J.Mac Constructions Pty Ltd v Queensland Building and Construction Commission

Link copied
Case Copied 38 min read

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL


CITATION:

J.Mac Constructions Pty Ltd v Queensland Building and Construction Commission [2019] QCAT 233

PARTIES:

J.MAC CONSTRUCTIONS PTY LTD
(applicant)
v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(respondent)

APPLICATION NO:

GAR203-18

MATTER TYPE:

General administrative review matters

DELIVERED ON:

25 February 2019

HEARING DATE:

26 November 2018

HEARD AT:

Brisbane

DECISION OF:

Dr Collier, Member

DECISION:

1. Has a ‘relevant company event’ occurred for the purposes of s 56AC(2)? No.

2. Which version of s 56AC(2) applies, the old or the new? The New Version.

CATCHWORDS:

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – Queensland Building and Construction Commission Act 1991 (Qld) – a relevant company event – winding up a company ‘for the benefit of a creditor’ – distinguish winding up of solvent and insolvent companies

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – Queensland Building and Construction Commission Act 1991 (Qld) – excluded individual – permitted individual – unintended consequences of amendments – identifying Parliament’s apparent intention – inferring provisions into an Act based on Parliament’s apparent intention

STATUTES – ACTS OF PARLIAMENT – OPERATION AND EFFECT OF ACTS – provisions in an Act imposing strict liability on an individual –unintended removal of the right to seek a remedy – requirement for a regulator to make a deliberative decision before a consequence can flow

Acts Interpretation Act 1954 (Qld), s 14A, s 14B

Corporations Act 2001 (Cth), s 467(4)
Professional Engineers and Other Legislation Amendment Act 2014 (Qld)

Queensland Building and Construction Commission Act 1991 (Qld), Part 3A, s 56AC, s 56AC(2), s 56AC(2)(a), s 56AC(2)(b), s 56AC(3), s 56AC(6), s 56AD, s 56AD(1), s 56AF(2), Schedule 1: s 57, s 57(1), s 57(2), s 58(1)(b), s 86(1)(k)

Queensland Building and Construction Commission and Other Legislation Amendment Act 2014 (Qld) s 57, s 58, s 59

Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
Corcoran v Building Services Authority [2011] QCATA 158
D’Arro v Queensland Building and Construction Commission [2015] QCAT 100
D’Arro v Queensland Building and Construction Commission [2016] QCATA 76
D’Arro v Queensland Building and Construction Commission [2017] QCA 90
Gallagher v Queensland Building Services Authority [2010] QCAT 383
Lowe v Queensland Building and Construction Commission [2015] QCAT 110
McClintock v Queensland Building Services Authority [2010] QCAT 340
Marangone v Queensland Building Services Authority [2011] QCAT 210
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Singh v Commonwealth (2004) 222 CLR 322
Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397
Wentworth Securities Ltd v Jones [1980] AC 74

APPEARANCES & REPRESENTATION:

Applicant:

M Hindman QC, barrister

Respondent:

S Tabaiwalu, in-house solicitor of the Queensland Building and Construction Commission

REASONS FOR DECISION

  1. In this Application the parties seek a decision concerning two preliminary questions involving this matter in accordance with Directions of the Tribunal dated 1 November 2018.

  2. J.Mac Constructions Pty Ltd (‘J.Mac’) seeks the review, pursuant to s 86(1)(k) of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’),…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read J.Mac Constructions Pty Ltd v Queensland Building and Constr... and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2019] QCAT 233
Decision Date

CaseChat Overview and Summary

In the matter of J.Mac Constructions Pty Ltd v Queensland Building and Construction Commission, the primary dispute centred on the interpretation and application of the Queensland Building and Construction Commission Act 1991 (Qld), particularly the classification of individuals and companies under sections 56AC(2) and 56AC(6) as they pertain to the circumstances surrounding the winding up of Colonial Properties. The court was tasked with determining whether the Commission’s decision to categorise Craig Mortensen as an excluded individual and J.Mac as an excluded company was legally sound. This classification stemmed from Mortensen's role as the secretary of Colonial Properties at the time of its winding up, and subsequently, J.Mac's status as an excluded company due to Mortensen's position within the company.

The legal issues before the court primarily revolved around the interpretation of statutory provisions within the QBCC Act, specifically s 56AC(2), and the implications of these provisions on Mortensen and J.Mac. The court had to discern whether the QBCC's decision to classify Mortensen as an excluded individual was correct under the Act, and if so, whether this classification correctly led to J.Mac being designated as an excluded company. Additionally, the court needed to address whether the QBCC's failure to consider the specific circumstances of the winding up of Colonial Properties, namely whether it was for the benefit of a creditor, rendered its decisions defective.

In addressing these issues, the court examined the legislative intent behind the amendments to the QBCC Act and sought to infer the provisions that Parliament might have intended to include. The court noted that the QBCC's decision-making process appeared to lack a necessary deliberative step, which was required for strict liability provisions to apply effectively. The court found that the QBCC's failure to consider whether the winding up of Colonial Properties was for the benefit of a creditor constituted a procedural error, leading to an unintended consequence of Mortensen's classification as an excluded individual. Consequently, the court concluded that the QBCC's decisions were not enforceable due to this procedural flaw.

