QBSA v Uniport Australia Pty Limited
[2011] QCAT 612
•1 December 2011
| CITATION: | Queensland Building Services Authority v Uniport Australia Pty Limited [2011] QCAT 612 | |
| PARTIES: | Queensland Building Services Authority | |
| v | ||
| Uniport Australia Pty Limited | ||
| APPLICATION NUMBER: | OCR307-10 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Member |
| DELIVERED ON: | 1 December 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | The respondent, Uniport Australia Pty Limited, pay the Queensland Building Services Authority a penalty of $13,500 on or before 31 January 2012. |
| CATCHWORDS: | EXCEEDING ANNUAL ALLOWABLE TURNOVER – where AATO significantly exceeded in four consecutive years –large sized company Queensland Building Services Authority Act1991, 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 2005-06 year, Uniport Australia Pty Limited had an Allowable Annual Turnover (“AATO”) of $1,974,943. Uniport’s actual turnover that year was $3,398,532, exceeding the AATO by $423,589 or 21.4%. Uniport 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 2006-07 year, Uniport had an AATO of $959,531. Uniport’s actual turnover that year was $4,325,033 exceeding the AATO by $3,365,502 or 350.7%. Once again, Uniport 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 2007-08 year, Uniport had an AATO of $1,324,486. Uniport’s actual turnover that year was $17,137,923 exceeding the AATO by $15,813,437 or 1,193.3%. Once again, Uniport 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, Uniport had an AATO of $12,000,000. Uniport’s actual turnover that year was $13,470,650 exceeding the AATO by $1,500,035 or 12.5%. Once again, Uniport 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 Uniport 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.
The Authority urges a significant penalty in the range of $20,000 to $24,000. It has directed the tribunal’s attention to Queensland Building Services Authority v Peninsula Construction Group (Qld) Pty Ltd[1] as the tribunal decision that is closest to the facts of this proceeding. Peninsula had two AATO breaches but had been licensed for only two years. The first breach was 363.1% above the AATO; the second breach was 504.6% above the AATO. The Authority submits that, because Uniport breached the AATO twice as many times, the penalty should be at least twice that imposed in Peninsula.
[1] [2009] QCAT 026.
The Authority referred the tribunal to Queensland Building Services Authority v Alfredo Mena[2], a decision of the former Commercial and Consumer Tribunal. The licensee, Mr Mena, breached the AATO twice. The tribunal imposed a penalty of $5,000. Mr Mena did not learn from this penalty, as he was breached again in 2009. This time, he was penalised $7,000[3]. The Authority submits that any penalty imposed on Uniport should take account of the aggravating features of a pattern of behaviour by the licensee.
[2] [2005] CCT L019-05.
[3] [2009] CCT QD024-09.
The Authority also referred the tribunal to Queensland Building Services Authority v Thomas & Coffey Ltd[4]. That company committed four breaches because, in two successive years, it had failed to maintain the necessary level of Net Tangible Assets. A penalty of $10,000 was imposed. The Authority submits that, while the offences are different, the tribunal should have regard to the multiple offences. Applying today’s penalty unit rate, the Authority submits that an equivalent penalty would be $13,333.
[4] [2006] CCT QD003-06.
Uniport accepts that it failed to discharge its statutory obligations. Its explanation of how the breaches occurred is:
a)It expanded to Queensland in 2005 but has only undertaken two jobs in Queensland; one in 2006 and one in 2010.
b)It allocated the duty of statutory compliance to its external accountant.
c)Neither Uniport nor its accountant was aware that the AATO included licence work done in other jurisdictions.
d)It was not aware that it was in breach of the AATO until these proceedings were commenced.
e)The company has now implemented measures to ensure that it complies with its statutory obligations.
f)It has an otherwise unblemished disciplinary record.
g)The offences were committed by omission and the Authority did not notify the company of the breach when it first occurred. Instead, for four years, the Authority renewed the company’s licence without comment.
In addition to the decisions already mentioned, Uniport referred the tribunal to the following decisions:
Case
$ over AATO
% over AATO
Penalty
QBSA v McLucas Pty Ltd[5]
$457,620
$445,650
69
28
$4,000
QBSA v FDC Construction and Fit-out Pty Ltd[6]
$129,000
256
$9,000
QBSA v Goomeri Service Centre[7]
$137,365
345.8
$1,000
QBSA v Lecton Constructions Pty Ltd[8]
$1,707,679
569.2
$1,000
QBSA v Dilizio Painting Pty Ltd[9]
$735,205
245.4
$4,000
QBSA v Coastal Interior Linings Pty Ltd[10]
$6,787,774
226.3
$4,000
QBSA v Northstar Plumbing Pty Ltd[11]
$892,588
892.6
$800
[5] [2005] CCT L014-05.
