Queensland Judgments
Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Chapel of Angels Pty Ltd v Hennessy Building Pty Ltd[2017] QDC 280

Chapel of Angels Pty Ltd v Hennessy Building Pty Ltd[2017] QDC 280

DISTRICT COURT OF QUEENSLAND

CITATION:

Chapel of Angels Pty Ltd v Hennessy Building Pty Ltd & Anor [2017] QDC 280

PARTIES:

CHAPEL OF ANGELS PTY LTD

(plaintiff)

v

HENNESSY BUILDING PTY LTD

(first defendant)

and

JOHN PAUL HENNESSY

(second defendant)

FILE NO/S:

4121/14

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court

DELIVERED ON:

21 November 2017

DELIVERED AT:

Brisbane

HEARING DATE:

28 June 2017 and 8 March 2017

JUDGE:

Reid DCJ

ORDER:

Subject to submissions of the parties as to the form of orders and as to costs:

  1. (1)
    On the application filed 20 February 2017;

Upon the undertaking of Saskia Pryce and Peter James McQuitty that if any Order for costs is made against the Plaintiff in the action, then on behalf of the Plaintiff they will be jointly and severally responsible for the Plaintiff and be responsible for and will pay those costs as taxed, assessed or agreed between the parties.

  1. (i)
    The Plaintiff file and serve an affidavit within 14 days of this order in relation to all documents relevant to the allegations pleaded at paragraphs 2S, 11 and 11A of the Further Amended Statement of Claim.
  1. (ii)
    The application to strike out paragraphs 29A, 32, 33, 33A and 36(a) of the Further Amended Statement of Claim is dismissed.
  1. (iii)
    The Plaintiff is given leave to amend paragraphs 40-43 of the Further Amended Statement of Claim.
  1. (2)
    On the application filed 14 June 2017;
  1. (i)
    The application to sever threshold issues and have those issues heard separately is dismissed.
  1. (ii)
    The Plaintiff be given leave to file a Second Further Amended Claim and Statement of Claim as per paragraph 1(d) and 2 of paragraph [93] of this judgment, but the application for leave to file amendments as per paragraphs 1(a), (b), (c), (e) and 3 of the said paragraph is dismissed.

CATCHWORDS:

PROCEDURE – BUILDING, ENGINEERING AND RELATED CONTRACTS – consideration or whether to order further security – relevant considerations – effect of an undertaking by shareholders of plaintiff to meet any costs order made against the plaintiff – where the plaintiff contracted with the defendants to build a chapel – where application for further security of costs – where application to strike out parts of the further amended statement of claim and for further disclosure – whether amendments to statement of claim substantially alter the claim to amount to special circumstances enlivening the court’s discretion to vary an order for security for costs

PROCEDURE – BUILDING, ENGINEERING AND RELATED CONTRACTS – amendments to prayer for relief – unnecessary amendments not allowed – where leave sought to amend claim and counterclaim –  whether sought amendments subject to an adjudication decision under the BCIPA – whether declarations concerning an adjudication beyond jurisdiction – whether the orders sought would involve a review of the jurisdiction of the adjudicator – whether declarations necessary

PROCEDURE – BUILDING, ENGINEERING AND RELATED CONTRACTS – where aspects of the plaintiff’s claim are unsupported by documentary evidence – whether to strike out such aspects – where an accountant’s report must be based on instruction unsupported by any documentary proof – documents existing to contrary effect – absence of any such documents relevant to credit but does not justify strike out

PROCEDURE – BUILDING, ENGINEERING AND RELATED CONTRACTS – where factual dispute is wide-ranging – where application to hear an aspect of the case separately – whether appropriate to order separate determination – application refused

Building Construction Industry Payments Act 2004 (Qld)

Judicial Review Act

Queensland Building and Services Authority Act 1991 (Qld), s 31, ss 42(3) & (4)

Uniform Civil Procedure Rules 1999 (Qld), r 171, r 211, r 223, r 232, r 444, r 445, r 483, r 525, r 560, r 670, r 671, r 672, r 675

Advance Traders Pty Ltd v McNab Construction Pty Ltd , [2011] QSC 212

DAE Boong International Co Pty Ltd v Gray [2009] NSWCA 11

Dart Holdings Pty Ltd v Total Concept Group [2012] QSC 158

Fiduciary Limited v Morningstar Research Pty Ltd (2004) 208 ALR 564

Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) FCA 391

Global Access Limited v EducationDynamics, LLC and anor (2010) 1 Qd R 525

Green (as liquidator of Arimco Mining Pty Ltd v CGU Insurance Limited (2008) 67 ACSR 105

Kirk & Anor v Industrial Court of New South Wales & Anor (2010) 239 CLR 531

Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd & Ors [2011] QCA 22

R D Werner & Co v Bailey Aluminium Products Pty Ltd (1998) FCR 389

Procorp Civil Ltd v Napoli Excavations and Contracting Pty Ltd (No. 2) [2006] NSWCA 147

Redding Australia Pty Ltd v Australian Mutual Provident , Society (1999) 217 ALR 495

COUNSEL:

A Fitzpatrick for the plaintiff

P A Travis for the defendants

SOLICITORS:

Axia Litigation Lawyers for the applicants

Aitken Whyte, solicitors for the respondent

Introduction

  1. [2]
    In these proceedings the owner of a property (hereafter the plaintiff) seeks damages against a building company (the first defendant) with whom it contracted to build a building on land owned by the plaintiff and an individual who is a director of that company and was involved in its daily operations (the second defendant). The plaintiff also seeks a declaration that the first defendant make restitution of money paid to it on the ground that it was not a builder entitled by its licence to construct a building of the sort it contracted to and in fact built for the plaintiff. Other consequential orders are also sought.
  1. [3]
    Two applications have come before me.
  1. [4]
    The defendants in an application heard on 8 March sought an order pursuant to r 675, of the Uniform Civil Procedure Rules (UCPR) for security for costs, to strike out parts of the further amended statement of claim and for further disclosure. The plaintiff in an application heard on 28 June 2017 sought an order pursuant to r 483, UCPR that an aspect of the case be separately heard and for leave to amend the claim and counterclaim.

FIRST APPLICATION

Security of Costs

  1. [5]
    The plaintiff has previously entered into an agreement with the first defendant to pay $40,000 into an agreed account as security for the first defendant’s costs. The defendants now seek an order for payment of a further $40,000 to be paid as additional security. They assert that a change in the plaintiff’s pleadings means there are “special circumstances” enlivening the court’s discretion to vary the original consent order. A critical question to be first determined is thus whether the amendments to the statement of claim so substantially alter the claim as to amount to such special circumstances.
  1. [6]
    The plaintiff filed a further amended statement of claim on 4 April 2016 pursuant to an order of Bowskill DCJ (as her Honour then was) of 1 April. The second defendant was not previously a party to the proceedings but was joined as second defendant by that amended pleading. In response to that pleading the defendants filed an amended defence and a counterclaim on 22 July 2016.
  1. [7]
    The most important features of the further amended statement of claim, relevant to consideration of the question of whether there are “special circumstances” are:
  1. the second defendant was joined as a party;
  1. the defendants were said to have held only a “Builder-Low Rise” licence issued by the Queensland Building Services Authority (QBSA Act) and so were licensed to construct Class 9 Buildings, but not type A or type B construction under the Building Code of Australia. Whilst the allegation concerning the license is admitted by the defendants, the dispute is whether the building the first defendant contracted to and did build was a building of that character.
  1. [8]
    This last issue has involved each of the parties obtaining reports from a qualified building certifier. Each expresses contrary views as to whether the building was of a type the first defendant was licensed to construct. The issue arises because of amendments made to the original plans to include and/or to change a small storeroom under the main level of the building, a chapel and wedding venue. It is said that the inclusion of this storeroom increases the number of floors of the building to two so as to make the building work performed by the first defendant outside the ambit of its licence.
  1. [9]
    On 17 January 2017 the defendants’ solicitor wrote to the plaintiff’s solicitor (Exhibit JLR-6 to the affidavit of Jennifer Raphael filed 23 February 2017). The letter stated:
  1. (i)
    Since payment of the original sum of $40,000 as security for costs the plaintiff “has substantially amended its claim” by –
  1. (a)
    adding the second defendant as a party and
  1. (b)
    introducing new heads of claim.
  1. (ii)
    These new heads of claim included:

i.An alleged oral variation that “the contract sum would not exceed the contract price” (which it seems is an allegation that it was agreed that, despite any agreed variations, in no case would the original quoted price be exceeded);

ii.an allegation that the agreed works were outside the scope of the first defendant’s licence and, consequently, that the plaintiff was entitled to restitution of all amounts paid to the first defendant under the contract;

iii.an allegation that both defendants had breached s 18 of the Australian Consumer Law

  1. (iii)
    As a result, the original sum of $40,000 as security was insufficient and, in any case, there was no security for the second defendant’s costs.
  1. (iv)
    That the property owned by the plaintiff, and on which the building was constructed, was valued at between $300,000 and $650,000, but secured a loan of $785,000.
  1. (v)
    That the defendants required further security for costs.
  1. (vi)
    That the defendants had already incurred legal costs of over $83,000 and expected to incur further costs of between $130,000 and $145,000 of which $50,000 to $55,000 would be attributable to the second defendant’s costs.
  1. (vii)
    That on an assessment of costs on a standard basis “it is foreseeable that they would recover … no less than 50 per cent of the costs … actually incurred.”
  1. [10]
    The defendants’ solicitor sought security in the sum of $25,000 for the second defendant’s costs and $44,000 as further security for the first defendant’s costs but stated if the plaintiff had evidence of its ability to meet any adverse costs order (and outlined the nature of such evidence required by the defendants) it should provide that within seven days. The letter foreshadowed an application for further security if that was not done.
  1. [11]
    The plaintiff’s solicitor, Ms Palmer responded by letter of 25 January 2017 (Exhibit JLR-7 to Ms Raphael’s affidavit). She denied the amendments to the pleadings “substantially expanded” the plaintiff’s claim asserting, inter alia:

i.The addition of the second defendant as a party “will not create any extra work”; and

ii.That the first defendant worked without the appropriate licence and so the defendants’ prospects of success were not high.

  1. [12]
    She also sought “an itemisation as to how you reached” the sums of $25,000 and $44,000 respectively.
  1. [13]
    The defendants’ counsel, in his submissions, noted that the letter from the plaintiff’s solicitors “did not provide any information about the (the plaintiff’s) ability to meet any adverse costs order.” I note in relation to this that the plaintiff’s counsel’s submissions before me included a statement that the plaintiff did not make any submissions in relation to its capacity to pay an adverse costs order.
  1. [14]
    The defendant’s counsel also submitted that the fact that the plaintiff had previously provided security can be relied on to give me “reason to believe” that the threshold question has been satisfied, at least in circumstances where the plaintiff does not show a change of circumstances since the order was made. I do not accept that to be so. A party may agree to provide a sum as security for many reasons, including a wish to avoid incurring the costs of an application for security for costs. Its doing so does not amount to a determination by a court, or indeed by anyone, that the plaintiff was then unable to pay the defendants’ costs, if ordered to do so. It is in my view not a relevant consideration, a submission made by the plaintiff’s counsel.
  1. [15]
    In the circumstances I proceed in any case on the basis, consistent with the evidence about the value of the land, which is said to be the plaintiff’s only asset, and the amount of the mortgage on that property, that indeed the plaintiff does not have capacity to meet any adverse costs order beyond the $40,000 already paid into court as security for the first defendant’s costs.
  1. [16]
    Having determined that the threshold question should be resolved in the defendants’ favour I then turn my mind to the question of whether there are special circumstances. That is a requirement of UCPR, r 675 which deals with varying an order for security for costs.
  1. [17]
    On 31 March 2017 Ms Raphael responded to the plaintiffs solicitor’s letter. Her letter is Exhibit JLR-11 to her affidavit. The letter disputed a number of the plaintiff’s solicitors contentions set out in the letter of 25 January. Of particular importance are:
  1. The defendants’ solicitors reference to the plaintiff’s now pleading that the Contract Sum for the Varied Works would have a guaranteed upper limit of $652,312.79 (including GST) “(the maximum price term)” and the assertion that this was a new allegation raising new issues. Clearly it did.
  1. Their noting that the plaintiff had not responded to the defendants request to provide evidence of the plaintiff’s solvency and ability to meet an adverse costs order. I have referred to this issue earlier.
  1. [18]
    Subsequently r 444 and r 445 letters were exchanged (Exhibits JLR-12 and JLR-13 to Ms Raphael’s affidavit). The letters reiterated the position set out in the earlier correspondence that I have referred to.
  1. [19]
    The defendant’s letter, at paragraph 2.50 thereof, states:

“Enclosed is a detailed breakdown of the defendant’s [sic] calculation of the quantum of security for costs sought.”

  1. [20]
    The exhibited letter on the court file does not include the enclosure. I do not ultimately think that critical.
  1. [21]
    The r 445 letter in response indicated that the r 444 letter was the first provision of a detailed breakdown of such costs and indicated their client’s instructions were being sought. The letter noted however:
  1. that the costs were solicitor and own client costs, and were not calculated in accordance with the relevant scale;
  1. that why those costs, including outlays, will be incurred was not identified and in particular it was not shown how their being incurred was related to the changes in the plaintiff’s pleading.
  1. [22]
    It described the defendants’ claim for additional security as “a further cash grab”.
  1. [23]
    Rule 670 of UCPR provides that on an application by the defendant for security for costs the court may order the plaintiff to give the security the court considers appropriate for the defendants’ costs of and incidental to the proceedings. The following rule, r 671, sets out prerequisites for such an order. Of particular relevance here is sub-rule (a) which provides that such an order may be made only if the court is satisfied the plaintiff is a corporation (and that is undisputed) and there is reason to believe the plaintiff will not be able to pay the defendants’ costs if ordered to pay them. Again, for the reasons I have already set out, that is not in contention.
  1. [24]
    Rule 672 of UCPR provides:

“672Discretionary factors for security for costs

In deciding whether to make an order, the court may have regard to any of the following matters—

  1. (a)
    the means of those standing behind the proceeding;
  1. (b)
    the prospects of success or merits of the proceeding;
  1. (c)
    the genuineness of the proceeding;
  1. (d)
    for rule 671(a)—the impecuniosity of a corporation;
  1. (e)
    whether the plaintiff's impecuniosity is attributable to the defendant's conduct;
  1. (f)
    whether the plaintiff is effectively in the position of a defendant;
  1. (g)
    whether an order for security for costs would be oppressive;
  1. (h)
    whether an order for security for costs would stifle the proceeding;
  1. (i)
    whether the proceeding involves a matter of public importance;
  1. (j)
    whether there has been an admission or payment into court;

(k)whether delay by the plaintiff in starting the proceeding has prejudiced the defendant;

(l)whether an order for costs made against the plaintiff would be enforceable within the jurisdiction;

(m)the costs of the proceeding.”

