Rapid Contracting P/L v Multiplex & Other [1998] QSC 227

4. That the plaintiff deliver its statement of claim to Multiplex within 14 days of the date of this order (sic) failing which the plaintiff's writ be struck out.

5. That the plaintiff pay Multiplex's costs of and incidental to the application to be taxed.

(a) by an agreement dated 13 May 1996 ("the head contract") Perpetual Trustees Victoria Ltd (as trustee of the Trust) as proprietor contracted with Multiplex as builder to execute the whole of the work known as the Cairns Central in Cairns North Queensland and as described in that agreement;

(b) by subcontract agreement dated 14 August 1996, Multiplex contracted with the plaintiff ("Rapid") to execute works described as "FABRICATION & ERECTION OF PRE-CAST CONCRETE" for 1.22 million Australian dollars. The work to be executed by Rapid appears to have been part of the work to be performed by Multiplex in the head contract.

(c) by a document dated 10 September 1997 and addressed to Multiplex, Rapid gave notice that it had given notice to Perpetual Trustees Victoria Limited (as trustee of the Trust) that it claimed under the Subcontractors' Charges Act 1974 - 1976 a charge upon moneys which then were or would be payable by Perpetual Trustees to Multiplex in respect of the work described in the notice namely "the fabrication and erection of pre-cast concrete in relation to the construction of the Cairns Central Shopping Centre Cairns ... which work was done by Rapid under a subcontract with [Multiplex] between August 1996 and August 1997". The amount claimed was $249,984.51.

(d) by a document dated 1 October 1997 and addressed to Rapid, Multiplex gave notice that it disputed Rapid's claim under the Subcontractors' Charges Act and in that notice set out its reasons for disputing the claim and also set out figures showing that it had overpaid Rapid by $50,394.

(e) the above named second defendant has paid into court the sum of $249,984.51.

(f) Multiplex alleges that the payment into court of that sum prejudices Multiplex because it is unable to meet payments due to other subcontractors (to whom amounts have been certified) except from its own funds.

3 Mr Hastie, counsel for Multiplex has argued that at the material times Rapid was not licensed under the Queensland Building Services Authority Act 1991 (the "BSA Act"), that the work the subject of the claim of charge fell within the description in that Act of work required to be done by a person holding the appropriate licence, and that as a result Rapid had and will have no claim to be paid any money under its contract with Multiplex and the charge ought to be cancelled.

4 Mr Hastie, has relied on cases including Groutco (Aust) Pty Ltd v Thiess Contractors Pty Ltd (1985) 1 Qd.R 238 and Marshall v Marshall an unreported Court of Appeal decision (CA 9365 of 1996) - judgment 28 October 1997.

5 Section 42 of the BSA Act appears in "Division 7 - requirement to be licensed". Division 7 appears in "PART 3 - LICENSING". Section 42 is headed "unlawful carrying out of building work" and relevantly provides:-

"42(1) A person must not carry out, or undertake to carry out, building work unless that person holds a contractor's licence of the appropriate class under this Act.

(a) a person carries out building work whether that person carries it out personally, or directly or indirectly causes it to be carried out; and

(b) a person is taken to carry out building work if that person provides advisory services, administration services, management services or supervisory services in relation to the building work; and

(c) a person undertakes to carry out building work if that person enters into a contract to carry it out or submits a tender or makes an offer to carry it out.

(3) A person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so.

(7) A person who contravenes this section commits an offence ..."

Section 42 is directed to the unlawful carrying out of building work.

6 Mr Hastie has submitted that the work performed by Rapid, pursuant to its subcontract was building work within the meaning of "building work" as defined in the BSA Act. The definition in s. 4 shows:-

(a) the erection or construction of a building; or

(b) the renovation, alteration, extension, improvement or repair of a building; or

(c) the provision of lighting, heating, ventilation, air-conditioning, water supply, sewerage or drainage in connection with a building; or

(e) any site work (including the construction of retaining structures) related to work of a kind referred above; or

(f) the preparation of plans or specifications for the performance of building work; or

but does not include work of a kind excluded by regulation from the ambit of this definition."

