that the defendant also submits a final order could have been made on the originating application.[25]

Decision by Kingham DCJ

  1. [38]
    Turning to the decision of Kingham DCJ, the originating application filed by the plaintiff was “the applicant have judgment against the respondent pursuant to s 19(2)(a)(i) of the BCIPA and rule 658 of the UCPR for the sum of $258,966.09 together with interest pursuant to s 67P of the QBSA Act or alternatively interest pursuant to s 58 of the Civil Proceedings Act 2011.” 
  1. [39]
    The application was heard before Kingham DCJ on 23 August 2013. The defendant argued that the plaintiff could not invoke the recovery procedure under the BCIPA as it did not hold a licence under the QBSA Act.[26]Her Honour noted at [8] that it was common ground Mackay Labour did not hold a licence under the QBSA Act.  Her Honour noted at [9] that in Cant Contracting[27]the Court of Appeal concluded that s 42(3) was a bar to invoking the procedure of the Payments Act.
  1. [40]
    At [10] her Honour held:

“Given that decision, the parties agree that, if Mackay Labour was required to hold a licence because of its supply of labour to Project Builders, its claim under the Payments Act could not proceed.”

  1. [41]
    Her Honour then at [14] stated:

“The question is, then, whether Mackay Labour was required to hold a licence under the QBSA Act in order to provide labour to carry out construction work. That depends on the interpretation of the phrase carry out in s 42(1) of the QBSA Act.

  1. [42]
    Her Honour then analysed s 42(1) and the definition of “carry out” in schedule 2 to the QBSA Act.  Her Honour then referred to two Supreme Court decisions.[28]Her Honour noted at [26]:

“There is no argument that the work undertaken by the labourers themselves was building work in the sense that it caused the building to be built. However, Mackay Labour asserts there is no factual foundation for concluding that it indirectly caused the building work to be carried out, in the sense required under s 42 of the QBSA Act. Mackay Labour was not engaged to perform building work and it did not do so. It supplied Project Builders with labour so that Project Builders could carry out building work. Project Builders directed the labourers and were responsible for their supervision and for completion of the construction work.”

  1. [43]
    Her Honour noted at [27] that the plaintiff’s characterisation of the arrangement was disputed by Project Builders.
  1. [44]
    Importantly, at [28], her Honour held:

“On a judgment application, where the deponents of the conflicting affidavits were not subject to cross-examination, it is not appropriate to resolve the factual dispute. In any case, were I to act on the evidence led by Mackay Labour, I would consider it has indirectly carried out building work.”

  1. [45]
    Her Honour then referred to the Oxford Dictionary definitions at [29] and held:

“[30] Those definitions are helpful. If Mackay Labour had assumed responsibility for undertaking the building work and supervised its employees to carry it out, then it would be directly causing the work to be done. It does not have that direct responsibility or role. Mackay Labour stands at one, remove (sic) from the act of construction. Indirectly, though, by supplying the labour to undertake the work, it has caused it to be carried out. Its role is not so removed that it could be argued its connection with causing the work to be done was too remote to fall within the definition.

[31] Given my conclusion on that point, s 42(3) of the QBSA Act precludes Mackay Labour from proceeding under the Payments Act and the application for judgment is refused.”

  1. [46]
    Her Honour then analysed whether the payment claims were valid and effective under the Payments Act and concluded that there was a failure to strictly comply with s 17(1).[29]Her Honour held that the application for summary judgment was refused, the applicant had to pay costs, and the originating application would proceed before the court as a claim.

Disposition

  1. [47]
    It is my view that the plaintiff’s arguments should be accepted. It is my opinion that the BCIPA was designed to ensure a quick adjudication of payments to builders.  The ultimate correctness of these payments can be argued at a later point. 
  1. [48]
    When one closely analyses the judgment of Kingham DCJ in the end result, her Honour ultimately held it was not appropriate to resolve the factual dispute.  She did not make a final order.  She dismissed what she called a “summary judgment”.  Whilst that might not have been correct terminology in its terms, it certainly indicates the approach the court took. Her judgment did not in its terms finally dispose of the rights between the parties.
  1. [49]
    In the circumstances, I do not consider there has been a final determination as required by the authorities for the application of the principles of issue estoppel.
  1. [50]
    As to the paragraphs challenged it seems to me that more needs to be pleaded by the plaintiff to support the contention that what was provided by the plaintiff was not “building work” as alleged by the defendant. It seems to me that the appropriate place to plead the material facts in this regard is in the reply. Presently the reply states that the allegations by the defendant are “conclusions of law.” However r 150(4) provides that a party in a defence must specifically plead a matter that shows a transaction is void or voidable. This is what has happened here. Also, a conclusion of law may be pleaded under the rules (see r 149(2)). In those circumstances I consider it incumbent on the plaintiff to plead the matters it relies on in reply.   
  1. [51]
    In the circumstances, I decline to strike out paragraphs 3 to 11, 17 to 25 and 31 to 40 of the plaintiff’s further amended statement of claim, and I strike out paragraphs 3(d), 18(c) and 33(c) of the further amended defence and counterclaim served 13 July 2015 where it reads “is void pursuant to the determination by Kingham DCJ delivered 27 September 2013”.

