Bradford v Queensland Building and Construction Commission [2016] QCATA 158

CITATION: Bradford v Queensland Building and Construction Commission [2016] QCATA 158 PARTIES: Mark Antony Bradford (Appellant) v Queensland Building and Construction Commission (Respondent) APPLICATION NUMBER: APL471-15 MATTER TYPE: Appeals HEARING DATE: 13 June 2016 HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM Member Howe DELIVERED ON: 25 October 2016 DELIVERED AT: Brisbane ORDERS MADE: 1. Application for leave to appeal refused. 2. The parties are to file written submissions on costs within 14 days of the date of order, costs to be decided on the papers. CATCHWORDS: APPEAL – LEAVE TO APPEAL – PROFESSIONS AND TRADES – BUILDERS – LICENCES AND REGISTRATION – Permitted individual – identification of circumstances resulting in the happening of the relevant event – dominant and secondary circumstances – investigative exercise to distinguish between – failure to take legal advice – the prudence of taking legal advice – sub-subcontract to be read with subcontract Queensland Building and Construction Commission Act 1991 (Qld) ss 56AC, 56AD Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 142(3)(b) -- 1 of 14 -- 2 ACI Operations Pty Ltd v Bawden [2002] QCA 286 Bohan v Queensland Building Services Authority [2010] QCAT 404 Benz v Queensland Building Services Authority [2010] QCAT 625 Dancey v Queensland Building Services Authority [2014] QCAT 173 Haywood v Queensland Building and Construction Commission [2015] QCAT 392 Klooster v Sticky Fingers (Qld) Pty Ltd [2011] QCATA 282 Lustre Hosiery Ltd v York (1935) 54 CLR 134 Pickering v McArthur [2005] QCA 294 Queensland Building and Construction Commission v Mudri [2015] QCATA 78 Smith v Ash [2011] 2 Qd R 175 Underwood v Queensland Department of Communities [2013] 1 Qd R 252 Younan v Queensland Building Services Authority [2010] QDC 158 APPEARANCES and REPRESENTATION (if any): APPLICANT: Bowden, LD Counsel instructed by QBM Lawyers appearing on behalf of the Applicant RESPONDENT: Formby, SP Counsel appearing on behalf of the Respondent REASONS FOR DECISION Senior Member Stilgoe OAM [1] I have read Member Howe’s reasons for decision in draft. I agree with those reasons and the order he proposes. Member Howe [2] This matter involves an application for leave to appeal a decision of the Tribunal made 6 October 2015 confirming a decision of the Queensland Building and Construction Commission (‘QBCC’) to refuse to categorise the applicant, Mr Bradford, as a permitted individual pursuant to s 56AD of the Queensland Building and Construction Commission Act 1991 (Qld) (‘QBCC Act’). [3] Mr Bradford was the sole director and shareholder of BBC Concrete Pty Ltd (‘BBC’) when administrators were appointed on 6 September 2013. At that time, it traded as Remo Concrete Constructions. He held a concreting licence issued by QBCC. Because of the appointment of administrators, he -- 2 of 14 -- 3 was notified that he was categorised as an excluded individual under s 56AC of the QBCC Act. That meant he could not trade as a contractor. Mr Bradford applied to be categorised as a permitted individual, which would allow him to continue working as a contractor in any case. That application was refused. [4] He applied to the Tribunal for a review of that decision not to categorise him as a permitted individual. The Tribunal upheld the decision of the QBCC. The Tribunal found it was not satisfied that Mr Bradford had taken all reasonable steps to avoid the coming into existence of the circumstances leading to the appointment of administrators over his company. [5] Mr Bradford now seeks leave to appeal that decision of the Tribunal. Background [6] In late 2012, early 2013, BBC performed concreting work as a sub- subcontractor to McNab Constructions Australia Pty Ltd (‘McNab’) for the Gladstone Liquefied Natural Gas Plant project on Curtis Island. McNab’s head contractor was Bechtel Australia Pty Ltd (‘Bechtel’). [7] Initial negotiations between BBC and McNab regarding the project commenced around October 2012. At the time, BBC had a number of other large projects on foot. The negotiations resulted in email advice to BBC on 23 October 2012 that McNab and BBC would go into contract for the ‘ground works’ and ‘tilt panels’ for the project at a cost of $1,825,000. McNab advised there was paperwork to come but the email should be accepted as a Letter of Intent. The scope of works for the project had been discussed. BBC was asked to sign and return two forms so that the relevant people in McNab could give approval and then BBC’s contract could be sent. [8] BBC was advised on 19 November 2012 that McNab was waiting on Bechtel to approve McNab’s subcontractors. By email on 23 November 2012, McNab advised BBC approval had been given to get BBC’s workforce underway. BBC received a draft contract on 4 December 2012. Under the draft, the date of commencement of the sub-subcontract was that day. BBC dispatched some workers to Curtis Island that day. Practical completion was set for 12 April 2013. [9] Changes to the sub-subcontract were discussed 3 days