Leet v Queensland Building and Construction Commission - [2020] QCAT 160

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Leet v Queensland Building and Construction Commission [2020] QCAT 160

PARTIES: GLENN LEET

(applicant)

v

QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION

(respondent)

APPLICATION NO/S:

OCR188-19

MATTER TYPE:

Occupational regulation matters

DELIVERED ON:

13 May 2020

HEARING DATE:

26 February 2020

HEARD AT:

Brisbane

DECISION OF:

Member Kanowski, Presiding
Member Norling

ORDERS:

The decision made by the Queensland Building and Construction Commission on 13 May 2019 that Glenn Leet is an excluded individual is confirmed.

CATCHWORDS:
PROFESSIONS AND TRADES – BUILDERS – LICENCES AND REGISTRATION – OTHER MATTERS – where licensee was director of a company within two years of a relevant event – whether company was a construction company – whether company solvent when the applicant ceased to be a director

Corporations Act 2001 (Cth), s 95A

Queensland Building and Construction Commission Act 1991 (Qld), s 56AC

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20

ASIC v Plymin [2003] VSC 123

Briginshaw v Briginshaw (1938) 60 CLR 336
Ezra Constructions Pty Ltd & Ors v Queensland Building and Construction Commission [2019] QSC 47
Pearce v Gulmohar Pty Ltd [2017] FCA 660

Queensland Building and Construction Commission v Mudri [2015] QCATA 78

APPEARANCES & REPRESENTATION:

Applicant:

Self-represented

Respondent:

Robinson Locke Litigation Lawyers

REASONS FOR DECISION

Introduction

Mr Leet was a director of Integrity New Homes Pty Ltd from 12 June 2003 to 12 March 2018 and from 4 May 2018 to 5 June 2018.
Integrity New Homes Pty Ltd changed its name to Laxmi Custom Homes Pty Ltd (the Company) on 6 August 2018.
A liquidator was appointed to the Company on 15 March 2019.
On 2 April 2019, the Queensland Building and Construction Commission (the QBCC) decided that Mr Leet was an excluded individual as defined in s 56AC of the Queensland Building and Construction Commission Act 1991 (Qld) (the QBCC Act).
On 16 April 2019, Mr Leet sought an internal review of the QBCC decision.
On 13 May 2019, the QBCC on internal review confirmed its decision that Mr Leet was an excluded individual as defined in s 56AC of the QBCC Act.
On 5 June 2019, Mr Leet lodged an application to review that decision with the Tribunal. The matter was heard on 26 February 2020. QBCC then filed written closing submissions on 3 March 2020, and Mr Leet provided an email on 4 March 2020 as his closing submissions.

Legal Framework

This is a fresh hearing on the merits. [1] The role of the Tribunal is to produce the correct and preferable decision. [2] The Tribunal may have regard to any relevant evidence. It is not confined to the evidence that was before the QBCC when the reviewable decision was made. The Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision, or set aside the decision and return the matter for reconsideration to the decision-maker for the decision, with the directions the Tribunal considers appropriate.^[3]
[1]Queensland Civil and Administrative…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] QCAT 160
Decision Date: 13 May 2020

CaseChat Overview and Summary

The case of Leet v Queensland Building and Construction Commission was heard by the Queensland Civil and Administrative Tribunal (QCAT). The dispute arose when the Queensland Building and Construction Commission (QBCC) determined that Glenn Leet was an excluded individual, barring him from holding a building licence. Mr Leet challenged the QBCC's decision, arguing that at the relevant time, the company he was associated with was solvent, which was a factor the QBCC should have considered.

The primary legal issue before the QCAT was whether the QBCC was correct in its determination that Mr Leet was an excluded individual, and if it had sufficient evidence to conclude that the company was not solvent at the relevant date. Mr Leet argued that the QBCC had access to sufficient evidence to find the company solvent as at the relevant date, including reports from accountants stating the company was solvent as at 31 March 2018 and 30 June 2018. The QBCC contended that the company was a construction company, had a liquidator appointed, and Mr Leet had not provided sufficient evidence of solvency.

