Brett & Anor v Manson t/as Manson Homes [2020] QCATA 122

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Brett & Anor v Manson t/as Manson Homes [2020] QCATA 122 PARTIES: STEWART BRETT (first applicant) SARAH PURNELL (second applicant) v LEE MANSON T/AS MANSON HOMES (respondent) APPLICATION NO/S: APL346-19 ORIGINATING APPLICATION NO/S: BDL117-14 MATTER TYPE: Appeals DELIVERED ON: 19 August 2020 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Brown Member Traves ORDERS: The application to stay the decision in BDL117-14 is refused. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL - GENERAL PRINCIPLES – PROCEDURE – QUEENSLAND – STAY OF PROCEEDINGS – GENERAL PRINCIPLES AS TO GRANT OR REFUSAL – where tribunal below made order in favour of the builder – where stay of order is sought pending final determination of application for leave to appeal or appeal – whether an arguable case – whether the applicants will suffer material detriment if stay refused – whether balance of convenience favours granting a stay Queensland Civil and Administrative Tribunal Act 2009 (Qld), 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 -- 1 of 11 -- 2 Gardner v Smith [2001] WASCA 116 La Macchia v Department of Housing and Public Works [2015] QCATA 143 Lee Manson t/as Manson Homes v Brett & Purnell [2016] QCAT 282 Mann v Paterson Constructions Pty Ltd (2019) 373 ALR 1; [2019] HCA 32 Manson v Brett (No. 2) [2019] QCAT 411 Partington v Urquhart (No 2) [2018] QCATA 120 Sumpter v Hedges [1898] 1 QB 673 REPRESENTATION: Applicant: C Wilson Respondent: T Adames, solicitor of All Building Law APPEARANCES: 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 This is an application to stay the operation of a decision of the Tribunal delivered on 18 November 2019 (the Decision)1 pending the final determination of the application for leave to appeal or appeal.2 In the decision, the Tribunal made an order against the applicants in the amount of $25,254.00, in favour of the respondent, Lee Manson. Mr Manson was the builder who undertook extensive renovations for the applicants, Mr Brett and Ms Purnell (the homeowners). It is that work, undertaken by Mr Manson, that is at the heart of this dispute. The amount of $25,254.00 represents the difference between the amount found to be owed to the builder ($77, 232.30) and the amount found to be owed to the homeowners ($51,978.30). In particular, the Tribunal allowed the following claims by the builder and homeowners respectively: The Builder  Work completed within enclosed stage: $67,091.00  Work completed beyond enclosed stage: $10,141.30 Total: $77,232.30 Homeowners  Extra building costs incurred: $29,768.30  Rent incurred: $9,240.00  Solatium: $10,000.00 1 Manson v Brett (No. 2) [2019] QCAT 411. 2 Application to stay a decision filed 13 February 2020. -- 2 of 11 -- 3  Extra planning costs: $2,970.00 Total: $51,978.30 The decision is related to an earlier decision3 in which the Tribunal found the contract between the builder and the homeowners had been validly terminated by the homeowners. The application has been made under s 145(2) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). Section 145 provides: 145 EFFECT OF APPEAL ON DECISION (1) The start of an appeal under this division against a decision does not affect the operation of the decision or prevent the taking of action to implement the decision. (2) However, the tribunal may make an order staying the operation of the decision being appealed against until the appeal is finally decided. (3) The tribunal may act under subsection (2) on the application of the appellant or on its own initiative. (4) The tribunal’s power to act under subsection (2) is exercisable only by— (a) the tribunal constituted for the appeal; or (b) if the tribunal has not been constituted for the appeal—a judicial member. Principles applicable to the granting of a stay The decision as to whether to grant a stay involves the exercise of a discretion. The party seeking the stay has the onus of demonstrating that there is a basis for the stay.4 The relevant principles to be considered in determining an application for stay under s 145(2) of the QCAT Act were set out by Carmody J in La Macchia v Department of Housing and Public Works:5 [7] A successful party is entitled to the fruits of its litigation. The orders of the original decision-maker are intended to be final, and not merely provisional subject to the applicant initiating an appeal. This is particularly the case where the applicant requires leave to appeal, and is not entitled to appeal as of right. Accordingly, the applicant must furnish compelling reasons before the Appeal Tribunal will grant a stay of an original decision. [8] An application to stay the decision of an original decision-maker requires the Appeal Tribunal to be satisfied that: (a) the applicant possesses an arguable case; (b) the applicant will suffer some kind of harm, detriment, prejudice, injury, damage or other disadvantage if the stay is not granted; and (c) the balance of convenience favours granting the stay of the decision. The failure to 3 Lee Manson t/as Manson Homes v Brett & Purnell [2016] QCAT 282. 