later between company representatives, including Mr Bradford, but BBC was advised they would have to be approved by McNab head office. The changes affected the scope of works. The McNab representative who discussed the changes was subsequently injured in a motorcycle accident. His replacement did not know about any changes. [10] There was a further meeting discussing further changes to the scope of work on 5 February 2013. On 13 February 2013, a copy of the sub- subcontract was signed by BBC and submitted to McNab. It appears a contract was not signed by both parties until late March 2013 or early April 2013. -- 3 of 14 -- 4 [11] There were significant wet weather problems at Curtis Island over January and February 2013. BBC could only work 4 days in February 2013. BBC claimed an extension of time to complete the sub-subcontract but that was refused. BBC had to pay a significant wage bill however to employees stood down on site during the wet weather. [12] During early negotiations, BBC understood it was agreed their contract required construction of seven buildings to be completed in lineal progression, one after the other. In February and March 2013, McNab required BBC to work on all seven buildings contemporaneously in order to facilitate completion. BBC contended that was not the agreement, however the contract documents did not support that claim. [13] BBC found it very hard to access adequate labour. McNab arranged additional labour but charged BBC for it at significant cost. Those charges were offset against BBC’s progress claims. Then McNab took part of the scope of works for the project off BBC in April 2013. McNab and Bechtel discussed ending the McNab subcontract in July 2013. BBC stopped work on Curtis Island that month or in early August 2013. [14] McNab and BBC discussed a final payment to BBC in August 2013. BBC offered to reduce its final claim from $1.1 million to $630,000. In September 2013, McNab offered only $155,000 citing incomplete work, overcharging by BBC and the cost of labour provided BBC by McNab. [15] No legal advice was sought by BBC prior to or during the currency of the Curtis Island project. [16] In January 2013, BBC made arrangements with the Australian Taxation Office (ATO) to defer payments of tax due of $420,000 through a series of monthly scheduled payments concluding 5 June 2013. Despite those payments being made, by letter dated 17 July 2013 the ATO notified BBC that it had, as at that date, an outstanding taxation liability of $548,359.26. [17] On 19 August 2013, the ATO issued a ‘Notice of Director’s Liability to Pay a Penalty’ requiring Mr Bradford as director to pay $575,344 unpaid company withholding tax for various periods in respect of December 2012 and March, May and June 2013. Payment was required within 21 days. Faced with that demand, the company appointed KordaMentha as voluntary administrators. The administrators subsequently liquidated the company. GROUNDS OF APPEAL [18] Mr Bradford’s appeal involves questions of mixed law and fact. A party may appeal to the Appeal Tribunal on a question of law without leave, but appeals on questions of fact or mixed law and fact require leave be granted before an appeal will be heard.1 [19] Generally, there should be sufficient doubt raised as to the correctness of the decision under appeal as to justify the grant of leave. If a reasonable 1 QCAT Act s 142(3)(b). -- 4 of 14 -- 5 argument exists that there is an error to be corrected and an appeal is necessary to correct a substantial injustice to the appellant, then leave will usually be granted.2 Sometimes there may be additional factors requiring consideration according to the circumstances of the case, such as the importance of the issue proposed to be raised on appeal.3 [20] Mr Bradford’s grounds of appeal are as follows: Ground 1: The learned Member wrongly concluded that the failure of McNab to meet its contractual obligations to BBC was not the circumstance that resulted in the happening of the relevant event. Ground 2: The learned Member wrongly construed s 56AD of the QBCC Act and in particular the words “circumstances that resulted in the happening of the relevant event”. Ground 3: The learned Member wrongly construed the said words as meaning that every background circumstance could be considered as such a circumstance. Ground 4: In construing the said words, the learned Member adopted a wrong test of causation. Ground 5: The learned Member was wrong to conclude that BBC failed to take proper legal and other advice before entering into the contract with McNab or after its execution when it was clear that disputes had arisen. Ground 6: The learned Member was wrong to conclude that the failure by BBC to take legal or other advice was a relevant circumstance to be taken into account. Ground 7: The learned Member was wrong to conclude that BBC failed to take all reasonable steps to recover the amounts owing to it. Ground 8: The learned Member was wrong to conclude that the alleged failure by BBC to take all reasonable steps to recover the amounts owing to it was a relevant circumstance to be taken into account. Ground 9: The learned Member was wrong to conclude that BBC did not make appropriate provision for the payment of taxation debts. Ground 10: The learned Member was wrong to conclude that the alleged failure by BBC to make appropriate provision for the payment of taxation debts was a relevant circumstance to be taken into account. Ground 11: The learned Member failed to take account of the fact or give sufficient weight to the fact, that the applicant in his position as director was obliged to act through and on the advice of the other officers of the company. 