Queensland Building and Construction Commission v Jangho Curtain Wall Australia Pty Ltd
[2014] QCAT 646
•8 December 2014
| CITATION: | Queensland Building and Construction Commission v Jangho Curtain Wall Australia Pty Ltd [2014] QCAT 646 |
| PARTIES: | Queensland Building and Construction Commission (Applicant) |
| v | |
| Jangho Curtain Wall Australia Pty Ltd (Respondent) |
| APPLICATION NUMBER: | OCR128-14 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Senior Member O’Callaghan |
| DELIVERED ON: | 8 December 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Jangho Curtain Wall Australia Pty Ltd pay to the Queensland Building and Construction Commission a penalty of $5,000 within 21 days from the date of this order. 2. Jangho Curtain Wall Australia Pty Ltd pay to the Queensland Building and Construction Commission its costs fixed at $1,500 within 21 days of the date of this order. |
| CATCHWORDS: | Disciplinary proceedings – exceeding annual allowable turnover – where breach significant percentage – where new licensee – where isolated breach – comparative cases considered Queensland Building and Construction Commission Act 1991 (Qld), s 89, s 91 Queensland Building Services Authority v Built Qld Pty Ltd [2005] QCCTB 152 |
APPEARANCES:
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
In this disciplinary referral the parties have agreed, and the Tribunal finds, that proper grounds exist for taking disciplinary action against Jangho Curtain Wall Australia Pty Ltd (‘Jangho’). The ground being that during its 2011 to 2012 licence year Jangho exceeded its allowable annual turnover (‘AATO’) by $52,738,724 or 1,757.96 per cent without first notifying the Commission or obtaining the Commission’s approval in breach of s 89(a) and s 89(k) of the QBCC Act.[1]
[1]Queensland Building and Construction Commission Act 1991 (Qld).
It is now for the Tribunal to make a determination as to the appropriate penalty to be imposed.
The QBCC Act[2] enables the Tribunal to impose a penalty up to an amount equal to 1,000 penalty units. This equates to a maximum of $113,850.[3]
[2]Section 91(3)(b).
[3]Current penalty unit is $113.85.
Relevant Factors
The relevant factors to be taken into account when determining an appropriate penalty for breach of financial conditions of a licence were set out in the decision of Queensland Building Services Authority v Built Qld Pty Ltd[4] and have been confirmed in various subsequent Tribunal decisions as follows:
a) The length of time the licensee has been in business.
[4][2005] QCCTB 152.
Jangho was registered in 2008 and obtained its contractors licence in 2011. The breach occurred within the companies first year of holding a licence.
b) Whether the breach was an isolated incident or whether there was more than one breach.
It is accepted that Jangho’s breach of its licence conditions was an isolated event.
c) Whether there is a satisfactory explanation for the occurrence of the breach.
Jangho says it experienced unanticipated growth in 2011-2012 as a result of the growth of the Australian property market. In that year it also received an injection of funds from its parent company and as a consequence its turnover increased dramatically.
The Commission says that Jangho has not provided a satisfactory explanation for the occurrence of the breach.
It says Jangho should have been aware of its obligations. The ‘financial requirements for licensing policy’ provides a clear statement of the meaning of ‘annual turnover’ that is the total revenue derived by the licensee from all sources.
The Commission also points out that it publishes a range of educative materials explaining the policy.
I accept that Jangho has provided an explanation for the increase in its turnover but does not have a satisfactory explanation as to the failure to notify the Commission. It Should have been aware of the policy and the licence condition.
d) Whether the breach is likely to reoccur.
Jangho says the breach is unlikely to reoccur. It has sufficient assets to support a growing turnover and has introduced a range of checks and balances to ensure compliance with its AATO.
It says it has engaged an auditor qualified to manage and monitor the finances of an operation of its size.
I accept that the breach is unlikely to reoccur in these circumstances.
e) The size of a licensee’s business or company, both relative to the size of the breach and generally.
f) Amount by which the AATO was exceeded both in monetary and percentage terms.
QBCC point out Jangho’s AATO at the time was $3 million. Its actual annual turnover was $55,738,724.
It is accepted that a breach of 1,757.96 per cent is significant.
Its also accepted that Jangho is a large scale business.
g) Whether the licensee has been involved in other breaches.
It is accepted that Jangho has no prior or subsequent history with the QBCC of disciplinary action.
Submissions on Penalty
The QBCC explains that a licensees AATO is determined on the basis of the company’s formerly declared or certified nett tangible assets. It says the purpose in adopting this method of regulating licensees turnover is to reduce the risk to the Queensland building and construction industry of financial collapses. It says that its regulatory role and purpose is undermined when licensees breach the financial conditions of their licence.
QBCC says that as the primary purpose of these disciplinary proceedings is to protect the public and uphold the regulatory scheme a significant penalty is warranted to ensure that Jangho is ‘fully aware of the requirements of their licence and their obligation to the Commission’.
Both parties have referred the Tribunal to comparative matters.
