Queensland Building and Construction Commission v Ericson
[2015] QCATA 111
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- Unreported Judgment
- Appeal Determined (QCA)
- Queensland Building and Construction Commission v Ericson[2015] QCATA 111
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Queensland Building and Construction Commission v Ericson[2015] QCATA 111
Queensland Building and Construction Commission v Ericson[2015] QCATA 111
CITATION: | Queensland Building and Construction Commission v Ericson t/a Flea’s Concreting [2015] QCATA 111 |
PARTIES: | Queensland Building and Construction Commission (Applicant/Appellant) v Ian James Ericson t/a Flea’s Concreting (Respondent) |
APPLICATION NUMBER: | APL180-12 |
MATTER TYPE: | Appeals |
HEARING DATE: | 14 May 2015 |
HEARD AT: | Brisbane |
DECISION OF: | Acting Deputy President O'Callaghan Member Lumb |
DELIVERED ON: | 7 July 2015 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
|
CATCHWORDS: | APPEALS – LEAVE TO APPEAL – licensing – cancellation of trade contractor licence – financial requirements for licensing – relevance of the objects of the financial requirements to the question of whether a debt is a current asset – error of law – irrelevant consideration – previous suspension of license – review of decision to cancel licence does not permit review of previous suspension of licence Queensland Building and Construction Commission Act 1991 (Qld), s 86, s 87 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142, s 146, s 147 Bannink v Solar Energy Group Pty Ltd [2012] QCATA 148 Home Owners Warranty (2010) 241 CLR 390 BHP Billiton Ltd v Dunning [2015] NSWCA 42 Cachia v Grech [2009] NSWCA 232 Kostas v HIA Insurance Services Pty Ltd t/as Laing & Anor v Kokikos & Anor (No 2) [2013] QCATA 247 McKegney v Roofley Pty Ltd [2011] QCATA 221 Onesteel Reinforcing Pty Ltd v Sutton [2012] NSWCA 282 Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc and Anor (2014) 307 ALR 262 |
APPEARANCES: |
|
APPELLANT: | Queensland Building and Construction Commission represented by Mr G.I. Thomson of counsel instructed by Shaheen Afzal, in-house lawyer |
RESPONDENT: | Ian James Ericson, self-represented |
REASONS FOR DECISION
Acting Deputy President O'Callaghan
- [1]In this matter the Appeal Tribunal consisted of Member Lumb and me. I have had the benefit of reading his reasons in draft.
Member Lumb
- [2]The Applicant/Appellant (the Queensland Building and Construction Commission formerly the Queensland Building Services Authority (the QBCC) appeals (or, alternatively, seeks leave to appeal) a decision of a Member of the Tribunal delivered on 22 May 2012 (the Decision).
- [3]By the Decision, the learned Member set aside the decision of the QBCC to cancel the Trade Contractor licence number 883720[1] (the Licence) held by the Respondent (Mr Ericson). The Member also made further orders which are set out below.
- [4]In order to address the grounds upon which the QBCC relies, it is necessary to set out, in summary, the background to the matter.
Background
- [5]The Licence was issued under the Queensland Building Services Authority Act 1991 (Qld) (now named the Queensland Building and Construction Commission Act 1991 (Qld)) (the Act).
- [6]By letter dated 25 June 2009 from the QBCC to Mr Ericson, the QBCC gave notice that the Licence was suspended from 25 June 2009.
- [7]It is not in dispute that Mr Ericson did not seek to review the decision to suspend the Licence.
- [8]On 11 October 2010 the QBCC cancelled the Licence.
- [9]Mr Ericson made an application to review the decision to cancel the Licence pursuant to s 86(1)(c) and s 87 of the Act.
- [10]By the Decision, the learned Member ordered that:
- The decision to cancel the Licence be set aside.
- In substitution for that decision, the suspension of the License be terminated.
- It be a condition of the License, for a period of 15 months from the date of the Decision, that Mr Ericson provide to the QBSA an independent review report in accordance with the Financial Requirements for Licensing (the Licensing Requirements) (on the dates specified in the Decision).