Withdrawal of admissions

  1. [52]
    The defendant applies pursuant to r 188 for leave to withdraw admissions made in the defence in paragraphs 3, 6(a), 7(a), 18, 21(a), 33, 34, 35, 36, 37 and 38(a) of its defence filed 13 October 2014. 
  1. [53]
    The plaintiff applies for a declaration pursuant to r 371 that the amended defence and counterclaim filed in July 2015 is ineffectual to the extent that it purports to withdraw the admissions. 

Submissions

  1. [54]
    The defendant submits:
  1. (a)
    the original defence (document 22) pleaded in paragraphs 3, 18 and 33 the operation of s 42 of the QBSA Act;
  1. (b)
    the defence has always been that no enforceable contract between the parties existed;
  1. (c)
    the amendments are necessary to allege “unlicensed building work” and are necessary to remove an ambiguity in the pleading.
  1. [55]
    The plaintiff submits:
  1. (a)
    rule 371 permits a court to declare that a document or step taken is ineffective;
  1. (b)
    in order for a party to obtain leave it is necessary for the party to provide evidence of a genuine dispute about the matters that have been admitted and evidence needs to be lead on how and why the admissions came about, any delay and prejudice;[30]
  1. (c)
    the defence have not sworn as to the matters above.

The law

  1. [56]
    Rule 188 of the UCPR provides:

“A party may withdraw an admission made in a pleading or under r 187 only with the court’s leave.”

  1. [57]
    I am prepared to accept the plaintiff’s submissions that in the usual case there would need to be sworn evidence on the reason admissions are to be withdrawn.
  1. [58]
    I however consider the present case to be a different matter. At all times the plaintiff has been aware that the defendant has alleged that any contract with it was void by reason of the provisions of the QBSA Act. 
  1. [59]
    In effect, the new paragraphs admit entry into agreements with the plaintiff and requesting further services but allege that the contracts were void and the requests for further service as the plaintiff carried out “building work” as defined. The withdrawal of amendments here will regularise the pleadings. I do not consider there is any prejudice to the plaintiff if the admissions are withdrawn. Neither actual or presumed prejudice has been alleged by the plaintiff. It seems to me that it has always been clear that the allegation by the defendant is that this work or provision of labour for hire was “building work” in accordance with the Act.
  1. [60]
    In the circumstances, I exercise my discretion to permit the withdrawal of the allegations.

Leave to extend time for filing and serving of counterclaim

  1. [61]
    The plaintiff does not oppose this. I have considered the material. The counterclaim directly relates to allegations made in the defence originally. In the circumstance, I consider it appropriate to grant leave to extend time for the filing and serving of the counterclaim.
  1. [62]
    No doubt the plaintiff will give consideration in its answer to any defences which may arise to a claim for unjust enrichment.[31]

Directions

  1. [63]
    I am prepared to make directions for the future conduct of this matter if requested.

Costs

  1. [64]
    I am prepared to hear the parties on the question of costs. My preliminary view in light of the mixed outcome and in light of the issues involved is that it would be appropriate to reserve costs to the trial judge. If one or both of the parties contends that a different order should be made, I direct that submissions (not longer than 3 pages for each party) will be filed and served within 72 hours, otherwise the order of the court is that the costs of and incidental to the applications are reserved to the trial judge.

Footnotes

[1] Formerly the Queensland Building Services Authority Act 1991 (Q) (“QBSA Act”). The relevant reprint is the one current as at 1 January 2011. 

[2] Mackay Labour Hire Pty Ltd v J M Kelly (Project Builders) Pty Ltd [2013] QDC 230.

[3] It is not certain that there are admissions.

[4] It is not certain that there are admissions.

[5] It is not certain that there are admissions.

[6] It is not certain that there are admissions.

[7] It is not certain that there are admissions.

[8] [2008] 2 Qd R 158 at [114].

[9] (1939) 62 CLR 464 at pp 531-532.

[10] (1993) 112 ALR 627 at p 639.

[11] [2002] SASC 272 at [397]-[400].

[12] [2008] 2 Qd R 219.

[13] Ibid at [74].

[14] [1967] 1 AC 853 at pp 909 and 917 per Lord Reid; 927 per Lord Hodson; 935 per Lord Guest; 949 per Lord Upjohn.

[15] Ibid. at p 935.

[16]         (2004) 220 CLR 363 at [21].

[17] See Cant Contracting Pty Ltd v Casella & Anor [2007] 2 Qd. R. 13 at [33] per Williams JA, [44] per Jerrard JA and [55] and [61] per Phillip McMurdo J.

