Batwing Resorts Pty Ltd v Body Corporate for Liberty on Tedder [2011] QCAT 277

CITATION: Batwing Resorts Pty Ltd v Body Corporate for Liberty on Tedder CTS 27241 [2011] QCAT 277 PARTIES: Batwing Resorts Pty Ltd v Body Corporate for Liberty on Tedder CTS 27241 APPLICATION NUMBER: OCL047-10 MATTER TYPE: Other civil dispute matters HEARING DATE: 1 December 2010 (further written submissions received after the hearing on 20 December 2010) HEARD AT: Brisbane DECISION OF: Justice Alan Wilson, President DELIVERED ON: 24 June 2011 DELIVERED AT: Brisbane ORDERS MADE: 1. Dismiss the application for miscellaneous matters filed by Batwing Resorts Pty Ltd on 11 October 2010; and 2. Also dismiss the application for miscellaneous matters filed by the Body Corporate on 26 October 2010. CATCHWORDS: BODY CORPORATE AND COMMUNITY MANAGEMENT – TERMS OF AN AGREEMENT – EQUITABLE RELIEF – JURISDICTION – where Batwing (the on-site manager) notified the Body Corporate that it would no longer attend to the maintenance of gardens and lawns – where the Body Corporate disagreed that Batwing could do this, so deducted amounts from the monthly remuneration it paid Batwing – where Batwing now seeks a mandatory injunction that the Body Corporate paid what had been deducted and refrain from making further deductions until the dispute about the meaning and effect of the agreement between Batwing and the Body Corporate and the manager’s obligations is resolved – where the Body Corporate also alleged that Batwing was legally prevented (equitably estopped) from denying an obligation to maintain the lawns and gardens, or it should -- 1 of 9 -- 2 pay damages for its failure to fulfil its obligations – where Batwing says that these claims are outside QCAT’s jurisdiction and the documents raising those claims should be struck out – where the Body Corporate subsequently argued that QCAT does have jurisdiction to grant equitable relief – where counsel for Batwing subsequently submitted that the claims for equitable relief should be transferred to the Supreme Court – whether QCAT has power to grant equitable relief – whether QCAT has jurisdiction to deal with the matter – whether QCAT has an equitable jurisdiction which complements its jurisdiction under the Body Corporate and Community Management Act 1997 Body Corporate and Community Management Act 1997, ss 149B, 228, 276, sch 6 Commercial and Consumer Tribunal Act 2003, ss 4, 9 District Court of Queensland Act 1967, ss 8, 69 Magistrates Court Act 1921, s 4 Queensland Civil and Administrative Tribunal Act 2009, ss 3, 4, 6, 9, 28, 52, 59, 60, 164 Retail Leases Act 1994 (NSW), s 72 Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, cited DJL v Central Authority (2000) 201 CLR 226, cited Emmanuele v Australia Securities Commission (1996-1997) 188 CLR 114, cited Grassby v R (1989) 168 CLR 1, cited Pelechowski v Registrar, Court of Appeal (1999) 162 ALR 336, cited Prasad v Fairfield City Council [2000] NSWADT 164, cited Project Blue Sky Inc v Australian Broadcasting Authority (11998) 194 CLR 355, applied Queensland Fish Board v Bunney, ex parte Queensland Fish Board [1979] Qd R 301, cited R v Forbes; Ex parte Bevan (1972) 127 CLR 1, cited R v Ross Jones: ex parte Green (1984) 156 CLR 185, applied Sandmoon Pty Ltd v Body Corporate for South Pacific Noosa Apartments CTS 26117 [2008] QCCTBCCM 27, cited The Herald & Weekly Times v Victoria [2006] VSCA 146, applied Tucci v Victorian Civil and Administrative Tribunal & Anor [2010] VSC 425, applied -- 2 of 9 -- 3 Walton v McBride [1995] 36 NSWLR 440, cited APPEARANCES and REPRESENTATION (if any): APPLICANT: S McNeil of Counsel instructed by Hynes Lawyers RESPONDENT: D Keane of Counsel instructed by Ledger & Co Lawyers REASONS FOR DECISION [1] The parties to this proceeding are the managers of a unit development on the Gold Coast, and its Body Corporate. Contractual arrangements between them are affected by the provisions of the Body Corporate and Community Management Act 1997 (BCCMA). This Tribunal is invested with jurisdiction in some disputes arising under that legislation, but the question that has arisen now is whether or not QCAT also has jurisdiction concerning disputes referrable to the legislation but not, themselves, directly governed by it. In short, the question is whether or not QCAT has an equitable jurisdiction which complements what it can do under the BCCMA and the Queensland Civil and Administrative Act 2009 (QCAT Act). [2] The dispute goes back to 2009 when Batwing, as the on-site manager, notified the Body Corporate