Clipstar Pty Ltd v Kearns-Healey [2011] QCAT 58

CITATION: Clipstar Pty Ltd v Kearns-Healey [2011] QCAT 58 PARTIES: Clipstar Pty Ltd v Steven Kearns-Healey APPLICATION NUMBER: BDL354-10 MATTER TYPE: Building matters HEARING DATE: 23 February 2011 HEARD AT: Brisbane DECISION OF: Michelle Howard, Member DELIVERED ON: 23 February 2011 DELIVERED AT: Brisbane ORDERS MADE: [1] That the default decision dated 9 December 2010 be set aside; [2] That the proceeding be listed for a compulsory conference at 1.30pm on 15 April 2011 at Brisbane. CATCHWORDS : Application to Set Aside Default Decision – where prima facie or arguable response to claim – where response filed late but explanation given – where application to set aside default decision filed promptly Queensland Civil and Administrative Tribunal Act 2009 – section 51 Queensland Civil and Administrative Tribunal Rules 2009 – Rule 44 Evans v Bartlam [1937] AC 473 Taylor v Taylor (1979) 143 CLR 1 Cook v DA Manufacturing Co Pty Ltd [2004] QCA 52 National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441 National Australia Bank Ltd v Singh [1995] 1 Qd R 377 Aboyne Pty Ltd v Dixon Homes Pty Ltd [1980] 1 Qd R 142 APPEARANCES: -- 1 of 8 -- BDL354-10 / Page 2 of 8 This proceeding was heard on the papers in the absence of the parties. -- 2 of 8 -- BDL354-10 / Page 3 of 8 REASONS FOR DECISION [1] Clipstar Pty Ltd (Clipstar or the applicant) made application regarding a domestic building dispute seeking orders that the respondent pay the sum of $33,033 for a debt owing, or in the alternative payment on a quantum meruit basis, in relation to the supply and installation of plasterboard at the respondent’s home. The application was served on the respondent, Mr Kearns-Healey, on 16 November 2010. [2] On 1 December 2010, the applicant requested that a decision be made by default for the full amount of the claim together with costs and interest as a response had not been served and the amount had not been paid. The request was accompanied by a supporting affidavit. [3] On 9 December 2010, Senior Member Oliver made a decision by default that the respondent pay to the applicant the amount of $36,882.68, being the amount claimed, interest of $2,289.68 and costs. [4] On 20 December 2010, the respondent filed a response to the application concerning the claim and an application to set aside the default decision made on 9 December 2010. The respondent’s application to set aside the default decision states that when he was served with the application he was advised that he had 28 days to respond, and that the application is incorrect and he denies that there was a debt owing as alleged by the applicant. [5] The response to the applicant’s claim broadly contends that there was no contract, written or otherwise, whereby the respondent was to pay money to the applicant for the supply and installation of the plasterboard. It acknowledges a quote dated 3 April 2009 for $20,423.70 but contends a ‘contra deal’ between the respondent and Rick Halstead, a director of Clipstar Pty Ltd. The contra deal alleged in the response is that in exchange for supplying and installing the plasterboard which was the subject of the claim, Clipstar would be given the opportunity to quote on various projects for Simcorp for whom the respondent worked as purchasing manager, and if it provided the best quote would win the tender. The response contends that as purchasing manager he was able to assist the tender. [6] The respondent was directed to serve his application to set aside the default decision on the applicant and to file and serve any statements and submissions in support of it. The applicant was directed to file and serve its statements and submissions in response and the application to set aside the default decision was then to be heard on the papers. Relevant Considerations [7] Under section 51 of the Queensland Civil and Administrative Tribunal Act 2009 (the Act) the tribunal can set aside or amend a decision by default on terms as the tribunal considers appropriate. The section does not make specific provision about when the discretion to set aside may be exercised. [8] Courts have considered the discretion to set aside a default decision is unconditional, although they have established principles to guide the exercise -- 3 of 8 -- BDL354-10 / Page 4 of 8 of the discretion. 1 When the judgment has been regularly obtained, the applicant must generally demonstrate a prima facie defence, although courts may have regard to other matters such as an explanation about why judgment by default occurred2 and any delay in making the application.3 [9] The Uniform Civil Procedure Rules 1999 (Qld) provide a similarly wide discretion to set aside or amend a default judgment. The Queensland Court of Appeal has considered the broad discretionary power it provides. 4 In recent times, courts have placed considerable significance on whether the applicant is able to demonstrate an arguable defence, considering this the most cogent matter of the three matters identified above. 5 [10] Rule 44 of the Queensland Civil and Administrative Tribunal Rules 2009 (the QCAT Rules) provides for responses to prescribed applications, including a building dispute, to be filed within 14 days of service: responses to a variety of other applications may be filed within 28 days of service. Clipstar’s application for material from the respondent to be disregarded [11] The respondent provided only one further document in support of his application, and it is in effect a statement by him although it also contains some submissions, provided after the filing of the Clipstar’s material, which consists of affidavits of Jarrod Sierocki, operations manager of Clipstar, and Richard Halstead, managing director of Clipstar, together with submissions. [12] Clipstar, through further submissions filed after the respondent provided his further document by their legal representatives, who have not sought or been granted leave to represent it in the proceedings, argues that the respondent’s statement/submissions should not be taken into account by the tribunal as it was not filed in accordance with the tribunal’s directions and where directions are given it is in the interests of justice that they be complied with. [13] Whereas parties are required to comply with tribunal directions and orders, the tribunal must act with as little technicality and formality as a proper consideration of the matters before it permit, 6 and must ensure that as far as practicable, all relevant material is disclosed to it to enable it to decide the proceeding with all the relevant facts. 