- [11]The Application for leave to appeal or appeal (the Application) was filed on 18 June 2012.
- [12]The Application was initially heard by the Appeal Tribunal on 22 April 2013. By a decision delivered on 3 June 2013 (the original AT decision), the Appeal Tribunal set aside the Decision and further ordered that the decision of the QBCC to cancel the Licence was confirmed. The Appeal Tribunal admitted evidence that Mr Ericson had become bankrupt on 1 March 2012. In setting aside the decision to cancel the Licence, the Appeal Tribunal found that it was not open to the learned Member to examine and review the suspension decision[2] and that the learned Member misdirected himself in characterising a debt known as the ‘Hansen and Yuncken debt’ as not a current asset by considering only one of the objects of the Licensing Requirements.[3] The Appeal Tribunal confirmed the decision to cancel on the basis that it was satisfied that, at the time of the Licence cancellation, Mr Ericson’s business did not meet the Licensing Requirements.[4]
- [13]Mr Ericson sought, and was granted, leave to appeal the original AT decision.
- [14]The Court of Appeal allowed the appeal and remitted the matter to the Appeal Tribunal for reconsideration in accordance with the Court’s reasons (the 2013 CA decision). Relevantly for present purposes, the Court of Appeal (Holmes JA, Fraser JA and Applegarth J agreeing) found that:
- a)the identification of error by the Appeal Tribunal in the Member’s approach to the objects and, consequently, to the Hansen and Yuncken debt was accurate;[5]
- b)there was no arguable error of law in the Appeal Tribunal’s conclusion that the jurisdiction to review the decision to suspend the Licence did not arise.[6]
- a)
- [15]However, the Court of Appeal allowed the appeal on the basis that the Appeal Tribunal, having misapprehended the nature of its jurisdiction, failed to exercise the relevant discretion under s 48 of the Act or to remit the matter to the learned Member for that purpose.[7] The Appeal Tribunal had purported to proceed with the appeal as one limited to questions of law so that its powers were those conferred by s 146 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act).[8] Section 146 did not permit the Appeal Tribunal to determine the outcome of Mr Ericson’s application for review of the exercise of discretion to cancel the Licence; that could only be done on a consideration of all the evidence, with appropriate findings of fact and fresh exercise of discretion (although this might have occurred had the Appeal Tribunal been proceeding under s 147 of the QCAT Act).[9]
- [16]The Appeal Tribunal heard the matter on remittal, on the papers, and delivered a decision on 9 April 2014 (the second AT decision). The Appeal Tribunal set aside the Decision and, again, confirmed the decision of the QBCC to cancel the Licence.
- [17]Mr Ericson sought, and was granted, leave to appeal the second AT decision.
- [18]On 21 November 2014 the Court of Appeal allowed Mr Ericson’s appeal and remitted the matter to a differently constituted Appeal Tribunal for reconsideration in accordance with the Court’s reasons (the 2014 CA decision). The Court found that in making the findings that it had, purportedly under s 146 of the QCAT Act, the Appeal Tribunal had impermissibly trespassed into a rehearing and that if it wished to act under s 146 it could do so only by returning the matter to the Member for reconsideration.[10] Further, to the extent that the Appeal Tribunal purported to also exercise jurisdiction under s 147, it made no finding which could be regarded as one of error of fact or error of fact and law combined and, without identification of error of that kind, there was no occasion under s 147 for it to interfere with the learned Member’s exercise of discretion.[11] The Court also noted the previous Court of Appeal’s findings that the original Appeal Tribunal had correctly decided that there were errors in the Decision.[12]
- [19]It now falls to this Appeal Tribunal to determine the matter.
Grounds of Appeal
- [20]The QBCC relied upon the following grounds in its Application:
- The Tribunal erred in finding that, absent the suspension of the Respondent’s licence by the QBSA on or about 25 June 2009 (“the Suspension”) the Respondent’s business was “otherwise apparently viable” (paragraph [29] of the reasons) in circumstances in which there was no, or no sufficient, evidence to support such finding, or it was contrary to the evidence.
