Queensland Building Services Authority v Grasstree Landscaping Design Pty Ltd
[2010] QCAT 89
•1 April 2010
| CITATION: | Queensland Building Services Authority v Grasstree Landscaping Design Pty Ltd [2010] QCAT 89 |
| PARTIES: | Queensland Building Services Authority |
| v | |
| Grasstree Landscaping Design Pty Ltd |
| APPLICATION NUMBER: | OCR033-09 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 1 April 2010 |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr R. Joachim |
| DELIVERED ON: | 1 April 2010 |
| DELIVERED AT: | 1 April 2010 |
ORDERS MADE: | The respondent Grasstree Landscaping Pty Ltd pay the applicant the Queensland Building Services Authority, the sum of $4,000 by way of penalty by 4pm on 7 May 2010. Each party bears their own cost. |
| CATCHWORDS : | Penalty – breach of condition on licence and failure to notify – exceeding allowable annual turnover – substantial breach |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers by agreement between the parties.
REASONS FOR DECISION
The Queensland Building Services Authority (QBSA) applied to the then Commercial and Consumer Tribunal (CCT) in November 2009 seeking orders against Grasstree Landscaping and Design Pty Ltd (Grasstree).
Grasstree applied for a licence from the QBSA in October 2007 listing the class of licence sought as for Landscaping and Irrigation. Grasstree nominated an annual turnover not to exceed $300,000 for the 12 month period of its licence (its Allowable Annual Turnover or AATO).
The basis of the application was that grounds existed for disciplinary actions against Grasstree because during its 2008-2009 licence year it exceeded its Allowable Annual Turnover by $1,818,802 or 606.3% without first notifying the QBSA or obtaining its approval. (Its turnover was in fact $2,118,802).
On 1 December 2009, the CCT ceased to exist and its functions were assumed by the Queensland Civil and Administrative Tribunal (QCAT). The CCT had not commenced hearing the matter and thus the Queensland Civil Administrative Tribunal Act 2009 (The Act) applies to the way the matter is dealt with.
At a review hearing conducted by the President of QCAT on 1 February 2010, he directed in part that:
Proper grounds exist for taking disciplinary action against the respondent in that it contravened sections 89(a) and/or 89(k) of the Queensland Building Services Authority Act 1991 in that, during its 2008-09 licence year, it exceeded its Allowable Annual Turnover by one million eight hundred and eighteen thousand eight hundred and two dollars ($1,818,802.00) or 606.3% without first notifying the Queensland Building Services Authority or obtaining the Authority’s approval.
The issue of penalty will be determined by the Tribunal on the papers.
He further directed that the QBSA and Grasstree provide submissions as to penalty.
The Tribunal’s powers to impose a penalty are contained in section 91(3)(b) of the Queensland Building Services Authority Act (1991) (the QBSA Act).
The Submissions
The QBSA submits that the Tribunal should order a penalty in the range of $4,000 to $5,000. The QBSA justifies its submission with reference to recent cases of the CCT and QCAT. I will detail these later.
The respondent submits that the company should receive a warning instead of a fine.
10. The QBSA notes that the Tribunal may make an order under section 91(3)(b) of the QBSA Act imposing a penalty for a corporation up to a maximum of $100,000. The QBSA cites the matter of Queensland Building Services Authority v Built Qld Pty Ltd [2005] CCT L018-05.
In this matter the relevant factors taken into account in determining the penalty for a breach of AATO were as follows:
the length of time the licensee has been in business;
whether the breach was an isolated incident or whether there was more than one breach;
whether there is a satisfactory explanation for the occurrence of the breach;
whether the breach is likely to reoccur;
the size of the licensee’s business or company, both relative to the size of the breach and generally;
the amount by which the AATO was exceeded, both in monetary and in percentage terms; and
viiwhether the licensee has been involved in previous events of this nature, or other offences against statutory obligations and/or failure to comply with statutory standards.
11. The authority submits that although the breach occurred in the respondent’s first year of holding a license this should not be considered a mitigating circumstances and this factor alone should not result in a more lenient penalty.