2 Underwood v Queensland Department of Communities [2013] 1 Qd R 252; Smith v Ash [2011] 2 Qd R 175; Pickering v McArthur [2005] QCA 294 at [3] per Keane JA. 3 ACI Operations Pty Ltd v Bawden [2002] QCA 286; Klooster v Sticky Fingers (Qld) Pty Ltd [2011] QCATA 282 at [12]-[14]. -- 5 of 14 -- 6 [21] Grounds 2, 3 and 4 are best comprehended as one ground of appeal. Grounds 1, 2, 3 and 4 might also conveniently be considered together, as too grounds 5, 6, 7 with 8 and grounds 9 with 10. Grounds 1, 2, 3 and 4 Ground 1: The learned Member wrongly concluded that the failure of McNab to meet its contractual obligations to BBC was not the circumstance that resulted in the happening of the relevant event. Ground 2: The learned Member wrongly construed s 56AD of the QBCC Act and in particular the words “circumstances that resulted in the happening of the relevant event”. Ground 3: The learned Member wrongly construed the said words as meaning that every background circumstance could be considered as such a circumstance. Ground 4: In construing the said words, the learned Member adopted a wrong test of causation. [22] Mr Bradford submits the learned Member erred in law in finding there was more than one circumstance which resulted in the happening of the relevant event. He says there was a single circumstance which was the failure of McNab to meet its contractual obligations to BBC. The relevant event here was the appointment of administrators to BBC on 6 September 2013 whilst Mr Bradford was a director of the company. [23] Under the QBCC Act Mr Bradford could be categorised as a permitted individual for a relevant event only if the QBCC was satisfied on the basis of the application, that he had taken all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event. [24] Mr Bradford argues that the words “that resulted in” found in s 56AD(8) establishes a necessary causal link between the “circumstances” and the happening of the relevant event. What is necessary, he submits, is that the real cause of the happening of the relevant event be ascertained. He submits that the real cause for the happening of the relevant event must be distinguished from incidental causes. [25] It is suggested there are authorities to support that approach. Comments by McGill DCJ in Younan v Queensland Building Services Authority (‘Younan’)4 are cited in support of the proposition. Queensland Building and Construction Commission v Mudri (‘Mudri’)5 and Haywood v Queensland Building and Construction Commission (‘Haywood’)6 are also relied on. 4 [2010] QDC 158 at [21]. 5 [2015] QCATA 78. 6 [2015] QCAT 392. -- 6 of 14 -- 7 [26] Careful perusal of the decision in Younan fails to disclose any attention drawn to a process of investigation being necessary to ascertain “real” as opposed to “incidental” causes for the happening of a relevant event. [27] In Mudri, the Appeal Tribunal identified the relevant event there as the appointment of liquidators. The Appeal Tribunal said: “The circumstances that resulted in the happening of the relevant event were the failure by Bridgeport to pay the adjudicated amount that was, by its nature, a statutory debt and led to fresh winding up proceedings in June 2013 based on the existence of the adjudicated decision. Associated with this was the failure by Bridgeport to respond to the notice of the winding up proceedings and the failure to appear in May 2013 in the winding up proceedings”.7 [28] Mr Bradford suggests “flow on effects” from one event should not be misconstrued as circumstances resulting in the happening of a relevant event in their own right. The circumstances identified in Mudri might arguably be labelled as consequential links in one chain of causation rather than separate individual circumstances contributing to the happening of the relevant event there. In my view, Mudri is no support of Mr Bradford’s position. [29] In respect of Haywood, there were three circumstances suggested as causes of the happening of the relevant event: the loss of a District Court action; the decision to defend the litigation rather than resolve it; and under capitalisation. The Tribunal concluded the loss of the District Court action was a circumstance that resulted in the happening of the relevant event, as too under capitalisation, but the decision to defend the litigation rather than resolve it was more appropriately to be considered as a step taken to avoid the circumstance of the loss in the District Court action.8 [30] Perhaps Haywood is in some measure supportive of the