Coral Homes Qld Pty Ltd v Queensland Building Services Authority [2011] QCAT 715

CITATION: Coral Homes Qld Pty Ltd v Queensland Building Services Authority [2011] QCAT 715 PARTIES: Coral Homes Qld Pty Ltd (Applicant) v Queensland Building Services Authority (Respondent) APPLICATION NUMBER: GAR076-11 MATTER TYPE: Building matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Michael Howe, Member DELIVERED ON: 21 November 2011 DELIVERED AT: Brisbane ORDERS MADE: Application to join Evolution Professional Engineers Pty Ltd, Desmond Stanaway and Downs Earthmoving Pty Ltd as Second, Third and Fourth Respondents herein dismissed. CATCHWORDS: Building and Construction – joinder of parties – parties whose interests may be affected by the proceedings – review of a decision of the Queensland Building Services Authority Queensland Building Services Authority Act 1991, s 72 Queensland Civil and Administrative Tribunal Act 2009, ss 4(c), 32, 42(1) Queensland Building Services Authority Regulation 2003, s 5 Body Corporate for London Woolstores Apartments & Ors v Queensland Building Services Authority [2011] QCAT 86 Comfortable Homes Pty Ltd v QBSA [2001] -- 1 of 7 -- 2 QBT 61 Smith v Queensland Building Services Authority [2010] QCAT 448 Punshon v Queensland Building Services Authority [2011] QCAT 382 APPEARANCES and REPRESENTATION (if any): This matter was determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). REASONS FOR DECISION The Application [1] The Applicant, Coral Homes Pty Ltd, has applied to have Evolution Professional Engineers Pty Ltd, Desmond Stanaway And Downs Earthmoving Pty Ltd joined as second, third and fourth Respondents respectively, and the Queensland Building Services Authority named as first Respondent. Background [2] In 2005 Coral commenced construction as builder of a house at Bell Street, Greenmount. Coral arranged site classification tests and design of the footing system through Evolution and certified by Mr Desmond Stanaway, a registered professional engineer. [3] The engineered footing design specified soil disturbance beneath the house pad, which work was done by Downs Earthmoving. [4] On 4 March 2011 the Queensland Building Services Authority served a direction to rectify defective or incomplete building work at the site on Coral. [5] On 25 March 2011 Coral filed an application seeking review of the decision to issue that direction to rectify. [6] The Authority provided a statement of reasons to Coral on 20 July 2011. The statement of reasons included determinations that the footing system was not suitable for the soil conditions and that the required ripping work had been inadequate in that it had not prevented the heaving of the reactive clay soils. [7] Coral submits the defective work alleged is attributable to Evolution, Mr Stanaway, or Downs Earthmoving, but not Coral. [8] Coral has accordingly brought this application to join Evolution, Mr Stanaway and Downs Earthmoving as respondents. [9] On 12 August 2011 the Tribunal ordered Coral file its application for joinder together with any supporting evidence and submissions on the respondents and the Authority and those parties reply thereafter. Coral complied with the direction and Mr Stanaway has filed and served submissions and evidence. The Authority has advised it does not object -- 2 of 7 -- 3 to the joinder proposed and filed no additional material. Evolution and Downs Earthmoving have not filed material. Joinder [10] By s 42(1) of the QCAT Act the Tribunal may order a person joined as a party to proceedings if the Tribunal considers that: (a) the person should be bound by or have the benefit of a decision of the Tribunal in a proceeding, or (b) the person’s interests may be affected by the proceeding, or (c) it is desirable to join a person for another reason. [11] I take it from Mr Stanaway’s material that he opposes his joinder. The Authority raises no objection. Neither Evolution nor Downs Earthmoving have made submissions. The matter still requires an exercise of discretion on the part of the Tribunal however. Amongst other things, the Tribunal may well conclude that substantive, procedural or fairness issues necessitates refusal of such an application. A Person’s Interest May be Affected – s 42(1)(b) [12] Coral’s principal submission is that the proposed parties should be joined in the proceedings because their interests may be affected by the proceedings as provided by s42(1)(b). They may be affected because the work alleged to have caused the damage to the dwelling is the failure of the footing system for the soil conditions present or the inadequate ripping/scarifying of the subgrade contrary to design and engineering requirements or perhaps both. Coral says that the design and certification work is attributable to Evolution and Mr Stanaway and the ripping/scarifying work to Downs Earthmoving. [13] Coral argues that the expression “may be affected” in s 42(1)(b) should be interpreted broadly and there should be a low threshold test for successful application. [14] There can be no doubt, says Coral, that the proposed respondents’ interests may be affected by the proceeding because it is their work which has earned the direction to rectify. Accordingly, the argument is made, it is “inescapable” that any proceeding examining the correctness of the direction to rectify will involve an examination of the suitability or otherwise of the work of those parties. An examination of whether proper care and diligence was exercised and whether the work was undertaken in a workmanlike manner will affect the interests of the proposed respondents. [15] Coral offers two scenarios where the interests of those parties may be seen to be so affected. First if the Tribunal overturns the direction to rectify on the ground it is unfair to issue the direction because Coral did not do the defective work, then the owner of the dwelling or Coral