Cousens v Commissioner of State Revenue [2023] QCAT 423

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Cousens v Commissioner of State Revenue [2023] QCAT 423 PARTIES: TANIA DE’ARNE COUSENS (applicant) v COMMISSIONER OF STATE REVENUE (respondent) APPLICATION NO: GAR008-22 MATTER TYPE: General administrative review matters DELIVERED ON: 30 October 2023 HEARING DATE: 14 June 2023 DATE FINAL SUBMISSIONS RECEIVED: 21 August 2023 HEARD AT: Brisbane DECISION OF: Member Olding ORDERS: The decision under review is confirmed. CATCHWORDS: ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – whether applicant entitled to home builder grant – where applicant held freehold title to property – where applicant’s husband signed building contract – whether contract made by applicant – whether applicant’s husband signed contract as agent for applicant – whether parties dealt with each other at arm’s length – whether presumption that transaction part of a scheme to circumvent eligibility requirements – where building company not a licensed builder – where director who supervised the building work is registered builder – whether licensed builder requirement satisfied First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld), s 25U Queensland Building and Construction Commission Act 1991 (Qld), ss 31(1), 42 Administrative Direction, Australian Government HomeBuilder Grant- Queensland, [1.c.] Peet v The Commissioner of State Revenue [2023] QCAT 73 Lewis v Commissioner for State Revenue [2022] QCAT 109 -- 1 of 8 -- 2 APPEARANCES & REPRESENTATION: Applicant: P G Walsh Respondent: D E Fawcett of Counsel REASONS FOR DECISION What is this case about? [1] The applicant, Ms Cousens, seeks a review of the decision of the Commissioner of State Revenue refusing payment of a “home builder grant” relating to substantial renovations to her home undertaken during the COVID-19 pandemic. [2] At the time of the hearing, the only condition of eligibility for the grant in dispute was the requirement that the renovation contract is a “contract made by the freehold owner of a home”. This came down to whether Ms Cousens’ husband executed the contract as her agent. [3] However, in submissions exchanged pursuant to directions made after the hearing, further issues emerged. [4] The first is whether Ms Cousens and the builder had dealt with each other at arm’s length. If they had not, a prima facie presumption that the contract forms part of a scheme to circumvent the grant eligibility requirements would arise. In that case, it would be necessary to consider whether the Tribunal should be satisfied to the contrary. [5] The second additional issue is whether the licensed builder requirement is satisfied. [6] In accordance with s 25U of the First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld), eligibility requirements for the grant are specified in an administrative direction: Administrative Direction, Australian Government HomeBuilder Grant – Queensland (“the Direction”). The agency issue [7] Eligible transactions are listed in clause 1 of the Direction. Relevantly, clause 1.c.identifies as a relevant transaction “a substantial renovation contract made by the freehold owner of a home”.1 [8] Ms Cousens is the sole freehold owner of the home she shares with her husband and partner of many years, and their children. However, Ms Cousens did not sign the contract with the builder. Her husband, Mr Damien Cousens, signed it. [9] Ms Cousens submits that Mr Cousens signed the contract on her behalf as her agent. The Commissioner rejects that submission. [10] A somewhat similar situation arose in Peet v The Commissioner of State Revenue.2 In that case, the Tribunal inferred the contract was signed by the applicant’s longstanding de facto husband as her agent. [11] However, the Tribunal in Peet found the applicant had informed the builder that the applicant was the registered owner of the land but her partner would sign the contract.3 1 Subject to commencement date requirements that are not in issue in this matter. 2 [2023] QCAT 73. 3 [2023] QCAT 73, [40]. -- 2 of 8 -- 3 No such finding is available on the evidence in this matter. Mr Walsh, who appeared for Ms Cousens, did not submit otherwise. The contract [12] The builder used the Master Builders Queensland “Commercial Cost Plus” pro forma contract form which states the contract is between the “Owner” and the “Contractor” (that is, the builder). [13] The schedule to the contract contains the following information under the heading “OWNER”:4 Business name (if applicable) Damien Cousens Trading as (if applicable) [left blank] Contact name/s Tania Cousens Address [address of property] ABN (if applicable) [blank] Phone 1 [Mr Cousens’ mobile number] Phone 2 [blank] Email address [Mr Cousens’ email address] Facsimile number [blank] [14] This part of the pro forma contract is curious. Nowhere does it explicitly make provision for the name of an individual