Queensland Building and Construction Commission v Crocker
[2024] QDC 140
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- Unreported Judgment
- Queensland Building and Construction Commission v Crocker[2024] QDC 140
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Queensland Building and Construction Commission v Crocker[2024] QDC 140
Queensland Building and Construction Commission v Crocker[2024] QDC 140
DISTRICT COURT OF QUEENSLAND
CITATION: | QBCC v Crocker & another [2024] QDC 140 |
PARTIES: | QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (Plaintiff) v LEE ANTHONY CROCKER (First Defendant) and DENE WARD CROCKER (Second Defendant) |
FILE NO: | 729/21 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court |
DELIVERED ON: | 11 October 2024 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20 August 2024 |
JUDGE: | Heaton KC DCJ |
ORDERS: |
|
CATCHWORDS: | Pleadings – Statement of claim – Striking out of statement of claim – Practice and procedure – Proceedings – Dismissal – Want of prosecution |
LEGISLATION | Uniform Civil Procedure Rules 1999 (Qld) rr 5; 280; 292; 389 Queensland Building and Construction Commission Act 1991 (Qld) r 111C |
CASES | Tyler v Custom Credit Corp Ltd [2000] QCA 178 Dempsey v Dorber [1990] 1 Qd R 418 Queensland Building and Construction Commission v Smith [2024] QDC 101 Lilyville Pty Ltd v Colonial Mutual Life Assurance Society Ltd [1999] QSC 372 |
COUNSEL: | A Tindall (Applicant) N Cooke (First and Second Defendants) |
- [1]The Queensland Building and Construction Commission (QBCC) commenced action against the defendants on 31 March 2021, then took no action after 10 December 2021 to progress that action. As a consequence of that inaction, two related applications are now before the court. Firstly, by application filed on 26 July 2024, the defendants seek an order pursuant to rule 280 of the Uniform Civil Procedure Rules 1999 (UCPR) to dismiss the Cause of Action for want of prosecution. Secondly, by application filed on 5 August 2024 the QBCC seek leave to proceed pursuant to rule 389 of the UCPR.
- [2]It is uncontroversial that the last step in the proceeding was on 10 December 2021 and that therefore, a period exceeding two years has elapsed during which no further steps have been taken to progress the Cause of Action. By operation of rule 389 of the UCPR no new step may be taken in the proceedings without an order of the court. Further, in light of the plaintiff’s inaction, rule 280 of the UCPR empowers the court to dismiss a proceeding for want of prosecution.
- [3]The factors relevant to the discretion to dismiss a proceeding for want of prosecution and the discretion to grant leave to proceed under rule 389 overlap such that it is appropriate to consider these applications together. The proper approach is to identify the relevant factors, assess the weight to be given in the circumstances of the case to each of them, and then to determine whether, on balance, there is good reason for granting leave.[1] The courts discretion is not fettered by the application of rigid rules but must take into account all of the relevant circumstances of the particular case including the consideration that ordinary members of the community are entitled to get on with their lives and plan their affairs without having the continuing threat of litigation and its consequences hanging over them.[2]
- [4]In Tyler v Custom Credit Corp Ltd at [2], Atkinson J with whom McMurdo P and McPherson JA agreed, set out a non-exhaustive list of 12 factors to be taken into account in determining whether the interests of justice require the exercise of the discretion in rule 389. Whether there is a satisfactory explanation for the delay in the progress of the action and whether the defendants will suffer prejudice if the action proceeds are always relevant factors, but they are not exhaustive.
- [5]It is also relevant to note that rule 389 sits in conformity with rule 5 of the UCPR which sets out the overriding obligations of parties to proceedings under the UCPR and dictates that priority be given to efficiency and the avoidance of undue delay and expense.
Background
- [6]In June 2012 the QBCC received a complaint in respect of incomplete building work against Statewide Residential Building Inspection and Maintenance Services Pty Ltd (the company). The defendants Lee Crocker and Dene Crocker were then Directors of that company.
