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Etro Metroplex on Gateway CTS 39623 v Broad Construction Services (Qld) Pty Ltd[2015] QDC 62

Etro Metroplex on Gateway CTS 39623 v Broad Construction Services (Qld) Pty Ltd[2015] QDC 62

DISTRICT COURT OF QUEENSLAND

CITATION:

Etro Metroplex on Gateway CTS 39623 v Broad Construction Services (Qld) Pty Ltd & others [2015] QDC 62

PARTIES:

ETRO METROPLEX ON GATEWAY CTS 39623

(Plaintiff)

v

BROAD CONSTRUCTION SERVICES (QLD) PTY LTD (ACN 089 532 061)

(First Defendant)

AND

SILVADA PTY LTD (ACN 099 110 942)

(Second Defendant)

AND

MORGAN CONSULTING ENGINEERS PTY LTD (ACN 009 859 081)

(Third Defendant)

AND

GROUP 4 ARCHITECTS PTY LTD (ACN 072 308 582)

(Fourth Defendant)

FILE NO/S:

570/14

DIVISION:

Civil

PROCEEDING:

Application

DELIVERED ON:

27 March 2015

DELIVERED AT:

Brisbane

HEARING DATE:

25 March 2015

JUDGE:

Bowskill QC DCJ

ORDER:

Parties will be heard on the terms of the orders.

CATCHWORDS:

PROCEDURE – Queensland – Cause of Action – Application for Summary Judgment under r 293 UCPR

PROCEDURE – Queensland – Cause of Action – Application to Strike Out Pleading under r 171 UCPR

Body Corporate and Community Management Act 1997 (Qld)

Uniform Civil Procedure Rules (Qld) rr 171 and 293

Barrett v Enfield London borough Council [2001] 2 AC 550

Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 313 ALR 408; 88 ALJR 911

Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712

The Owners –SP69567 v Landson Alliance Australia [2014] NSWSC 1592

Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515

COUNSEL:

D. Williams for the Applicant

P. Hay for the Respondent

SOLICITORS:

