Buljan v Queensland Building Services Authority [2012] QCAT 177

CITATION: Buljan v Queensland Building Services Authority [2012] QCAT 177 PARTIES: Jason Buljan v Queensland Building Services Authority APPLICATION NUMBER: OCR302-10 MATTER TYPE: Occupational regulation matters HEARING DATE: 12 August 2011 HEARD AT: Brisbane DECISION OF: P J Hanly, Member DELIVERED ON: 30 April 2012 DELIVERED AT: Brisbane ORDERS MADE: The decision of the Authority dated 12 October 2010 refusing to categorise Mr Buljan as a permitted individual is confirmed. CATCHWORDS: Permitted individual Queensland Building Services Authority Act 1991, ss 56AB-56AH Younan v QBSA [2010] QDC 158 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mr Buljan RESPONDENT: Jodie Stroud for QBSA REASONS FOR DECISION [1] Jason Buljan was the sole director and secretary of Jcon (Aust) Pty Ltd. On 5 July 2010 liquidators were appointed to that company (the Event). At the time, Mr Buljan also held a current licence under the Queensland Building Services Authority Act 1991 (QBSA Act) in the class of concreting. [2] The liquidation of his company triggered action by the Queensland Building Services Authority (the Authority) whereby Mr Buljan was advised on 20 July 20101 by the Authority that it considered him to be an excluded 1 Attachment ND3 to Statement of Natasha Dennis dated 15 February 2011. -- 1 of 6 -- 2 individual under section 56AC of the QBSA Act because of the Event. In the Authority’s letter of 20 July 2010, Mr Buljan was advised that he had the right to apply to this Tribunal for a review of the finding that he was an excluded individual. [3] Mr Buljan did not seek a review of the finding that he was an excluded individual. [4] Mr Buljan was also advised on 20 July 2010 that he could apply to the Authority to be classified as a permitted individual, but that in doing so he had to accept firstly that he was an excluded individual. In applying to be a permitted individual, Mr Buljan was required to demonstrate that he had taken all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the Event. [5] Mr Buljan applied to be categorised as a permitted individual on 18 August 2010. His application listed family issues and economic conditions affecting industry as the main cause and significant contributing cause respectively of the Event. In his covering letter he elaborated further on these factors, particularly surrounding the ill health of his mother, who passed away on 10 January 2010. [6] On 12 October 20102 the Authority advised Mr Buljan that it had refused his application to be categorised as a permitted individual and provided detailed reasons3 for that decision. The Authority also advised Mr Buljan that he had the right to seek a review of the decision in this Tribunal. [7] Mr Buljan lodged his application for review on 11 November 2010. The Tribunal issued various directions for the filing of material, and the holding of a compulsory conference. The application was heard on 12 August 2011. [8] In exercising its review jurisdiction under the Queensland Civil and Administrative Tribunal Act 2009 (the Act) the Tribunal must decide the review in accordance with the Act and the enabling Act (in this case, the QBSA Act); may perform the functions conferred on the Tribunal by both Acts and has all the functions of the decision maker for the reviewable decision being reviewed4. [9] The Tribunal, standing in the shoes of the decision maker must act in accordance with the objects of the QBSA Act, which include “to achieve a reasonable balance between the interests of building contractors and consumers”5. [10] Mr Buljan advised the Authority on 18 August 2010 that his business and personal affairs suffered greatly during an 18 month period after his mother was diagnosed with cancer until she passed away. He stated that his mother lived in Melbourne during this time to enable her to access the 2 Attachment ND6 to Statement of Natasha Dennis dated 15 February 2011. 3 Attachment ND5 to Statement of Natasha Dennis dated 15 February 2011. 4 Section 19 QCAT Act 2009. 