Berthelsen v Queensland Building and Construction Commission [2017] QCATA 82

CITATION: Berthelsen & Anor v Queensland Building and Construction Commission [2017] QCATA 82 PARTIES: Kailen Berthelsen IDC Developments Pty Ltd (Applicants/Appellants) v Queensland Building and Construction Commission (Respondent) APPLICATION NUMBER: APL339-16 MATTER TYPE: Appeals HEARING DATE: 27 February 2017 HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM A/Senior Member Howard DELIVERED ON: 4 July 2017 DELIVERED AT: Brisbane ORDERS MADE: 1. The appeal is allowed; 2. The decision of the Tribunal dated 12 September 2016 in OCR110-15 is set aside; 3. The proceeding is returned to the Tribunal for reconsideration; 4. OCR110-15 will be listed for a directions hearing on a date to be advised for the Tribunal to make directions for the filing of any additional evidence by the parties and to fix a date for the hearing. CATCHWORDS: PROFESSIONS AND TRADES – BUILDERS – APPEALS – where licensee convicted on indictable offence – where licensee failed to disclose conviction – where QBCC cancelled licence – where Tribunal confirmed QBCC decision – whether tribunal erred in failing to consider or failing to explain reasons for rejecting submissions – whether tribunal erred in the exercise of its discretion -- 1 of 20 -- 2 Queensland Building and Construction Commission Act 1991 (Qld), s 31(1), s 31(2), s 48, s 48(a), s 48(f), s 48(j), s 101, s 108C Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(3)(b), s 146 Amour v QBSA [2012] QCAT 360 Attorney-General v Kehoe [2000] QCA 222 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33 Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119 Berthelsen v Queensland Building and Construction Commission [2016] QCAT 517 Bloomfield v Queensland Building and Construction Commission; Roofshield Restorations v Queensland Building & Construction Commission [2014] QCAT 293 Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219; [2009] QCA 66 Ericson v Queensland Building Services Authority [2013] QCA 391 House v The King (1936) 55 CLR 499; [1936] HCA 40 Hughes & Vale Pty Ltd v New South Wales (1955) 93 CLR 127 Poytress v Director General, NSW Fair Trading [2015] NSWCATOD 100 Queensland Building and Construction Commission v Bloomfield & Anor [2015] QCATA 019 Victorian Legal Services Commissioner v Lewenberg (2016) VCAT 439 APPEARANCES: APPLICANT: S Taylor of Counsel, instructed by Crouch & Lyndon, appeared for the applicants RESPONDENT: R M de Luci of Counsel, instructed by Robinson Locke, appeared for the Queensland Building and Construction Commission REASONS FOR DECISION The Queensland Building and Construction Commission (QBCC) cancelled the building industry license of Mr Kailen Derek Berthelsen and the industry licence for IDC Developments Pty Ltd (IDC) of which Mr Berthelsen was a director and influential person on the basis that it had decided Mr Berthelsen was not a fit and proper person to hold a licence. Mr Berthelsen -- 2 of 20 -- 3 reviewed the QBCC decisions in the Tribunal. A Member heard and determined the review proceedings. The Tribunal made orders confirming the decisions of the QBCC in each case. Its reasons for decision are published as Berthelsen v Queensland Building and Construction Commission [2016] QCAT 517. Mr Berthelsen and IDC have appealed the Tribunal’s decision alleging errors of law. At the hearing of the appeal, they sought to amend their grounds of appeal. QBCC made no objection to the amendment, has had notice of the amendments sought, and provided submissions about the grounds of appeal as amended. We give leave for the amendments as sought. The three grounds of appeal (as amended) may be summarised as follows: 1. The Tribunal erred in failing to consider its submissions concerning the following decisions: i) (The Tribunal’s decision in) Bloomfield v Queensland Building and Construction Commission; Roofshield Restorations v Queensland Building & Construction Commission,1 and (the decision of the Appeal Tribunal in) Queensland Building and Construction Commission v Bloomfield & Anor.2 ii) Amour v QBSA;3 and iii) Victorian Legal Services Commissioner v Lewenberg.4 They submit that, as a consequence, the Tribunal either failed to complete its statutory task or, alternatively, did not afford procedural fairness to Mr Berthelsen and IDC; 2. Alternatively, insofar as the cases referred to in Ground 1 were considered by the Tribunal but deemed not to be relevant, the Tribunal erred in law by failing to give sufficient reasons for its conclusion; 3. The Tribunal erred in the exercise of its discretion as follows: i) Proceeding upon a mistaken fact or erroneous conclusion in rejecting Mr Berthelsen’s explanation that he held a genuine (but) mistaken belief that he did not have a prior conviction to disclose; or, alternatively, in not affording natural justice to Mr Berthelsen by drawing a conclusion in circumstances where that 1 [2014] QCAT 293. 2 [2015] QCATA 019. 3 [2012] QCAT 360. 4 (2016) VCAT 439. -- 3 of 20 -- 4 proposition was not put to him; or, alternatively, in not providing an adequate explanation as to why his evidence was rejected; ii) Proceeding upon a mistaken fact or an erroneous conclusion, namely in finding that Mr Berthelsen had ‘insufficient regard for the significance of declarations’;5 or alternatively in relying upon part only of Mr Berthelsen’s evidence at paragraph [44] of the decision; iii) Failing to take into account a material consideration, namely Mr Berthelsen’s evidence of his intention or, otherwise, in support of the proposition that Mr Berthelsen did not intentionally make false declarations; iv) Failing to take into account a material consideration, namely positive ‘character evidence’ which was led by Mr Berthelsen; v) Failing to take into account a material consideration, namely the purpose of the legislation, in failing to undertake a balancing of the seriousness of the false declarations (and other issues raised) in comparison to Mr Berthelsen’s personal financial position and that of