Carter Newell for the Applicant

Piper Alderman for the Respondent

  1. [1]
    By these proceedings, the plaintiff (Etro), the body corporate for a community titles scheme known as the Etro Metroplex on Gateway (Etro Metroplex), seeks to recover the cost of rectifying what it says are defects in the construction of the common property of the scheme, by claims against:
  1. (a)
    the builder of the Etro Metroplex (the first defendant), for breach of contract, negligence, and breach of warranties implied by s 74 of the Trade Practices Act 1974 (Cth) (TPA);
  1. (b)
    the original owner of the land on which the Etro Metroplex was constructed, and the developer of the property (the second defendant) (Silvada), for negligence;
  1. (c)
    the engineers (the third defendant) engaged by Silvada for the purposes of providing engineering services for the design and construction of the Etro Metroplex, for negligence and breach of warranties implied by s 74 of the TPA; and
  1. (d)
    the architects (the fourth defendant) engaged by Silvada for the purposes of providing architectural services for the design and construction of the Etro Metroplex, for negligence, breach of the pleaded design contract and breach of warranties implied by s 74 of the TPA.[1]
  1. [2]
    Etro has foreshadowed[2] broadening the basis of its claim in negligence against Silvada (in reliance upon the requirement in s 46 of the Body Corporate and Community Management Regulation (Commercial Module) 2008 (Qld) for Silvada to provide certain documents[3] to Etro at its first annual general meeting, which Etro alleges Silvada did not do) and also expanding the bases of its claim against Silvada to include:
  1. (a)
    a claim for damages for wrongful compromise or extinguishment of Etro’s rights to claim for the cost of rectification of defects against the builder,[4] in breach of the subrogation rights provided for by s 36(3) of the Body Corporate and Community Management Act 1997 (Qld)[5] (BCCMA); and
  1. (b)
    a claim for damages for breach of the sales contracts between Silvada and the purchasers of lots in Etro Metroplex, on the basis of both express provisions in those contracts (requiring Silvada to construct the building in a good and tradesman-like manner) and warranties implied by operation of s 223 of the BCCMA.[6]
  1. [3]
    By application filed 23 February 2015, Silvada sought the following orders:
  1. (a)
    pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (UCPR), that summary judgment be entered in its favour, on the whole of Etro’s claim against it;
  1. (b)
    alternatively, pursuant to r 171 UCPR that paragraphs 28-34, and 46(b) of the amended statement of claim filed 6 November 2014 (in which the negligence claim against all defendants is pleaded) be struck out.[7]
  1. [4]
    Consequential upon the alternative relief sought under r 171, orders for the removal of Silvada as a party to the proceeding were also sought. However, on the hearing of the application, acknowledging the foreshadowed alternative bases for claim against Silvada, the alternative strike out application was put on the basis that the claim in negligence, as presently pleaded, does not clearly articulate the material facts relied upon as constituting a duty of care particularly owed by Silvada, as distinct from the builder, engineer and architect. Rather, as presently pleaded, the negligence claim is described as a “rolled-up plea that the plaintiff was vulnerable to all defendants in identical terms ‘to suffer property damage and … economic loss’ without making any distinction whatsoever…”.[8]
  1. [5]
    In so far as this issue is concerned, counsel for Etro noted that Silvada’s pleading complaint was first articulated in these terms in correspondence from Silvada’s solicitor received the day before the hearing, on 24 March 2015.[9]  In light of the lack of notice, it was submitted Etro could not substantively respond to the complaint. At the hearing, I indicated that I could see merit in the complaint made by Silvada about the pleading, but that in the circumstances, I would make appropriate orders adjourning that part of Silvada’s application to enable Etro to address it.
  1. [6]
    Etro also brought an application, filed 19 March 2015, seeking an order pursuant to r 223(2) UCPR that Silvada file and serve an affidavit stating, relevantly, the circumstances in which the sale contracts between Silvada and lot owners ceased to exist or passed out of the possession or control of Silvada.
  1. [7]
    This application was brought in circumstances where Etro says the sales contracts are significant, in light of the need to determine the question of whether a duty of care is owed by examination of the parties’ complete relationship;[10] and they have not been produced by Silvada.[11] 
  1. [8]
    Mr Richards, the Legal Counsel for Silvada, has deposed that Silvada does not possess executed copies of the sale contracts, and that he believes “these documents have been disposed of in the ordinary course of business”.[12]   Counsel for Silvada indicated it was unlikely that any more could be said about this than appears in Mr Richards’ affidavit. Whilst I was informed at the hearing that Etro have begun the process of trying to obtain these documents from the lot owners themselves, Etro pressed its application on the basis that a fuller explanation of the circumstances in which the sale contracts passed out of the possession or control of Silvada may provide information to enable the documents to be obtained more efficiently. On the basis that further, directed enquiries may assist, and that it ought not be an onerous obligation for such an affidavit to be made, I propose ordering that to be done.
  1. [9]
    At the completion of the hearing, I indicated to the parties that I was not satisfied it was appropriate to summarily dismiss Etro’s claim in negligence against Silvada. I now provide my reasons for refusing the application for summary judgment.
  1. [10]
    Rule 293 UCPR confers a discretion on the Court to give judgment for a defendant against the plaintiff, if the court is satisfied:
  1. (a)
    the plaintiff has no real prospect of succeeding on all or a part of the plaintiff’s claim; and
  1. (b)
    there is no need for a trial of the claim (or part of it).
  1. [11]
    The same test applies to a defendant applying for summary judgment, as applies to a plaintiff under r 292 UCPR.[13] 
  1. [12]
    Whilst rr 292 and 293 are to be applied keeping in mind the purpose of the UCPR, articulated in r 5, to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense,[14] that does not detract from the well-established principle that:

“Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.”[15]

