Body Corporate for the Johnson CTS 49098 v Maxcon Constructions Pty Ltd [2024] QSC 65

Julie Whitehead  |  Renee Shike  |  Connor Wright

Key takeout

A court will not join a party to a dispute concerning a construction contract unless it can be clearly demonstrated that joining the party will assist in the resolution of the dispute.

Facts

In June 2015, construction commenced on the former Main Roads Building in Spring Hill, on the outskirts of the Brisbane CBD. The building was to be converted into a building that incorporated commercial premises, residential units and hotel rooms. In September 2016, the building was completed and converted into separate strata titles with a number of separate bodies corporate. The plaintiff, the Body Corporate for the Johnson Community Title Scheme (Johnson), was the Principal Body Corporate.

Johnson alleged that the construction was undertaken by the former owner of the land, Asian Pacific Group Pty Ltd (AP Group), which contracted Maxcon Constructions Pty Ltd (Maxcon), to undertake the design and construction work. In September 2022, Johnson commenced proceedings in the Supreme Court of Queensland against Maxcon, alleging that the design and construction work was subject to defects. In its defence, Maxcon asserted that the contract between AP Group and Maxcon was a sham. It argued that it contracted with AP Group to build, but not design, the building. Maxcon did not identify in its pleadings who under the contract was responsible for the design of the building.

The case in question arose out of those proceedings and concerned an application by Johnson to:

1. join Asian Pacific Building Corporation (AP Building) as the second defendant in the proceedings; and
2. amend its claim and Statement of Claim to maintain its allegations against Maxcon but plead an alternative claim against AP Building based upon the same alleged breaches of the contract.

The limitation period for the action against AP Building had passed so Johnson also had to argue that the limitation period was postponed so Johnson could bring proceedings against AP Building.

Johnson was entitled to bring this claim by section 36(3)(a) of the Body Corporate and Community Management Act 1997 (Qld), which provided that Johnson was subrogated to the rights of the original owner under the contract to the extent that the contract applied to work affecting scheme land that is common property.

Decision  

Johnson argued that the court should join AP Building under rule 69(1) of the Uniform Civil Procedure Rules as it would be desirable, just and convenient to enable the court to adjudicate effectually and completely on all matters in dispute connected with the proceeding. Johnson based its application upon Maxcon’s denial in its Defence that it was a party to the contract relied on for the design and construction of the building. However, Johnson did not produce any evidence that Maxcon’s assertions had any basis.

To succeed in joining AP Building, Johnson needed to:

• identify a dispute with AP Building; and
• establish a prima facie case that it would be desirable, just and convenient for the court to join AP Building.

The court would not join AP Building under rule 69(1) as Johnson did not establish that AP Building’s presence before the court would be desirable, just and convenient because Johnson did not establish that AP Building was the entity which contracted with AP Group to provide the design work. This was based on three reasons:

1. Johnson did not adduce any evidence to suggest any involvement by AP Building;
2. Maxcon’s pleadings did not suggest that AP Building performed the design work; and
3. the court had not seen the material in Maxcon’s pleadings that Johnson alleged identified that AP Building as the architect of the project.

His Honour held that if Johnson had satisfied rule 69(1), then it would have also satisfied rule 69(2)(iv), which allows a court to join or substitute a party after the end of a limitation period, if the court considers it doubtful that the proceeding was commenced in or against the name of the correct person.

Johnson also argued that section 38(1) of the Limitation of Actions Act 1974 (Qld) applied to postpone the limitation period such that Johnson could also commence proceedings against AP Building. The provision provides that where the cause of action is based upon the fraud of the defendant or their agent, or concealed by the fraud of the defendant or their agent, the limitation period does not commence until the plaintiff discovers the fraud. Martin SJA held that the provision did not apply because:

1. Johnson could not prove the necessary facts to engage section 38(1);
2. the contract in question was not executed by an agent of AP Building; and
3. there was no evidence to suggest that AP Building or its agents represented to Johnson that the sham contract alleged by Maxcon was the actual document upon which the construction and design work were based.