SUPREME COURT OF QUEENSLAND

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1 SUPREME COURT OF QUEENSLAND CITATION: PARTIES: Ericson v Queensland Building and Construction Commission [2014] QCA 297 IAN JAMES ERICSON (applicant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (respondent) FILE NOS: Appeal No 4568 of 2014 QCAT Appeal No 180 of 2012 DIVISION: PROCEEDING: ORIGINATING COURT: Court of Appeal DELIVERED ON: 21 November 2014 DELIVERED AT: Application for Leave Queensland Civil and Administrative Tribunal Act Queensland Civil and Administrative Tribunal at Brisbane Brisbane HEARING DATE: 17 October 2014 JUDGES: ORDERS: Holmes JA, Mullins and Henry JJ Separate reasons for judgment of each member of the Court, each concurring as to the orders made 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The matter is remitted to a differently constituted Appeal Tribunal of the Queensland Civil and Administrative Tribunal for reconsideration in accordance with these reasons. CATCHWORDS: PROCEDURE INFERIOR COURTS QUEENSLAND QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL REMITTED ACTIONS where the respondent suspended and then cancelled the applicant s builder s licence for contravention of a licence condition where a single member of the Queensland Civil and Administrative Tribunal (QCAT) set aside those decisions where the Appeal Tribunal of QCAT reversed the Member s decision and confirmed the cancellation of the applicant s licence where the applicant s application for leave to appeal and appeal were allowed on the basis that the Appeal Tribunal had misapprehended the nature of its jurisdiction where this Court remitted the matter to Appeal Tribunal for reconsideration where, on its further hearing, the Appeal Tribunal again set aside the Member s decision and confirmed the respondent s decision to cancel the licence

2 2 where the applicant seeks leave to appeal the decision the Appeal Tribunal made on remitter where the applicant contends that the Appeal Tribunal failed to reconsider the matter in accordance with this Court s reasons where if the appeal to the Appeal Tribunal were decided on questions of law it remained necessary to return the matter to the Member for decision on the merits where the Appeal Tribunal did not identify any error of mixed fact and law as the basis for it to re-hear the matter and interfere with the Member s exercise of discretion Building and Construction Industry Payments Act 2004 (Qld) Queensland Building Services Authority Act 1991 (Qld), s 35(3), s 48 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 18, s 33, s 67, s 69, s 142, s 146, s 147 Ericson v Queensland Building Services Authority [2013] QCA 391, related Queensland Building Services Authority v Ian James Ericson trading as Flea s Concreting [2013] QCATA 180, related Queensland Building Services Authority v Ian James Ericson trading as Flea s Concreting [2014] QCATA 66, related COUNSEL: SOLICITORS: The applicant appeared on his own behalf G I Thomson for the respondent The applicant appeared on his own behalf Queensland Building and Construction Commission for the respondent [1] HOLMES JA: The applicant is a concreter whose builder s licence was first suspended and then cancelled by the respondent (then the Queensland Building Services Authority). He succeeded in having those decisions set aside on an application for merits review of the licence cancellation, heard by a single Member of the Queensland Civil and Administrative Tribunal (QCAT). However, the Member s decision was reversed on the respondent s appeal to the Appeal Tribunal of QCAT, and the decision to cancel the licence was confirmed. 1 The applicant sought leave to appeal to this Court. His application and appeal were allowed, and the matter was remitted to the Appeal Tribunal for reconsideration in accordance with this Court s reasons. 2 On its further hearing, the Appeal Tribunal once more set aside the Member s decision and confirmed the respondent s decision to cancel the licence. 3 [2] The applicant seeks leave to appeal that decision on grounds which, in the main, revolve around contentions that the Appeal Tribunal failed to reconsider the matter in accordance with this Court s reasons and failed to identify the basis on which the appeal to it was being decided, with some additional arguments as to what approach Queensland Building Services Authority v Ian James Ericson trading as Flea s Concreting [2013] QCATA 180. Ericson v Queensland Building Services Authority [2013] QCA 391. Queensland Building Services Authority v Ian James Ericson trading as Flea s Concreting [2014] QCATA 66.

