Commissioner of State Revenue v Reynolds
[2025] QCATA 58
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- Unreported Judgment
- Commissioner of State Revenue v Reynolds[2025] QCATA 58
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Commissioner of State Revenue v Reynolds[2025] QCATA 58
Commissioner of State Revenue v Reynolds[2025] QCATA 58
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Commissioner of State Revenue v Reynolds [2025] QCATA 58 |
PARTIES: | COMMISSIONER OF STATE REVENUE (appellant/applicant) v michael reynolds (respondent) SHANNON REYNOLDS (respondent) |
APPLICATION NO/S: | APL133-24 |
MATTER TYPE: | Appeals |
DELIVERED ON: | 20 June 2025 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Senior Member Aughterson |
ORDERS: |
|
CATCHWORDS: | ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – HOMEBUILDER GRANT – where the respondents applied for home builder grant – where the appellant determined the respondents were not eligible for the grant – where part of the work carried out by a relative of the respondents at no cost to the respondents or to the builder – where certain materials were supplied by the respondents – where decision of the appellant set aside by the Tribunal at first instance – whether there was a comprehensive home building contract – whether respondents entitled to the grant Administrative Direction Australian Government Home Builder Grant – Queensland, cl 1, cl 8, cl 9, cl 10, cl 14 Electrical Safety Act 2002 (Qld), s 56 First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld), s 25Q, Schedule Dictionary Queensland Building and Construction Commission Act 1991 (Qld), Schedule 1B Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142 Commissioner of State Revenue v Taske [2023] QCATA 121 Lobban v Minister for Justice [2016] FCAFC 109 University of Wollongong v Metwally (No 2) (1985) 60 ALR 68 |
APPEARANCES & REPRESENTATION: | The matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) |
REASONS FOR DECISION
Background
- [1]This is an appeal from a decision of the Tribunal at first instance setting aside a decision of the Commissioner of State Revenue (‘appellant’) rejecting Michael Reynolds and Shannon Reynolds’ (‘the respondents’) application for a First Home Owner Grant (‘the Grant’). The Tribunal at first instance determined that the Grant should be paid.
- [2]On 30 July 2020, the respondents entered into a building contract (‘the Building Contract’) with Trevor Seawright (‘the Builder’) for the building of a home. The electrical work for the building was undertaken by Michael Peter Reynolds (‘Peter Reynolds’), the father of the respondent, Michael James Reynolds, at no cost to either the respondents or the Builder. As discussed below, it is evident that this resulted in a saving for the respondents in the order of $17,000 to $20,000 and, as such, impacted the total contract price charged by the Builder.
- [3]The question for determination on appeal, as was the case before the Tribunal at first instance, is whether the respondents satisfied one of the criteria for eligibility for the grant; that is, whether they had entered into a ‘comprehensive home building contract’. The appellant accepts that the respondents satisfied all criteria for the Grant other than meeting the requirement that the contract be a comprehensive home building contract.
- [4]The grant scheme is administered by the appellant under the First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld) (‘the Act’) and a statutory instrument, the Administrative Direction Australian Government Home Builder Grant – Queensland (‘the Direction’).[1]
- [5]Relevant to the present matter, s 25Q of the Act provides (emphasis added):
- A person who is eligible to apply for a home builder grant under the home builder direction may apply for the grant.
- An application for a home builder grant must comply with the home builder direction.
- An applicant for a home builder grant is entitled to be paid the grant if—
- the applicant or, for a joint application, each of the applicants, complies with the eligibility criteria for the grant under the home builder direction; and
- the transaction for which the grant is sought is an eligible home builder transaction; and
- the relevant requirement in relation to the eligible home builder transaction has been met.
- [6]The term ‘eligible home builder transaction’ is defined in the Schedule to the Act and means ‘an eligible transaction within the meaning of the home builder direction’.
- [7]Relevant to the present matter, the Direction at paragraph 1(b) provides that ‘eligible transactions’ include (emphasis added):
A comprehensive home building contract made by the freehold owner in Queensland or a person who will, prior to completion of the comprehensive home building contract be the freehold owner of land in Queensland, to have a new home built on the land, if the contract commencement date is between 4 June 2020 and 31 March 2021 (both dates inclusive), and the construction commencement date is on or after the contract commencement date and within 6 months of the contract commencement date;
- [8]The term ‘comprehensive home building contract’ is defined at paragraph 14 of the Direction (emphasis added):
A comprehensive home building contract means a contract under which a builder undertakes to build a home from the start of the building work to the point where the home is ready for occupation and, if for any reason, the work to be carried out under the contract is not completed, includes any further contract under which the work is to be completed.[2]
- [9]Paragraphs 8 to 10 of the Direction are headed ‘Disqualifying arrangements’ and provide:
- 8.A transaction is not an eligible transaction if the Commissioner is satisfied the contract forms part of a scheme to circumvent limitations on, or requirements affecting, eligibility or entitlement to the grant for an eligible transaction.
