Anderson v Queensland Building Services Authority [2010] QCAT 390

CITATION: Anderson v Queensland Building Services Authority [2010] QCAT 390 PARTIES: Mr Yustan Anderson v Queensland Building Services Authority APPLICATION NUMBERS: QR101-08; QR284-08 MATTER TYPE: General administrative review matters HEARING DATE: 3 March 2010 HEARD AT: Brisbane DECISION OF: K O'Callaghan DELIVERED ON: 16 August 2010 DELIVERED AT: Brisbane ORDERS MADE: The reviewable decisions be confirmed. CATCHWORDS : Queensland Building Services Authority Act 1991 Section 56AD permitted individual, whether Applicant took all reasonable steps to avoid coming into existence of the circumstances relating to the relevant event Section 56AF(3)(b) cancellation of license APPEARANCES and REPRESENTATION (if any): APPLICANT : Mr Yustan Andersen was self represented RESPONDENT: Queensland Building Services Authority represented by Ms Mardee Campbell -- 1 of 15 -- QR101-08 / Page 2 of 15 REASONS FOR DECISION Introduction 1. The Applicant filed two (2) applications to review two (2) decisions of the Queensland Building Services Authority (“the Authority”). Those decisions were:- i. A decision of the Authority of 16 April 2008 to refuse to categorise the Applicant pursuant to section 56AD of the Queensland Building Services Authority Act 1991 (“the QBSA Act”) as a permitted individual for a relevant event (“the permitted individual decision”) ii. A decision of the Authority of 10 December 2008 to cancel the Applicants license pursuant to the provisions of sections 56AF(3) of the QBSA Act (“the license cancellation decision”) The Applications were heard together. The evidence 2. The Applicant submitted 2 statements of evidence and 2 submission documents. He also relied on his oral evidence at the hearing. 3. The Authority relied on its statement of reasons filed in each application, an affidavit, and oral evidence of Carol Leung in relation to the permitted individual decision and an affidavit of Natasha Dennis in relation to the license cancellation decision. Chronology 4. It is useful to set out a chronology of relevant events pertaining to both applications. ƒ 21 May 2004, the Applicant was granted a carpentry (supervisor license) license. ƒ 23 December 2004 the Applicant was granted a builder low rise license (builder license). ƒ Diamond Residential Development Pty Ltd (“DRD”) was incorporated on 11 August 2003. The directors at that time were the Applicant, Mr Allen Bess and Ms Jennifer Joy Anderson. Ms Anderson resigned as a director on 23 January 2006 at which time the Applicant’s father, Mr Graham Anderson was appointed a director. ƒ Mr Graham Anderson subsequently resigned as a director on 1 November 2007. ƒ DRD was engaged in building homes. ƒ On 5 December 2007, DRD was served with a statutory demand under the Corporations Act 2001 demanding payment of an alleged debt of $381,261.93. ƒ On 14 January 2008 DRD was served with a winding up application as a consequence of non compliance with the statutory demand. -- 2 of 15 -- QR101-08 / Page 3 of 15 ƒ On 21 January 2008 DRD appointed an Administrator Jonathan Paul McLeod on the basis of a resolution that the company was insolvent, or likely to become insolvent at some future time. This is the “Relevant Event” for the purposes of section 56AD. ƒ On 25 January 2008 the Authority sent the Applicant an “Excluded Individual” notification. ƒ On 13 February 2008 Mr Ian Curry was appointed as liquidator of DRD pursuant to the winding up application filed on 14 January 2008. ƒ On 22 February 2008 the Applicant submitted his application to become a permitted individual. ƒ On 16 April 2008 the Applicant was advised that his application was refused. This is the first decision under review. ƒ On 6 August 2008 the Applicant entered into bankruptcy. ƒ On 21 August 2008 the Authority sent a letter to the Applicant which outlined a notice of reasons for the proposed cancellation of his license on the basis of his bankruptcy (the second event). ƒ On 8 September 2008 the Applicant wrote to the Authority disputing the Authority’s basis of classifying him as an excluded individual. ƒ On 16 October 2008 the Applicant made application to the Authority to be classified as a permitted individual for the second event. ƒ On 4 November 2008 the Authority refused the permitted individual application. ƒ The Applicant did not lodge a review of the Authority’s decision to refuse to categorise him as a permitted individual. ƒ On 10 December 2008 the Authority sent notification to the Applicant that his license had been cancelled pursuant to section 56AF(3). ƒ On 18 December 2008 the Applicant filed a review of the Authority’s license cancellation decision. -- 3 of 15 -- QR101-08 / Page 4 of 15 The Law The key provision is section 56AD (8) of the QBSA Act which relevantly provides that: “The authority may categorise the individual as a permitted individual for the relevant event only if the authority is satisfied, on the basis of the application, that the individual took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event.” 