Queensland Building Services Authority v Phoenix Constructions (Qld) Pty Ltd
[2010] QCAT 542
•1 November 2010
| CITATION: | Queensland Building Services Authority v Phoenix Constructions (Queensland) Pty Ltd [2010] QCAT 542 |
| PARTIES: | Queensland Building Services Authority |
| v | |
| Phoenix Constructions (Queensland) Pty Ltd |
| APPLICATION NUMBER: | OCR186-10 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | Decision on the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Ms Peta Stilgoe |
| DELIVERED ON: | 1 November 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | The respondent pay the applicant a penalty of $5000 plus $300 costs on or before 22 November 2010. |
| CATCHWORDS : | EXCEEDING ANNUAL ALLOWABLE TURNOVER – where AATO significantly exceeded – where respondent did not take into account income earned from sale of units Queensland Building Services Authority v Janda Commercial Pty Ltd Queensland Building Services Authority v Coastal Interior Linings Pty Ltd |
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 2008-09 year, Phoenix Constructions (Qld) Pty Ltd (“Phoenix”) had an Allowable Annual Turnover (“AATO”) of $16,542,568. Phoenix’s actual turnover that year was $22,552,186, exceeding the AATO by $6,009,618 or 36.3%. Phoenix 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 Phoenix for breaching sections 89(a) and/or 89(k) of the Queensland Building Services Authority Act. Pursuant to section 91(3)(b) of the Act, the Tribunal may impose a penalty of an amount not more than 1000 penalty units.
Relevant factors for consideration in determining penalty
The Authority 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. As to each of those factors:
a)Phoenix was registered as a company on 21 May 1992. The Authority first issued a licence to Phoenix on 26 June 1992. It has been trading for some time without incident.
b)There is no suggestion that the breach is anything other than an isolated incident.
c)Phoenix says that it genuinely misunderstood the AATO, believing that it related to the period between renewals and not the financial year. Phoenix has provided a copy of an email from the company to its accountant dated 27 July 2009 in which it notes that the company’s turnover exceeded the AATO but was still within the 10% allowable margin. It seems that Phoenix knew that it had to do something about it but, by this time, it was too late.
d)The breach is not likely to recur. Phoenix has sufficient assets to support its growing turnover. Mr Marsh, a director of Phoenix has provided an affidavit in which he states that he has instituted a range of measures to monitor compliance in the future.
e)There is no doubt that Phoenix exceeded the AATO by a significant sum although it was not so significant in percentage terms.
[1] [2005] QCCTB 152
Authority’s submissions
The Authority urges a significant penalty in the range of $4,000 to $5,000:
a)Phoenix’s apparent misunderstanding is not wholly persuasive and should not persuade the Tribunal towards a more lenient penalty, particularly as Phoenix had ready access to accounting and legal services.
b)A licence is a privilege, not a right.
c)Phoenix did not regularly monitor its turnover, as the Commercial and Consumer Tribunal suggested that a licensee should[2].
d)Phoenix should be characterised as a large-sized business. Its current AATO is $22,833,259.
e)Phoenix exceeded its AATO by $6,009,618 or approximately 36%. This is a significant margin.
f)The penalty should act as a deterrent to both Phoenix and other licensees. Therefore, the penalty should not be insignificant to the benefit gained by Phoenix and should not simply be factored into Phoenix’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.
[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 MGS[3] $1,124,028 44.9 $3,500 QBSA v Coastal Interior Linings Pty Ltd[4] $6,787,774 226.3 $4,000 [3]QBSA v MGS Technologies t/a 21st Century Steel Homes QD001-08
[4] Queensland Building Services Authority v Coastal Interior Linings Pty Ltd [2010] QCAT 165
Phoenix’s submissions
Phoenix accepts that the primary purpose of these proceedings is to protect the public and uphold the statutory regulatory scheme. It also accepts that the penalty must act as a deterrent to Phoenix and other licensees. Phoenix urges the Tribunal to impose a penalty of between $1,000 and $3,500 and has submitted these factors as relevant matters in mitigation:
a)It has been operating for a significant period of time with no previous breaches.
b)Phoenix exceeded its allowable turnover by only 25.72% (taking into account the buffer of 10%);
c)It has increased its AATO and the amount by which it exceeded the AATO in 2008-09 is within the new AATO;
d)There was no risk to consumers, contractors or suppliers because Phoenix had the net tangible assets to support the turnover;
e)Phoenix has co-operated with the Authority.
Phoenix provided a table of comparative decisions.
Considerations
When the range of penalties is considered in light of the percentage by which the AATO was exceeded, I can see an argument for imposing a penalty at the lower end of the range. However, the amount by which the AATO was exceeded is significant. In this case, I am persuaded to impose a penalty of $5,000 by two factors:
a)the penalty should not be insignificant to the benefit gained by Phoenix and should not simply be factored into Phoenix’s business practices;
b)Although it had ready access to, and ability to pay for, financial and accounting advice, Phoenix did not have the necessary checks and balances in place to ensure compliance. I consider that this indicates a worrying disregard for the company’s obligations to the Authority.
The Authority has applied for an order that Phoenix pay its costs of the application in the sum of $300 on the basis that it has been wholly successful. Phoenix makes no submissions in relation to costs. $300 is a very modest claim that barely covers the cost of preparing the application. Given the protective nature of the jurisdiction, and the Authority’s obligation to bring the application, I will order Phoenix to pay costs in the sum of $300.
10. I order that Phoenix pay the Authority $5000 plus $300 costs, within 21 days of today’s date.
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