QBSA v Classic Brick & Block Pty Ltd
[2011] QCAT 130
•23 March 2011
| CITATION: | Queensland Building Services Authority v Classic Brick & Block Pty Ltd [2011] QCAT 130 |
| PARTIES: | Queensland Building Services Authority |
| v | |
| Classic Brick & Block Pty Ltd |
| APPLICATION NUMBER: | OCR307-10 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Member |
| DELIVERED ON: | 23 March 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | The respondent pay the applicant a penalty of $10,000 on or before 20 April 2011. |
| CATCHWORDS : | EXCEEDING ANNUAL ALLOWABLE TURNOVER – where AATO significantly exceeded in two consecutive years – medium sized company – no evidence of management controls in place Queensland Building Services Authority Act 1991, ss 89(a), 89(k), 91(3)(b) |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
In the 2007-08 year, Classic Brick & Block Pty Ltd had an Allowable Annual Turnover (“AATO”) of $300,000. Classic’s actual turnover that year was $1,504,359, exceeding the AATO by $1,204,359 or 401%. Classic did not notify the Authority that it was likely to exceed the AATO, nor did it obtain the Authority’s consent to exceed the AATO.
In the 2008-09 year, Classic had an AATO of $1,102,764. Classic’s actual turnover that year was $1,320,179, exceeding the AATO by $217,415 or 19.7%. Once again, Classic did not notify the Authority that it was likely to exceed the AATO, nor did it obtain the Authority’s consent to exceed the AATO.
The parties agree, and the tribunal accepts, that proper grounds exist for taking disciplinary action against Classic for breaching sections 89(a) and/or 89(k) of the Queensland Building Services Authority Act 1991. Pursuant to section 91(3)(b) of the Act, the tribunal may impose a penalty of an amount not more than 1,000 penalty units.
Authority’s submissions
The Authority urges a significant penalty in the range of $8,000 to $10,000. It has directed the tribunal’s attention to Queensland Building Services Authority v Built Qld Pty Ltd[1] which lists the relevant factors to be taken into account when determining a penalty for exceeding the allowable AATO and submits:
[1] [2005] QCCTB 152.
a)Classic was incorporated on 11 April 2006. The Authority first issued a licence to Classic on 27 June 2006. It can be characterised as a medium sized business.
b)The breaches occurred in two consecutive years. At least in relation to the second breach, Classic had been specifically notified of its licence conditions on numerous occasions. Early in the 2008-09 year, the Authority sent Classic a letter noting its breach of the AATO in 2007-08 and reminding it of its obligation not to further breach the AATO.
c)Classic did not regularly monitor its turnover, as the Commercial and Consumer Tribunal suggested that a licensee should[2].
d)Classic has not demonstrated that it has implemented ongoing accounting and business forecasting measures to ensure it does not breach the AATO in the future.
e)A licence is a privilege, not a right.
f)The penalty should act as a deterrent to both Classic and other licensees. Therefore, the penalty should not be insignificant to the benefit gained by Classic and should not simply be factored into Classic’s business practices.
g)The penalty should reflect the primary purpose of the financial requirements which is to avoid situations where licensees trade beyond their means and are unable to honour their obligations to consumers, contactors and suppliers.
h)The most concerning aspect is that Classic exceeded its AATO in two consecutive years, and in face of a warning from the Authority.
Classic’s breach in 2007-08 was by a significant margin of 401.45%.
[2]Queensland Building Services Authority v Janda Commercial Pty Ltd [2009] QCCTB 241 at paragraph 6.
The Authority referred the tribunal to the following cases:
Case $ over AATO % over AATO Penalty QBSA v M & R Hudson Plumbing Pty Ltd[3] $708,079 236 $4,000 QBSA v Grasstree Landscaping & Design Pty Ltd[4] $1,818,802 606.3 $4,000 QBSA v G & T Roofing Pty Ltd[5] $912,917 252.5 $4,000 QBSA v Janda Commercial Pty Ltd[6] $1,220,678 157.7 $4,700 QBSA v Dilizio Painting Pty Ltd[7] $735,205 245.4 $4,000 [3] [2010] QCAT 623.
[4] [2009] QCAT 089.
[5] [2010] QCAT QD031-09.
[6] Supra.
[7] [2009] CCT QD012-09.
The Authority also referred the tribunal to Queensland Building Services Authority v Peninsula Construction Group (Qld) Pty Ltd[8], the only decision of the tribunal involving two AATO breaches. In that case, the company had only been licensed for two years. In its first year, it breached the AATO by $907,801 or 363.1%. In its second year, the company breached the AATO by $7,767,351 or 504.6%. The tribunal imposed a single penalty of $8,000.
[8] [2009] QCAT 026.
Considerations
Despite an opportunity to do so, Classic has not filed any submissions although the Authority, in its submissions, noted that Classic says the breaches were as a result of its rapid business growth.
Unlike the respondent in Peninsula Classic appears to have learnt something from its first breach of the AATO in that at least its breach in the second year was of a reduced size and scale. However:
a)Classic had knowledge of the first breach and ample warning of the consequences of a second breach.
b)There is no material before the tribunal to demonstrate that Classic has implemented any accounting or management controls to prevent a recurrence of the breach. I note that the AATO for the second year was significantly higher than the AATO for the first year and still Classic managed to exceed it.
c)The second breach cannot be explained as inadvertent.
d)The breach cannot be explained as occurring because of a period of the rapid growth, as the growth had occurred, and been recorded, in 2007-08.
Classic’s conduct in breaching its AATO in two consecutive years is very serious and demonstrates a lack of consideration for the licensing requirements of the Authority. Therefore, a significant penalty is warranted. I order that Classic pay the Authority a penalty of $10,000.
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