Body Corporate for the Watermark North v Ferris & Global Management Corporation (Qld) Pty Ltd [2012] QDC 223

1 [2012] QDC 223 DISTRICT COURT CIVIL JURISDICTION JUDGE ROBIN QC No 227 of 2011 BODY CORPORATE FOR THE WATERMARK NORTH COMMUNITY TITLE SCHEME 33520 Plaintiff and PAUL PHILIP FERRIS And GLOBAL MANAGEMENT CORPORATION (QLD) PTY LTD (ACN 081 676 520) First Defendant Second Defendant BRISBANE ..DATE 17/08/2012 ORDER CATCHWORDS Uniform Civil Procedure Rules 1999, r 16, r 144, r 171, r 293 Body Corporate and Community Management Act 1997 s 312 Defendant files conditional notice of intention to defend but makes no application for setting aside etc within 14 days - instead applies for summary judgement - asserts court lacked jurisdiction because no special resolution authorised the proceeding - while application stood adjourned to "a date not before 1 July 2012" but after that date, special resolution passed, held effective to ratify the proceeding -- 1 of 10 -- 2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: What's before the Court is the first defendant's application filed on the 10th of April 2012 but erroneously described in an outline of submissions as filed two days later. It seeks dismissal of the plaintiff's under rule 293; alternatively, the striking out of the claim, in its entirety, under rule 171 and dismissal of the plaintiff's claim pursuant to the Limitation of Actions Act 1974. Also, costs on the indemnity basis are sought. The application came on before Judge Devereaux on the 23rd of April 2012 with the result of his adjourning it on the respondent/plaintiff's application "to a date not before 1 July 2012". His Honour also ordered that the costs of the day be the applicant's costs in the application stating, "It will be a matter for the Judge hearing the application whether those costs will be on the standard or indemnity basis". The respondent/plaintiff sought that adjournment on the basis of Mr Thomson, who was then new counsel in the matter, accepting that there was a serious difficulty confronting the claim given that there'd been no special resolution of the Body Corporate authorising it, as required by section 312 of the Body Corporate and Community Management Act 1997. The claim is for damages for defective building work in a structure which contains more than 40 units. The Court has been given to understand that there are proceedings on foot before the Building Services Authority in which all or some of the relevant matters may be dealt with in -- 2 of 10 -- 3 ORDER 1 10 20 30 40 50 60 some way. Mr Alford, representing the defendant/applicant advises that there is to be hearing there within days. The defendant, Mr Ferris, who prepared the application filed on the 10th of April 2012, according to the footer, is a builder. He has a clear preference for claims of the present kind to be pursued before the Authority rather than in the Court but Mr Alford has not asserted today that there's any legislative provision which would oust the Court's jurisdiction. Mr Thomson formed the view that the statement of claim would require amendment. The application was adjourned to a date which the Court and Mr Thomson and those instructing him considered would allow the obtaining of a special resolution and amendment of the pleading. One of the issues today has been whether his Honour's order in some way precludes the plaintiff from taking steps to change its situation after the 1st of July 2012 being a date referred to by his Honour. Mr Alford relied on the material and an outline of argument used on the 23rd of April 2012 and submitted that Mr Thomson was to be limited in the same way. I take it that Mr Alford would have to concede that there was a window of opportunity until the end of last June for the plaintiff to change matters by introducing new material or arguments. He strenuously submitted there was no possibility of that afterwards. The plaintiff needs further time because the special resolution in question was not obtained until the 5th of July -- 3 of 10 -- 4 ORDER 1 10 20 30 40 50 60 2012 the Court hears with one abstention only and no votes against, indicating some enthusiasm among the owners for the proceeding which they ought to have since they all will be responsible for the costs of it. Nothing was done by way of amendment either until yesterday from the defendant's point of view. There's now presented a substantially amended statement of claim which Mr Alford indicates he will require