appellant’s proposition, but not to the extent of suggesting that an investigative process must occur to identify and separate incidental causes for the occurrence of a relevant event from primary causes with only the latter then falling for consideration within the parameters of s 56AD(8). Haywood might initially seem somewhat at odds with the conclusion as to the circumstances that resulted in the happening of the relevant event in Mudri. but not when one recognises it was an active decision to defend litigation that was identified as a step taken to avoid the circumstance of loss in Haywood, as opposed to a failure to act on the part of the individual in Mudri. [31] In Bohan v Queensland Building Services Authority,9 the learned Member there referred to a number of primary or predominant relevant circumstances and he also referred to minor causes. “The factors described as minor causes were also relevant but were not significant”.10 There does not appear to have been any distinction drawn however between dominant 7 [2015] QCATA 78 at [21]. 8 [2015] QCAT 392 at [44]-[46]. 9 [2010] QCAT 404. 10 Ibid at [46]. -- 7 of 14 -- 8 and subdominant circumstances for the purpose of identification of the circumstances resulting in the happening of the relevant event. [32] In Benz v Queensland Building Services Authority,11 the Tribunal said: “If the ’event’ is the appointment of the liquidator, then the circumstances resulting in that event are all the circumstances which lead to the company failing to meet its tax liability prior to August 2007, when the critical step was taken by the ATO (the filing of the winding up Application) which lead directly to that event.” [33] In Dancey v Queensland Building Services Authority,12 the Tribunal considered a linked series of failures on the part of the applicant and found each a circumstance resulting in the applicant’s bankruptcy which was the relevant event. The circumstances identified there included the applicant’s company seeking a loan, the applicant personally guaranteeing his company’s obligations, a receiver being appointed under the agreement concerned, default judgment entered against the applicant and the applicant having insufficient assets to meet the judgment debt and then his decision to file a debtor’s petition. [34] The meaning of the text of s 56AD(8) seems clear. The legislation does not call for an investigative process to distinguish between direct and incidental circumstances resulting in the happening of a relevant event. What may occur is that greater significance is accorded to one circumstance rather than another. Such course would be inappropriate however if, in consequence, the Tribunal fails to take into account circumstances labelled secondary or incidental or subdominant, howsoever described, but which did contribute to the happening of the relevant event. In each case, the circumstances resulting in the happening of the relevant event will differ. There will generally be a matrix of events, some more obvious or more obviously significant than others, but together converging in the occurrence of the relevant event. [35] Here the learned Member noted that Mr Bradford himself identified the main cause of the relevant event as the inability of his company to recover amounts owing to it. Additionally however he identified other significant contributing causes of the relevant event as being the debt owed to the ATO and insufficient working capital. The applicant stands in very good position as a key participant in the unfolding events and decision-making leading up to the happening of the relevant event to be able to identify circumstances resulting in the happening of the relevant event. [36] The learned Member gave careful consideration to the ATO liability and took into account that Mr Bradford did not retain any money to pay tax despite BBC being classified (and advised) it was deemed a large withholder of PAYG payments from 27 May 2013. That meant it faced an accelerated regime of payments of tax thereafter. Prior to that, an instalment arrangement had to be negotiated with the ATO in January 2013 to pay tax due from 2012. 11 [2010] QCAT 625 at [10]. 12 [2014] QCAT 173 at [15]. -- 8 of 14 -- 9 [37] The Member considered the availability of working capital. As at January 2013, Mr Bradford had no equity in any personally owned real estate. BBC’s overdraft facility was $250,000 and that was drawn down in full by late March 2013. Additionally, BBC was obliged to start paying back the principal of a loan from Bendigo Bank from end April 2013. [38] The learned Member then turned to the McNab project. She considered the report from the administrators, KordaMentha. The report found that the company’s difficulties were attributable to its failure to manage the contractual position with McNab, as well as insufficient working capital to continue trading in the absence of McNab payments and historical trading results and cash flow insufficient to meet outstanding ATO liabilities. [39] Taking all those factors into account, the Member rejected Mr Bradford’s proposition that the failure of