  1. [25]
    Because of the earlier consent orders, whereby the plaintiff has already provided $40,000 as security for the first defendant’s costs, r 675 is also relevant. That rule provides:

“The court may set aside or vary an order made under this chapter in special circumstances.”

  1. [26]
    The defendant’s application is for an order under r 670 and in the alternative for an order under r 675. The question is whether or not an order for security for costs in respect of the first defendant and for the second defendant can be said to be a variation of the earlier order which was for the benefit of the first defendant only. In my view it is, since at least in part it seeks further security for the costs of the first defendant. Indeed, as earlier outlined in [8] hereof, most of the additional costs that are said to arise as a result of the amendment to the plaintiff’s pleading, are said by the defendants’ solicitors to relate to the first defendant.
  1. [27]
    In order to underpin a finding that there are, in the circumstances of this case, “special circumstances” the defendants have sought to rely on what they submit are the significant changes in the nature of the case related to the amendments set out in the further amended statement of claim, including the joinder of the second defendant.
  1. [28]
    In my view the changes to the plaintiff’s pleading in the further amended statement of claim do significantly alter the nature of the plaintiff’s claim. The most obvious changes are that the second defendant has been added as a party and that the plaintiff now pleads that the work performed was contrary to the first defendant’s licence. This has resulted in both parties obtaining reports from qualified building certifiers as to whether that is in fact so. The issue involves whether or not the building now has an additional storey, as earlier mentioned. The certifiers have come to different conclusions about that issue. That will be a relevant dispute at the trial. The plaintiff, in reliance on s 42(3) of the Queensland Building and Services Authority Act (QBSA Act), pleads that by reason of the work being beyond its licence the first defendant is not entitled to retain money paid to it, or to sue under the contract. It thus bases its claim for restitution of money paid to the first defendant. The defendant denies the factual basis for such allegations – relying on the report of the building certifier it has engaged – and in any case relies on s 42(4) of the QBSA Act to claim reasonable remuneration for the work performed.
  1. [29]
    There are, as I earlier set out, other issues raised in the further amended statement of claim in relation to the plaintiff’s allegation that the second defendant on behalf of the first defendant orally agreed to a price cap on the cost of the building work and also an allegation of breach of Australian Consumer Law.
  1. [30]
    It seems to me the issue concerning the price cap would involve consideration of oral testimony from the second defendant and a Ms Saski Pryce, the representative of the plaintiff with whom all negotiations were conducted. Of itself that would, I think not so alter or expand the case so as to amount to “special circumstances”, particularly where the initial order for security had been made by consent.
  1. [31]
    In R D Werner & Co v Bailey Aluminium Products Pty Ltd (1998) FCR 389 Keane JA (as his Honour then was) held that where, as here, the original order had been made by consent that was a relevant factor to be taken into account in an application for orders varying the original order. The applicant will in such circumstances need to show both the change in material facts and that an alteration in the original order is fair.
  1. [32]
    I am persuaded that the joinder of the second defendant, and the issues surrounding the allegation that the building was not one the first defendant was licensed to construct, do constitute special circumstances. In so deciding I am conscious of the plaintiff’s counsel’s submission that the second defendant was always the central witness in the case for the defence, and that his joinder does not expand the case to any significant degree.
  1. [33]
    That he was always a critical witness is a factor, but in my view it is also important to consider that by reason of his joinder the second defendant is now potentially also liable for damages and for costs. He is personally exposed, in a financial sense. That is an important feature not present at the time of the making of the original order. The licensing issues are also now critically important, and have resulted in the parties each obtaining the advice of expert witnesses.
  1. [34]
    In circumstances where I have concluded “special circumstances” are shown, I am required to consider whether to exercise my discretion to make the order sought, or to make another order as to security for the defendants’ costs.
  1. [35]
    I have referred already to the lack of material concerning the financial position of the plaintiff. There is a similar lack of evidence on the means of those standing behind the plaintiff. In Green (as liquidator of Arimco Mining Pty Ltd v CGU Insurance Limited (2008) 67 ACSR 105 at para 11 Hodgson JA, with whom Baston JA and Campbell JA agreed, said that it was an important factor in the exercise of the discretion that there are persons who stand behind the impecunious plaintiff who seek to take the benefit of our system of justice (i.e. share of the proceeds of victory) without the corresponding burden (i.e. a potential adverse costs order).
  1. [36]
    In my view, paraphrasing an issue posed by the Court of Appeal in DAE Boong International Co Pty Ltd v Gray [2009] NSWCA 11 at 27, it would be unfair to the defendants, who will incur substantial costs and be exposed to a risk of significant restitution if they have no real chance of recovering costs even if the plaintiff’s action is unsuccessful when the persons behind the plaintiff, who would benefit from success in the litigation, face no risk of liability for costs themselves.
  1. [37]
    Each party submits the other party’s case is a weak one. In my assessment, whilst the lack of written evidence of important variations, said by the plaintiff to have been made to the contract orally, might be thought to make acceptance of evidence of such matters less likely, those questions are questions of credit. It is not, I think, appropriate to consider the strength of the party’s case as of significance to my determination. I accept that the plaintiff’s claim is bona fide and has reasonable prospects of success but consistently with the approach of the courts in Fiduciary Limited v Morningstar Research Pty Ltd (2004) 208 ALR 564 at [37/38], I conclude the merits of the party’s claims should be regarded as a neutral factor.
  1. [38]
    Whether a plaintiff is effectively in the position of a defendant can also be a relevant consideration (see UCPR r 672(f)). Although the defendants seek, by counterclaim, to claim reasonable numeration from the plaintiff this counterclaim is to be considered only if the defendants assertion that the first defendant was licensed to perform the building work performed is rejected. That of course is a matter raised only in the recent amended pleadings. If it was so unlicensed, the first defendant might well be ordered to make restitution of the sums paid to it under the contract, but seeks, in such circumstances, to recover reasonable remuneration pursuant to s 42(4) of QBSA Act, a claim limited in scope by the terms of the Act itself.
  1. [39]
    In this case it is also relevant that prior to the commencement of these proceedings the builder filed an Adjudicator’s Application in accordance with the Building Construction Industry Payments Act (BCIPA). That application was determined in favour of the first defendant in the sum of $96,526.24. That sum was not paid so, on 24 June 2014, the defendant obtained a judgment in the Magistrates Court at Landsborough in the sum of $101,184.94. Because the plaintiff still did not pay that judgment sum the first defendant then commenced proceedings in the District Court to establish the interest claimed by it under a caveat lodged by the builder on the plaintiff’s property.
  1. [40]
    Only then did the plaintiff start these proceedings but, contrary to s 31 of the QBSA Act and r 560 UPCR did not initially pay the adjudicated sum into court. That sum was paid into court only in February 2015, at which time the plaintiff also agreed to pay the $40,000 into court as security for the first defendant’s costs as earlier referred to.
  1. [41]
    Thereafter the plaintiff’s pleadings were amended as earlier discussed. The important amendments referred to were made after April 2016.
  1. [42]
    Thus it can be seen the counterclaim seeking payment pursuant to s 42(4) of QBSA Act is an alternative sought by the first defendant only in the event the court finds in favour of the plaintiffs on the issue of whether the first defendant performed unlicensed work, first raised in the amended pleadings of the plaintiff.
  1. [43]
    The defendant’s counsel relied on the following passage of Hodgson JA in Procorp Civil Ltd v Napoli Excavations and Contracting Pty Ltd (No. 2) [2006] NSWCA 147 at [10] referred to by Applegarth J in Global Access Limited v EducationDynamics, LLC and anor (2010) 1 Qd R 525 at [28]:

“A party instituting court proceedings to challenge any adjudicator’s determination or a judgment pursuant thereto is fairly regarded as being in substance a plaintiff rather than merely defending a claim made against it … .”

