Allen & Anor v Contrast Constructions Pty Ltd (No 2) [2021] QCATA 43

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Allen & Anor v Contrast Constructions Pty Ltd (No 2) [2021] QCATA 43 PARTIES: REECE ALLEN (first applicant) CHANTELL TAYLOR (second applicant) v CONTRAST CONSTRUCTIONS PTY LTD (respondent) APPLICATION NO/S: APL181-20 ORIGINATING APPLICATION NO/S: BDL219-19 MATTER TYPE: Appeals DELIVERED ON: 15 April 2021 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Judge Allen QC, Deputy President Member Traves ORDERS: Leave to appeal be granted. The appeal be dismissed. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL - GENERAL PRINCIPLES – INTERFERENCE WITH DISCRETION OF COURT BELOW – IN GENERAL - where applicant applied for leave to appeal and stay of a decision on an interlocutory application – where Tribunal below found jurisdiction established – whether error in finding s 77(2) of the Queensland Building and Construction Commission Act 1991 (Qld) complied with – whether error in the construction of the dispute resolution provisions in the contract – whether error in finding those provisions did not survive termination – whether error in finding provisions did not apply to disputes arising out of termination – whether error in finding Tribunal had the power to order a stay – whether denial of natural justice in reliance on a decision not yet accessible by the parties - whether error in -- 1 of 17 -- 2 REPRESENTATION: Applicant: Respondent: APPEARANCES: refusing to grant a stay – whether leave to appeal or appeal should be allowed Queensland Building and Construction Commission Act 1991 (Qld), s 77; Schedule 1B, s32, s 45(1) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 47, s 58, s 142(3)(a)(ii), s 145(2) Austman Pty Ltd v Mount Gibson Mining Ltd [2012] WASC 202 Cook's Construction Pty Ltd v Stork Food Systems Aust Pty Ltd [2008] QCA 322 Day v Humphrey [2017] QCA 104 Downer EDI Mining Pty Ltd v Wambo Coal Pty Ltd [2012] QSC 290 Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [1999] WASCA 144 Great Southern Loans v Locator Group [2005] NSWSC 438 Jamac Construction Group Pty Ltd v De Mol Investments Pty Ltd [2014] WASC 273 Kime v Klepper [2020] QCAT 207 La Macchia v Department of Housing and Public Works [2015] QCATA 143 Legal Services Commission v Baker [2005] QCA 482 Leonard v Hugh Reilly Real Estate [2020] QCATA 24 Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd [2014] WASC 10 Redding v Simmons [2016] QCATA 100 Richmond v Moore Stephens Adelaide Pty Ltd [2015] SASCFC 147 The Illawarra Community Housing Trust Limited v MP Park Lane Pty Ltd [2020] NSWSC 751 Western Australian Land Authority v Simto Pty Ltd [2001] WASC 136 4D Electrical Qld v Greyburn Pty Ltd [2020] QCAT 74 Project Legal Construct Law Group Pty Ltd This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) -- 2 of 17 -- 3 REASONS FOR DECISION This is an application for leave to appeal or appeal a decision made on 21 May 2020 refusing an interlocutory application filed by Reece Allen and Chantell Taylor (the homeowners).1 The underlying proceedings, BDL219-19, were commenced with an application for building dispute filed by the builder on 19 August 2019 by which the builder sought money owing under the contract in the sum of $415, 695.46 and damages in the sum of $791, 899.01 (a total of $1 207 594.47) against the homeowners. The homeowners filed a conditional response on the basis they did not consider the Tribunal had jurisdiction to determine the matter. The issues raised by the homeowners by way of interlocutory application, and now the subject of this application on appeal, were, in effect, whether the Tribunal had jurisdiction in BDL219-19 and, in particular, whether the builder had complied with s 77(2) of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act). The homeowners sought orders dismissing BDL219-19, or alternatively, orders that BDL219-19 be stayed pending compliance by the parties with clause 42 of the General Conditions of Contract (as amended by Special Condition 13 of the Contract) which was a dispute resolution clause. The interlocutory application was determined by a Senior Member on 21 May 2020. The Senior Member held that the Tribunal had jurisdiction to decide the building dispute and, accordingly, that the matter should not be dismissed under s 47 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). The Senior Member also determined that the proceedings should not be stayed on the basis the parties had not complied with the contractual dispute resolution provisions in their building contract. The Senior Member also made directions for the future conduct of the proceedings. The homeowners filed an application for leave to appeal or to appeal the interlocutory decision of the Senior Member pursuant to s 142(3)(a)(ii) of the QCAT Act. The homeowners also applied for a stay of that decision pending the hearing of the application for leave to appeal or to appeal. The stay was refused by the Appeal Tribunal on 16 September 2020.2 The proceeding now before us is the determination of the application for leave to appeal or to appeal the interlocutory decision of 21 May 2020. Leave to appeal is sought on the basis the Senior Member erred in law in respects which materially affected his decision and that a substantial injustice to the homeowners will occur if the decision stands. Further, leave is sought on the basis that the issues raised by the appeal are of public importance. There are eight proposed grounds of appeal.3 Those grounds will be considered as they arise in the context of the issues now identified. 1 Application for miscellaneous matters filed 25 September 2019. 