  1. [13]
    Silvada applies for summary judgment on the basis that, in light of the High Court’s decision in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 313 ALR 408; 88 ALJR 911 (Brookfield), Etro’s claim against Silvada in negligence has no real prospect of succeeding.
  1. [14]
    In Brookfield, the High Court held that the builder of strata-titled serviced apartments did not owe a duty to the owners’ corporation (body corporate) to avoid causing it to suffer loss resulting from latent defects in the common property. This holding was on the basis of a finding that the body corporate was not vulnerable, in the sense of having no capacity, or limited capacity, to take steps to protect itself from economic loss arising out of the defendant builder’s conduct;[16] having regard, inter alia, to the express provisions in the contracts for the design and construction of the building, and the subsequent sales, dealing with defects liability.
  1. [15]
    The claim by Etro against Silvada in this proceeding was described by counsel for Silvada as a “novel, and difficult” one.[17]  Novel, in the sense that, as submitted for Silvada, “there has never been a successful instance in this country where a body corporate has established that the developer/original landowner, and usually the moving party behind the creation of the body corporate, owed it a duty of care to avoid pure economic loss arising from defects flowing from the construction of the premises”.[18]
  1. [16]
    Silvada relied upon a decision of the Supreme Court of New South Wales in Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712, in which McDougall J found against the existence of such a duty. In that case, the body corporate sought to recover damages from the builder and the developer, for defects in the common property, on the basis of alleged breaches of warranties implied by s 18B of the Home Building Act 1989 (NSW), and a common law duty of care. The questions of whether the body corporate had the benefit of those implied warranties, and whether it was owed a common law duty of care by the builder and the developer, were dealt with separately from the other issues in the case, including issues of breach and damages.
  1. [17]
    His Honour found that the body corporate was entitled to the benefit of the statutory implied warranties (at [127]).[19]  His Honour articulated his reasons for finding against the existence of a common law duty of care owed by the builder to the body corporate at [143]-[149], culminating in a finding that whether the body corporate should be considered vulnerable, in light of the conclusion that it does have the benefit of the statutory implied warranties, is questionable; and his Honour’s conclusion that it is not appropriate, at trial level, to impose a duty of care over and above the available measure of protection afforded by statute, in an area where the legislature has intervened expressly to protect the rights of parties such as the body corporate (at [149]).
  1. [18]
    His Honour then went on to say, at [150], that the consideration that the legislature has intervened, and afforded successors in title in the position of the body corporate a remedy against the developer, was sufficient to dispose of the claim that the developer owed a the duty of care alleged. His Honour therefore said he saw “no point in attempting to deal with the questions of vulnerability and duty of care”.
  1. [19]
    Justice McDougall did go on to make the following observation, at [151], which was relied upon by Silvada:

“I would, however, observe that the duty of care alleged is one that would require a principal under a design and construct contract to retain a small army of professional and otherwise qualified staff to supervise every aspect of the design and construction work undertaken by the builder. To my mind, the law should be slow to impose such an onerous and expensive requirement on developers.”

  1. [20]
    Silvada also pointed to McDougall J’s rejection of the decision of the Court of Appeal of New Zealand in Mount Albert Borough Council v Johnson [1979] 2 NZLR 234[20] as providing any support for the duty of care pleaded against the builder and the developer in the case before him (at [152]). Likewise, Silvada pointed to the comment made in the reasons of Crennan, Bell and Keane JJ in Brookfield, at [164] (fn 202) suggesting that the approach reflected in New Zealand decisions represented a departure from the approach which has prevailed in the United Kingdom, which is to be preferred.
  1. [21]
    Silvada advanced a number of arguments in support of its contention that Etro has no real prospect of succeeding on its negligence claim against Silvada:
  1. (a)
    that it is questionable, in light of the plurality’s reasoning in Brookfield,[21] whether Etro can be said to have suffered any loss;
  1. (b)
    that the body corporate’s statutory relationship with the developer (relevantly, by s 36(3) of the BCCMA) militates against a finding of vulnerability supportive of the existence of a duty of care;[22]
  1. (c)
    that the protection afforded to lot owners, both by the express terms of the sale contracts,[23] and the implied warranties under s 223 of the BCCMA, likewise was a factor telling against the existence of any such duty;[24] and
  1. (d)
    that bearing in mind that “vulnerability” in this field of discourse is concerned not only with reasonable foreseeability of loss if reasonable care is not taken by a defendant, but also with “the inability of the plaintiff to take steps to protect itself from the risk of loss”,[25] the reasoning in Brookfield is fatal to Etro’s claim in this case, because Etro cannot establish that it was relevantly vulnerable to Silvada, in light of the available contractual and statutory protections.
  1. [22]
    In opposing the application for summary judgment, consistently with the general principle that a high degree of certainty is required on such an application, Etro submitted that it is not appropriate to determine questions concerning the existence of a duty in a context such as the present, in a summary way. In this regard, reference was made to the comments of Kirby J in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 (Woolcock Street) at [138] that:

“If there is any reasonable prospect that the appellant might be able to make good a cause of action, it is not proper for a court, in effect, to terminate the appellant’s action before trial. Where the law is uncertain, and especially where it is in a state of development, it is inappropriate to put a plaintiff out of court if there is a real issue to be tried. The proper approach is one of restraint. Only in a clear case will answers be given, and orders made, that have the effect of denying a party its ordinary civil right to a trial. This is especially so where, as in many actions for negligence, the factual details may help to throw light on the existence of a legal cause of action – specifically a duty of care owed by the defendant to the plaintiff…”

As well as to comments by the plurality in Woolcock Street, at [7], recognising the potential difficulty in using procedures other than a trial (relevantly there, a case stated on agreed facts) in cases in which it is necessary to consider developing, as distinct from applying, common law principles.

  1. [23]
    Those comments were referred to by Muir JA in Project Company No 2 Pty Ltd v Cushway Blackford & Associates Pty Ltd & Anor [2011] QCA 102 at [27] and [28], albeit in a different context (an appeal against a refusal of an application for joinder), although on the basis that the same principles ought to apply. Justice Muir also made reference to the following comments of Lord Browne-Wilkinson in Barrett v Enfield London borough Council [2001] 2 AC 550 at 557, which are applicable here:

“In my speech in the Bedfordshire case [1995] 2 AC 633, 740-741 with which the other members of the House agreed, I pointed out that unless it was possible to give a certain answer to the question whether the plaintiff’s claim would succeed, the case was inappropriate for striking out. I further said that in an area of the law which was uncertain and developing (such as the circumstances in which a person can be held liable in negligence for the exercise of a statutory duty or power) it is not normally appropriate to strike out. In my judgment it is of great importance that such development should be on the basis of actual facts found at trial not on hypothetical facts assumed (possibly wrongly) to be true for the purpose of the strike out.”

  1. [24]
    A similarly cautious approach was taken by McDougall J in The Owners –SP69567 v Landson Alliance Australia [2014] NSWSC 1592. In that case, like this one, the defendants moved for summary dismissal of a body corporate’s claim against them for recovery of damages for negligence (alleged defective design, supply, installation and certification of windows and doors forming part of the common property), on the basis that the claim based on negligence was doomed to fail because of the High Court’s decision in Brookfield.
  1. [25]
    The body corporate also had an alternative claim for misleading and deceptive conduct. Justice McDougall dealt first with that claim, refusing to strike it out. Turning to the negligence claim, his Honour noted that there would be significant overlap between the issues arising under the TPA claim, and the issues that would arise if the claim in negligence were permitted to go to trial (such that the savings in time and costs, if the negligence case were struck out, were not likely to be significant) (at [52]).
  1. [26]
    Further, his Honour distinguished the case before him, from Brookfield, because Brookfield was not an application to strike out or for summary dismissal. The question of the existence of a duty of care was determined in Brookfield, as a separate question, on the basis of agreed facts and an agreed bundle of documents (at [55]).
  1. [27]
    His Honour said it was also relevant that there were two aspects to the asserted duty of care, one of which was the asserted duty to take reasonable care in the performance and completion of the subcontract works; the other was a duty to take reasonable care in relation to the issue of their certificates. Whilst the first could be said to be “extremely close” to that dealt with in Brookfield, the second could not (at [57]-[58]).
  1. [28]
    Justice McDougall then said, at [59] and [60]:

“I acknowledge without any hesitation whatsoever that the Owners Corporation will face an extremely difficult case at trial to distinguish either of its claims in negligence from the decision in Brookfield Multiplex, so as to show a meaningful reason (rather than a distinction without a difference) as to why the logic of that decision does not dictate, adversely to it, the outcome of its claim in negligence. If there were only a claim in negligence, then it would require closer consideration than I propose to give it. However, in circumstances where (as I have said, in the absence of appellate intervention) there will be a case to go to trial, in any event, because of what I have said as to the first aspect of the Owners Corporation’s claim, and where for the reasons I have indicated I do not think that the overriding purpose set out in s 56(1) of the Civil Procedure Act[26] will be served by striking out the case in negligence.