3 3 the Appeal Tribunal should have taken to the licence suspension decision and the events leading up to it. The Appeal Tribunal s jurisdiction [3] The respondent s appeal to the Appeal Tribunal, so far as it concerned a question of law, could be brought without leave. 4 However, to the extent that it concerned a question of fact or a question of mixed law and fact, the Appeal Tribunal s leave to appeal was required. 5 The Appeal Tribunal s powers depended on whether the appeal was decided in relation only to a question of law or whether it concerned a question of fact or a question of mixed law and fact. Section 146 deals with the former situation, s 147 with the latter: 146 Deciding appeal on question of law only In deciding an appeal against a decision on a question of law only, the appeal tribunal may (a) confirm or amend the decision; or (b) set aside the decision and substitute its own decision; or (c) set aside the decision and return the matter to the tribunal or other entity who made the decision for reconsideration (i) with or without the hearing of additional evidence as directed by the appeal tribunal; and (ii) with the other directions the appeal tribunal considers appropriate; or (d) make any other order it considers appropriate, whether or not in combination with an order made under paragraph (a), (b) or (c). 147 Deciding appeal on question of fact or mixed law and fact (1) This section applies to an appeal before the appeal tribunal against a decision on a question of fact only or a question of mixed law and fact. (2) The appeal must be decided by way of rehearing, with or without the hearing of additional evidence as decided by the appeal tribunal. (3) In deciding the appeal, the appeal tribunal may (a) (b) The cancellation of the applicant s licence confirm or amend the decision; or set aside the decision and substitute its own decision. [4] The respondent had a discretion under s 48 of the Queensland Building Services Authority Act 1991 (now re-named the Queensland Building and Construction Commission Act) to suspend or cancel a building contractor s licence for contravention of a licence condition. Standard licence conditions include meeting 4 5 Queensland Civil and Administrative Tribunal Act 2009 s 142(1). Section 142 (3)(b).

4 4 relevant financial requirements, 6 a set of which has been promulgated as the Financial Requirements for Licensing. On 25 June 2009, the respondent suspended the applicant s licence on the basis that he had failed to meet the Financial Requirements. The applicant disputed that that was the case, arguing that the respondent had failed to take into account a trade debt owed to him. An adjudicator had given a decision in his favour as to that debt, under the Building and Construction Industry Payments Act 2004, but the company said to owe it had obtained an interlocutory injunction preventing him from enforcing the decision. The respondent decided that the debt was not a current asset and, on 11 October 2010, gave the applicant notice that his licence had been cancelled because of his failure to meet the Financial Requirements. The Tribunal review of the cancellation decision [5] The applicant had not applied for review of the decision to suspend his licence, but he did seek review of the decision to cancel it. The Tribunal Member carrying out the review acknowledged the respondent s argument that the trade debt was not a current asset for the purposes of the Financial Requirements. However, the Financial Requirements had an express object of promoting more financially viable businesses; it was difficult to see how that could be met by failing to accept the debt in question as a current asset. The fact that the applicant had obtained an adjudicator s decision in his favour as to the debt, which he was unable to enforce, would have provided good grounds for not suspending the applicant s licence; given that aspect, the suspension decision was harsh. [6] Taking into account the contribution of the suspension decision to the applicant s financial state, and the fact that his assets/liability ratio was not substantially below the level required, the Tribunal Member concluded that the licence should be reinstated. He set aside the cancellation decision and terminated the suspension decision, setting conditions on the applicant s reinstated licence which required him to provide financial reports at three-monthly intervals for 15 months. The Appeal Tribunal s original decision on the appeal of the review decision [7] The Appeal Tribunal, accepting the respondent s submission, ruled that the Tribunal Member had no power to review the suspension decision because it was not the subject of the application before him. That question was held in this Court to have been correctly decided. 7 The Appeal Tribunal also found error by the Member in his approach to the treatment of the trade debt, in considering only one of the objects of the Financial Requirements, without regard to a second object, of foster[ing] more professional business practices in the building industry. This Court regarded that finding of error, too, as properly made. 8 [8] However, the Appeal Tribunal, having found those errors of law, proceeded to substitute its own decision. It noted the reasons for the respondent s cancellation of the applicant s licence, which concerned his failure to meet the Financial Requirements, expressed itself satisfied that his business did not meet the Financial Requirements and confirmed the decision to cancel his licence Section 35 (3) of the Queensland Building Services Authority Act. Ericson v Queensland Building Services Authority [2013] QCA 391 at [22]. At [20].

