ASAP Plasterers Pty Ltd v Matrix Projects (QLD) Pty Ltd & Anor [2013] QDC 218

1 [2013] QDC 218 DISTRICT COURT OF QUEENSLAND CIVIL JURISDICTION JUDGE ROBIN QC No 2370 of 2011 ASAP PLASTERERS PTY LTD Plaintiff/Applicant and MATRIX PROJECTS (QLD) PTY LTD and ANOTHER Defendants/Respondent ASAP PLASTERERS PTY LTD Plaintiff/Respondent and MATRIX PROJECTS (QLD) PTY LTD and ANOTHER Defendants/Applicant BRISBANE 4.17 PM, MONDAY, 20 MAY 2013 ORDER CATCHWORDS Uniform Civil Procedure Rules, 7. 444, 629 Cross-application for dismissal of plaintiff’s claim for failure to provide security for costs as ordered and for variation of the order for security -- 1 of 5 -- __________________________________________________________________________________ 2 HIS HONOUR: The court has cross applications before it in these two proceedings. In each the first filed was one by the first defendant under rule 674(c) seeking dismissal of the proceeding for failure of the respondent plaintiff to provide the first tranche of security for costs required by an order of the court. The cross-application is one seeking changes to that order by revoking it, varying the amount of it or 5 allowing additional time, specifically to the 20th of August 2013 - being the date nominated by the plaintiff’s director. That last respect is the only one in which any of the applications succeeds. The order requiring provision of security came about in extraordinary circumstances. 10 Its date is 9 October 2012, generating a surprise in a reader that in each matter, of the $50,000 security for costs required, the first $20,000 was required “within 14 days after 12 April 2012”, further amounts of $20,000 and $10,000 being required to be secured to the registrar’s satisfaction within seven days after the filing of the request for trial date and then not less than 14 days before the first day of trial. It appears 15 that the plaintiff was, by definition, in default in respect of the first $20,000. On the 12th of April 2012 his Honour gave reasons for his conclusions in relation to both claims in two important respects. The first one was what security for costs, if any, ought to be provided. The second was the extent to which the plaintiff’s claims 20 fell relevantly within the purview of the Subcontractors’ Charges Act, large components of the claims being for damages, prolongation and such matters and, as it was held, not within the Act. In relation to security for costs, his Honour’s approach was to draw inferences 25 unfavourable to the plaintiff’s financial soundness from its reticence in responding to invitations to disclose assets and also its being a $2 company. His Honour, with his usual thoroughness, scrutinised the cost estimates of the parties’ rival cost assessor experts, coming down somewhere in the middle. He set the parties a complex exercise for the purpose of determining the dollar amounts of each of the claims 30 which came within the purview of the Subcontractors’ Charges Act properly. Extreme difficulty was said to have been encountered in that regard by counsel and solicitors engaged in it, and there were difficulties attributable to his Honour’s absence from the jurisdiction adding to the delay, which explains the unusual chronology here. 35 It’s not necessary to consider the implications of the plaintiff’s default in provision of security which on one view existed from the 26th of April 2012. It’s unlikely that the plaintiff would have been visited with ill consequences at any time before the 23rd of October 2012. The first defendant took longer to move than that, not filing 40 applications until late in April of this year. Its failure to precede the failing of them by a rule 444 letter has been raised by Mr Whitten at a late stage. It did not feature in an outline of submissions which was made available shortly before Court hours began this morning, but it does feature in a revised version which is the only one presented to the court. This matter was stood down until 2.30 at the call-over. 45 Although the omission of a Rule 444 letter may embarrass litigants, and justify dismissal of an application - see Meredith v Palmcam, Pty Ltd [2000] QCA 113 - I assume it’s (2000) 1 Queensland Reports 645 - in practice judges are loath to be -- 2 of 5 -- __________________________________________________________________________________ 3 responsible for unproductive expenditure of effort and money and loss of time, and in many circumstances can be expected to deal with the merits of applications then and there. See, for example, Reynolds v Aluma-Lite Products Pty Ltd (2004) QSC 477 and Millhouse IAG Pty Ltd v Environautics, Pty Ltd [2000] QDC 196, although it’s noteworthy that in paragraph 29 of his reasons, Judge McGill said that “A failure 5 to comply with Rule 444 would be ample justification for depriving a successful applicant of costs.” I made it clear to the parties from the outset that I proposed to deal with the applications today rather than force an adjournment as occurred in Metar Pty Ltd v 10 Hagen [2004] QSC 462. That was an application like the defendant’s applications here which ultimately succeeded after an adjournment period of nine days. Jones J dismissed the plaintiff’s claim, noting its “…rather dubious nature…” and the plaintiff’s failure “…to give any indication that the order might be complied with in the future.” 15 In this case Mr Halstead, the plaintiff’s principal, has indicated the date referred to above as one when he ought to be able to provide the security, least the first branches of it. 20 A feature of the present matters that disturbs me is that the first defendant is, really, nowhere on record as stating a position as to what, if anything, it might owe the plaintiff. It’s true that Mr Johnson, in material before Judge McGill in paragraph 27 of each of his affidavits, indicates that he has perused his client’s records and that, in his opinion, nothing is owing to the plaintiff. Mr Matthews was stung into drawing 25 those paragraphs to my attention in response to my observations of a general concern that I think the community shares that subcontractors at the bottom of the pecking order are often inappropriately held out of their remuneration by superior contractors. Mr Matthews asserted that the contrary is more or equally likely to be the position 30 with hapless building contractors at the