and all unit owners that it would not henceforth be attending to the care and maintenance of gardens and lawns beyond the ‘title line’. The Body Corporate disagreed that Batwing could lawfully do that, and began to deduct amounts from the monthly remuneration it paid Batwing under the On-Site Management Agreement. [3] Batwing then applied to QCAT for a mandatory injunction that the Body Corporate pay what had already been deducted ($26,837) and refrain from making any further deductions or withholding remuneration until the dispute about the meaning and effect of the agreement and the manager’s obligations, if any, for maintenance of gardens outside the property itself was resolved. [4] On 7 June 2010 interim orders on those lines were made after Batwing provided the usual undertaking as to damages. The parties were then directed to exchange submissions and attend a compulsory conference. [5] In the course of these steps the Body Corporate alleged in tribunal documents that Batwing was prevented, on equitable grounds, from denying an obligation to maintain areas outside the title line, and it cross applied for equitable damages from Batwing. [6] In that cross-application the Body Corporate claimed that there was an agreement between the parties, and a promise from Batwing, to maintain gardens and lawns outside the common property and that, as a consequence, Batwing is legally prevented (‘equitably estopped’) from denying an obligation to maintain those lawns and gardens; or, that it -- 3 of 9 -- 4 should pay damages for its failure to fulfil its obligation under those promises. [7] Batwing says these claims are outside QCAT’s jurisdiction and those parts of the Body Corporate’s documents which raise them should be struck out; or, that those claims should be transferred to the District (or Supreme) Court, which has jurisdiction, under s 52 of the QCAT Act. 1 [8] The Body Corporate then filed a further application seeking an order that the entire proceeding be transferred to the District Court (or to a Commissioner appointed under the BCCMA, for specialist adjudication) on the grounds that QCAT does not have power to grant the equitable relief it seeks in its response and its cross application. [9] What came on for hearing before the Tribunal were: a) Batwing’s application to strike out parts of the Body Corporate’s response and cross claim; or, for an order transferring those parts of the cross-claim to the District, or Supreme Court; and b) The Body Corporate’s application to transfer the entire proceedings to the District Court. [10] At the hearing however the Body Corporate, through its counsel, took a different position from what might have been expected, in light of its application: Mr Keane argued that QCAT does have jurisdiction to deal with the equitable relief the Body Corporate sought, and should do so. Batwing’s representatives were (unsurprisingly) rather taken by surprise, they having attended the hearing in the belief that the Body Corporate not only did not oppose, but actively sought, a transfer of the proceedings to another court. Because of that surprise, counsel for Batwing was given leave to deliver supplementary written submissions after the hearing, as she did. In those submissions it is now said that the Body Corporate’s claims for equitable relief should be transferred to the Supreme Court. [11] Under ss 6 and 9 of the QCAT Act this Tribunal has jurisdiction to deal with matters invested in it under that Act, or an enabling Act. Here, the enabling Act is the BCCMA and the substantive dispute concerns contractual relations between a body corporate, and its caretaker. QCAT’s power to determine that dispute arises under s 149B of the BCCMA, which gives the Tribunal jurisdiction in a dispute about a contractual matter concerning the engagement of a service contractor. [12] Under the definitions in Schedule 6 of the BCCMA a contractual matter concerns, among other things, alleged contraventions of the terms of the contract of engagement, and the exercise of rights or powers and the performance of duties under it. 1 Section 52 allows QCAT to transfer a proceeding, or part of a proceeding, to a court if it considers the subject matter would be more appropriately dealt with by that court. -- 4 of 9 -- 5 [13] The parties agree that their original dispute about Batwing’s obligations to maintain gardens outside the title line of the premises was of that kind, and QCAT has jurisdiction. [14] The QCAT Act does not expressly bestow equitable jurisdiction upon the