- 9.Unless satisfied to the contrary, the Commissioner must presume the existence of a scheme under paragraph 8 if the contract replaces a contract made before 4 June 2020, and the contract is:
- a.to purchase the same or substantially similar home;
- b.a comprehensive home building contract to build the same or substantially similar home; or
- c.for the same or substantially similar renovation of the home.
- 10.Also, unless satisfied to the contrary, the Commissioner must presume the existence of a scheme under paragraph 8 if the parties to the contract have not dealt with each other at arm’s length.
- [10]In the decision of the Tribunal at first instance, it was held that there was a comprehensive home building contract, as Peter Reynolds had not entered into a separate contract with the respondents in relation to the electrical work. Rather, he was considered to be a subcontractor to the Builder, so that all of the work undertaken by him was incorporated within the one comprehensive home building contract.
- [11]With reference to the submissions of the appellant, noted below, to the effect that there was no valid subcontract as between the Builder and Peter Reynolds as it did not comply with the contractual requirements of consideration and certainty of terms, the Tribunal at first instance stated that this did not render the subcontract void or illegal, but simply unenforceable.
Grounds of appeal
- [12]In summary, the grounds of appeal are that the Tribunal at first instance erred:
- by misconstruing the term ‘contract’ in the phrase ‘comprehensive home building contract’;
- in determining that the alleged variation of the contract was a valid variation in the absence of the common law requirements of consideration and certainty of terms;
- in determining that in the context of the Direction and the Act, a variation did not need to comply with the requirements for a variation as set out in the building contract or the Queensland Building and Construction Commission Act 1991 (Qld) (‘the QBCC Act’);
- in determining that there was a subcontract between the Builder and Peter Reynolds, in circumstances where no consideration was provided by the Builder and there was uncertainty of terms;
- in not applying the ‘Disqualifying arrangements’ at paragraphs 8 to 10 of the Direction;[3]
- in finding that the contract was a ‘comprehensive home building contract’ as a consequence of grounds (1) to (5) and on the undisputed facts.
- [13]The grounds of appeal rest on the proper interpretation of the Act and the Direction or, in effect, that the finding of the Tribunal was not reasonably open on the evidence and, as such, involve questions of law. Accordingly, leave to appeal is not required: see s 142(3)(b) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
Submissions
- [14]In summary, the appellant submits that the Building Contract was not a comprehensive home building contract because the electrical work was undertaken by Peter Reynolds under a separate agreement and at no cost to the Builder or the respondents.
- [15]In particular, it was submitted that any agreement as between the Builder and Peter Reynolds was neither a valid variation of the Building Contract nor a valid subcontract. On that basis, the work undertaken by Peter Reynolds was outside the Building Contract, such that the Building Contract was not a ‘comprehensive home building contract’ within the meaning of the Act.
- [16]It was submitted that there was no valid variation because the variation was not in writing, as required by the Building Contract and s 40 of Schedule 1B of the QBCC Act, and because it did not comply with the common law requirements of consideration and certainty of terms for the formation of a contract. Further, it was submitted that any purported subcontract was invalid because of non-compliance with the same common law requirements.[4]
- [17]Accordingly, it was submitted that as the electrical work of Peter Reynolds was not undertaken pursuant to the terms the Building Contract, but rather was undertaken independently of that contract, the Building Contract was not a ‘comprehensive’ home building contract within the meaning of the Act.
- [18]The respondents were self-represented at the hearing at first instance and, although they were given the opportunity to do so, did not file any submissions on appeal. In October 2024, they indicated that they no longer sought a successful resolution in this matter. At the hearing at first instance, the respondents submitted that Peter Reynolds undertook the electrical work as a subcontractor of the Builder pursuant to an oral agreement. It is not in dispute that that work was at no cost to either the Builder or the respondents and that the value of the work undertaken by Peter Reynolds was in the order of $17,000 to $20,000.
Discussion
- [19]While, in part, the grounds of appeal and the submissions of the appellant focus on what was said to be an invalid variation of the Building Contract, it is clear that the decision at first instance rested on a finding that the work undertaken by Peter Reynolds was as a subcontractor to the Builder and, on that basis, there was one comprehensive home building contract entered into between the respondents and the Builder. It is also clear from the undisputed evidence of the respondents and Builder that the arrangement in relation to Peter Reynolds was set in place prior to entering into the Building Contract.[5] Accordingly, there was no relevant variation of that contract.
