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- Appeal Determined (QCA)
Berthelsen v Queensland Building and Construction Commission QCATA 171
Berthelsen & Anor v Queensland Building and Construction Commission  QCATA 171
IDC Developments Pty Ltd
Queensland Building and Construction Commission
On the papers
Senior Member Stilgoe OAM
11 November 2016
APPEAL – PROCEDURE – STATE AND TERRITORY COURTS – JURISDICTION, POWERS AND GENERALLY – INHERENT AND GENERAL STATUTORY POWERS – TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY – where tribunal confirmed cancellation of building licence – where appeal – where application for stay pending hearing of appeal
Queensland Building and Construction Commission Act 1991 (Qld) s 3(a)(i)
Asia Pacific International Pty Ltd v Peel Valley Mushrooms Ltd  2 Qd R 458
Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430
Crinis v Ray White Paradise Group  QCATA 90
Drew v Makita (Australia) Pty Ltd  2 Qd R 219
Elphick v MMI General Insurance Ltd & Anor  QCA 347
Fitzgibbon v Waterway Authority  NSWCA 294
JC Scott Constructions v Mermaid Waters Tavern Pty Ltd (No 2)  2 Qd R 255
Res 1 v Medical Board of Queensland  QCA 152
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
APPEARANCES and REPRESENTATION (if any):
S Taylor of Counsel, instructed by Crouch & Lyndon
R DeLuchi of Counsel, instructed by Robinson Locke
REASONS FOR DECISION
- Kailen Berthelsen was the sole director, secretary, shareholder and nominee of IDC Developments Pty Ltd. In 2015, Mr Berthelsen’s past caught up with him as the Queensland Building and Construction Commission (QBCC) became aware that he had been convicted in the District Court in 2008. Mr Berthelsen did not disclose his conviction to the QBCC, despite a specific question to that effect on the licence renewal application. The QBCC cancelled both Mr Berthelsen’s licence and IDC’s licence.
- The tribunal confirmed the QBCC’s decision to cancel the licences. Mr Berthelsen and IDC have appealed that decision. They have also applied for a stay of the tribunal’s decision.
- A reasonably arguable case on appeal;
- disadvantage if a stay is not ordered;
- the competing disadvantage to the respondent, should the stay be granted, does not outweigh the disadvantage suffered by the applicant if the stay is not granted (‘the balance of convenience’); and
- success on appeal would not be rendered nugatory if the order appealed from not be stayed in the interim.
Do the applicants have a good arguable case on appeal?
- The applicants have, rightly, pointed out that it is not necessary to demonstrate that they will succeed on appeal. It is enough to show that there is a reasonably arguable case that the decision below is infected by error.
- The applicants have twelve grounds of appeal. The first three grounds relate to the tribunal’s failure to refer to Bloomfield v Queensland Building and Construction Commission; Roofshield Restorations v Queensland Building and Construction Commission in its reasons for decision. The applicants say that Bloomfield was a significant part of their submissions and the tribunal’s failure to refer to it at all amounts to an error of law.
- The QBCC says that Bloomfield would not have made any difference to the tribunal’s decision, because its facts are not analogous with the present situation.
- A failure to give reasons is an error of law. A tribunal is not required to give reasons in the same way, or to the same detail, as a court, but it must give reasons that allow the losing party to understand why it has lost.
The rationale for the requirement that courts give reasons for their decisions provides some guidance as to the extent of the reasons required. The requirement has been explained, variously, as necessary: to avoid leaving the losing the party with a ‘justifiable sense of grievance’ through not knowing or understanding why that party lost; to facilitate or not frustrate a right of appeal; as an attribute or incident of the judicial process; to afford natural justice or procedural fairness; to provide ‘the foundation for the acceptability of the decision by the parties and the public’ and to further ‘judicial accountability’.
- If, as the applicants contend, Bloomfield was an important part of their submissions to the tribunal, the tribunal’s failure to deal with it in the reasons for decision is an error of law. Whether or not that potential error, when corrected, creates a different result is not something that I am required to consider in determining an application for a stay.
- I am satisfied that there is an arguable ground for appeal.
Will the applicants suffer detriment?
- Mr Berthelsen filed an affidavit setting out his financial position if he is not permitted to continue working. There is, of course, no doubt, that he, the company and his family, will suffer financially by the cancellation of the licences.
The balance of convenience
- That IDC and Mr Berthelsen will suffer inconvenience if the stay is not granted is a given.
- The objects of the Queensland Building and Construction Commission Act 1991 (Qld) include regulation of the building industry to ensure the maintenance of proper standards in the industry. The QBCC is concerned that a refusal to grant a stay will not ensure the maintenance of proper standards. It is concerned that the applicants may incur debts within the industry that they are not able to pay. It says, therefore, that the balance of convenience does not favour a stay.
- The QBCC has some particular issues with allowing IDC to continue trading. IDC does not currently have a nominee. I have a letter from Nathan McGill, indicating that he is prepared to be the company’s nominee. It seems to me that this concern is easily cured.
- The QBCC is concerned about the company’s capacity to fund its proposed work. The company provided a Minimum Financial Requirements Report in January 2016. That document showed that the Maximum Revenue the company could turn over was $6,855,845 per annum.
