Queensland Building Services Authority v Bencee Pty Ltd
[2013] QCAT 687
CITATION: Queensland Building Services Authority v Bencee Pty Ltd [2013] QCAT 687
PARTIES: Queensland Building Services Authority
(Applicant)
v Bencee Pty Ltd
(Respondent)
APPLICATION NUMBER: OCR142-13
MATTER TYPE: Occupational regulation matters
HEARING DATE: On the papers
HEARD AT: Brisbane
DECISION OF: Member Bayne
DELIVERED ON: 14 November 2013
DELIVERED AT: Brisbane
ORDERS MADE: 1. Bencee Pty Ltd pays to the Queensland Building Services Authority a penalty of $11,000 by 3 February 2014.
2. Bencee Pty Ltd pays to the Queensland Building Services Authority its costs fixed at $1,500 by 3 February 2014.
CATCHWORDS: Exceeding Annual Allowable Turnover – two breaches – timely warning – large sized company – no evidence of management controls in place – costs penalty
Queensland Building Services Authority Act 1991 ss 89(a) and (k), 91(3)
Queensland Building Services Authority v Battaglia Industries Pty Ltd [2012] QCAT 3
Queensland Building Services Authority v Classic Brick & Block Pty Ltd [2011] QCAT 130APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
What is this Application about?
[1]In 2008-2009, Bencee Pty Ltd had an Allowable Annual Turnover of $3,246,918 and an actual turnover of $4,755,235.
[2]Two years later in 2010-2011, Bencee had an AATO of $7,000,012 and an actual turnover of $12,363,412.
[3]On both occasions, Bencee neither notified the Authority that it was likely to exceed the AATO by more than 10%, nor did it obtain the Authority’s consent to exceed it.
[4]The parties agree, and the Tribunal accepts, that proper grounds exist for taking disciplinary action against Bencee for breaching sections 89(a) and/or 89(k) of the Queensland Building Services Authority Act 1991. The decision of the Tribunal dated 18 July 2013 found that the penalty will be determined on the papers. This determination is the subject of this hearing.
What are the relevant factors?
[5]I accept the following factors in determining the penalty for exceeding the allowable AATO[1]:
a) Bencee was granted a contractor’s licence in the classes of Carpentry and Joinery in September 2003; an additional licence class (Builder – Medium Rise) was granted in November 2003;
b) Bencee’s current AATO is $12,000,000[2]; the Authority characterises Bencee as a large size business;
c) Bencee exceeded its AATO by $1,508,317 (46.5%) in 2008/09 and by $5,363,400 (76.6%) in 2010/11. The second beach is significantly larger, in monetary value and percentage, than the first breach;
d) The breaches were not isolated incidents as there was more than one breach;
e) The explanation from Bencee for the first breach is that it was ‘in an early stage of growth as a company and had steadily progressed’ from an AATO of $250,000 in November 2003 to one of $3,246,918 in October 2008[3];
f) At the time of the second breach in 2011, Bencee asserted that its business activity was significantly increased as a result of rebuild and new built work following the 2011 floods. Bencee explains that ‘amid the chaos’ (of its commitments), it again failed to notify the Authority that the AATO was exceeding the allowable limit;
g) Bencee has held licences for approximately 10 years and should be aware of its licencing obligations;
h) After the first breach in 2009 and a warning letter issued by the Authority on 28 October 2009, Bencee claims to have introduced measures to prevent any further breaching. These obviously failed, and, despite reassurances from Bencee, there is little evidence to support that ongoing accounting and business forecasting measures have been implemented to ensure that the AATO is not breached in the future.
[1]Queensland Building Services Authority v Built Qld Pty Ltd [2005] QCCTB 152.
[2] As declared by Bencee in a letter to the Authority dated 26 August 2013.
[3]Submission on penalty by Bencee Pty Ltd dated 26 August 2013.
What is the appropriate penalty?
[6]The primary purpose of this disciplinary proceeding is to protect the public[4] and to uphold the regulatory scheme. The penalty should reflect the primary purpose of the financial requirements which is to avoid situations where licensees trade beyond their means and are at risk of becoming unable to honour their obligations to consumers, contractors and suppliers.
[4]Filipinni v Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development [2008] QCA 96.
[7]The Authority argues that a significant penalty is warranted to ensure that Bencee is ‘fully aware of the requirements of their licence and their obligations to the Authority[5]’.
[5] Queensland Building Services Authority v McLucas Pty Ltd [2005] QCCTB 111.
[8]The Tribunal may impose a penalty of an amount up to $110,000.[6]
[6]Queensland Building Services Authority Act 1991 s 91(3) and Penalties and Sentences Act 1992 s 5.
What are comparable previous decisions?
[9]In deciding the appropriate penalty, I must consider the relative seriousness of Bencee’s breaches in the context of the range of penalties set in decided cases.
[10]The Authority refers me to two cases to support its penalty range; Bencee did not refer to any.