mercy of unscrupulous subcontractors working up dishonest prolongation claims and the like. For what it’s worth, both parties were actively cooperating in working out prolongation claims here against the university principals - a different one in each proceeding. There’s no basis on which the court can form views of the rights and wrongs of the claims here although it’s 35 perhaps noteworthy that the work which Judge McGill required to be done indicates arguable claims for tens of thousands of dollars within the purview of the Act. The plaintiff claims about a quarter of a million dollars in each of the proceedings, a good part of it made up by components that aren’t in the Act as indicated before. Mr 40 Matthews’ authorities in support of striking out included H&R Management Consulting Pty Ltd v Bickford [2010] QSC 144 and Stern Electronics Pty Ltd v Vascular Enhancement Technology Pty Ltd [2010] QDC 42 where reference was made to Metar Pty Ltd v Hagen. 45 HIS HONOUR: As Jones J indicated in Metar courts are reluctant to use provisions such as rule 674 to put an end to claims of plaintiffs which might have some merit,, where the plaintiff’s difficulty flows from impecuniosity the making of a guillotine order as sought by Mr Matthews here has been contemplated so that if the security or -- 3 of 5 -- __________________________________________________________________________________ 4 the first branch weren’t provided by the 20th of August this year the claims would be dismissed. That didn’t occur in Stern Electronics given that the plaintiff could point to no prospects whatever of providing security as had been ordered by Judge Kingham see [2009] QDC 284. 5 I recently came across a guillotine made under corresponding rules about appeals in Prins v Body Corporate for Wave CTS 36 237 [2013] QDC 66 in which the guillotine order had been made by a magistrate as part of an order for security for costs of an appeal from the Magistrates Court to this court. The guillotine order came into effect in the events which happened, putting an end to the appeal. I’m not inclined to make 10 a guillotine order in the circumstances of these cases. Those orders seem to me to involve a very high risk of things going wrong and possibly leading to injustices. It’s enough to say that the plaintiff here would be extraordinarily ill-advised, should 20th of August loom and it become clear the security was not going to be provided, not to move before that date to seek further time. 15 If it didn’t move it would be in a position of seeking a second indulgence which Mr Mathews characterises as one under rule 675 which provides that the court may set aside and vary an order made under the relevant chapter in special circumstances rather than under rule 7 which provides that the court may, at any time, extend a time 20 set under the rules or by order. Mr Matthews was making his point in an exercise of characterising the plaintiff as the pot calling kettle black in not having sent a rule 444 letter before filing its own applications. I’m not convinced of that point which is, I think, that the plaintiff is making an application relating to its own “failure to comply with an order” for the purposes of rule 443(d), or perhaps for purposes of (c), rule 25 374. The rule 444 aspect, in the end, has little importance today. The sending of a letter by the defendants might not have achieved much and one would not expect the plaintiff to agree that its claims should be dismissed. So far as varying the order in other respects is concerned, there was a specific request to reduce the original twenty-thousand dollar amount required as the first tranche of security by $4400 in 30 each case. That has to do with the plaintiff’s contention made now that first defendant, is responsible for the plaintiff’s financial difficulties by wrongly holding on to retention moneys in respect of a number of contracts. This is an aspect that the plaintiff’s 35 solicitors have been pursuing for well over a year, all their correspondence in that regard being ignored by the first defendant and its solicitors. Finally this month a response has come, setting up a case for retention of an amount of some $41,000 by reason of defective work in one particular job. 40 On the face of it, Mr Whitten’s contention that the defendant was not entitled to retain such moneys except in respect of the specific job for which the provision is made has appealed at court, but Mr Matthews couldn’t have been expected to respond to these claims today and really, it seems to me not a proper part of this proceeding or either of these proceedings, to attempt to resolve those issues which 45 involve questions under the Queensland Building Services Authority Act 1991, section 67J. -- 4 of 5 -- __________________________________________________________________________________ 5 Speaking generally, my understanding is that whether or not orders for security for costs ought to be made at all, and the amount of them, may be affected by the extent to which the court considers that the plaintiff’s impecuniosity is attributable to what the defendant has done. But as things stand today, I am not inclined to go into that 5 aspect, which is not to say that on a future occasion it might not be appropriate for the court to do so. Even if there is something in that aspect, the question might arise whether it’s appropriate to make any reduction amount against the first tranche of security, as opposed to one of the later ones. No case has shown for dispensing with security entirely. 10 The twenty-thousand dollar amounts seem to me a reasonable requirement to get the plaintiff to the stage which I would like to have seen reached long before today, where the first defendant is obliged to put in a particularised defence or defence and counterclaim in response to each statement of claim. 15 As indicated, the result is that the first defendant’s applications are dismissed, and in each of the plaintiff applications, the date for provision of first part of the security becomes 20th of August 2013. … 20 HIS HONOUR: Well, the costs of the first defendant’s applications will be the plaintiff’s costs in the cause in each matter and the costs of the plaintiff’s applications will be the defendant’s costs in any event. That means you get them when the proceedings finish. 25 ______________________ -- 5 of 5 --