To put it another way, I think that this is a case where, despite the very formidable obstacles placed in the path to success by the decision in Brookfield Multiplex, the case in negligence should go to trial. I have taken into account in this context the observations of Kirby P in Wickstead v Browne (1992) 30 NSWLR 1 at 5-7.[27] (Although his Honour was in the minority, an appeal (by special leave) was allowed, with the High Court essentially adopting his Honour’s reasons (Wickstead v Browne (1993) 10 Leg Rep SL 2.)  I take into account that in this case the plaintiff has yet to put before the court all the evidence that it can muster in support of its case. I take into account that the duty of care is not asserted to be simply one to take reasonable care in the construction of the works, but also to take reasonable care in the certification of the works.”

  1. [29]
    Further, Etro argued that the application ought be refused because:
  1. (a)
    The question of duty cannot be determined in the absence of the sale contracts, since that question depends upon examination of the parties’ complete relationship.[28]
  1. (b)
    The limited analysis able to be undertaken so far of the sale contracts, points to inclusion of a provision by which Silvada agreed to “construct the Building in a good and tradesman-like manner”.[29] This is arguably consistent with an assumption of responsibility for the proper (ie defect free) construction of the building.
  1. (c)
    The mere existence of a contractual duty in these terms does not preclude the existence of a concurrent duty of care under the law of negligence.[30] What ultimately determines whether a common law duty of care is owed is the character of the relationship between the parties, which requires a consideration of all of the salient features of it.[31]
  1. (d)
    In so far as Silvada relies on s 36(3) of the BCCMA as a factor militating against the existence of any duty of care owed by it, on the basis of the case pleaded by the builder against Etro, relying on the Deed of Variation and Settlement, it is far from certain that the statutory provision would provide the necessary protection.

In this context, reference was made to the timing of the entry into the Deed of Variation and Settlement;[32] the foreshadowed allegation that Silvada’s entry into that deed, and purported compromise or extinguishment of rights to claim against the builder without notice to or permission from Etro, was wrongful; and the foreshadowed allegation that the deed (as well as the building contract and the design contract) was not provided to the body corporate until 4 years later, after all, or almost all of the lots were sold (as a result of which, prospective purchasers searching the body corporate’s records would not have known about it).

These matters were said to be significant, in distinguishing Brookfield. The control exercised by Silvada in undertaking the construction, marketing and sale of the property; and in entering into the Deed of Variation and Settlement, after creation of the body corporate, were said to be acts consistent with an assumption of responsibility on the part of Estrada towards Etro. The purported compromise of the body corporate’s, and lot owners’ rights to claim against the builder, and failure to provide the relevant documents to the body corporate, were said to render the body corporate and lot owners relevantly vulnerable, in the sense of having impaired capacity to protect themselves.[33]