5. Section 56(8)(A) sets out matters that the Authority must have regard to in determining whether a person took all reasonable steps: “In deciding whether an individual took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of a relevant event, the authority must have regard to action taken by the individual in relation to the following— (a) keeping proper books of account and financial records; (b) seeking appropriate financial or legal advice before entering into financial or business arrangements or conducting business; (c) reporting fraud or theft to the police; (d) ensuring guarantees provided were covered by sufficient assets to cover the liability under the guarantees; (e) putting in place appropriate credit management for amounts owing and taking reasonable steps for recovery of the amounts; (f) making appropriate provision for Commonwealth and State taxation debts.” Section 56(8)(B) provides that: “Nothing in subsection (8A) prevents the authority from having regard to other matters for deciding whether an individual took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of a relevant event.” 6. The following sections are relevant to the license cancellation decision. 7. Section 56AF(3) provides that: “The authority must cancel the individual’s licence by written notice given to the individual if— (a) the individual has not already applied to be categorised as a permitted individual for the relevant event, and the individual does not apply for the categorisation within 28 days after the authority gives the individual the written notice under subsection (2); or -- 4 of 15 -- QR101-08 / Page 5 of 15 (b) the individual has already applied to be categorised as a permitted individual for the relevant event, or the individual applies for the categorisation within the 28 days mentioned in paragraph (a), but— (i) the authority refuses the application; and (ii) either of the following applies— (A) the period for applying for a review of the decision to refuse has ended and no application for review has been made; (B) an application for review has been made and the authority’s decision is confirmed, or the application is not proceeded with.” 8. There a number of decisions in the former Commercial and Consumer Tribunal (“CCT”) which provide an analysis and interpretation of the permitted individual provisions. A number of these decisions were referred to by both the Applicant and the Authority. 9. Since this matter was before the Tribunal, a decision has been delivered by Judge McGill of the District Court in Younan v Queensland Building Service Authority [2010] QDC158. This case provides an insightful analysis of and guide as to the interpretation of the relevant provisions. As His Honour noted there have been no previous decisions of the District Court or the Court of Appeal on the operation of these provisions. It is useful therefore to set out the Courts’ findings in respect of the interpretation of the provision. His Honour made the following points: ƒ At [24] when having regard to the criteria in section 56AD(8A) “… the focus of this subsection is on prevention rather than dealing with problems after they have arisen” ƒ At [26] “the test outlined in section 56AD(8) requires: 1. the identification of the relevant event, 2. the identification of the circumstances that resulted in the happening of the relevant event, 3. a consideration of whether the relevant individual took all reasonable steps to avoid those circumstances coming into existence, and if satisfied of that 4. a decision whether to categorise as an individual as a permitted individual.” ƒ At [26] “the reasonableness of his behaviour must be assessed by reference to what was known by him at the time, without the benefit of hindsight” -- 5 of 15 -- QR101-08 / Page 6 of 15 ƒ In relation to whether any reference should be made to the explanatory note to the Bill – His Honour said “This may be the sort of thing which politicians say when playing to a particular audience, but when it comes to interpreting these statutory provisions enacted by the legislature, attention must be focussed on the words actually used by the legislature. ƒ And at [35] “what has been enacted by the legislature in section 56 AD(8) is not the test described in the explanatory note, or the test described by the Minister. The test enacted is perfectly clear, though its application may be a difficult and complex process. That will depend very much on what, in a particular case, were the circumstances that resulted in the happening of the relevant event” ƒ At [37] on the issue of onus: “… subsection (8) authorises the characterisation of an individual as a permitted individual only if the authority was satisfied of the relevant matter on the basis of the application, that is to stay on the basis of the case made by the applicant. It follows that if 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” 10. In relation to the cancellation of license decision, the Authority relied on the CCT decision of Shaw v QBSA [2008] QCCTB218. 