The court's final orders were that the decisions made by the QBCC regarding Mortensen and J.Mac were not enforceable due to the procedural error in not considering whether the winding up of Colonial Properties was for the benefit of a creditor. This finding was pivotal in negating the QBCC's classification of Mortensen and J.Mac under the QBCC Act.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The parties agree that if the answer to the Second Preliminary Question is that the New Version of s 56AC(2) of the QBCC Act applies it is unnecessary to answer the First Preliminary Question. However, for reasons made clear in the decision below, it is necessary to consider the First Preliminary Question first.Background facts The facts relevant to the questions posed are not controversial, and are set out in the following paragraphs. Colonial Properties was a company formed in 1996. By January 1998 all shares in Colonial Properties had been acquired by two shareholders: B.M.D. Constructions Pty Ltd (‘BMD’) and Patrick Property Investments Pty Ltd (‘PPI’). Each shareholder held 50% of the issued shares, with the intention of acquiring and developing a parcel of land in Townsville known as ‘Colonial Park’. Differences between the shareholders of Colonial Properties started in 2006, and by 2013 the shareholders agreed that Colonial Properties should be wound up in order to liquidate the assets and return the proceeds to the shareholders. This was effected by a members’ voluntary winding up on the petition of BMD. In accordance with the wishes of the members the Queensland Supreme Court made a Winding-up Order on 15 November 2013. On that same date Robert Humphreys of BRI Ferrier was appointed liquidator of Colonial Properties. BRI Ferrier in its Report to Creditors dated 19 May 2015 reported that, following the liquidation of Colonial Properties, unsecured creditors would be paid 100c in the dollar, leaving a balance of more than $1.3 million available for distribution to the members.[1] [1]Section 8 of that report. At the end of the liquidation, 21 January 2016, all unsecured creditors of Colonial Properties were paid 100c in the dollar and the remaining assets of the company were distributed to members. At no time was Colonial Properties unable to pay its bills as and when they fell due. These facts are supported by the statutory declaration of the liquidator, Robert Humphreys.[2][2]Statutory Declaration of Robert Humphreys made at Townsville on 17 September 2018. At the date of the Winding-up Order, 15 November 2013, Craig Mortensen was secretary of Colonial Properties. Since 30 July 2015 J.Mac has been a QBCC licence-holder in the class: Builder - Low Rise. Craig Mortensen was also a director and secretary of J.Mac at this time. On 17 April 2018 J.Mac submitted an application to the QBCC seeking to be licenced also as: Builder - Medium Rise. The QBCC notified Mr Mortensen on 24 May 2018 that he had been categorised as an excluded person under s 56AC of the QBCC Act as a result of him being secretary of Colonial Properties on the date of the Winding-up Order. Furthermore, as a consequence of Mr Mortensen’s categorisation by the QBCC as an excluded person, J.Mac became an ‘excluded company’ so long as Mr Mortensen remained a director or secretary of, or an influential person for, the company because s 56AC(6) of the QBCC Act applied, as follows: A company is an excluded company if an individual who is a director or secretary of, or an influential person for, the construction company is an excluded individual for a relevant event.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Before answering the preliminary questions, it is appropriate to comment on the letters and notices sent to Craig Mortensen and Colonial Properties on 24 May 2018 that started the series of events examined here.Whether the decisions made by the QBCC are enforceable On their face the notices dated 24 May 2018 sent by the QBCC to each of Craig Mortensen and J.Mac appear to be defective. In its letter to Craig Mortensen dated 24 May 2018 the QBCC gave notice to Mr Mortensen that the QBCC considered him to be an excluded individual. In expressing this conclusion the QBCC said that:A person becomes an excluded individual if the individual:·becomes a bankrupt or otherwise takes advantage of bankruptcy laws by entering into an agreement under Part IX or X of the Bankruptcy Act 1966; or·is a director, secretary or influential person for a company at any time up to one year before the company has a provisional liquidator, liquidator, administrator or controller appointed.…Why the QBCC considers you to be an excluded individualQBCC has become aware of the following relevant event (the Event):·On or about 15 November 2013 Robert Collin Humphreys of BRI Ferrier was appointed as liquidator to Colonial Properties Pty Ltd (The Company).TAKE NOTICE pursuant to Section 56AC of the Queensland Building and Construction Commission Act 1991 (the QBCC Act), QBCC considers you to be an excluded individual for the following reason:·You were a director, secretary or influential person for the Company at the time of, or within one year of, the Event. This letter and notice made no reference to s 56AC(2)(a) of the QBCC Act,[44] which says that s 56AC applies to an individual if a company has a liquidator (inter alia) appointed ‘for the benefit of a creditor’. The letter and notice made reference only to the fact that, in this case, a liquidator had been appointed to Colonial Properties. Because the letter and notice to Mr Mortensen made no mention of the QBCC having categorised Mr Mortensen as an excluded individual because the liquidator had been appointed ‘for the benefit of a creditor’, there can be no confidence that this factor had been taken into account by the QBCC when making its decision and categorising Mr Mortensen as an excluded individual.[44]The same requirement exists in the QBCC Act at all relevant times: before and after 1 July 2015. Similarly, in its letter to J.Mac dated 24 May 2018 giving notice of reasons for the proposed cancellation of J.Mac’s builder’s licence, the QBCC explained the reasons for its decision. Again quoting the relevant portions of this letter and notice:A company becomes an excluded company if an excluded individual is a director, secretary or influential person for the company.A person becomes an excluded individual if the individual:…is a director, secretary or influential person for a company at any time up to one year before the company has a provisional liquidator, liquidator, administrator or controller appointed.Why the QBCC consider the Company to be an excluded companyOn or about 15 November 2013 Robert Collin Humphreys of BRI Ferrier was appointed as liquidator to Colonial Properties Pty Ltd (The Event).

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.