2 Allen & Anor v Contrast Constructions Pty Ltd [2020] QCATA 132. 3 The application for leave to appeal filed by the homeowners lists the following proposed grounds of appeal: -- 3 of 17 -- 4 The central issues for determination in the appeal, should leave be granted, are: (a) did the builder comply with s 77 of the QBCC Act; (b) did clause 42 apply to the dispute notwithstanding termination of the contract; (c) was the dispute resolution process contemplated by clause 42 complied with; (d) if not, did that failure deprive the Tribunal of jurisdiction; (e) did the Tribunal have power to stay the proceedings pending compliance with the dispute resolution process contemplated by clause 42; and (f) did the Tribunal err in not granting a stay. (a) Did the builder comply with s 77(2) of the QBCC Act? [10] Section 77 of the QBCC Act relevantly provides: (1) A person involved in a building dispute may apply, as provided under the QCAT Act, to the tribunal to have the tribunal decide the dispute. (2) However, the person may not apply to the tribunal unless the person has complied with a process established by the commission to attempt to resolve the dispute. [11] The homeowners raise s 77 in grounds 4 and 5. They contend that the builder failed to comply with s 77(2) of the QBCC Act and that, therefore, the Tribunal lacks jurisdiction to decide the dispute. [12] The Senior Member made the following findings relevant to the application of s 77 of the QBCC Act at [42]-[45] of the decision: [42] It is reasonably clear on the material before the tribunal that: (a) A building contract dated 17 February 2016 was entered into between the parties; (b) The respondents purported to terminate the contract on 21 November 2017; (c) Contrast purported to terminate the contract on 1 December 2017; 1. The Tribunal erred in finding it has jurisdiction to hear the proceeding, when it does not. 2. The Tribunal erred in finding Clause 42 and Special Condition 13 did not survive termination of the Contract, when the clauses survived termination. 3. The Tribunal erred as to the proper construction of Clause 42 and Special condition 13 of the contract. 4. The Tribunal erred in failing to find that the respondent had not satisfied ss 77(1) and (2) of the Queensland Building and Construction Commission Act 1991 (Qld) (QBBC Act) either at all, or in the alternative, before commencing proceedings in the Tribunal. 5. The Tribunal erred in failing to find that the respondent had not satisfied ss 77(1) and (2) of the QBBC Act in relation to the co-respondent, Ms Taylor, at all. 6. The Tribunal erred in failing to dismiss the proceedings for want of jurisdiction. 7. The Tribunal erred in failing to find that Clause 42 and Special Condition 13 survived termination and apply to the dispute the subject of the proceedings because rights the subject of the proceeding relied on by the respondent, such as the respondent’s claim for an extension of time and delay damages, concern rights which arose before termination. 8. In the alternative, the Tribunal erred in failing to grant a stay pending compliance by the parties with Clause 42 and Special Condition 13 of the contract. -- 4 of 17 -- 5 (d) The respondents subsequently made a claim under the Home Warranty Scheme in respect of incomplete building works; (e) On 20 March 2018 the QBCC wrote to Contrast and advised it had decided the respondents had not properly terminated the contract and they had no entitlement to pursue a claim under the Home Warranty Scheme; (f) The respondents commenced proceedings in the tribunal seeking a review of the QBCC decision (the review proceedings); (g) On 12 April 2018 the QBCC wrote to Contrast referring to ‘the defective building dispute’ at the respondents’ property, noting that as the respondents had not provided Contrast with reasonable access to the site to rectify the defects the ‘current case’ was closed. The letter also advised Contrast that it had ‘participated in the QBCC’s dispute resolution process as prescribed by legislation …’; (h) On 28 June 2019 the QBCC wrote to Contrast advising that: (i) the dispute between the parties related to a building contract had been terminated; (ii) the dispute was outside the scope of the QBCC’s Early Dispute Resolution process; (iii) Contrast had participated in the QBCC’s dispute resolution process as prescribed by legislation; (i) On 19 August 2019 the present proceedings were commenced; (j) On 4 November 2019 the QBCC wrote to Contrast advising that it had ‘reached the end of (the QBCC’s) dispute process’; (k) On 27 February 2020 the tribunal decided the review proceedings and confirmed the original decision by the QBCC; (l) On 2 March 2020 the QBCC wrote to Contrast advising that their letter of 28 June 2019 contained a typographical error (that error being the reference to the male respondent as the builder) and enclosing a further letter dated 20 March 2020 (in the same terms as the letter of 28 June 2019) correcting the error. [43] I am satisfied that the ‘dispute resolution process as prescribed by legislation’ referred to in the letters from the QBCC to Contrast dated 12 April 2018 and 28 June 2019 (noting the subsequent clarification by the QBCC regarding the contents of the latter correspondence referred to above) is a reference to ‘a process established by the commission’ as referred to in s 77(2) of the QBCC Act. [44] In circumstances where the QBCC is satisfied that a party to a building dispute has complied with a process established by the commission for the purposes of s 77(2), what form that process might take, and whether parties to a building dispute have complied with such a process, is