11. In that case the Applicant had applied to review a decision of the Authority cancelling his license. The Authority submitted that the Applicant was given notice that he was considered an excluded individual for a relevant event, the Applicant did not apply to be categorised as a permitted individual, and as such under section 56AF, they had no option but to cancel his license. The Tribunal agreed with that submission. The Member found “in the circumstances I am of the view that there is no legislative provision that would enable the Tribunal to set aside the Authority’s decision in this instance and the Tribunal would have no option but to affirm the decision of the QBSA”. The Issues The permitted individual decision (GAR101-08) 12. Applying the test set out in case of Younan, the issues which the Tribunal must consider are the following: (i) What was the relevant event? 13. The relevant event was the appointment of Jonathan Paul McLeod of McLeod & Partners as administrator of DRD on 21 January 2008. -- 6 of 15 -- QR101-08 / Page 7 of 15 (ii) What were the circumstances that resulted in the happening of the relevant event? 14. The immediate circumstances which resulted in the appointment of the administrator was that the directors resolved on 21 January 2008 that DRD was insolvent or was likely to become insolvent and that an Administrator should be appointed. It is necessary to investigate the circumstances that led to this resolution. That is, what circumstances led to the company being insolvent as at 21 January 2008. 15. In his application to be categorised as a permitted individual the Applicant identifies “under pricing or unprofitable building contracts” as the main cause of the relevant event. He then lists other significant contributing causes as: ƒ Adverse legal reaction and ƒ Inability to recover amounts owing The Authority’s consideration of the application is recorded in the memorandum of the compliance officer, Carol Leong (exhibit 7 to her affidavit). From the evidence, I accept these were circumstances which lead to the company being put into administration. In his application, and at the hearing, the Applicant supplied further details of what he considered were the “contributing causes”. I will deal with each cause in turn. A. Unprofitable contracts 16. The Applicant’s evidence was that DRD entered into a number of contracts to build houses which were of a type of construction with which the company had little experience. These contracts were all entered into within a relevantly short period of time. In the case of each contract there were excessive cost overruns. 17. The Applicant summarised the cost overruns of each project as follows: 58 Siemon Street $ 89,045.06 28 Ruston Street $ 80,943.73 30 Ruston Street $ 92,492.26 25 Victoria Street $ 62,507.83 23 Victoria Street $183,769.32 37 Midway Terrace $ 57,986.17 39 Midway Terrace $ 88,612.80 Whla Street $113,930.50 Total in cost overruns $769,287.67 18. The Applicant’s evidence was that the overruns were caused by a combination of under costing of work, price increases for labour and materials and client demands which exceeded the allowable contract price. The company itself absorbed the total loss of $769,287.67. The Applicant’s evidence was that the profit from previous -- 7 of 15 -- QR101-08 / Page 8 of 15 projects was used to absorb the loss. I find that these unprofitable contracts where a circumstance giving rise to the company’s insolvency. B. Adverse legal action 19. The Applicant refers to 2 cases of “adverse legal action”. ƒ BGS Concrete Construction Claim. 20. BGS was a concreting subcontractor engaged by DRD to do concreting work on a number of the houses DRD was constructing. DRD declined to pay certain of BGS invoices on the basis that it claimed it could offset the cost of rectifying defective work performed by BGS. 21. BGS pursued its claim through the Building and Construction Industry Payment regime. The dispute went to adjudication under that scheme and despite DRD responding to the claim the adjudicator awarded BGS’ total claim in the sum of $25,194.96. This amount was paid by DRD on 30 March 2007. 