  1. [44]
    Such considerations are here relevant. The first defendant, who has been paid a significant sum and who has the benefit of a further sum pursuant to an adjudicator’s certificate, is now being sued, along with its director, the second defendant, for restitution and other remedies. Their response, in the event of failing with their primary position, of seeking reasonable remuneration under s 42(4) of QBSA Act should not in my view result in the plaintiff being characterised as a party who is effectively in the position of a defendant because of that counterclaim.
  1. [45]
    I have observed already that, with apparent reluctance, the plaintiff paid the amount of the judgment obtained by the first defendant in reliance on the adjudicator’s certificate into court. The plaintiff has progressed the claim only slowly and its late amendments appear to have further delayed its determination. There is no evidence that this delay has prejudiced the defendants beyond that which might be expected to occur to a builder as a result of delay in receipt of monies and its effect on a builder’s cash flow. That can, of course, be significant but no particular evidence was placed before me of distress resulting therefrom. I do not think that delay is of critical importance in my determination, but it is a factor to be considered.
  1. [46]
    Important considerations in the exercise of my discretion in this case concern subparagraphs (g) and (h) of r 672 – whether an order for costs will be oppressive and whether it would stifle the proceedings by the plaintiff.
  1. [47]
    The defendant’s themselves say the plaintiff is in a parlous financial position. The land, which seems to be the company’s only asset, is very heavily mortgaged – to the extent that, the defendant’s say, the mortgage is between $135,000 and $485,000 more than the land value. How that occurred is not explained.
  1. [48]
    In support of a submission that to order further security would be oppressive counsel for the plaintiff relied on the payment of the sum of $632,615 to the defendants on account of building costs to date, the payment of the judgment sum of $101,184.94 into court, as statutorily required having regard to the adjudicator’s certificate, and the payment of $40,000 already as security for the first defendant’s costs.
  1. [49]
    Counsel for the plaintiff also relied on the fact of the first defendants caveat over the plaintiff’s land which it was said “further enhances (the first defendant’s) position.” Having regard to the mortgage over the land, I think the value of the caveat is minimal.
  1. [50]
    A consideration with ordering further security is thus that the plaintiff itself appears to have no capacity to pay anything further. To so order might, in such circumstances, be said to be oppressive and effectively bring an end to the litigation. Whether it would do so was not the subject of evidence from the plaintiff.
  1. [51]
    No doubt in recognition of the facts plaintiff’s dire financial position, two of the shareholders of the plaintiff, who are said to hold a majority of shares in it, have offered undertakings to the court to meet any adverse costs order against the plaintiff but would give the undertaking only if the court would otherwise make an order for security of costs.
  1. [52]
    The effect of such an undertaking is undoubted. In Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) FCA 391 at [34]; 8 ACSR 405 at 415 Cooper J said:

“Once the shareholders have been exposed to personal liability for the applicant's costs, the weight to be given to the statutory purpose is gone. Those who stand behind the applicant once they accept personal liability for the applicant's costs are in no worse [sic] position than they would be as litigants in person in the court:  (citations omitted).

The offer by the shareholders of the applicant to accept personal liability for the applicant’s costs is a factor weighing heavily against the making of an order against the applicant for provision of a cash or other security for costs notwithstanding that the worth of the shareholders may ultimately prove insufficient to satisfy any judgment in whole or in part.”

  1. [53]
    Importantly, the undertaking of the two shareholders, Ms Pryce and Mr McQuitty is to be made only if I would otherwise order that the plaintiff pay further security for costs.
  1. [54]
    I am strongly of the view that there are special circumstances and that the plaintiff’s conduct of the case is such that, but for the undertaking, an order for security of costs ought to be made. Whilst I am conscious that the plaintiff has no capacity to itself continue the litigation, in my view the offer that has been made means that, if an order for security were made it would not effectively bring an end to the litigation since it is likely that MsPryce and Mr McQuitty, who have given the undertaking I have referred to, would ensure that the litigation continued, by personally providing the security.
  1. [55]
    In such circumstances I conclude that it would in the circumstances be appropriate to make an order for security of the defendants’ costs but, in view of the undertaking, will not do so upon the undertaking of Ms Pryce and Mr McQuitty to meet any adverse costs order made against the plaintiff.
  1. [56]
    In concluding that I would otherwise have made an order for security I am particularly influenced by the delay by the plaintiff in the diligent prosecution of its case, the late and significant amendments of its claim which have both significantly expanded the scope of the action and joined the second defendant as a party – thus exposing him to orders that might be made against him including importantly costs orders. These are important factors. The amendments have and will inevitably lead to the defendants incurring significant further costs.
  1. [57]
    I am conscious of the criticism by the plaintiff’s counsel of the method by which the defendants’ solicitors have calculated the defendants’ likely future costs. There is much to be said for a party, through its solicitors, providing an estimate of reasonable costs on a standard basis. There is here however an assertion by a competent solicitor of likely standard costs being “no less than 50% of the costs…actually incurred”. On that basis her estimation of standard costs likely to be incurred was significantly above the amount sought as security.
  1. [58]
    A broadbrush approach to such matters is appropriate. Having regard to my own experience, and my appreciation of the additional complexity of the case arising from the plaintiffs amended pleadings, including the joinder of the second defendant a party, I conclude the sum sought as security was not unreasonable.
  1. [59]
    I will, in such circumstances, hear submissions as to the form of the undertaking and orders with respect to the claim for security of costs from the parties.

Disclosure issues

  1. [60]
    The defendants also seek orders for further disclosure as set out in paragraphs 5-9 of their application filed 20 February 2017. Before turning to them, I shall refer to some paragraphs of the further amended statement of claim.
  1. [61]
    In paragraphs 2O, 2P, 2Q and 2R thereof the plaintiff alleges that after signing the first defendant’s quotation (which was in about August/September 2012) the plaintiff’s agent, Saskia Pryce, informed the second defendant of difficulties the plaintiff had in obtaining finance for the development, including the fact that she had been unsuccessful in doing so. It is alleged that the second defendant recommended to her a finance broker he had previously himself used and that he assisted her application by providing information about the costs of the proposed construction. It is alleged that the plaintiff subsequently obtained finance in the sum of $640,000 to fund the construction from ANZ Bank.
  1. [62]
    Paragraphs 2S, 11 and 11A of the Further Amended Statement of Claim allege:

“2SBy reason of the matters pleaded in paragraphs 2O to 2R, by no later than October 2012 the Contractor (by Hennessy) knew, or reasonably ought to have known, that the Owner:

  1. (a)
    had limited funds to fund the Proposed Construction;
  1. (b)
    had experienced difficulty in obtaining funding for the Proposed Construction; and
  1. (c)
    had, in the premises, very limited ability to meet any costs in excess of the Quoted Price.

11Between about January 2013 and 28 March 2013, Saskia (on behalf of the Owner):

  1. (a)
    sent revised plans and, eventually, the Amended Plans, to the Contractor; and
  1. (b)
    engaged in discussions with Hennessy (on behalf of the Contractor) as to whether or not the Works could be undertaken within the limits of the funds available to the Owner (the 2013 Pre-Works Discussion).