a matter for the QBCC. [45] I am satisfied that Contrast complied with s 77(2) of the QBCC Act before commencing the proceedings. [13] The issue is whether the Senior Member was in error. The homeowners’ submissions regarding s 77 of the QBCC Act [14] The homeowners, in their submissions, submit that the Senior Member erred in failing to consider the proper requirements of ss 77(1) and (2) of the QBCC Act, in particular that the issue was whether the QBCC had established a process to “resolve the dispute” not merely whether “some process” was established. This was a failure to -- 5 of 17 -- 6 properly construe s 77(2) and, therefore, led to a failure to properly determine whether the builder had satisfied it or not. [15] The homeowners submit that the letter of 28 June 2019, relied upon by the builder to show compliance with s 77, in fact shows no process was established and did not otherwise satisfy s 77(2). In particular, they submit that the dispute referred to the QBCC under s 77 must be the same dispute before the Tribunal. [16] The homeowners submit that the Senior Member erred in failing to consider and apply Redding v Simmons,4 a decision they say required the builder to establish it had complied with s 77(1) of the QBCC Act before commencing proceedings. Further, the homeowners in their further submissions filed after the application for leave to appeal and/or appeal5 argue that the Senior Member did not consider their submissions in relation to the failure of the QBCC letter of 28 June 2019 to refer to Ms Taylor at all. The homeowners submit that this shows no process was established by the QBCC in relation to Ms Taylor and that the failure to consider their submissions regarding this point was a denial of natural justice. The builder’s submissions regarding s 77 of the QBCC Act [17] The builder submits that there is no error in the decision at first instance. The builder submits it complied with a process by its interaction with the QBCC, as evidenced by letters of 12 April 2018 and 28 June 2019 (as corrected in correspondence dated 2 March 2020). Alternatively, as the building dispute relates to relief claimed following termination of the contract, the builder was not required to comply with s 77(2) of the QBCC Act, the QBCC not having established a process for contracts which have been terminated. [18] The builder disagrees that the dispute submitted to the QBCC process must be identical to the dispute pursued later in the Tribunal. If that were the case, the builder submits, a party would not be entitled to amend an application, for example, to claim additional damages for a defective item not previously claimed for. The builder submits that Redding v Simmons is distinguishable on the basis that the builder in that case had not attempted to comply with a process established by the QBCC prior to commencing proceedings in circumstances where there was such a process. Consideration of grounds relating to s 77 of the QBCC Act [19] The Senior Member, in our view, understood that s 77(2) required compliance with a process established by the Commission to attempt to resolve the dispute prior to applying to the Tribunal for it to decide the dispute. This was not in issue between the parties. The relevant issue with respect to s 77(2), in our view, is whether the builder had “complied with the process” before filing the relevant application in the Tribunal. [20] Here, the builder filed a Form 26 Application for a domestic building dispute in the Tribunal on 19 August 2019. That form states in bold letters on the covering page: “You must file with this application the formal notification letter from the Queensland Building and Construction Commission advising that the dispute resolution process has been complied with.” Under Part B General Dispute Details, the following appears: 4 [2016] QCATA 100. 5 Applicants’ Further Submissions dated 20 February 2020. -- 6 of 17 -- 7 • Has a complaint about this dispute been made to the Queensland Building and Construction Commission (QBCC)? Yes x If yes please specify: - Date of complaint – 27/06/2019 - QBCC file number – 542213 • Have you participated in the QBCC dispute resolution process? Yes x • Have you attached the formal notification letter from the QBCC to this application? Yes x [21] The builder attached the following dispute resolution letter from the QBCC dated 28 June 2019 to the Form 26: Dear Directors ….., PADDINGTON, Qld 4064 I refer to our recent telephone conversation regarding the dispute lodged with QBCC on 27 June 2019 about building work being performed by Reece Allen at the above property. As discussed, the dispute relates to a building contract that has been terminated. Such disputes are outside the scope of the Early Dispute Resolution process. QBCC is therefore unable to assist you further with this matter. No further action will be taken by Resolution Services in relation to this dispute. The QBCC however reserves its right to continue investigation into any breaches that may have arisen during our investigations of this matter. This correspondence serves as notification that you have participated in the QBCC’s dispute resolution process as prescribed by legislation and your case has now been finalised. If you wish to pursue the matter further you may now apply to QCAT for assistance. Please present his letter to the registry staff of QCAT at the time of application, quoting case number 542213. … The Commission regrets not being able to progress your matter further via its early dispute resolution service on this occasion. [22] We note that the letter mistakenly referred to the homeowners as the builder and vice versa, however