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Battersby v Queensland Building and Construction Commission[2016] QCAT 467

Battersby v Queensland Building and Construction Commission[2016] QCAT 467

CITATION:

Battersby v Queensland Building and Construction Commission [2016] QCAT 467

PARTIES:

Bryan Richard Battersby

(Applicant)

 

v

 

Queensland Building and Construction Commission

(Respondent)

APPLICATION NUMBER:

OCR186-15

MATTER TYPE:

Occupational regulation matters

HEARING DATE:

12 September 2016 and 28 October 2016

HEARD AT:

Brisbane

DECISION OF:

Member Hanly

DELIVERED ON:

25 November 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The decision of the Queensland Building and Construction Commission made on 16 September 2015 which refused to categorise Bryan Richard Battersby as a permitted individual is confirmed.

CATCHWORDS:

ADMINISTRATIVE REVIEW – OCCUPATIONAL REGULATION – PERMITTED INDIVIDUAL – relevant event- whether applicant took all reasonable steps to avoid circumstances leading to relevant event – where applicant did not enter into a payment plan with the ATO – where applicant did not make any payments to the ATO because the amount due was in dispute – whether applicant was entitled to rely upon accountant without further action on applicant’s part

Queensland Building and Construction Commission Act 1991 (Qld), s 56AC, s 56AD

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20

Younan v Queensland Building Services Authority [2010] QDC 158

Younan v Queensland Building Services Authority [2011] QCA 1

APPEARANCES:

 

APPLICANT:

The applicant appeared in person

RESPONDENT:

Ms Jessie Jagger, in-house solicitor for the respondent

REASONS FOR DECISION

  1. [1]
    Mr Battersby was a director of B & G Battersby Pty Ltd. The company held a licence with Queensland Building and Construction Commission (QBCC) in the class of Roof Tiling.
  2. [2]
    On 12 June 2015, the company went into liquidation.[1] As a result of this event, Mr Battersby became an excluded individual.[2]
  3. [3]
    Mr Battersby then applied to QBCC to be categorised as a permitted individual.[3]
  4. [4]
    On 16 September 2015, QBCC refused the application on the basis that it was not satisfied that Mr Battersby had taken all reasonable steps to avoid the circumstances that resulted in the relevant event.
  5. [5]
    Mr Battersby sought review of that decision by the Tribunal.[4] The Tribunal is required to consider the matter afresh, and to determine it on its merits. In doing so, the Tribunal is required to make “the correct and preferable decision”.[5]
  6. [6]
    The Tribunal may categorise Mr Battersby as a permitted individual only if it is satisfied that he “took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event.”[6] The “relevant event” referred to in section 56AD(8) refers to the relevant event set out in section 56AC.
  7. [7]
    It is necessary, therefore, for the Tribunal to decide the following issues:
    1. What is the “relevant event”?
    2. What were the circumstances that resulted in the happening of the relevant event?
    3. Did Mr Battersby take all reasonable steps to avoid the coming into existence of those circumstances?
    4. If the threshold issue is satisfied, should the Tribunal exercise its discretion to classify Mr Battersby as a permitted individual?
  8. [8]
    In determining what those reasonable steps are, the Tribunal must make that assessment “by reference to what was known by (Mr Battersby) at the time, without the benefit of hindsight.”[7] It is also not a question of whether Mr Battersby did everything possible to prevent the circumstances from arising, or whether they would have arisen if he had acted differently.[8]