7 It must observe the rules of natural justice.8 [14] Further, the tribunal’s directions for the filing of material did not provide for a reply to Clipstar’s material. Mr Kearns-Healey possibly could have provided more detailed material earlier but did not do so. He became aware of the 1 Evans v Bartlam [1937] AC 473, 480 (per Lord Aitken); 481-482 (per Lord Killowen). See also Taylor v Taylor (1979) 143 CLR 1. 2 Evans v Bartlam [1937] AC 473, 480 (per Lord Aitken); 481-482 (per Lord Killowen). 3 Aboyne Pty Ltd v Dixon Homes Pty Ltd [1980] 1 Qd R 142. 4 Cook v DA Manufacturing Co Pty Ltd [2004] QCA 52. 5 Cook v DA Manufacturing Co Pty Ltd [2004] QCA 52, [19] citing National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441, 449-450; National Australia Bank Ltd v Singh [1995] 1 Qd R 377, 380. 6 Queensland Civil and Administrative Tribunal Act 2009 section 28(3)(d). 7 Queensland Civil and Administrative Tribunal Act 2009 section 28(3)(e). 8 Queensland Civil and Administrative Tribunal Act 2009 section 28(3)(a). -- 4 of 8 -- BDL354-10 / Page 5 of 8 evidence and arguments raised against his application when he received Clipstar’s material and apparently considered it required response. [15] I consider it appropriate to act flexibly in order to properly consider the matters raised by both parties to the proceedings with all of the relevant available material and to afford the respondent natural justice by allowing him to respond to evidence raised in response to his application. Therefore, it is appropriate in my view to consider the document provided by the respondent after Clipstar filed its material. On the same basis, I will also consider the further material provided by Clipstar in its further submissions. The statements and submissions [16] Clipstar alleges through Richard Halstead that a quotation for the works was submitted on 3 April 2009, in the belief that the work was to be done at Lot 1735 Ruthean Circuit, Coomera for Simcorp. He says that because of ‘necessary variations to the intially forecast works’ revised quotes were issued between 3 April 2009 and 25 May 2009 and that Alex Simpson, director of Simcorp, contacted him between those dates questioning the quote. He says that it became apparent to him that the work was to be performed for the respondent in his personal home and in his personal capacity. [17] He says that on 25 May 2009, a quotation was reissued to the respondent, addressed to him directly, not Simcorp. He says that on 27 May 2009 the respondent advised him by telephone that the quote was accepted. He alleges that on 29 May 2009, he caused a contract to be signed and forwarded for the works, and then work commenced. He does not suggest that the contract was signed and returned to Clipstar. He understands that the respondent resigned from Simcorp prior to the final invoice for the works being rendered. He states that there was no contra deal or other arrangement, and that the respondent did not offer Clipstar any work, alleging that at the time of the initial quote, Clipstar was already contracted to perform all the work it has ever performed for Simcorp. [18] Further, Mr Halstead believes that the respondent did not have the authority to bind Simcorp. This belief is apparently based on a telephone conversation he had with Alex Simpson on 20 January 2011, which was confirmed in an email from Alex Simpson dated 24 January 2011 and which he provided to the tribunal. The email also refers to Mr Simpson concluding negotiations and sign off for Simcorp projects. [19] It was not until about 17 March 2010 that a tax invoice was issued to the respondent, by Jarrod Sierocki. Mr Kearns-Healey’s response contends that he did not receive it. The copy provided to the tribunal by the applicant is undated. Mr Sierocki states that he noticed that QBSA insurance had not been taken out for the works to be invoiced and so he arranged for it at that stage. On 15 June 2010, he forwarded a letter of demand for the amount. Richard Halstead says he returned a telephone call from the respondent’s wife, Deana Kearns-Healey, on 17 June 2010 stating that she knew nothing of the amount said to be owing and only had an initial unvaried quote to Simcorp. -- 5 of 8 -- BDL354-10 / Page 6 of 8 [20] After a request from Richard Halstead to do so, Jarrod Sierocki sent a copy of the tax invoice to Deanna Kearns-Healey. As payment was not received, he instructed lawyers to prepare a further letter of demand. [21] The respondent states that there was not a contract. He states that the first he knew that the applicant alleged he owed monies was when he received a letter of demand on 16 June 2010. He says that Deanna Kearns-Healey spoke with Rick Halstead on 16 June 2010, and he subsequently emailed to her a quotation for the works dated 17 June 2010. The respondent states that Alex Simpson was the licenced builder for the house project for his home, and also his employer at the time. He states that the agreement between Mr Simpson and himself was that he would source and engage the trades for the project. He alleges that Mr Simpson had no knowledge of the details of any trades used or any contra deals. He states that Mr Simpson had no involvement in the project at all ‘by his request.’ [22] The respondent states that Rick Halstead was aware from the outset that the project was for his own home, not a standard Simcorp project. He provides a copy of an email dated 2 April 2009 from himself to persons including ‘[email protected]’ and ‘[email protected]’. [23] In respect of the quotation, the respondent notes the endorsement that ‘any variations to the quoted price must be signed prior to any works carried out’, and states that ‘No variation requests were ever received or signed for’ contrary to Mr Halstead’s assertions that necessary variations led to revised quotes issuing. [24] He states that the ‘initial unvaried quote’ to which Deanna Kearns-Healey referred in her conversation with Richard Halstead on 16 June 2010 was a quotation for a Lot 1936 for $19,274.20 for a home belonging to a Mark and Abbi Warner which did not progress. [25] The respondent asserts that the recovery action commenced in March 2010 after media reports of retrenchment of the majority of Simcorp’s employees after it had been involved in a ‘very public legal battle which resulted in the company being handed over to Administrators.’ He says that Clipstar was involved in the winding up of Simcorp and lost a large sum of money as a result of the liquidation. [26] To support his application to set aside the default decision, the respondent submits that there is clear evidence that the arrangement for the works at his property was a special arrangement. He points to the taking out of QBSA insurance in March 2010, instead of at the time of signing of any contract as required by law. He also points to the absence of a written contract or signed quote. Further he relies upon the delay in requiring payment until after Simcorp had been placed in liquidation. [27] Clipstar submits that the application of the respondent should be dismissed. Clipstar denies the existence of a ‘contra deal’ pointing to an absence of evidence supporting it. It argues that the QBSA insurance does not affect the formation of the contract. It is also submitted that the respondent lacked authority to authorise such a contra deal, and that in any event, the deal as alleged is only to win the tender if he had the best tender in which case it -- 6 of 8 -- BDL354-10 / Page 7 of 8 would have been conveyed the work anyway. Further, it argues that the supposed benefit did not eventuate as no works were conveyed. [28] It submits that the respondent’s argument that he is entitled to make a contra deal to take a personal benefit in return for concessions by Simcorp, about which Alex Simpson had no knowledge, is nonsensical, embarrassing and potentially contrary to law. It argues that Mr Simpson as director was necessarily required to sign off arrangements for works to be carried out. [29] The applicant argues that the respondent’s arguments are inconsistent including in that he submits that there is no debt owing; that there was no agreement as to the performance of the works on his premises; that there was an agreement by way of a contra deal; that he received a quotation for a monetary amount; and that there was never an agreed quote or amount. [30] Clipstar also submits that the respondent has failed pay or make good the debt despite letters of demand, and failed to file a response to its application within the required 14 days, and his assertions about filing within 28 days are irrelevant. Discussion and Decision [31] The default decision was regularly obtained. The QCAT Rules provide for 14 days for the filing of a response in respect of prescribed applications including a building dispute. The respondent did not file his response within this time frame. The respondent mistakenly believed that he had 28 days to file a response. He says he held this belief on the basis of comments made to him by the person who served the documents on him, although the application clearly states that a response is required within 14 days. Nevertheless he has explained why there was a delay in the filing of his response. [32] Once he became aware of the making of the default decision, he promptly made his application to set it aside. The decision was made on 9 December 2010, and he filed his application on 20 December, 2010. [33] The respondent has ineloquently expressed his arguments in defence of the application made by Clipstar. However, at the heart of it, he says that there was not a contract between himself and the applicant which obliged him to make a payment of money for the supply and installation of plasterboard by Clipstar in his house property. He says there was a different arrangement, which did not involve the payment of money by him. Clipstar denies this. [34] The applicant asserts that the arrangement the respondent relies upon is nonsensical, embarrassing and potentially contrary to law. This does not diminish the respondent’s contention that there was no contract for the payment of money payable to Clipstar for the work performed by it at his premises. [35] On this application, I am required to turn my mind to whether to exercise the discretion to set aside the default decision. In my view, the respondent has raised a prima facie or arguable defence, namely that there was no contract for the payment of $33,033 claimed as payable by the applicant for the supply and installation of plasterboard at his house. This constitutes a real issue or -- 7 of 8 -- BDL354-10 / Page 8 of 8 dispute which ought to be heard. He explained the delay in filing of his response. Further, he acted promptly to make his application to set aside the default decision once he became aware of it. [36] In the circumstances, I am satisfied that it is appropriate to exercise the discretion to set aside the default decision. I make orders accordingly, and also list the matter for a compulsory conference on 15 April at 1.30pm in Brisbane. -- 8 of 8 --