- The Tribunal erred in its interpretation and application of the “financial requirements for licensing” (“the FRL”) promulgated under the Queensland Buildings Services Authority Act 1991 (“the QBSA Act”):
a) By failing to take any, or any sufficient, account of the mandatory terms of clauses 2.4 and 2.5 of the FRL and section 35(3)(a) of the QBSA Act;
b) By purporting to construe the express mandatory requirements of the FRL, and particularly clauses 2.4 and 2.5 thereof, so as to be subordinate to one of the expressed objects of the FRL, being “to promote more financially viable businesses” (paragraph [26] of the reasons);
c) By failing to take any, or any sufficient, account of the other expressed object of the FRL, being to “foster more professional business practices in the building industry”;
d) By finding (paragraph [26] of the reasons) that the QBSA’s refusal to categorise the debt referred to in paragraph [17] of the reasons as a current asset was contrary to the objects of the FRL, in circumstances in which such categorisation:
i) Was correct under the FRL, as the Tribunal expressly found at paragraph [25] of the reasons;
ii) Could not, given the express mandatory terms of the FRL, have been affected by the expressed objects of the FRL;
iii) Was in any event not contrary to the objects of the FRL, but rather served to further them.
- The Tribunal erred in finding that the Suspension was “harsh” (paragraphs [29] and [37] of the reasons) and “ought arguably not to have been imposed” (paragraph [32] of the reasons) in circumstances in which:
a) The Tribunal, in making such findings, misdirected itself by relying upon the erroneous precursor findings identified in paragraphs 1 and 2 above;
b) The Tribunal failed to afford any, or any sufficient, weight to the evidence concerning the Respondent’s significant liabilities and poor financial state;
c) The Respondent Mr Ericson did not commence review proceedings in the Tribunal pursuant to section 86 of the QBSA Act seeking to overturn the QBSA’s decision to effect the Suspension, so that the Tribunal should have (but failed to ) proceed on the footing that the Suspension was lawfully and correctly effected.
- The Tribunal erred:
a) In finding (paragraph [38] of the reasons) that the financial position of the Respondent had been “substantially detrimentally affected” by the Suspension;
b) Further, or alternatively in making the finding, implicit in paragraphs [32] and [37] to [39] (inclusive) of the reasons, that the Suspension was a significant, primary or proximate cause of the Respondent’s “very poor financial state” (paragraph [38] of the reasons);
in circumstances in which there was no, or no sufficient, evidence to support such findings, or they were contrary to the evidence.
- The Tribunal erred (paragraphs [33] and [39] of the reasons) in placing undue emphasis upon the margin (no less than 7%, and perhaps more) by which the Respondent failed to meet the “current ratio” of assets to liabilities of 1:1 provided for in clause 2.5 of the FRL, in circumstances in which, as the Tribunal correctly found, the Respondent faced severe financial problems:
a) The Respondent’s business was “no longer viable” (paragraphs [36] and [38] of the reasons);
b) The Respondent owed substantial amounts to the Australian Taxation Office, and in respect of superannuation (paragraph [34] of the reasons);
c) The Respondent’s business generally was in decline, characterised by considerable reduction in turnover, and the need to sell assets (paragraph [35] of the reasons).
- The Tribunal erred in determining that, in the exercise of the discretion conferred by section 48 of eth QBSA Act, the Respondent’s licence should not be cancelled, in circumstances in which the Tribunal, in making such determination:
a) Misdirected itself by relying upon the erroneous precursor findings identified in paragraphs 1 to 5 (inclusive) above;
b) Failed to take any, or any sufficient, account of the evidence, and its own findings, concerning the Respondent’s significant liabilities and poor financial state.