may take civil action against the proposed respondents. Second if the Tribunal affirms the decision to rectify on the basis the design work was inappropriate for the site or the ripping/scarifying was insufficient, Coral -- 3 of 7 -- 4 would seek indemnification for the rectification costs from the prospective respondents because it was their work that was defective. [16] Coral relies on the decision of the Tribunal in Body Corporate for London Woolstores Apartments & Ors v Queensland Building Services Authority1 for support. In that matter Mr Barlow SC said: “There are two crucial differences between Comfortable Homes and this case. First, the relevant paragraph of the Act was different, in that s 45(1)(b) of the former Act provided for the circumstance that the person’s interests “are” affected by the proceeding. In contrast, s 42(1)(b) of the QCAT Act provides for the circumstance that the person’s interests “may be” affected by the proceeding. The current test is not as high as the former test was. The tribunal need only be satisfied that the proposed respondent’s interests may be affected by the proceeding. Secondly, in Comfortable Homes, no orders were sought in respect of the proposed new respondent. In contrast, the applicants in this case expressly seek an order that a direction to rectify be issued to Leyshon.” [17] Accordingly, says Coral, London Woolstores shows the inclusion of the word “may” in s 42(1)(b) broadens the scope of the joinder provision. What follows is that Coral doesn’t have to prove that the proposed respondents will be affected by the review decision, but rather all they need do is raise a reasonable apprehension that the proposed parties may be affected by the decision. Decisions such as Comfortable Homes2 where the Tribunal refused to order joinder on the basis that the review proceeding did not affect the proposed engineer respondent should be distinguished as relevant to an earlier more limited joinder provision. Affected by the Proceedings [18] In my view London Woolstores is distinguishable on the facts from the present matter. Rather, the present matter is much closer to the circumstances that existed in Comfortable Homes. Whilst I agree with Mr Barlow SC in London Woolstores that the current test in s 42(1)(b) has broadened the scope of joinder under this head, I do not consider that in consequence every possible interest or association qualifies under the provision. Just how much broader the scope of joinder under the present s 42(1)(b) is has yet to be determined. The words in s 42(1)(b) “affected by the proceedings” must be accorded weight, not just the word “may”. [19] Additionally, one must recognize that simply because the test in s 42(1)(b) has broadened with the use of the word “may”, that in itself does not mean that an interest considered insufficient to warrant joinder under the provision that read “are affected” as in Comfortable Homes now qualifies by default under the provision that now reads “may be affected”. [20] In London Woolstores the proposed respondent was affected by the proceedings in that an order was sought against it that a direction to rectify be issued to it. In Comfortable Homes the proposed engineer respondent was not amenable to any such order. 1 [2011] QCAT 86. 2 Comfortable Homes Pty Ltd v QBSA [2001] QBT 61. -- 4 of 7 -- 5 [21] Neither Coral nor the Authority claim any relief from the proposed respondents in this review proceeding. Coral talks about proceedings for indemnity and possible claims by the owner against the respondents – but not in these proceedings. [22] There has not been a decision by the Authority not to issue a direction to rectify to the proposed respondents which is subject to review. The only issue for review concerns the direction to rectify given to Coral. [23] On the issue of complaint about engineering design, which concerns Evolution and Mr Stanaway, it should be remembered the Authority is limited to directing a person who carries out defective or incomplete building work to rectify the building work. By s 5 of the Queensland Building Services Authority Regulation 2003 work performed by an engineer in the engineer’s professional practice is not building work. The review application cannot enlarge the jurisdiction of the Authority by order affecting Evolution and Mr Stanaway where the jurisdiction has never been available to the Authority. [24] Coral submits, tentatively, that any certification or supervisory work undertaken by Evolution or Mr Stanaway was “building work”, and the work done by Downs Earthmoving was site works which apparently leaves it open to the Tribunal to “direct” all the proposed respondents. I have great hesitation, on the material filed, concluding that as regards Evolution and Mr Stanaway. I do not intend to make findings about that in this interlocutory application. Downs Earthmoving is perhaps another matter. [25] At the end of the day, the orders the Tribunal will be able to make, leaving aside the tentative submission about their certification or supervisory work not being work performed in their professional practice, will not extend to a direction to the engineers to rectify defective building work. The Tribunal will not have any jurisdiction over them. [26] This leaves the submission that Downs Earthmoving is a person who carried out site work on the property which it is said was building work, which falls within the province of the Authority and therefore possible Tribunal orders. That proposition amounts to a considerable extension from the circumstances of the parties in London Woolstores. [27] It is at the least exceedingly doubtful that the Tribunal would make an order as such in the present review proceedings, particularly given Coral has itself stated in its application for review of the Authority’s decision the very opposite. In the grounds for contesting the decision to direct