we do not consider, as the homeowners submitted, that this materially detracted from the evidentiary value of the letter for the purposes of s 77. [23] On 30 August 2019, the Tribunal issued directions in relation to the matter which required the builder to file and serve evidence demonstrating either that there was a process established by the QBCC to resolve the dispute the subject of the proceeding or that there was no process. -- 7 of 17 -- 8 [24] On 12 September 2019, the builder emailed the letter previously attached to its application (as reproduced above) as evidence in relation to direction 1(b) of the Tribunal Directions dated 30 August 2019, that is, that there was no process established by the QBCC. The letter further provided: QBCC stated that as the building contract had been terminated, the dispute between Contrast Constructions Pty Ltd and Reece Allen & Chantell Taylor is outside the scope of the QBCC Early Dispute Resolution Process and as such they were unable to take further action. [25] The homeowners rely on Redding v Simmons6 as authority for the proposition that s 77(2) requires submission of a building dispute to the QBCC’s dispute resolution process which is not satisfied by simply obtaining a letter advising of the outcome. The homeowners say that the intent and objects of s 77 require the entire building dispute plus contract to be submitted to the QBCC, which was not done. In our view, Redding v Simmons is distinguishable because in that case the builder did not engage with the QBCC at all, in circumstances where there was an applicable established dispute resolution process for the relevant dispute. In any event, we disagree that s 77 imposes any such requirements for referral. [26] The nature and extent of the process established by the QBCC for the purposes of s 77(2) was in issue in Kime v Klepper.7 In Kime it was held that there was no dispute resolution process established by the QBCC as contemplated by s 77(2) of the QBCC Act which deals with a commercial building dispute or a domestic building dispute in circumstances where the contract has been terminated.8 Accordingly, it was held that in circumstances where a domestic building contract had been terminated, it would not be a breach of s 77(2) of the QBCC Act for the applicants to have omitted to attempt to participate in a process established by the QBCC to resolve the dispute.9 [27] Here, the builder did attempt to comply with a process established by the commission to attempt to resolve the dispute. The builder received a formal notification from the QBCC that it had attempted to do so but was outside the scope of the established process. In our view, this is sufficient to comply with s 77(2) of the QBCC Act. If there is no process to deal with the dispute then there is no “established” process to deal with the dispute within the meaning of s 77(2). It follows that a person can not be in breach for a failure to comply with a process that does not exist, to resolve their dispute. [28] Having said that, the builder here applied to the Commission in any event. This is a prudent step to take, particularly when it is not clear exactly what the established process is or to which disputes it applies. It also avoids the Tribunal having to determine the extent of its jurisdiction by reference to the nature and extent of the QBCC’s dispute resolution processes that may have existed at the time.10 In that respect we note the Consumer Building Guide published pursuant to s 46 of Schedule 1B of the QBCC Act which provides that the QBCC’s EDR (early dispute resolution) process is a free service which offers a facilitation-based approach to resolving disputes while the contract is “still on foot”. There are also fact sheets which refer to the EDR process published from time to time by the QBCC which refer to contracts 6 [2016] QCATA 100. 7 [2020] QCAT 207. 8 Ibid at [28]. 9 Ibid at [30]. 10 See observations to similar effect in Kime v Klepper [2020] QCAT 207 at [16]. -- 8 of 17 -- 9 which are “still active”, in which case EDR will aim to facilitate an acceptable agreement between both parties. [29] Accordingly, in circumstances where the building contract was terminated and the builder had attempted to comply with the QBCC’s dispute resolution process before applying to the Tribunal, we find that the builder had complied with s 77(2) of the QBCC Act. [30] As to whether s 77 had been complied with in relation to Ms Taylor, we find that it had. The process under s 77(2) requires an applicant to show that the applicant complied with an “established process to deal with the dispute”. There is, as the builder submits, no requirement for notice to be provided to specific people nor for the process to be established in relation to specific people. In any event, whether there is an established process (as we have found there is not) does not change depending on whether Ms Taylor had notice of that fact. There is no substance in this submission. [31] There was no error in the Senior Member’s interpretation or application of s 77 of the QBCC Act and this proposed ground of appeal cannot succeed. (b) Did clause 42 apply to this dispute notwithstanding termination of the contract? [32] Clause 42, as varied by special condition 13, provides: 42.1 Notice of Dispute If a difference or dispute (together called a ‘dispute’) between the parties arises in connection with the subject matter of the Contract, including a dispute concerning: a) a Superintendent’s direction; or b) a claim: i) in tort; ii) under statute; iii) for restitution based on unjust enrichment or other quantum meruit; or iv) for rectification or frustration, or like claim available under the law governing the Contract, then either party shall, by hand or by certified mail, give the other and the Superintendent a written notice of dispute adequately identifying and providing details of the dispute. Notwithstanding the existence of a dispute, the parties shall, subject to clauses 39 and 40 and subclause 42.4, continue to perform the Contract. 