Tribunal but it is invested, under s 9, with jurisdiction to deal with matters under the QCAT Act or enabling Acts in original, review or appeal jurisdictions – and, under s 9(4) it is given jurisdiction to ‘…do all things necessary or convenient for exercising its jurisdiction’. [15] The QCAT Act is to be interpreted in a way which will best achieve its purposes.2 Here, provisions concerning QCAT’s jurisdiction appear in a number of different places in the legislation. Section 3 sets out its objects which include, in s 3(b), the purpose of having a tribunal deal with matters in a way that is accessible, fair, just, economical, informal and quick. The Tribunal’s functions relating to these objects include, in s 4, encouraging the early and economical resolution of disputes before the Tribunal; ensuring proceedings are conducted in an informal way that minimises costs to parties, and is as quick as is consistent with achieving justice; and, ensuring the Tribunal is accessible and responsive to the diverse needs to the persons who use it. [16] In conducting its proceedings the Tribunal must act fairly and according to the substantial merits of the case, and with as little formality and technicality and as much speed as the requirements of the QCAT Act (or an enabling Act) and a proper consideration of the matters before the Tribunal permit: s 28. [17] The Tribunal also has particular powers which have historical foundations in the equitable jurisdiction of the courts: the power to grant injunctions, and to make declarations (ss 59 and 60). [18] A subordinate court or tribunal must find its powers in the express language of the statute which gives it existence and in the implications which derive from that language. 3 Even in the absence of an express power, however, an inferior court may have an implied power to grant certain kinds of relief. As Dawson J observed in Grassby v R (1989) 168 CLR 1 at 16-17 while inferior courts are unable to draw upon the unrestrained and undivided powers of superior courts, they may possess jurisdiction arising by implication, on the principle that a grant of power carries with it everything necessary for its exercise. [19] The word ‘necessary’ has been defined, in a context similar to that appearing in s 9(4) of the QCAT Act, as identifying a power to make orders which are reasonably required or legally ancillary to the accomplishment to specific remedies. 4 2 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381. 3 Walton v McBride [1995] 36 NSWLR 440 per Kirby P at 447. 4 Pelechowski v Registrar, Court of Appeal (1999) 162 ALR 336 at 348. -- 5 of 9 -- 6 [20] It has also been observed that, for an inferior tribunal to exercise an implied or ‘necessary’ power, that power must be clearly evident in the statute said to confer it.5 [21] In Queensland, inferior courts have been expressly given some equitable jurisdiction: for example, under s 69(1) of the District Court of Queensland Act 1967 that court may exercise all the powers and authorities of the Supreme Court including giving effect to every ground of defence, whether equitable or legal. The Magistrates’ Court is given a limited, equitable jurisdiction under s 4 of the Magistrates Court Act 1921. [22] No similar, clear expression of conferral of these powers appears in the QCAT Act (or, relevantly here, in the BCCMA). [23] Some reliance was placed, by the Body Corporate, upon a decision of the Administrative Decisions Tribunal of New South Wales in Prasad v Fairfield City Council [2000] NSWADT 164, which involved a dispute about retail shop leases under the Retail Leases Act 1994 (NSW). The applicant there sought, in effect, a declaration that the respondent was estopped from denying the applicant’s right to conduct its business without competition, relying upon principles of promissory estoppel. Under s 72 of the NSW legislation the Tribunal had power to determine matters concerning retail tenancy disputes which included remedies such as relief from forfeiture, injunctions, declarations and ancillary orders necessary to give full effect to the provision. The judicial Member of the ADT held that these equitable powers should not be cut down, and rejected the respondent’s contentions that the Tribunal lacked jurisdiction. [24] In Victoria, the Court of Appeal looked to the degree of connection between the matter in which the Victorian Civil and Administrative Tribunal did have jurisdiction, and its power in equity to grant an injunction, in The Herald & Weekly Times v Victoria [2006] VSCA 