- [21]In its original submissions to the Appeal Tribunal dated 30 July 2012 (the AT submissions), the QBCC submitted that the matters complained of in its grounds of appeal are matters of law and that leave to appeal was not required under s 142 of the QCAT Act.[13] The QBCC submitted that if the appeal involved questions of both fact and law, leave to appeal should be granted.[14]
- [22]By letter to the Registrar of the Tribunal dated 23 April 2015, the QBCC advised that it would rely on the material already filed by it in this proceeding and the QBCC’s submissions made in the Court of Appeal proceeding number CA 4568/14. With respect to the written submissions, it appears that the QBCC seeks to rely upon, relevantly, the AT submissions (in relation to the Application) and the submissions dated 3 July 2014 before the Court of Appeal in CA 4568/14. The QBCC also made oral submissions by Mr Thomson of Counsel.
- [23]Mr Ericson provided written submissions to this Appeal Tribunal dated 9 April 2015. Mr Ericson also made relatively brief oral submissions. He referred, in particular, to paragraphs 11 to 13 inclusive of his written submissions. Mr Ericson also submitted that the preconditions to the exercise of the discretion were satisfied and the discretion itself was properly exercised by the Member. Mr Ericson contested the relevance of his bankruptcy.
The earlier findings as to errors by the learned Member
- [24]As noted above, the original Appeal Tribunal made findings that the Decision was infected with error and these findings were found to have been correctly made by the Court of Appeal.
- [25]The status of the findings of the Court of Appeal (in the 2013 CA decision) was raised with Counsel for the QBCC by this Appeal Tribunal. The initial submission was that this Appeal Tribunal is bound by those findings. It was submitted, in the alternative, that if the findings were not strictly binding they would be highly persuasive.
- [26]In my view, the ratio of the Court of Appeal’s decision was that the Appeal Tribunal, having misapprehended the nature of its jurisdiction, failed to exercise the relevant discretion under s 48 of the Act or to remit the matter to the learned Member for that purpose. I consider that the findings of the Court in relation to the correctness of the findings of the original Appeal Tribunal in relation to the learned Member’s reasons were strictly obiter. However, the findings of the Court of Appeal are highly persuasive.
- [27]The findings made by the Court related to Grounds 2 and 3 of the Application.
Ground 2 (Construction of the Financial Requirements)
- [28]The QBCC submitted that the learned Member erred in purporting to construe the express mandatory requirements of the Financial Requirements so as to be subordinate to only one of the ‘expressed’ objects of the Financial Requirements (and failed to take into account the other expressed object to ‘foster more professional business practices in the building industry’). The QBCC also submitted that the learned Member erred in asserting that the refusal to characterise the Hansen and Yuncken claim as a current debt was contrary to the objects of the Financial Requirements.[15]
- [29]Mr Ericson submitted that the debt was not irrelevant and could be characterised as a current asset.[16]
- [30]In the original AT decision, the Appeal Tribunal said:[17]
The objects of the Requirements, while giving guidance to the meaning as a whole, cannot override the specific financial requirements. We are satisfied that [the QBSA’s] characterisation of the Hansen and Yuncken debt as not a current asset is correct. In seeking that guidance from the objects, the learned member should have considered both objects. The learned member misdirected himself in his further characterisation of the debt by considering only one of the objects.
- [31]
... More importantly, while the member was correct in regarding as relevant the circumstances in which the [Mr Ericson] came to breach the Financial Requirements, he was wrong to the extent that he suggested that the QBSA ought to have treated the debt as a current asset. The objects of the Financial Requirements could not convert a non-current asset into a current asset as determined by the accounting standards, the application of which the Requirements prescribed. The identification of error by the appeal tribunal in the member’s approach to the objects and, consequently, to the debt was, in my view, accurate.