Corporate Structure and history of B&G Battersby Pty Ltd

  1. [9]
    Before examining the issues for determination it is useful to set out the background provided by Mr Battersby, in relation to the genesis of the company and his role in it.
  2. [10]
    The company was incorporated in 1994. Mr Battersby was a director from that date, and remained so until the liquidator was appointed in 2015.
  3. [11]
    From the time of incorporation until December 2009, the company had an informal partnership arrangement with Mr Francis Gerard Gaffney and his company Coastal Blue Pty Ltd (Coastal). The arrangement entailed the company acquiring and on selling a roof to Mr Gaffney and/or Coastal, who would then undertake the building work and install the roof.
  4. [12]
    In 2008/9 financial year, the company made a modest profit. The following year it made a small loss.
  5. [13]
    Since 2010, the company intermittently undertook work as a contractor/sub-contractor.
  6. [14]
    Prior to the January 2011 floods, Mr Battersby’s father, a former registered accountant, was in possession of a large proportion of the company’s books and records at his residence. The floods caused these records to be lost or destroyed.[9]
  7. [15]
    The offices of the company’s accountant at the time were also inundated by floodwaters and further company records were destroyed.
  8. [16]
    In 2012 the company engaged the services of Mr David Fitzpatrick, of Fitzpatrick Accountants, to facilitate the reconstruction of the company’s accounts and tax records; to ensure company tax compliance and to carry out day to day company book keeping.
  9. [17]
    Significant resources were required to be devoted to the reconstruction of the accounts and this led to delays in periodic lodgements with the ATO.
  10. [18]
    In the 2010/11 and 2011/12 financial years the company made modest profits. In the 2012/13 financial year, it posted a net loss of $28,415.25. The accounts for 2013/14 and 2014/15 were never completed.
  11. [19]
    Also in 2012, Mr Battersby engaged the services of a bookkeeper, Ms Tamika Murtagh, of Bills ‘n’ Books through Fitzpatrick Accountants.
  12. [20]
    A tax liability accrued from June 2013. Ultimately, the ATO wound the company up in 2015. The debt at that time was $126,159.49. Another creditor was Workcover ($3,417.28).[10]

What is the relevant event?

  1. [21]
    It is uncontroversial that the relevant event is the appointment of the liquidator on 12 June 2015.

What were the circumstances that resulted in the happening of the relevant event?

  1. [22]
    The company accrued a debt to the ATO, which, although disputed, was not paid, and Mr Battersby did not initiate a payment plan. The ATO ultimately issued a statutory demand, and at the expiration of the demand period, the ATO filed its petition on 29 April 2015.
  2. [23]
    The respondent also contends that Mr Battersby failed to maintain proper books and records before and after the January 2011 floods.

Did Mr Battersby take all reasonable steps to avoid the coming into existence of the circumstances leading to the relevant event?

Keeping books of account –

  1. [24]
    Mr Battersby’s father, Mr John Battersby, provided a statement dated 19 July 2016. Mr John Battersby was not called as a witness, and was not available for cross-examination. However, the respondent advised the Tribunal that it was happy to have that statement considered as agreed facts.[11]
  2. [25]
    Mr John Battersby stated that he was the company’s bookkeeper in the period leading up to the January 2011 floods. He further confirmed that he was in possession of a significant proportion of the company’s physical and electronic accounting records at his residential address at Lowood, and that these records were destroyed and or lost/damaged badly as a result of the floods.[12]
  3. [26]
    After the floods, Mr Battersby employed another bookkeeper, Ms Jill Kelly.[13]
  4. [27]
    Mr Battersby stated that Ms Kelly was not doing a particularly good job[14], so he engaged the services of professional advisers, amongst whom were Mr Fitzpatrick and Ms Murtagh. The dates of those engagements, from his oral evidence, were May 2013[15] and early 2014[16] respectively.
  5. [28]
    The company accountant from approximately 2004/5 was Mr Colin Wisemantel, however, Mr Battersby did not provide a statement from him, nor call him to give evidence. When asked about this, Mr Battersby stated that he thought Mr Wisemantel’s evidence would not have been relevant, because it was too long ago.[17]
  6. [29]
    Mr Battersby stated that he would get the financial information to Mr Wisemantel every three months approximately, to enable preparation of the BAS. Mr Wisemantel would then submit the BAS and send the ATO notifications for Mr Battersby to pay.[18]
  7. [30]
    Mr Battersby explained that at that stage the company was solvent. He said it was not “making a fortune”[19] but there was money in the bank to pay all debts.
  8. [31]
    Later in his evidence when asked whether he used to have any meetings or discussions with Mr Wisemantel about the financial position of the company, Mr Battersby stated that he used to talk to him every three months, “but as far as the financial position of the company was concerned, if there was money in the bank to pay bills and (I could) survive on a reasonably good wage, I thought that was more than adequate”.[20]
  9. [32]
    Mr Battersby stated that there was a period of time (on his evidence from the end of 2009 to about the middle of 2014) that he was working for wages, and the company was effectively not trading. This was after the GFC, when work fell away.[21]
  10. [33]
    Mr Battersby’s own documents, however, revealed that for the year ended 30 June 2011, the trading account for the company showed sales of $208,000.00. Mr Battersby conceded that this was evidence that the company was trading at that time.[22]
  11. [34]
    Mr Battersby engaged Mr Fitzpatrick in May 2013. He stated that he relied upon Mr Fitzpatrick, together with Ms Murtagh, in relation to his books and records, preparation of BAS, and then everything to do with the ATO.
  12. [35]
    The Tribunal accepts that the floods of January 2011 caused the majority of the company’s books and records to be lost or destroyed. It goes without saying that the resultant inconvenience is difficult to quantify, and further, that Mr Battersby cannot produce copies of records that have been destroyed.
  13. [36]
    However, Mr Battersby could have called his former accountant, Mr Wisemantel, or his former bookkeepers, Ms Kelly and Ms Murtagh, to inform the Tribunal about the keeping of books of account for the company. He did not do so. Even allowing for the fact that Mr Battersby was self-represented, he nonetheless gave evidence that when he did have solicitors giving him advice, they were aware at least of the existence of Mr Wisemantel.
  14. [37]
    The paucity of evidence in relation to the company’s books and records does not allow the Tribunal to make a finding either way about the adequacy of them.

