Morrow v Queensland Building Services Authority

[2005] QDC 261

[2005] QDC 261

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 2334 of 2005

JOHN KEITH MORROW	Applicant
and
QUEENSLAND BUILDING SERVICES AUTHORITY	Respondent

BRISBANE

..DATE 22/08/2005

ORDER

CATCHWORDS: Queensland Building Services Authority Act 1991, s 31(1), s 48, s 49 - leave to appeal against Queensland Building Tribunal determination that a s 49(1) notice requires the Authority to foreshadow "cancellation or suspension" of a licence rather than nominate only one or the other - conflicting decisions of Tribunal Members - notice held deficient for failure to state "reasons" - mere reference to a ground set out in s 48(a) to (j) insufficient.

HIS HONOUR:  This is an application for leave to appeal to the Court from a decision of the Queensland Building Tribunal in extremely unusual circumstances.

The applicant/appellant, John Keith Morrow, was sentenced in the District Court at Cairns on 26th March 2003 in respect of four offences of defrauding the Commonwealth under Section 29D of the Crimes Act.  He had pleaded guilty.  He was sentenced to three years imprisonment ameliorated by an order that he be released on recognisance after serving four months.  The offences were plainly serious.  It was agreed on the sentence that the total amount of deductions which should have been made from employees' wages and remitted to the Taxation Office was $191,771.68. 

Mr Morrow has a general registration or licence as a builder under the Queensland Building Services Authority Act 1991. Relevant sections, it should be noted, are 31, 48 and 49:

"31.  Entitlement to contractor's licence

(1)  A person (not being a company) is entitled to a contractor's licence if the authority is, on application by that person, satisfied that -

(a)  the applicant is a fit and proper person to hold the licence; and

(b) the applicant has the qualifications and experience required by regulation in relation to a licence of the relevant class; and

(c)  the applicant satisfies the relevant financial requirements stated in the board's policies.

(2)  A company is entitled to a contractor's licence if the authority is satisfied, on application by that company for a licence, that -

(a)  the directors and any other persons who are in a position to control or substantially influence the conduct of the company's affairs (including, for example, shareholders with a significant shareholding, financiers and senior employees) are fit and proper persons to exercise such control or influence over a company that holds a contractor's licence; and

(b)  the company's nominee holds a licence specifically identifying, as a class of building work that the nominee may supervise, the same class of building work for which the licence is sought by the company; and

(c)  the applicant satisfies the relevant financial requirements stated in the board's policies.

(3)  In deciding whether a particular person is a fit and proper person to hold a contractor's licence or to exercise control or influence over a company that holds a contractor's licence, the authority may have regard to -

(a)  commercial and other dealings in which that person has been involved and the standard of honesty and integrity demonstrated in those dealings; and

(b)  any failure by that person to carry out commercial or statutory obligations and the reasons for the failure; and

(c)  tier 1 defective work carried out by the person, whether or not the person received a notice under section 67AH, 67AI, 67AL or 67AM stating a term of ban for the work; and

(d)  any other relevant factor.

48  Cancellation or suspension of licence

The authority may suspend or cancel a licence if -

(a)  the licence was obtained on the basis of incorrect information supplied to the authority, whether or not fraud was intended; or

(b)  the licence was obtained by fraud or other improper means; or

(c)  the licensee is convicted of an indictable offence or an offence that, if committed in Queensland, would be an indictable offence; or

(e)  the licensee is a company and it ceases, for a period exceeding 28 days, to have a nominee holding a licence authorising supervision of building work of the appropriate class or classes; or

(f)  the licensee is convicted of an offence against this Act; or

(h)  the licensee contravened a condition to which the licence is subject under section 35 or that is imposed under section 36 on the licensee's licence; or

(i)  the licensee owes an amount to the authority and fails to comply with a demand by the authority to discharge the debt; or

(j) the authority becomes aware of the existence of facts that, having regard to section 31(1)(a) or (2)(a) -

(i)  would allow the authority to refuse to issue the licence if it were not being applied for by the licensee; or

(ii) would have allowed the authority to refuse to issue the licence originally.

49  Procedure for cancellation or suspension

(1)  The authority must, before cancelling or suspending a licence, give the licensee notice of its reasons for the proposed cancellation or suspension and allow the licensee 21 days from service of the notice to make written representations on the matter.

(2)  The authority must consider any written representations made within the time allowed under subsection (1) before imposing the cancellation or suspension.