- [32]The learned Member’s findings which gave rise to these observations are as follows:
Nevertheless, the FRL must be construed in accordance with its objects, which include the object of promoting more financially viable businesses. It is difficult to see how a failure to acknowledge a debt as a current asset, particularly where that debt has been determined to be owing by an independent person in accordance with a statutory scheme for that purpose, could serve the object of promoting more financially viable businesses. It would simply allow a business such as that of Mr Ericson to falter because its licence is suspended on the sole basis that a debtor continues to dispute a debt, where the amount of that debt is substantial having regard to the overall turnover and financial position of the licensee. That should, in my opinion, have a strong bearing upon the decision of the QBSA whether or not to suspend a licence where the sole potential ground of suspension is that a substantial debt is the subject of an ongoing dispute, even though an adjudicator has determined that it is owing. (underlining added)
- [33]Consistently with the Court of Appeal’s observations, I find that the prescribed accounting standards (governed by the Financial Requirements) dictate whether the claimed debt should be characterised as a current asset. The objects of the Financial Requirements cannot modify or affect the characterisation of a debt as a ‘current asset’. Further, in approaching the matter as he did, the learned Member relied upon only one of the two objects. The other object is to ‘foster more professional business practices in the building industry’. Even if the objects had been relevant to the characterisation of the Hansen and Yuncken debt, the characterisation of the debt as a non-current asset would have been consistent with the second of the objects.
- [34]In my view, the learned Member erred in law in his construction of the Financial Requirements and the adoption of that construction to the issue of whether the claimed debt should be characterised as a current asset.
Ground 3 (Review of the suspension)
- [35]It was submitted by the QBCC that the validity of the decision to effect the suspension of the License was not the subject of challenge by Mr Ericson and could not have been properly in issue before the Tribunal and that the learned Member purported to conduct a ‘de facto review’ of the suspension decision and fell into error in purported to revisit the suspension in this manner.
- [36]Mr Ericson submitted that the decision to suspend was a valid consideration for the learned Member and implicitly within the learned Member’s power.[19]
- [37]In the original AT decision, the Appeal Tribunal said:[20]
[18] The Authority submits that the learned member’s order terminating the suspension of Mr Ericson’s licence was, in fact, a review of the suspension decision. The Authority makes the point that if every review application permitted “by a side wind” the “de facto” review of all prior decisions concerning the same licensee, then: “...disorder and confusion would follow”. The effectuality of decisions not called into question could not safely be assumed, even where time limits had long since expired, and the ground would shift constantly under the feet of those charged with administering the legislation, as well as consumer and other industry stakeholders”.
[19] While this dystopian view of the future might be a little exaggerated, we do agree that the appeal process allows an examination of the decision in question only and that it was not open to the learned member to examine and review the suspension decision.
- [38]In the 2013 CA decision, the Court of Appeal said that it was an error for the learned Member to purport to exercise a power of review of the decision to suspend (although the circumstances in which the Licence was suspended formed part of the factual matrix in which the decision to cancel it fell to be considered).[21] In my view, a consideration of the circumstances in which the Licence was suspended is a different matter from the question of whether the Licence should, in fact, have been suspended.
- [39]In my view, in deciding the question of whether the Licence was validly cancelled, the learned Member has impermissibly had regard to whether the suspension of the Licence should not have been imposed and whether the decision to do so was ‘harsh’.
- [40]Under the heading ‘Consideration’, the learned Member said, inter alia:
First, by October 2011 Mr Ericson’s licence had been suspended, in controversial circumstances, for over 12 months. That suspension inevitably must have had a substantial effect on his financial position. If the suspension ought arguably not to have been imposed, then that ought to be taken into account in determining whether his licence ought be further suspended or cancelled having regard to a subsequent failure to meet the current ratio requirement.[22] (underlining added)
- [41]The learned Member further said:
As I have indicated, it seems to me that the initial decision to suspend Mr Ericson’s licence was harsh having regard to the reasons for it, particularly when the adjudication decision was in favour of Mr Ericson.[23] (underlining added)
- [42]Ultimately, the learned Member made orders that not only that the decision to cancel the Licence be set aside but also, in substitution for the decision, that the suspension of the Licence be terminated.