the McNab project was the only circumstance leading to the happening of the relevant event. The learned Member concluded the failure of McNab to pay BBC its payment claims in full affected BBC’s cashflow, but other circumstances also contributed to the problem. [40] In my opinion, the learned Member was entitled to reach that conclusion on the evidence before her. In my view the errors relied on by Mr Bradford under these grounds of appeal are not made out and there is no justification for a grant of leave to appeal based on grounds 1 through to 4. Grounds 5, 6, 7 and 8 Ground 5: The learned Member was wrong to conclude that BBC failed to take proper legal and other advice before entering into the contract with McNab or after its execution when it was clear that disputes had arisen. Ground 6: The learned Member was wrong to conclude that the failure by BBC to take legal or other advice was a relevant circumstance to be taken into account. Ground 7: The learned Member was wrong to conclude that BBC failed to take all reasonable steps to recover the amounts owing to it. Ground 8: The learned Member was wrong to conclude that the alleged failure by BBC to take all reasonable steps to recover the amounts owing to it was a relevant circumstance to be taken into account. [41] Under the QBCC Act, in deciding whether an individual has taken all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of a relevant event, the Tribunal must consider a number of factors. One is whether appropriate financial or legal advice was sought before entering into financial or business arrangements or conducting business. Another is whether appropriate credit management was in place and whether reasonable steps were taken to recover debts. [42] Mr Bradford (BBC) took no legal advice before entering into the major sub- subcontract with McNab, nor any throughout the project. The learned Member concluded that he acted unreasonably in failing to do so. The Member noted the McNab project was a large one governed by many legal -- 9 of 14 -- 10 documents, not only between McNab and BBC, but also between McNab and Bechtel. Any dispute between Bechtel and McNab could potentially affect BBC. [43] The Member found that during negotiations with McNab, Mr Bradford was aware of other matters impacting BBC’s financial position including lack of working capital, its inability to raise further working capital, the other contracts BBC had on foot, its ongoing taxation liabilities and the impact non-payment by McNab would have on cash flow. [44] Mr Bradford submits the difficulties which arose between BBC and McNab were issues typically likely to cause disputes in construction work, such as the scope of works, variations, sequencing of works, wet weather and site conditions. He says the contract in question contained standard terms and conditions about such matters. Obtaining legal advice at outset would have made no difference. Obtaining legal advice during the currency of the contract would similarly have achieved nothing. Even if a lawyer identified rights of action against McNab, there was insufficient time to seek a legal solution given the other problems facing BBC. [45] BBC’s work on Curtis Island was based on a sub-subcontract. It cannot be fairly described as a typical construction project for most Queensland contractors. It involved a very large project, and the head contractor, Bechtel, one of the largest construction and civil engineering corporations in the world. [46] No copy of the McNab subcontract (the head contract) with Bechtel was tendered in evidence. Mr Bradford produced a draft copy of the proposed BBC and McNab sub-subcontract provided to BBC on 4 December 2012. That document contained general conditions of sub-subcontract and by clause 3(b) provided that BBC agreed to assume the same obligations with respect to McNab as McNab assumed to Bechtel as head contractor. Further, it stated that to the extent the head contract imposed an obligation inconsistent with an obligation under the sub-subcontract, the obligation under the head contract prevailed to the extent of the inconsistency. [47] In effect this meant that to understand or know the full extent of BBC’s obligations (and rights) under the sub-subcontract, reference to the head contract was necessary and the latter might or might not substantially alter the rights and obligations BBC had discussed with McNab and enjoyed under the sub-subcontract. Taking legal advice about such a sub- subcontract project prior to contracting would seem prudent corporate management in the circumstances. [48] During the project and indeed even before formal execution of the sub- subcontract, disputes arose between McNab and BBC over a number of issues including wet weather delays, the scope of work, McNab’s engagement of other labour to perform some of BBC’s work, back charges associated with that, McNab’s withdrawal of certain work from BBC under the sub-subcontract and non-payment of claims and variations. [49] The obligations flowing from the head contract appear to have affected BBC’s wet weather extension of time