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- Casey v Queensland Building and Construction Commission[2016] QCAT 424
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Casey v Queensland Building and Construction Commission[2016] QCAT 424
Casey v Queensland Building and Construction Commission[2016] QCAT 424
CITATION: | Casey v Queensland Building and Construction Commission [2016] QCAT 424 |
PARTIES: | Timothy Gavin Casey (Applicant) v Queensland Building and Construction Commission (Respondent) |
APPLICATION NUMBER: | GAR043-14 |
MATTER TYPE: | General administrative review matters |
HEARING DATE: | 18 February 2016 |
HEARD AT: | Brisbane |
DECISION OF: | Dr Cullen, Member |
DELIVERED ON: | 10 November 2016 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
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CATCHWORDS: | OCCUPATIONAL REGULATION – EXCLUDED INDIVIDUAL – STATUTORY CONSTRUCTION – interpretation of s 56AC(6) and what is meant by ‘consequences flowing from what is, in substance, the one set of circumstances’. Corporations Act 2001 (Cth) Queensland Building and Construction Commission Act 1991 (Qld), s 56AC, s 56AF Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27 Grey v Pearson (1857) 6 HLC 61 Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355 |
REPRESENTATIVES: |
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APPLICANT: | G D Beacham, QC instructed by M C Long of TressCox Lawyers for the Applicant |
RESPONDENT: | M Robinson, Robinson Locke Litigation Lawyers for the Respondent |
REASONS FOR DECISION
- [1]The Applicant in this matter, Mr Timothy Gavin Casey, is the founder of the St Hilliers’ group of companies. In 2012, each of the companies that was part of the group became subject to a form of external appointment under the Corporations Act 2001 (Cth).
- [2]At the time of the external appointments, Mr Casey was a director of each of the companies. As a consequence, the Queensland Building Services Authority (‘QBSA’ as it was then known) and subsequently the Queensland Building and Construction Commission (‘QBCC’), notified him that he was an “excluded individual” in relation pursuant to s 56AC(6) of the Queensland Building Services Authority Act 1991 (Qld), as follows:
- 17 May 2012 decision of the QBSA that Mr Casey was an excluded individual in relation to St Hilliers Ararat Pty Ltd (‘Ararat’) and St Hilliers Construction Pty Ltd (‘Construction’).
- 13 June 2014 decision of the Queensland Building and Construction Commission (‘QBCC’) that Mr Casey was an excluded individual in relation to St Hilliers Pty Ltd (‘SHPL’).
- [3]The company arrangements for the St Hilliers’ group, decisions of the QBSA/QBCC, and review by Mr Casey, can be summarised as follows:[1]
Company | Date | Form of Appointment | Outcome of Appointment | Decision by QBSA/ QBCC | Review in the Tribunal |
St Hilliers Ararat Pty Ltd (‘Ararat’) | 15 May 2012 | Liquidation | Deregistered on 3 November 2013 | Mr Casey is an Excluded Individual | QCAT Review GAR043-14 |
St Hilliers Construction Pty Ltd (‘Construction’) | 15 May 2012 | Administration | Deed of company arrangement, wholly effectuated on 28 July 2014 | Mr Casey is an Excluded Individual | QCAT Review GAR043-14 |
St Hilliers Pty Ltd (‘SHPL’) | 6 September 2012 | Administration | Deed of company arrangement, wholly effectuated on 24 July 2013 | Mr Casey is an Excluded Individual | QCAT Review OCR148-14 |
STH Holdings Pty Ltd (‘SHH’) | 6 September 2012 | Administration | Deed of company arrangement, wholly effectuated on 29 July 2013 | QBCC did not issue a notice. |
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St Hilliers (SP) Pty Ltd (‘SHSP’) | 6 September 2012 | Administration | Deed of company arrangement, wholly effectuated on 29 July 2013 | QBCC did not issue a notice. |
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- [4]
- [5]The effect of the QBCC’s decisions, if confirmed by the Tribunal, would be that Mr Casey became a ‘permanently excluded individual’ by virtue of the operation of Part 3B of the Act. Were this to happen, Mr Casey would be prevented from participating in the Queensland building and construction industry for the rest of his life.
- [6]Mr Casey’s argument before the Tribunal relates to the proper interpretation of s 56AC(6) of the Act. It is Mr Casey’s contention that s 56AC(6) applies to each of the ‘relevant events’ that led to his becoming an excluded individual with the end result that they should be considered a single relevant event. He says that the ‘relevant events’ were, ‘consequences flowing from what is, in substance, the one set of circumstances’.