- [7]In February 2014, the QBCC receive a second complaint against the defendants in respect of incomplete building works at a second property. In May 2015, and then on various dates between April and November 2015 respectively, the QBCC made payments to the owners of the two properties to settle those complaints under the statutory insurance scheme.
The Cause of Action
- [8]As noted above, the QBCC commenced a Cause of Action to recover the amounts paid on the claims under the insurance scheme against each of the defendants pursuant to s. 111C of the Queensland Building and Construction Commission Act 1991 (the QBCC Act). Section 111C(3) of the QBCC Act entitles the QBCC to recover an amount paid by the Commission on a claim under the insurance scheme from each individual who was a director of the company when building work the subject of the claim was, or was to have been, carried out, and each individual who was a director of the company when the payment was made by the Commission.[3] The liability of the relevant individuals applies regardless of the status of the company, including that the company has been wound up.[4]
- [9]Relevantly, Lee Crocker (the first defendant) ceased to be a director of the company from 11 January 2013. That was soon after the QBCC received the first complaint and also only about three or so months after the company entered into a contract to carry out work at the second property. Also relevant is that the company commenced voluntary winding up in December 2013, which was about two months before the second complaint was received by the QBCC. The company was formally deregistered on 27 August 2017, that is, about three and a half years prior to the filing of the Claim and Statement of Claim by the plaintiff on 31 March 2021.
- [10]Once filed, the Claim progressed with reasonable expedition. In the Defence filed by each of the defendants on 15 July 2021, they seek to defend the claim and plead matters which might give rise to real questions as to the liability of them, or one or other of them, in relation to the action to recover monies paid under the insurance scheme. By that step, they engaged in the litigation and articulated a defence to the claim. Relevantly, they have not pleaded any reliance on the winding up of the company as a factor relevant to their defence of the claim. That approach was perhaps understandable given the clear language of s. 111C(7) of the QBCC Act which states that liability to pay a penalty or an amount applies regardless of the status of the company, including, for example, that the company is being or has been wound up.
- [11]As noted above, the last step occurred on 10 December 2021 with the defendants giving notice to the QBCC disputing the QBCC’s Notice to Admit Facts which had been delivered on 30 November 2021. After that last step, progress in the matters ground to a halt.
The Delay in Progress: The ‘Test Case’.
- [12]A little over six months later, on 21 June 2022, the solicitors acting for the QBCC wrote to the solicitors acting for the defendants to explain the cause of the delay. That explanation was in somewhat vague terms:
“Unrelated to this matter, there is a case being conducted which might affect the result in this matter. Accordingly, once that other issue is resolved, we will give you notice of intention to proceed.”[5]
- [13]Of note, and relevant to what is to come, it was not suggested in that correspondence that the resolution of the issue in the other case might cause the QBCC to withdraw its Claim in the present matter. Nor were the defendants given any indication as to what the issue in contention in that case was, or even the name of the case, should they wish to do some research of their own so as to be better informed.
- [14]Unbeknown to the defendants, the QBCC made a decision to not progress the proceedings against them because an issue was raised in defence of the unrelated case of Queensland Building and Construction Commission v Smith[6] which gave rise to a question as to the proper construction of s. 111C of the QBCC Act and in particular, whether a director can be liable where the relevant company has been deregistered. The QBCC decided that the resolution of that question might impact upon the viability of the action against the defendants. Consequently, the QBCC considered that it was appropriate for the question raised in QBCC v Smith to be determined before further proceeding with this case, because, despite their contentions to the contrary, if the construction of the relevant provisions advanced by Mr Smith was correct, it might result in the proceedings against the Crockers being discontinued.
- [15]Whilst it is easy to understand the desire of the QBCC, and those advising it, for there to be clarity in the legislation under which it purports to exercise its powers, and whilst the QBCC seems to have been mindful of the legislative framework designed to ensure that proceedings move expeditiously, it was necessary that it also remain mindful of its obligations pursuant to rule 5 of the UCPR and the clear policy of efficiency, expedition and fairness underpinning the legislative framework of the UCPR.