- [43]In my view, the learned Member did purport to exercise a power of review in relation to the decision to suspend the Licence. The Court of Appeal’s conclusion in this regard is highly persuasive.[24] I also consider that the learned Member’s reliance on the suspension of the Licence necessarily infected his findings in relation to the issue of whether the Licence should be cancelled. I would characterise the error of the learned Member as one of taking into account an irrelevant consideration. In my view this constituted an error of law[25] and leave to appeal is not required.
- [44]In my view, this error and the error in relation to the construction of the Financial Requirements are errors of law which would justify the setting aside of the Decision pursuant to s 146 of the QCAT Act.
- [45]As I understood the oral submissions of Counsel for the QBCC, the QBCC submits that with respect to the balance of the grounds of appeal, if the Appeal Tribunal were to find that they involved questions of fact or mixed questions of fact and law, leave to appeal should be granted and the matter dealt with under s 147 by way of a rehearing. While I consider it is a moot point as to whether an Appeal Tribunal is bound to deal with all purported grounds of appeal in circumstances where the Tribunal finds grounds to set aside the decision below (that is, the appellant is successful), I will address the further grounds of appeal.
The Further Grounds
Grounds 1 and 4 (The cause of Mr Ericson’s financial problems)
- [46]In my view, Grounds 1 and 4 are interrelated. The QBCC’s written submissions do not, as I read them, purport to deal with these two grounds discretely.
- [47]I will address the findings made by the learned Member in this regard. In Reasons [29] he said that to suspend the Licence would appear to be ‘somewhat harsh’ if the business was otherwise ‘apparently viable’. At paragraph [32] the learned Member said that the suspension inevitably must have had a ‘substantial effect’ on Mr Ericson’s financial position. At paragraph [38] the learned Member said that Mr Ericson’s financial position had been ‘substantially detrimentally affected’ by the suspension of the Licence. And at paragraph [39] the learned Member had regard to the ‘likely contribution’ to Mr Ericson’s financial position of the ‘initial decision’ (that is, to suspend the Licence).
- [48]Different meanings that may be attributed to the word ‘substantial’ as reflected in the Macquarie Dictionary definition of that term which includes ‘of a corporeal or material nature; real or actual’ and ‘of ample or considerable amount, quantity, size, etc.: a substantial sum of money’.
- [49]I consider that the substantive finding made by the learned Member was that Mr Ericson’s financial position had been ‘substantially detrimentally affected’ by the suspension of the Licence. I also consider that, in context, the learned Member concluded that the suspension of the License had a considerable detrimental effect on Mr Ericson’s financial position. In my view, the learned Member’s findings did not amount to a finding that the suspension was a ‘primary’ or ‘proximate’ cause of Mr Ericson’s ‘very poor financial state’ (see the Grounds of Appeal, paragraph 4(b)). Nor do they amount to a finding that the suspension was the ‘main cause’ of Mr Ericson’s financial decline.[26]
- [50]In my view, the manner in which Grounds 1 and 4 have been framed raise separate complaints which raise either a question of law (in the absence of evidence) or otherwise a question of fact.
- [51]A ‘no evidence’ ground of appeal may be characterised as ‘a decision of a question with respect to a matter of law’ and a ‘question of law’.[27]
- [52]It has been said that where the rules of evidence do not apply (and they do not apply to the Tribunal[28]), in order to find error of law based on absence of evidence there must be an absence of material, whether strictly admissible according to the rules of evidence or not.[29] The question here is whether there was any evidence before the learned Member upon which he could make the findings he did.
- [53]While the QBCC has pointed to evidence which demonstrates that there were other contributing factors to Mr Ericson’s financial position, I am not satisfied that the QBCC established that there was no evidence the Mr Ericson’s financial position had been ‘substantially detrimentally affected’ by the suspension of the Licence.