22. Although DRD paid this amount, on the basis of evidence from the Applicant that this dispute contributed to the insolvency of DRD I will accept it as a relevant circumstance leading to the insolvency of DRD. ƒ Mak Property Consultants (“Mak”) Claim 23. On 5 December 2007, Mak served a creditors statutory demand on DRD under the Corporations Act for non payment of a debt of $381,261.93. The affidavit in support of the claim was to the effect that the claim related to the costs of defective work and overpayment and damages in relation to a proposed townhouse project being constructed by DRD. 24. The Applicant’s evidence was that DRD had entered into a contract with Mak to build a townhouse project. He said it was agreed that Mak would take over the project and indemnify DRD for any subsequent losses. This agreement is recorded in a diary note of the director Mr Graham Anderson but is not signed by either party. 25. DRD was clearly unable to satisfy the statutory demand and the Applicant says it was a major contributing factor to “Diamonds demise”. I accept that the existence of the statutory demand and the inability to satisfy it was a circumstance leading to the appointment of the administrator. The Directors knew that if they were unable to meet the demand the company would be put into liquidation (which ultimately occurred) and as such resolved that the company should go into voluntary administration (the relevant event). -- 8 of 15 -- QR101-08 / Page 9 of 15 C. Inability to recover amounts owing. 26. This factor was listed by the Applicant as a significant contributing cause of the appointment of an Administrator however, he provided no written statements in support of his contention. 27. His oral evidence was to the effect that on a number of projects the clients owed money for additional work but refused to pay. He said the company did not pursue the claims. He said that they wanted to please the customers presumably in the hope of obtaining more work and they had legal advice to the effect that they had little prospects of success. 28. I consider that the circumstances is not so much as “an inability” to recover the money owing but rather a failure to take steps to recover money owing. (iii) Did the Applicant take all reasonable steps to avoid the circumstances coming into existence 29. I will deal with each circumstance and address whether the Applicant took all reasonable steps to avoid the circumstance coming into existence. A. Unprofitable contracts 30. The Applicant is required to present evidence which establishes that all reasonable steps were taken to avoid the contracts being unprofitable. The Applicant concedes that DRD entered into a number of contracts in quick succession which were the type not familiar to DRD. The contracts were fixed price and money was lost on all. The Applicant says that he was not aware of the extent of the losses being incurred on each contract before the next one was entered into. He said he was unable to detect any adverse costing effects. 31. A reasonable step, in circumstances where this was a new type of job for DRD would have been to take stock of the success or otherwise of the project before entering into further contracts. The avalanche effect could have been avoided. 32. The Applicant says that each contract was costed by an independent consultant however no documentary evidence was provided by the Applicant to the Authority or to the Tribunal to support that. 33. It is apparent that the contracts were not properly costed. If they had been there would not have been such extensive overruns on each project. The Applicant himself conceded in his written statement “our error was that we did not charge enough for the work which we did”. 34. It is also apparent from the evidence that the scope of works in some of the contracts was not properly defined. The Applicant conceded that in some cases the client took advantage of this by demanding more expensive fit outs and then refusing to agree to -- 9 of 15 -- QR101-08 / Page 10 of 15 a variation. More attention to defining the scope is a reasonable step the Applicant could and should have taken in a fixed price contract to avoid the extent of the losses on some of the contracts. 35. The Applicant did give evidence of some steps that were taken to avoid the losses on the contracts. He said that they did subsequently increase the price on later contracts. This was a reasonable step to take however as pointed out earlier it did not prevent the circumstances of earlier unprofitable contracts arising. And it did not save the situation because too many apparently under priced contracts were entered into without assessing the individual profitability of each project. B. Adverse legal action ƒ BGS Concrete Construction 36. As referred to above BGS was successful in an adjudication under the Building and Construction Industry Payments Act (“BCIPA”). The Applicant says having to pay this claim was a circumstance leading to the company’s insolvency. The Applicant’s evidence was that DRD responded to the claim and submitted that they “did not receive any consideration for the damage which we had suffered because of this extremely poor workmanship. Under the Building Payment Act it seems that tradesmen get paid no matter what quality his work or how grossly he may over charge”. 