Legislative Framework
- [7]Section 56AC of the Act provides, relevantly:
- (2)This section applies to an individual if-
- (a)… a company, for the benefit of a creditor:
- (i)has a provisional liquidator, liquidator, administrator or controller appointed; or
- (ii)is wound up, or is ordered to be wound up; and
- (b)5 years have not elapsed since the event mentioned in paragraph (a)(i) or (ii) (relevant company event) happened; and
- (c)the individual-
- (i)was, when the relevant company event happened, a director or secretary of, or an influential person for, the company; or
- (ii)was, at any time after the commencement of this section and within the period of 1 year immediately before the relevant company event happened, a director or secretary of, or an influential person for, the company.
…
- (4)If this section applies to an individual because of subsection (2), the individual is an excluded individual for the relevant company event.
…
- (6)An excluded individual for a relevant company event (the first event) does not also become an excluded individual for another relevant company event (the other event) if the first event and the other event are both consequences flowing from what is, in substance, the one set of circumstances applying to the company.
- [8]It is the case that these provisions of the Act have now been statutorily modified, following passage of the Professional Engineers & Other Legislation Amendments Act 2014 (Qld). However, those amendments commenced on 10 November 2014, and do not bear upon the law as it was at the time of the relevant events in this matter.
- [9]Simply put, the dispute about interpretation between the parties relates to the way that the relevant events are counted. The parties agree that s 56AC(6) applies to the relevant events for SHPL, SHH and SHSP. The parties also agree that the QBCC did not issue any notices in relation to SHH and SHSP.
- [10]Despite the agreement about the application of s 56AC(6), the parties do not agree about the way in which the section is to be interpreted. The proper interpretation has an impact upon the Tribunal’s decision in relation to the Applications before it, which are in relation to Ararat, Construction and SHPL.
Interpretation of s 56AC(6)
- [11]The QBCC asserts that the same set of circumstances applied to SHPL, SHH and SHSP, such that s 56AC(6) applies and they are collectively one ‘relevant event’. Mr Casey contends that the effect of s 56AC(6) is not to amalgamate those three company events into a single event, as the QBCC suggests. Rather, Mr Casey says that each relevant company event remains, but the correct interpretation of the legislation is that he is only an excluded individual for the relevant event for SHPL.
- [12]Mr Casey argues that, properly applied, the test in s 56AC(6) should lead to the Tribunal determining that the relevant events which led to Ararat, Construction and SHPL are ‘consequences flowing from what is, in substance, the one set of circumstances.’
- [13]The QBCC contends that s 56AC(6) does not apply to Ararat and Construction as ‘...whilst flowing from a related series of events, the particular triggers were different’.[4] The QBCC then contends that s 56AC(6) does not apply to the relevant event for SHPL because:
The circumstances operating in May 2012 in relation to Ararat and Construction do not appear to be the same set of circumstances that applied to [SHPL] on 6 September 2012.
As a result, the particular triggers were different.
- [14]The quandary in relation to the QBCC’s approach is that, if such a narrow approach is taken in relation to the operation of s 56AC(6), Mr Casey has tallied up three, rather than one, exclusions in relation to relevant events. This would be without Mr Casey having had any opportunity for objective review about whether the relevant events were consequences flowing from what he says is the first event (Ararat).
SHH and SHSP are not relevant to the Applications now before the Tribunal
- [15]Mr Casey says that the correct and preferable decision is that the Ararat relevant event is the ‘first event’ and that this had a domino effect in relation to Construction and SHPL. He also contends that, for purposes of this application, that SHH and SHSP are not relevant, and the Tribunal should not consider evidence in relation to those companies. This is, in the Tribunal’s view, the correct approach in these particular circumstances.
- [16]The QBCC has not issued a written notice to Mr Casey in relation to either SHH or SHSP, for the reason that they consider that s 56AC(6) applies, such that they arose from the same set of circumstances at SHPL. As there is no review before the Tribunal in relation to SHH and SHSP, there is therefore no rational basis to consider evidence in relation to SHH and SHSP.
- [17]This view is further supported by the fact that the SHH and SHSP relevant events were the last 2 cabs off the rank in the various company arrangements made in relation to members of the St Hilliers group. On this basis, it is difficult to see what impact the later demise of SHH and SHSP could have had upon the demise of the earlier arrangements entered into on behalf of Ararat, Construction and SHPL.
- [18]As identified in the chart above, it is the QBCC decisions to exclude Mr Casey in relation to Ararat, Construction and SHPL that are the reviewable decisions now before the Tribunal. Section 56AF of the Act provides:
- (1)This section applies if the authority considers that an individual who is a licensee is an excluded individual for a relevant event.