12. The authority further submitted that the penalty imposed by the Tribunal should be significant to encourage the respondent to undertake measures to ensure this type of breach does not occur again in the future. The authority also submitted that the Tribunal should take into account comments made in the matter of Queensland Building Services Authority v Lifetime Securities (Australia Pty Ltd) [2006] CCT QD 002-06, at paragraph 24
“it must be understood by licensees that, whatever their level of activity, their license obligation should have first priority, and cannot be relegated to some lesser priority because of a sudden upsurge in activity”.
13. The authority further submitted that the most significant aspect of the respondents breach is the fact that the respondent exceeded its AATO by $1,818,802 equating to a breach in percentage terms of 603.3%. The breach it is said equated to more than 60 times the 10% leeway allowed under the financial requirements for licensing policy. Consequently the authority argues the respondent should have known it was in breach of its AATO.
14. The authority argues that a deterrent effect is unlikely to occur should the penalty ordered be insignificantly proportionate to the benefit gained by the respondent. The authority further submits that the authority’s role as a regulator is undermined when licensees breach the financial conditions of their license and that rapid growth of a business without proper monitoring causes serious concerns to the building industry generally.
15. The authority refers to several cases which it says is analogous to the present case.
16. In the matter of Queensland Building Services Authority v Janda Commercial Pty Ltd [2009] CCT QD 015-09, there was a breach of an amount of $1,220,678.00 or 157% in the company’s first year and the CCT ordered a penalty of $4,700.
17. In the matter of QBSA v Mine-Con Plumbing Pty Ltd [2009] QCAT QD 027-09, QCAT imposed a penalty of $3,500. This company exceeded its AATO by 711.2% and had been licensed for about 4 years. The authority submits that the circumstance of the current case justifies similar or higher penalty.
18. A further case referred to by the authority was the Queensland Building Services Authority v Dilizio Painting Pty Ltd. This company had exceeded its AATO by $735,205 or 245% and the CCT ordered the company pay a penalty of $4,000. The authority submits that the circumstances of the present case justify higher penalty because the breach in the present case is higher in both dollar and percentage terms.
19. Finally the authority submits that the respondent ought to have known it was in breach of its AATO due to the large amount of the breach and that the Tribunal should order a penalty in the range of $4,000 to $5,000.
20. The respondent submitted that their business expanded at a rate that was completely unexpected and that turnover increased dramatically. The respondent further submits that they have hired an experienced office manager and undertake monthly reporting as well as putting procedures in place to avoid this happening again.
21. The Director, Tracey Rout, submitted that the company and its director are fully understanding of its statutory obligations and the licensing conditions. She submits that her company have been able to honour responsibilities to consumers, contractors and suppliers and have not traded beyond their means. She submitted that no other licensees are or ever have been at risk by her company.
22. Finally she submits that given her company has established a strong net tangible asset position, the size of the allowable annual turnover it now has, and the fact that it has taken necessary internal steps to monitor its monthly turnover to avoid the problem in the future, the company believes a warning would be appropriate instead of a fine.
The Tribunals View
23. The Tribunal cannot ignore the findings of previous tribunals which have determined that a monetary penalty is necessary as a deterrent to other licensees in relation to their breaching their AATO.
24. The Tribunal accepts that the licensee had only been in business for 12 months, that the business grew quickly, that the breach was an isolated incident and that the company has taken steps to ensure that this will not happen ever again.
25. However, the amount by which the AATO was exceeded is very large in both dollar and percentage terms and this cannot be ignored. The Tribunal accepts the submissions of the Queensland Building Services Authority that a penalty should be given to Grasstree in an amount similar to previous rulings.
26. The Tribunal is satisfied that because of the substantial nature of the breach there is a need for deterrents for Grasstree and other licensees that may follow. It is vitally important that licensees provide correct and up-to-date financial information.
27. The penalty should be at the lower end of that requested by the QBSA taking into account the submissions of the respondents as to the action they have taken and considering the comparative penalties in other matters.
Order of the Tribunal
28. The respondent Grasstree Landscaping Pty Ltd pay the applicant the Queensland Building Services Authority, the sum of $4,000 by way of penalty by 4pm on 7 May 2010.
29. Each party bears their own cost.
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