8 I mention that by the same section of the BSA Act (s.4) "building" is defined - "includes any fixed structure".

9 Mr Hastie has contended that the work performed by Rapid pursuant its subcontract falls within para.(a) of the above definition of "building work". Mr Matthews has challenged this submission, arguing that the work is not within any of the meanings of "building work" and alternatively that if this issue remains alive, the question can be resolved only after evidence has been heard as to exactly what work Rapid performed under its sub-contract and facts are then found.

10 There is no dispute that in the present case the respondent did not have a contractor's licence of any class under the BSA Act. The respondent contends that because the work it performed did not fall within the definition of "building work" it was not required to obtain and hold a license under the Act and it further contends it has not breached s.42.

11 I turn now to certain provisions of the Act dealing with licensing. As I have said Part 3 of the BSA Act is headed "LICENSING". Division 1 of that Part is headed "Classes of licences" and in Division 1, s.30 of the BSA Act reads:-

30.(1) A licence may be issued authorising the licensee -

(a) to carry out, and to supervise, all classes of building work; or

(b) to supervise (but not to carry out) all classes of building work; or

(c) to carry out, and to supervise, building work of 1 or more classes specified in the licence; or

(d) to supervise (but not to carry out) building work of 1 or more classes specified in the licence.

(2) Licences are to be divided into classes by regulation -

(a) according to whether the licence is a contractor's licence or a supervisor's licence; and

(b) according to whether the licence relates to all classes of building work or is limited to a specified class or specified classes of building work; and

(c) if the licence is limited to a specified class, or specified classes, of building work - according to the class or classes of building work to which it relates."

12 The classes of licence with which BSA Act is concerned are of two types - contractor's licence and supervisor's licence (see ss.30, 31 and 32 of BSA Act) but it should be noted that in Queensland Building Services Authority Regulation 1992, Regulation 6 is headed "Classes of Licence - Act, s. 30(2)". I shall later return to Regulation 6. The BSA Act established a body corporate known as Queensland Building Services Authority (see s.5). This authority is required to keep a register of licensees (s.39) and may issue certificates concerning (inter alia) whether or not a particular person was licensed under the Act at a particular date or over a particular period.

13 In the present case, before turning to the classes of licence "in accordance with schedule 2" of the Queensland Building Services Authority Regulation 1992, I look to see as far as I can what work was required of Rapid under its subcontract agreement. The description of the works there given is "fabrication & erection of precast concrete". The site is there described as "the land bounded by McLeod Spence Bunda & Aplin Street, Cairns" and the description of the principal works is there described "the construction of the Cairns Central Shopping Centre Cairns".

14 In the fourth schedule to the subcontract appear what are called "special conditions". From these special conditions it appears that Myer Stores was one of a number of major tenants in the building and on the same page of "special conditions" the following appears:-

"The bulk of Myer's panels, will be built by 20 July 1996 (some small facade panels to be stood on mezzanine floor and loading dock area may not be cast). This is based on the programme supplied to Rapid Contracting Pty Ltd in Cairns 4 June 1996 ... ."

15 Part of the sub-contract is what are described as "minutes of tender/pre-subcontract meeting" as well as copies of minutes of meetings and other documents.

16 On p.6 of the "minutes of tender/pre-subcontract meeting" under the heading "22. Day Labour" is a question which begins:-

"Day labour may be required for additional work whilst the subcontractor is established on site ..."

17 On p.7 of the same document under the heading "23. Materials Handling" appears the statements, apparently agreed in, "It is the subcontractor's responsibility for loading and distribution of subcontractors materials. The subcontractor will and (sic) allow to supply all hoisting and cranage necessary to complete their works including provision of dogmen and material handlers."

18 On p.8 on the same set of minutes under "28. Foreman" is the statement:-

"A competent foreman is to be employed by the subcontractor at all times on site to liaise with the General Foreman and to be able to agree short term programming ... ."