- (2)The commission must give the individual a written notice identifying the relevant event and stating the following—
- (a)why the commission considers the individual is an excluded individual for the relevant event;
- (b)the individual may apply to the commission to be categorised as a permitted individual for the relevant event if the individual has not already done so;
- (c)the circumstances, stated in subsection (3), in which the commission must cancel the individual’s licence.
- [19]As a result of the QBCC making the decision that s 56AC(6) applies to SHH and SHSP, Mr Casey cannot be considered to be an excluded individual in relation to the SHH and SHSP relevant events.
- [20]That the QBCC made the decision that it considers s 56AC(6) to apply to SHPL, SHH and SHSP should not serve as a basis to now preclude Mr Casey from arguing that, despite the QBCC’s view, the difficulties faced by Construction and SHPL flow back to the first event, Ararat. To prevent this argument from being ventilated would prevent a genuine consideration by the Tribunal of the factors that led to the challenges faced by Ararat, Construction and SHPL. Where the resulting decision has the consequence of preventing an ‘influential person’ in relation to a company from working in the industry, taking such a narrow view of s 56AC(6) is unjust.
- [21]The interpretation of s 56AC(6) contended for by Mr Casey is logical – after all, Ararat was, in a temporal context, the ‘first event’ for the St Hilliers’ group of companies. As such, it provides a sensible starting point for consideration as to whether the circumstances that led to its liquidation had broader reaching consequences for other companies in the group.
Section 56AC(6) should not be narrowed
- [22]In his written submissions, Mr Casey’s Counsel draws the Tribunal’s attention to the usual authorities cited in relation to statutory interpretation. The Tribunal acknowledges that, in considering the correct approach to be taken in relation to s 56AC(6), it is to have regard to the context and legislative purpose of s 56AC(6). The Tribunal must give the words their ordinary meaning; the section should not be read in isolation.[5]
- [23]As mentioned earlier, the outcome of this matter will have life-altering consequences for Mr Casey, his family, and potentially other persons such as employees and contractors. It is clear that s 56AC(6) is intended to countermand the profound effect of permanent exclusion where relevant company events are consequences flowing from the one set of circumstances.
- [24]The approach taken by the QBCC in deciding whether s 56AC(6) applies is to identify the ‘trigger’ that led to the relevant event happening. The reason for this, presumably, is because of the chain of events that flows from the QBCC making a decision that an individual is an ‘excluded individual’. As the legislation applied at the relevant time, a licensee who wanted to continue to work in the industry, despite being an excluded individual, needed to then apply to be a ‘permitted individual’ in relation to the relevant event. In order to be a permitted individual, the licensee needed to establish that they took all reasonable steps in accordance with s 56AD of the Act to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event. It is understandable that the QBCC would then try to determine whether the licensee took ‘all reasonable steps’ by identifying what it was that led to the happening of the relevant – i.e. ‘the trigger’.
- [25]However, whilst this is the approach that has been applied for some time in reviews of this nature by the QBCC, the effect of same is to add an additional test to the legislation, which has the effect, as demonstrated in Mr Casey’s circumstances, of narrowing the legislation. If applied in the manner suggested by the QBCC, the Tribunal would be firstly required to identify ‘the trigger’ (not part of the legislative provisions) and then go on to consider whether the events are part of the ‘one set of circumstances’.
- [26]Conceivably, the Tribunal may take a more global view as to the ‘one set of circumstances’ that led to the demise of a group of related companies, rather than identifying the specific trigger that led to the demise of one member of the group. On its face, the legislation does not contain any further tests that must be considered in deciding what the ‘one set of circumstances’ is.
- [27]Here, the preferable approach, and the only one that affords Mr Casey the benefit of an unconstricted application of s 56AC(6) is to look at Ararat first, and consider the impact its failure had on Construction and SHPL. The Tribunal should ‘Begin at the beginning,’ and consider the fallout from Ararat and when it has ‘come to the end: then stop.’[6]
The failure of the Ararat project, and its impact on Construction and SHPL
- [28]The liquidation of Ararat was the ‘first event’ for purposes of s 56AC(6). The Ararat event occurred at 7.55pm on 15 May 2012, just prior to the Construction event at 8.30pm the same day.[7] Ararat was a wholly owned subsidiary of Construction. It was incorporated for purposes of an unincorporated joint venture project with another construction project, the purpose of which was to build the Ararat Prison in Victoria.
- [29]The Ararat Prison project did not proceed according to plans, for many reasons. The State of Victoria had contracted with Aegis Correctional Partnership Pty Ltd (Aegis). Ararat failed after negotiations between the State of Victoria and Aegis failed, resulting in the advice to Ararat that Aegis would not be paying progress payments that had been certified, and which totalled $4,649,564.