(3)  A cancellation or suspension is imposed by written notice to the licensee.

(4)  The notice of cancellation or suspension must inform the licensee or former licensee of the right to apply to the tribunal for a review of the authority's decision.

Unsurprisingly, disciplinary proceedings were instituted against Mr Morrow who, it perhaps might be noted, had made inroads into the extent of his financial obligations to the Federal Government (which were increased by the levying of penalty taxes) in the amount of some $156,000 at the time of his sentence. 

Exhibit 1 before the Court is the Authority's letter of 9th April 2003 which constitutes the notice it was required to send under Section 49(1). The full terms of that notice are as follows:

"Notice of reasons for proposed cancellation or suspension

Pursuant to section 48 of the Queensland Building Services Authority Act, 1991 ('the Act') the Authority may suspend or cancel a licence if the licensee is convicted of an indictable offence or an offence that, if committed in Queensland, would be an indictable .

Pursuant to:

1. Section 49(1) of the Act, the Authority must, before cancelling or suspending a licence, give the licensee, notice of its reasons for the proposed cancellation or suspension or allow the licensee 21 days from the service of the notice to make written representations on the matter;

2. Section 49(2) of the Act, the Authority must consider any written representations made within the time allowed under section 49(1) before imposing a cancellation or suspension.

TAKE NOTICE that the Authority proposes to suspend or cancel your licence for the reasons set out below:-

The Authority has determined that you have been convicted of an indictable offence or an offence that, if committed in Queensland, would be an indictable offence.

Particulars

(a)  In the Cairns District Court on 26 March 2003, you were convicted of an indictable offence, under Section 29(D) of the Commonwealth Criminal Act.

The Authority now allows you 21 days from service of this notice to make written representations on the matter and will consider those representations before deciding whether to impose any cancellation or suspension of your licence.

If you have any queries, or wish to more fully discus the matters set out in this letter, please contact the author on the above telephone number.

Yours faithfully,

Natasha Dennis
Senior Compliance Officer.

The purpose of the appeal is to establish the invalidity or insufficiency of that notice. Two grounds are assigned: the first that it does not state "reasons" as required by section 49(1), the second that it fails to specify which course was under consideration by the Authority, either cancellation or suspension.

There has been no occasion for the Court to go in detail into the intricacies of proceedings before the Authority or on appeal to the Tribunal against the determination of the Authority communicated in a letter of 2nd July 2003, Exhibit 2, that Mr Morrow's licence be suspended for a period of 60 days from that day.  The penalty appears modest but that is not presently the point. 

For some reason, the Tribunal file has not been transmitted to the Court but counsel are agreed that sufficient material has been placed in evidence by the tender of documents to permit the issue of construction of s 49(1) which arises to be dealt with.

The Tribunal has not got to the merits of the appeal - having considered as a preliminary point the issue now raised here.

Did Mr Coyne worry about the reasons side or just the cancellation on suspension side?

MR SAVAGE:  Well, your Honour, I appeared in the - before Mr Coyne and my recollection, I'm careful about this, on my brief is a note of my argument that I didn't use in the sense that I tendered it but it's what I spoke from in my submissions which makes this point.  My learned friend suggests to me that it wasn't a point made below.  It is a point in the written submissions‑‑‑‑‑

HIS HONOUR:  Which were handed up?  They weren't?

MR SAVAGE:  They were before the Tribunal because they were on the actual file and it appears in my notice of argument, but other than that I'm not confident to tell your Honour.

HIS HONOUR:  Right.  Well, I appreciate‑‑‑‑‑

MR SAVAGE:  Because my learned friend challenges the proposition.

MR DAVIS:  I take no point in it to this extent: that there might be some doubt as to whether or not it's an error of law committed below if it wasn't argued.

HIS HONOUR:  Yes.

MR DAVIS:  But there's no point in sending it back, another decision being made and it ends up back before the Court.

HIS HONOUR:  That's right.

MR DAVIS:  So I'm happy for your Honour to deal with it.

HIS HONOUR:  All right. 

That is an important exchange which I would like transcribed and incorporated in these reasons.

The only aspect of the appeal to the Tribunal which has been determined as a preliminary point concerns the adequacy of the section 49(1) notice. The point was determined against Mr Morrow meaning that a merits hearing and determination are still in prospect unless the technical ponit raised in this Court succeeds. It is a technical point, the relevant suspension having long ago been served.

