Van Houdt v Queensland Building and Construction Commission
[2017] QCATA 116
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- Unreported Judgment
- Van Houdt v Queensland Building and Construction Commission[2017] QCATA 116
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Van Houdt v Queensland Building and Construction Commission[2017] QCATA 116
Van Houdt v Queensland Building and Construction Commission[2017] QCATA 116
CITATION: | Van Houdt v Queensland Building and Construction Commission [2017] QCATA 116 | |
PARTIES: | Luke Van Houdt (Applicant/Appellant) v Queensland Building and Construction Commission (Respondent) | |
APPLICATION NUMBER: | APL154-17 | |
MATTER TYPE: | Appeals | |
HEARING DATE: | 4 October 2017 | |
HEARD AT: | Brisbane | |
DECISION OF: | Senior Member O'Callaghan Member Olding | |
DELIVERED ON: | 27 October 2017 | |
DELIVERED AT: | Brisbane | |
ORDERS MADE: |
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CATCHWORDS: | PROFESSIONS AND TRADES – BUILDERS – LICENCES AND REGISTRATION – OTHER MATTERS – where applicant an “excluded individual for a relevant event” – where applicant applied to be categorised as a “permitted individual” – whether applicant took all reasonable steps to avoid company going into liquidation – where applicant unaware of statutory demand and application for winding up by tax authority – where evidence of tax debt but not period over which it accrued Queensland Building and Construction Commission Act 1991 (Qld), s 56AC, s 56AD Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142 Ericson v Queensland Building Services Authority [2013] QCA 391 Haritos v Commissioner of Taxation (2015) 233 FCR 315 Harrison v Meehan [2016] QCATA 197 Queensland Building and Construction Commission v Meredith [2014] QCA 62 RCW Plumbing & Excavations v Camporeale Holdings Pty Ltd [2017] QCATA 48 | |
APPEARANCES: |
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APPLICANT: | Luke Van Houdt | |
RESPONDENT: | Queensland Building and Construction Commission | |
REPRESENTATIVES: |
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APPLICANT: | Unrepresented | |
RESPONDENT: | represented by Mr M Robinson of Robinson Locke Litigation Lawyers | |
REASONS FOR DECISION
- [1]As a consequence of Mr Van Houdt being a director of Assured Builders Pty Ltd (the Company) at the time of the appointment of a liquidator to the Company, he is an “excluded individual for a relevant event” under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).[1]
- [2]Mr Van Houdt applied to the Queensland Building and Construction Commission (the Commission) to be categorised as a “permitted individual”. Having concluded that he did not take “all reasonable steps” to avoid the appointment of the liquidator – which at the relevant time was a requirement to be so categorised – the Commission refused to categorise Mr Van Houdt as a permitted individual.[2] The effect is that, while an excluded individual, Mr Van Houdt is excluded from holding a licence.[3]
- [3]On review, a member of the Tribunal (the Member) confirmed the Commission’s decision.[4] Mr Van Houdt seeks to appeal that decision to the Appeal Tribunal.
- [4]Because Mr Van Houdt’s grounds of appeal 2 - 4 at best reveal questions of mixed law and fact, he would require leave to appeal on those grounds.[5] We have decided not to grant leave to appeal on those grounds . However, in ground 1 Mr Van Houdt makes a broad allegation of an error of law.
- [5]We have identified an error of law in the Member’s reasons and allow the appeal on that ground. We have decided to set aside the Member’s decision and return the matter to the Tribunal for reconsideration with directions as outlined below.
- [6]Our reasons follow.
Background
- [7]The factual background is set out in detail in the Member’s reasons. The brief summary which follows focuses on those aspects that are most relevant to the appeal.
- [8]At all relevant times, Mr Van Houdt was a director of the Company, which carried on a construction business.
- [9]As the Company had an outstanding tax liability, on 7 March 2015 the Australian Taxation Office (ATO) sent a creditor’s statutory demand to the Company at its registered office, as it appeared in the records of the Australian Securities and Investments Commission (ASIC) at the time.
- [10]There being no response to the demand, on 23 April 2015 the ATO caused an application for winding up of the Company to be sent to the same address. When the application came on for hearing on 29 May 2015, there was no appearance for the Company and it was placed into liquidation.
- [11]The reason there was no appearance is that Mr Van Houdt was not aware of the statutory demand or the application for winding up, as the registered office of the Company had not been updated in the records of ASIC. Consequently, Mr Van Houdt did not receive either document.