IDC, the effect on dependants and the effect on the livelihood of contractors working for IDC; vi) Placing excessive weight on an irrelevant consideration, namely Mr Berthelsen’s failure to update his address; and vii) Failing to take into account a material consideration, namely the Bloomfield decision at first instance and on appeal, and by placing excessive weight on an irrelevant consideration, namely the distinguishable decision in the matter of Poytress v Director General, NSW Fair Trading.6 Mr Berthelsen and IDC seek orders allowing the appeal and referral of the proceeding back to the Tribunal for further determination, pursuant to s 146 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). The QBCC submits that there is no error in the Tribunal’s decision. The Tribunal’s reasons for decision At the time of the relevant events described in the following paragraphs, Mr Berthelsen held a building industry contractor licence in several categories. 5 Berthelsen v Queensland Building and Construction Commission [2016] QCAT 517, [52]. 6 [2015] NSWCATOD 100. -- 4 of 20 -- 5 He was also the nominee licence holder for licences in several classes of licence for IDC. He is the sole director, secretary and shareholder of IDC. The Tribunal concluded that Mr Berthelsen was not a fit and proper person to hold a licence. The Tribunal confirmed the decisions of the QBCC. The Tribunal referred to provisions of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act). A (natural) person is entitled to a contractor’s licence under the QBCC Act, if the QBCC is satisfied, among other things, that the person is a ‘fit and proper person’.7 A company is entitled to a contractor’s licence if the directors, secretary and influential persons for the company are ‘fit and proper persons’.8 The QBCC Act provides that the QBCC may suspend or cancel a licence in certain circumstances.9 The circumstances include those relied upon by the Tribunal in deciding the review: namely, when the licence was obtained on the basis of incorrect information supplied to the QBCC;10 and when it becomes aware of facts that would allow it to refuse to issue the licence on a new application or would have allowed it to refuse it originally (in essence, facts that demonstrate the licensee or nominee is no longer a fit and proper person, or was not, when the licence was issued, a fit and proper person).11 The Tribunal stated that the only relevant questions for it to determine were whether Mr Berthelsen is a fit and proper person and whether IDC was entitled to hold a company licence if Mr Berthelsen was found not to be a fit and proper person.12 The Tribunal considered the meaning of ‘fit and proper person’. It relied upon the High Court’s decision in Hughes & Vale Pty Ltd v New South Wales,13 where it held, quoting from a classic text, that fitness involved three things, honesty, knowledge and ability.14 Further, the Tribunal quoted Australian Broadcasting Tribunal v Bond15 and several other authorities which speak of the types of matters relevant to the assessment of fitness and propriety.16 The Tribunal found that ‘the ascertainment of fitness and propriety invites a broad inquiry…’17 7 QBCC Act, s 31(1). 8 Ibid, s 31(2). 9 Ibid, s 48. 10 Ibid, s 48(a). 11 Ibid, s 48(f). 12 Berthelsen v Queensland Building and Construction Commission [2016] QCAT 517, [31]. 13 (1955) 93 CLR 127, 156-7. 14 [2016] QCAT 517, [24]. 15 (1990) 170 CLR 321. 16 Berthelsen v Queensland Building and Construction Commission [2016] QCAT 517, [25] – [28]. 17 Ibid, [29] – [30]. -- 5 of 20 -- 6 The Tribunal considered Mr Berthelsen’s trade skills,18 honesty and knowledge19 relevant. His trade skills were conceded.20 The Tribunal directed its attention to evaluating his honesty and knowledge.21 The QBCC raised a number of matters that the Tribunal considered in assessing Mr Berthelsen’s honesty and knowledge, as discussed below. In 2013, Mr Berthelsen applied to QBCC to renew his licence. A question in the application relevantly asked whether he had been convicted of a criminal offence (excluding traffic offences) within the previous ten years. Mr Berthelsen responded, ‘No.’ As part of the application, he signed a declaration that his statements in the application were true and correct. In applying for a licence renewal for IDC in 2014, Mr Berthelsen similarly answered that no director, office holder, nominee or person of influence had been convicted of a criminal offence in the previous ten years. As part of that application, he again signed a declaration that the statements given in the application were true and correct. It was not in dispute at the hearing that in June 2008, Mr Berthelsen had been convicted of six counts of serious assault and one of public nuisance. He was sentenced to nine months imprisonment for each offence to be served concurrently, suspended for two years. The sentencing remarks refer to the imposition of a sentence of imprisonment, because he was already on 12 months probation (for a number of vandalism offences, for which he had been found guilty although no conviction was recorded, in the Magistrates Court, earlier in 2008, and which were committed while Mr Berthelsen was on bail for the assault and public nuisance charges). In discussing the prior criminal convictions and his false declarations about them, the Tribunal stated that Mr Berthelsen acknowledged his criminal conviction to the QBCC, and later to the Tribunal. The Tribunal said that Mr Berthelsen explained that he had ‘put the fact of that conviction out of his mind altogether….’22 Further, the Tribunal stated that he had sought, in some material (show cause documents provided to the QBCC), to advance a version of events that was inconsistent with guilt.23 The Tribunal said it found it difficult to accept that Mr Berthelsen had ‘no memory of his guilty plea’ and that ‘he genuinely believed he had no prior convictions.’24 It referred to what it considered was a ‘clutch of reasons’25 which provided alternative explanations for his statements and declarations, considering that they indicated a disregard for the significance of declarations or lack of 18 Ibid, [32]. 