4 Skinner v FTP Contracting Pty Ltd [2019] QCATA 97 at [4]; Stone Family Trust t/as Stone Consulting v Alison Rogers [2019] QCATA 7 at [5]. 5 [2015] QCATA 143. -- 3 of 11 -- 4 establish any one of these elements should result in the refusal of the application to stay the decision.” [7] In Cook's Construction Pty Ltd v Stork Food Systems Aust Pty Ltd6 Keane JA (as he then was) considered (inter alia) the relevance of the appeal prospects in exercising the discretion to grant a stay, and said: [12] The decision of this Court in Berry v Green [1999] QCA 213 suggests that it is not necessary for an applicant for a stay pending appeal to show “special or exceptional circumstances” which warrant the grant of the stay. Nevertheless, it will not be appropriate to grant a stay unless a sufficient basis is shown to outweigh the considerations that judgements of the Trial Division should not be treated as merely provisional, and that a successful party in litigation is entitled to the fruits of its judgement. Generally speaking, courts should not be disposed to delay the enforcement of court orders. The fundamental justification for staying judicial orders pending appeal is to ensure that the orders which might ultimately be made by the courts are fully effective: the power to grant a stay should not be exercised merely because immediate compliance with orders of the court is inconvenient for the party which has been unsuccessful in the litigation. Prospects of success [13] In cases where this Court is able to come to a preliminary assessment of the strength of the appellant's case, the prospects of success on appeal may weigh significantly in the balance of relevant considerations. The prospects of success will obviously tend to favour the refusal of a stay if the prospects of the appeal can be seen to be very poor. That is because, if there is obviously little prospect of ultimate reversal of existing orders, the concern to ensure that the existing orders can be overturned without residual injustice will have less claim on the discretion than might otherwise be the case. [14] The extent to which a preliminary assessment of prospects of success, which suggests that the prospects of success are good, should dispose the Court towards granting a stay may be somewhat less clear. It was, however, accepted by Stork that Cook's appeal is arguable, and Cook did not seek to argue that its prospects of success on the appeal are so strong as to overwhelm the importance of the consideration that the courts should impede the enforcement of their orders only so far as is necessary to ensure that the orders which might ultimately be made by the court can be given effect without leaving a residue of injustice. [15] Accordingly, the focus of this Court's attention must be upon whether Cook's appeal might be rendered nugatory by a refusal of the stay and whether Cook would be irremediably prejudiced if the stay were not granted and its appeal were ultimately to be upheld. [8] Accordingly, we turn to consider: (a) the applicants’ prospects of success on appeal; (b) whether the refusal of a stay would render the appeal nugatory; (c) the prospect of irremediable harm to the applicants if a stay is refused and the appeal is ultimately successful. 6 [2008] QCA 322. -- 4 of 11 -- 5 Prospects of success [9] The applicants rely upon eight grounds of appeal. In the present application, only grounds two and four are referred to and relied upon by the applicants. [10] Ground two relates to a discrepancy the applicants say results from the Member’s treatment of some bi-fold doors in his earlier decision of 5 August 2016 (dealing with the termination question) and in the decision the subject of appeal. [11] The applicants refer to the Member’s decision of 5 August 2016 where he found that the windows and doors supplied were not those required to be installed under the contract. The Member dealt with the issue from [196]-[205]. The learned Member accepted the evidence of the applicants’ building expert, Mr Jones. Mr Jones gave evidence about whether the windows and doors as provided for in the plans had been installed. His evidence was, relevantly, as follows: (a) The large glass door leading onto the Alfresco from the Dining is to be a 24- 51 bi-fold with highlights over (see Building Approved Plans WDB-4 & 