Obtaining legal and financial advice

  1. [38]
    Mr Battersby stated that after engaging Mr Fitzpatrick, Mr Fitzpatrick regularly reassured him that Mr Fitzpatrick had everything under control with the ATO.[23] Mr Battersby further stated that this reassurance extended in his mind to matters pertaining to BAS, outstanding taxation and anything else related to the company from the perspective of the ATO.
  2. [39]
    Mr Battersby contended therefore that he relied upon Mr Fitzpatrick’s assurances to his detriment, because eventually the ATO debt caused the company to be wound up.
  3. [40]
    Mr Fitzpatrick’s evidence contradicted this. He stated that doing a BAS was not something he would routinely do, but he would do a BAS if a client requested it, and if he had the information.[24]
  4. [41]
    In addition, Mr Fitzpatrick stated that his practice was to advise a client to sort out debt arrangements with the ATO, and he did not ever negotiate with the ATO on behalf of clients. He conceded that Mr Battersby might have gained the impression that he was going to negotiate with the ATO.[25] However, the only contact Mr Fitzpatrick had with the ATO after Mr Battersby brought the statutory demand in to Mr Fitzpatrick’s office was to ring the ATO that same day and enquire if there was anything that could be done by Mr Battersby at that stage.[26] The ATO reportedly told Mr Fitzpatrick that there was nothing that could be done, which information Mr Fitzpatrick passed on to Mr Battersby in a telephone call that day.[27]
  5. [42]
    It appeared from the evidence that the company was already behind in lodging BAS before engaging Mr Fitzpatrick, and that Mr Fitzpatrick’s role, upon direct instruction from Mr Battersby, then was to prepare and lodge those late BAS.[28]
  6. [43]
    Mr Fitzpatrick gave further evidence that BAS which he had prepared and lodged had not been paid by Mr Battersby, and he understood that Mr Battersby had received advice from another source in this regard.[29]