5 5 This Court s decision on the appeal from the Appeal Tribunal s original decision [9] This Court set the appeal tribunal s decision aside for the following reasons: [25] As has already been pointed out, the appeal tribunal purported to proceed with the appeal as one limited to questions of law, so that its powers were those conferred by s 146 of the Queensland Civil and Administrative Tribunal Act. That provision enables the appeal tribunal, if setting aside a decision, either to substitute its own decision or to remit the matter to the tribunal which made the appealed decision for further consideration. Plainly, it is only if the determination of the question of law is capable of resolving the matter as a whole in the appellant s favour that the appeal tribunal will be in a position to substitute its own decision. Section 146, as already noted, does not entail any re-hearing of the matter, whether on the evidence below or on fresh evidence. [26] The appeal tribunal s decision in the negative of the questions whether the suspension decision could be reviewed and whether the member s construction of the Financial Requirements for Licensing was correct could not determine the outcome of the applicant s application for review of the exercise of discretion to cancel his licence. That could only be done on a consideration of all the evidence, with appropriate findings of fact and a fresh exercise of discretion. All of that might have occurred had the appeal tribunal been proceeding under s 147. [27] It might be argued that, despite the characterisation of the appeal as one limited to a question of law, the appeal tribunal was, in fact, conducting a re-hearing under s 147. But that raises other difficulties. The tribunal professed itself satisfied that it had sufficient evidence in the material before the tribunal member and the fresh evidence (as to the applicant s bankruptcy) to allow it to set aside the decision appealed and substitute its own. It then proceeded to set out the QBSA s reasons for cancelling the licence and express itself satisfied that the applicant s business did not meet the Financial Requirements. That finding was a pre-condition to the exercise of a discretion to cancel the licence; it did not amount to a decision on whether the licence should be cancelled. Instead of substituting its own decision for that set aside, the appeal tribunal merely confirmed the QBSA s decision to cancel the licence. It did so although the correctness of the QBSA s decision was not in issue before it; the only decision under appeal was the tribunal member s decision. [28] If the appeal tribunal were to act under s 147 so as to substitute its own findings on the facts and its exercise of discretion for the member s decision, it was necessary for it to say as much and to give reasons for exercising the

6 6 discretion against the applicant. As it happened, the tribunal did not address any factual matter beyond the failure to meet the Financial Requirements, the premise which enlivened the discretion. The applicant s argument that the appeal tribunal if exercising the discretion had to take into account the facts, matters and circumstances behind the cancellation of his licence is correct: the circumstances in which his business failed to meet the Financial Requirements were a relevant, although not necessarily a decisive, consideration. But the real difficulty is that the tribunal, while setting aside the member s exercise of discretion, did not itself exercise any discretion. The Appeal Tribunal s reconsideration [10] As a result of those conclusions, the matter was remitted to the Appeal Tribunal for reconsideration. The decision which the Appeal Tribunal made on remitter 9 is the subject of the present application for leave to appeal. Its reasons commenced by briefly setting out the progress of the matter through the Tribunal at first instance, the Appeal Tribunal and this Court. Under the heading Section 146, the Appeal Tribunal noted what was said at [25] of this Court s judgment, that it could substitute its own decision only if determination of the question of law was capable of resolving the matter as a whole in the applicant s favour. [11] The Appeal Tribunal continued: [9] The learned Member found that the characterisation of the debt became superfluous when Mr Ericson s account[ant] lodged an independent review report that confirmed he did not meet the financial requirements. [10] He also found there were four relevant factors in the exercise of his discretion: the earlier suspension of the licence: that the proportion by which Mr Ericson failed to meet the financial requirements was not large; his assets included substantial trade debtors but his liabilities included almost $4M owed to the Australian Taxation Office; and Mr Ericson s then poor trading position. [11] The pervading theme of the learned Member s decision was that he thought the 2009 suspension was harsh, that the suspension contributed to Mr Ericson s financial position and that he should not be penalised for that. If, as has been confirmed, the learned Member was not entitled to consider the suspension, then the learned Member was left with an undisputed failure to meet the financial requirements and no mitigating circumstances. The fact that the learned Member imposed strict conditions on Mr Ericson s licence: to enable Mr Ericson to re-establish his business under the close financial supervision of the QBSA. If it becomes obvious (whether sooner or later) that it is 9 Queensland Building and Construction Commission v Ian James Ericson trading Flea s Concreting [2014] QCATA 66.