- The QBCC points out that, since then: Mr Berthelsen transferred his shares to his wife; Mrs Berthelsen applied for a fresh licence for a maximum turnover of $600,000 per annum; and Mr Berthelsen then indicated that Mrs Berthelsen intended to withdraw her application and he intended to make a fresh application.
- The company’s attempts to stay registered may have muddied the waters and, in retrospect may not have been the wisest course to adopt but they do not, in themselves, show that the company cannot pay its bills as and when they fall due.
- Mr Berthelsen’s bank manager provided a letter dated 5 October 2016 stating that all business and personal facilities are in order and his account conduct has been excellent. Further, Mr Berthelsen gave sworn evidence that the company’s position had not changed and tabled a copy of the company’s profit and loss statement as at 30 June 2016, which showed a healthy net profit for the year.
- The QBCC was concerned that the company had a number of contracts notified for which the insurance premiums were not paid ‘as soon as practicable after the contract is entered into with the consumer’. I do not understand the QBCC submission to be that the premiums were not paid, simply that the notification was late.
- The QBCC was also concerned about inconsistencies in Mr Berthelsen’s information about contracts that are on foot. Mr Berthelsen provided a copy of a letter from his local lawyers that explained that, although Mr Berthelsen stated he owned certain properties, they were, in fact, subject to a builder’s option. He also gave sworn evidence about these contracts.
- I can understand the QBCC’s concern that the affairs of Mr Berthelsen and IDC are somewhat obscure. While the QBCC is right to raise doubts, I am not persuaded that the evidence before me is enough to consider that there is a tangible risk that IDC will fail. The tribunal cannot act on hypotheticals, and the QBCC’s concerns are, at this stage, no more than that.
- Further, any perceived risk that IDC might conduct its affairs in a way that may adversely affect the industry, or members of the public, can be addressed by the imposition of conditions.
Will the refusal of a stay render the appeal nugatory?
- I accept that, if a stay is not granted, there will be little point in Mr Berthelsen or IDC prosecuting the appeal. Business will be lost, and the financial viability of the company at serious risk.
What orders should I make?
- I will grant a stay in relation to IDC only and on conditions that acknowledge the QBCC’s concerns about the conduct of the business:
- IDC shall lodge a new nominee consent form by 21 November 2016;
- IDC shall lodge a new Minimum Financial Requirements Report by 5 December 2016;
- The work that IDC may carry out pending the appeal, or further order of the tribunal, is limited to the work referred to in paragraph 17(a) – (c) of the affidavit of Kailen Berthelsen sworn 28 October 2016 and lot 44 Palermo Avenue Belle Eden.
- I note that the QBCC was concerned that Mr Berthelsen might continue to be an influential person in the administration of IDC. There are no conditions I can impose that will successfully address this concern. Mrs Berthelsen is aware of the issue, as demonstrated by her undated letter to the QBCC attached to an email of 26 September 2016. IDC and Mr Berthelsen should take care to ensure that there is no ongoing basis for the QBCC’s concern.
 JC Scott Constructions v Mermaid Waters Tavern Pty Ltd (No 2)  2 Qd R 255 at 259.
 Asia Pacific International Pty Ltd v Peel Valley Mushrooms Ltd  2 Qd R 458.
  QCA 347 at .
 See, for example, Crinis v Ray White Paradise Group  QCATA 90.
  QCAT 293.
 Soulemezis v Dudley (Holdings) Pty Ltd (Supra); Res 1 v Medical Board of Queensland  QCA 152 at para ; Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 431; and Fitzgibbon v Waterway Authority  NSWCA 294.
 Drew v Makita (Australia) Pty Ltd  2 Qd R 219 at .
 Queensland Building and Construction Commission Act 1991 (Qld) s 3(a)(i).
 Exhibit KDB-8 to the affidavit of Kailen Berthelsen sworn 28 October 2016.
 Exhibit SL2 to the affidavit of Michelle Ann Lockton sworn 24 October 2016.
- Published Case Name:
Berthelsen & Anor v Queensland Building and Construction Commission
- Shortened Case Name:
Berthelsen v Queensland Building and Construction Commission
 QCATA 171
Senior Member Stilgoe OAM
11 Nov 2016
|Event||Citation or File||Date||Notes|
|Primary Judgment|| QCAT 517||12 Sep 2016||Applications for review of two decisions of the Queensland Building & Construction Commission made 13 July 2015 (decisions to cancel Mr Berthelsen's licence and that of his company) dismissed; decisions confirmed: Member McLean Williams.|
|Primary Judgment|| QCATA 171||11 Nov 2016||Parties granted leave to be legally represented; decision dated 12 September 2016 stayed until further order: Senior Member Stilgoe OAM.|
|Primary Judgment|| QCATA 82||04 Jul 2017||Appeal allowed; decision dated 12 September 2016 set aside and proceeding returned to the Tribunal for reconsideration: Senior Member Stilgoe OAM and A/Senior Member Howard.|
|Primary Judgment|| QCAT 400||26 Nov 2018||Upon remit (see  QCATA 182) two decisions of the Queensland Building & Construction Commission made 13 July 2015 (decisions to cancel Mr Berthelsen's licence and that of his company) set aside: Member Howe.|
|Notice of Appeal Filed||File Number: Appeal 7881/17||02 Aug 2017||-|
|Appeal Determined (QCA)||Appeal 7881/17 (No Citation)||16 Apr 2018||Application dismissed: Sofronoff P and Gotterson and Morrison JJA.|