O'Brien v Queensland Building and Construction Commission - [2015] QCAT 105

CITATION:

O’Brien v Queensland Building and Construction Commission [2015] QCAT 105

PARTIES:	Craig O’Brien (Applicant)
v
Queensland Building and Construction Commission (Respondent)

APPLICATION NUMBER:

OCR348-12

MATTER TYPE:

Occupational regulation matters

HEARING DATE:

14 March 2014

HEARD AT:

Rockhampton

DECISION OF:

Member Beckinsale

DELIVERED ON:

8 April 2015

DELIVERED AT:

Brisbane

ORDERS MADE:

1. The decision of the Queensland Building and Construction Commission refusing to categorise Craig O’Brien as a permitted individual is confirmed.

CATCHWORDS:

PERMITTED INDIVIDUAL – whether applicant should be categorised as a permitted individual – whether took all reasonable steps – (failure to satisfy requirement to keep proper books and records, failure to satisfy requirement to seek appropriate financial advice, failure to put in place appropriate credit management for amounts owing and taking reasonable steps for recovery of the amounts, failure to make adequate provision for taxes)

Queensland Building and Construction Commission Act 1991 (Qld) ss 56AC, 56AD
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 20

Younan v QBSA [2010] QDC 158 followed

Gary Morrison Constructions Pty Ltd v QBSA [2012] QCATA 77 referred

APPEARANCES:

APPLICANT:

Craig O’Brien represented himself

RESPONDENT:

Queensland Building and Construction Commission represented by Susan Van Eyk

REASONS FOR DECISION
Application

Mr O’Brien holds a licence as a Builder-Low Rise and Carpentry with the Queensland Building Services Authority (as it was then).
On 16 August 2012, the Authority sent a notice to Mr O’Brien advising that the Authority considered him to be an excluded individual by reason of his entering into bankruptcy on 29 February 2012. Under the current Queensland licensing system for builders, an excluded individual’s building licence is cancelled for five years.[1]
[1]Queensland Building and Construction Commission Act 1991 s 56AC.
An excluded builder can apply to be a permitted individual allowing the builder to retain the building licence if the builder can satisfy the Commission that all reasonable steps were taken to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event, in this case, bankruptcy.[2]
[2]Ibid s 56AD.
On 25 September 2012, the Authority refused an application by Mr O’Brien to be categorised as a permitted individual under section 56AD(1) of the then Queensland Building and Services Authority Act 1991.
Mr O’Brien seeks a review of that decision.
Legal Framework
The Tribunal must conduct a fresh hearing on the merits[3] as to whether Mr O’Brien took all reasonable steps to avoid the circumstances of the bankruptcy and may have regard to evidence not available to the original decision maker. The Tribunal must stand in the shoes of the decision maker and make the correct and preferable decision under section 56AD in relation to the bankruptcy event.
[3]Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act) s 20.
The Queensland Building and Construction Commission Act 1991 (the Commission Act) sets out the matters the Commission (and therefore this Tribunal) must have regard to when examining any action by the excluded builder to show that he took all reasonable steps to…

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: [2015] QCAT 105
Decision Date: 8 April 2015

CaseChat Overview and Summary

Craig O'Brien sought to have himself categorised as a permitted individual, a status that would have exempted him from certain requirements under the Queensland Building and Construction Commission Act. The Commission had previously denied his application, citing failures to maintain proper books and records, seek appropriate financial advice, and implement effective credit management practices. The dispute reached the Queensland Civil and Administrative Tribunal (QCAT), which had the authority to review and amend the Commission's decision, substitute its own decision, or return the matter for reconsideration.

The primary legal issue before the court was whether Mr. O'Brien should be categorised as a permitted individual under the Act. This hinged on whether he had taken all reasonable steps to manage his financial affairs responsibly. Key points of contention included Mr. O'Brien's failure to keep adequate financial records, his reliance on Del Lawyers & Corporate Advisors for both legal and financial advice, and his handling of debts and credit management. The court needed to assess whether these failures were due to reasonable oversight or constituted significant negligence.

The court found that Mr. O'Brien had not taken all reasonable steps to manage his financial affairs. Evidence showed that he had poor record-keeping practices, relied excessively on his legal advisor for financial advice without verifying their qualifications, and failed to establish proper credit management systems. Additionally, his dealings with creditors, such as the missed payments to Mid Coast Timber, highlighted a lack of adequate financial oversight. The court concluded that these failures were not due to reasonable oversight but rather significant negligence, thereby denying his application to be categorised as a permitted individual.

The Tribunal confirmed the Commission's decision, refusing to categorise Craig O'Brien as a permitted individual. This decision was upheld, leaving Mr. O'Brien subject to the regulatory requirements from which permitted individuals are exempted.

Orders

Orders of the court

1. The decision of the Queensland Building and Construction Commission refusing to categorise Craig O’Brien as a permitted individual is confirmed.