8). The installed door is a sliding/stacking door with no highlights over. (b) Similarly, the door leading onto the Alfresco from bed 3 is to be a 21-27 bifold. The door installed is a sliding door. (c) On Plan WDB-08 the side and rear elevations state: ‘Timber Framed Windows” and ‘Timber Framed Bi-Fold Doors with highlight Windows above”. The windows and doors installed by the builder, Mr Manson, are aluminium. [12] The Member accepted the evidence of Mr Jones and found that the windows and doors supplied by the respondent were not the windows and doors required to be installed under the contract.7 The Member concluded that the element of the work as to the windows and doors required for the Enclosed Stage claim was not satisfied. [13] Mr Jason Thornley, a quantity surveyor, gave evidence for the applicants. Mr Thornley’s evidence was that the requirements for the enclosed stage had not been met and that the cost of the additional works required to reach the stage was $27,900.00. This amount included $9,190.00 for timber bi-fold doors in the kitchen and bedroom 3. [14] In the later decision the Member referred to the cost of obtaining timber bi-fold doors ($9,190.00) for the kitchen area and bedroom 3. The Member accepted that the doors were obtained by the respondent and were eventually installed by another contractor. The Member found that the cost of the bi-fold doors should not be included in the valuation of the uncompleted works. [15] The applicants say that the learned Member found in the earlier decision that the enclosed stage had not been reached as a result of the failure by the respondent to install the correct doors in the kitchen and bedroom 3. The error asserted by the applicants in the decision under appeal is that the learned Member made a contrary finding in allowing the builder the cost of the incorrectly installed doors. 7 Manson v Brett (No. 2) [2019] QCAT 411 at [202]. -- 5 of 11 -- 6 [16] Whether there was an error turns on the basis upon which the Member excluded the cost of the doors from the valuation of the uncompleted works. [17] The respondent argues that the Member was dealing with different questions in respect of the bi-fold doors in each decision. In the first decision, it is submitted, the Member found that because some of the doors did not match what was required by the contract, that the enclosed stage was not reached. In the decision the subject of the appeal, the Member was making an assessment of the work that was not completed by the respondent and determined that the respondent was entitled to a credit for bi- fold doors purchased by the respondent but installed by another contractor. The findings, the respondent argues, are not inconsistent and there was therefore no error. [18] In the part of his report setting out the cost of completing the enclosure works in accordance with the contract, Mr Thornley refers to ‘Timber bi-fold doors to kitchen’ and a cost of $5,560.00, ‘Timber bi-fold doors to Bed 3’ and a cost of $3,630.00 and ‘Highlight windows abover (sic) Kitchen timber doors’ and a cost of $1,100.00. These items appear to be those identified in the report of Mr Jones as the doors not complying with the plans as referred to at [199] of the reasons for the earlier decision. [19] The learned Member referred in his reasons to an invoice rendered to the respondent for the supply of six doors at a cost of $47.50 each. The applicants contended below that there was no evidence that these were the doors being referred to by Mr Thornley. The learned Member found that the assessment of cost by Mr Thornley included the supply and installation of the doors. Accordingly the learned Member found that the discrepancy between the invoice amount and the estimate by Mr Thornley was not determinative of the issue. [20] The applicants’ submissions place weight upon what they say was the learned Member’s finding that the respondent had supplied and installed the doors. If this was so, there would be some force to the submission that the learned Member had erred. Contrary to the applicants’ submissions however, the learned Member did not find that the respondent had installed the doors. The learned Member found that the doors were installed by another contractor.8 [21] The learned Member found that the doors referred to by Mr Thornley and the doors referred to by the respondent were the same doors9 and should not be included in the valuation of the uncompleted works.10 Whether this finding of fact was open on the evidence is not the subject of submissions by the applicants in the present application. In the absence of submissions from the applicants in relation to the factual findings to which we have referred we are unable to conclude that the applicants have reasonable prospects of success in respect of ground one. [22] Ground four relates to a question of law:11 The Tribunal member erred in law, at [132] of the judgment, in allowing the respondent/builder’s claim on a quantum meruit for work performed for the ‘enclosed stage’ of the project under the contract, in circumstances where the respondent/builder’s obligation to complete the ‘enclosed stage’ was an entire obligation that he did not complete as the applicants/owners terminated the contract for his breach and reasonable remuneration is not available to recover 8 Manson v Brett (No. 2) [2019] QCAT 411 at [144]. 