  1. (e)
    None of Bryan v Maloney (1985) 182 CLR 609, Woolcock Street or Brookfield concerned the duty directly as between a developer and its immediate purchasers (as represented by the body corporate).  The duty alleged to be owed by Silvada to Etro is not dependent on the establishment of an anterior duty owed by the builder to Silvada. Accordingly, Etro submitted that a primary factor in both Woolcock Street and Brookfield for denying a duty of care is not present here.
  1. (f)
    The fact that there is no appellate authority directly considering the existence of a duty owed by a developer to a body corporate, and it being, as Silvada describes it, a “novel” case, are matters favouring dismissal of the summary judgment application (rather than supporting it).
  1. (g)
    In so far as the decision of McDougall J in Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712 is concerned, that case can be seen to turn on the statutory protections available to the body corporate under the Home Building Act 1989 (NSW), which are not applicable in this case. In contrast Etro submits that whether the rights conferred by s 36(3) of the BCCMA are available to it in this case is a live issue yet to be decided, made so by the conduct of Silvada in entering into the Deed of Variation and Settlement.
  1. (h)
    In so far as Silvada relies on comments in Brookfield as to it being “questionable” whether Etro can be said to have suffered loss, it is noted that Etro’s claim is solely for the cost of rectification, rather than a claim for diminution in value.
  1. [30]
    Consistently with the authorities, both as to general principle regarding r 293 UCPR, and more particularly those referred to at paragraphs [22], [23] and [24]-[28] above, adopting the requisite cautious approach, in my view the application for summary judgment ought to be refused.
  1. [31]
    Whilst undoubtedly the High Court’s decision in Brookfield presents a significant hurdle for Etro to overcome in its claim in negligence against Silvada, the position is not so clear or certain as to lead me to the view that it is appropriate to summarily determine that claim, and deny Etro its right to a trial. The relevant principles are developing, and the circumstances of their application are evolving. There is not a direct correlation between the factual matrix as it was presented, by agreement, in Brookfield, and such as it appears, as pleaded, and as foreshadowed, in this case. Even in Brookfield, French CJ noted that there were special features in that case, generated by the contractual and statutory matrix in which the duty of care was asserted, that gave it an element of novelty not overcome by a straightforward application of precedent (at [23]).
  1. [32]
    That seems to me to be the case here as well. Whilst acknowledging the force of the holding in Brookfield, on the basis of the matters identified by Etro, which I have set out above, there can be said to be features of the case sought to be put by Etro against Silvada, including the contractual, statutory and broader factual matrix, which could potentially distinguish it from that case. But whatever the ultimate conclusion is, it ought to be reached on the basis of actual facts found at trial, rather than in a summary way on an application such as this.
  1. [33]
    I am not persuaded to any different conclusion by the decision of McDougall J in Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712, which depends entirely on the finding regarding the availability, and effect, of the statutory warranties in that case (see at [150]).
  1. [34]
    Also, as was the case in McDougall J’s decision in The Owners –SP 69567 v Landson Alliance Australia, it does seem that there will be considerable overlap between the issues arising under the foreshadowed broadened claims against Silvada, for damages for wrongful compromise of rights to claim against the builder and breach of the sale contracts, and those relied upon to establish the asserted duty of care; which is a relevant factor, in the sense that there would need to be a trial of those issues in any event.
  1. [35]
    However, adopting the appropriately cautious approach required by the authorities, even apart from the addition of those broader bases of claim, I would not be prepared to summarily dismiss Etro’s claim in negligence. Although, it must be said that the foreshadowed amendments, and refinement of the basis of the claim in negligence against Silvada, focussing in particular on matters of distinction from Brookfield, were an important factor in my determination of this application. As I have already said, I acknowledge the merit in Silvada’s complaints about the current form of the pleading of the negligence claim against Silvada, and note that this is a matter which will be further addressed, together with the costs of both applications.
  1. [36]
    Following the hearing on 25 March 2015, having indicated how I proposed to deal with each application, I invited the parties to confer with a view to agreeing upon appropriate orders to reflect my decision in respect of both applications, and directions for the further conduct of the proceedings. I will hear the parties on the form of those orders.

Footnotes

[1]  Amended statement of claim, filed 6 November 2014.

[2]  In a draft further amended statement of claim, annexed to Etro’s submissions dated 24 March 2015.

[3]  The construction contract (between Silvada and the first defendant builder), the design contract (between Silvada and the fourth defendant architect) and a Deed of Variation and Settlement between Silvada and the first defendant builder.

[4]  Arising from the entry into the Deed of Variation and Settlement, between Silvada and the first defendant builder, upon which the builder relies to defend Etro’s claim against it.

[5]  Section 36(3) of the BCCMA provides, relevantly, that “[i]f, before a community titles scheme is established, a contract is entered into to have work carried out on land that becomes scheme land – (a) the body corporate is, on the establishment of the scheme, subrogated to the rights (if any) of the original owner under the contract to the extent that the contract applies to work affecting scheme land that is common property”.

[6]  By operation of s 223 of the BCCMA, warranties are implied in a contract for the sale of a lot, namely (relevantly):  (a) a warranty that to the seller’s knowledge, there are no latent or patent defects in the common property or body corporate assets, other than defects arising through fair wear and tear or as disclosed in the contract; and (b) a warranty that the body corporate records do not disclose any defects to which (a) applies.

[7]  A further alternative order sought, for Etro’s claim against Silvada to be determined as a separate question under r 483 UCPR was not pressed, in light of the foreshadowed further amendments to the statement of claim.

[8]  Silvada’s submissions dated 24 March 2015 at [12].

[9]  See exhibit KP5 to the affidavit of Katrina Pagey filed by leave on 25 March 2015, at pp 172-3.

[10]  Referring to Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 313 ALR 408; 88 ALJR 911 at [30] and [34] per French CJ; and at [77]-[89] and [154]-[156] per Crennan, Bell and Keane JJ; and Perre v Apand Pty Ltd (1999) 198 CLR 180 at [198] per Gummow J.

