Dream Modular Homes Pty Ltd v Horseman & Anor [2025] QCAT 202

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Dream Modular Homes Pty Ltd v Horseman & Anor [2025] QCAT 202 PARTIES: DREAM MODULAR HOMES PTY LTD (applicant) v STEPHEN LODGE HORSEMAN (respondent) ROSEMARY ANN FITZGERALD (respondent) APPLICATION NO/S: BDL296-24 MATTER TYPE: Building matters DELIVERED ON: 11 April 2025 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Brown ORDERS: The Application for miscellaneous matters filed 28 January 2025 is refused. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – TIME, EXTENSION AND ABRIDGEMENT – Where respondents allege applicants failed to file statement of evidence and response to counter- application in accordance with directions – where respondents allege disadvantage – whether respondents entitled to final decision on the counter-application pursuant to section 48 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) – where explanation for delay – where delay not great – where parties have elected to adopt quasi-pleadings – where delay in filing statements of evidence not as significant in circumstances where quasi- pleadings adopted – where respondents seek relief pursuant to Australian Consumer Law beyond jurisdiction of the Tribunal Fair Trading Act 1989 (Qld), s 50(1) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 47, s 48 Mills v Ethell [2024] QCATA 67 Sanctuary Cove Golf and Country Club Pty Ltd (ACN 120 308 410) v Machon [2019] QCATA 1 -- 1 of 8 -- 2 APPEARANCES & REPRESENTATION: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) REASONS FOR DECISION [1] On 11 April 2025 I refused an application by the respondents for a decision by default on the respondents’ counter-application. These are my reasons. [2] The applicant undertook domestic building work for the respondents. The applicant’s claim is for the recovery of money it says is owing by the respondents for the practical completion stage of the works. The claim is framed in the alternative as one for a quantum meruit. [3] The respondents say that the works have not reached practical completion and that the applicant has no entitlement to the amount claimed. The respondents say that they are entitled to claim as a set off an amount for loss of rent occasioned as a result of the delay by the applicant in bringing the works to practical completion. In the alternative, the respondents say that they are entitled to set off against the applicant’s claim an amount for late completion damages. The respondents also counter-claim the amounts claimed by way of set-off in addition to which they claim damages for the applicant’s breach of s 60 of the Australian Consumer Law (‘ACL’). [4] The relevant chronology of events in the proceeding follows: Date Event 21.08.24 Application filed by the applicant 10.09.24 Directions made by the Tribunal for the filing of a response by the respondent and statements of evidence by the parties 11.10.24 Response and counter-application filed by the respondents 29.10.24 Directions made by the Tribunal for the filing of a response by the applicant to the counter-application 01.11.24 Amended response and counter-application filed by respondents 28.01.25 Application for decision by default filed by respondents 30.01.25 Response to counter-application filed by applicant 03.03.25 Amended response to amended counter-application filed by applicant [5] The respondents say the following in support of the application for a decision by default: (a) The application for default decision was filed as a result of the failure by the applicant to file statements of evidence and a response to the counter application in accordance with Tribunal directions; -- 2 of 8 -- 3 (b) The response to the counter-application filed by the applicant on 30 January 2024 is embarrassing as being incomplete and in draft form; (c) Despite communications from the respondents’ solicitors to the applicant’s solicitors, the applicant took no steps to file an amended response to the counter- application; (d) The response to the counter-application, in its unamended form, unnecessarily disadvantages the respondents who do not know the case they are required to meet; (e) The response to the counter-application should be struck out pursuant to s 48 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’); (f) The applicant has failed to file its statements of evidence as directed by the Tribunal; (g) The failure by the applicant to file its statements of evidence is unnecessarily disadvantaging the respondents who do not know the case they are required to meet; (h) The ongoing litigation is a source of stress for the respondents who have incurred legal costs as a result of the failure by the applicant to comply with Tribunal directions; (i) The applicant’s application should be dismissed pursuant to s 48 of the QCAT Act. [6] In response, the