Background

Background to the litigation

On review the Tribunal may confirm or amend the decision; set aside and substitute its own decision; or set aside the decision and return the matter for reconsideration by the decision maker.[10][10]QCAT Act s 24(1).Background Mr O’Brien commenced work in the building industry in Melbourne as an apprentice aged 16. He left to play football professionally for around twelve years, in Melbourne and later in Sydney where he also built and sold a number of houses. He and his wife Samantha O’Brien then moved to the Gold Coast where they bought residential properties, some of which they lived in, which they renovated and sold for profit. Mr O’Brien said he also worked as a carpenter for various companies from time to time and as a coach for a football club.Sale of Coobowie Street to DKR Investments Pty Ltd Mr O’Brien and his wife purchased and renovated a property at 5 Coobowie Street Broadbeach Waters which they sold by contract of sale dated 31 May 2007 to DKR Developments Pty Ltd for $1,325,000. The purchase price was to be paid by way of $1,000 deposit, $944,000 at settlement, another $331,250 (25%) after 12 months and the balance after 24 months. Interest on the outstanding balance was to be paid by the purchaser each quarter. Security on the loan to the purchaser comprised a second mortgage to the O’Briens as vendors and a personal guarantee from the director of DKR Developments, Glen Duker. On the recommendation of a representative of DKR Investments the O’Briens engaged David Evans principal of Del Lawyers to act on their behalf in relation to the sale. Mr O’Brien said Del Lawyers cost ten times the cost of a conveyancer but Mr O’Brien had no experience of a second mortgage and wanted to be sure it was done properly. He said he specifically asked what would happen if the balance was not paid and that David Evans reassured him that he had Glen Duker’s personal guarantee and that Mr Duker also had an extensive property portfolio. Mr O’Brien also knew Glen Duker was the pastor of a local church and a solicitor with his own practice. In response to a question as to whether he sought financial advice about the Coobowie Street sale as well as legal advice, Mr O’Brien said Mr Evans’ firm went by the description “Del Lawyers & Corporate Advisors” which he appeared to take as meaning they were financial advisors as well. Documentation provided by Mr O’Brien[11] indicates the net amount paid to Mr and Mrs O’Brien at settlement on 11 July 2007 was $37,060 although Mr O’Brien’s oral evidence at one point was that it was around $100,000. In any event, most of the settlement sum of $944,000 from Coobowie Street paid the O’Brien’s mortgage on that property.[11]Statement of Claim filed 6 July 2010 in the Supreme Court Brisbane Registry 6997/10 O’Brien v Evans trading as Del Lawyers & Corporate Advisors (BN18297470).TE Peters Drive The O’Briens contracted on 30 April 2007 to purchase a house at 85 TE Peters Drive, Broadbeach Waters for the sum of $1,060,000 with settlement on 30 July 2007.[12] Mr O’Brien gave contradicting oral evidence as to whether the sale proceeds from Coobowie Drive were applied to buy TE Peters Drive or whether he had $100,000 from another source. He said they borrowed more than they usually did to buy TE Peters Drive, intending to rely on the interest they expected to receive from DKR Developments to pay the mortgage. In oral evidence Mr O’Brien said he thought he had purchased TE Peters Drive for $850,000. [12]Ibid.

Evidence

Evidence Before The Court

Mr O’Brien said that after Gary Scott left Southern Gold Coast Lawyers they were not kept adequately informed regarding their creditors and the bankruptcy proceedings by Mid Coast Timber went ahead despite the owners of that firm agreeing to accept small regular payments. Mr O’Brien said the owner did not advise the debt collection firm of the payments but he did not adequately explain why he did not communicate with the collection agency or the court as proceedings progressed. Mr O’Brien said he would have paid Mid Coast Timbers in full had he known that he would be bankrupted but there was no evidence to suggest he was not duly served with notices at all stages of the proceedings.Evidence of Mr O’Brien’s Accountant Mr O’Brien’s current accountant, Jason Simmonds, provided a letter and gave oral evidence on Mr O’Brien’s behalf. His letter (dated 14 February 2013 in error having been written 14 February 2014) stated he had been engaged by Mr and Mrs O’Brien to ‘help them move forward and to get their books and records in order as the last three years book work and financial records have suffered due to hardship and this unfortunate and stressful times (sic)’. Mr Simmonds recalled that he may have first been engaged by the O’Briens around the time of the bankruptcy or a bit before ‘at the point of not being able to pay his previous accountant’. Mr Simmonds agreed that the financial records he had been working on included reconstructing books and records which had generally been done from bank statements and notations to bank statements. He said it had taken time because he worked on it sporadically and the records generally had been disorganised. He had also been trying to work out what the previous accountant had done. The period for which the financial records related he said was ‘a bit before the bankruptcy and probably going up to 12 months ago’. Before that time he said the records were handled by the O’Briens previous accountant and ‘generally prepared quite well’. He said he had ‘no reason to believe they wouldn’t have been prepared adequately’. Mr Simmonds thought the O’Briens’ business had been profitable. He said he at no time provided financial advice to Mr O’Brien and he was not qualified to do so. Mr Simmonds said he had completed BAS statements for Mr O’Brien as part of getting his records in order but these were not lodged when due.The Relevant Event There was no disagreement that the relevant event was Mr O’Brien’s bankruptcy on 29 February 2012.The Circumstances that Resulted in the Happening of the Event Mr O’Brien identified what he considered to be the main causes of the relevant event in his application to be categorised as a permitted individual received by the then Authority 14 September 2012 which can be summarised as follows:a) fraudulent property and investment scams by DKR Developments Pty Ltd and Mr Glenn Duker and consequent legal proceedings;b) legal proceedings against former solicitors; andc) failed repayment arrangements with creditors.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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