[11]  Etro has obtained two of the sale contracts, one signed and one unsigned:  see the affidavit of Frances Ronnfeldt filed 18 March 2015 at [10] and [11] (and exhibit FR2, commencing at p 29) (unsigned copy of sale contract for lot 17) and [12] and [13] (and exhibit FR3, commencing at p 52) (signed copy of sale contract for lot 19). Silvada has located unsigned copies of sale contracts for lots 8 and 9, and a signed copy of the sale contract for lot 20 (affidavit of Mark Richards filed 23 March 2015 at [11] and exhibits MR2 and MR3). Etro’s position is that it cannot be inferred from the small handful of the overall sale contracts that they are all in the same terms, and accordingly is pressing to obtain more, or preferably all of them.

[12]  Affidavit of Mark Richards filed 23 March 2015 at [10].

[13]  As to which, see Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at [2]-[3], [11]-[17] and [47]; Coldham-Fussell v Commissioner of Taxation (2011) 82 ACSR 439 at [98].

[14]Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469 at [38]; Salcedo at [3], [17] and [45]; Coldham-Fussell at [101]; and Thomas v Balanced Securities Ltd [2012] 2 Qd R 482 at [69].

[15]Agar v Hyde (2000) 201 CLR 552 at 575-576 per Gaudron, McHugh, Gummow and Hayne JJ.

[16]  See Brookfield at [22] and [34] per French CJ; at [51], [56]-[59] per Hayne and Kiefel JJ; at [130]-[132], [140], [144] per Crennan, Bell and Keane JJ; and at [182]-[185] per Gageler J.

[17]  Silvada’s submissions at [9].

[18]  Silvada’s submissions at [25].

[19]  The relevant provisions are set out in paragraphs 18 and 19 of the decision.

[20]  In which it was held that a developer owed a non-delegable duty of care to a purchaser of a dwelling in a block of flats “to see that proper care and skill are exercised in the building of the houses and that it cannot be avoided by delegation to an independent contractor”:  [1979] 2 NZLR 234 at 241 and 242. Etro made reference to this decision as an authority for the acceptance of a duty owed by a developer in another jurisdiction, and one which supports a finding of an acceptance of responsibility on the part of a developer who procures the construction of a new and permanent building and who markets it for sale as such to prospective purchasers.

[21]  Referring in particular to Brookfield at [67] and [150] per Crennan, Bell and Keane JJ, where it is noted that a body corporate acquires the common property without any outlay on its part, and therefore questioning the basis for a claim for diminution in value of the property, as a result of the conduct of the party said to owe the relevant duty.

[22]  Referring to Brookfield at [12] per French CJ.

[23]  Reference was made, by way of example, to clause 9 in the contract for the sale of proposed lot 19 (exhibit FR3 to the affidavit of Frances Ronnfeldt filed 18 March 2015, at p 60), obliging the seller (Silvada) to fix defects notified within 6 months after possession, and conferring a right of compensation on the buyer subject to that.

[24]  Referring to Brookfield at [86]-[89] and [155] per Crennan, Bell and Keane JJ.

[25]  Referring to Brookfield at [68]-[69] and [130] per Crennan, Bell and Keane JJ.

[26]  Equivalent to r 5 UCPR.

[27]  Observations which are consistent with those made by Kirby J in Woolcock Street, referred to at paragraph [22] above.

[28]  See paragraphs [7] and [8], and footnote 11 above.

[29]  Clause 8.4, as it appears in the contract for sale of proposed lot 19 (affidavit of Frances Ronnfeldt at p 60).

[30]Bryan v Maloney at 619-620, 621 and 622 per Mason CJ, Deane and Gaudron JJ.

[31]Woolcock Street at [12]; Brookfield at [30] per French CJ.

[32]  May 2009, subsequent to the registration of the community management statement in January 2009, by which Etro was created.

[33]  The relevant concept of vulnerability not being an absolute one – Woolcock Street at [23].