[18] [1999] 1 Qd. R. 173 at p 175.

[19] Also see Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd. R. 196 per McPherson JA at [3], Pincus JA at [12] and [21] and Jones J at [24].

[20] Demir Pty Ltd v Graf Plumbing Pty Ltd [2004] NSWSC 553 at [19], referred to at [34] of Reed Construction Qld Pty Ltd v Dellsun Pty Ltd [2009] QSC 263.

[21] [2007] QSC 159 at [16].

[22] Brodyn Pty Ltd v Davenport [2003] NSWSC 1019 at [14] affirmed in the NSW Court of Appeal see (2004) 61 NSWLR 421 at [87].

[23] (2005) 62 NSWLR 385; [2005] NSWCA 49 at [13] and [22] per Handley JA.

[24] [2009] QCA 75 at [39] per Keane JA.

[25] Walton Constructions Qld Pty Ltd v Plumber by Trades Pty Ltd and Others [2012] QSC 280 at [12].

[26] Op. Cit. 2 at [4].

[27] Op. Cit. 17.

[28] PJS Development Pty Ltd v Tong [2003] QSC 337 and Puerto Galera Pty Ltd v JM Kelly (Project Builders) Pty Ltd [2008] QSC 356.

[29] Op. Cit. 2 at [43].

[30] Hanson Construction Materials Pty Ltd v Norlis and others [2010] QSC 34 at [16] and Rigato Farms Pty Ltd v Ridolfi [2001] Qd R 455; [2000] QCA 292.

[31] David Securities Pty Ltd and Others v Commonwealth Bank of Australia (1991) 175 CLR 353.

Close

Editorial Notes

  • Published Case Name:

    Mackay Labour Hire Pty Ltd v J M Kelly (Project Builders) Pty Ltd

  • Shortened Case Name:

    Mackay Labour Hire Pty Ltd v J M Kelly (Project Builders) Pty Ltd

  • MNC:

    [2015] QDC 196

  • Court:

    QDC

  • Judge(s):

    Smith DCJA

  • Date:

    07 Aug 2015

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Australian Securities Commission v Marlborough Goldmines Ltd (1993) 112 ALR 627
2 citations
Blair v Curran (1939) 62 C.L.R., 464
2 citations
Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSW LR 421
2 citations
Brodyn Pty Ltd v Davenport (2003) NSWSC 1019
2 citations
Cant Contracting Pty Ltd v Casella[2007] 2 Qd R 13; [2006] QCA 538
2 citations
Carl Zeiss Stiftung v Rayner & Keeler Ltd (1967) 1 AC 853
3 citations
Castillon v P&O Ports Ltd[2008] 2 Qd R 219; [2007] QCA 364
3 citations
Cook's Construction Pty Ltd v SFS 007.298.633 Pty Ltd [2009] QCA 75
2 citations
David Securities Pty Ltd v Commonwealth Bank of Australia (1991) 175 CLR 353
2 citations
Demir Pty Ltd v Graf Plumbing Pty Ltd (2004) NSWSC 553
2 citations
Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd (2005) 62 NSWLR 385
2 citations
Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2005] NSWCA 49
2 citations
Hanson Construction Materials Pty Ltd v Norlis [2010] QSC 34
2 citations
Kuligowski v Metrobus (2004) 220 CLR 363
2 citations
Mackay Labour Hire Pty Ltd v J.M. Kelly (Project Builders) Pty Ltd [2013] QDC 230
2 citations
Marshall v Marshall[1999] 1 Qd R 173; [1997] QCA 382
2 citations
Peekhurst Pty Ltd v Wallace [2007] QSC 159
2 citations
PJS Development Pty Ltd v Tong[2004] 2 Qd R 172; [2003] QSC 337
2 citations
Puerto Galera Pty Ltd v JM Kelly (Project Builders) Pty Ltd [2008] QSC 356
2 citations
Reed Construction (Q) Pty Ltd v Dellsun Pty Ltd[2010] 2 Qd R 481; [2009] QSC 263
2 citations
Ridolfi v Rigato Farms Pty Ltd[2001] 2 Qd R 455; [2000] QCA 292
2 citations
Ridolfi v Rigato Farms Pty Ltd [2001] Qd R 455
2 citations
Santos v Delhi Petroleum Pty Ltd [2002] SASC 272
2 citations
UI International Pty Ltd v Interworks Architects Pty Ltd[2008] 2 Qd R 158; [2007] QCA 402
2 citations
Walton Construction (Qld) Pty Ltd v Plumber by Trade Pty Ltd (No 2) [2012] QSC 280
2 citations
Zullo Enterprises Pty Ltd v Sutton[2000] 2 Qd R 196; [1998] QCA 417
2 citations

Cases Citing

Case NameFull CitationFrequency
Mackay Labour Hire Pty Ltd v J M Kelly (Project Builders) Pty Ltd (No. 2) [2015] QDC 2091 citation
1

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