11AIn the course of the 2013 Pre-Works Discussion:

  1. (a)
    Saskia informed Hennessy that the Owner would not be able to undertake construction of the Works in accordance with the revised drawings (Proposed Revised Works) if the costs were to exceed the Contract Sum;
  1. (b)
    Saskia and Hennessy identified and agreed that costs savings could be achieved by:

i.the Owner (by Saskia) obtaining, and the Contractor utilising cheaper quotation for elements of the Revised Proposed Works wherever possible; and

ii.deleting the following from the Revised Proposed Works and crediting the associated costs to the Owner in respect of the Contract Sum:

…”

  1. [63]
    The items alleged to have been deleted were then set out and amount to a total of $84,697.73.
  1. [64]
    The defendants in paragraph 5 of the application seek an order pursuant to r 223(2) of the Uniform Civil Procedure Rules that the plaintiff file an affidavit “in relation to the documents that are relevant to the allegations pleaded in paragraphs 2S, 11 and 11A of the Further Amended Statement of Claim stating:
  1. (a)
    that the documents do not exist or have never existed; or
  1. (b)
    the circumstances in which the document ceased to exist or passed out of the possession or control of the first party.”
  1. [65]
    Such orders are opposed by the plaintiff.
  1. [66]
    Rule 223(2), which is part of the disclosure provisions of the Rules, provides:

“(2)The court may order a party to a proceeding (the first party) to file and serve on another party an affidavit stating—

  1. (a)
    that a specified document or class of documents does not exist or has never existed; or
  1. (b)
    the circumstances in which a specified document or class of documents ceased to exist or passed out of the possession or control of the first party.”
  1. [67]
    The history of the defendants’ solicitor’s requests for disclosure of documents in relation to the plaintiff seeking loans from any lending facilities, including the ANZ Bank, is set out in paragraphs 51-59 of an affidavit of Ms Raphael, solicitor, filed on 23 February 2017.
  1. [68]
    The plaintiff, in an email of 9 February 2017 (Exhibit JLR-18 to Ms Raphael’s affidavit) stated that the allegation in the pleadings (being those earlier set out) “relate to the knowledge of (the defendants) as to (the plaintiff’s) financial situation insofar as it relates to the contract and only at those relevant times. It is difficult to see how documents relating to facilities, loan and mortgages outside of the relevant timeframe would bear any relevance on the proceedings”.
  1. [69]
    The respondents’ solicitors responded on 16 February (Ex. JLR-19) refuting the plaintiff’s contention and stated:

“Paragraph 2S of your client’s third amended statement of claim says that our client knew, or reasonably ought to have known, not just that your client had limited funds to fund the Proposed Construction but also that your client had a very limited ability to meet any costs in excess of the Quoted Price. This allegation relates to a future event or expectation. Additionally, by pleading that our client had knowledge in respect of these things, you are not only making an allegation about our client’s particular state of mind, your client is also alleging that that state of mind was true.

Accordingly, documents relating to facilities, loans or mortgages that your client has obtained in excess of the Quoted Price and directly relevant to the allegations in issue as they would tend to prove or disprove that your client has a very limited ability to meet any costs in excess of the Quoted Price. Similarly, any documents relating to facilities, loans, or mortgages that your client unsuccessfully applied for, are required to be disclosed, as they would tend to prove or disprove that your client had a very limited ability to meet any costs in excess of the Quoted Price.”

The letter continued:

“Moreover our client is aware that your client has obtained finance in excess of the Quoted Price.”

  1. [70]
    The letter sets out how their client had become so aware and the solicitors then reiterated they intended to bring an application for further disclosure in respect of this issue.
  1. [71]
    Subsequently, but on the same day, the defendants’ solicitors received an email from the plaintiff’s solicitor (Exhibit JLR-13). The letter (at p 3) referred to r 211 of the Uniform Civil Procedure Rules, emphasising the obligation of disclosure extended to documents directly relevant to allegations in issue in the pleadings or to issues in the proceedings. The plaintiff’s solicitors asserted the documents requested relate to the financial status of the plaintiff and submitted that the documents requested are unequivocally not relevant to the pleadings and are not directly relevant. In such circumstances the request for disclosure was refused.
  1. [72]
    In essence the plaintiff’s argument is that the issue in dispute concerning paragraphs 2S, 11 and 11A of the further amended statement of claim relates only to what was said during discussions between Ms Pryce and Mr Hennessy.
  1. [73]
    The difficulty with that submission, in my view, is that paragraph 2S of the further amended statement of claim is not just an allegation that Hennessy was told the matters set out in sub-paragraphs (a), (b) and (c) thereof, but that the first defendant, by Hennessy, knew, as a fact, that the owner had limited funds, had experienced difficulty in obtaining funding and had very limited ability to meet any costs in excess of the quoted price. Thus the allegation relates not only to what was said, but to the truth of those assertions since it is alleged Hennessy knew those matters as a fact i.e. he knew the truth of those facts. It is in such circumstances that the plaintiff pleads in paragraphs 11 and 11A that Ms Pryce engaged in discussions with Hennessy as to whether or not the works could be undertaken within the limits of the funds available to the owner, and, it is said, informed Hennessy that the plaintiff would not be able to undertake construction of work in excess of the contract sum.
  1. [74]
    Against that background the defendants in paragraph 2S of the amended defence to the further amended statement of claim and counter-claim assert that Ms Pryce represented to Hennessy that the plaintiff in fact would have access to funding outside its finance obtained through ANZ Bank.
  1. [75]
    In such circumstance it is appropriate to make orders pursuant to r 232(2) for disclosure of documentations in terms of paragraph 5 of the application.

Strike Out

  1. [76]
    The final issue for determination of the application filed on 20 February 2017 concerns the defendant’s application to strike out, pursuant to r 171 of the Uniform Civil Procedure Rules, paragraphs 29A(a), 32-33A and 36(a) of the Further Amended Statement of Claim. In his oral submissions the defendant’s counsel also sought to strike out paragraphs 40-43 thereof. Alternative relief concerning the same paragraphs is sought but the defendant’s counsel said in oral submissions that he had “in his written outline” framed the issue “more as a strike out issue”.
  1. [77]
    The relevant paragraphs in the further amended statement of claim are these:

“29A For the reasons pleaded in paragraphs 25-29 above:

  1. (a)
    The contractor has no entitlement to the adjudicated sums; and, or alternatively,
  1. (b)
    The owner is entitled to return of the adjudicated sum paid into the District Court of Queensland at Brisbane on 11 February 2015.

32 In further breach of Varied Agreement, the contractor failed to complete the varied Works by the Date for Practical Completion, being the period of 30 weeks from 20 May 2013.

33 But for the breach of the Varied Agreement pleaded in paragraph 32 above, the Owner would have commenced trading from the Site by on or about 16 December 2013.

33A

  1. (a)
    By reason of the matters pleaded in paragraph 33 above, the Owner has suffered loss and damage.
  1. (b)
    The Owner opened for business on 23 August, 2014, a period of 8 months and 8 days after the due date for completion.
  1. (c)
    The Owner lost the opportunity to earn income from hire of the Chapel for wedding services during the period 16 December, 2013 5o 23 August, 2014.
  1. (d)
    The Owner reasonably expected to earn the same amount, during the period 16 December, 2013 to 23 August, 2014, as the Owner earned over a period of 8 months and 8 days after 23 August, 2014, for the hire of the Chapel for wedding services. The sum earned over that period was $3,491.41 net of the cost of sales.
  1. (e)
    The Owner has suffered loss and damage in the sum of $3,491.41.