37. The Authority had provided a written memorandum of Carol Leung setting out her initial assessment of the Applicants permitted individual application. 38. In that memorandum the Authority refers to the adjudication and the deficiencies in the Applicant’s position. The Authority apparently had access to the adjudicator’s decision. They point out that the adjudicator found that there was no written contract with BGS and as such the Applicant could not establish that BGS had over charged. 39. A reasonable step to avoid this circumstance would have been to ensure the contract was in writing. There is at least 1 other project referred to by the Applicant (the Martinez project) where there is an allegation of overcharging by the subcontractor but no written contract was entered into. 40. The Authority says the adjudicator also pointed out that the Applicant did not submit a payment schedule upon receipt of the invoice (as required by the BCIPA) and had not raised the issue of defective work previously. Both of these steps are critical in responding to a BCIPA claim. 41. The Tribunal was not provided with a copy of the adjudicator’s decision. However if the Applicant took issue with the Authority’s representation of the adjudicator’s decision he took no steps to contradict Ms Leung’s representation. The Applicant provided no evidence as to the case DRD presented to the adjudicator, for example, what evidence did they provide regarding the alleged defective work? -- 10 of 15 -- QR101-08 / Page 11 of 15 42. In those circumstances, I accept the Authority’s record of the adjudicator’s findings and find that the Applicant did not take all reasonable steps to avoid the adverse finding in the BGS claim. ƒ Mak 43. The Applicant’s evidence was that the statutory demand made by Mak in December 2007 was unexpected as they had entered into an agreement with Mak in July 2007 to the effect that DRD would withdraw from the project and Mak would accept the works as they were and indemnify DRD against any action of breach of contract. The only evidence of this “agreement” is an unsigned diary note which does record the terms of the agreement which the Applicant says was reached. 44. In view of the general difficulties the DRD was experiencing at that time and the difficulties they had faced on that particular job it would have been a reasonable step to properly document the agreement. 45. I accept that DRD was unable to pay the statutory demand because of its financial position at the time however the claim may not have arisen at all if the agreement had been properly documented. C. Failure to recover monies owing to DRD 46. I consider this circumstance to be a significant contributing factor to the insolvency of DRD. 47. The Applicant’s consistent evidence was that on all of the “unprofitable contracts” the clients owed the company money either under the contract or for additional work. The Applicant’s evidence was simply put that they were unable to recover the monies and they received legal advice to this effect. 48. No written evidence was provided as to the legal advice given. Vague references were made that because of the way the contracts were structured it would be difficult to recover the monies alleged to be owing. The Applicant did not provide a copy of any of the contracts to support this contention. 49. It was conceded by the Applicant that written variations were not obtained from the clients. It is conceivable that if this had been done that the legal advice may have been to the effect that DRD would have had prospects of recovering the monies due to it. 50. The Authority submits that the Applicant “failed to ensure proper documentation and correspondence was issued in the timely fashion to maximise the possibility of debt recovery”. They also point out the Applicant did little in the way of resolving disputes about defective work. I agree with these submissions being reasonable steps the Applicant should have taken to avoid the “inability to recover monies owing” which was a contributing factor to the company’s insolvency. -- 11 of 15 -- QR101-08 / Page 12 of 15 51. I find that as detailed above there are reasonable steps the Applicant could have taken and did not take to avoid the coming into existence of the circumstances identified by the Applicant as giving rise to the relevant event. D. Other Issues 52. The Applicant in a written statement specifically addressed the issues listed in section 56AD(8A) being matters that the Authority (and on the review the Tribunal) must have regard to in deciding whether the Applicant took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event. (a) Keeping proper books of account and financial records: 53. The Applicant’s evidence was that DRD did keep proper records by way of a fully integrated accounting software program. He stated the company always had up to date information via general ledger, accounts payable ledger, accounts reviewable ledger and job costing ledger. The Applicant produced a letter from DRD’s accountant which confirmed that a computerised accounting system was used and that he reviewed the accounts on a regular basis. 