19 Ibid, [33]. 20 Ibid, [32] – [33]. 21 Ibid, [33]. 22 Ibid, [36] – [37]. 23 Ibid, [43]. 24 Ibid, [43]. 25 Ibid, [44] – [45]. -- 6 of 20 -- 7 understanding about their purpose.26 In any event, the Tribunal considered either of these was ‘a negative determinant’ in assessing whether Mr Berthelsen was a fit and proper person.27 Mr Berthelsen was convicted of an offence in 2015 arising out of his failure to pay an insurance premium on a building job that resulted in an infringement notice for breach issuing under the QBCC Act. As a result of this event, Mr Berthelsen was an enforcement debtor for an offence under the QBCC Act. Mr Berthelsen submitted that that offence arose out of his ‘first independent job in the building industry and that he was unaware at the time that this was a compulsory requirement.’28 He said he had not paid the fine when first notified of it because he was distracted by complications in his wife’s pregnancy.29 He assumed it would subsequently be repaid through an already established automatic payment arrangement he had in place with SPER for his traffic fines. (The Tribunal declined to draw additional adverse inferences urged upon it by QBCC as to how the SPER fine payment arrangement came about).30 The QBCC also raised issues concerning IDC’s original licence application. That application was accompanied by a declaration from Mr Berthelsen stated that IDC had net tangible assets of $18,000 to meet minimum requirements. However, the financial return for IDC ending only a month or so later inconsistently specified net tangible assets of $20.31 The Member noted that Mr Berthelsen had then provided further financial accounts, again declared correct by Mr Berthelsen, but ‘again demonstrably inconsistent with other facts similarly declared by him.’32 The Tribunal further accepted that IDC’s address in the QBCC Public Register (in breach of his notification obligations under s 101 of the QBCC Act) was recorded as premises at which Mr Berthelsen no longer resided.33 It considered this relevant to fitness and propriety, inferring from it that Mr Berthelsen had insufficient understanding or awareness of obligations imposed on licence holders.34 This was considered another factor relevant to whether he had adequate knowledge to be considered a fit and proper person. The Tribunal also accepted that Mr Berthelsen had falsely told QCAT in a witness statement that IDC employed a number of people, inconsistently 26 Ibid, [45]. 27 Ibid, [45]. 28 Ibid, [39]. 29 Ibid, [39]. 30 Ibid, [46]. 31 Ibid, [42]. 32 Ibid, [50]. 33 Ibid, [48]. 34 Ibid, [48]. -- 7 of 20 -- 8 with its financial records that revealed no employment expenses.35 Only after the inaccuracy was identified did he correct the error. The Tribunal found that the fact of the prior convictions when Mr Berthelsen was young was not of itself relevant to whether Mr Berthelsen was a fit and proper person. Had these convictions been declared, the Tribunal said that they would not have been an impediment to a building industry licence. However, the false declarations subsequently given about them was relevant.36 The Tribunal concluded that Mr Berthelsen had ‘insufficient regard for the significance of declarations’ and ‘is much too quick to declare the accuracy of information’, later shown to be inaccurate.37 It found that this called his honesty into doubt38 and, in essence, was unsatisfactory in light of the legislative intent to ensure that ‘consumers can repose confidence in the trustworthiness of licence holders.’39 Further, the Tribunal concluded that Mr Berthelsen did not ‘sufficiently understand the importance of the statutory obligations imposed on licence holders.’40 Therefore, he did not have the knowledge necessary to be a fit and proper person. In ‘the circumstances of these findings’, the Tribunal said it considered it appropriate to cancel the licences of Mr Berthelsen and IDC, pursuant to s 48(j) or s 48(a).41 It confirmed the QBCC’s decisions. Grounds of appeal 1 & 2: Did the Tribunal err in law in failing to consider Mr Berthelsen and IDC’s submissions about the Bloomfield, Amour and Lewenberg cases? Alternatively, did the Tribunal err in failing to give adequate reasons for considering the cases, but deeming them irrelevant? The first two grounds of appeal allege error by the Tribunal in not considering, or discussing, in its reasons Mr Berthelsen’s submissions about the relevance of the Tribunal’s and Appeal Tribunal’s Bloomfield decisions and the Amour decision of the Tribunal; and VCAT’s decision in Lewenberg. Mr Berthelsen and IDC submit42 that the Tribunal made no mention of the Bloomfield cases in its reasons, despite the applicants having raised the cases in a serious manner for the Tribunal’s consideration on numerous occasions. They submit that the Tribunal’s failure to refer to the Bloomfield decisions amounts to a failure to give adequate reasons or is a breach of 35 Ibid, [50]. 36 Ibid, [51]. 37 Ibid, [52]. 38 Ibid, [52]. 39 Ibid, [52]. 40 Ibid, [53]. 41 Ibid, [54]. 42 Applicant’s Appeal Submissions, [5]. -- 8 of 20 -- 9 procedural fairness. It submits that either failure would be an error of law. The applicants submit that although the Tribunal was entitled to reject the application of the cases, in doing so it was bound to give reasons as to why that authority was not applicable.43 The QBCC submits,44 in essence, that the Tribunal dealt satisfactorily with the points raised by the decisions referred to regarding the assessment of ‘fit and proper person’, through its discussion of other relevant case law.45 Further, it submits that it appears the cases were considered by the Tribunal having regard to the Transcript of the proceedings.46 The QBCC submits that the facts of Bloomfield and Amour are clearly distinguishable from the facts of Mr Berthelsen’s case and that in any event the Tribunal is not bound by its own decisions.47 Therefore, QBCC submits that if it was an error, it