36 But for the contractors’ reach of the Duty of Care, the Owner: a. would have commended trading on or about 16 December 2013 and would not have suffered loss and damage in the sum of $3491.41.

Misleading of deceptive conduct

40 In making of each of the Price Warranty, the Licensing Representation and the Competency Representation, each of Hennessy and the Contractor;

  1. (a)
    engaged in “conduct” in “trade or commerce” within the meaning of those words as found in s 18 of the Australian Consumer Law; and
  1. (b)
    made a representation:–
  1. (i)
    as to a “future matter”, within the meaning those terms as found in s 4 of the Australian Consumer Law;
  1. (ii)
    upon which the Owner was intended to, and did in fact, rely in:

A.signing the Contractor’s Quotation;

B.entering into the Agreement;

C.entering into the Varied Agreement; and

D. making each of the payments particularised in paragraph 19(b) above.

  1. (iii)
    that, in the premises of the matters pleaded in paragraphs 2, 7A, 10A, 11G, 16A, 16B, 16E to 16I, 17 to 19C, 19E, 20(b), 20(c), 20(d) and 22 above was:

A. false, and, or alternatively, without any reasonable foundations;

B.misleading or deceptive, or likely to mislead or deceive.

41 In the premises of the matters pleaded in paragraph 40 above, by making each of the Price Warranty, the Licensing Representation and Competency Representation each of the Contractor and Hennessy contravened s 18 of the Australian Consumer Law.

42 By the making of which of the Price Warranty, the Licensing Representation and Competency Representation by the Contractor and Hennessy, the Owner:–

  1. (a)
    would not have:
  1. (i)
    signed the Contractor’s Quotation; or
  1. (ii)
    entered into the Agreement; or
  1. (iii)
    entered into the Varied Agreement; or
  1. (iv)
    made any of the payments particularised in paragraph 19(b) above.
  1. (b)
    Instead, have sought to enter into an agreement with an appropriately licensed, and reasonably skilled and competent, builder to undertake the Works and, subsequently, the Varied Works.

Damages

43 In a premises of the matter pleaded in paragraph 42 above, by reason of the Contractor’s and Hennessy’s contraventions of the Australian Consumer Law pleaded in paragraph 41 above, the Owner has suffered loss and damage:

  1. (a)
    in the amount of $632,615.64 as particularised in paragraph 19(b) above; or, alternatively
  1. (b)
    as set out in paragraph 36 above; and
  1. (c)
    is entitled to recover damages under s 236 of the Australian Consumer Law against the Contractor and Hennessy and/or compensation under s 237 of the Australian Consumer Law against the contractor and Hennessy.
  1. [78]
    The matters pleaded in paragraphs 25-29 of the further amended statement of claim referred to in paragraph 29A thereof concern the outcome of the adjudication made on 9 May 2014 and the plaintiff’s assertion that, by reason of the fact that the constructed building was one the defendant was not licensed to construct, the first defendant had no right to payment of money in respect of the works as constructed, under the contract or pursuant to BCIPA.
  1. [79]
    As earlier set out, the defendants deny that the work undertaken was contrary to the first defendant’s license. They also deny that BCIPA has the effect the plaintiff contends for and deny receipt of the adjudication sum. I understand it is undisputed that it has, rather, been paid into court, though belatedly, as I earlier indicated.
  1. [80]
    Rule 171(2) of UCPR provides that a court may at any stage of proceedings strike out all or part of a pleading.
  1. [81]
    The defendant contends that I should strike out the paragraphs of the Further Amended Statement of Claim referred to on the basis that they disclose no reasonable cause of action, have a tendency to prejudice or delay the fair trial of the proceedings and are unnecessary. These are of course circumstances specifically identified under r 171(1) of UCPR which enliven the strike out discretion under subrule 2.
  1. [82]
    In his written submissions the defendants’ counsel requests that the court strike out:

“(a) Paragraphs 33, 33A and 36(a) of the SOC:

The owner’s disclosure reveals that those allegations display no reasonable cause of action, are unnecessary and would tend to delay the fair trial of the proceedings.

  1. (b)
    Paragraph 29A(a) of the statement of claim:

The uncontroverted fact is that the builder has not received any part of the “adjudicated sum” so as to be in a position to make restitution and, thus, the allegations disclose no reasonable course of action, are unnecessary and would tend to delay the fair trial of the proceeding.

  1. (c)
    See paragraph 40-43 of the SOC:

The owner has failed to plead a cause of action under the ACL. The causes of action are presumably the statutory causes of action set out in ss 236 and 237 of the ACL.

  1. [83]
    In oral submissions, consistent with the content of Ms Raphael’s affidavit, the defendants’ counsel submits there were no documents disclosed by the plaintiff showing that it would have been able to start business on the date alleged, namely 16 December 2013, and no financial records of any sort showing what the profits of the business would have been, so that losses can be calculated. He submits that any assumptions an expert might make as to, for example, the starting date of operations and losses attributable thereto would need to be proved. The lack of any documentation at all to support the assumption places the plaintiff, it is submitted, in a position where the matters are incapable of proof such that the pleading ought to be struck out.
  1. [84]
    Furthermore in Ms Raphael’s affidavit, in particular Exhibit JLR-22 thereof, there are references to correspondence written on behalf of the plaintiff which might cast significant doubt on the suggestion that the building could have been open for business in December 2013. Ms Raphael attests to the fact that she was not able to identify any document to support the plaintiff’s contention.
  1. [85]
    The plaintiff’s counsel highlights the assertions made by the plaintiff’s solicitors in documentation attached to Ms Raphael’s affidavit that no documentation that is relevant to the allegation can be disclosed, since none exist. The plaintiff’s pleaded case is that the detail of the plaintiff’s loss, arising from its inability to commence trading from the site from about 16 December 2013, will be particularised by way of an expert report. Whilst that report has not yet been obtained, the plaintiff’s counsel says that remains the plaintiff’s intention.
  1. [86]
    I can see no reason why the absence of documentation in respect of such issues can justify striking out the claim. No doubt the lack of documentation, and indeed contrary assertions in Ms Pryce’s correspondence with the defendants, may be a significant evidentiary burden to overcome in proving the assertion as to the anticipated opening. Likewise any expert opinion about possible losses might also be thought to be problematic in the absence of any such documentation, but it does not seem to me that the absence of documentation precludes the plaintiffs from making the assertions that they have, or from conducting its case on that basis.
  1. [87]
    Accordingly, the application to strike out paragraphs 32, 33, 33A, 36(a) is dismissed.
  1. [88]
    The defendants contention concerning paragraph 29A of the Further Amended Statement of Claim (see paragraphs 74-78 of Ms Raphael’s affidavit) appear to be based on the premise that what the plaintiff seeks is that the first defendant make the restitution of the adjudicated sum, and yet that sum has not been received by the defendants. That contention may have been justified in relation to the Amended Statement of Claim which did seek such restitution. That claim in the Further Amended Statement of Claim is altered. In its altered form it does not seem to be objectionable. No doubt the matter will be determined by the trial judge’s factual findings, and by orders he or she may make concerning the monetary entitlements of the parties.
  1. [89]
    I dismiss the application to strike out paragraph 29A.
  1. [90]
    In relation to the application concerning paragraphs 40-43 of the Further Amended Statement of Claim, counsel for the defendants fairly conceded he had not given notice of his concern about those paragraphs to the plaintiff’s counsel, and they were not part of the written application.
  1. [91]
    In the circumstances I will not make any order concerning paragraphs 40-43 beyond giving the plaintiff leave to further amend those paragraphs. If, after any such amendments there is an ongoing debate about them that can be determined on a further application.