applicant says: (a) The applicant concedes that it has delayed in filing statements of evidence; (b) Since the commencement of the proceeding three (3) persons have left the employ of the applicant which has significantly impacted the ability of the applicant to locate relevant evidence and verify factual allegations made by the respondents; (c) Upon undertaking review of the amounts claimed in the counter-application the applicant formed the view that certain matters raised by the respondents ‘could have merit’. The applicant instructed its solicitor to make an open offer to the respondents reducing the amount claimed by the applicant by $31,286.55 and a subsequent open offer that each party walk away bearing their own costs; (d) The delay by the applicant is not of sufficient magnitude as to result in prejudice to the respondents; (e) The delay has not been occasioned by the applicant in an attempt to cause prejudice or disadvantage; (f) The delay can be explained; (g) The delay has not resulted in the respondents incurring additional costs other than the costs associated with the application for a default decision; (h) The delay can be remedied by further directions. [7] In reply the respondents say: -- 3 of 8 -- 4 (a) The affidavit by the applicant’s director relied upon to support the applicant’s submissions is incomplete and inadmissible; (b) The respondents take issue with the applicant’s characterisation of one of the offers to settle made by the applicant and with the applicant’s disclosure of the offer which the respondent says was a closed offer; (c) The applicant offers no explanation for its failure to apply to extend the time for compliance with Tribunal directions; (d) The applicant’s solicitors had proposed to the respondents’ solicitors a revised timetable for the filing of statements of evidence which, even had the respondents agreed to the timetable, was not adhered to by the applicant. [8] The above summary of the parties’ respective positions extracts the key points. I have considered the totality of the submissions and affidavit material filed by each of the parties. [9] Section 48 of the QCAT Act provides: 48 Dismissing, striking out or deciding if party causing disadvantage (1) This section applies if the tribunal considers a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including by— (a) not complying with a tribunal order or direction without reasonable excuse; or (b) not complying with this Act, an enabling Act or the rules; or (c) asking for an adjournment as a result of conduct mentioned in paragraph (a) or (b); or (d) causing an adjournment; or (e) attempting to deceive another party or the tribunal; or (f) vexatiously conducting the proceeding; or (g) failing to attend conciliation, mediation or the hearing of the proceeding without reasonable excuse. (2) The tribunal may— (a) if the party causing the disadvantage is the applicant for the proceeding, order the proceeding be dismissed or struck out; or (b) if the party causing the disadvantage is not the applicant for the proceeding— (i) make its final decision in the proceeding in the applicant’s favour; or (ii) order that the party causing the disadvantage be removed from the proceeding; or (c) make an order under section 102, against the party causing the disadvantage, to compensate another party for any reasonable costs incurred unnecessarily. -- 4 of 8 -- 5 Note— See section 108 for the tribunal’s power to order that the costs be paid before it continues with the proceeding. (3) In acting under subsection (2), the tribunal must have regard to the following— (a) the extent to which the party causing the disadvantage is familiar with the tribunal’s practices and procedures; (b) the capacity of the party causing the disadvantage to understand, and act on, the tribunal’s orders and directions; (c) whether the party causing the disadvantage is acting deliberately. (4) The tribunal may act under subsection (2) on the application of a party to the proceeding or on the tribunal’s own initiative. (5) The tribunal’s power to act under subsection (2) is exercisable only by— (a) the tribunal as constituted for the proceeding; or (b) if the tribunal has not been constituted for the proceeding— a legally qualified member or an adjudicator. [10] In Mills v Ethell1 Judicial Member McGill said the following in relation to the meaning and application of s 48 of the QCAT Act: [17] In a decision of the Appeal Tribunal earlier this year, Csorba v Petka Investments Pty Ltd [2024] QCATA 12, Member Lember summarised the legislative context of s 48 as follows: [3] Parties are expected to take active steps to engage in and are obliged to act quickly in any dealing relevant to the proceeding. [4] Section 48 of the QCAT Act permits the tribunal to dismiss or struck out a proceeding if it considers a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding. …. [6] To “cause disadvantage” includes not complying with a tribunal order or direction without reasonable excuse. [18] The Member also referred to the requirements of s 48(3), and referred to earlier decisions of the Tribunal as follows: [7] In other section 48 matters before it, the Tribunal has relevantly stated that: (a) Section 48 is to be construed in the light of the statutory objects under the QCAT Act, which emphasise informality, the minimisation of costs to the parties, and expediting proceedings so far as is consistent with achieving justice. 