Fraud and Guarantees– neither is in issue here

Credit Management

  1. [44]
    Mr Battersby gave evidence about some business arrangements into which the company entered with two other companies. One company, Ausflex, was based in Western Australia.[30]
  2. [45]
    Another company was Quick Clips, of which Mr Battersby was briefly a director, although he resigned in 2010.[31]
  3. [46]
    They were both start-up companies. Mr Battersby’s company loaned money to both companies, however in each instance the respective companies failed, the loans were irrecoverable, and were written off as bad debts.[32]
  4. [47]
    Mr Battersby did not detail whether there was any written agreement covering the loans made by the company. He stated that there were no formal steps taken to recover the loans. He further stated that he inquired about the loans, through his previous business partner, and discovered that his partner went through “a pretty big problem” and the National Bank took over everything.[33]
  5. [48]
    The Tribunal can only conclude from the evidence that a somewhat loose business arrangement existed, from which the company emerged losing money.
  6. [49]
    Mr Battersby did not give any evidence about other credit management within the company.
  7. [50]
    It seems self-evident that if the loans to Ausflex and Quick Clips had been recovered, the financial position of the company would have been healthier. However, for the reasons which follow, the Tribunal is of the view that having additional monies available to the company would not necessarily have altered the ultimate outcome, because Mr Battersby did not utilise funds that he did have available to pay some or all of the ATO debt in any event.

Provision for Commonwealth and State taxation debts

  1. [51]
    Mr Battersby stated that the company’s problems arose from around July 2013.[34] He explained that he was relying on Mr Fitzpatrick, he was not keeping track of the ATO account, and he was not checking the ATO portal, as he did not know how to do so, and no one had informed him that he was permitted to do so.[35]
  2. [52]
    However, in further evidence Mr Battersby acknowledged that the documents processed by the ATO on 30 July 2013 were for the company’s income tax for the period 1 July 2010 to 30 June 2011, and that therefore those lodgements were late.[36]
  3. [53]
    Furthermore, even though the January 2011 floods had destroyed company records, Mr Battersby did not explain why the BAS for the first quarter of that financial year had not been lodged before the floods.
  4. [54]
    Mr Battersby claimed that he knew when BAS payments would be due, but he waited to hear from Mr Fitzpatrick as to what he had to pay. He said he had money to pay the ATO. He could not explain why, when he was not receiving information from Mr Fitzpatrick, he did not ring the ATO himself and ask whether he owed any money.[37]
  5. [55]
    Even when Mr Battersby received correspondence from the ATO advising that he owed money, he still claimed to be relying on Mr Fitzpatrick to sort everything out for him. At one point he said he had made provision for taxation, he just had not paid it. By this, he meant that he had the money in an account.[38]
  6. [56]
    By the time Mr Battersby received the statutory demand, the ATO debt had increased significantly.
  7. [57]
    Mr Battersby claimed that he had the sum of $85,000.00 available to pay the ATO debt, but he was relying on Mr Fitzpatrick to advise him how and when to pay.[39]
  8. [58]
    In later evidence, it was put to Mr Fitzpatrick that Mr Fitzpatrick had given Mr Battersby advice that the money could be better utilised by putting it into an off-set account against his wife’s home loan. Mr Fitzpatrick denied ever giving such advice.[40]
  9. [59]
    In spite of his evidence that “alarm bells” were beginning to go off for him because of the lack of action by Mr Fitzpatrick, Mr Battersby did not at any stage attempt to contact the ATO, nor attempt to enter into a payment plan with the ATO.
  10. [60]
    Mr Battersby contended that he had made provision for his taxation debts because he had money available in an account to pay such debts. He said that the only reason that he did not do so, was because he disputed the amount the ATO claimed was owing, and Mr Fitzpatrick had advised him to use the money in the meantime to off-set his wife’s loan account.
  11. [61]
    The Tribunal accepts Mr Fitzpatrick’s evidence that he did not advise Mr Battersby to transfer monies to his wife’s off-set account for her home loan. The Tribunal also accepts that Mr Fitzpatrick did not know of the $85,000.00 that Mr Battersby allegedly had in an account, and that the first time he was informed of any such figure was by another person from whom Mr Battersby was receiving advice, Mr Craig Baldwin.[41]
  12. [62]
    Mr Battersby had endeavoured to obtain further evidence from Mr Barry Hopkins, a person who had been engaged by Mr Battersby after the statutory demand period had expired. Mr Hopkins had declined to provide a statement, and also did not attend at the hearing, in spite of a Notice to Attend having been issued to him by the Tribunal.
  13. [63]
    The Tribunal is satisfied that by the time of Mr Hopkins’ engagement, the fate of the company was charted inexorably, because the statutory demand period had expired, and based upon Mr Fitzpatrick’s evidence, the ATO would not negotiate with anyone at that stage.
  14. [64]
    Accordingly, the Tribunal is of the view that Mr Hopkins’ evidence was unlikely to have altered the outcome of this hearing.
  15. [65]
    The Tribunal is satisfied that Mr Battersby did not make adequate, or indeed any, provision for taxation from at least July 2013, when he received advice from Mr Fitzpatrick that there was a debt owing to the ATO.
  16. [66]
    The Tribunal is further satisfied that Mr Battersby failed to take the steps that a prudent person should have taken in relation to the ATO, once the “alarm bells” started ringing for him, namely to contact the ATO himself and make appropriate enquiries as to the company’s position, and then to negotiate a payment plan.
  17. [67]
    At the very least, if the monies owing were disputed by Mr Battersby, he could have written to the ATO to put his position, and to inform the ATO that he had been relying upon his accountant, but that the accountant was not resolving issues for him as he had expected. Such a letter could have sought, for example, some forbearance from the ATO whilst Mr Battersby resolved the issues, either through his accountant or directly with the ATO.
  18. [68]
    In these circumstances, the Tribunal is satisfied that Mr Battersby did not take all reasonable steps to avoid the coming into existence of the circumstances leading to the relevant event.
  19. [69]
    Accordingly, the decision of QBCC made on 16 September 2015 to refuse to categorise Mr Battersby as a permitted individual is confirmed.