or a legal entity to be inserted as the Owner. “Business name” is not ordinarily used to refer to a legal entity but rather the name under which the entity trades. “Trading as” is commonly used to denote the business name under which an individual or legal entity trades. [15] The manner in which the pro forma has been completed is also curious. Mr Cousens’ name is inserted against “Business name” and Ms Cousens’ against “Contact name/s”. [16] However, it seems clear it is Mr Cousens, not Ms Cousens, who is intended to be the contact person as it is only Mr Cousens’ contact details – mobile number and email address – that have been inserted. Ms Cousens’ contact details do not appear on the contract. [17] This suggests Mr Cousens was intended to be the nominated contact person and Ms Cousens, not being the contact person, was intended to be nominated as the Owner. That is scarcely a startling proposition since Ms Cousens is in fact the owner of the property and Mr Cousens is not. [18] The signing clause for signature by the Owner is as follows: SIGNED – OWNER Signed by, or for and on behalf of, the Owner Signature [Mr Cousens’ signature] Printed name DAMIEN COUSENS Date 14/12/2020 14:21 AEST 4 The bolding is mine, to highlight the key information. -- 3 of 8 -- 4 [19] As will be noted, the pro forma contract contemplates signature either directly by the owner or by another person on behalf of the owner. No doubt the most common application of the second option, bearing in mind it is a pro forma for a commercial contract, would be where an individual, such as a director, signs for a company. [20] However, it certainly accommodates signature by one natural person on behalf of another. Mr Cousens is not the owner of the property. It is unlikely that he purported to sign as owner. The more natural inference is that he signed, as the contract contemplates, “for and on behalf of, the Owner”, Ms Cousens. [21] That the expression “Owner” in the contract is not merely an identifier for the counterparty to the contractor, but means the owner of the property, is consistent with other terms of the contract. [22] For example, clause 11 states that: the Owner must effect and maintain a policy of insurance over any existing building affected by the Works and their contents: i) in the joint names of the Owner and Contractor. . . [23] Mr Cousens would not have an insurable interest in the home. The clause is only capable of operation if the Owner is the owner of the property or at least has an interest in it which Mr Cousens does not. [24] Similarly, under clause 15, the Owner: i) charges its interest in the Site with due payment to the Contractor of all moneys that may become payable to the Contractor . . .; ii) must, if requested by the Contractor, promptly deliver an executed mortgage in registerable form to secure the charge; iii) agrees to the Contractor lodging a caveat over the Site to secure the Contractor’s interest in the Site; iv) if requested, must do all things and sign all documents necessary to enable the Contractor to lodge a caveat . . . [25] These are promises only the owner of the property or at least a person with an interest in it could perform. Mr Cousens cannot, for example, sign documents necessary to enable the Contractor to lodge a caveat over the property. Any purported agreement by Mr Cousens to the Contractor lodging a caveat would be ineffective unless given on behalf of Ms Cousens. [26] Mr Fawcett, who appeared for the Commissioner, noted that Annexure A to the contract, dealing with the scope and extent of the works, states: The extension as per plans supplied by Damien Cousens. [27] I do not see that insertion as detracting from the submission that Mr Cousens signed the contract as agent for Ms Cousens. If anything, it supports the view that Mr Cousens was not intended to be the “Owner” under the contract. If that were so, it would be expected the clause would refer to the “Owner” supplying the plans rather than to Mr Cousens. Other evidence [28] At the hearing, Ms Cousens gave evidence and was cross examined. Mr Cousens did not and nor did any representative of the builder. -- 4 of 8 -- 5 [29] Ms Cousens agreed that she did not expressly state to the builder that she had appointed Mr Cousens as her agent or authorised him to sign the contract on her behalf. She readily agreed that she would not have used legal terms of that kind but said it would have been clear that Mr Cousens was to sign on her behalf. [30] Ms Cousens agreed that Mr Cousens primarily managed the family’s finances and arranged the payments to the Contractor. It was also noted that the contractor’s invoices were addressed to Mr Cousens rather than Ms Cousens. [31] In the context of a married couple, financing substantial renovations from their joint resources, I do not consider Mr Cousens receiving and paying the invoices is fatal to, or points strongly against, the proposition