1 [2024] QCATA 67. -- 5 of 8 -- 6 (b) The unnecessary disadvantage must be of sufficient gravity to justify dismissal or a final decision. (c) The fact that a claim has significant merit, will not preclude an exercise of section 48 discretion where a party has been recalcitrant or delinquent in their conduct of the proceeding to cause unnecessary disadvantage. Matters relating to the substantive merits of a claim may in fact be irrelevant to a section 48 consideration. (d) In determining a section 48 application in accordance with the tribunal’s obligations and objects under the QCAT Act, a balance should be struck between the need for quick procedure and the obligation to deal with matters in a way that is fair and accessible. [19] The responsibility of litigants in the Tribunal to attend to their own interests was also emphasised by a former President of the Tribunal, Justice Wilson, in The Pot Man Pty Ltd v Reaoch [2011] QCATA 318 at [9]-[10]: “The QCAT statutory regime itself places obligations upon parties to take care in dealing with tribunal matters ... The legislation and the demands upon public resources which fund QCAT, necessarily impose an expectation and an obligation upon a party that it act in its own best interests, or accept the consequences.” (footnotes omitted) [11] It may be accepted that the applicant’s claim is an arguable one. It may also be accepted that the applicant has not acted with celerity in the prosecution of its claim. Having made these observations it should be noted that this is not a matter in which the applicant has simply done nothing while failing to comply with Tribunal directions. Indeed, some attempt has been made by the applicant to explain its failure to comply with Tribunal directions. [12] The respondents filed their response and counter-application on 11 October 2024. On 29 October 2024 the Tribunal made directions for the applicant to file a response to the counter-application by 3 December 2024. On 1 November 2024 the respondents filed an amended response and counter-application. On 16 December 2024 the Tribunal made directions for the applicant to file a response to the amended counter- application by 13 January 2024. On 30 January 2024 the applicant filed a response to the amended counter-application. It may therefore be fairly observed that the delay by the applicant in filing a response to the amended counter-application was not great, only a little over two weeks. While one may be critical of certain aspects of the drafting of the response, and it may be accepted that the document appears to some extent to be in draft form, the document nevertheless addresses a number of substantive issues raised in the amended response and counter-application. It should also be observed that the respondents’ application was not one brought pursuant to s 47 of the QCAT Act, that is, for summary determination of the counter-application on the basis that the response to the counter-application raised no arguable defence. In any event any defects in the response to the counter-application, perceived or otherwise, appear to have been addressed in the amended response filed by the applicant on 3 March 2025. Again, while it may be accepted that the applicant did not act with any haste in filing the amended response, the delay was not great. -- 6 of 8 -- 7 [13] The initial directions made by the Tribunal for the filing and service by the parties of their statements of evidence were overtaken to some extent by the events to which I have referred. While in Tribunal proceedings, where pleadings are absent, the issues are generally identified in the statements of evidence, in this matter both parties are legally represented and a decision has been made by the solicitors to adopt a more formal approach in the proceeding by filing pleading type documents. This is often the case in building dispute proceedings in the Tribunal and the approach can be of great assistance in identifying and narrowing the issues in dispute. However when legally represented parties elect to proceed in this manner, this can have consequences in respect of the filing of statements of evidence by the parties. Generally, the filing of statements of evidence should follow the end of the quasi-pleadings. To do otherwise would result in