Gregory Melville Raedel & Anor v Jezer Construction Pty Ltd & Ors [2009] QDC 114 (11 May 2009)

Last Updated: 12 May 2009

[2009] QDC 114

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 1291 of 1999

GREGORY MELVILLE RAEDEL AND KATHLEEN TERESA RAEDEL	Plaintiffs
and
JEZER CONSTRUCTION PTY LTD (ACN 054 548 319) DORIS NGIE LIK CHOI AND MICHAEL WAI MAN CHOI COMPTON'S VILLAGE LIMITED (ACN 072 933 987) RAMAVILLE PTY LTD (ACN 010 910 568) DORIS TING	Defendants

BRISBANE

..DATE 30/01/2009

ORDER

CATCHWORDS: Where Court of Appeal hearing of plaintiffs' appeal against dismissal of their claim as assigner of entitlements of a subcontractor allegedly arising within the Subcontractors Charges Act 1974 was imminent - stay sought of judgment for costs entered by the registrar following assessment pursuant to the trial judge's order (made following institution of the appeal) and of that order whether stay (and repayment into court of moneys paid in under the Act which were directed to be paid out by the same order) could be applied for notwithstanding that there was no specific appeal yet instituted against that order or that judgment

HIS HONOUR: This is an application by the plaintiffs for interim relief pending the outcome of their appeal, number 9692 of 2008, presently before the Court of Appeal. I accept that the application comes before this Court in circumstances of some urgency and a Judge of the Court of Appeal is unavailable. There seems to be no point taken that the District Court lacks jurisdiction.

The plaintiffs were principals of a company which was a subcontractor of the first defendant in a construction project. Their company appears to have encountered financial difficulties which led them to resort to the expedient of taking an assignment from it of entitlements to payments from the first defendant. The hope may well have been that if the first defendant had cross-claims, those could only be pursued against the struggling company.

In the traditional way, substantial sums of money were paid into Court in this proceeding and others aggregating something like $100,000 for the potential benefit of subcontractors, not limited to the plaintiffs' company. Whether as assignees the plaintiffs had or might obtain entitlements to the moneys in Court is perhaps a matter for argument which hasn't been gone into today but counsel at either end of the Bar table have indicated opposing views about that.

The proceeding in this Court is an old one, going back almost 10 years. It was resolved, so far as this Court is concerned, when in September last year Judge Durward dismissed the plaintiffs' claim.

Reading the Court of Appeal's reasons of the 27th of November 2008 for rejecting Jezer Construction Group Pty Ltd's application to strike out the appeal as having no prospect of success, it appears that the reason for the failure of the plaintiffs' claim was that his Honour had treated as available against them as a setoff a liquidated damages clause or the like in the subcontract. The Court of Appeal identified some prospects of success to exist in relation to the availability of that setoff "at least in relation to that component of $62,000".

The appeal is set down for hearing on the 25th of February 2009. On the 4th of February 2009, the plaintiffs will be in Court again, this time in the Federal Magistrates Court seeking the setting aside of a bankruptcy notice which the first defendant has caused to be served upon them. That bankruptcy notice is based upon a costs order of the District Court made by the Registrar on the 24th of December 2008 following an assessment which occurred pursuant to a second order of Judge Durward of the 10th of October 2008.

His Honour's earlier order of the 2nd of September 2008 had requested submissions in respect of costs, also in respect of what ought to happen to the moneys paid into court pursuant to the Subcontractors' Charges Act. He ordered costs against the plaintiffs and that the moneys in court be paid out to the first defendant, as I understand things. It appears that those funds may have gone to the trust account of its solicitors. Mr Stephens emphasises he's not seeking any order against them in paragraph 3 of the application which seeks, pending the determination of the Court of Appeal, the moneys which have gone out of court be paid back into court.

Mr Peden for Jezer Construction Group points to some serious technical difficulties standing in the way of the application for a stay of the costs order, which Mr Stephens has sought to expand today, so that the order of the 10th of October 2008 is covered as well as the one of Christmas Eve.