that he signed the contract as agent for Ms Cousens as the owner of the property. [32] Ms Cousens impressed me as a witness doing her best, in unfamiliar circumstances, to answer honestly the questions put to her. In the end, though, I do not consider this matter turns upon Ms Cousens’ testimony. In my view, the matter is resolved by terms of the contract construed in the context of the surrounding circumstances. Conclusion – the contract was made by Ms Cousens [33] I consider the better construction of the contract is that Mr Cousens signed the contract as agent for Ms Cousens. [34] That is consistent with the terms of the contract to which I referred above and with the reality that it is Ms Cousens who owns the property. To borrow from the language of the Tribunal in the Peet case, there is no suggestion that Mr Cousens was on a frolic of his own.5 It is improbable that Mr Cousens would enter into a contract in his own right for substantial changes to Ms Cousens’ property to be carried out without Ms Cousens’ authority or that Ms Cousens would stand by as unauthorised major alterations to her home were undertaken and paid for. The obligations incurred under the contract were, after all, to be met from their joint resources. The scheme issue [35] The building contractor under the contract is HX Constructions Pty Ltd (“the Company”) as trustee for the HX Constructions Trust. Mr Gregory Rees is the sole director and shareholder of the Company and the person with whom Mr and Mrs Cousens dealt in relation to the transaction. [36] Mr Cousens has known Mr Rees for many years. Mrs Cousens came to know Mr Rees through his friendship with her husband. [37] Clause 8 of the Direction provides: 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. [38] Clause 10 provides that: 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. 5 [2023] QCAT 73, [40]. -- 5 of 8 -- 6 [39] For the purposes of clause 10, the question is not whether, by virtue of the friendship between Mr Cousens and Mr Rees, the parties were not at arm’s length. Rather, the issue is whether the parties “have not dealt with each other at arm’s length”. [40] Mr Rees provided a statutory declaration in which he deposed that: (a) The contract was a “cost plus” agreement. (b) This was commercially reasonable because it allowed his company to pass on all costs incurred. (c) He estimated the cost of works at approximately $310,000. (d) He agreed to a 12% margin on the estimated cost of works which came to about $32,000, which is a commercially reasonable builder’s fee. (e) At the end of the job, the cost invoices came to a total of $256,376.08. (f) The final invoice for $30,765.13 issued on 20 June 2022. This covered the builder’s margin, being 12% of $256,376.08. [41] Up to that point, there is nothing in the evidence to suggest the parties were not dealing with each other at arm’s length. [42] However, the final invoice amount of $30,765.13 remains unpaid. In that regard, Mr Rees deposed that he is aware Mr Cousens’ father had suffered a major stroke in late 2020 and remains bedridden and that the costs of his care created a major continuing financial burden on the family’s cash flow. [43] Mr Rees went on to depose that he therefore agreed to the final payment being delayed to when the family gain access to funds held in a private equity investment. This is consistent with Mrs Cousens’ statutory declaration in which she deposed to her understanding that funding from the venture capital round “has been delayed due to unfavourable market conditions”. [44] In summary, Mr Rees has agreed to a delay in the final payment for an indefinite period. This means the company has so far received only reimbursement of its costs and no profit or other reward for Mr Rees’ own time organising and supervising the renovations. In the absence of any further explanation of why a builder acting at arm’s length would agree to an indefinite delay in a substantial payment, I can only conclude that the parties are not dealing with each other at arm’s length. [45] It does not follow, though, that the applicant is therefore disqualified from receiving the grant. Mrs Cousens will not be disqualified under clause 8 if I am satisfied the contract does not form “part of a scheme to circumvent limitations on, or requirements affecting, eligibility or entitlement to the grant for an eligible transaction”. [46] I can see nothing in the builder accepting the delay in payment, or otherwise in the arrangements between them, to suggest acceptance of the delay or anything else in the arrangements was designed to circumvent the conditions of eligibility for the grant. The Commissioner did not point to any particular circumvention said to have been a consequence of the parties not dealing with each other at arm’s length. -- 6 of 8 -- 7 [47] In particular, I note the evidence, which I accept, that the agreed price was of a commercial nature and