A.L Builders Pty Ltd v Fatseas [2014] QCAT 92

CITATION: A.L Builders Pty Ltd v Fatseas [2014] QCAT 092 PARTIES: A.L. Builders Pty Ltd (ACN 113 964 711) (Applicant) v Nicholas and Tricia Fatseas (Respondents) APPLICATION NUMBER: BDL302-12 MATTER TYPE: Building Matters HEARING DATE: 7 March 2014 HEARD AT: Brisbane DECISION OF: Member Favell DELIVERED ON: 21 March 2014 DELIVERED AT: Brisbane ORDERS MADE: The application is dismissed. CATCHWORDS: Building Matters – Application to determine preliminary issues – whether just and convenient – whether the determination would contribute to the saving of time and cost – whether contested factual issues – whether determination of credibility required – whether agreed facts APPEARANCES and REPRESENTATION (if any): APPLICANT: L Bowden instructed by Nicholas Radich Solicitors RESPONDENT: M Williams instructed by Robert Sasalegno Solicitors REASONS FOR DECISION [1] The respondents are the registered proprietors of property at 20 Admiralty Drive, Paradise Waters, Surfers Paradise. -- 1 of 7 -- 2 [2] On or about 14 February 2010 the applicant and the respondents entered into a written construction contract for rectification and completion work on the property. [3] The applicant contends that, shortly after the contract was executed, the respondents informed the applicant that they had their own contractors and suppliers of material, and they wished to delete certain work the subject of the contract and add other items of work in the form of extras. [4] The applicant contends that the respondents admitted to requesting the applicant to abandon the fixed price under the contract and thereafter completing the work on a cost plus basis. The applicant contends that the respondents agreed to pay the applicant in response to progress claims made on a fortnightly basis with a supervision fee being a sum equal to 10% of the total value of the invoices submitted. The respondents deny all of those contentions. [5] The applicant has applied for a preliminary determination as to: a) Whether the contract between the applicant and the respondents was a fixed price contract or a costs plus contract; b) The relevant terms of the contract insofar as they bear upon the rights of the parties as relevant in the proceedings; c) Which of the alleged defects in the house building, the subject of the proceedings, remain in issue as a consequence of any determinations referred to in a) and b) above. [6] The application is opposed. [7] Section 28(1) of the Queensland Civil and Administrative Tribunal Act 2009 provides: 28 Conducting proceedings generally (1) The procedure for a proceeding is at the discretion of the tribunal, subject to this Act, an enabling Act and the rules. (2) In all proceedings, the tribunal must act fairly and according to the substantial merits of the case. (3) In conducting a proceeding, the tribunal— (a) must observe the rules of natural justice; and (b) is not bound by the rules of evidence, or any practices or procedures applying to courts of record, other than to [8] The Tribunal has jurisdiction to decide and resolve the dispute. The applicant and respondents are parties to a ―domestic building dispute‖ within the meaning of the Queensland Building Services Authority Act 1991. -- 2 of 7 -- 3 [9] Section 55 of the Domestic Building Contracts Act 2000 relevantly provides: 55 Cost plus contracts (1) A building contractor must not enter into a cost plus contract unless – (a) the contract is included in a class of contracts prescribed under a regulation; or (b) the cost of a substantial part of the subject work cannot reasonably be calculated without some of the work being carried out. Maximum penalty—100 penalty units. (2) A building contractor must not enter into a cost plus contract that would be a regulated contract unless the contract contains a fair and reasonable estimate by the building contractor of the total amount the building contractor is likely to receive under the contract. Maximum penalty—100 penalty units. (3) If a building contractor enters into a cost plus contract in contravention of this section, the building contractor cannot enforce the contract against the building owner. (4) However, the tribunal may, on an application made, as provided under the QCAT Act, to the tribunal by the building contractor, award the building contractor the cost of providing the contracted services plus a reasonable profit if the tribunal considers it would not be unfair to the building owner to make the award. [10] The Applicant contends that a costs plus contract was made in accordance with section 55. [11] The respondents deny the contract was a costs plus contract. [12] Section 3 of the QCAT Act provides: 3 Objects The objects of this Act are— (a) to establish an independent tribunal to deal with the matters it is empowered to deal with under this Act or an enabling Act; and (b) to have the tribunal deal with matters in a way that is accessible, fair, just, economical, informal and quick; and (c) to promote the quality and consistency of tribunal decisions; and (d) to enhance the quality and consistency of decisions made by decision- makers; and (e) to enhance the openness and accountability of public administration. [13] The applicant has referred the Tribunal to rule 483(1) of the Uniform Civil Procedure Rules 1999 (UCPR) which is as follows: 483 Order for decision and statement of case for opinion (1) The court may make an order for the decision by the court of a question separately from another question, whether before, at, or after the trial or continuation of the trial proceeding. -- 3 of 7 -- 4 [14] In Reading Australia Pty Ltd v Australian Mutual Providence Society1, Branson J summarised the authorities as follows: [7] Ordinarily all issues of fact and law in a proceeding will be determined at the one time by the court following a trial: O 32. However, the authorities show that O 29 r 2 has been relied on to support the making of orders that have modified this general rule in the following ways: (a) by requiring that certain questions, formulated by the order, be decided separately from (and presumably, before) any other questions in the proceeding on the basis of a special case stated in accordance with O 50 r 1 (see, for example, Chippendale Printing Co Pty Ltd v Commonwealth (1995) 17 ACSR 328); (b) by requiring the determination of a preliminary issue of law in circumstances in which it was unnecessary for any facts to be stated or evidence to be adduced (see, for example, Blurton v Minister for Aboriginal Affairs (1991) 29 FCR 442; 101 ALR 350); (c) by requiring the determination of certain preliminary questions of law as to the competence of the case of the applicant on the basis of certain agreed facts (see, for example, Pritchard v Racecage Pty Ltd (1996) 64 FCR 96; 135 ALR 717 and on appeal, (1997) 72 FCR 203; 142 ALR 527; South Pacific Air Motive Pty Ltd v Magnus (1998) 87 FCR 301; 157 ALR 443); (d) by requiring the separate trial ―as a preliminary issue‖ of certain of the claims made by the applicant (see, for example, Comite Interprofessionnel des Vins des Cotes de Provence v Bryce (1996) 69 FCR 450; 35 IPR 170); (e) by requiring that the question of the respondents‘ liability be tried separately, and that any question as to the quantum of any damages to be paid by the respondents, or any of them, to the applicants, or as to the taking of any account of the respondents‘ profits, be tried separately and at a dated to be fixed after the determination of the question of liability (see, for example, Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1985) 10 FCR 567; 75 ALR 601). [8] The principles that govern the circumstances in which an order will be made under O 29 r 2 are relatively well established. They may be summarised as follows: (a) the term ―question‖ in O 29 r 1 includes any question or issue of fact or law in a proceeding. The distinction in the rule between an ―issue‖ and a ―question‖ is the distinction between that which, when resolved, will result in an adjudication in favour of one party or the other, being an ―issue‖, and less decisive matters of dispute being ―questions‖ (Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 425; 113 ALR 643 at 647); (b) a question can be the subject of an order for a separate decision under O 29 r 2 even though a decision on such a question will not determine any of the parties‘ rights (Landsal Pty Ltd (in liq) v REI Building Society at FCR 425; ALR 647); (c) however, the judicial determination of a question under O 29 r 2 must involve a conclusive or final decision based on concrete and established or agreed facts for the purpose of quelling a controversy between the parties (Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 ; 161 ALR 399 ; [1999] HCA 9 at [45]); (d) where the preliminary question is one of mixed fact and law, it is necessary that the question can be precisely formulated and that all of the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable either as facts assumed to be correct for the purposes of the preliminary determination, or as agreed facts or as facts to be judicially determined (Jacobson v Ross [1995] 1 VR 337 at 341, referring to Nissan v Attorney-General [1970] AC 179 at 242–3; [1969] 1 All ER 629 at 663–4 per Lord Pearson; Bass v Perpetual Trustee at [53]); 1 (1999) 217 ALR 495. -- 4 of 7 -- 5 (e) care must be taken in utilising the procedure provided for in O 29 r 1 to avoid the determination of issues not ―ripe‖ for separate and preliminary determination. An issue may not be ―ripe‖ for separate and preliminary determination in this sense where it is simply one of two or more alternative ways in which an applicant frames its case and determination of the issue would leave significant other issues unresolved (CBS Productions Pty Ltd v O’Neill (1985) 1 NSWLR 601 per Kirby P at 606); (f) factors which tend to support the making of an order under O 29 r 2 include that the separate determination of the question may: (i) contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the action; or (ii) contribute to the settlement of the litigation (CBS Productions Pty Ltd v O’Neill per Kirby P at 607); (g) factors which tell against the making of an order under O 29 r 2 include that the separate determination of the