could not be material. In response, Mr Berthelsen and IDC argue that if the decisions were distinguishable, they should have been distinguished but were not. The reasons given by the Tribunal do not make specific reference to either of the Bloomfield decisions, Amour or Lewenberg, nor why the Tribunal decided not to apply them. That said, the submissions of Mr Berthelsen and IDC referred to Lewenberg only in order to discount/distinguish it in response to submissions of QBCC relying upon it,48 which submissions were not adopted by the Tribunal. It follows that Mr Berthelsen and IDC can have no legitimate complaint that the Tribunal’s non-reliance upon their submission in response was somehow a breach of procedural fairness to them, failure to perform its function or failure to give adequate reasons. It is not discussed further. The Appeal Tribunal in Bloomfield49 and the Tribunal in Amour50 discussed relevant High Court authorities, and in Amour, an additional New South Wales Supreme Court authority, as to the meaning of the phrase ‘fit and proper person.’ In deciding the review, the Tribunal here referred to those same authorities, at paragraphs [23] to [27], extracted below (citations omitted): [23] The expression “fit and proper person” as used in s.31(2)(a), s.32(1)(g) and s.32AA(1)(d) of the QBCC Act is one often used in statutes concerned 43 Applicant’s Appeal Submissions, [19]. 44 QBCC’s submissions, [6]. 45 QBCC’s submissions, [6], referring to reasons for decision in Berthelsen v Queensland Building and Construction Commission [2016] QCAT 517, [24] – [26]. 46 QBCC’s submissions refer to the Tribunal’s discussion at transcript pages 1-98 to 1- 102 of the proceedings below. 47 QBCC’s submissions, [9]. 48 Appeal Book, page 416, Written submissions of Mr Berthelsen and IDC dated 26 April 2016, paras 64-66. 49 [2015] QCATA 19, [33] – [34]. 50 [2012] QCAT 360, [34] – [38]. -- 9 of 20 -- 10 with occupational regulation. The concept is a broad one, with that breadth giving the widest possible scope for judgement. [24] The classic statement as to the connotation of that expression is usually taken from Hughes & Vale Pty Ltd v New South Wales (per Dixon CJ, McTiernan and Webb JJ.), where the High Court said: ‘Fit’....with respect to an office is said to involve three things, honesty, knowledge and ability: ‘honesty to execute it truly, without malice affection or partiality; knowledge to know what he ought duly to do; and an ability as well in estate as in body, that he may intend and execute his office, when need is diligently, and not for impotency or poverty neglect it’ – Coke.’ [25] In Australian Broadcasting Tribunal v Bond, Toohey and Gaudron JJ said: ‘The expression “fit and proper person”, standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of “fit and proper” cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely further conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.’ [26] Also in Australian Broadcasting in Bond, Chief Justice Mason said: ‘The question whether a person is fit and proper is one of value judgement. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring a person whose fitness and propriety are under consideration’. [27] In the specific context of the building industry, in Dougdale Holdings Pty Ltd v Builders Licensing Board of New South Wales, Goran J, when speaking of the fit and proper person test in the Builders Licensing Act 1971 (NSW) said: ‘A fit and proper person to hold a licence to build, in my view, is a person who is responsible in his intention and those projected intentions, that is projected into the performance of them; that he is so to speak a stable person upon whom the customer could depend and that he is the sort of person who the Board, in its wisdom, having looked at him in the context of the building trade and industry as a whole, would regard as the sort of person who could be entrusted with -- 10 of 20 -- 11 projects on behalf of prospective customers who have to pay for his services’. At first instance, the Tribunal in Bloomfield did not consider the meaning of the phrase ‘fit and proper person’ in light of the relevant authorities (that were relied upon by the Tribunal in Mr Berthelsen’s and IDC’s review proceedings). Mr Bloomfield had been convicted of extortion and served a jail term. The Tribunal accepted that he signed applications to the QBCC (prepared by his partner) that wrongly stated he had no relevant criminal conviction/s and declared that the contents were true. The Tribunal found that Mr Bloomfield’s lack of intent (because he had not read the documents) in failing to disclose relevant criminal conviction51 and in recklessly and inappropriately making several false declarations that he did not have any such convictions, did not, in the particular circumstances of the case, on the evidence before it, give rise to a conclusion that he was not a fit and proper person. An instance of failing to comply with a statutory requirement when the homeowner refused to allow him access to the premises, was likewise not considered sufficient to indicate a lack of fitness.52 We observe that having regard to the more limited issues raised in Bloomfield than against Mr Berthelsen, it was distinguishable on its facts. However, consistently with submissions made by Mr Berthelsen and IDC in these proceedings,53 the Tribunal in Bloomfield considered the manner in which the Tribunal was required to approach decision-making under s 48 of the QBCC Act. It held that there was a two-step process in determining the application. Firstly, whether relevant facts arose under s 48 of the QBCC Act, and secondly, then whether the discretion to cancel or suspend a license should be exercised.54 The Appeal Tribunal in Bloomfield confirmed that the parties agreed that the determination required a two-step process to be followed.55 It observed that the Bloomfield case arose from a very particular set of circumstances unlikely to arise again (noting that if intent had been evident, then QBCC would have invoked a penalty provision for providing false and misleading information to it, which it had not).56 It further observed that the case was authority ‘only for the general principles guiding the exercise of discretion’.57 Each case must, of course, be decided on its own merits. In Mr Berthelsen’s and IDC’s review, the Tribunal followed some of the relevant general principles articulated by the Appeal Tribunal in Bloomfield and by the Tribunal in Amour about matters relevant to fitness and 51 [2014] QCAT 293, [25] – [40]. 