considerable uncertainty in relation to the preparation of statements in circumstances where the parties’ respective cases may not have fully crystallised. [14] The quasi-pleadings in this proceeding closed upon the filing by the applicant of the amended response to the amended counter-application. It is therefore difficult to be critical of delay by the applicant in filing statements of evidence. True it may be that this was not why the applicant delayed in filing its statements of evidence however the fact remains that the parties have chosen to adopt a more formal approach to the conduct of the litigation with the consequences I have referred to. And has has been earlier observed, the applicant has offered an explanation for the delay in filing its statements of evidence as a result of the departure of a number of persons from its employ. [15] It is also relevant that on 13 December 2024 the applicant proposed to the respondents a revised timetable for the filing of statements of evidence, whether or not the respondents agreed. As I have referred to earlier in these reasons, this is not a case in which the applicant was doing nothing to advance the proceeding. [16] The disadvantage which the respondents say they have suffered as a result of the applicant’s delays is confined to increased legal costs and the stress of being involved in the proceeding. As to the former, this is a proceeding for a building dispute in which the Tribunal has a broad discretion to award costs. Upon the disposition of the present interlocutory application, the respondents are at liberty to apply for a costs order. As to the latter, litigation inevitably causes the parties stress and inconvenience. In the particular circumstances of the present matter this does not rise to a level sufficient to engage the operation of s 48 of the QCAT Act. [17] The respondents refer to the disclosure by the applicant of a closed offer. The annexure to Mr Gathercole’s affidavit is largely illegible. It is difficult to make anything of the document. The parties are at liberty to apply to the Tribunal to have the document placed in a sealed envelope to avoid further reference to same. I am not prepared to make such an order in the absence of being able to actually read the document. [18] There is a further matter that is relevant in the determination of the application. The respondents seek relief under various provisions of the ACL. The jurisdiction of the Tribunal to decide claims under the ACL is not at large. In Sanctuary Cove Golf and Country Club Pty Ltd (ACN 120 308 410) v Machon2 the Appeal Tribunal stated: 2 [2019] QCATA 1. -- 7 of 8 -- 8 (a) the Australian Consumer Law (schedule 2 to the Competition and Consumer Act 2010 (Cth)) is applied as a law of Queensland by the Fair Trading Act 1989 (Qld) (‘the FTA’) (see s 16 of the FTA); (b) the FTA is an enabling Act as far as the ACL (Qld) is concerned: s 6(2) of the QCAT Act; (c) the FTA confers jurisdiction to make an application in respect of certain provisions in the ACL (Qld): ss 50 and 51 of the FTA. [19] Section 50(1) of the FTA provides: A proceeding for the purposes of a provision of the Australian Consumer Law (Queensland) listed in the table to this section must be heard in the tribunal or in a court having jurisdiction for the proceeding, having regard to— (a) for the tribunal, whether the subject of the proceeding— (i) would be a minor civil dispute within the meaning of the QCAT Act; or (ii) would be a matter to which section 50A applies; or (b) for a court—any civil jurisdictional limit, including any monetary limit, applying to the court. [20] The respondents’ claims which rely upon the various provisions of the ACL cannot be determined by the Tribunal. The claims are beyond jurisdiction. The respondents will need to turn their minds to either abandoning those claims or applying to have the proceeding transferred to a court of competent jurisdiction. [21] In conclusion, I am not satisfied that the consequences of the applicant’s failure to comply with Tribunal directions is of sufficient gravity to engage the application of s 48 of the QCAT Act. Indeed, as I have observed and noting that the parties have chosen to adopt a formal approach to the identification of the issues in dispute, the delay in the filing of statements of evidence may have resulted in the avoidance of unnecessary costs being incurred. Nor, given the jurisdictional issues attaching to the respondents’ claims under the provisions of the ACL, would it be appropriate to address those parts of the counter-application without the parties being given an opportunity to be heard. [22] The application for miscellaneous matters filed 28 January 2025 is refused. Directions will be made separately for the filing of statements of evidence by the parties and to progress the matter to a compulsory conference. -- 8 of 8 --