Absolute Painting (Qld) Pty Ltd & Anor v Redland City Council [2008] QDC 177

1 [2008] QDC 177 DISTRICT COURT CIVIL JURISDICTION JUDGE ROBIN QC No 1346 of 2008 ABSOLUTE PAINTING (QLD) PTY LTD & ANOR Applicant and REDLAND CITY COUNCIL Respondent BRISBANE ..DATE 03/07/2008 ORDER CATCHWORDS: Uniform Civil Procedure Rules r 69, r 70, r 149, r 371 Corporations Act (Cth) s 500(2) - claim by a subcontractor to enforce a charge under the Subcontractors Charges Act 1974 (Qld) - whether plaintiff justified in proceeding against "employer" alone and insisting on timely filing of its notice of intention to defend and defence - head contractor in liquidation - whether its joinder as a defendant should be ordered on basis of liquidators' belated consent before leave of appropriate Court is obtained - costs reserved. -- 1 of 7 -- 2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: In the end the Court makes the following orders: 1. That under rule 69 of the Uniform Civil Procedure Rules, McDonald Keen Group Pty Ltd (in liquidation) be included in the proceeding as the second defendant subject to compliance with relevant requirements under section 500(2) or otherwise of the Corporations Act 2001 (Commonwealth); 2. That pursuant to rule 74 of the Uniform Civil Procedure Rules, the applicant/plaintiff file and serve on the first defendant and the second defendant its amended claim and statement of claim within 14 days of obtaining any requisite leave; 3. That the applicant/plaintiff pay the costs of the first defendant/respondent, if any, which may hereafter necessarily be thrown away as a result of the first defendant/respondent having filed a notice of intention to defend and defence to the statement of claim of the applicant/plaintiff, and the need, if any, arising from that same cause, to file any amended defence to the amended claim and statement of claim on a standard basis, which costs shall be agreed or in the absence of agreement, be assessed; 4. Adjourn to a date to be fixed on 2 days written notice. The plaintiff's application under rule 371(2)(c) filed by leave today; -- 2 of 7 -- 3 ORDER 1 10 20 30 40 50 60 5. Costs otherwise reserved including whether any fund or additional subcontractors should contribute. It is probably appropriate to say something about what has happened for the guidance of myself or some other Judge should argument occur in respect of costs, as it has today at considerable length. The order made refers to section 500 subsection (2) of the Corporations Act which appears to me given the reference to the "Court" to require leave of the Supreme Court, Federal Court or Family Court before anything can happen in respect of McDonald Keen Group Pty Ltd. I may have an imperfect understanding here and note that the liquidators of that company have consented to its inclusion in the proceeding and indeed, by the relevant document, that the plaintiff "have leave to begin and proceed with proceeding BD1346 of 2008 against [it]". In the circumstances there was no need for Mr Johnson to show service on the company under Rule 70(2). The relevant document headed "Consent to order of registrar" has been signed by Allans Arthur Robinson on 23rd of June 2008 as solicitors for the second respondent, McDonald Keen Group Pty Ltd (in liquidation). The liquidators were formerly administrators of the company. Wearing that hat they were opposed to the joinder of the company in this proceeding until the administration was completed. The State of Queensland v Walter Construction Group [2005] QSC -- 3 of 7 -- 4 ORDER 1 10 20 30 40 50 60 241 explores the way in which the Commonwealth Act works to extend time for subcontractors wishing to bring an action to maintain a claim of charge under the Queensland Subcontractors Charges Act 1974. Mr Orange for the defendant Council submits that that case shows there was no requirement for the plaintiff to proceed as it did by commencing a proceeding against it, alone, as the employer of the company now in liquidation. Whether or not that's technically right, the Court can sympathise with someone in the position of the plaintiff and its solicitor, Mr Johnson, anxious not to fall foul of the time limit for instituting a proceeding established by the Subcontractors Charges Act. Mr Johnson has relied on S & S Contractors (a firm) v. Gold Coast Co- operative Plantations Society Limited [1981] Queensland Reports 228 as establishing that it's open to a subcontractor to proceed against the employer only in the first instance. Mr Johnson having done that, the question arose whether the Council ought to be required to file and serve its notice of intention to defend and defence within the 28 days provided in the rules. Mr Orange sought longer. For reasons which escape me, in a telephone conversation in early June, which was said to be without prejudice, Mr Johnson insisted on those documents being filed within the ordinary time, and they were. That has led to argument over who should bear the costs occasioned by re-pleading by the Council, should that be necessary. Mr Orange proposed a formula to cover those costs which is the -- 4 of 7 -- 5 ORDER 1 10 20 30 40 50 60 basis of the costs order in the Council's favour indicated above, but was presented to Mr Johnson in much looser language which to my mind appeared to establish a blank cheque which would entitle the Council if so advised to re-plead, perhaps on an expansive basis and at the plaintiff's expense. I have attempted to cut back to the appropriate minimum the extent of the risk and, as Mr Orange has accepted today, it may not be necessary to re-plead. In one respect he may wish to do so, because in paragraph 9 the second reference to "the defendant" should be to the plaintiff. Paragraph 9 says, and I quote: "As regards paragraph 12 of the statement of claim, the defendant admits that it has not paid money to the plaintiff on account of the plaintiff's claim, and has not made any arrangements to pay the plaintiff the amount claimed and says the defendant has not pleaded facts which establish an obligation on the part of the defendant to pay any money to the plaintiff." The second or penultimate reference to the defendant was in error. Attention was paid to that paragraph because Mr Johnson sought leave to read and file a second application over and above that seeking to get McDonald Keen Group Pty Ltd into the proceeding. This was to strike out the words at paragraph 9 from "and says", not because they were confusing necessarily -- 5 of 7 -- 6 ORDER 1 10 20 30 40 50 60 but because they amounted to a "general demurrer" or a conclusion of law without a pleading of "the material facts in support" in breach of rule 149. I am very far from sharing Mr Johnson's asserted mystification and, without Mr Orange having to confirm it, surmise that the point was that the statement of claim doesn't plead that moneys are or will be payable by the Council as employer to McDonald Keen Group Pty Ltd. What the final state of accounts there will be at this point is anyone's guess. One of the issues to emerge in the sparring that occurred at the bar table concerned Council's providing or failing to provide, depending on the point of view, sufficient information about securities under section 9A of the Queensland Act. That's not a matter for Court today. Nor should Mr Johnson's new application be dealt with today in the face of opposition by Mr Orange who complains of the short notice. That's a general complaint at the bar table in relation to late provision of affidavit material and outlines of argument which in some cases show a changed stance, for example, in the Council now seeking costs of today's application in its favour. As the Court is told that there is at least one other identified subcontractor and a strong probability is that there will be several more who are likely to be intervening in this proceeding, the justice of the case may well point to the costs which for the moment the plaintiff is bearing being -- 6 of 7 -- 7 ORDER 1 10 20 30 40 50 60 contributed to a wider constituency or even satisfied by recourse to a fund which may yet come under the control of the Court. Whether the matter goes any further, given that the company in liquidation appears to be a necessary party, depends on what happens under the Commonwealth Act. The costs situation is too complicated in my opinion for the Court to resolve it today and I may say I would be sorry to see friction among the parties exacerbated by any early assessment of costs. Whether there are any in respect of amendments to the existing defence is a matter to be determined in the future as well. I dislike reserving costs but I think it's the best outcome today. ----- -- 7 of 7 --