52 Ibid, [38] – [39]. 53 Appeal Book, at 405 and following, esp at 410. 54 [2014] QCAT 293, [10], [41] – [44]. 55 [2015] QCATA 19, [6] – [7]. 56 [2015] QCATA 19, [32], referring to s 108C of the QBCC Act. 57 Ibid, [37]. -- 11 of 20 -- 12 propriety, although without citing them. That said, the Tribunal did not follow the two step process articulated in the Bloomfield decisions. Further, the Tribunal did not either consider or, alternatively, articulate the process that it was required to undertake in deciding the review of a decision made pursuant to s 48 of the QBCC Act. Despite reciting relevant sections of the QBCC Act,58 the Tribunal provides no analysis of the process. Indeed, the Tribunal in its reasons says at [31] that the only questions for the Tribunal relate to whether Mr Berthelsen is a fit and proper person and whether IDC is entitled to hold a licence if he is not. This suggests that it did not consider that there was a two step process. Having found that Mr Berthelsen’s honesty was in doubt59 and that he had an inadequate knowledge and understanding of his statutory obligations, the Tribunal found that Mr Berthelsen is not a fit and proper person.60 The Tribunal then went on to say only that ‘In the circumstances of these findings it is appropriate to cancel [both licences] … pursuant to s 48(j) or 48(a) of the QBCC Act’.61 This reinforces the conclusion that the Tribunal did not engage in a two step process. Accordingly, the Tribunal appears to have exercised the discretion without considering any further matters (that is, in addition to Mr Berthelsen’s fitness and propriety). However, section 48(a) of the QBCC Act provides a discretion to cancel (or suspend) if the licence was obtained on the basis of incorrect information, irrespective of fraud. Likewise, section 48(j) provides a discretion to cancel or suspend, in essence, if the licensee (or its office holders in the case of a company) is not a fit and proper person. On a fair reading of his reasons, we are satisfied that the Tribunal determined that, having found Mr Berthelsen was not a ‘fit and proper person’, s 48 was invoked and it was therefore appropriate to cancel the licences, without turning its mind to whether the discretion to cancel ought be exercised. Alternatively, if we are wrong and the Tribunal did, in saying it was ‘appropriate’ to cancel, in view of its findings about fitness and propriety, take the second step in the process, it did not explain why. In doing so, the Tribunal failed to give adequate reasons for that determination, as they cannot be gleaned or understood from the reasons for decision.62 In either event, the Tribunal erred at law. The appeal should be allowed. 58 Berthelsen v Queensland Building and Construction Commission [2016] QCAT 517, [18] – [22]. 59 Ibid, [52]. 60 Ibid, [53]. 61 Ibid, [54]. 62 Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219, [58]. -- 12 of 20 -- 13 Ground 3: Did the Tribunal err in the exercise of its discretion? It is uncontroversial that in an appeal against an exercise of discretion, some error must have been made in exercising the discretion: for example, acting on a wrong principle; taking irrelevant matters into account; mistaking the facts; not taking into account material consideration/s.63 It follows from our reasons for decision on ground 1 that the Tribunal did err in the exercise of the discretion, for reasons other than those raised in ground of appeal 3. However, we have also considered the matters raised in Ground 3.64 The specific alleged errors identified by Mr Berthelsen and IDC are each considered separately in the following paragraphs. Proceeding on a mistaken fact and/or erroneous conclusion The alleged error in the exercise of discretion encompasses the matters referred to in 3 i) and 3 ii) as set out in paragraph [3] of these reasons for decision. Ground 3 i) – The convictions The Tribunal had uncontroversial evidence that Mr Berthelsen had criminal convictions against him. However, Mr Berthelsen and IDC contend that the Tribunal made an erroneous finding of fact in [43], in finding that Mr Berthelsen contended that he had no memory of his guilty plea in the District Court and believed he had no prior convictions. They submit that, in essence, the Tribunal found he had express knowledge of his prior conviction. They argue that his consistent evidence was that he proceeded on a mistaken belief that he had no recorded convictions, not that he had no memory of his convictions. The finding made, they argue, is not supported by the evidence, and nor can it be inferred from it. In particular, they submit that the proposition, that he had express knowledge of the conviction, was not put to him. The QBCC submits that the Tribunal’s finding does not amount to a finding that Mr Berthelsen had express knowledge of his prior conviction. It argues that the Tribunal’s finding was that it could not accept Mr Berthelsen’s evidence that he had no memory of his guilty plea and genuinely believed that he had no prior convictions, referring to evidence of the conviction in Mr Berthelsen’s (and other) evidence which it says supports a finding that he forgot about the conviction. In doing so, it largely refers to evidence about the false declarations where he admitted that he may have read the forms more quickly than he ought to have.65 It submits that preferring one 63 House v The King (1936) 55 CLR 499. 64 Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119. 