19 The minutes of a tender meeting dated 7 June 1996 form part of the subcontract. At this meeting were three representatives of Multiplex and two of Rapid. These minutes include the following:-

"1.01 Rapid stated they would pour all panels in locations (to be agreed) suitable for lifting into place at a later date. Rapid would return to erect panels. Multiplex asked Rapid to guarantee that they would return to site with consideration of any future work undertaken by Rapid when erection was to take place. Rapid guaranteed their commitment to the project."

"1.06 Rapid stated they had visited site and reviewed access etc."

"1.11 Rapid stated they would not do any site welding. Site welding to be completed by others."

20 Another document forming part of the subcontract was headed "TILT UP CONCRETE PANELS SCOPE OF WORK CHECK LIST". This document includes the following statement:-

"This performance contract is for the complete supply and installation of concrete wall panels including all labour, materials, plant and equipment to complete the works in whole and includes, but is not limited to:-

4. supply and construct casting beds and remove on completion."

10. provide class of finish required including scraping, patching. Class 2 finish."

21 I turn now to Regulation 6 of the Queensland Building Services Act Regulation 1992 which relevantly reads:-

6.(1) Licences are divided into classes in accordance with schedule 2.

(2) Further licence classes may be established by determination of the authority in relation to classes of building work specified in the determination.

22 Schedule 2 contains "CLASSES OF LICENCES AND LICENCE REQUIREMENTS" - It contains 29 parts each of which refers to a class of licence, the scope of work and qualification for that class of licence.

23 Of these 29 parts the only one which appears to be relevant is "PART 5 - CONCRETING LICENCE". In this part the licence class is described "1. Concreting".

(6) Placing and fixing reinforcement to footings, slabs on ground, suspended slabs, walls, columns and stairs.

(7) Placing, vibrating, levelling and finishing of concrete including all special finishes.

(10) Construction of paths, driveways and kerbs."

25 I do not refer to "technical qualifications" and "managerial qualifications" experience requirements and financial requirements relevant to "concreting licence" - all appear in Part 5.

26 Looking at the above scope of work it may be said prima facie that Rapid's work included "curing concrete" and "laying bedding material" and therefore fell within the scope of work for a concreting licence. Whether Rapid's work as required under its subcontract with Multiplex fell within any other aspect of scope of work, I cannot say - I should need to hear evidence before being able to deal with that aspect of the matter.

27 Although as I say, prima facie Rapid's work may have included curing concrete, and laying bedding material, another question and an important question is whether Rapid's work fell within the definition of "building work". I have already set out the definition of "building work" and it seems to me that if the curing of concrete - and it must borne in mind that the subcontract refers to "precast concrete" - occurred on the site of the construction of the Cairns Central Shopping Centre and if the curing of concrete was "site work" related to the erection or construction of a building then arguably the curing of precast concrete was building work (see para.(e) of the definition of "building work"). Similar comments may be made concerning "laying bedding material". In addition I have no evidence before me as to what is meant by "site work" (refer para.(e) of definition of "building work").

28 Again, I am hampered by not knowing the true facts as to exactly what work Rapid performed under its contract and where it performed that work - these it seems can only be ascertained after evidence touching on these topics is heard.

29 I find this question whether the work required by the subcontract was "building work" is further complicated by the following further matters placed before me in evidence:-

1. A 19 page document exhibited to the affidavit of Anthony Healey, the person in charge of the Queensland Building Services Authority's Division responsible for the licensing of persons under the BSA Act.

2. That 19 page document has 88 different classes of licence [the difference between the 29 set out in the Queensland Building Services Authority Regulation 1992, and the 88 is apparently explained by exercise of the power given to the authority under Regulation 6(2) which I have earlier set out].

3. Of the 88 classes the only arguably relevant licence is "concreting" and I have already referred to it. I add that the 88 classes include classes for "light concreting" and "minor concreting work" but in my view neither of these is relevant to the present case.