- [54]By letter from Mr Ericson to the QBCC dated 21 August 2009, it was stated, inter alia:[30]
We wish to inform the BSA that actual annual turn over has decreased from $18m to $9.5m due to current industry decline, along with that of the current restrictions imposed upon licensee. We would expect the next twelve (12) month period turnover (if successful) to be in the facility [sic] of $6m to $9m and have based enclosed reporting computations on $12m (category 3) and request to have licence down graded to this amount whilst during this reporting and review process. (underlining added)
- [55]In my view, this evidence (in the context of the consequence to any contractor of having his or her trade contractor licence suspended) is sufficient to preclude a finding that there was an absence of evidence to support the learned Member’s findings.
- [56]If my conclusion is wrong, the absence of evidence would amount to an error of law. In those circumstances, it would raise an additional ground to the two grounds upon which I have found that the Decision should be set aside and the matter returned to the learned Member for reconsideration.
- [57]To the extent that there is some evidence to support the learned Member’s conclusion, the case would necessarily turn on a consideration of the factual matters relating to same. In that event, I would not be minded to grant leave to appeal under s 142(3)(b).
- [58]In the context of the seeking of leave to appeal in relation to a question of mixed law and fact it was said by Justice Alan Wilson, President in Laing & Anor v Kokikos & Anor (No 2):[31]
Is there a reasonably arguable case of error in the primary decision? Is there a reasonable prospect that the applicant will obtain substantive relief? Is leave necessary to correct a substantial injustice to the applicant caused by some error? Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?
- [59]
It is important to keep in mind that for leave to appeal to be granted in a case such as this, the court must be satisfied not merely that there is a reasonably arguable case of error, but also that there is a reasonable prospect of substantive relief being obtained.
- [60]
Leave to appeal will ordinarily only be granted where there is some question of general importance upon which further argument, and a decision of the Appeal Tribunal would be to the public advantage; or, there is a reasonably arguable case of error in the primary decision and a reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is: is leave necessary to correct a substantial injustice to the applicant, caused by some error?
- [61]In my view, resolution of the purely factual issue of whether Mr Ericson’s financial position had been ‘substantially detrimentally affected’ by the suspension of the Licence would not satisfy the requisite test, particularly in circumstances where the Decision is to be set aside and the matter is to be reconsidered by the learned Member.
Ground 5 (The Current Ratio)
- [62]Under s 2.5 of the Financial Requirements, a licensee must demonstrate that he or she meets the minimum Current Ratio of 1:1 calculated in accordance with those requirements. The learned Member found that Mr Ericson’s current ratio was below the required ratio as it was 0.93:1[36] and that the proportion by which Mr Ericson failed to meet that ratio requirement was ‘not large’.[37] The learned Member also concluded that having regard to the likely contribution to Mr Ericson’s financial position of the initial decision [to suspend the Licence] and to the fact that ‘his current ratio is not substantially below the required level’ it seemed to the learned Member that the decision to cancel the Licence was also ‘harsh’.[38]
- [63]The QBCC contended that the learned Member was wrong to emphasise that Mr Ericson’s ‘margin of failure’ on the Current Ratio was only 7% and to rely upon this approach in the exercise of its discretion.[39] The QBCC submitted that this was either an error of law or alternatively a factual error or mixed legal and factual error.[40]
- [64]In my view, this matter was relied upon by the learned Member in the purported exercise of the discretion under s 48 of the Act. I consider that the ground raised by the QBCC could only be classified as an error of law if the margin by which a licensee failed to meet the required Current Ratio was, invariably, irrelevant to the exercise of the discretion under s 48. In my view, the extent of the failure to meet the Current Ratio may be a relevant consideration to the exercise of the discretion. For example, in the event that the established current ratio had been only 0.50:1, I consider that the QBCC could point to the extent of such a deficiency as a factor which may (not must) be taken into account in the exercise of the discretion. In other circumstances, a licensee may (not must) be entitled to rely upon the fact that the current ratio was 0.995:1. In my view, no error of law has been demonstrated.
- [65]To the extent that the complaint of the QBCC focused on the learned Member’s reliance on a margin of failure of some 7%, I consider that the alleged error is one of fact only. In those circumstances, I would not be minded to grant leave to appeal for the reasons expressed in relation to Grounds 1 and 4.
