Federal Court Halts Relitigation as Abuse of Process

OUTCOME: Struck Out

NOT SUITABLE FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) NG 161 of 1996 ) GENERAL DIVISION )

BETWEEN: [COMPANY_1] Applicant

AND: [NAME_3] and [NAME_5] Respondents CORAM: Burchett J. PLACE: Sydney DATE: 12 June 1996

REASONS FOR JUDGMENT

BURCHETT J.: In this matter a stay of proceedings is sought. A number of alternative propositions are put forward. I do not think it is necessary to debate all of them. The matter arises out of a building contract which was terminated. There is no doubt it was terminated. Both sides alleged it was terminated, each claiming to have been in the right in relation to that termination, in proceedings which were heard by the New South Wales Consumer Claims Tribunal. The Tribunal made, in favour of the proprietors, an order which can only be sensibly understood as made on the footing that the contract had been properly terminated by them for the default of the builder.It was, I should interpolate, a fairly ordinary building contract, in a form, described as a plain English home building contract form, apparently put out by bodies concerned with such transactions. The issue which is now in dispute relates to the right to utilize the plans that had been prepared by the architectural staff of the builder, and were referred to in the contract. In particular, clause 28 of the contract contained a provision: "If the contractor prepares the drawings" - as I note had occurred in this case - "the contractor retains copyright in those drawings but the owner will, except where the contract is ended within the cooling off period, be entitled to complete the work in accordance with those drawings."

This contract was not terminated within the cooling off period, but, as I have said, for the default of the builder. The builder now asserts that the right apparently conferred on the proprietors by the terms of clause 28 does not apply, and that the builder is entitled to succeed in a claim for an injunction (and/or damages and/or account of profits) in respect of the use, which subsequently occurred, of the plans when the building proceeded with another builder. It seems to me that that would be an absurd construction to give clause 28. After all, one could never tell in advance at what stage a building contract might come to an end. Also, the contemplated defaults in this contract include, for instance, the bankruptcy of the builder. Yet if the builder's argument is correct, clause 28 might leave the proprietors with a partially built building which could not be completed without breach of copyright. I do not accept that this is the meaning. I think it is plain, at least in the case where a breach is a breach attributable to the builder rather than the proprietors, that once the contract is signed, if it thereafter goes off, the proprietors are entitled to complete the building utilizing the contract plans. In any case, this very issue was raised as a matter of defence in the proceedings in the Consumer Claims Tribunal. There, the builder submitted in writing that the amount which the proprietors, in claims for damages that they were putting forward, were prepared to allow the builder as a credit in respect of the plans, was something like one fifth of the amount that ought properly to be allowed for them. This issue was determined. A figure was arrived at. It seems plain the Consumer Claims Tribunal thought that the figure shown in the contract documents themselves in respect of the plans ought to be accepted, rather than the figure subsequently put forward by the builder on the basis of scales of fees. Whether that decision be right or wrong, the issue was tendered to the Consumer Claims Tribunal on behalf of the builder, and was determined by the Tribunal. To my mind, the bringing of this action in this Court is simply a relitigation of the very issues that were litigated in the Consumer Claims Tribunal, and is an abuse of the process of this Court.

Accordingly, I grant a stay of the proceeding. The stay is granted with costs. I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.

Associate: Date: 2 July 1996. Counsel for the Applicant: [redacted] (the respondent in this motion) Solicitors for the Applicant: [redacted] Counsel for the Respondents: [redacted] (the applicants in this motion) Solicitors for the Respondents: [redacted] Date of hearing: 12 June 1996