Benz v Queensland Building Services Authority [2010] QCAT 625

CITATION: Benz v Queensland Building Services Authority [2010] QCAT 625 PARTIES: Mr Anthony Raymond Benz v Queensland Building Services Authority APPLICATION NUMBER: QR251-09 MATTER TYPE: Occupational regulation matters HEARING DATE: 2 December 2010 HEARD AT: Brisbane DECISION OF: Kate Buxton, Adjudicator DELIVERED ON: 2 December 2010 DELIVERED AT: Brisbane ORDERS MADE: [1] The Decision of the Respondent made on 1 September 2009 is confirmed. [2] The Application for Review is dismissed. CATCHWORDS : APPEARANCES and REPRESENTATION (if any): APPLICANT : Mr Anthony Raymond Benz did not attend. RESPONDENT: Queensland Building Services Authority represented by Brendan Cole -- 1 of 5 -- QR251-09 / Page 2 of 5 REASONS FOR DECISION [1] In this application Mr Benz, the Applicant, seeks to review the refusal by the QBSA to categorise him as a “permitted individual” under s.56AD of the Queensland Building Services Authority Act (the “QBSA Act”). [2] The consequence of that refusal is that Mr Benz is not presently entitled to hold the relevant BSA licence and, therefore, no longer able to perform the work of a licenced builder, which has provided Mr Benz with a livelihood for many years. [3] The statutory framework by which Mr Benz became an excluded individual, under the QBSA Act Part 3A, is set out in the QBSA’s Statement of Reasons for the Decision which was filed in these proceedings on 3 November 2009. That statement contains a useful summary of the provisions relevant to this application. Therefore rather than setting out those provisions in full in these reasons, I will refer to the text of the individual provisions only as necessary. [4] Section 56AC of the QBSA Act operated so that Mr Benz became an “excluded individual” when the company of which he was a director, Emerald Homes (Qld) Pty Ltd (the “Company”), had a liquidator appointed on 27 September 2007. That is the relevant “event” for the purpose of these provisions. [5] In order now to demonstrate that Mr Benz ought be categorized as a “permitted individual” he needs to have established, pursuant to s.56AD(8) of the QBSA Act, that he took “all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of a relevant event” (here, the appointment of the liquidator). [6] Mr Benz did not appear at the hearing of this matter. I am satisfied based on the material in the file that he has been provided with a notice of hearing to the address for service nominated by him and that it is therefore appropriate to proceed in his absence. [7] I am prepared to determine this matter based on the material available at the hearing. In the absence of any oral evidence supplementing the statement of evidence which was filed in these proceedings on 18 January 2010 (with attachments), Mr Benz can be said, at best, to have demonstrated the following: a. The company ceased to trade on or about July 2005; b. Mr Benz cited, as reasons for the Company ceasing to trade, “marital separation and my subsequent illness (depression)” (undated statement filed 18 January 2010) and elsewhere “my illness and a very bitter separation” (undated letter to “Ryan” of the QBSA attached to that statement). c. The liquidator was appointed following the filing, by the Australian Taxation Office (“ATO”), of Application 265/2007 for the winding up on the Company who owed the ATO the sum of $140,726.48. d. The claim made by the ATO was for tax liabilities incurred in the 2006 and 2007 tax years, during which the company had not been trading. -- 2 of 5 -- QR251-09 / Page 3 of 5 e. Mr Benz had made attempts to reach a negotiated resolution with the tax department but was unable to come to an arrangement satisfactory to the ATO. f. Thereafter, Mr Benz described himself as having “buried his head in the sand”. g. Mr Benz indicated that he felt he was affected by depression during the periods relevant to the incursion of the debt to the ATO and the appointment of the liquidator to the Company. h. The Company had an accountant with whom Mr Benz was in regular contact. i. Mr Benz undertook management of the day to day accounts of the company, including making necessary payments for supplies and subcontractors, and utilised account management software (MYOB) for this purpose. [8] The evidence presented in the QBSA’s material further established: a) The unsecured creditors identified in the liquidation were the ATO (owed $140,726.48, Russell and Wood Pty Ltd (accountants) owed $3168.00) and the QBSA (owed $14,360.75) b) Control of at least some of the Company’s assets had been removed from Mr Benz as a result of proceedings relating to Mr Benz’ separation from his former de facto. This shifting of control was apparently interim, rather than final (Liquidator’s Report dated 28 March 2008, p4 (“SOR 3”)) and was to be opposed in the Supreme Court proceedings to which Mr Benz was a party. c) The liquidators report dated 28 March 2008 showed available cash of $367,149.43 following discharge of secured creditors and deductions for the costs of the realization of certain of the Company’s assets and prior to deduction of the costs of liquidation. d) The liquidator expected a dividend of close to 100 cents in the dollar assuming that the claims by Mr Benz’ fromer defacto were unsuccessful (Liquidator’s Report p.4) [9] However, there is no further evidence either as to the outcome of the Supreme Court proceedings nor the detail or terms of the finalization of the liquidation (or any indication that it is not yet finalized). [10] The question for this Tribunal is whether the evidence establishes that Mr Benz took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the liquidator being appointed to the Company. 