SKJ Qld Pty Ltd v Turul Building Services Pty Ltd (No 4)
[2025] QDC 66
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- SKJ Qld Pty Ltd v Turul Building Services Pty Ltd (No 4)[2025] QDC 66
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SKJ Qld Pty Ltd v Turul Building Services Pty Ltd (No 4)[2025] QDC 66
SKJ Qld Pty Ltd v Turul Building Services Pty Ltd (No 4)[2025] QDC 66
DISTRICT COURT OF QUEENSLAND
CITATION: | SKJ Qld Pty Ltd v Turul Building Services & Anor (No. 4) [2025] QDC 66 |
PARTIES: | SKJ QLD PTY LTD A.C.N. 654 675 180 ABN 64 264 366 846 AS TRUSTEE FOR THE SKJ PROPERTY TRUST (Plaintiff) v TURUL BUILDING SERVICES PTY TD ABN 99 626 781 968 TRADING AS TURUL BUILDING SERVICES (First Defendant) And ANDREW STEVEN LAZAR (Second Defendant) |
FILE NO/S: | 3149/23 |
DIVISION: | Civil |
PROCEEDING: | Claim |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 15 May 2025 (ex tempore) |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 May 2025 |
JUDGE: | Porter KC DCJ |
ORDER: |
|
COUNSEL: | L. M. Campbell for the Plaintiff B. CODD and S. P. Taylor for the Defendant |
SOLICITORS: | Holding Redlich for the Plaintiff Wood L&M Solutions for the Defendants |
- [1]This is an application by the second defendant (Mr Lazar) for a stay of the plaintiff’s (SKJ) claims against him. The history of these proceedings is set out in my previous three judgments in this matter: SKJ Qld Pty Ltd v Turul Building Services & another [2024] QDC 109; SKJ Qld Pty Ltd v Turul Building Services & Anor (No. 2) [2025] QDC 34 and SKJ Qld Pty Ltd v Turul Building Services & Anor (No. 3) [2025] QDC 35. I will not repeat all that background.
- [2]The stay application arises from the restructuring plan under Part 5.3B Corporations Act 2001 (Cth) (the Act) made for the first defendant (Turul), described in SKJ v Turul (No. 3) and entered into on the 24th of July 2024. The consequence of Turul entering into that restructuring plan is that proceedings by SKJ against Turul were stayed by operation of statute. I determined, in SKJ v Turul (No. 3), that Turul’s counterclaim against the plaintiff was also stayed by reason of the making of that plan.
- [3]The consequence of those matters is that the only claims which remain unstayed in the proceedings are SKJ’s claims against Mr Lazar.
- [4]SKJ’s claims against Mr Lazar are in contract, restitution and under the ACL for misleading or deceptive conduct, both directly or as a party to alleged conduct by Turul (though he was the human agent of Turul it seems). Prior to entry into the restructuring plan SKJ also sued Turul in contract, restitution and misleading or deceptive conduct. These claims were similar to, and overlapped factually and, in some respects, legally, with the claims against Mr Lazar. A good example is the accessory liability claim in respect of the ACL against Mr Lazar, which was related to a claim against Turul for its primary liability in respect of that alleged misleading or deceptive conduct.
- [5]With the stay of the proceedings between SKJ and Turul, the question arose as to the effect that that had on the plaintiff’s extant proceedings against Mr Lazar. Although a lot of ink was spilled in learned submissions on both sides about this, two issues really arose.
- One issue was this: as a matter of law, could SKJ pursue its causes of action against Mr Lazar notwithstanding the stay of the factually overlapping proceedings against Turul?
- The second issue was if, as a matter of law, the plaintiff could pursue those proceedings, should it be allowed to do so prior to the fate of the plan being finally resolved?
- [6]The first question can be resolved relatively simply in the affirmative. Various arguments were advanced in the detailed submissions of Mr Lazar as to why SKJ could not pursue its claims against Mr Lazar as a matter of law without Turul being a party to the proceeding. It is unnecessary for me to descend into the detail. The fact is that all of those propositions were wrong. For example, it was submitted that the concurrent wrongdoer provisions of the ACL could not be invoked by Mr Lazar identifying Turul as a concurrent wrongdoer unless Turul was a party to the proceedings. That is wrong. One purpose of the proportionate liability provisions was to remove from a defendant the responsibility of bringing in other parties who might be jointly or severally liable in claims brought against the defendant. As to the misleading or deceptive conduct claims, it was said that the ACL claim against Mr Lazar involved facts that would affect and involve the company. There was a good deal of factual overlap, and in some respects, same facts were alleged against Mr Lazar and Turul. However, the proceedings against Turul are stayed. Turul will not be a party to and will not be bound by issue estoppels or judgment estoppels that arise out of a trial of the proceedings against Mr Lazar.