- [20]In any event, a focus on whether or not there was a valid variation of the contract or a valid subcontract as between the Builder and Peter Reynolds may distract from the primary question of whether there was a ‘comprehensive home building contract’. In itself, any invalidity in the performance of that contract should not serve to deny entitlement to a grant under the Act. For example, circumstances might arise where, independently of the other contracting party and unbeknown to them, a builder enters into a private arrangement with a person to undertake some of the work under the building contract without cost to the builder. Presumably, that would not prevent it from being a ‘comprehensive building contract’ for the purposes of the Act, even should the conduct of the builder be in breach of some common law or statutory requirement.
- [21]Rather, the focus should be on whether or not the parties had entered into a ‘comprehensive’ home building contract, in the sense that all relevant work was to be carried our pursuant to that contract, or, alternatively, whether there had been a ‘disqualifying arrangement’ in terms of paragraphs 8 to 10 of the Direction.[6]
- [22]In Commissioner of State Revenue v Taske[7] (‘Taske’), it was held that for the purposes of paragraph 14 of the Direction it is the ‘builder’, in the singular, who must undertake to build the house from start to finish under the contract.
- [23]In any event, a ‘comprehensive’ home building contract cannot be intended to refer to a contract that incorporates the bulk of the work but excludes part of the work, which part is to be completed by another builder. As noted in Taske,[8] otherwise it would compromise another of the eligibility requirements for a grant. Paragraph 3 of the Direction provides that a transaction that is a comprehensive home building contract is not an eligible transaction if the total consideration for the transaction is more than $750,000. As stated in Taske,[9] at [24]:
…
If it was otherwise, the $750,000 cap that is prescribed in the Direction would easily be rendered ineffective by owners simply having various works performed outside the contract and thereby not considered to be subject to the monetary limit. That clearly is not what was intended.
- [24]Accordingly, the question is whether the contract was a comprehensive home building contract in the sense that a builder contracted to do all of the work, ‘from the start of the building work to the point where the home is ready for occupation’, regardless of whether or not that work would be carried out with the assistance of employees, subcontractors or others.
- [25]In the present case, it is evident that the Tribunal at first instance erred in focusing on the opinions of the respondents and the Builder as to the legal effect of the arrangement entered into with Peter Reynolds, rather than on the evidence pointing to what in fact was the nature of the arrangement. That evidence indicates that the work was undertaken independently of the Building Contract, in which event the latter was not a ‘comprehensive home building contract’. The relevant evidence is as follows.
- [26]First, Peter Reynolds was not licenced to undertake electrical work as a subcontractor to the Builder. He held a license as an electrical fitter mechanic.[10] Section 56 of the Electrical Safety Act 2002 (Qld) (‘the ESA’) relevantly provides:
- A person must not conduct a business or undertaking that includes the performance of electrical work unless the person is the holder of an electrical contractor licence that is in force.
- Without limiting subsection (1), a person conducts a business or undertaking that includes the performance of electrical work if the person—
…
- contracts for the performance of electrical work, other than under a contract of employment;[11]
…
- However, a person does not conduct a business or undertaking that includes the performance of electrical work only because the person—
- is a licensed electrical mechanic who—
- performs electrical work for the person or a relative of the person at premises owned or occupied by the person or relative; or
…
- [27]A breach of s 56(1) of the ESA carries a maximum penalty of 400 penalty units. Consistent with s 56(3) of the ESA, Peter Reynolds gave evidence that while he is not an electrical contractor, under his licence as an electrical fitter mechanic he is ‘allowed to do electrical installation work for immediate family’.[12] In that context, it is reasonable to assume that his evidence was not that he had a ‘contract’ with the Builder in terms of s 56(2)(b) of the ESA, such that would attract liability for an offence under s 56(1) of the ESA, but rather that he was doing the work independently and as a favour for his son.[13] When asked about being a subcontractor, Peter Reynolds stated, ambiguously, that he ‘committed to perform the electrical installation of the new dwelling’[14] and that he did the work ‘in conjunction with’ the Builder.[15] He also said that he did the work ‘for’ and ‘on behalf of’ his son.[16]
- [28]The Builder gave evidence that he understood that Peter Reynolds held a licence as an electrical contractor,[17] and that he had not heard of the term ‘electrical mechanic’.[18] At the very least, this indicates a lack of appropriate engagement between the Builder and Peter Reynolds, which might be expected if a subcontract were to be set in place.