4. Affidavit evidence from Stephen Ross Clark, the managing director of Rapid to the following effect:-

(a) that in July 1996 Rapid began its work under the sub-contract and in about July 1997 completed that work and work under another sub-contract.

(b) that in or about February or March 1997, he received a telephone call from a lady who identified herself as being from the Building Services Authority Cairns office, in which she said she wished to find out what work Rapid was doing for Multiplex on the Cairns Central site, that Multiplex had given the authority a list of all the subcontractors on the site, so that she could make enquiries of them as to whether they were or should be licensed and that she noted that Rapid was one of those subcontractors on that list; that he informed her that Rapid was undertaking precast concrete panelling work on the project; that she told him and he verily believed that Rapid did not require a licence for doing that work and he replied by saying words to the effect "I was aware of that because I had made enquiries about Rapid having to be licensed when it was being set up back in 1993".

(c) that he told this lady (whose name he could not recall) that Rapid was interesting in obtaining a general builders licence for other contracts which it hoped to obtain and asked her to send him the necessary forms and that he later received these forms at the Cairns address at which he was then living whilst working on the site.

(d) that about 3 weeks before the 3rd September 1998, he again telephoned the Building Services Authority's Cairns Office and spoke to the same lady; that during this conversation she confirmed her previous advice that she had made enquiries of subcontractors at the Cairns Central site in around February or March 1997, that she had been in touch with Multiplex staff at the time to obtain from it lists of subcontractors for structural trades of which Rapid was one, that she had made further enquiries a few months later in 1997 regarding finishing trades and at that time received a complete list from Multiplex of all subcontractors who were employed on the site - not just the finishing trades - and again made enquiries; that in her view Multiplex had a file on the issue of the licensing of the site subcontractors and that she did not have any files at her office as they had all been sent to the head office in Brisbane of the Building Services Authority, and that if he, Clark, wanted further information a freedom of information application would have to be made.

(e) that he, Clark, passed that information onto Mr Clout, the liquidator of Rapid.

5. There is affidavit evidence from John Park, a Chartered Accountant in the employ of the liquidator's firm Clout & Associates, in which he records having sent a freedom of information application to the Building Services Authority at Brisbane (executed by the liquidator) on 17 August 1998, that as at 3 September 1998 he had not received the documentation sought, that on 3 September 1998 a person named Peter, from the Building Services Authority informed him that the documents and information he was seeking were contained on files held by the authority in the name of "Multiplex", that the authority required Multiplex's written consent before it could release that documentation and information to Clout, that the authority had no file in the name of Rapid and that he would urgently seek the consent of Multiplex.

30 As at the 4 September 1998, Park had not heard whether or not Multiplex had consented to the information being made available.

31 Mr Park has further sworn that on 19 August 1998, he had a telephone discussion with a lady at the Cairns Office of the Building Services Authority who identified herself to him as "Jodie" and that she informed him and he verily believed that the Building Services Authority did in fact do "licence compliance tests" on the Cairns Central site, and had visited the site on a few occasions for that purpose, that the Authority did speak with the prime contractors on the site about the licensing issue, that following those investigations the Authority did liaise with Multiplex with respect to whether or not the prime subcontractors on the site were or had to be licensed, that Multiplex would have been made aware by the Authority of the licensing position of those subcontractors who were engaged directly by Multiplex as prime subcontractors (sic) and that such enquiries were made by the Authority and a report on them given by the Authority to Multiplex's servants or agents in early 1997.

32 The evidence from Clark and Park, although based on hearsay suggests reasonably strongly that the Queensland Building Services Authority, investigated the work which it understood Rapid was performing for the Cairns Central Shopping Centre, pursuant to its subcontract and concluded that Rapid was not required to have a licence under the BSA Act to perform that work; the evidence also suggests that the Authority advised Multiplex of this.

33 To succeed in its present application before me, Multiplex must satisfy me that the work performed by Rapid pursuant to its subcontract fell within "building work" as defined in the BSA Act and therefore within s.42 of that Act; it must also satisfy me what class of licence it is that Rapid was required to have.