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. What, then, were those circumstances? [11] It is oversimplifying matters to suggest that the failure to make provision for the unpaid tax is, in itself, the only circumstance. According to the available evidence it appears that the Company’s assets are or will be sufficient to meet the unsecured creditors claims in full, (assuming the Company can defeat the claims made by Mr Benz’ former de facto) but that those assets were not able to be made available to the ATO without placing control of those assets in the -- 3 of 5 -- QR251-09 / Page 4 of 5 hands of the liquidators. This, in turn, is because of the unresolved proceedings relevant to the distribution of the assets of Mr Benz’ dissolved de facto relationship. [12] There is material to support the conclusion that Mr Benz sought advice about the business elements of his accounts in the years that the Company was trading. However, what is missing from the material is any information or explanation as to the steps taken relevant to his separation. The relevant events are those leading to the ATO being unable to access the Company’s assets when they were demanded. Those being the “circumstances”, the Tribunal must be satisfied that the actions taken by Mr Benz in response to those circumstances were “reasonable”. [13] In terms of what amounts to “reasonable” action, the words of McPherson JA in Rich v. State of Queensland and Ors; Samin v. State of Qld and Ors [2001] QCA 259 are instructive: “What amounts to reasonable steps necessarily involved investigation of the nature of the harm, the forseeability and degree of risk of its happening and the measures reasonably available for preventing or averting it.” [14] The non-exhaustive list provided, in s.56AD(8A) of the QBSA Act, to which the QBSA must have had regard in determining whether the steps taken to avoid the event were “reasonable”, gives some instruction as to the types of actions the legislators had in mind, and include such necessary corporate practices as keeping proper books and records, taking appropriate advice and making appropriate provision for tax. However, by virtue of the broader circumstances relevant to this application, the enquiry to be undertaken must also be broader than the list of actions identified in the statute. [15] In order to determine whether an Applicant such as Mr Benz has taken all reasonable steps, it was essential that he provide some evidence of the steps he did take in order to avoid the ATO’s filing of the winding up application and, further, to consider what else he could reasonably have done. [16] Unfortunately, the material available to this Tribunal does not demonstrate any positive steps taken by Mr Benz, including to avoid the assets being frozen, enjoined or otherwise being made unavailable to the ATO at the relevant time. That step seems to have been taken in the Supreme Court proceedings, but there is no evidence of what, if any, involvement Mr Benz had in those proceedings. [17] The steps which might otherwise have been taken to ensure that the company’s assets were available to the ATO, in order to avoid the need to wind up the company could only relate to the proceedings relevant to Mr Benz’ separation from his de facto. The evidence as to how company assets came to be frozen or otherwise controlled in those proceedings is unclear. Could Mr Benz have avoided that occurrence by taking different advice or different steps in the proceedings? The answer is uncertain. Was it reasonable for him not to have been able to avoid those interim orders in the relevant proceedings? Due -- 4 of 5 -- QR251-09 / Page 5 of 5 to the absence of evidence on this point, this Tribunal cannot be satisfied of the reasonableness of Mr Benz actions. [18] Although the evidence about the related proceedings is not extensive, there is certainly insufficient evidence to conclude that Mr Benz did act reasonably, or took all (or any) step in those proceedings which, if taken, would have ensured that the Company’s assets where available to the ATO when demanded. That issue goes to the heart of the “circumstances” leading to the “event”, as defined in s.56AD(8) of the QBSA Act. [19] In Younan v. QBSA [2010] QDC 158, McGill DCJ said (at [37]): “An application to be categorised as a permitted individual must under s.56AD include the reasons why the authority should categorise the individual as a permitted individual for the relevant event. Further, subsection (8) authorises the characterisation of an individual as a permitted individual only if the authority is satisfied of the relevant matter on the basis of the application, that is to say on the basis of the case made by the applicant. It follows that if the relevant considerations are not addressed by the applicant, so that the applicant fails to show in a relevant respect that he took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event, then the application will fail.” [20] When coming to the material afresh, the correct interpretation is that Mr Benz had failed to demonstrate that he took all reasonable steps to make the Company’s assets available to the ATO. This leads to the conclusion that the Mr Benz did not demonstrate that he ought be categorized as a permitted individual under Part 3A of the QBSA Act. [21] The correct or preferable decision of this Tribunal is that Mr Benz not be categorised as a permitted individual for the relevant event, being the appointment of the liquidator to the Company on 27 September 2007. and, therefore, that the QBSA’s decision be confirmed. The Application for review of the decision made by the QBSA on 1 September 2009 to refuse to categorise Mr Benz as a permitted individual is therefore dismissed. Order [1] The Decision of the Respondent made on 1 September 2009 is confirmed. [2] The Application for Review is dismissed. -- 5 of 5 --