Footnotes

[1]  Exhibit 4 para [6].

[2] Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), s 56AC(3).

[3]  Ibid, s 56AD.

[4]  Ibid s 86(1)(j); Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 9(1).

[5]  QCAT Act, s 20.

[6]  QBCC Act, s 56AD(8).                                                        

[7] Younan v QBSA [2010] QDC 158 at para [26].

[8]  Ibid.

[9]  Exhibit 4 para [17].

[10]  Exhibit 4 para [29].

[11]  Transcript 1-11 lines 5-9.

[12]  Statement of John Battersby dated 19 July 2016.

[13]  Transcript 1-71 line 5.

[14]  Transcript 1-71 line 24.

[15]  Transcript 1-33 lines 17-21.

[16]  Transcript 1-46 line 25.

[17]  Transcript 1-28 lines 17-20.

[18]  Transcript 1-28 lines 41-42.

[19]  Transcript 1-28 lines 46-47.

[20]  Transcript 1-29 lines 19-22.

[21] Transcript 1-30.

[22] Transcript 1-31 line 39-43.

[23] Transcript 1-51 lines 2-4.

[24] Transcript 1-66 lines 6-12.

[25] Transcript 1-67 lines 7-16.

[26] Transcript 1-68 lines 35-41.

[27] Transcript 1-68 lines 41-42.

[28] Transcript 1-35 lines 1-6.

[29] Transcript 1-73 lines 21-24.

[30] Transcript 1-39 lines 42-44.

[31] Transcript 1-40 lines 4-7.

[32] Transcript 1-40 lines 15-16, 33-34.

[33] Transcript 1-40 lines 41-45.

[34] Transcript 1-35 lines 41-42.

[35] Transcript 1-35 lines 34-47, 1-36 lines 1-4.

[36] Transcript 1-34 lines 43-46 and 1-35 line 1.

[37] Transcript 1-50 lines 42-47, 1-51 lines 1-10.

[38] Transcript 1-54 line 32.

[39] Transcript 1-53 lines 28-38.

[40] Transcript 2-13 lines 37-47, 2-14 lines 1-13.

[41] Transcript 2-12 lines 18-32.

Close

Editorial Notes

  • Published Case Name:

    Bryan Richard Battersby v Queensland Building and Construction Commission

  • Shortened Case Name:

    Battersby v Queensland Building and Construction Commission

  • MNC:

    [2016] QCAT 467

  • Court:

    QCAT

  • Judge(s):

    Member Hanly

  • Date:

    25 Nov 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Younan v Queensland Building Services Authority [2011] QCA 1
1 citation
Jump To
Cite 1 - [2011] QCA 1
Younan v Queensland Building Services Authority [2010] QDC 158
2 citations
Jump To
Cite 1 - [2010] QDC 158
Cite 2 - [2010] QDC 158

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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