claims, which were refused by McNab -- 10 of 14 -- 11 on the basis that Bechtel disallowed them. There is no clear explanation why that was accepted by BBC as determinative of the issue. No legal advice about the refusal to extend time was sought. Prudent corporate management where a contractor suddenly faces a potential exposure to a liquidated damages claim if unable to complete on time would surely suggest otherwise.13 [50] BBC submitted an account to McNab to cover the costs of paying its men during four weeks downtime caused by the rain events in February 2013, but that was also rejected. It is clear Mr Bradford thought he was entitled to those monies under the sub-subcontract or he would not have claimed the money. Again, there is no explanation why McNab refused payment. That evidently resulted in a loss of approximately $120,000 to BBC.14 Again, seeking legal advice about that at the time would seem a reasonably prudent step to take. [51] In Younan, McGill DCJ explained15 that s 56AD(8) required consideration of whether the individual took all reasonable steps to avoid the circumstances that resulted in the happening of the relevant event. What constituted reasonable steps depended on what was reasonable for the individual concerned in the circumstances he found himself, armed with the information he had at the time. [52] But if a reasonable contractor in the shoes of the individual would have sought legal advice to avoid the circumstances that resulted in the happening of the relevant event, and did not, then the individual has failed to take the reasonable step of obtaining legal advice. That conclusion remains valid even if, subsequently armed with the benefit of hindsight, legal advice would not have made a difference. [53] In Younan it was also said “It is not helpful simply to say that it was unreasonable not to take advice without identifying the substance of the advice which would have been received had advice being taken and identifying how that would have been of benefit to the company in that situation”.16 But that comment must be considered in light of the peculiar fact situation found there. The company had no assets and substantial debts and was then confronted with a judgment debt which it plainly could not satisfy. In those circumstances, McGill DCJ concluded no particular accounting or legal advice would have been of assistance. [54] The appellant’s contention here is that legal advice, either sought at commencement of the project or during the project, would have been of no value and no effect. In the opinion of the Member, to the contrary, at the time of the project, which is the relevant time for consideration, a reasonable contractor in Mr Bradford’s position would have sought legal advice prior to contract and during the project about the refusal of an extension of time because of the weather, the acceleration of the construction program, 13 Transcript page 1-28, line 7. Ultimately, no wet weather days were allowed – Statement of evidence of Mark Bradford, filed 2 February 2015 at [33]. 14 Transcript page 1-27, lines 23-39. 15 [2010] QDC 158 at [26]. 16 Ibid at [15]. -- 11 of 14 -- 12 advice on a potential claim under the Building and Construction Industry Payments Act 2004 (Qld) (‘BCIPA’) and the failure to pay progress claims in full. [55] In my opinion, the Member was entitled to reach that conclusion based on the evidence adduced at hearing, which included the concession by Mr Bradford that he should have sought legal advice at least with respect to the extension of time refusal. The concession was more than a mere “wavering preference for one of two or more possible hypotheses none of which have been tested or determined”.17 Mr Bradford specifically rejected other propositions about legal advice being appropriate in the lead up to contract, McNab’s acceleration of the work schedule and when McNab appointed other contractors to take over some of BBC’s scope of works. [56] According to Mr Bradford, there was no room to negotiate the terms of the standard form contract BBC was obliged to execute. But perhaps early legal advice about obligations imposed by virtue of the subcontract could have influenced the decision to enter into the sub-subcontract in the first place. [57] Mr Bradford admitted he had not experienced problems with a project like Curtis Island before. Accordingly, the learned Member concluded that the dispute with McNab was outside his usual experience and that he should have sought legal advice about options available. The Member correctly identified, in my opinion, the question to be asked which was whether seeking legal advice at any particular stage was a reasonable step to take to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event. [58] The Member was entitled to conclude the taking of legal advice both before contract and during the course of the Curtis Island project would have been a reasonable and prudent step to take for any reasonable contractor entering into a large sub-subcontract agreement such as that at Curtis Island which was beyond the contractor’s usual experience. [59] Similarly, with respect to the failure to take reasonable steps to recover amounts owing, either through the adjudication process under BCIPA or via a subcontractors charge. [60] No error being shown in the reasoning of the learned Member, it is not appropriate to grant leave to appeal in respect of grounds 5, 6, 7 or 8. Grounds 9 and 10 Ground 9: The learned Member was wrong to conclude that BBC did not make appropriate provision for the payment of taxation debts. Ground 10: The learned Member was wrong to conclude that the alleged failure by BBC to make appropriate provision for the payment of taxation debts was a relevant circumstance to be taken into account. 