[11]Classic Brick[7] concerned two breaches; the warning to the licensee of the breach and the lack of steps to prevent recurrence were seen as significant. In Battaglia[8], there were two breaches and three warnings; Battaglia claimed that it was unaware of the AATO rules.
[7] QBSA v Classic Brick & Block Pty Ltd [2011] QCAT 130.
[8] QBSA v Battaglia Industries Pty Ltd [2012] QCAT 3.
[12]I also considered a number of other decisions.
[13]Sandy Straits[9] (2011) concerned two breaches, and attracted a penalty of $9,000. Although this also is very similar to Bencee by the number of breaches and warnings, Sandy Straits is distinguishable as a low volume business which did however make some attempt to assign breach responsibility to others.
[9]QBSA v Sandy Straits Plumbing Pty Ltd [2011] QCAT 686.
[14]Uniport[10] (2011) attracted a penalty of $13,500. Uniport is distinguishable as too high because the licensee committed four breaches in four consecutive years and as a large company was expected to provide leadership within the industry.
[10] QBSA v Uniport Australia Pty Limited [2011] QCAT 612.
[15]Flowtech[11], with significantly higher value breaches in two consecutive years, attracted in October 2013 a penalty of $7,500. The penalty was mitigated as the Authority had delayed in prosecuting the breaches and Flowtech had taken steps to prevent the breaches from recurring.
[11] QBSA v Flowtech Hydraulics Pty Ltd [2013] QCAT 517.
[16]Megasealed[12], which in October 2013 attracted a penalty of $15,000, is distinguishable as too high because the AATOs were significantly exceeded with four breaches in consecutive years. In addition, Megasealed had received three timely warnings and was considered to have had equivocal acceptance of both the need and responsibility for compliance with the Queensland licence requirements.
[12] QBSA v Megasealed Bathrooms Aust. Pty Ltd [2013] QCAT 512.
Considerations
[17]The Authority submits that the appropriate penalty is in the range of $8,000 to $12,000. Bencee asks for leniency.
[18]I accept that Classic Brick and Battaglia are the most comparative cases.
[19]Some adjustments to the penalties attracted would however be needed to arrive at 2013 equivalents. The value of a penalty unit increased by 10 percent on 21 August 2012[13]; the range is also increased by the same percent.[14] In addition, inflation 2011-2013[15] would have also had some impact (albeit minor) on these figures.
[13]Penalties and Sentences Act 1992 s 5 as amended by the Penalties and Sentences and Other Legislation Amendment Act 1992 s 34.
[14]Succinctly explained in QBSA v Fisher Builders Pty Ltd [2013] QCAT 431 at [20].
[15]Reserve Bank of Australia, Inflation Calculator, 2013 data not yet available.
| Case | $ over AATO | % over AATO | Penalty | Date of Penalty |
| QBSA v Classic Brick & Block Pty Ltd | $1,204,359 | 401.45 | $10,000 | March 2011 |
| QBSA v Battaglia Pty Ltd | $1,093,408 $2,018,009 | 364.50 143.99 | $11,000 | January 2012 |
| QBSA v Bencee Pty Ltd | $1,508,317 $5,363,400 | 46.45 76.62 | November 2013 |
[20]Bearing in mind the relativities in the above table, my determination of the penalty appropriate for Bencee is based on several factors.
[21]Bencee appears to have learnt little from its first breach in 2009. The breach two years later was a significant increase in size as well as an increase in scale.
[22]Bencee had knowledge of the first breach and ample warning of the consequences of a second breach. The second breach cannot be explained as inadvertent.
[23]I am not convinced that appropriate measures are now in place to prevent any future breach.
[24]On the other hand, I accept that the breaches were not deliberate.
[25]In addition, Bencee has accepted responsibility for these, and has accepted and adopted the Authority’s submissions almost in their entirety. Bencee has thereby demonstrated insight into its responsibilities.
[26]The Authority has not been required to undertake actions in prosecuting these breaches other than bringing an application to the Tribunal.
[27]Bencee has not been involved in any other offences against its statutory obligations and /or failure to comply with statutory standards.
[28]I find therefore that the penalty should be $11,000.
Should Bencee pay the Authority’s costs?
[29]The Authority seeks its costs fixed at $1,500. Bencee made no submissions as to costs.
[30]Section 100 of the QCAT Act provides that each party must bear their own costs. Section 102(3) sets out discretionary factors for consideration.
[31]The proceedings arose as a result of Bencee's failures, and the Authority’s action was commenced as a result of its obligatory statutory role. The Authority has been wholly successful. I am not persuaded that each party must pay its own costs.
[32]The amount sought is the maximum allowed for disciplinary proceedings under Schedule 2 Part Two of the Justices Regulation 2004. I am satisfied that this is reasonable for the work undertaken in the proceeding by the Authority.
What are the appropriate Orders?
[33]I order that Bencee pays to the Authority the amount of $11,000 plus $1,500 costs by 3 February 2014.
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