question may: (i) give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial (GMB Research & Development Pty Ltd v Commonwealth [1997] FCA 934); (ii) result in significant overlap between the evidence adduced on the hearing of the separate question and at trial — possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: GMB Research & Development Pty Ltd v Commonwealth; Arnold v Attorney-General (Vic) (unreported, Fed C of A, Sundberg J, Nos VG629–37 of 1995, 8 September 1995, BC9502745). This factor will be of particular significance if the court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or (iii) prolong rather than shorten the litigation (GMB Research & Development Pty Ltd v Commonwealth). [9] Ultimately the issue for the court to determine when consideration is being given to the making of an order under O 29 r 2 is whether it is ―just and convenient‖ for the order to be made: Arnold v Attorney-General (Vic). There are classes of proceedings in which it is commonly recognised that it is just and convenient for an order under O 29 r 2 to be made. One such class is proceedings concerning intellectual property rights where an applicant cannot be compelled to make an election as between damages and an account of profits at least until all of the evidence has been received so that, if an order has not been made separating the determination of the issues of liability and relief, the parties will have to call evidence to deal with both damages and an account of profits: Dr Martens Australia Pty Ltd v Bata Shoe Co of Australia Pty Ltd (1997) 75 FCR 230; 145 ALR 233. Another class is proceedings in which an application in the nature of a demurrer is appropriately made. An application of this kind assumes the truth of the pleaded facts. In a case in which it is clear that the pleadings contain all of the relevant facts but one party contends that the pleading does not disclose a cause of action, or a defence or a matter of reply, as the case may be, an application in the nature of a demurrer will have obvious utility: Bass v Permanent Trustee Co Ltd at [50]. [15] In Re Cotton Crops Pty Ltd2, McPherson J held that, with respect to a commercial clause or a commercial dispute being dealt with under the commercial clauses act, where a preliminary issue of law or construction arises, considerations of cost saving and convenience may require a trial of such preliminary issues separately from the trial of the factual disputes in the action. His Honour held that it was unnecessary to show that a decision either way on the preliminary issue would put an end to the whole 2 [1985] 2 Qd R 448. -- 5 of 7 -- 6 litigation. His Honour was of the view that, in that case, it was ‗both practicable and convenient effectively to isolate the legal questions … from the other issues in that impending litigation‘. [16] Rule 483 of the UCPR is intended to provide for the determination of an issue or issues the resolution of which is likely to lead to substantial savings on expense.3 [17] Whether an order is made is subject to the exercise of the discretion of the Tribunal.4 [18] I accept that a crucial element in this matter is whether the relevant contract was modified into a ―cost plus‖ contract. [19] The application to determine the nature of the contract as a preliminary issue is in my view an application for separate trials. [20] It is not suggested that the determination of the suggested preliminary issue would dispose of the litigation. [21] I am not persuaded that the suggested determination would substantially shorten the trial of the issue. In my view evidence will be required to determine the suggested preliminary determination and it is appropriate that such evidence be given in the hearing of all relevant issues. It is not suggested that there are agreed facts sufficient to allow the determination to be made. [22] I am not persuaded that the suggested preliminary determination will advance the efficient conduct of the litigation. [23] Further it seems to me that a suggestion that there may be a saving of time and resources depends in part on the outcome of the determination of the proposed preliminary question. [24] I am not persuaded that the preliminary question is ―ripe‖ for separate and preliminary determination. Unlike the circumstances in Re Cotton Crops Pty Ltd the question is not essentially one of statutory construction and the determination of the proposed questions would be a piece meal approach to the litigation. [25] There is no suggestion that the proposed separate determinations will contribute to the settlement of the litigation. I am not persuaded that course will shorten the litigation and it appears that I may have to determine credibility of some witnesses. [26] In the circumstances, the application is dismissed. 3 Evans Deacon Industries Ltd v Commonwealth [1983] 1 Qd R 40 at 45 - 46; Advanced Traders v McNabb Constructions [2011] QSC 212 at [10]. 4 Body Corporate for Sun Resorts CTS v Sunland Constructions Pty Ltd [2010] QSC 463 at [19]; Advanced Traders v McNabb Constructions [2011] QSC 212 at [10]. -- 6 of 7 -- 7 [27] The question of costs is reserved. -- 7 of 7 --