SECOND APPLICATION

  1. [92]
    The plaintiffs filed a further application heard on 28 June 2017 in which it sought:
  1. (i)
    Leave to file and serve a Second Further Amended Statement of Claim.
  1. (ii)
    Leave to sever threshold issues in the matter and have those allegations heard separately on an interim pre-trial hearing pursuant to the provisions of r 483 of the Uniform Civil Procedure Rules. I will refer to the details of the order sought in respect of the separate hearing in due course.

Proposed amendments to second Further Amended Statement of Claim

  1. [93]
    The proposed amendments to the Further Amended Statement of Claim are set out in paragraphs 1 to 3 of the prayer for relief in the proposed second Further Amended Statement of Claim. The plaintiff had sought a declaration that the First Defendant must make restitution to the Plaintiff in respect of all monies paid to the First Defendant in respect of the Varied Agreement and the Adjudicated Sum (see paragraph 1(a) of the prayer for relief in the Further Amended Statement of Claim). It also sought an order that the First Defendant make restitution to the Plaintiff in respect of the Varied Agreement and the Adjudicated Sum.
  1. [94]
    The proposed amendments to the prayer for relief are in the following terms:

The plaintiff claims the following relief against the first defendant:

  1. A declaration that:

(a)the First Defendant entered into an Agreement for the performance of building work and carried out building work in breach of s 42(1) of the Queensland Building Services Authority Act 1991 (Qld);

(b)the First Defendant had no contractual entitlement to be paid any consideration for any of the work the subject of the Agreement (as originally made or as varied);

(c)the First Defendant was not entitled to make a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) for any of the work the subject of the Agreement (as originally made or as varied);

(a)(d)The First Defendant must make restitution to the plaintiff in respect of all monies paid to the First Defendant in respect of the Varied Agreement and the Adjudicated Sum; and, or alternatively;

  1. (e)
    The Adjudicated Sum paid into the District Court of Queensland at Brisbane on 11 February 2015 be paid out of court to the plaintiff;
  1. An order that the first defendant make restitution to the Plaintiff in respect of all monies paid to the First Defendant in respect of the Varied Agreement and the Adjudicated Sum.
  1. An order that the Adjudicated Sum paid into the District Court of Queensland at Brisbane on 11 February 2015 be paid out of Court to the Plaintiffs.
  1. [95]
    The defendants do not oppose the amendments to paragraphs (1)(d) or (2) but oppose the other amendments to the prayer for relief.
  1. [96]
    The plaintiff submits the proposed amendments follow logically from the allegation that the First Defendant and Second Defendant were unlicensed to perform the building work in question.
  1. [97]
    The defendants’ objection to the proposed amendments to the prayer for relief in the Statement of Claim is based on two grounds. They submit that what are sought in paragraphs 1(c), 1(e) and 3 are declarations concerning, inter alia, work that was the subject of an adjudication decision under the provisions of BCIPA. Counsel submits that such a declaration concerning the adjudication would involve a matter beyond the jurisdiction of this court.
  1. [98]
    Second, he also submits that the declaration sought in paragraphs 1(a) and 1(b) are entirely unnecessary, since, if such a declaration were to be made, inevitably the court would make an order under paragraph 2 that the first defendant make restitution to the plaintiff in respect of such sums.
  1. [99]
    It does seem to me that the declarations sought in 1(a) and (b) above are unnecessary. An order under paragraph 2 of the second Further Amended Statement of Claim, which amendment is not opposed, would have the effect that the Defendants make restitution to the Plaintiff of all money paid to the First Defendant under the Varied Agreement. The declaration sought in subparagraphs (a) and (b) do involve so central a part of the plaintiff’s case for restitution that the plaintiff would succeed only if the court found the first defendant’s licence was breached by its performance of the building work. Accordingly the amendment appears to be unnecessary.
  1. [100]
    More important considerations arise with respect to subparagraphs (c) and (e) of paragraph 1 and paragraph 3 of the proposed amendments.
  1. [101]
    It must be remembered that the first defendant has already received the benefit of the determination of the adjudication claim and a judgment registered in the Magistrates Court with respect to that determination. Counsel submitted that the relief sought is effectively a review of the adjudicator’s decision that the first defendant was entitled to make a claim under BCIPA. He submits that only the Supreme Court has jurisdiction to review such alleged jurisdictional error. He relies, inter alia on the following passage of the High Court in Kirk & Anor v Industrial Court of New South Wales & Anor (2010) 239 CLR 531. At page 566 the majority of the Court said in a joint judgment:

“Chapter III of the Constitution requires that there be a body fitting the description ‘the Supreme Court of a State’. It is beyond the legislative power of a state so to alter the constitution or character of its Supreme Court that it ceases to meet the constitutional description.

...

A privative provision in State legislation, which purports to strip the Supreme Court of the State of its authority to confine inferior courts within the limits of their jurisdiction by granting relief on the ground of jurisdictional error, is beyond the powers of the State legislature.”

  1. [102]
    Consistent with this approach, counsel submitted that only the Supreme Court of Queensland exercising its constitutionally protected ‘supervisory jurisdiction’ can review jurisdictional error. The importance of such considerations arises because, as was pointed out in Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd & Ors [2011] QCA 22, the Judicial Review Act was amended in 2007 so that adjudication decisions, like the one made in this case under BCIPA were included in provisions of the Judicial Review Act intended to deprive the Supreme Court of its power to review for such error. As indicated by McMurdo P at paragraph 5 of her judgment in the Northbuild Constructions case, the relevant explanatory notes of the amending act stated:

“The amendment will fully exempt the decisions of adjudicators made under the (Payments Act) from review under the Judicial Review Act 1991. This amendment is constituted with the objective of the [Payments Act] to create a dispute resolution process whereby adjudicators can quickly resolve payment disputes between parties to a construction contract on an interim basis.”

  1. [103]
    Her Honour at paragraph 6 said in relation to this amendment:

“The 2007 amendment and explanatory note strongly suggest that the legislature intended to exclude from judicial review by the Supreme Court all administrative decisions under enactments listed in Sch 1, Pt 2 of the Judicial Review Act, including judicial review of an adjudicator’s decision under the Payments Act. But the High Court in Kirk v Industrial Court (NSW) has recently made clear that the legislature cannot exclude the power of a State Supreme Court to exercise its supervisory jurisdiction as to jurisdictional error in executive and judicial decision-making.”

  1. [104]
    As is clear from the comments of the High Court in Kirk, the same inherent supervisory jurisdiction does not exist in inferior courts. It is a peculiar power of the Supreme Court of the States, in the exercise of their constitutionally protected powers of supervision.
  1. [105]
    In such circumstances the question is whether or not the orders the plaintiff seeks in paragraph 1(c) and (e) and 3 of the proposed amended prayer for relief would in fact involve a review of the jurisdiction of the adjudicator.
  1. [106]
    In my view they would. A determination that the first defendant was not entitled to make a payment claim under BCIPA, or that the adjudicated sum should be paid out of court to the plaintiff would appear to me to directly cut across the jurisdiction of the adjudicator under the BCIPA and would exceed the jurisdiction of the District Court.
  1. [107]
    In any case, it seems to me that the orders sought are unnecessary. Pursuant to 1(d) and 2, if the plaintiff succeeds with its claim the first defendant would be required to make restitution to the plaintiff in respect of all monies paid to the first defendant in respect of the varied agreement (subject to its claim under s 42(4) of BCIPA earlier referred to). Such a determination, if made, in my view provides adequate protection for the plaintiff. The declarations sought in the paragraphs of the prayer for relief I have earlier referred to do not advance the plaintiff’s claim and in my view raise real issues as to the jurisdiction and competency of this court.
  1. [108]
    In the circumstances I dismiss the application to amend the claim and prayer for relief insofar as it relates to subparagraphs 1(a), (b), (c) and (e) and subparagraph 3 of thereof. I will allow the amendments to paragraphs 1(d) and 2 of the proposed amended claim and amended prayer for relief.