- [16]Whilst the QBCC were parties to both this proceeding as well as those involving Mr Smith, they instructed different solicitors in each case. Mr Robinson, Solicitor, was engaged in the present matter. He was clearly alive to the impeding expiration of the two year time limit within which a step needed to be taken in this proceeding when he wrote again to the solicitors acting for the defendants on 21 September 2023. By that time, there had then been approximately 15 further months of inaction in progressing the claim against the defendants.
- [17]In that correspondence, Mr Robinson explained that the delay was the result of a ‘test case’ being conducted in the District Court which bears on whether or not the proceeding against the defendants should proceed. On this occasion, Mr Robinson sought the agreement of the defendants to not progress the matter (and thereby avoid potentially unnecessary costs in the event that the proceedings were later discontinued by the QBCC) and for them to take no issue with a delay of more than two years (when the QBCC came to apply to the Court for leave to proceed). Mr Robinson explained that in the absence of agreement, he would obtain instructions (from the QBCC) and continue with the litigation.
- [18]The defendants did not respond to the correspondence. Consequently, Mr Robinson did not obtain the agreement he sought. Despite that, no further steps were taken to progress this litigation. That is also despite his indication that in the absence of agreement the litigation would continue.
- [19]The decision in QBCC v Smith was handed down on 26 April 2024 and only after that were the defendants told of the name of the case that caused the delay. However, it was not until a further three months that they were able to obtain a copy of the decision.[7] It became apparent, only then, that the question that arose in the circumstances of that case was whether Mr Smith can be liable under s. 111C(6) of the QBCC Act if the relevant company was deregistered at the time the building work the subject of the claim was carried out, and/or at the time the payment was made by the Commission. Neither of those factual circumstances arise in the present case.
- [20]The defendants argue in this application that the issue in QBCC v Smith could not have determined the outcome in the present matter in light of the identified issues in contest between the parties and the basis upon which the defendants sought to resist the QBCC’s claim. Whilst I acknowledge the force of that contention, it is perhaps understandable, and maybe even commendable that the QBCC would seek to have some clarity about the legislative power to recover monies before seeking to do so. Or, in this case, continuing with efforts to do so. The QBCC is, after all, a statutory body and must therefore conduct itself at all times having regard to the Model Litigant principles. However, having commenced litigation against the defendants, it had an obligation to pursue, with diligence, that litigation. Not only is that a necessary requirement of the Model Litigant principles, it is also a requirement of the legislative scheme in the UCPR.
- [21]Returning to the chronology of relevant events; on 31 May 2024, after the decision in QBCC v Smith had been handed down, but before a copy of the reasons was available to the defendants, the solicitors for the QBCC wrote again to the defendants advising them that the outcome of the ‘test case’ was favourable to the position of the QBCC such that they therefore intended to apply for leave to proceed with the Cause of Action.
The Current Applications
- [22]On 26 July 2024, the defendants filed an application seeking to have the proceedings dismissed for want of prosecution pursuant to rule 280 of the UCPR.
- [23]On 5 August 2024, the QBCC filed an application to continue the proceedings after delay pursuant to rule 389 of the UCPR.
- [24]In relation to their application to dismiss the proceedings, the onus is on the defendants to show that the matter should be struck out. It is uncontroversial that the factors relevant to an application pursuant to rule 389 are also applicable to an application to strike out pursuant to rule 280, and are those articulated in Tyler v Custom Credit (above).
- [25]The Plaintiff accepts that it failed to take a step in the proceedings for a period which exceeds two years. Having failed to take a relevant step in the proceedings, the Court is empowered, on application by the defendant, to dismiss the claim for want of prosecution. The QBCC is also legislatively precluded from taking a step without an order of the Court permitting it to do so.