42.2 Conference Within 14 days after receiving a notice of dispute, the parties shall confer at least once to resolve the dispute or to agree on methods of doing so. At every such conference each party shall be represented by a person having authority to agree to such resolution or methods. All aspects of every such conference except the fact of occurrence shall be privileged. If the dispute has not been resolved within twenty eight 28 days of service of the notice of dispute, either party may refer the dispute to: (a) the dispute resolution processes administered by the QBCC; -- 9 of 17 -- 10 (b) QCAT; or (c) a court. Any reference of the dispute to the QBCC is without prejudice to either party’s right to refer any dispute to QCAT where entitled under Legislative requirements or otherwise to a court. [42.3 deleted] 42.4 Summary relief Nothing herein shall prejudice the right of a party to institute proceedings to enforce payment due under the Contract or to seek injunctive or urgent declaratory relief. ‘Dispute’ is defined in clause 1 as follows: Dispute has the meaning in clause 42. [33] The ‘Superintendent’ is defined by reference to item 5 which lists BASE Architecture Pty Ltd as the Superintendent. [34] Clause 39 deals with default or insolvency of either the principal or contractor and allows for termination by the principal by clause 39.4(b) and termination by the contractor by clause 39.9. [35] Clause 40 deals with termination by frustration. Homeowners’ submissions regarding the dispute resolution clause [36] The homeowners submit that clause 42 survived termination and applied to the claims the builder seeks to pursue in the Tribunal. They submit that the Senior Member erred in not following superior court and court of appeal decisions relating to this issue. In particular, they submit there was error in failing to consider, follow and apply Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [1999] WASCA 144 and find that the requirement for the provision of a notice of dispute, to negotiate and the requirement to submit “claims arising out of or in connection with the contract” survives termination. Further, it is submitted that the Senior Member erred in applying Richmond v Moore Stephens Adelaide Pty Ltd [2015] SASCFC 147 by not referring to a particular passage in Justice Blue’s judgement (at [199]) which they contend supports the proposition that certain types of obligations, like dispute resolution clauses, are not contingent on the subsistence of the contract and survive termination. [37] The homeowners submit that the Senior Member erred in failing to construe the clause as a whole by failing to recognise that it incorporated the QBCC mediation process and was, therefore, a ‘structured approach’ to dispute resolution. Further, they submit that the clause was not limited to claims ‘arising out of the build’ and, in any event, that the claims did arise out of the build and not just from termination of the contract. [38] The homeowners submit that the clause should be given a broad interpretation and that the Senior Member ignored the express words of the clause which provide that it applies to “termination by frustration or like claims under the law of contract”. Further, they submit that it was an error to find the application of the clause would be “commercially nonsensical” where a contract had been terminated because this failed to take into account the purpose of the clause which was to put the other party on notice that there was a dispute and potentially to narrow the dispute if it could not be -- 10 of 17 -- 11 resolved. A receipt of a notice of dispute also, they submit, enables the recipient to consider whether to issue their own notice of dispute or to contact the QBCC and request its EDR service. The builder’s submissions regarding the dispute resolution clause [39] The builder submits clause 42 was unenforceable for its failure to be sufficiently certain, principally because it did not set out the process or model of dispute resolution to be employed and in a manner which did not leave it to further agreement (relying on WTE Co-Generation v RCR Energy Pty Ltd11). In WTE it was held that a contract which leaves the process or model for the dispute resolution ill defined, or the subject of further negotiation and agreement, will be uncertain and unenforceable. Here, all the clause required was for the parties to confer once to attempt to reach agreement on the process of dispute resolution which is unenforceable due to its inherent uncertainty. [40] The builder also raises for consideration a further two grounds it says are relevant to the appeal and which favour its dismissal. They are: (a) Whether the dispute resolution clause was enforceable; and (b) Whether, as a matter of public policy, a dispute resolution clause can be an effective precondition to commencing proceedings in the Tribunal for a domestic building dispute. [41] The homeowners rely on a number of intermediate appellate authorities to support their submission that the clause survives termination. The three main authorities relied upon are Downer EDI Mining Pty Ltd v Wambo Coal Pty Ltd;12 Richmond v Moore Stephens;13 and Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd.14 [42] The builder submits, in relation to the new