Separate determination

  1. [109]
    The plaintiff’s counsel seeks an order that the following questions be separately determined:

“(a)whether the building to be constructed in accordance with the Initial Plans, the Amended Plans and as in fact constructed was a Class 9b (Assembly building), Type A construction (two stories), under the Building Code of Australia;

  1. (b)
    whether the First Defendant was the holder of a license under the Queensland Building Services Act 1991 (Qld) (QBSA) enabling it to perform building work described in accordance with the Initial Plans, the Amended Plans or in fact performed in the construction of the building;
  1. (c)
    whether the First Defendant entered into a contract for the performance of building work and in fact carried out building work in breach of s 42(1) of the QBSA;
  1. (d)
    whether the First Defendant had any contractual entitlement to be paid any consideration for any of the work the subject of the contract (as originally made or as varied);
  1. (e)
    whether the First Defendant was entitled to make a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) for any of the work the subject of the contract (as originally made or as varied).”
  1. [110]
    It was submitted by counsel for the plaintiff that the question could be determined merely by consideration of the opinions of two expert certifiers, referred to earlier in these reasons, and should not involve consideration of other witnesses’ evidence. It was also submitted that determination of the separate questions would determine many of the parties’ rights and involve a final determination of a significant dispute between the parties. Counsel submitted that a similar approach was adopted in making an order for separate determination of an issue in Dart Holdings Pty Ltd v Total Concept Group [2012] QSC 158.
  1. [111]
    A significant difference, however, in that case was that the issues for separate determination were ordered by consent of the parties. Thus, while the case involved the question whether contractual work was within the scope of what was authorised by the contractor’s license, the fact that it was ordered by consent, I think, may well have made a court more disposed to conclude that there were unlikely to be disputes of fact. Here, however, the factual disputes between the parties are wide ranging. Counsel for the defendants submits that the separate question itself gives rise to a number of factual disputes and is unlikely to reduce the length or expense of the final determination of the matter.
  1. [112]
    In Advance Traders Pty Ltd v McNab Construction Pty Ltd [2011] QSC 212, Boddice J held at [10] that the discretion in a court to make an order for the decision of a question separately from another question in a matter is a rule “intended to provide for its determination of an issue or issues the resolution of which is likely to lead to substantial savings and expense”.
  1. [113]
    An important consideration was, his Honour said, whether the successful determination of the separate issues would:

“(a)relieve the parties and the Court of the need to otherwise consider a significant volume of documents;

  1. (b)
    avoid the need for the Court at trial to consider expert evidence,
  1. (c)
    avoid, or at the very least reduce, the necessity for a lengthy trial.”
  1. [114]
    His Honour then referred to factors said in Redding Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 especially at para [8] thereof by Branson J, in respect of a rule in the Federal Court Rules materially identical to r 483 of the UCPR, to be relevant to the discretion.
  1. [115]
    Importantly, her Honour had said that such a separate judicial determination “must involve a conclusive or final decision based on concrete and established or agreed facts for the purpose of quelling a controversy between the parties”. Furthermore, her Honour also said it was relevant whether the facts relevant to the determination of the question are to be ascertainable either as facts assumed to be correct or as agreed facts or as facts judicially determined was a material consideration.
  1. [116]
    It was also said by her Honour in the Redding case, that it was relevant whether the separate determination may narrow the issues at trial, lead to the disposal of the action or contribute to settlement of the litigation.
  1. [117]
    The possibility that the separate determination sought might give rise to significant contested factual issues at the time of either the determination of the separate issue, or at trial, was a factor, her Honour said, which told against the making of an order for separate determination of an issue.
  1. [118]
    These matters exhaustive of the relevant matters are not or of the matters identified by her Honour in Redding’s case or by Boddice J in the Advanced Traders case. Consideration of them does, however, cause me to conclude that this is not a suitable case for a separate determination of the issue identified in the plaintiff’s application.
  1. [119]
    It is self-evidently true that the issue of whether or not the work was within the first defendant’s license is a matter that must be determined. I am not however satisfied that to do so separately from the trial of the matter is appropriate. Submissions of the defendants’ counsel caused me to conclude that the issue is likely to involve a mixed question of fact and law. There appears to be a dispute as to the exact scope of work agreed to be undertaken by the defendant, and how this might relate to the determination of whether or not the work performed was within the scope of the first defendant’s license. This dispute extends not only to the written plans, but to oral variations thereto. Furthermore, even if the matter was separately determined, I am far from convinced that would result in any material diminution in the length or expense of the trial. Other than obviating the need to call the two experts at the trial, rather than at an earlier separate hearing, determination of the first defendant’s claim under s 42(4) of the Act would involve consideration of much of the totality of the evidence of Mr Hennessy and Ms Pryce. Whatever the determination of the separate issue, these would remain significant questions concerning the work undertaken by the defendant, whether determined by recourse to a contractual entitlement or to s 42(4) considerations.
  1. [120]
    In the circumstances the application for separate determination of the issue is also dismissed.

Orders

  1. [121]
    After delivering these reasons submissions were made as to the form of the undertaking, which was subsequently agreed upon.
  1. [122]
    I order:

On the application filed 20 February 2017;

  1. (i)
    Upon the undertaking of Saskia Pryce and Peter James McQuitty that if any Order for costs is made against the Plaintiff in the action, then on behalf of the Plaintiff they will be jointly and severally responsible for the Plaintiff and be responsible for and will pay those costs as taxed, assessed or agreed between the parties.
  1. (ii)
    The Plaintiff file and serve an affidavit within 14 days of this order in relation to all documents relevant to the allegations pleaded at paragraphs 2S, 11 and 11A of the Further Amended Statement of Claim.
  1. (iii)
    The application to strike out paragraphs 29A, 32, 33, 33A and 36(a) of the Further Amended Statement of Claim is dismissed.
  1. (iv)
    The Plaintiff is given leave to amend paragraphs 40-43 of the Further Amended Statement of Claim.

On the application filed 14 June 2017;

  1. (v)
    The application to sever threshold issues and have those issues heard separately is dismissed.
  1. (vi)
    The Plaintiff be given leave to file a Second Further Amended Claim and Statement of Claim as per paragraph 1(d) and 2 of paragraph [93] of this judgment, but the application for leave to file amendments as per paragraphs 1(a), (b), (c), (e) and 3 of the said paragraph is dismissed.
Close

Editorial Notes

  • Published Case Name:

    Chapel of Angels Pty Ltd v Hennessy Building Pty Ltd & Anor

  • Shortened Case Name:

    Chapel of Angels Pty Ltd v Hennessy Building Pty Ltd

  • MNC:

    [2017] QDC 280

  • Court:

    QDC

  • Judge(s):

    Reid DCJ

  • Date:

    21 Nov 2017

Appeal Status

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

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.