Consideration
- [26]These legal proceedings relate to events that commenced approximately 12 years ago in 2012. It wasn’t until 2021, some nine years later, that proceedings were commenced in this Court. The first defendant has not been a director of the company for over 10 years and the company itself has been deregistered for seven years. In response to the contention that the defendants have a good case to deny liability, the plaintiff submitted, in effect, that the legislative framework is such as to provide little scope to defend a claim such as this. Whilst that may be so, it is relevant that the defendants engaged in the litigation, indicated their intention to defend the claim and pleaded their case. In doing so, no reliance was placed on the deregistration of their company as a basis upon which they might escape liability.
- [27]Whilst I can accept that it is reasonable for the QBCC to ensure that they are on strong footing to commence, and to continue with, litigation before putting the parties to further expense that may prove to be wasted, the particular issue that arose in QBCC v Smith was not pleaded by the defendants, it was, in light of the considerable experience of Mr Robinson, novel, and it was contrary to the clear words of the legislation. The contention advanced in QBCC v Smith might reasonably have been thought to be an interesting, but ambitious, point to advance in defence of a claim by the QBCC under this legislative regime.
Was it reasonable to delay progress?
- [28]That therefore calls into question the reasonableness of the decision by the QBCC to intentionally and unilaterally delay proceeding with their claim against the defendants on the basis of a legal point that did not squarely arise in the circumstances of the present case. Further, the QBCC made that decision without properly informing the defendants of the basis for it, the nature of the issue that it considered important to clarify, or even the name of the relevant ‘test case’ so that the defendants might make their own assessment of the utility of the issue in that case, or in theirs. Quite simply, they were denied the opportunity to consider the merits of any necessity for delay and instead were beholden to the QBCC to decide when and if it would continue with the litigation that it commenced. All the while, the continuing potential impact of the legal proceedings were hanging over their heads.
- [29]In his evidence in this application, Mr Robinson admitted that the decision to communicate with the defendants in nebulous terms and to not alert them to the particular issue that arose for consideration in the case of Smith, or indeed even the name of the ‘other case’, was a deliberate tactical decision.
- [30]Consequently, the QBCC is entirely responsible for the delay in these proceedings. It deliberately failed to take another step in the proceeding until it filed its application pursuant to rule 389 on 5 August 2024. The QBCC made the unilateral decision to await the outcome of Smith without seeking to alert the defendants to the particular issue that arose and without giving them the opportunity, if they so desired, to seek a resolution of their own case on the merits of the issues in contest between the parties.
- [31]The QBCC submits that it was necessary that they await the resolution of the issue raised in defence of the claim in QBCC v Smith before progressing their claim against the defendants. In my view, the question that arose in the case of Smith was not of such direct application to the circumstances of this case as to necessitate awaiting the outcome before proceeding with the present case. In particular, given the issue that arose in that case, it could not have been of such importance to the present proceedings as to overwhelm the other requirement for expedition and the implied undertaking in rule 5 of the UCPR. In that regard it is relevant that it was not an issue pleaded in defence of the Cause of Action.
- [32]Further, the QBCC, through its legal representatives sought agreement from the defendants for the delay. That agreement was not forthcoming. In the absence of agreement, the QBCC foreshadowed that it would continue with the proceedings. It did not do so. Instead, mindful of its obligation to proceed in a timely way, it continued to await the decision of another case in contravention of its implied undertaking for expedition.
- [33]In my view, the QBCC has not provided a satisfactory reason for the delay of over two and a half years in progressing this proceeding.
Prejudice?
- [34]It is not necessary here to embark upon a detailed analysis of the merits of the respective cases, however, I note that both defendants have pleaded circumstances which would undermine the conclusion that they were liable for the amount sought by the QBCC. The relevant events, as noted above, commenced over 10 years ago. There was a considerable delay in the commencement of the proceedings by the filing of a Claim and Statement of Claim.
- [35]Whilst I acknowledge that striking out these proceeding will bring an end to the claim and the capacity for the QBCC to recover the monies paid under the insurance scheme, in my view, on the material pleaded, the QBCC’s success is not assured. This is not a case in which the defendants have no scope to resist liability. There are issues to be tried in this case, none of which turn on the de-registration of the defendant’s company. The defendants have been denied the opportunity to have the merits of those issues determined within the timeframe dictated by the UCPR.