rectification Coral said “The applicant contests the BSA’s claim that the ripping/scarifying of the subgrade was inadequate. We have evidence that the ripping/scarifying was adequate and conforming to the Engineer’s requirements.” [28] This then leads to the question which I have not been able to find answered in the submissions of Coral in support of its joinder application, namely, why join the parties at all? Why must the engineers or Downs Earthmoving be a party to the review application when the investigation of -- 5 of 7 -- 6 the issues raised by Coral can surely be and probably already have been undertaken by that party and their witnesses and experts? [29] The test under the present s 42(1)(b) may have broadened the scope of considerations for the Tribunal in such applications as the present, however it does not then follow that the applicant party does not bear the burden of showing why the Tribunal’s discretion should be exercised in favour of joinder once the threshold entry requirement of s 42(1)(a), (b) or (c) is passed. Why Join? [30] In my opinion the observations of Mr Wensley QC in Comfortable Homes that applications for joinder involve a two stage process remains true. Whilst the scope of s 42(1)(b) may have been broadened under the current legislation by inclusion of the word “may”, that should not be understood as more than the first part of the two step process of joinder, namely whether the discretionary power of the tribunal to order joinder is enlivened. After that, the issue for determination is whether it should be exercised. [31] There were a number of relevant observations made in Comfortable Homes which are pertinent to the matter at hand. In that case Mr Wensley QC observed the application for joinder appeared to be on the basis that duplicity of proceedings would thereby be avoided. Coral has not made that submission here. Coral’s submission is limited to urging joinder because the proposed respondents’ interests “are affected by the proceedings” and it is desirable in the interests of justice to join the proposed respondents. [32] I am left without guidance on the point. It seems to me that the application for joinder has been brought without proper consideration of the benefits or liabilities that would follow to all parties concerned, nor the costs associated therewith, which could be substantial. Mr Oliver raised this point in Smith v Queensland Building Services Authority3: “Further, joinder of Eco Housing would result in unnecessary delays and costs to both parties without utility. It may also add to the complexity of the issues given the position of the applicant that the defects go to design rather than actual construction. If the applicant does propose to contest the direction to rectify on the basis submitted, then the Authority is at liberty to lead evidence from representatives of Eco Housing to contest this position if it chooses to do so.” [33] I cannot but concur with the reasoning of Mr Oliver and apply it to the matter before me. [34] At the end of the present proceedings the issue of fault will, I suspect, be one that remains extant between the various parties. I am not convinced that the costs Downs Earthmoving, let alone the engineers, would incur if joined in the present review would be a reasonable cost which would not be duplicated and thereby thrown away given the further probable expense to be incurred in the future with future litigation. This is a 3 [2010] 448 at [39]. And see Punshon v Queensland Building Services Authority [2011] QCAT 382. -- 6 of 7 -- 7 hardship which, given the dubious nature of the benefit to be derived in having Downs Earthmoving as a party to Coral’s review application, fails, in my opinion, to achieve the object of the Tribunal to ensure proceedings are conducted in an informal way that minimises costs to parties4. Desirable the Parties be Joined – s 42(1)(c) [35] On a final point, Coral invokes the doctrine of natural justice to argue the proposed respondents should be afforded an opportunity to be joined in the proceeding to defend their work. Further, it is argued, it is in the interests of justice to have the parties ventilate all the facts and evidence regarding the allegedly defective work undertaken. [36] As to the latter, the present parties to the application are well able and positioned to ventilate the facts and evidence regarding the allegedly defective work performed. If necessary the proposed respondents could be called to give evidence5. [37] As to the call for natural justice, that doctrine is also today commonly referred to as procedural fairness. I see no procedural unfairness associated with not joining the proposed respondents given my conclusion that the interests of the proposed respondents are not affected by the proceedings on foot and that there is nothing to indicate the proposed respondents seek an opportunity to be heard as a party. Conclusion [38] Accordingly I determine that as regards Mr Stanaway and Evolution those parties’ interests are not affected by the review proceedings so as to bring them within the terms of s 42(1) of the Queensland and Civil Procedure Act 2009. As to Downs Earthmoving, I determine that even should it be accepted that that party’s interests are affected by the review proceedings such as to come within the terms of s 42(1)(b), the expense and work that would be required of Downs Earthmoving, and perhaps the other existing parties, by Downs Earthmoving’s joinder, coupled with the lack of explanation showing the efficacy of such joinder, outweighs exercise of the discretion in favour of the applicant. Orders [1] The following order should be made: The application to join Evolution Professional Engineers Pty Ltd, Desmond Stanaway and Downs Earthmoving Pty Ltd as Second, Third and Fourth Respondents respectively is dismissed. 4 QCAT Act, s 4(c). 5 Punshon at [8]. -- 7 of 7 --