that there were no side agreements affecting the price. Under clause 4.b. of the Direction, a substantial renovation contract is not an eligible transaction if the consideration is less than $150,000 or more than $750,000. It is not in issue that the renovations were carried out. Even allowing for the delayed payment, the consideration in this case is well within those requirements. Given the external costs incurred by the builder, it seems unlikely that the consideration has been manipulated in a way that would impact upon eligibility for the grant. [48] In the circumstances, I am satisfied the contract was not part of a scheme of the kind referred to in clause 8 of the Direction. The licensed builder issue [49] Under clause 6 of the Direction: a transaction is not an eligible transaction if the building work6 will be performed by a person who does not hold a licence to carry out the building work under the Queensland Building and Construction Commission Act 1991. … [50] Mr Rees is a licensed as a building contractor under the Queensland Building and Construction Commission Act 1991 (Qld) but the Company is not. It appears this issue came to light belatedly as it was wrongly assumed that Mr Rees was the trustee of the HX Constructions Trust and thus the contractor under the building contract which specifies the trust as the contractor. However, the Company, not Mr Rees, was the trustee of the trust at all relevant times and the building contractor under the contract. [51] On behalf of Ms Cousens, it was submitted that: (a) the Tribunal should not revisit this issue; but in any case (b) the disqualifying condition in clause 6 does not arise because it was Mr Rees, not the Company, that “performed” the work. I can see no basis on which the Tribunal could refrain from determining whether an eligibility condition is satisfied. I therefore turn to consider Ms Cousens’ second submission on this issue. [52] Ms Cousens sought to draw support for her submission from the Tribunal’s decision in Lewis v Commissioner for State Revenue.7 In that case, the Tribunal concluded that the provisions of the Direction relevant to a comprehensive building contract were satisfied where a building company was not licensed but, as the Tribunal concluded, the work was carried out through its nominee who was licensed. [53] Three observations may be made regarding that decision. First, at the time of preparing these reasons, the Commissioner’s appeal against the decision is pending. 6 This part of clause 6 is footnoted to the following reference: “The definition of ‘building work’ in schedule 2 of the Queensland Building and Construction Commission Act 1991 is adopted for the purposes of this administrative direction.” 7 [2022] QCAT 109. -- 7 of 8 -- 8 Secondly, although there are similarities in the wording, the decision was not concerned with the provisions in the Direction governing the current matter. Thirdly, it appears the Tribunal in Lewis proceeded on the basis that the licensed individual was the nominee of the corporate entity. There is no evidence that Mr Rees was the nominee of the Company, although even if that were so it would not change my view regarding the outcome for the reasons that follow. [54] The contract in this case was entered into by the Company. It was the Company that promised to perform the work. A company, as an artificial legal construct, can only perform work through the agency of a natural person. Against that background, it would be, in my view, an unnatural application of the provision to look past the Company as the contracting party to identify Mr Rees as the party performing the work. The company is the legal entity that contracted to, and did, perform the work through its director, Mr Rees. [55] Further, under s 42 of the Queensland Building and Construction Commission Act 1991 (Qld), it is unlawful for a person, which includes a company, to carry out “or undertake to carry out” building work without a contractor’s licence. Thus, it was unlawful for the company to enter into the building contract while unlicensed. That is so regardless of whether Mr Rees held a licence. [56] It would be an unlikely intention to attribute to the drafter of the Direction that the grant would be payable in respect of a contract that it was unlawful for the Company to enter into. That would be at odds with the consumer protection intent evident in the requirement for work to be performed by a licensed builder. Such protections are not limited to the technical competence of builders and extend to matters relating to the integrity of those who control corporate building contractors and their financial capacity to fulfil contractual promises: Queensland Building and Construction Commission Act 1991, s 31(1). Conclusion [57] As the licensed builder condition is not satisfied, Ms Cousens is not entitled to the grant and the decision under review must be confirmed. -- 8 of 8 --