5 Section 3(a)(ii) QBSA Act 1991. -- 2 of 6 -- 3 best possible medical care, and that he, in order to provide support for her, travelled to Melbourne frequently, including working in Melbourne from time to time. As a result of this disruption to his normal business activities, together with the general downturn in the economy, he asserted that his business failed. [11] At the hearing Mr Buljan elaborated further on this theme, detailing the difficulties experienced by him in securing contracts in Brisbane when he had to travel to Melbourne to be with his mother, and later to finalise her estate. He also stated that because he could not secure contracts, and finish jobs, he then had difficulty obtaining materials to perform new contracts, because he did not have the cash flow to do so. [12] However, when questioned about the debt owed by his company to Hanson Construction Materials Pty Ltd (Hanson), the applicant for his company’s winding up order, Mr Buljan made the following admissions: he had not received the statutory demand from Hanson as it was sent to the company’s registered office address; the registered office address was a rental property previously occupied by Mr Buljan and his family; he and his family had not resided at the rental property for a lengthy period; he had failed to change the registered office address of the company. [13] Mr Buljan asserted that his accountant should have changed the registered office address of the company but Mr Buljan had not instructed him to do so. He agreed that as a director, it was his obligation to ensure that necessary company documents were lodged, and admitted that some documents were not lodged. In his defence, he asserted that relevant documents were lodged until 2007, but after that he could not say. [14] Mr Buljan was unable to remember whether he had made any payments to Hanson when invoices were issued for the materials that Hanson was supplying, but confirmed that no money was paid to Hanson between March 2010 and April 2010 when almost $50,000.00 was received by his company for work performed by it using the Hanson materials. Furthermore Mr Buljan admitted that he had not approached Hanson to negotiate a debt repayment schedule in an effort to avoid further action by Hanson for the outstanding sum of $15,007.63. [15] Mr Buljan also admitted that he had not sought legal advice in relation to the Hanson debt. [16] Mr Buljan asserted that his company was financially secure until January 2010. His understanding of financial security was that he could pay his wages, pay for materials and continue working. He admitted that he did not understand the “paperwork jargon” and stated that that was why he had an accountant. He asserted that because a company was making “paper losses” it did not mean that the company was not financially secure. -- 3 of 6 -- 4 [17] Mr Buljan admitted that he did not know that the Australian Taxation Office (ATO) had issued proceedings in the Federal Court against his company until he was advised by the liquidator. He agreed that the debt of $131,427.00 to the ATO had arisen prior to the Event. He also admitted that he did not seek legal advice about this debt. [18] Mr Buljan’s accountant, Mr Emmanuel Panourakis, wrote to the Authority on 25 May 20116 providing certain financial documents for the financial years ended June 2007 and June 2008. No financial records were provided for the financial years ended June 2009 and June 2010. [19] During the hearing Mr Buljan stated that he had provided relevant information for the preparation of these documents to his accountant, although he conceded that his accountant claimed that he had not done so. [20] Mr Panourakis’ letter to the Authority stated that Mr Buljan had been a client of the firm for over 12 years, and “during this time he has never ever had a problem with any of the authorities especially with the Australian Taxation Office”. [21] Mr Panourakis continued: “What has recently happened to Jason and his business is an isolated incident and never to be repeated.” [22] Mr Panourakis’ statement to the Authority is directly contradicted by Mr Panourakis’ letter dated 18 December 20097 to Mr Buljan, enclosing a letter dated 8 December 2009 from the ATO to Mr Buljan, as director of Jcon (Aust) Pty Ltd. Mr Panourakis advised Mr Buljan that the ATO “will now issue amended assessments together with penalty notices within the next 28 days. If all the obligations to the ATO are not paid by Jcon (Aust) Pty Ltd when they are due and payable, then the ATO will commence legal proceedings within the next 6 months.” [23] The ATO’s letter dated 8 December 2009 advised Mr Buljan that it had completed an Employer Obligations Audit, and having found that Mr Buljan had failed to notify in respect of PAYG amounts withheld during the audit period, as well as having failed to meet his superannuation guarantee obligations in full, had imposed penalties and issued amended assessments. [24] During the hearing Mr Buljan admitted that the company did not have the capacity to pay the ATO when the amended assessments were issued. [25] Following his appointment as liquidator of Jcon (Aust) Pty Ltd on 5 July 2010, Mr Nick Combis provided a report to creditors dated 22 October 2010. The report contained, amongst other things, findings that the following factors contributed to the financial difficulties of the company: Director’s absence from duties due to personal reasons; 6 Exhibit 7. 