time to consider and respond to if it's a pleading that his client has to face at all. That's a reasonable position to take, obviously. The amendments are substantial. The amendments may change. The discussion this morning revealed an unsatisfactory feature of the prayer for relief and another issue as to whether or not the special resolution ought to be pleaded which it would not be, according to the present document. It's accepted that the claim requires amendment in ways that may now be obvious but there's no document before the Court showing what form the claim would require to be in. The Court's leave would be necessary to amend the claim but not, at this stage of the proceeding, to amend the statement of claim. I'm ready to entertain an oral application by the plaintiff in that regard today. Determination of the application has to be adjourned to a suitable date to accommodate the defendant's reasonable requirements. His situation today is invidious and the plaintiff must be -- 4 of 10 -- 5 ORDER 1 10 20 30 40 50 60 accounted responsible for it. As one would expect, Mr Alford at the end of June, on the 28th, he advises, inquired of the plaintiff's representatives what was happening and was told the following day that the plaintiff would be available from 3rd of August onwards to continue the fight in Court. The Registry was approached to provide a hearing date and today is, I understand, a much later one than the defendant would have desired. From his point of view, until yesterday, things stood in exactly the same case as they were on the 23rd of April so that the relisting of the matter was entirely justifiable. I am of the firm view that nothing in Judge Devereaux's reference to the 1st of July 2012 fixed that date as a cut-off date after which the plaintiff was not entitled to attend to matters such as obtaining the necessary special resolution or getting its pleading in order. The plaintiff's inaction, however, has placed the defendant in a situation it really ought not to have been in. Although the language of section 312 arguably does not invite this, it is established that the special resolution contemplated may be obtained retrospectively to breathe life into a proceeding that might otherwise be defective. See Warren v. Body Corporate for Buon Vista Community Title Scheme [2006] QDC 394 at [34]. Body Corporate Aleutian at Seaforth v. The Lot Owners for Each of the Applicant Bodies Corporate [2009] QDC 52 at [43], citing Banks v. Body Corporate "Noosa on the Beach" [2000] QCA 146 and other Supreme Court -- 5 of 10 -- 6 ORDER 1 10 20 30 40 50 60 authorities. See in particular [44] ff. Here, the required special resolution effectively ratifying the proceeding has been obtained during the period of the adjournment. Judge Devereaux was plainly open to the same view taken in Banks which underlay his adjourning the matter. I would respectfully agree with the decsions referred to and propose to make a declaration today which will have the effect of taking an issue in this regard away. The limitations point raised by Mr Ferris will be noted. Mr Alford said his client's view was that the limitation period ran out in December last year. The proceeding wasn't commenced until January this year. There's been no occasion to look into this. But the Court plainly ought to be extremely careful about allowing the claim to be amended, if the effect is to let in a claim that is statute barred; that is one of the reasons why the Court ought not to allow the amendment today but put the decision off until an occasion when the defence side can be properly prepared. The defendant's procedure is interesting. A conditional notice of intention to defend which asserted on behalf of the first defendant that the Court lacked jurisdiction, was filed by Mr Helmold on the 21st of March 2012. An amended conditional notice of intention to defend was filed the following day, now by Mr Ferris, the explanation for that change apparently being the plaintiff's solicitors advising concern that Mr Helmold who's not a lawyer but, as Mr Alford -- 6 of 10 -- 7 ORDER 1 10 20 30 40 50 60 said, is assisting Mr Ferris and present in Court today, was not entitled to file the document. By 144, Mr Ferris was obliged to apply for an order under rule 16 within 14 days on pain of the conditional notice of intention to defend becoming an unconditional one under sub- rule (4). Where that occurs, then by sub-rule (5), the defendant must file a defence within a further