- [12]Mr Van Houdt entrusted certain bookkeeping and other responsibilities to a contracted bookkeeper. While the bookkeeper previously had lodged the appropriate form with ASIC in relation to the retirement of a director of the Company, she did not do so in respect of the change of registered office.
- [13]The appointment of the liquidator therefore took Mr Van Houdt by surprise. He had been in contact with the ATO since mid 2014 and leading up to the time the liquidator was appointed, in relation to the activity statements lodged on behalf of the Company by the bookkeeper. These discussions were taking place because Mr Van Houdt had concerns about the bookkeeper’s work and the accuracy of the returns lodged on behalf of the Company, which he was trying to sort out.
- [14]Mr Van Houdt had been receiving statements of outstanding tax and the like from the ATO at his then current address, rather than the registered office listed with ASIC. He also gave evidence that he had not been advised in the discussions with the ATO that a statutory demand or winding up application were in contemplation, nor had he been pressed to make a payment or enter into an instalment arrangement to clear the debt. Nevertheless, the ATO sent the statutory demand and caused the winding up application to be sent to the (incorrect) registered office address.
- [15]These events took place against the background of Mr Van Houdt having taken various steps over a period in an endeavour to overcome the financial difficulties the Company was facing. These steps included ongoing discussions with the ATO to try to resolve the correct amount of the Company’s tax liability and putting in place financial facilities with a bank that would have allowed the Company to meet a demand from the ATO, if such a demand had been received.
The tax debt
- [16]The evidence before the Member regarding the tax debt was, unfortunately, not as complete as it might have been.
- [17]After the oral hearing of the appeal, we directed the parties to identify any evidence before the Tribunal relevant to when the tax liabilities arose and the amount or amounts comprising the liability.
- [18]After the appeal, the Commission (on behalf of the parties) filed a timeline identifying relevant events and their basis in evidence before the Tribunal below. A running balance account statement dated 27 September 2014 showing an opening balance of $67,771.55 and a closing balance of $71,253.96 was identified, and there were subsequent running balance account statements showing slightly higher amounts.[6]
- [19]However, we were not directed to any evidence before the Tribunal regarding the date or dates on which the liability of $67,771.55 first arose. It is not clear, for example, whether the entire amount is attributable to the quarterly tax period ended 30 June 2014 or arose progressively over one or more previous periods. In other words, it is not clear how long the debt had been outstanding.
Grounds of appeal
- [20]Mr Van Houdt’s application stated the following grounds of appeal:
Ground 1: The Tribunal erred in law in determining that the Applicant failed to take all reasonable steps to avoid the coming into existence of circumstances that resulted in the liquidation of Assured Builders Pty Ltd.
Ground 2: The Tribunal erred in fact in determining that the Applicant failed to keep proper books of account and financial records.
Ground 3: The Tribunal erred in fact in determining that the Applicant failed to seek appropriate financial or legal advice in conducting his business.
Ground 4: The Tribunal erred in fact in determining that the Applicant failed to make appropriate provision for Commonwealth Tax debts.
- [21]The distinction between questions of law and fact, and in particular the meaning of a question of mixed law and fact, are not always clear and the courts have not formulated satisfactory tests of universal application.[7] However, it has been said that questions of law are about what is the correct legal test; questions of fact are about what actually took place; and questions about whether facts satisfy the legal test are questions of mixed law and fact.[8]
- [22]Ground 2-4 raise only questions of fact. Accordingly, leave to appeal would be required to appeal on these grounds.
- [23]The issues to be considered in determining whether to grant leave to appeal are: 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 appeal tribunal would be to the public advantage?[9]
- [24]Mr Van Houdt’s submissions did not comprehensively address the question of whether leave should be granted.
- [25]In relation to Ground 2, there were clearly issues with the accuracy of the financial records. In relation to Ground 3, it is true that Mr Van Houdt obtained the services of the bookkeeper, but he continued to rely upon these services for some time after he began to harbour concerns about the bookkeeper’s work, which raises issues about whether Mr Van Houdt sought appropriate advice in a timely fashion. In relation to Ground 4, it may be that the evidence would support a finding that Mr Van Houdt eventually made provision for tax, but whether he did so in a sufficiently timely way is another matter.
- [26]It is doubtful whether these matters raise a reasonably arguable case of error, but even if they do we do not consider that the slightly different findings that might have been made would be likely to lead to a different outcome. Nor is this, in our view, a case where it is clear that leave is necessary, on these grounds, to correct a substantial injustice. And no question of public importance regarding the application of the relevant legislative provisions arises, as those provisions have since been removed.