65 QBCC’s appeal submissions filed 13 January 2017, [23] – [29]. -- 13 of 20 -- 14 version of the facts, or attributing more weight to some evidence, is not an appealable error. In [43], the Tribunal referred to an apology and version of events given by Mr Berthelsen to QBCC in response to the show cause notice, referring to that version of events as inconsistent with his guilt. The Tribunal rejected the evidence about that version of events. The Tribunal also explained that it had ‘considerable difficulty’ with Mr Berthelsen’s explanation for the false declarations, rejecting his evidence that he had ‘no memory of his guilty plea’ and ‘genuinely believed that he had no prior convictions’. The relevant correspondence from Mr Berthelsen to QBCC in response to the show cause notice states that Mr Berthelsen had intended to plead not guilty and that he did not consider himself guilty, but that he had entered a plea of guilty on legal advice,66 believing that as a consequence of his plea, no conviction was to be recorded.67 Subsequently, he provided additional statements in the show cause process, which he explained were intended to provide further submissions and detail to supplement the earlier correspondence.68 In that supplementary correspondence, he explained that after the criminal proceeding, he did empty his head of thoughts about it.69 That is not the same as forgetting about it. Further, that comment must be read in the context of the submission in its entirety which explains about his mistaken belief about the recording of a conviction, and how that came about. At the hearing, while acknowledging that he tried not to think about the criminal proceedings,70 Mr Berthelsen’s evidence was to the effect that he vividly recalled the proceedings in the District Court.71 However, consistently, his recollection was that, on legal advice, he entered a plea of guilty, understanding that no conviction would be recorded and that meant he had not been convicted.72 We were not referred to and nor do we apprehend any evidence to suggest that he knew, when he completed the questions and declarations, that a conviction was recorded against him or that he forgot about the convictions. However, and perhaps, but not necessarily, confusingly (this is discussed later), he acknowledged that he may have read the standard forms more quickly than he ought have done.73 He specifically denied ‘forgetting’ about the conviction.74 66 Appeal Book, 134-141. 67 Appeal Book, especially at 137. 68 Appeal Book, 142-46. 69 Appeal Book, 145. 70 Transcript page 1-28, line 30. 71 Transcript page 1-28, line 30 and page 1-30, lines 1-45. 72 Ibid, especially at Transcript page 1-30, line 4; page 1-30, line 10; page 1-31, lines 40- 45; page 1-53, line 30; and page 1-62 lines 1-15. See also Appeal Book, 160 at para 11. 73 Appeal Book, 160 at para 11 and Transcript page 1-59 to 1-60. 74 Transcript page 1-30, lines 1-2. -- 14 of 20 -- 15 Accordingly, Mr Berthelsen’s evidence about his conviction and mistaken belief about its recording is consistently expressed. The version of events discussed by the Tribunal that explained the events inconsistent with guilt in response to the show cause notice, acknowledged the conviction, and was given with an explanation that he (mis)understood that a conviction was not recorded. There was no basis for the Tribunal’s stated rejection of Mr Berthelsen’s evidence that he answered the question about prior convictions negatively because he had no memory of his guilty plea and genuinely believed he had no prior convictions. That was not his evidence. He consistently acknowledged the conviction and his guilty plea, believing that on the basis of the guilty plea, no conviction was to be recorded against him. In rejecting evidence that was not given, and making findings in light of that against Mr Berthelsen, the Tribunal erred in exercising its discretion. Ground 3 ii) – The false declarations about the convictions In [52], the Tribunal concluded that, ‘I am left with an overall impression that Mr Berthelsen has insufficient regard for the significance of declarations…’. Mr Berthelsen and IDC raise several arguments about error in making that conclusion. In [44], the Tribunal considers three aspects of the available written evidence. The first quote omits the preceding words in the relevant sentence, namely, ‘I knew I would be convicted but just not recorded and …’. They say the expanded quote does not support the conclusion in [52]. QBCC acknowledges the expanded quote, but points out that the question in the declarations was whether a person has been convicted, not whether convictions were recorded. That said, we accept that the extended quote is consistent with the evidence of Mr Berthelsen about his mistaken belief, as discussed earlier. The second quote also omits preceding words of Mr Berthelsen to the effect that, when he signed the declaration, he did so conscientiously and believed it to be true.75 QBCC submits that the extended quote does not affect the meaning. However, we do not accept that argument. The additional context paints a picture of greater consistency in Mr Berthelsen’s evidence than without it and does not support the proposition that he acted with insufficient regard for declarations, at least in respect of the declarations about his prior criminal convictions. The third quote omits Mr Berthelsen’s statement forming part of the same sentence (and that is consistent with his evidence about holding a mistaken belief), that after reviewing the documents, that ‘separately as noted in my Reply I did genuinely believe that I had no conviction/s recorded against 75 Appeal Book, especially at 137. -- 15 of 20 -- 16 me.’76 He submits that considered in its entirety, the statement does not positively support the proposition that he acted with insufficient regard for declarations. QBCC submits that the statement by Mr Berthelsen that he read the forms quickly appears to be offered as an alternative explanation to that about his beliefs. We accept, as QBCC suggests, that Mr Berthelsen’s evidence about perhaps reading the documents too quickly can be