The QCAT considered the definition of solvency under the Corporations Act, noting that it is a question of fact to be determined on a case-by-case basis. The Tribunal concluded that the cash flow test was more appropriate for determining solvency. It acknowledged that the QBCC had before it sufficient evidence to conclude that the company was solvent as at the relevant date. However, the Tribunal found that the QBCC's decision to disregard this evidence in favour of subsequent research and information was unfair. Despite this, the QCAT confirmed the QBCC's decision, finding that the other factors in the QBCC Act supported the determination that Mr Leet was an excluded individual.

In summary, the QCAT upheld the QBCC's decision to exclude Glenn Leet from holding a building licence. While the Tribunal found that the QBCC had sufficient evidence of solvency, it concluded that other factors in the QBCC Act justified the exclusion.

Orders

Orders of the court

The decision made by the Queensland Building and Construction Commission on 13 May 2019 that Glenn Leet is an excluded individual is confirmed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Solvency is not defined in the QBCC Act. However, Schedule 2 of the QBCC Act provides the following relevant definition:insolvent under administration has the meaning given by the Corporations Act, section 9. The Corporations Act 2001 (Cth) (‘Corporations Act’) has definitions of ‘solvent’ and ‘insolvent’, which are appropriate to adopt here, in s 95A:(1) A person is solvent if, and only if, the person is able to pay all the person’s debts, as and when they become due and payable. (2) A person who is not solvent is insolvent. It is noted that accountants typically utilise two tests to assess solvency, the cash flow test and the balance sheet test. The Tribunal considers that the cash flow test better satisfies the definition of solvency articulated in the Corporations Act. Ultimately, solvency is a question of fact to be ascertained from a consideration of the company’s financial position taken as a whole and is to be decided on a case-by-case basis. [9] It is also relevant to note that ASIC v Plymin[10] sets out a list of 14 indicators that assists in understanding whether and when a company will be found to be insolvent. [9]Pearce v Gulmohar Pty Ltd [2017] FCA 660, [144]-[157].[10][2003] VSC 123. Mr Leet submits that at the date of the QBCC decision, the QBCC had before it sufficient evidence to find that as at the relevant date, 5 June 2018, the Company was solvent. That evidence comprised an email from an accountant, Mr Valjan, stating that the company was solvent as at 31 March 2018 and referencing a report by another accountant, Mr Stone, that the company was solvent as at 30 June 2018 (although the QBCC internal review stated that the Stone report was not before it at the time of its decision). Mr Leet submits that it is not fair for the QBCC to now justify its decision upon subsequent research and information. The QBCC submits that:(a)The Company was a construction company within the meaning of s 56AC(7) of the QBCC Act;(b)The Company had a liquidator appointed for the benefit of creditors within the meaning of s 56AC(2) of the QBCC Act;(c)Mr Leet was a director within two years of the relevant event;(d)Mr Leet has not provided sufficient evidence to demonstrate that the Company was solvent at the relevant date; and(e)The QBCC decision should be confirmed. The Tribunal provided a Direction dated 26 November 2019 allowing each party to submit further evidence before the Tribunal. Mr Leet provided oral evidence and relied upon the following evidence:(a)Brief email dated 15 April 2019 from Mr Valjan, accountant, stating that the Company was solvent on a balance sheet and commercial basis as at 31 March 2018. This email was supported by unaudited Management Accounts as at 31 March 2018;(b)Very brief email dated 9 August 2019 from Mr Valjan, accountant, stating that the Company was solvent during June 2019 and in particular on 5 June 2019 (although the parties agreed that these years were in error and both should refer to 2018); and(c)Report as to Solvency into Integrity New Homes Pty Ltd by Mr Stone dated 20 August 2018, which concluded that the Company was solvent at 30 June 2018 (the Stone Report). This was based, in part, upon unaudited Management Accounts as at 30 June 2018.