- [27]Accordingly, we would not grant leave to appeal. We therefore turn to consider whether the appeal should be allowed on the basis of an error of law.
An error of law
- [28]Ground 1 is expressed with an unfortunate lack of particularity, such that it might encompass either a question of law or a question of mixed law and fact. However, in its terms it alleges an error of law and it is uncontroversial that an error of law occurs if a finding of fact is made without relevant evidence.
- [29]At paragraphs [65] and [66] of his reasons, the Member states:
[65] I accept the statements of the builder [that is, Mr Van Houdt] that he would have been able to pay the tax owing by a combination of funds in the company, amounts owing by creditors, his personal funds, and his financing arrangement with his bank.
[66] The importance of the builder’s evidence is that he could have paid the outstanding tax liability, of which he was aware, if he had chosen to, but that he made a deliberate decision to not pay the tax until such time as he considered it absolutely necessary. (emphasis added)
- [30]After the hearing of the appeal, we directed the parties to file a document identifying any evidence in support of the finding in paragraph [66]. Neither party identified any evidence to support the finding that Mr Van Houdt decided not to pay the tax until he considered it absolutely necessary to do so.
- [31]We accept that an inference might be drawn from the conclusion at paragraph [65] of the reasons that Mr Van Houdt had made a deliberate decision not to pay the tax debt at that time. It may also be possible to draw an inference, from evidence regarding the discussions between Mr Van Houdt and the ATO and his efforts to sort out the correct amount of his tax liability, that he had decided not to pay the tax debt until he had determined the correct amount and the debt had been adjusted to reflect the correct amount.
- [32]There is also evidence that Mr Van Houdt prioritised payment of other creditors over paying the ATO. However, we cannot identify any evidence to support the finding that Mr Van Houdt decided not to pay the tax “until such time as he considered it absolutely necessary”.
- [33]A conclusion that Mr Van Houdt did not take “all reasonable steps” to avoid the Company going into liquidation might more readily be reached if Mr Van Houdt deliberately chose not to pay the debt until he considered it absolutely necessary than if he chose not to pay the debt until he had determined the correct amount payable.
Disposition of the appeal
- [34]In view of the error of law identified above, we would set aside the Member’s decision. When deciding an appeal on a question of law only, the Appeal Tribunal must either confirm the decision or return the matter to the Tribunal for reconsideration, unless the Appeal Tribunal’s determination of the question of law is capable of resolving the matter as a whole.[10] As our decision would not resolve the matter as a whole, it must be returned to the Tribunal for reconsideration.
- [35]The Tribunal’s reconsideration of the matter may be assisted by more complete evidence regarding the background to the tax debts, for example, the period over which the debt had accrued and what, if any, payments were made and when. It is not impossible to envisage a decision-maker being more inclined to conclude that reasonable steps had not been taken to avoid liquidation if a tax debt had accrued over an extended period, without payments or timely arrangements being made with the ATO, than if the debt had been in existence for a relatively short time before discussions with the ATO commenced.
- [36]This is, of course, a matter for the Tribunal on reconsideration of the matter on the basis of the entirety of the evidence and we do not seek to influence that reconsideration. However, we will make directions for the efficient conduct of the reconsideration of the matter with the benefit of further evidence regarding the background to the tax debt. Noting that the parties may need to approach the ATO for assistance in providing copies of records, and possibly seek orders from the Tribunal, we will allow longer than the usual time for directions to file further evidence.
Footnotes
[1] Section 56AC. All references to the QBCC Act are to that Act prior to the amendments that took effect from 1 July 2015. The provisions being considered in the application for review continue for applications made before that date: Schedule 1, s 58.
[2] QBCC Act, s 56AD. For a discussion of the test for whether all reasonable steps have been taken, see: Queensland Building and Construction Commission v Meredith [2014] QCA 62
[3] QBCC Act, s 56AE.
[4] Van Houdt v Queensland Building and Construction Commission [2017] QCAT, decided 19 April 2017 before Member Paratz.
[5] Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act), s 142.
[6] In the winding up, the ATO debt was $75,747.31.
[7] Haritos v Commissioner of Taxation (2015) 233 FCR 315 contains a detailed survey of the authorities.
[8] For a recent example, see RCW Plumbing & Excavations v Camporeale Holdings Pty Ltd [2017] QCATA 48.
[9] See, for example, Harrison v Meehan [2016] QCATA 197, [8].
[10] Ericson v Queensland Building Services Authority [2013] QCA 391.