QBCC refers to the following:
· Queensland Building Services Authority v Geocal Constructions Pty Ltd.[5] In that case:
oThe size of the breach in percentage terms was similar that is the company exceeded its AATO by $8,197,080 which was 1,714.38 per cent.
oThe company was also a mid to large size business.
oThe event was isolated.
oThe company was ordered to pay a penalty of $6,000.
[5][2010] QCAT 460.
Jangho says this case can be distinguished because that company was in its fourth licensing year.
· Queensland Building Services Authority v Alternate Dwellings:[6]
oThere was one disciplinary ground for breach of the AATO.
oThe company was a large scale business.
oThe breach occurred in the company’s first year of licensing.
oThe percentage breach was less than Jangho being 157.65 per cent.
oA penalty of $3,000 was imposed.
[6][2011] QCAT 460.
Jangho says in that case the licensee had a well established operation interstate with a turnover that would inevitably breach its AATO. It says it has an inadequate system and monitoring its turnover.
It would appear that in Jangho’s case, at the time of the breach, there was also an inadequate system for monitoring its turnover.
· Queensland Building Services Authority v Mainbrace Constructions (NSW) Pty Ltd:[7]
oThe breach was similar in percentage terms.
oThe breach occurred in the company’s third year of operation.
oThe company carried out work principally in New South Wales and did not realise its AATO calculations were based on all works.
oThe company was fined $7,000.
[7][2011] QCAT 93.
Jangho points out that in that case it was not an isolated event the licensee breached its AATO by substantial amounts over three years.
· Queensland Building Services Authority v Silverback Constructions:[8]
[8][2013] QCAT 222.
oThe breach was 1,074 per cent of the company’s AATO.
oIt was an isolated event and within the licensees fourth year of operation.
oA penalty of $4,800 was imposed.
· Queensland Building Services Authority v Gartess:[9]
oThe breach was $1,354,822.83 representing 286.9 per cent and was an isolated event.
oA penalty of $4,500 was imposed.
· Queensland Building Services Authority v Grasstree Landscaping Design Pty Ltd:[10]
oThe breach was isolated in the company’s second year of its licensing history.
oThe size of the breach was 606.3 per cent.
oA penalty of $4,000 was imposed.
[9][2011] QCAT 42.
[10][2010] QCAT 089.
Jangho has referred the Tribunal to two other decisions which it says relate to breaches more serious than its own:
· Queensland Building Services Authority v FDC Construction and Fitout Pty Ltd:[11]
oThe breach of the AATO was by an amount more than double of Jangho’s breach.
oA penalty between $7,000 to $10,000 was imposed.
· Queensland Building Services Authority v Thomas and Coffery:[12]
oThe breach of the AATO was in an amount similar to Jangho.
oIt occurred twice.
oThe company also failed to maintain the necessary level of net tangible assets.
oA penalty of $10,000 was imposed.
[11][2009] QCCTB 16.
[12][2006] QCCTB 003.
Jangho says its case is more in line with circumstances in Queensland Building Services Authority v Janda:[13]
· The licensees business in Australia had only just commenced and expanded quickly which led to the breach.
[13][2009] QCCTB.
Jangho did not advise the Tribunal as to the extent of the penalty in that case.
Jangho says that in all the circumstances a penalty in the $3,000 to $5,000 is appropriate and any penalty above $5,000 would be excessive.
I agree that $3,000 to $5,000 is the appropriate range.
The cases of Mainbrace ($7,000) and Geocal ($6,000) were more serious in that although the breach was similar in percentage terms but the breach occurred later in the company’s licensing history and in the case of Mainbrace on more than one occasion.
The breach here is more serious than those in Gartess and Grasstree Landscaping Design where the breach in percentage terms was lower.
The breach in percentage terms is more serious however than that of Silverback where the penalty of $4,800.
I find an appropriate penalty in the circumstances to be $5,000.
Costs
The Commission seeks an order that Jangho pay its costs fixed at $1,500.
Jangho opposes the order. It says considering the ‘extent of its submissions’ the appropriate order would be that each party bears their own costs.
The starting point is that each party will pay its own costs.[14]
[14]Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 100.
Section 102 of the QCAT Act provides for the making of a costs order if the Tribunal considers that it is in the interests of the justice to do so.
I agree with the comments of the learned Member in the Tribunal’s decision in Queensland Building Services Authority v Bencee Pty Ltd.[15] In making the order for costs the Member noted ‘that proceedings arose as a result of Bencee’s failure, and the Authorities action was commenced as a result of its obligatory statutory role. The Authority has been wholly successful’.
[15][2013] QCAT 687.
I find it is in the interests of justice that Jangho pay the Commission’s costs fixed in the sum of $1,500.
The orders will be:
1. Jangho Curtain Wall Australia Pty Ltd pay to the Queensland Building and Construction Commission a penalty of $5,000 within 21 days from the date of this order.
2. Jangho Curtain Wall Australia Pty Ltd pay to the Queensland Building and Construction Commission its costs fixed at $1,500 within 21 days of the date of this order.
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