- [30]Construction, as part of the Ararat project, provided a guarantee of Ararat’s performance of the construction contract. Additionally, there were bonds issued by Swiss Re under the Ararat Prison construction contract, in relation to performance of the construction work by Ararat. These bonds were guaranteed by Ararat, Construction and SHPL.
- [31]Following the non-completion of the prison project, Ararat became liable for non-completion damages. The Swiss Re bonds were called upon, leading to Ararat, Construction and SHPL becoming liable for the amounts paid out under the Swiss Re bonds.
- [32]Construction, now having incurred liability in relation to the Ararat non-completion and Swiss Re bonds, was in jeopardy in relation to some of its own building projects. Construction’s own projects were secured by bonds provided by Vero Insurance Limited. As a consequence of the fragility of Construction’s own projects, occasioned by the demise of the Ararat prison project, there were calls made on some of the Vero bonds.
- [33]When the Ararat prison project failed, the value of Vero bonds issued in relation to Construction was approximately $39 million. Of this amount, approximately $13.7 million had been encashed. The calls on the Vero bonds, and potential for further calls, led to a liability by both Construction and SHPL to Vero.
- [34]The QBCC acknowledge that the insolvency and liquidation of Ararat was the catalyst for the administration of Construction. But, the QBCC says that:
The liquidation of Ararat was caused by its insolvency resulting from the blow-out of the costs to complete the project, which were such that Ararat could not complete and would breach the contract.[8]
The administration of Construction was because it gave a guarantee of Ararat, the limit of which exceeded its net assets (and if related entity loans are considered, the shortfall is substantial).
- [35]The QBCC acknowledges that Ararat and Construction flow from a ‘related series’ of events. Similarly, the administration of SHPL was the result of the Swiss Re and Vero liabilities. The approach to determining the ‘trigger’ and then narrowing the application of s 56AC(6) is not, for the reasons set out above, the correct and preferable approach.
- [36]The evidence before the Tribunal demonstrates that the Ararat, Construction and SHPL events are ‘consequences flowing from what is, in substance, the one set of circumstances’. The liquidation of Ararat had a direct impact upon Construction and SHPL and arose from the failure of the Ararat prison project.
- [37]The difficulty with the argument that the QBCC makes in relation to Ararat, Construction and SHPL can be illustrated with the following analogy. Assume that Ararat, Construction and SHPL are, instead of companies, all buildings located on a city block, which are destroyed following an earthquake. The obvious common factor in their destruction is the earthquake. The buildings may have been, depending on their structural underpinnings, damaged in slightly different ways and to different degrees. But, it could not logically be argued that the cause of any one of the buildings falling related to the manner in which it was designed and built, even if that may have had some impact on the level of destruction. Here, the ‘earthquake’ was the failure of the Ararat prison project. Rather than looking only at the detail referable to each company, the appropriate, and fair approach, requires looking at the overarching genesis of the ‘one set of circumstances’.
- [38]The Tribunal determines that s 56AC(6) applies to the Ararat, Construction and SHPL relevant events, such that Mr Casey is an excluded individual in relation to the Ararat event.
Orders
- The 17 May 2012 decision of the QBSA that Mr Casey was an excluded individual in relation to St Hilliers Ararat Pty Ltd ‘Ararat’ and St Hilliers Pty Ltd ‘Construction’ is set aside.
- The 13 June 2014 decision of the Queensland Building and Construction Commission (‘QBCC’) that Mr Casey was an excluded individual in relation to St Hilliers Pty Ltd ‘SHPL’ is set aside.
- In substitution, the Tribunal decides that pursuant to s 56AC of the Queensland Building and Construction Commission Act 1991 (Qld) (as it applied on 15 May 2012), Timothy Gavin Casey is an excluded individual because he was a Director of St Hilliers Ararat Pty Ltd at the time of liquidators being appointed on 15 May 2012.
Footnotes
[1] Helpfully, these arrangements have been outlined in the Outline of Submissions filed on behalf of Mr Casey in the Tribunal, at paragraphs [5]-[6].
[2] And the QBCC’s predecessor, the Queensland Building Services Authority.
[3] Queensland Building Services Authority Act 1991 (Qld), Part 3A; Queensland Building Construction Commission Act 1991 (Qld) – (‘the Act’).
[4] Statement of Reasons for Decision, dated 27 February 2014, paragraph 13; Exhibit 16.
[5] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27 at 31 and 46-7; Grey v Pearson (1857) 6 HLC 61 at 106; Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355 at 381.
[6] Lewis Carroll, ‘Alice in Wonderland’.
[7] Annexure A, Extension of Time Application filed 31 January 2014 in GAR043-14; Minutes of Meetings, pages 21 and 23 of “Annexure 3”.
[8] QBCC Statement of Reasons GAR043-14, 27 February 2014, para [12].