[6] [2009] QCCTB 16.
[7] [2009] QCCTB 228.
[8] [2009] QCCTB 230.
[9] [2009] CCT QD012-09.
[10] [2010] QCAT 165.
[11] [2009] QCAT 33.
The relevant factors to be taken into account when determining a penalty for exceeding the allowable AATO are set out in Queensland Building Services Authority v Built Qld Pty Ltd[12].Relevantly:
a)Although Uniport was incorporated in 1989, it did not seek a licence in Queensland until 2005.
b)Uniport concedes that it should be characterised as a “large size” business.
c)The breaches occurred in four consecutive years although Uniport says that it had no specific notice of the breaches until these proceedings were issued.
d)Uniport did regularly monitor its turnover, as the Commercial and Consumer Tribunal suggested that a licensee should[13] albeit on an incorrect basis.
e)Uniport has demonstrated that it has implemented ongoing accounting and business forecasting measures to ensure it does not breach the AATO in the future.
[12] [2005] QCCTB 152.
[13]Queensland Building Services Authority v Janda Commercial Pty Ltd [2009] QCCTB 241 at paragraph 6.
As the tribunal has stated on many occasions, a licence is a privilege, not a right.
The penalty should act as a deterrent to both Uniport and other licensees. Therefore, the penalty should not simply be factored into Uniport’s business practices.
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. There is, however, no suggestion that Uniport was ever at risk of trading beyond its means, defaulting on trade creditors or exposing Queensland consumers to risk.
Considerations
Uniport accepts that it had the ultimate responsibility for ensuring that it complied with the AATO requirements. It is unanswerable that the various publications issued by the Authority specify that AATO must be calculated by reference to all revenue generated, regardless of where the work is carried out, where the licensee is located or from which source the revenue is generated.
As the learned Member pointed out in Peninsula, directors who are experienced in other jurisdictions should be aware that licensing in Queensland carries unique obligations and they should take steps to ensure that these obligations are met. Simply devolving that task to an external accountant is not sufficient, as the events of this proceeding demonstrate.
Uniport submits that it should receive a reduced penalty because the Authority took no action in relation to its breaches for the first three years. The Authority argues that it is a busy statutory authority with many licensees, making it difficult to follow up every instance of non-compliance.
The undisputed evidence is that the Authority consistently publishes information advising licensees about the AATO requirements and many of these publications explicitly canvass the meaning of AATO. I cannot understand how the officers of a company such as Uniport failed to understand this fundamental concept. Uniport has not assisted my ability to understand this lacuna by providing the tribunal with a statement from any of the directors or the external accountant. Importantly, no officer of the company has explained how, each year, Uniport submitted an application for renewal of its licence, with an Independent Review Report, which apparently ignored the definition of AATO.
Uniport’s proposed penalty of $800 is manifestly inadequate and takes no account of the magnitude of the breach, the number of breaches or the need for a deterrent.
The breaches in this case, having continued for four years, are more serious than those of Peninsula. I find the penalty imposed in Thomas & Coffey is a better comparative, particularly as:
a) Both Uniport and Thomas & Coffey cooperated with the Authority once the breaches were identified.
b) The companies are both large companies and bear a responsibility for providing leadership within the industry.
c) The breaches were significant and continuing.
In all the circumstances, I adopt the Authority’s analysis of the current value of the penalty imposed in Thomas & Coffey, by applying the current value of the penalty unit. Rounding up, I therefore impose a penalty of $13,500.
The tribunal commonly orders that a party in breach pay the regulatory body’s costs of bringing disciplinary proceedings on the basis that other licensees should not have to bear the costs of bringing the proceeding.[14] However, the Authority’s submission that Uniport pay the Authority $250 costs is simply a token gesture which cannot have any relevance to the actual cost of the proceeding nor can it act as a deterrent. In these circumstances, the general rule that each party should bear its own costs should prevail.
[14]See, for example, Veterinary Surgeons Board of Queensland v McIntosh [2011] QCAT 417 at [10].
The respondent, Uniport Australia Pty Limited, should pay the Queensland Building Services Authority a penalty of $13,500 on or before 31 January 2012.
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