What Mr Morrow is concerned about is the nature of the public record regarding his performance as a builder under the Act.  I am prepared to accept that blemishes appearing on that record are likely to have considerable impact on his ability to pursue his occupation successfully. 

The appeal to this Court is available only in respect of matters of law. That is plainly what the Court is faced with now. So far as the requisite leave being granted is concerned, Mr Davis did not positively concede that leave ought to be given; he was unable to oppose the giving of it strongly in circumstances where Members of the Tribunal have taken different views in respect of whether the section 49(1) notice ought to elect between cancellation and suspension. That was the view of the Tribunal Member, Mr Sweeney, in O'Toole v. Queensland Building Services Authority [1996] QBT 266 12 December 1996.

His approach was followed by Mr Lorisch in Hanson v Queensland Building Services Authority [1999] QBT 85.  In the determination under appeal Mr Coyne differed to the extent of determining that it was incumbent on the Authority in issuing the notice to include reference to "cancelling or suspending" - in the sense of both being included. 

The Member referred to Burnham v The City of Mordialloc [1956] VLR 239 and concluded that by parity of reasoning section 49(1) properly construed required the Authority to state both alternatives - that is, cancellation or suspension - in its show cause notice.

If reference is made to the Victorian decision at page 242, one finds Mr Coyne is correct in his view of it.  Lowe J said after some consideration of the matter that:

"Three alternatives are set out in the regulation and in my opinion they must be set out in the notice.  The cause which may be shown may differ in regard to each alternative.  The notice must inform the recipient that he must show cause in relation to all these alternatives.  If the alternatives are not brought to his knowledge he may not be prepared to show cause as to one or more of the alternatives.  The notice of the 26th of May 1953 gave one alternative only: take notice that the Council hereby requires you to show cause why such building should not be demolished."  "The form of the notice suggests that the Council has already considered the alternatives and resolved (provisionally at any rate) that of the three alternatives, that of the demolition should be chosen unless good reason was shown to the contrary."

I would think that as a practical matter recipients of s 49(1) notices would be grateful if one of the alternatives open was identified, in particular if the penalty faced was identified as suspension. I would have some difficulty in concluding that a notice foreshadowing suspension only was invalid. Of course such a notice would limit what might follow. I do however think that Mr Coyne has correctly applied Burnham and that in the present circumstances the relevant notice can not be successfully challenged on that ground.

So far as the other ground is concerned, however, I take a different view.  It is unfortunate that the Member's discussion does not extend to this aspect.  I note Mr Davis' concession in the circumstances (which, perhaps because we do not have the file, are somewhat mysterious) that the Court may look at this aspect as well.

Mr Davis' argument is that the reasons referred to in section 49(1) correspond with the circumstances - whether they be regarded as grounds or reasons, in the absence of categorisation, does not matter - in paragraphs (a) to (j) in section 48.

This is a somewhat difficult question.  It is brought to the Court on a hypothetical basis in the sense that Mr Morrow could hardly have been in any doubt what the "reasons" of the Authority were.  What influences my approach is that there can be no necessary or even prima facie consequence of occurrence of any of the events in (a) to (j), (j) perhaps excepted, and suspension or cancellation of a licence being appropriate. 

The circumstances which bring about the existence of the conditions or grounds may be minor in the extreme and on any reasonable approach have no relevance to the licensee's being a fit and proper person or a sufficiently qualified and experienced person or a sufficiently sound person financially to deserve the privilege of becoming or continuing licensed. 

In my opinion, the statement of reasons ought to show why it is considered that the condition relied on from section 48 makes suspension or cancellation of the licence appropriate. It may well be enough to refer to one of the sub paragraphs of section 31(1) no longer applying (or in other circumstances the sub paragraphs of other subsections).

I think the notice was, as a matter of form, deficient and that the Court should so rule notwithstanding that if
Mr Morrow's case is looked at on the merits, he may not command much sympathy.  Leave to appeal should be granted, the appeal allowed.

...

HIS HONOUR:  The Authority's determination notified on the 2nd of July 2003 should be set aside.

...

HIS HONOUR: I will mark Exhibit 5 a document prepared by counsel which signifies agreement that the proper costs orders are that the appellant bear the costs of and incidental to compliance with section 100(3) and (4) of the Commercial and Consumer Tribunal Act 2003; that otherwise, the respondent pay the appellant's costs of and incidental to the appeal and the application to be assessed on the standard basis.

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