D'Arro v Queensland Building and Construction Commission

In this interesting decision, the Court of Appeal gives consideration to the question of whether the QCAT erred in failing to apply amendments made by an Act – in this case, the Professional Engineers and Other Legislation Amendment Act 2014. In determining this question, the court adopted a distinction between “a liability having become complete by past events rather than a situation in which some future event must occur to make the effect of past events a completed liability”.  Here, the relevant amendments did not change the applicant’s licence status as it was at a time before the Act was enacted.  Accordingly, it did not operate retrospectively and the QCAT erred in failing to apply the amendments.

Fraser and Philippides JJA and Mullins J

12 May 2017

This was an application for leave to appeal against a decision of the Queensland Civil and Administrative Tribunal (“QCAT”) Appeal Tribunal, noteworthy in that it raised questions regarding the applicability of material amendments made to the Queensland Building and Construction Commission Act 1991 (“the Act”) which commenced after the hearing in the QCAT but prior to the delivery of judgment. The question for determination was whether the Appeal Tribunal erred in affirming the decision of the QCAT that the amendments were inapplicable on the ground that to apply them would retrospectively change the previous operation of the Act. [2].

On 22 May 2009, liquidators were appointed to four companies associated with the applicant, which together operated a design and construction business. On 1 July 2010, the applicant was made bankrupt. [4]. On 3 July 2009, the applicant was held to be an “excluded individual” for a relevant event, for the purpose of s 56AF. [11]. It later also determined that the applicant was an excluded individual for his bankruptcy. [11]. The applicant applied to the respondent to be characterised as a “permitted individual” for each of the five events. The respondent had refused those applications and the applicant had applied to QCAT for review of those decisions. The review hearing in the Tribunal ultimately proceeded only in relation to two of the respondent’s decisions, both of which were confirmed. [15].

The applicable legislation and the relevant amendments

Pt 3A of the Act (ss 56AB–56AH, headed “Excluded and permitted individuals and excluded companies”) and Pt 3B (ss 57–61, headed “Permanently excluded individuals”) concern licensing.  Section 56AF(3) provides, relevantly, that the commission must cancel an individual’s licence by written notice in the event it “considers that an individual who is a licensee is an excluded individual for a relevant event”.  The meaning of “excluded individual” is contained in s 56AC.

Three material amendments were made to the Act before the QCAT made its decision, including amendments to ss 56AC(5) and (6), which in their unamended form provided:

“(5) An excluded individual for a relevant bankruptcy event (the first event) does not also become an excluded individual for another relevant bankruptcy event (the other event) if the first event and the other event are both consequences flowing from what is, in substance, the one set of circumstances applying to the individual.

(6) An excluded individual for a relevant company event (the first event) does not also become an excluded individual for another relevant company event (the other event) if the first event and the other event are both consequences flowing from what is, in substance, the one set of circumstances applying to the company.”

Before the QCAT decision, the Professional Engineers and Other Legislation Amendment Act 2014 (the Amending Act) entirely omitted ss 56AC(5) and (6) and inserted a new s 56AC(5), which provides:

“An excluded individual for a relevant event does not also become an excluded individual for another relevant event if the commission is satisfied that both events are consequences flowing from what is, in substance, the one set of circumstances.”

The Amending Act also omitted part of the text of s 56AD(8) and inserted other text, so that the subsection provided:

“The commission may categorise the individual as a permitted individual for the relevant event only if the commission is satisfied, on the basis of the application, that –

               (a) section 56AC(5) applies to the individual for the relevant event …”.

The applicant argued that his bankruptcy and the appointment of liquidators to the companies were both consequences arising from what was, in effect, the one set of circumstances and accordingly s 56AD(8)(a) supplied an additional ground enlivening the power to treat him as a permitted individual for relevant events. [18].

Retrospectivity

The applicant argued that the presumption against retrospective operation of statutes was not offended by the application of a statute making amendments, which had future consequences in respect of past facts. Therefore, the question here was whether the applicant was, by virtue of past facts, entitled to the grant or a continuation of a grant of a right or privilege (that is, to be a “permitted individual” and therefore entitled to hold or be associated with the older of a building licence). [23].

In determining whether the Amending Act would operate retrospectively if the amendments were applied by the QCAT, the court first considered the relevant liability or consequence of the operation of the Act that would be affected. [29]. In doing so, the court rejected the submission by the respondent that other provisions of the Act required that ss 56AC(3) and (4) themselves operated to create a liability or other adverse consequence effect upon the occurrence of a relevant event. [29]–[30]. Instead, the court held that any relevant liability or thing suffered is instead created by the subsequent cancellation of the licence or refusal of an application for a licence by the respondent, consequent upon its decision that the individual is an excluded individual. [30].

The court considered that the amendments made by the amending Act would act retrospectively if they changed the applicant’s licence status as it was at a time before the amending Act was enacted. [31]. An example was given that the Amending Act would operate retrospectively if the Act, as amended, “entitled the applicant or one of his companies to be regarded as having held a licence in the period before the commencement of the amendments even though in that period the respondent had duly refused an application or had duly cancelled the licence”. Following Dixon CJ in Maxwell v Murphy (1957) 96 CLR 261, 267, the court found that the possible consequence that after the Amending Act had commenced, any application for a licence could not be lawfully refused or a licence lawfully cancelled did not attribute retrospective operation to the Amending Act as it would not apply “in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events”. [31].

The court observed that the distinction in this case was between “a liability having become complete by past events rather than a situation in which some future event must occur to make the effect of past events a completed liability”. The court explained that until any licence the applicant held or any application he might make for a licence was refused any disadvantage to him by being described by the statute, as “an excluded individual” should not be regarded as an accrued liability or a completed transaction. [33]–[34].  Accordingly, the court determined that the application of the amendments in the Tribunal would not attribute a retrospective operation to the Amending Act.

The appeal was allowed with costs, the orders made in the Appeal Tribunal set aside, and the appellant’s applications for review of the respondent’s decision that he was an excluded individual be returned to the Queensland Civil and Administrative Tribunal for reconsideration according to law. [43].

A de Jersey