read as providing an alternative explanation for the false declarations. However, in context, it is Mr Berthelsen’s explanation for not understanding that all convictions, irrespective of whether recorded or not, had to be disclosed. The Tribunal’s selective reference to parts of sentences contained in the evidence does not reasonably reflect the evidence about the issue. Although the Tribunal was entitled to reject evidence, or give more weight to some evidence, it was incumbent upon it to explain why it did so. In quoting from relevant evidence selectively, the Tribunal did not identify that it had, or why it had, rejected that other evidence or given it less weight, when contained in the same sentences, when it painted a significantly different picture, at least in relation to the non-disclosure and declarations about the criminal charges. That said, in [52] the Tribunal referred to its ‘overall impression’ about Mr Berthelsen’s inadequate regard for declarations and the accuracy of information he provides, not only as concerns his mistaken belief about his convictions. As discussed, however, the Tribunal had accepted that there was other evidence of inaccurate information and declarations about IDC’s financial circumstances and its employees. The Tribunal’s findings about those other matters are not challenged in the appeal. That aside, we accept that the Tribunal erred in the manner in which it presented and dealt with the evidence by not providing adequate reasons for relying so selectively upon those limited parts of it, at least as concerns the criminal convictions and the declarations about them. Failing to take into account material considerations Mr Berthelsen’s contends the Tribunal failed to take into account four material considerations. Ground 3 iii) – Intention or otherwise (to make a false declaration) It is common ground that the QBCC Act does not prescribe mandatory considerations. However, Mr Berthelsen submits that in the circumstances of the review, the issue of intention is a material consideration. He argues that this is so having regard to the purpose of the legislation, the question of fitness and propriety, and the facts (that is, the prior criminal convictions and false declarations about them). Accepting that honesty is essential to the consideration of fitness and propriety, (as the High Court has done and 76 Appeal Book, 157 [11]. -- 16 of 20 -- 17 as discussed and accepted by the Tribunal in [24] and [33]), he submits that whether a false declaration was intentionally or honestly given is material. Mr Berthelsen relies in this regard upon statements made by the Tribunal and the Appeal Tribunal in the Bloomfield cases. Both considered intent important in determining whether a person is fit and proper.77 Also, he relies on Turcinovic v QBCC,78 where the Tribunal held that without positive evidence of a wilful or reckless disregard for the truth of a declaration, it could not find an intention to mislead. QBCC submits that in considering ‘why’ Mr Berthelsen made false declarations, the Tribunal considered intent. Implicitly, in making the submission, QBCC acknowledges that intent was a material consideration. We do not agree with QBCC that intent was considered. It is sufficiently clear in the Tribunal’s reasons that it did not consider Mr Berthelsen’s intent in providing the false information and declarations about his prior convictions, in looking at the honesty component of fitness and propriety. It (mistakenly for the reasons explained) understood that his evidence was to the effect that he forgot about his guilty plea and believed he had no convictions. Further, it did not consider his intent in determining whether to exercise its discretion to cancel the licences, because on a fair reading of its reasons for decision, the Tribunal did not take that separate step. Alternatively, if it did, it did not give reasons for doing so. In the circumstances before the Tribunal, intent was materially relevant to both Mr Berthelsen’s honesty in the determination of fitness and propriety, as well as whether the discretion to cancel the licences should be exercised. Failure to consider intent in both contexts is an error. Character evidence Mr Berthelsen and IDC submit that the evidence of Mr Berthelsen’s 12 or so character referees was relevant, and material to a determination of fitness and propriety, and the exercise of discretion having regard to the objects of the QBCC Act to maintain proper standards in the industry, but that it was not considered or discussed by the Tribunal without adequate explanation. Alternatively, if it was rejected, they submit that there are insufficient reasons for that rejection. Further, they argue that at [29], the Tribunal was in error in stating that general character traits are irrelevant and that the QBCC Act is primarily concerned with consumer protection (as it requires balance between contractors and consumers). QBCC argues that the substance of the references was about his trade skills which were 77 Queensland Building and Construction Commission v Bloomfield & Anor [2015] QCATA 019, [29]; Bloomfield v Queensland Building and Construction Commissions [2014] QCAT 293, [30]. 