- [36]Whilst no specific prejudice is advanced in support of their application, as a consequence of the delay, the defendants have continued to have the proceedings and its potential consequences hanging over them. These proceedings would understandably weight heavily on them. Rule 5 of the UCPR reflects not only the overarching requirement for fairness in the efficient and expeditious conduct of proceedings, but it also reflects the well understood legal maxim that justice delayed is justice denied.
- [37]The matters pleaded in defence of the claim by each of the defendants focus on the scope of the relevant legislative provisions to the particular circumstances of each defendant. Whilst I anticipate that the resolution of those issues would largely turn upon documentary evidence and statutory interpretation and not so much on human memory, there remains a risk of understandable deterioration in the quality of the available evidence, the recollections of the parties and clarity in the circumstances surrounding the relevant events.
- [38]This is a case in which the comments by Atkinson J in Tyler v Credit Corp at [3] are apposite:
“…unnecessary delay in proceedings has a tendency to bring the legal system into disrepute and to decrease the chance of there being a fair and just result.”
- [39]The object of courts is to decide the rights of parties on their merits and not to punish them for mistakes or procedural missteps in the conduct of their cases, and whilst I can accept that Mr Robinson genuinely believed that the legal issue that arose for the first time in his extensive experience required resolution before proceeding with the present proceeding, in the circustances here, that ought not to have overwhelmed the other obligations on a plaintiff in legal proceedings under the UCPR and, in this case, a model litigant. This was not a simple mistake. The plaintiff was clearly mindful of the legislative requirements for efficiently, expedition and fairness and yet made a conscious, unilateral decision, to delay their proceedings without meaningfully informing the defendants, whose rights were directly affected by the litigation and who was entitled to the benefit of expedition, of the reason for the delay.
- [40]In the circumstances of this case, the QBCC could have, and in my view, should have done more to meaningfully engage with the defendants given the issue which it saw as impacting upon the legislative foundation for its decision to proceed against the defendants and to seek recovery of money paid under the insurance scheme. Particularly as it was inevitably going to result in considerable delay in the progress of the action against the defendants. It was not reasonable for a model litigant such as the QBCC to unilaterally decide to delay proceedings involving a claim against the defendants with significant potential consequences to them. That is particularly so given the legislative scheme of the UCPRs and the overarching undertaking for the expeditious conduct of proceedings.
- [41]The application by the defendants to strike out the proceedings should succeed. I am satisfied that having regard to the circumstances of this case, that the defendants have demonstrated that the power in rule 280 should be exercised in their favour.
- [42]In relation to the QBCC’s application to continue the proceeding pursuant to rule 389, I am satisfied that the defendants have raised considerations which tell against the exercise of the discretion to allow the proceedings to continue, and that the QBCC have failed to demonstrate that grounds exist for exercising the discretion in their favour.[8] I am not persuaded that in all of the circumstances of this case, good reason exists for making the order sought by the QBCC.
Orders
- Pursuant to rule 280(2) of the UCPR, the plaintiff’s Claim and Statement of Claim filed on 31 March 2021 are dismissed for want of prosecution.
- The Application by the plaintiff (QBCC) filed on 5 August 2024 seeking leave to proceed pursuant to rule 389 is dismissed.
- The plaintiff pay the defendants’ costs of and incidental to the applications and the proceedings.
Footnotes
[1] Dempsey v Dorber [1990] 1 Qd R 418 at 420 per Connolly J.
[2] Tyler v Custom Credit Corp Ltd [2000] QCA 178 per Atkinson J.
[3] Queensland Building and Construction Commission Act 1991 s. 111C(6).
[4] Queensland Building and Construction Commission Act 1991 s. 111C(7).
[5] Affidavit of Malcolm Robinson of 5 August 2024 Exhibit MJR1.
[6] [2024] QDC 101; delivered ex tempore on 26 April 2024.
[7] 22 July 2024.
[8] See Lilyville Pty Ltd v Colonial Mutual Life Assurance Society Ltd [1999] QSC 372.