54. No actual accounts were produced by the Applicant. The difficulty with the assertion that proper books and account were kept is that the company went from having an operating profit in June 2006 to having a 1.2 million dollars debt in December 2007 and the Applicant’s evidence was that although he had regular reviews of the accounts this fact did not come to his attention until December 2007. 55. The Applicant says that until November 2007 the company was able to pay it’s accounts. The liquidator of DRD Mr Ian Currie, gave oral evidence on the phone. He said he had difficulty obtaining access to the company’s records and that the former director Mr Graham Anderson was reluctant to provide access. He said he had formed the view that DRD had been engaging in insolvent trading for some time, possibly for up to 1 year prior to the liquidation. His view was that the company was unable to pay its debts even leaving aside the statutory demand from Mak. In light of these indicators it is difficult to accept the proposition that proper books of account and financial records had been kept. (b) Seeking appropriate financial or legal advice before entering into financial or business arrangements in conducting business. 56. The Applicant gave evidence that the directors sought financial advice from their accountant and legal advice in relation to possible recovery of monies owing. As with other aspects of the Application, the Applicant failed to produce any substantial evidence of this assertion. The only evidence from the accountant is a letter advising that he reviewed the records on a regular basis. There is no evidence that financial or other advice was sought before engaging in what the Applicant concedes was a different type of construction and where a number of contracts were entered into in a -- 12 of 15 -- QR101-08 / Page 13 of 15 short time frame. It would have been a reasonable step to seek financial and legal advice as to the viability of and the structuring and documenting of such projects. (c) Reporting fraud or theft to the police – this consideration was not relevant in these circumstances. (d) Ensuring guarantees provided were covered by sufficient assets to cover the liability. 57. The Applicant acknowledges that his personal bankruptcy came as a consequence of not being in a financial position to discharge his obligations under the guarantee of DRD liabilities. This issue is not relevant in the context of the relevant event being the administration of DRD. It may have been a relevant issue had the Applicant sought a review of the decision to make him an excluded individual consequential upon his bankruptcy. (e) Putting in place appropriate credit management for amounts owing and taking reasonable steps for recovery of the amounts. 58. The Applicant in a written statement submits that the company “collected all funds payable to it as the payments were made directly to the company by the banks and other financial institutions”. Clearly, the Applicant is referring only to the funds authorised by the companys’ clients. As detailed above I am not satisfied that DRD took all reasonable steps to recover monies it claimed that were owing to it by clients on a number of projects. (f) Making appropriate provision for commonwealth and state taxation debt. This consideration was not relevant in these circumstances. Applicant’s general submissions 59. The Applicant made general submissions concerning the operation of the legislation which should be addressed. 60. The thrust of the Applicant’s submission was that he was in no way dishonest in dealing with clients and indeed made no profits. I accept that the Applicant did not act in any way dishonestly however as the Authority points out it is not relevant whether or not the Applicant acted honestly, it is a question of whether he took all reasonable steps to avoid the circumstances. 