78 [2016] QCAT 279. -- 17 of 20 -- 18 not in dispute.79 It submits that in the circumstances, a detailed examination of the character evidence was not necessary. The Tribunal discussed in the context of determining fitness and propriety, suitable trade skills and, effectively, an absence of a propensity for dishonesty, are relevant, rather than general character traits.80 As discussed, Mr Berthelsen’s trade skills were not in issue. We accept, as QBCC submits, that the references largely attest to his trade skills, although there is some reference to his honesty from a former client, in context of her renovations,81 and two references concerning Mr Berthelsen’s desire and actions to change his life after the criminal charges.82 In the course of determining fitness and propriety, the references may add little. However, in step two of the process required pursuant to s 48 of the QBBC Act, that is, in deciding whether to exercise its discretion to cancel the licences, the references did provide material evidence about the experiences of other persons in the building industry and consumers with Mr Berthelsen. The Tribunal erred in failing to consider them. The need to balance the seriousness of the false declaration with Mr Berthelsen’s and IDC’s financial position if licence restriction imposed Mr Berthelsen submits that the purpose of the legislation is to achieve a reasonable balance between the interests of building contractors and consumers.83 However, he submits that the Tribunal failed to consider and weigh against other relevant factors, the evidence about the effect on him, his dependents, contracts on foot and employees/contractors of the licence cancellation. QBCC acknowledges that the objects of the QBCC Act require a balance, but submits that the Tribunal discussed community protection.84 While acknowledging the evidence about the effect of cancellation on Mr Berthelsen and IDC, it further submits that it was not strictly relevant to determining Mr Berthelsen’s fitness and propriety. In any event, it submits that cancellation will almost always affect the licensee’s income and ability to contract: Mr Berthelsen’s circumstances are no different. It submits that there is nothing special about their circumstances that would weigh in favour of the licensees. The evidence about the effect of licence cancellation was material to whether to exercise the discretion to cancel the licences, but not the decision about Mr Berthelsen’s fitness and propriety. As discussed earlier, 79 Berthelsen v Queensland Building and Construction Commission [2016] QCAT 517, [33]. 80 Ibid, [29]. 81 Appeal Book, 152, reference of Melinda Scherer. 82 Appeal book, 150 and 181-182. 83 QBCC Act s 3(a). 84 Berthelsen v Queensland Building and Construction Commission [2016] QCAT 51, [29]. -- 18 of 20 -- 19 on a fair reading of his reasons for decision, the Tribunal, having concluded that several acts fell within s 48, did not separately then proceed to decide whether it should exercise the discretion. The Tribunal simply cancelled the licence because of its findings about fitness and propriety. If we are wrong about that, in the alternative, the Tribunal failed to give reasons for its decision to exercise the discretion. In conclusion, the evidence about the effect of cancellation on Mr Berthelsen and IDC is material to step two in the process, in deciding whether to exercise the discretion, even though it may be attributed little weight in that determination. We accept that the Tribunal erred in failing to consider it. Failing to consider Bloomfield decisions and giving excessive weight to Poytress The Bloomfield decisions have been discussed earlier. In Poytress v Director General, New South Wales Fair Trading,85 the NSW Tribunal found that a building licensee had no ‘ulterior motives’ for his lack of candour in ensuring information in his application was correct, but did not engage in the necessary attention to detail in completing forms. He was considered to lack the necessary ability and understanding of the importance of the obligations of a licensee. The Tribunal quoted relevant statements from Poytress at [30] of its reasons. Mr Berthelsen and IDC submit that Bloomfield was analogous to their case because it dealt with fitness and propriety in the context of a false declaration under the same legislation and dealing with the same issues. On the other hand, they argue that Poytress should have been distinguished because it did not concern failure to disclose a prior criminal history, rather other things related to running a construction business, including liquidation. QBCC says that Poytress was referenced only for its general principle. The Tribunal did not follow it. It says essentially that Bloomfield was not analogous and arose from very particular circumstances. The Tribunal was not bound to consider it as it did not involve any novel application of the law, and in any event adopted the general principles in it about fitness and propriety, relying on the High Court’s decisions. As discussed earlier, Bloomfield was not analogous, but did refer to the process to be undertaken in determining a review under s 48 of the QBCC Act. We agree that Poytress was not followed, but cited in respect of a general principle only. 85 [2015] NSW CATOD 100. -- 19 of 20 -- 20 For the reasons already explained, the Tribunal’s failure to refer to the Bloomfield decisions was an error. However, we are satisfied that Poytress was not given excessive weight. Placing excessive weight on an irrelevant consideration Mr Berthelsen and IDC contend that the Tribunal placed excessive weight on Mr Berthelsen’s failure to update his address at [48], which was not a serious consideration in the context of revoking his licence. The QBCC submits that licensees are obliged to notify any change of details and failure to do so is an offence under s 101 of the QBCC Act. It acknowledges that this consideration might attract less weight in the overall assessment of fitness, but it is not irrelevant. We agree. As the Tribunal said in [48], it was ‘another factor’ in making its assessment of Mr Berthelsen’s knowledge as relevant to determining fitness and propriety. Other factors relevant to the knowledge component are not specifically identified in the reasons for decision as being relevant to knowledge, but on a fair reading of the reasons for decision, several are so relevant to both knowledge and honesty. The reasons for decision do not suggest the failure to update the address was given excessive weight and it is not irrelevant. Conclusions and Orders The Tribunal erred at law. The appeal should be allowed for the reasons discussed. In the circumstances, we are obliged to return the matter to the Tribunal for reconsideration according to law pursuant to s 146 of the QCAT Act. We make orders accordingly and for the further listing of the proceeding. -- 20 of 20 --