9 Ibid [143]. 10 Ibid [144]. 11 Application for leave to appeal or appeal filed 16 December 2019, annx A at [4]. -- 6 of 11 -- 7 the value of the part performance under the rule in Sumpter v Hedges [1898] 1 QB 673. [23] The applicants rely on Sumpter v Hedges12 as authority for the principle that a party in breach cannot claim for the value of the work and labour done under a contract unless he has an accrued contractual entitlement to be paid. [24] The applicants submit that the Tribunal’s judgment for the builder on the claim for the value of work and labour done towards the completion of the ‘Enclosed stage’ cannot stand on the authority of Sumpter v Hedges. This would mean that the allowance of $67,091.00 for the value of work and labour done towards completing the ‘Enclosed stage’ would be set aside. The applicants submit that the Appeal Tribunal in Partington v Urquhart (No 2)13 did not consider the different positions of a defaulting party and an innocent party claiming relief in restitution and, further, that the issue was not considered by the High Court in Mann v Paterson Constructions Pty Ltd.14 [25] The respondent places reliance on the Appeal Tribunal’s decision in Partington v Urquhart (No 2) in support of the argument that he is entitled to his claim in restitution for work and labour done for the ‘Enclosed stage’. The respondent submits that it can be assumed the applicants and their legal representatives in the proceedings at first instance did not consider Sumpter v Hedges would assist them and instead relied on Austman Pty Ltd v Mount Gibson Mining Ltd.15 He submits that the Tribunal was correct to rely on Partington in preference to Austman. In relation to Sumpter, he says the case was an entire contract which was not the case in this matter and so the Sumpter principle did not apply. [26] We note that neither party referred to Sumpter v Hedges in the Tribunal below. However, the applicants did rely on Austman Pty Ltd v Mount Gibson Mining Ltd as authority for the proposition that a builder who was in breach of a contract with divisible entire stages could not succeed in a claim in restitution for the value of work done towards completion of an uncompleted stage. [27] The decision in Austman was a single decision of the Western Australian Supreme Court. It concerned a design and construct contract (to design and construct a crushing and screening plant at Extension Hill) which was repudiated by Austman by its conduct in denying any contract existed and by renouncing future obligations of performance under it. MGM as the innocent party gave notice to Austman on 28 November 2008 which put an end to all parties’ future performance obligations under the contract. In that case the issue of an entitlement to a claim on quantum meruit by Austman was not identified up front as an issue in the case. It was not until page 126 of a 140 page judgment under the heading “Residual issues on Austman’s wrongful repudiation and termination by MGM” that any mention of quantum meruit was made. Martin J merely said that Austman appeared ‘close to submitting’ that it would be entitled to obtain a quantum meruit in its favour, even if MGM had validly terminated. Martin J states: [542] At one point, Austman appeared close to submitting that it would be entitled to obtain a quantum meruit in its favour, even if I concluded (as I do) 12 [1898] 1 QB 673. 13 [2018] QCATA 120. 14 (2019) 373 ALR 1; [2019] HCA 32. 