- [7]Further, in respect of the contract and restitution claims relating to money that was allegedly paid to Mr Lazar dehors the contract with Turul for the purposes of doing some of the work contemplated from the building project, it was submitted that the effect of the plan was, in some way, to give rise to a defence because of an election by the plaintiff. That may be so. Quite how it does, eludes me at present however, I do not say that such an argument cannot be correct. In any event, it is a matter for a defence. There was and is no reason in law why if the company does not participate in the proceedings presently as constituted against Mr Lazar, those proceedings are not properly constituted and cannot properly proceed to trial. The company will not be bound, as I said, by findings or anything else that arises from that trial.
- [8]Turning to the second question of whether I should stay the proceedings against Mr Lazar pending the resolution of the fate of the company’s plan, the calculation is this. On the one hand, Mr Codd, who appeared with Mr Taylor for the second defendant, submitted that if the plan failed at some point in the next 18 to 20 months (it seems uncontentious that the plan, if performed, it will have to have been performed by, at the latest, February of 2027) then the statutory stay of the proceedings against the company will end and SKJ will be free to pursue its claims against Turul. He submitted that if the proceedings against Mr Lazar had reached trial and judgment before that happened, and SKJ then wished to litigate against the company, there would be a real risk of inconsistent findings on what will, in many respects, be the same issues.
- [9]That such a situation is highly undesirable in theory is unarguably correct. Courts try to avoid situations where litigation of the same factual matters or the same issues result in inconsistent findings as between different parties to different proceedings. I hasten to add that as a matter of principle, there is nothing wrong with that outcome. That is, in a sense, the consequence of the limited scope of judgment estoppels. However, it is unquestionably something to be avoided if possible. The difficulties, though, for Mr Lazar are:
- The prospect of such a thing occurring; and
- The delay that would be involved in the stay he seeks.
- [10]As to the first point, for there to be a prospect of inconsistent findings, the company’s plan will have to be terminated. There is no basis for me to consider that likely. Indeed, on the evidence before me, that is very improbable. That evidence includes the fact that the plan has been on foot for 10 months, a distribution has been made, and there is no evidence of any creditor agitating about bringing an application to terminate the plan nor any evidence of any creditor complaining at all. That does not mean that some creditor might not suddenly challenge the plan out of the blue, but that seems inherently improbable at this stage.
- [11]Further, Mr Lazar remains the guiding mind and will of the company. He is well positioned to tell the Court if anything had happened which might provide an objective basis to suspect the plan will not be performed, and no such evidence has been put before me.
- [12]Finally, I have before me an affidavit of Mr Archer, who is the small business restructuring practitioner of the plan. The gravamen of his affidavit provides no basis at all to think the plan is not going to be completed. Mr Archer is the other person best placed to know if there is any risk of that happening.
- [13]The probability of the plan not being completed is more theoretical than real and provides no sufficient basis to conclude there is a real prospect of two trials ever happening on the same issues.
- [14]There is another compelling consideration. The most likely way that a restructuring plan would be terminated would be as a consequence of the company becoming insolvent. In that case, the probability of a trial of the proceedings against the company is virtually zero. Apart from anything else, there would be a statutory stay, and I cannot see how SKJ would get leave to proceed on a money claim like this.
- [15]So, on the second point, in my mind, the precondition for the undesirable outcome which Mr Codd rightly identified in principle is extremely unlikely to be met.
- [16]Mr Codd tried a different approach after that, and made a submission that the plan, if performed, would be performed within about 18 to 20 months, and that submission seems right. As I ultimately understood it, the argument was, it is only 18 to 20 months, and then the parties and the Court will know for certain how to deal with the implications of the plan for various defences and for the assessment of loss.
- [17]There is something to be said for a wait and see approach. However, in my respectful view, a stay of the proceedings is not justified for that reason either. For the reasons I have already given, it is highly likely that the plan is going to be performed. Further, it will take some time before the matter reaches trial and by the time a trial occurs, there will be an even clearer position on the likely performance of the plan. That will also facilitate assessing damages on a once and for all basis considering the likely effect of the plan on quantum for SKJ’s claims.
- [18]Apart from that, there are compelling reasons why I would not order a stay. This is a relatively small claim. There has already been considerable delay in the matter. The idea that I would completely stay the proceedings against Mr Lazar until February 2027 would mean the proceedings had been on foot for four and a-half years before movement towards a trial occurred. Mr Campbell also made the submission that no harm could be done by cracking on with interlocutory steps right now. If something happens with the company while this case is being prepared, it can be dealt with then. He also made the submission the most likely outcome if the plan falls over is there is going to be a liquidation anyway.
- [19]The plaintiffs, having properly invoked the jurisdiction of the Court, are entitled to get to a trial, and get to a trial as fast as reasonably possible. That is mandated by rule 5 Uniform Civil Procedure Rules 1999 and it is the policy of this commercial list. For all those reasons, I would not stay the proceedings pending the performance of the plan, and I am certainly not going to stay them against the possibility, remote, that the plan will not be performed. I therefore dismiss the application. I order the second defendant pay the plaintiff’s costs of the application on the standard basis.