- [29]Second, it is evident that the contract as between the respondents and the Builder did not include the electrical work, so that it was not a ‘comprehensive’ home building contract. In the Building Contract there was no allowance made for the work undertaken by Peter Reynolds, both in the sense that there was no cost allowed for his labour and, it seems, no provision made for any costs associated with the supervision of his work and the responsibility of the Builder for his work.[19] Further, at Appendix F of the Building Contract, an allowance was made in the contract price for up to $10,000 ‘for supply of electrical material only’. It is evident that those materials were included in the contract price for the purposes of a bank loan.[20] The electrical material was purchased by the respondents or Peter Reynolds, paid for by the respondents and, in reduction of the total contract price, was reimbursed to the respondents by the Builder.[21] The actual cost of the materials was $6,500, so that the remaining $3,500 was also reimbursed to the respondents.[22] It follows that not only did the Building Contract have no component for the electrical labour costs, but also, in effect, there was no component for the cost of the electrical materials.
- [30]Other evidence is also indicative that the electrical work was not undertaken by Peter Reynolds as a subcontractor of the Builder. The respondents, rather than the Builder, provided all necessary documentation regarding the electrical work to the building inspector.[23] Also, in giving evidence and when asked how his father would be paid, Michael Reynolds said that they did not enter into a labour agreement with him ‘and neither did’ the Builder.[24] Further, when the arrangement was made between the respondents and the Builder in relation to the electrical work, Peter Reynolds had no direct contract with the Builder.[25]
- [31]Leaving to one side the views expressed by the witnesses as to the legal effect of the arrangement in relation to the electrical work, it is apparent from the evidence that in fact there was no subcontract between Peter Reynolds and the Builder. Also, it is clear from the evidence that, ultimately, the electrical materials were separately paid for by the respondents and were not the responsibility of the Builder. Consistent with what was said in Taske,[26] a ‘comprehensive’ home building contract cannot be intended to refer to a contract that incorporates the bulk of the work but excludes part of the work. Otherwise, the monetary cap for the work could be avoided by the owner purchasing and supplying certain materials to the builder.
- [32]Accordingly, the appeal is allowed. The decision of the Tribunal at first instance is set aside and the decision of the Commissioner of State Revenue of 29 November 2021 is confirmed.
Footnotes
[1] The term ‘home builder direction’ is defined in the Schedule to the Act and means ‘the administrative direction called ‘Australian Government HomeBuilder Grant—Queensland’ made by the Minister and published on the department’s website’.
[2] With reference to the potential for ‘any further contract’ referred to in paragraph 14 of the Direction, it is evident that a further contract might arise as a consequence of, for example, the builder’s bankruptcy, liquidation or loss of licence: see Commissioner of State Revenue v Taske [2023] QCATA 121, [17].
[3] In its submissions, the appellant acknowledges that that this argument was not directly put at the hearing at first instance. In that regard, see Lobban v Minister for Justice [2016] FCAFC 109, [64]; University of Wollongong v Metwally (No 2) (1985) 60 ALR 68, 71. In any event, given the present decision in this matter, it is not necessary to consider this ground of appeal.
[4] There is no requirement that a subcontract be in writing. While, by s 14(2) of Schedule 1B of the QBCC Act, a level 2 ‘regulated contract’ (which by s 5 of Schedule 1B of the QBCC Act includes a ‘domestic building contract’) must be in writing, s 3(2)(a) of Schedule 1B of the QBCC Act provides that a ‘domestic building contract’ does not include a contract between a building contractor and subcontractor.
[5] See Transcript, 1-15 L12; 1-27 L13 L40; 1-34 L3.
[6] See fn. 3, above.
[7] [2023] QCATA 121, [16] (‘Taske’).
[8] Ibid, [24].
[9] Ibid.
[10] See Transcript 1-23 L 23; 1-40 L 26.
[11] Peter Reynolds gave evidence that he was not employed by the Builder: Transcript 1-44 L 26.
[12] Transcript 1-40 l 30, 1-42 L 4.
[13] See Transcript 1-35 L35.
[14] Transcript 1-44 L 39.
[15] See Transcript 1-45 L 10; though there is also reference to his working ‘under’ the Builder: Transcript 1-45 L 14.
[16] Transcript 1-40 L 43.
[17] Transcript 1-36 L36-47.
[18] Transcript 1-37 L42.
[19] See Transcript 1-34 L3.
[20] See Transcript 1-15 L27.
[21] See Transcript 1-15 L42 to 1-16 L25; 1-18 L1-L14.
[22] See Transcript 1-33 L41.
[23] See Transcript 1-15 L37; compare the evidence of the Builder at Transcript 1-35 L3.
[24] Transcript 1-28 L 3.
[25] See Transcript 1-27 L19.
[26] Taske (n 6) [27]–[30].