Close

Editorial Notes

  • Published Case Name:

    Etro Metroplex on Gateway CTS 39623 v Broad Construction Services (Qld) Pty Ltd & others

  • Shortened Case Name:

    Etro Metroplex on Gateway CTS 39623 v Broad Construction Services (Qld) Pty Ltd

  • MNC:

    [2015] QDC 62

  • Court:

    QDC

  • Judge(s):

    Bowskill DCJ

  • Date:

    27 Mar 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
Agar v Hyde (2001) 201 CLR 552
1 citation
Jump To
Cite 1 - (2001) 201 CLR 552
Barrett v Enfield London Borough Council [2001] 2 AC 550
2 citations
Jump To
Cite 1 - [2001] 2 AC 550
Cite 2 - [2001] 2 AC 550
Bernstrom v National Australia Bank Ltd[2003] 1 Qd R 469; [2002] QCA 231
1 citation
Jump To
Cite 1 - [2003] 1 Qd R 469
Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 313 ALR 408
9 citations
Jump To
Cite 1 - (2014) 313 ALR 408
Cite 2 - (2014) 313 ALR 408
Cite 3 - (2014) 313 ALR 408
Cite 4 - (2014) 313 ALR 408
Cite 5 - (2014) 313 ALR 408
Cite 6 - (2014) 313 ALR 408
Cite 7 - (2014) 313 ALR 408
Cite 8 - (2014) 313 ALR 408
Cite 9 - (2014) 313 ALR 408
Brookfield Multiplex Ltd v The Owners - Strata Plan No. 61288 (2014) 88 ALJR 911
3 citations
Jump To
Cite 1 - (2014) 88 ALJR 911
Cite 2 - (2014) 88 ALJR 911
Cite 3 - (2014) 88 ALJR 911
Bryan v Maloney (1985) 182 CLR 609
2 citations
Jump To
Cite 1 - (1985) 182 CLR 609
Cite 2 - (1985) 182 CLR 609
Coldham-Fussell v Commissioner of Taxation (2011) 82 ACSR 439
2 citations
Jump To
Cite 1 - (2011) 82 ACSR 439
Cite 2 - (2011) 82 ACSR 439
Deputy Commissioner of Taxation v Salcedo[2005] 2 Qd R 232; [2005] QCA 227
2 citations
Jump To
Cite 1 - [2005] 2 Qd R 232
Cite 2 - [2005] 2 Qd R 232
Mount Albert Borough Council v Johnson (1979) 2 NZLR 234
2 citations
Jump To
Cite 1 - (1979) 2 NZLR 234
Cite 2 - (1979) 2 NZLR 234
Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712
8 citations
Jump To
Cite 1 - [2012] NSWSC 712
Cite 2 - [2012] NSWSC 712
Cite 3 - [2012] NSWSC 712
Cite 4 - [2012] NSWSC 712
Cite 5 - [2012] NSWSC 712
Cite 6 - [2012] NSWSC 712
Cite 7 - [2012] NSWSC 712
Cite 8 - [2012] NSWSC 712
Perre v Apand Pty Ltd (1999) 198 CLR 180
1 citation
Jump To
Cite 1 - (1999) 198 CLR 180
Project Company No 2 Pty Ltd v Cushway Blackford & Associates Pty Ltd [2011] QCA 102
1 citation
Jump To
Cite 1 - [2011] QCA 102
The Owners -SP69567 v Landson Alliance Australia [2014] NSWSC 1592
2 citations
Jump To
Cite 1 - [2014] NSWSC 1592
Cite 2 - [2014] NSWSC 1592
Thomas v Balanced Securities Limited[2012] 2 Qd R 482; [2011] QCA 258
1 citation
Jump To
Cite 1 - [2012] 2 Qd R 482
Wickstead v Browne (1992) 30 NSWLR 1
1 citation
Jump To
Cite 1 - (1992) 30 NSWLR 1
Wickstead v Browne (1993) 10 Leg Rep SL 2
1 citation
Jump To
Cite 1 - (1993) 10 Leg Rep SL 2
Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515
8 citations
Jump To
Cite 1 - (2004) 216 CLR 515
Cite 2 - (2004) 216 CLR 515
Cite 3 - (2004) 216 CLR 515
Cite 4 - (2004) 216 CLR 515
Cite 5 - (2004) 216 CLR 515
Cite 6 - (2004) 216 CLR 515
Cite 7 - (2004) 216 CLR 515
Cite 8 - (2004) 216 CLR 515
X v Bedfordshire County Council [1995] 2 AC 633
1 citation
Jump To
Cite 1 - [1995] 2 AC 633

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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