grounds, that the clause is void or unenforceable because it offends s 108D of the QBCC Act (which provides that a contract is void to the extent to which it is contrary to the Act or purports to annul, exclude or change a provision of the Act) or is otherwise contrary to public policy. The builder submits that the QBCC Act seeks to have the Tribunal finally determine building disputes under domestic building contracts and that the sole precondition to applying to the Tribunal is that set out in s 77(2). Consideration of the grounds relating to the dispute resolution clause [43] Did the Senior Member err in finding clause 42 did not survive termination? This is raised by proposed ground 2. [44] Whether a clause survives termination or only applies to disputes where the contract is on foot is generally a matter of construction of the contract. We accept that the principles of construction applicable to commercial contracts apply to this contract, namely that: 11 [2013] VSC 314 at [46]. 12 [2012] QSC 290. 13 [2015] SASCFC 147. 14 [1999] WASCA 144. -- 11 of 17 -- 12 …it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract…[and] that a court is entitled to approach the task…on the assumption ‘that the parties…intended to produce a commercial result’.15 [45] It is important to keep in mind that each contract must be construed on its own terms and not by applying the interpretation given to similar clauses in other cases. Many of the authorities relied on by the homeowners, as the builder submits, involved more detailed, prescriptive dispute resolution processes, often requiring the parties to go to arbitration before instituting proceedings. [46] Unlike Downer EDI, the contract does not contain an express provision identifying clauses intended to survive termination. Nor does it envisage a binding expert determination take place. We agree therefore that Downer EDI is, for those reasons, distinguishable and that there is no error in not applying it. [47] The following principles can be distilled from the cases to which we have been referred regarding whether arbitration, mediation or dispute resolution clauses survive termination: (a) The effect of “termination” for breach is to discharge parties from the further performance of the substantive terms of the contract: McDonald v Dennys Lascelles (1933) 48 CLR 457. In this sense, performance (and to some extent the contract) is terminated. (b) But termination does not absolve the parties from the performance, or observance, of contractual terms that were intended to govern their rights and liabilities after termination: and this is so regardless of the reason for termination: Great Southern Loans v Locator Group [2005] NSWSC 438 at [61]. (c) Contract terms can survive termination if it is apparent from the terms of the contract and the particular provision that it is intended to continue governing the relations of the parties even after the rest of the contract is gone: Iezzi Constructions Pty Ltd v Watkins Pacific (Qld) Pty Ltd [1994] QCA 49. (d) The general rule is that termination discharges those obligations of a party that are not contingent upon its subsistence or future events dependent on its subsistence or future obligations discharged by its termination: Richmond v Moore Stephens Adelaide Pty Ltd [2015] SASCFC 147, [197]. (e) Some clauses, like dispute resolution clauses, ordinarily by their nature will lead naturally to a construction of the contract that the obligation is not contingent and survives termination: Richmond, [199]. (f) Clauses which require parties to submit to arbitration have been held to survive termination: Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd [2014] WASC 10; Ferris v Plaister (1994) 34 NSWLR 474. 15 Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 116. -- 12 of 17 -- 13 (g) Clauses which require mediation have been held to survive termination: Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd (1995) NSWLR 709. (h) There is no difference in principle between arbitration clauses and dispute resolution clauses: Pipeline Services (implicit); Downer EDI v Wambo. [48] We note the submission by the builder that the clause was void as contrary to s 108D of the QBCC Act, which provides that a domestic building contract is void to the extent to which it is contrary to the Act or “purports to annul, exclude or change a provision” of the Act. Section 108D(4) provides that nothing in the section prevents the parties from including provisions that impose greater or more onerous obligations on a building contractor than are imposed by the Act. While it may be that clause 42 imposes greater obligations on the builder and so does not offend s 108D, it also imposes greater obligations on the homeowners by imposing an early dispute resolution requirement in addition to that imposed by s 77. We do not consider it necessary, in view of our findings below, to determine this issue. In any event, we will proceed assuming that the clause is enforceable. [49] Clause 42.1 applies if a difference or dispute between the parties arises in connection with the subject matter of the contract. If such a dispute arises then the notice requirements of the clause are activated. The “subject matter of the contract” extends at least to the construction of the dwelling. Plainly, the dispute is “in connection with” the construction of the dwelling. On its proper construction, the clause applies. Is there any reason why the parties ought not continue to be bound by the clause post termination of the contract? In our opinion, there is not. The clause on its face applies to the dispute. There are good reasons of commercial common sense that