15 [2012] WASC 202. -- 7 of 11 -- 8 that MGM had validly terminated the D&C Contract after it was repudiated by Austman's breach conduct. That legal proposition is unsupportable. In law it is the innocent party to the breach of contract which would hold the entitlement. In Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141; (2009) 24 VR 510, the right to elect a quantum meruit was held by the builder, who was the innocent breach party. I find nothing in that decision to support any reverse contention as to a quantum meruit favouring a builder who is found to have been the repudiating party. Sopov v Kane Constructions followed the Privy Council decision in Lodder v Slowey [1904] AC 442 as to the quantum meruit election issue for an innocent breach party. [28] The cases that Martin J refers to are authority for the proposition that an innocent party may sue in quantum meruit. That is a different thing, however, from saying that they are authority for the proposition that quantum meruit can never apply to a party in breach. Given the principle was not, it would seem, fully argued before Martin J and that it was not necessary for him to decide it, it cannot, in our view, be regarded as either binding or persuasive authority. We note in that respect that the passage in Austman relied upon by the applicants appears inconsistent with the earlier decision of the Western Australian Court of Appeal in Gardner v Smith.16 [29] The rule in Sumpter v Hedges has been criticised. Further, we note that, at least on one view, the rule is not as broad as the applicants would have it. It has been expressed as follows in Halsbury’s Laws of Australia:17 Where the plaintiff’s breach or repudiation led to termination, the rule in Sumpter v Hedges applies, and restitution as on a quantum meruit is not available unless the defendant accepted the benefit of the plaintiff’s performance. [30] There is support for the proposition that the basis for a claim in quantum meruit is the acceptance of benefit and the claim does not rest on any implied contract theory. As stated in Halsbury’s:18 The rule is based on the view that there must be evidence justifying the inference of a fresh contract to pay for the work done. However, because the implied contract theory of restitution has been rejected, an inability to imply a contract is no longer conclusive and, under the guidance of unjust enrichment, acceptance of benefit or incontrovertible benefit are the proper bases for quantum meruit claims in relation to a benefit conferred by way of partial performance by a plaintiff in breach. [31] This analysis recognises that a claim in quantum meruit can refer to different types of claims. The High Court in Mann recently outlined the history of a claim in “quantum meruit”: 19 [150] The issues on this appeal, as at first instance and before the Court of Appeal, were described in terms of “quantum meruit“, sometimes on the assumption that the phrase identifies a species of restitution for unjust enrichment. But the Latin may mislead. It means only “as much as he deserved”, and as such refers to a sum certain which represents the benefit of services. As is explained in what follows, it was a label given to a form of action which fell into desuetude, superseded by counts in indebitatus assumpsit, even before the 16 [2001] WASCA 116 at [149]-[150]. 17 LexisNexis, Halsbury’s Laws of Australia (at 19 October 2016) [370-2585]. 18 Ibid. 19 [2019] HCA 32 at [150], per Nettle, Gordon and Edelman JJ. -- 8 of 11 -- 9 abolition of the forms of action. In its historical use, the form of action was truly contractual, describing an implied price of a reasonable sum for work done. To plead a claim today merely by reference to that language of the form of action tells a lawyer very little, and a layperson nothing at all, as to (i) whether the cause of action is one to enforce the contract, seeking payment of a reasonable price implied into the contract, (ii) whether it is an asserted claim for a restitutionary remedy for breach of contract, or (iii) whether it is a remedy arising by operation of law in that category of actions concerned with restitution in the category of unjust enrichment. This litigation has only ever been concerned with the final category. The issue therefore appears to involve other considerations including, for instance, whether there was acceptance by the applicants of the respondent’s work, and is not confined to whether the respondent was in breach. [32] Similarly, in this case, we are concerned with the latter category and are too, focused on acceptance of the respondent’s work and not merely whether he was in breach. [33] The applicants have not submitted its prospects of success on the appeal are so strong as to overwhelm the importance of the consideration that the courts should impede the enforcement of their orders only so far as is necessary to ensure that the orders which might ultimately be made by the court can be given effect without leaving a residue of injustice.20 [34] We turn then to whether the appeal might be rendered nugatory by a refusal of the stay and whether the applicants would be irremediably prejudiced if the stay were not granted and the appeal ultimately upheld. Nugatory appeal [35] The applicants submit that there is no evidence before the Tribunal that the respondent will be able to refund the money if they were successful on appeal. They say the