Ground 6 (Alleged misdirection)
- [66]In my view, this ground is effectively a catch-all for Grounds 1 to 5 inclusive. I do not consider that it encompasses any materially different considerations to those considered above.
Conclusion
- [67]In my respectful view, the learned Member erred in law in the two respects identified above in relation to the construction of the Financial Requirements and the suspension of the Licence. Each of these grounds raises a question of law only and the Appeal Tribunal should proceed under s 146 of the QCAT Act. In my view, the Decision should be set aside and the matter returned to the learned Member for reconsideration.
The issue of Mr Ericson’s bankruptcy
- [68]In the event that this Appeal Tribunal determined that the matter be remitted to the learned Member for reconsideration, the QBCC submitted that the Tribunal should also make a direction that the learned Member have regard to the evidence of Mr Ericson’s bankruptcy.
- [69]Mr Ericson opposed any such direction and submitted that the question of his subsequent bankruptcy was irrelevant to the determination to be made by the learned Member.
- [70]In my view, the direction sought should not be made.
- [71]In the 2013 CA decision, the Court of Appeal made it clear that s 146 of the QCAT Act does not provide any power to receive additional evidence. Given that this Appeal Tribunal has no power to receive evidence of Mr Ericson’s bankruptcy (in dealing with the matter under s 146) I consider that it necessarily follows that there is no proper basis upon which this Tribunal could make a direction to the learned Member to have regard to Mr Ericson’s bankruptcy. That will be an issue for the learned Member to decide in his reconsideration of the matter.
Orders
- [72]For the reasons discussed above, the following orders are made pursuant to s 146 of the QCAT Act:
- The appeal is allowed.
- The decision of the Tribunal delivered on 22 May 2012 is set aside.
- The matter is returned to the original Member for reconsideration.
- The parties shall file any submission in relation to costs within 14 days of the making of these orders.
Footnotes
[1] Affidavit of Warren Tonks, at [3].
[2] Reasons at [19].
[3] Reasons at [24].
[4] Reasons at [26]-[27].
[5] Reasons at [20].
[6] Reasons at [22].
[7] Reasons at [29].
[8] Reasons at [25].
[9] Reasons at [25]-[26].
[10] Reasons at [13]-[16].
[11] Reasons at [17].
[12] Reasons at [7].
[13] AT Submissions, at [5]-[6].
[14] AT Submissions, at [7]-[9].
[15] The AT submissions, at [39].
[16] Mr Ericson's written submissions dated 9 April 2015, at [19]-[20].
[17] At [24].
[18] See [26]. See also the Court of Appeal’s 2014 CA decision, at [7].
[19] Mr Ericson's written submissions dated 9 April 2015, at [21].
[20] At [18]-[19].
[21] Reasons at [22].
[22] At [32].
[23] At [37]. See also [29].
[24] See Reasons at [22].
[25] Cf Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc and Anor (2014) 307 ALR 262 at [4] (Bathurst CJ, Beazley P and Tobias AJA).
[26] See AT submissions at [62].
[27] Onesteel Reinforcing Pty Ltd v Sutton [2012] NSWCA 282 at [56] (citing Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty (2010) 241 CLR 390 at [59], [90] – [91]). See also BHP Billiton Ltd v Dunning [2015] NSWCA 42 at [35].
[28] See s 28(3)(b) of the QCAT Act.
[29] Onesteel Reinforcing Pty Ltd v Sutton [2012] NSWCA 282 at [60].
[30] Record Book, p 395.
[31] [2013] QCATA 247 at [29].
[32] [2012] QCATA 148 at [16].
[33] [2009] NSWCA 232.
[34] Ibid, at [13].
[35] [2011] QCATA 221 at [6] per Senior Member O'Callaghan and Member A Forbes.
[36] Reasons at [27].
[37] Reasons at [33].
[38] Reasons at [39].
[39] Submissions at [63]–[64].
[40] Submissions of the QBSA in the 2014 appeal, at [22] – [27].