it should continue to bind the parties. The operation of the clause does not depend on the subsistence of the contract. And the weight of authority favours that view.16 We note, in particular and in addition to the authorities above, the decision of Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd17, which concerned a clause not unlike the present, and where the Court of Appeal reasoned the clause continued to apply following termination of the contract.18 [50] Elsewhere it has, for example, been held that it would be an “extraordinary construction” to suggest that the clause was intended to apply to disputes that arose while the agreement was current (that is, whilst each party remained obliged to perform it) but not to disputes that remained unresolved at termination or that arose out of the events leading up to termination.19 Often disputes develop and, while they begin prior to termination, may ultimately lead to termination and involve issues arising out of that termination. As was said in Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd,20 it would be “manifestly inconvenient” for the applicability of the dispute resolution clause to depend upon whether the contract had been terminated.21 It would also be unlikely that the parties would have intended that the 16 Richmond v Moore Stephens Adelaide Pty Ltd [2015] SASCFC 147; Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd [2014] WASC 10; Jamac Construction Group Pty Ltd v De Mol Investments Pty Ltd [2014] WASC 273. 17 [1999] WASCA 144 at [40]-[44]. 18 See also Great Southern Loans v Locator Group [2005] NSWSC 438 at [62]-[63]. 19 Ibid. 20 [2014] WASC 10. 21 Ibid at [47]. -- 13 of 17 -- 14 dispute resolution process applied to disputes arising out of the build but not to those arising out of termination and that, accordingly, two different processes applied. [51] We do not consider that the express words of clause 42 preclude the application of the general approach to the issue of whether dispute resolution clauses survive termination. Indeed, the clause expressly applies to disputes concerning claims for “restitution based on unjust enrichment or other quantum meruit” and for “rectification or frustration” with a “catch-all” extending to a “like claim available under the law governing the contract”. The effect of frustration is to discharge the parties from future performance of the contract. This is similar in effect to “termination”. Further, a claim by a builder for quantum meruit is usually made after termination of the contract and independently of the contract. [52] In our view, a dispute concerning a claim that the contract has been validly terminated and the consequences of that would be covered by the clause. This approach would be consistent with giving the clause a liberal construction. It would also be a commercially sensible approach which would mean the parties could deal with the dispute in one process rather than having to carve out the disputes which arose concerning termination. [53] We find that grounds 2 and 3 disclose an arguable case of error. (c) Was the dispute resolution process contemplated by clause 42 complied with? [54] We find that the clause which required a notice of dispute to be sent to the other party was not complied with. We also do not consider that the parties met at least once to resolve on methods of resolving the dispute. (d) If not, did that failure deprive the Tribunal of jurisdiction? [55] We do not consider that the failure to comply with the clause deprived the Tribunal of jurisdiction. [56] The Tribunal has the power to determine a building dispute provided any established EDR process with the QBCC has been complied with. There is no further impediment to the Tribunal’s jurisdiction. [57] It is not an abuse of process for the builder to have applied to the Tribunal in these circumstances. Accordingly, we find no error in the Senior Member refusing to order a stay until the clause was complied with, or in failing to dismiss the proceeding under s 47. (e) Did the Tribunal have power to stay the proceedings pending compliance with the dispute resolution process contemplated by clause 42? [58] Section 58 of the QCAT Act provides: 58 Interim orders (1) Before making a final decision in a proceeding, the tribunal may make an interim order it considers appropriate in the interests of justice, including, for example— (a) to protect a party’s position for the duration of the proceeding; or -- 14 of 17 -- 15 (b) to require or permit something to be done to secure the effectiveness of the exercise of the tribunal’s jurisdiction for the proceeding. Note— See also section 22 (3) for the tribunal’s power to stay the operation of a reviewable decision while it is being reviewed by the tribunal. [59] The power has been held to include the power to order a stay.22 In our view, the provision is broad enough to extend to the power to grant a stay in these circumstances. It follows that there was no need to rely on the power of the Tribunal in s 9(4) of the QCAT Act to “do all things necessary or convenient for exercising its jurisdiction.” [60] We do not agree that the Senior Member’s omission to refer the parties to 4D Electrical Qld v Greyburn Pty Ltd23 was a denial of natural justice. The Senior Member relied on this authority in support of the proposition that the Tribunal has a power to stay proceedings if it is in the interests of justice to do so. The homeowners did not take issue with the Tribunal’s power to grant a stay. The extent of the obligation to afford natural justice must be determined in the context of the particular statutory framework relevant to the proceedings, here the QCAT