146. [25] In that case the President of VCAT, Morris J, had issued an injunction against the publication of the contents of a settlement agreement between parties who had been involved in proceedings before the Tribunal. The Tribunal’s legislation gave it power to grant an injunction, but Morris J had also ordered that a newspaper be restrained from publishing the contents of the terms of settlement, and it was that order which came before the Court of Appeal. [26] The Victorian Court of Appeal6 held that the critical question was whether or not VCAT had jurisdiction to entertain the application and said that the answer depended on whether the claim for a suppression order could be said to be so related to the original proceeding that it formed part of it or whether it was, in truth, a separate proceeding in respect of which the Tribunal’s original jurisdiction had not been invoked. The Court ultimately 5 Queensland Fish Board v Bunney, ex parte Queensland Fish Board [1979] Qd R 301at 303. 6 Chernov, Nettle and Ashley JJA. -- 6 of 9 -- 7 found that the Tribunal had not had jurisdiction because the different proceedings lacked the necessary inter-relationship. [27] That question of relationship was addressed by the High Court in R v Ross Jones: ex parte Green (1984) 156 CLR 185 in which Gibbs CJ (with whom Mason J agreed) said7 that proceedings will have the appropriate relationship if the order sought is consequential on or incidental to an order being made in the other proceedings. [28] The degree of connection was also considered by Cavanough J in a matter involving judicial review of another VCAT decision, Tucci v Victorian Civil and Administrative Tribunal & Anor [2010] VSC 425. The question was whether VCAT had jurisdiction to hear a claim by a landlord against a guarantor of the tenant’s obligations under a lease. At [46]-[47] Cavanough J noted that, because the Victorian Tribunal had power to entertain a consumer and trader dispute, and even though it was not a court, it was obviously intended to have power to recognise and give affect to equitable defences in cases of that kind: Equitable principles and defences would potentially be relevant in many kinds (perhaps all kinds) of consumer and trader disputes, not only in disputes relating to guarantees. The posited inability of VCAT to have regard to equitable principles or defences surely could not have the effect that contracts of guarantee, alone amongst all contracts, are taken outside the notion of “services” and outside the definition of “consumer and trader dispute. [29] The Body Corporate also relied, in its submissions here, upon the fact that QCAT is said in s 164 of its Act to be a ‘court of record’. The fact that QCAT is so designated does not, however, appear to carry any strong or automatic inference that the legislature intended to invest it with the power or right, either inherent or implied, to draw upon the broad powers of a superior court. As the High Court said of the Family Court in DJL v Central Authority (2000) 201 CLR 226, the governing legislation of that court provides no express conferral of particular powers.8 [30] It is also to be observed that, despite the fact that the District Court of Queensland is categorised as a ‘Court of Record’ in s 8 of its governing legislation, the legislature also apparently deemed it necessary to include an express provision granting it general powers to exercise wide equitable jurisdiction. [31] The Body Corporate also sought to rely upon the decision of the High Court in Emanuele v Australian Securities Commission (1996) 188 CLR 114 and, in particular, an observation of Kirby J at 147: A feature of the administration of justice in more recent times has been a general disfavour towards procedural rigidities and a preference for a somewhat more flexible approach to statutory preconditions where these are of a procedural character. [32] Gaudron J also observed in Emanuele that the powers of courts must be exercised in the interests of justice, which are not well served if the 7 At 197 citing Perlman v Perlman (1984) 155 CLR 474. 