Tribunal can infer in the absence of any evidence to the contrary that evidence of the respondent’s financial circumstances would not have assisted him. They also point to the fact that the respondent has not offered an undertaking to negative these concerns. [36] The respondent submits that none of these arguments provide any evidence that the respondent could not repay the amount of the judgment reversed on appeal. Accordingly, he submits that, because the applicants have not adduced such evidence and therefore failed to satisfy the onus, that consideration of this factor should be determined in favour of the respondent.21 The respondent submits that he has held a builder licence for some 20 years, has a permissible business turnover in excess of $3 million and that the Queensland Building Construction and Commission Act 1991 (Qld) mandates that the respondent must have sufficient assets to maintain such a licence. [37] We are not satisfied on the available evidence that the respondent could not repay the amount of $25,254.00 if the appeal was successful. Accordingly, we do not accept that the refusal of a stay would render the appeal nugatory. Irremediable harm 20 See Cook’s Construction Pty Ltd v Stork Food Systems Aust Pty Ltd [2008] QCA 322 at [14]. 21 Relying on Skinner v FTP Contracting Pty Ltd [2019] QCATA 97 at [5]. -- 9 of 11 -- 10 [38] The applicants submit that if judgment is enforced against them they do not have the means to satisfy it and would face bankruptcy. If made bankrupt they say there is a serious possibility that a meritorious appeal would not be pursued. This was said to be a “powerful consideration” in the balance of convenience in Condo v Dang.22 [39] The respondent submits that the applicants have not provided sufficient evidence to compel a finding that they will suffer irremediable harm, given they only provided a bank letter in relation to Mr Brett and not for Ms Purnell and that the letter did not confirm that the account mentioned was the only bank account of the applicants. [40] In relation to this argument we note that the applicants have owed that money to the builder and have not been entitled to it for the five or so years since the contract was terminated by them. We also do not know whether the financial information provided by the applicants tells the whole picture. We do not know whether there are other accounts or what the borrowing capacity of the applicants might be. [41] There is no evidence that a bankruptcy notice has been served on either of the applicants or that there is the threat of such a notice. There is no evidence from the applicants as to the likelihood of bankruptcy if the stay is not granted. It would be premature to grant a stay merely on the applicants’ assertion that they may face bankruptcy if the stay is not granted.23 The applicants have the onus of providing sufficient information to support their assertion that they are unable to satisfy the judgment debt pending the appeal. In those circumstances we are unable to conclude, on the material presented, that the applicants could not satisfy the debt now without suffering serious damage. As was held in Cook’s Constructions: 24 [20] The plaintiff has failed to provide 'sufficiently extensive' or 'specific' evidence as to the impact payment of the judgment would have (Willemse Family Trust v Deputy Commissioner of Taxation [2002] QSC 292; [2003] 2 Qd R 334 at [28]). In the absence of that information it is not possible to conclude that CCPL’s contention on this point is valid and that the effect of having to pay the amount owing will be so serious as to justify a stay. Balance of convenience [42] In considering the factors above we find that there is an arguable case in the appeal; the applicants have failed to establish they will suffer irremediable harm if they were to comply with the decision in the sense of that harm being caused by the refusal of the stay as distinct from the natural consequences of the operation of the decision at first instance; and, the applicants have failed to demonstrate that success on appeal would be rendered nugatory if the stay is not granted. [43] The respondent has been denied payment for work done in 2016. The applicants have had the benefit of that money for the same period. On balance, we can see no reason why the respondent should be denied the fruits of the learned Member’s decision. Conclusion 22 [2015] QCA 64. 23 Sopov v Kane Constructions Pty Ltd [2009] VSCA 216. 24 [2008] QCA 322. -- 10 of 11 -- 11 [44] For the reasons we have discussed above, we consider that the overall balance of convenience favours the respondent and that a stay should not be granted. [45] Accordingly, the application for a stay is refused. -- 11 of 11 --