seven days. Mr Ferris is plainly in default in that regard, there being no pleading yet from him. But there's little point in requiring one at this stage. Mr Thomson, understandably, says his client is not intent on taking, at this stage, any step based on there being no defence filed. The application filed the 10th of April might have been intended as a rule 16 application asserting want of jurisdiction in the Court. But what was done, as noted, was to invoke other rules of Court as a way of disposing of the claim. This probably has the consequence that Mr Ferris has abandoned the idea of participating in the proceeding only conditionally. Rule 16 places him in that situation in any event. There's no point, in the circumstances, in considering the defendant's application any further today. The situation in the proceeding is changing and judgements about where the parties stand have to be made against the current position which, for practical purposes, must have regard to the claim as the plaintiff now desires to pursue it. The 6th of -- 7 of 10 -- 8 ORDER 1 10 20 30 40 50 60 September is a suitable date for these matters to be determined and accordingly, the Court adjourns to that date, the defendant's application filed the 10th of April 2012. It's adjourned to the 6th of September 2012. There's also adjourned to that day the plaintiff's oral application to amend the claim to bring it into substantial accord with the proposed further amended statement of claim exhibited to the affidavit of Paul Priest, affirmed the 15th of August 2012, the subject of leave to read and file today. The Court declares that the special----- MR THOMSON: I'm sorry, your Honour. I'm so sorry to have to rise at this point. HIS HONOUR: Yes. That's all right. MR THOMSON: There's something I want to raise before your Honour----- HIS HONOUR: Yes. MR THOMSON: -----formally makes that declaration. HIS HONOUR: Yes. MR THOMSON: It just occurred to me, as I was listening to your Honour's reasons, the second defendant has played no part in any of these----- HIS HONOUR: Yes. MR THOMSON: -----interlocutory stoushes HIS HONOUR: That's right. I know. Yes. MR THOMSON: My learned friend's application wasn't served on them. HIS HONOUR: Yes. MR THOMSON: I'll just raise with your Honour - because they're not here, I just raise with your Honour, the declaration - they haven't been heard on this question. -- 8 of 10 -- 9 ORDER 1 10 20 30 40 50 60 HIS HONOUR: Who are they? MR THOMSON: A project manager. We say that they're also liable for some damages. HIS HONOUR: Well, perhaps I should say, subject to - but they're not here, so they'll----- MR THOMSON: No, they're not. HIS HONOUR: So, if they think that declaration shouldn't have been made and it affects them----- MR THOMSON: Yes. HIS HONOUR: -----they can----- MR THOMSON: They would be----- HIS HONOUR: -----ask the Court to revisit it, can't they? MR THOMSON: They would be at liberty to ask the Court to revisit it. HIS HONOUR: Yes. Well - yes, all right. MR THOMSON: Out of caution, I just wanted to raise that. HIS HONOUR: I'd like that exchange typed out----- MR THOMSON: Yes. HIS HONOUR: -----with the rest of the reasons. That's the ordinary principle. MR THOMSON: Thank you, your Honour. HIS HONOUR: So, subject to any order that the second defendant may obtain, declare that the special resolution of the plaintiff of 5 July 2012 suffices to authorise the commencement of this proceeding for the purposes of section 312 of the Body Corporate and Community Management Act 1997. The applicant defendant’s costs of today are reserved. The Court notes that Mr Alford sought them on an indemnity basis -- 9 of 10 -- 10 ORDER 1 10 20 30 40 50 60 but that can be determined on the future date which is also the appropriate time for determination of the special matter which Judge Devereaux's order provided in relation to indemnity costs. How does the second defendant come in? MR THOMSON: The second defendant, we say, gave a certificate of practical completion; signed a certificate which they oughtn't have signed because it represented that things were okay when, in fact, they were defective. HIS HONOUR: Is that certifier a private certifier? MR THOMSON: They're not a private certifier. They're - they were in the business of managing projects for people. HIS HONOUR: All right. You probably ought to have them in there. Have they got an insurer? MR THOMSON: I don't know the answer to that. HIS HONOUR: Right. Okay. ----- -- 10 of 10 --