7 Exhibit 4. -- 4 of 6 -- 5 Poor account and record keeping; The global economic downturn. [26] The QBSA Act sets out the matters to which the Authority (and this Tribunal on review) must have regard when assessing the action taken by Mr Buljan to demonstrate that he took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event, which are: Keeping proper books of account and financial records; Seeking appropriate financial or legal advice before entering into financial or business arrangements or conducting business; Reporting fraud or theft to the police; Ensuring guarantees provided were covered by sufficient assets to cover the liability under the guarantees; Putting in place appropriate credit management for amounts owing and taking reasonable steps for recovery of the amounts; Making appropriate provision for Commonwealth and State taxation debts. [27] This list is not exhaustive, and regard may be had to other matters when deciding if Mr Buljan took all reasonable steps.8 [28] The Authority’s submission in relation to Mr Buljan’s application was that he had demonstrated poor business management by: failing to enter into written contracts for domestic building work, as admitted during the hearing; failing to regularly review the financial position of the company; failing to properly understand the duties of a director (having given evidence that he had engaged an accountant in discharge of these duties); failing to properly understand, or seeking further information to enable him to understand, the financial documents provided to him by his accountant which revealed that the company had incurred accumulated losses since 2003; failing to keep proper accounts and records; failing to make proper provision for Commonwealth taxation debts; failing to make any payments to Hanson prior to the action taken by Hanson to wind up the company because Hanson would not reduce the debt; failing to change the address of the company’s registered office thereby not receiving the statutory demand from Hanson; 8 Section 56AD(8B) QBSA Act 1991. -- 5 of 6 -- 6 failing to take any steps to provide the ATO with further financial documents after receiving notice of the ATO’s intention to carry out the Employer Obligations Audit; failing to obtain legal advice in relation to the company’s financial position. [29] In the matter of Younan v QBSA9, (later upheld in the Court of Appeal10), McGill DCJ found that there were four steps required under the QBSA Act in these applications namely the need to identify the Event; to identify the circumstances that resulted in the happening of the Event; to consider whether all reasonable steps were taken to avoid those circumstances coming into existence and if satisfied of that to make a decision whether to categorise the individual as a permitted individual. [30] His Honour stated that “the reasonableness of (the individual’s) behaviour must be assessed by reference to what was known by him at the time without the benefit of hindsight”. [31] Mr Buljan urged the Tribunal to find that circumstances beyond his control had caused his company to be placed into liquidation. Whilst I have some sympathy for the undoubted upheaval that occurred in Mr Buljan’s personal and business life whilst his mother was terminally ill, the evidence reveals that his company was in a parlous financial state well before his mother’s diagnosis was made. [32] I am satisfied that the state of the company was brought about by Mr Buljan’s failure to appreciate his obligations as a company director; his failure to lodge relevant documents; his failure to keep proper accounts and records; his failure to obtain legal advice; his failure to understand, or obtain assistance in understanding, the financial records of the company; and his failure to make proper provision for Commonwealth taxation debts. [33] I am further satisfied that Mr Buljan did not take all reasonable steps to avoid the circumstances leading to the Hanson judgment coming into existence. [34] It follows that I am not satisfied that Mr Buljan should be categorised as a permitted individual. The decision of the Authority made on 12 October 2010 is therefore confirmed. 9 [2010] QDC 158. 10 Younan v Queensland Building Services Authority [2011] QCA 1. -- 6 of 6 --