34 On the material before me, I am unable to say that it has discharged that onus on any of those matters, and in the view I take of the matter, the questions whether the work was building work and what class of licence (if any) was required can only be resolved after a trial of those issues. I note that a statement of claim has been delivered in this case. I bear in mind that Multiplex in effect seeks to have me order, on summary proceedings, the cancellation of the charge and before the trial of the action. In my view such a step should only occur in a case where it is demonstrated to the court that the case for the claim of charge is clearly untenable (see General Steel Industries Inc. v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125 at 130). In my view it cannot at present be said that the claim of charge is clearly untenable.

35 It is unnecessary for me to consider at this stage the argument Mr Hastie has based on the decisions in Groutco and Marshall & Marshall. In my view, those matters can only properly be considered once a decision is made as to whether or not Rapid was required to hold a licence and if so what class of licence under the BSA Act when it performed its work pursuant to the sub-contract.

36 I turn now to the final matter relied on by Mr Matthews to justify my dismissing the present application, that is the matter of estoppel. Mr Matthews relies on statements by Deane J in the Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at p.444 et. seq. where his Honour discussed the content and operation of the general doctrine of estoppel by conduct, and in 8 paragraphs identified what he saw as the conceptual foundation and essential operation of the doctrine of estoppel by conduct. It is unnecessary to set out here all those paragraphs. The evidence of Messrs Clark and Park, to which I have already referred and which is unchallenged on the date of the hearing before me, shows that there may well be material with the Queensland Building Services Authority and with Multiplex relevant to this issue. The affidavit evidence read before me shows that Multiplex and Rapid were before Mr Justice Helman on 22 July 1998, when his Honour made an order in this action. At that stage there was no mention in the material of the fact that Rapid did not have a licence - nor was there any allegation or suggestion that Multiplex was relying on s.42 of the BSA Act.

37 The estoppel relied on by Mr Matthews is silence by Multiplex, which, by implication from the affidavit material before me, led Rapid to believe that no licence was required before it could enter into the subcontract and then do the work. Mr Clark swears that at no stage during the time when Rapid performed its work under the sub-contract did he hear Multiplex claim that Rapid required a licence.

"2. The central principle of the doctrine is that the law will not permit an unconscionable - or, more accurately, unconscientious - departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation.

3. Since an estoppel will not arise unless the party claiming the benefit of it has adopted the assumption as the basis of action or inaction and thereby placed himself in a position of significant disadvantage if departure from the assumption be permitted, the resolution of an issue of estoppel by conduct will involve an examination of the relevant belief, actions and position of that party.

4. The question whether such a departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were now to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party: (a) has induced the assumption by express or implied representation; (b) has entered into contractual or other material relations with the other party on the conventional basis of the assumption; (c) has exercised against the other party rights which would exist only if the assumption were correct; (d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so. Ultimately, however, the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted. In cases falling within category (a), a critical consideration will commonly be that the allegedly estopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of, the assumption. Particularly in cases falling within category (b), actual belief in the correctness of the fact or state of affairs assumed may not be necessary. Obviously, the facts of a particular case may be such that it falls within more than one of the above categories."

39 On the evidence before me at the hearing it appears that there may be a prima facie case of unconscientious conduct by the applicant Multiplex. Multiplex did not mention to Rapid any need for a licence under the BSA Act until it brought the present application. It may also be that the Building Services Authority holds documents relevant to this matter and which may assist or destroy the projected claim of estoppel by silence. The claim for estoppel can only be evaluated after all relevant facts touching the issue have been presented to a court for its consideration and determination. In the present state of affairs I am not prepared to say there is no justifiable claim of estoppel against Multiplex and this factor is a further reason for refusing the application. It is not appropriate for me to comment further on the merits or otherwise of the application.

40 For the reasons which I have given, cancellation of the charge is clearly untenable at present. I dismiss the application and shall hear from the parties on costs.