There is no appeal instituted against either of those orders, and perhaps for the obvious reason that they were made after the commencement of the appeal to the Court of Appeal.

We don't have a date for that, do we, Mr Stephens?

MR STEPHENS: I was just looking for that, your Honour.

HIS HONOUR: That's said to be undated in the material.

MR PEDEN: Your Honour, I think the - I've printed out the Court of Appeal's listing and it seems that first Notice of Appeal was filed on the 30th of September 2008.

HIS HONOUR: Yes.

MR PEDEN: And then the second Notice of Appeal or the amended Notice of Appeal was, I think, the 5th of December 2008.

HIS HONOUR: Yes. But the Court of Appeal was first brought in before Judge Durward's second order.

MR PEDEN: The second order; that's so.

HIS HONOUR: Thanks.

It's correct to say that there is no appeal in terms complaining of his Honour's orders of the 10th of October or the Registrar's later order following the costs assessor's certificate.

On that basis, Mr Peden submits that it's not open to this Court to make in aid of non-existent appeals orders to preserve a status quo until the determination of the existing appeal which makes no reference to those orders.

I'm unhappy that there hasn't been reference to authorities which I would think may exist dealing with the important general point of whether those orders not the subject of an appeal nominating them may be regarded as subsidiary to the order which is the subject of an appeal.

The Notice of Appeal indicates that the relief sought includes the plaintiffs getting their costs. I would have thought that that necessarily implied that the order that the defendant have its costs against the plaintiffs of the same proceeding would go and, in that sense, is the subject of the appeal.

I would venture the suggestion that it would be the accepted and, indeed, the good practice for there to be an express appeal against every order which is sought to be set aside by an appellate court. I'm not sure whether that's necessary in the criminal jurisdiction. For example, I don't know that the setting aside of a penalty is treated as a separate matter from the setting aside of a conviction that might justify the penalty.

Forced to deal with the matter as one of general principle, I've determined to take the broad-brush approach that the existing appeal can be regarded as having important implications for the orders of the 10th of October last year and what followed them.

I think that preserving the value of the plaintiffs' appeal rights indicates that this Court ought to interfere. The bankruptcy notice threatens a drastic change in the plaintiff/applicants' status.

Although the evidence Mrs Raedel has been able to assemble about the financial standing of the defendant is a little thin, I think, taking a broad-brush approach again, that pending determination of the appeal which is to be heard within the next four weeks, the defendant ought to be prevented from doing anything to make that fund disappear, assuming it's still intact.

I think that relief ought to be contingent upon its being made express that the orders of the 10th of October and what followed are sought to be set aside, and that can only be done by amendment permitted by the Court of Appeal under rule 751 or perhaps by separate appeals; that would seem an unattractive alternative to me.

The orders that I think appropriate, on the plaintiff giving the usual undertaking as to damages described in rule 264 are as follows, expressly subject to the filing and prosecution in the Court of Appeal of appeals against or an application to amend Appeal 9692 of 2008 to expressly bring in the District Court's orders of the 10th of October 2008 and 24th of December 2008.

Order that:

Those orders be stayed until the final determination of that appeal or earlier order and that until final determination of that appeal or earlier order, the defendant not deal in any way with the moneys paid out of Court pursuant to the District Court's order of 10th of October 2008, except by way of paying them back into Court.

I adjourn to a date to be fixed consideration of paragraph 2 of the plaintiffs' application filed the 13th of January 2009 and reserve costs.

Paragraph 2 concerns another difficulty the plaintiffs have, attributable to difficulties in their being laypeople and self-represented at the time. The assessment of costs was allowed to go by default, Mrs Raedel deposing, and I accept this, that she considered that the appeal instituted in the Court of Appeal would work as a kind of stay. She knows now with the benefit of legal assistance that steps ought to have been taken to contest the claim for costs. The plaintiffs now need an order of this Court to permit that to be done. Practical considerations dictate awaiting the Court of Appeal's decision because, one way or another, the costs order may go or be changed.

...

HIS HONOUR: I will add liberty to apply.

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