8 See also R v Forbes; Ex parte Bevan (1972) 127 CLR 1. -- 7 of 9 -- 8 exercise is undertaken inflexibly and without regard to the ‘… convenience of the situation’.9 Her Honour’s judgment was a dissenting one, but it is not unfair to observe that a similar philosophy springs from the judgments in the subsequent decision of the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. [33] Prior to 1 December 2009 disputes of the present kind were within the jurisdiction of the former Commercial and Consumer Tribunal (CCT). In Sandmoon Pty Ltd v Body Corporate for South Pacific Noosa Apartments CTS 26117 [2008] QCCTBCCM 27 the presiding CCT member, Mr James Thomas AM QC was concerned with a dispute between a managing agent and a Body Corporate over whether the latter was entitled to terminate the managing agent’s rights under the applicable agreements. The managing agent had sought a variety of forms of relief from the CCT, including alternative claims for relief against forfeiture of its interest in the agreements. [34] As the learned and very experienced Member observed, under the CCT’s governing legislation10 the Tribunal was given jurisdiction to deal with particular matters and, under s 9 given the power to ‘…do all things necessary or convenient to be done for exercising its jurisdiction’ – that is, the legislation was in almost identical terms to s 9(4) of the QCAT Act. The CCT Act also required, in s 4, that the CCT act in ways that were ‘… just, fair, informal, cost efficient and speedy’. [35] Although Mr Thomas ultimately concluded that the legislation did not invest that Tribunal with powers to grant equitable remedies like relief against forfeiture or penalty he observed, in passing, that the BCCMA gives Adjudicators, appointed under Chapter 6, power to make orders that are ‘just and equitable in the circumstances (including a declaratory order) to resolve a dispute’ about contractual matters: s 276; and, that it was odd that no similar provision appeared to have been included in the legislation for the CCT. He went on to observe that the failure appeared to be the product of an oversight, requiring serious reconsideration by the legislature. [36] Elsewhere, the provisions of the BCCMA make it clear that the legislature intended, in the Act, to confine and simplify dispute resolution processes: in s 228(1)(d) it is said that Chapter 6, relating to dispute resolution, is intended to establish arrangements for resolving disputes about matters arising under the engagements of persons as Body Corporate managers – that is, the provision is couched in broad terms, which might be said to include the disputes anticipated by the Act itself. [37] There are other indications that the legislature considered that QCAT would be a Tribunal undertaking important legal work, and that its jurisdiction ought not be unduly constrained: for example, persons can only be appointed Senior Members of QCAT if they are Australian 9 At 137. 10 Commercial and Consumer Tribunal Act 2003. -- 8 of 9 -- 9 lawyers of at least 8 years standing, and ordinary Members must have been Australian lawyers for 6 years. [38] While it is clear that QCAT was not intended, by the legislature, to have all of the same broad equitable powers as a superior court it is improbable that the legislature intended that the Tribunal would immediately cede jurisdiction when instances like the present arise. It is, as a matter of logic, equally improbable that there was legislative intent that inter-linked disputes like those arising here could, or should, be adjudicated separately. [39] In this case the Body Corporate is arguing, in effect, that the agreement between the parties which underpins this Tribunal’s jurisdiction has been affected by events and circumstances associated with it which give rise to equitable defences, or relief. Once that is appreciated, it is compelling that the different elements of the dispute form part of the same proceeding – the test applied by the Victorian Court of Appeal in Herald & Weekly Times, and suggested by the High Court in R v Ross-Jones; and, as observed in Tucci, it is readily foreseeable that, in the jurisdiction invested in QCAT by the BCCMA, equitable defences or matters involving equitable issues might from time to time arise. [40] The grant, to this Tribunal in the QCAT Act, of specific powers to provide traditional equitable remedies under its legislation, read in combination with the clauses discussed earlier, points with sufficient clarity to a construction of the legislation which would empower this Tribunal to address the equitable cross claims raised by the respondent here in a matter where the applicant has brought a claim which plainly, otherwise, falls within the Tribunal’s statutory jurisdiction. [41] For these reasons, I have concluded that the proceedings should remain here and Batwing’s applications should be dismissed – as should the Body Corporate’s application for a transfer of the proceedings. -- 9 of 9 --