17 Lustre Hosiery Ltd v York (1935) 54 CLR 134. -- 12 of 14 -- 13 [61] The learned Member found Mr Bradford did not make appropriate provision for payment of taxation debts. It was his inability to satisfy the Director’s Penalty Notice issued in August 2013 which led to the appointment of administrators which constituted the relevant event. [62] Mr Bradford submits BBC was meeting its taxation obligations in timely fashion through 2012. The taxation liability only fell into arrears around February 2013 in line with the decline of the McNab transaction. Accordingly, he submits, the taxation difficulties was not a cause of the relevant event but a consequence of the McNab problem. [63] But an examination of BBC’s account with the ATO shows that the self assessed amounts for the period ending 31 December 2012 includes a PAYG liability of $168,522 and also a GST liability of $255,596, a total of $423,657. Neither can be linked in any meaningful way to the McNab project. BBC placed only 6 to 8 men on Curtis Island in December 2012, which was the start of the project. [64] The schedule of payments arranged with the ATO in January 2013 appears to have been intended to clear this pre-existing liability over the period February to June 2013, and indeed the payments agreed were made on time. However, by the time of the final scheduled payment on 5 June 2013, BBC’s ongoing taxation indebtedness had increased to $542,291.30 as at 31 May 2013 in any case. No provision had been made for payment of those accruing amounts, which included GST in respect of the period March to May 2013 of $127,209, during the term of the McNab project. [65] The Member found that Mr Bradford had no equity in any of his personal assets and no ability to raise funds to pay the ATO. He did not retain any amounts to pay ATO liabilities. Accordingly, the Member found Mr Bradford had not made appropriate provision for taxation debts. In my opinion, the Member was correct in drawing that conclusion. [66] Further, that conclusion was available regardless that the BBC taxation liability of $575,344 demanded by the ATO from Mr Bradford as director of BBC might also be described as a consequence of the McNab contract. Such does not detract from the conclusion that appropriate provision for taxation debts was not made in respect of the company’s taxation indebtedness. [67] Leave to appeal should not be granted on these stated grounds of appeal. Ground 11 Ground 11: The learned Member failed to take account of the fact or give sufficient weight to the fact that the applicant, in his position as director, was obliged to act through and on the advice of the other officers of the company. [68] Mr Bradford submits it should only be his conduct as director which is under scrutiny. Whatever the company did by its servants or agents is separate to his performance as a director. The reasonableness of his behaviour must be seen in light of the size of his company and the nature of the enterprises -- 13 of 14 -- 14 in which the company was engaged at the relevant time. He was obliged to rely on the activities of the employees of the company to perform their duties in a competent fashion. [69] But Mr Bradford fails to identify any circumstance of wrongdoing on the part of employees or negligence. He was the sole director and shareholder of BBC. The Member was satisfied that the company had maintained proper books of account and financial records. There was no issue of fraud or theft associated with the matter. [70] According to Mr Bradford’s statement of evidence sworn 17 June 2015,18 he was the person who signed the contracts and he attended the company’s jobsites at the Gold Coast, Brisbane and the Sunshine Coast at least once a week to meet contractors and talk to employees to check if any issues had arisen and to ensure there were appropriate resources for the jobs. He priced the jobs and kept track of company financials, but an employee monitored payments on payment claims. [71] This ground of appeal cannot succeed. Conclusion [72] The application for leave to appeal should be refused. No error on the part of the learned Member below has been demonstrated. The learned Member was entitled to find as she did and reach the conclusions she did. [73] The parties should make submissions on costs of appeal within 14 days of the date of this decision. 18 Statement of evidence of Mark Bradford, filed 17 June 2015 at [4]–[9]. -- 14 of 14 --