61. The Applicant refers in his submissions to the Minister’s second reading of the Bill where he referred to preventing “the re emergence of the shonks through the device of the “phoenix” company”. He submits that this indicates that it was the Minister’s intention to stop dishonest people from taking advantage of those who did not have the same knowledge of the industry. -- 13 of 15 -- QR101-08 / Page 14 of 15 62. This argument must be rejected in light of the Younan decision. As discussed above Judge MacGill said the explanatory note was not to be “considered when applying the provision. (at 35) “What has been enacted by the legislature in section 56AD(8) is not the test described in the explanatory note”. 63. The Applicant also submits that steps were taken to borrow money by the directors in November 2007 to relieve the financial pressure that DRD was under. The application was refused. In any event I do not think that this was a step taken to avoid the circumstances. As Judge MacGill pointed out in Younan the focus of the subsection is on prevention rather than dealing with the problems after they have arisen. Any attempt to borrow funds by the directors was a step to deal with the circumstances not to avoid them coming into existence. Findings 64. I find that in all the circumstances the Applicant did not take all reasonable steps to avoid the coming into the existence of the circumstances which lead to the appointment of the administrator. 65. As the threshold issue has not been determined in the Applicant’s favour, it is not necessary to consider whether the discretion should be exercised to categorise the applicant as a permitted individual. The excluded individual decision (GAR284-08) 66. The relevant event to which the Applicant refers in this application is his bankruptcy. 67. He applied to the Authority to become a permitted individual for the relevant event which application was refused. Of critical importance is that the Applicant did not apply to review this decision of the Authority. As a consequence the Authority cancelled the Applicant’s license in accordance with section 56AF(3)(b). It is this decision which the Applicant seeks to review. 68. The principal argument of the Applicant is that by virtue of section 56AC(5) and (6) the Authority was incorrect in classifying him as an “excluded individual” for the bankruptcy (the second event). Section 56AC(5) provides: “An excluded individual for a relevant bankruptcy event (the first event) does not also become an excluded individual for another relevant bankruptcy event (the other event) if the first event and the other event are both consequences flowing from what is, in substance, the one set of circumstances applying to the individual.” Section 56AC(6) provides: “An excluded individual for a relevant company event (the first event) does not also become an excluded individual for another relevant company event (the other -- 14 of 15 -- QR101-08 / Page 15 of 15 event) if the first event and the other event are both consequences flowing from what is, in substance, the one set of circumstances applying to the company.” 69. The Applicant argued that because his bankruptcy was a result of his liability under a guarantee on the default by DRD, both events “flowed” from the same set of circumstances and as such he could not be regarded as an excluded individual for the bankruptcy. 70. I do not agree with the Applicant’s interpretation of these provisions. 71. I accept the Authority’s submission that subsection 5 refers to personal bankruptcy matters and subsection 6 to company matters. There is no section which refers to a mixed event. 72. Section 56AC(5) would apply if there were 2 bankruptcy events for example a part 9 arrangement under the bankruptcy legislation followed by bankruptcy. Section 56AC(6) would apply where there were 2 company events for example administration followed by liquidation. In this case if the Applicant have been classified as an excluded individual for the liquidation of the company he could have argued that this was prohibited by sections 56AC(6) as he had already been excluded as a result of the company going into administration. 73. In any event, even if I accept the Applicant’s interpretation, such an argument should have been raised in review of the Authority’s decision not to classify him as a permitted individual for the bankruptcy event. The Applicant did not review the decision. His reviewed the cancellation of his license. 74. I accept the Authority’s submission (as confirmed in the CCT decision of Shaw v QBSA) [2008] CCT 152) that in view of the mandatory requirement in section 56AF(3)(b) to cancel the Applicant’s license, upon failure to review the decision that “neither the Authority, nor the Tribunal standing in the Authority’s shoes, has the discretion to renew or reinstate the Applicant’s license.” 75. Therefore the application to review the Authority’s decision to cancel the Applicant’s license is dismissed. Order 76. I order in both applications that the reviewable decisions be confirmed. -- 15 of 15 --