Act and QBCC Act. We are satisfied that the homeowners had an opportunity to be heard on relevant issues. It is not the case that they should have been given an opportunity to correct or contradict every finding made by the Senior Member, particularly where the homeowners had presented their arguments on the basis that such a power existed. In any event, no stay was granted so any reliance on the authority was not determinative. [61] In these circumstances, although the power existed, the Senior Member in the exercise of his discretion refused to grant a stay. We turn to consider whether there was any error in the exercise of that discretion. (g) Did the Tribunal err in not granting a stay? [62] The issue is whether the Senior Member, who assumed for the purposes of his decision that the clause survived termination, erred in the exercise of his discretion to refuse to stay the proceedings until the requirements provided for by clause 42 had been met. [63] The exercise of a discretion, particularly in relation to an interlocutory decision, should not be interfered with lightly.24 [64] The homeowners do not point to any errors by the Senior Member in the exercise of the discretion to refuse to grant the stay. [65] In Hooper Bailie Associated Ltd v Natcon Group Pty Ltd,25 Giles J held that an agreement to mediate is enforceable in principle, if the conduct required of the parties for participation in the process is sufficiently certain. The Senior Member referred to the principles regarding the enforceability of contractual dispute resolution procedures in WTE Co-Generation v RCR Energy Pty Ltd.26 The Senior Member emphasised the following principles: what is enforced by a stay in these circumstances is not co- 22 Leonard v Hugh Reilly Real Estate [2020] QCAT 24; Hessey-Tenny v Jones [2018] QCAT 131. 23 [2020] QCAT 74. 24 House v R (1936) 55 CLR 499. 25 (1992) 28 NSWLR 194. 26 [2013] VSC 314, [39]. -- 15 of 17 -- 16 operation and consent of the parties but participation in a process that might lead to consent; that honest business people who approach a dispute about an existing contract will often be able to settle it; the trend is to construe such clauses in a way that enables them to work as the parties intended rather than declaring them void for uncertainty or as an attempt to oust the jurisdiction of the court; and, although the process need not be overly structured, the process from which consent might come must be sufficiently certain to be enforceable. [66] We see no error by the Senior Member in the application of those principles. [67] The Senior Member relied on the following in the exercise of his discretion to refuse the stay: (a) whether a stay, the effect of which would be to require the parties to engage in the dispute resolution process in cl 42, would be of any utility; (b) whether the process outlined in cl 42 is one from which a resolution of the dispute might come; (c) whether the conduct of the parties has been such that they will approach the process with the necessary goodwill to attempt to resolve the dispute; and (d) whether the process is sufficiently structured to provide a framework within which the parties may resolve the dispute. [68] The conclusion reached by the Senior Member was to the effect that staying the proceedings to enable the parties to participate in the dispute resolution process provided for in clause 42 would have no utility and “would produce no result other than to prolong the present proceedings”.27 This conclusion was open to him. The Senior Member, in concluding the process would have no utility, was persuaded on the basis of careful consideration of the history of the proceedings, the litigious approach by the respondents to these proceedings and to related review proceedings, the limited nature of the process prescribed by clause 42 and, importantly, by the fact the parties had already engaged in a compulsory conference at the Tribunal, one of the purposes of which is to attempt to resolve the matter. [69] We find no error in that approach. The clause was at the low end of the dispute resolution spectrum in terms of what it required the parties to do. It merely required the parties to meet once, without a third party, to attempt to resolve the dispute or to agree to methods of doing so. If the dispute was not resolved within 28 days, the parties had the option of referring the dispute to the QBCC dispute resolution processes, QCAT or the court. [70] It is clear, in reading the reasons as a whole, that the Senior Member considered there was little to no utility in forcing the parties to comply with the relatively benign process outlined in clause 42, in particular given the nature and complexity of the dispute and the uncompromising position of the parties to date. It was, accordingly, against the interests of justice to order a stay where the result would most likely be a further 28 day delay. We find no error in that approach. [71] We would add that, were we to exercise the discretion again, we would exercise it in the same way as the Senior Member and for like reasons. 27 Reasons at [38]. -- 16 of 17 -- 17 Conclusion [72] The errors of law with respect to issue (b) and the proper construction of clause 42 warrant the grant of leave to appeal. That said, the Senior Member assumed for the purposes of his decision that the clause survived termination and applied to the dispute. He accordingly went on to consider whether, in those circumstances, to grant a stay. That was an exercise in his discretion and, for reasons we have outlined above, we find no error in the exercise of that discretion. [73] Accordingly, the appeal is refused. -- 17 of 17 --