7 7 no longer a viable business, QBSA will be entitled to make a fresh decision whether to suspend or cancel the licence. is, in our view, a clear acknowledgement that, absent the earlier suspension, the learned Member should have exercised his discretion to confirm the Authority s decision. [12] For that reason, we find that the question of law is capable of resolving the matter as a whole in the Authority s favour. We therefore set aside the learned Member s decision and substitute our own decision; that the Authority s decision is confirmed. (Footnotes omitted). The question of law of which the Appeal Tribunal is speaking is not identified in its decision, but one infers that it is a reference to the findings in its original decision that the Tribunal Member had misconstrued the Financial Requirements and had acted beyond jurisdiction in setting aside the licence suspension. [12] The Appeal Tribunal then proceeded, under the heading Section 147, to give further reasons for confirming the cancellation decision. Presumably, this was meant as an alternative basis for decision to that under s 146. Having observed that if it was decided that the Member had erred on a question of mixed fact and law, the appeal must be decided by way of re-hearing, exercising the discretion under s 48 of the Queensland Building and Construction Commission Act afresh, it continued: [14] Mr Ericson has favoured us with submissions on this issue. He says that we should ignore the fresh evidence of his bankruptcy. He still submits that we should consider the effect of the earlier suspension. He says that we should categorise the trade debt as an asset because he had a favourable decision under the BCIPA legislation 10 and that the debtor successfully obtained an injunction because of the Authority s decision to suspend Mr Ericson s licence. Mr Ericson says he constantly updated the Authority about the progress of recovering that debt. [15] We must ignore the earlier suspension of the licence. Even if we ignore Mr Ericson s bankruptcy, we are left with facts that compel the exercise of the discretion to cancel Mr Ericson s licence. He has substantial debts to the Australian Taxation Office. His income at the time of the learned Member s decision included the sale of assets, which cannot be, and were not, replicated in subsequent years. [16] His assets exceed his liabilities only if trade debtors are included as current assets. Without the trade debtors, Mr Ericson s liabilities exceed his assets. To date, Mr Ericson has not demonstrated that a debt owed in 2008 has been recovered. [17] Mr Ericson cannot meet the financial requirements of his licence. The Authority s decision of 11 October October 2010 to cancel Mr Ericson s licence is confirmed. 10 Building and Construction Industry Payments Act 2004.

8 8 The Appeal Tribunal s purported exercise of jurisdiction under s 146 [13] Unfortunately, in dealing with the matter under s 146, the Appeal Tribunal, while having regard to paragraph [25] of this Court s judgment, apparently overlooked what follows at [26]: that the resolution of the questions of law, as to whether the suspension decision could be reviewed and whether the Tribunal Member s construction of the Financial Requirements was correct, could not determine the application. What followed from identification of the relevant errors of law was, firstly, that the trade debt could not be classified as a current asset, so that the applicant was in breach of the Financial Requirements and the pre-condition for exercise of the discretion to cancel the licence had been met; and, secondly, that there remained the task of considering on the merits whether that discretion but not the discretion to suspend - had been exercised correctly. That was a task for the Member; the Appeal Tribunal had no power under s 146 to conduct a re-hearing so as to reach its own conclusions on the evidence. 11 [14] The Appeal Tribunal s statement, at [11] of its reasons, that the Member was left with a failure to meet the Financial Requirements and no mitigating circumstances, is problematic. As a characterisation of the Member s conclusions, the assertion that there were no mitigating circumstances would be inaccurate; he plainly did consider that the circumstances which had led to the applicant s breach, involving his difficulties with the trade debt, were relevant and mitigatory. If the Appeal Tribunal was there making its own finding that no such circumstances existed, or alternatively was expressing a view as to their lack of significance, it was trespassing into a re-hearing. [15] Similarly, the Appeal Tribunal s remark that the Member s imposition of licence conditions was a clear acknowledgement that absent the earlier suspension he should have confirmed the respondent s decision presents some difficulties. It seems most unlikely that the Member meant to acknowledge any view that the discretion ought to be exercised against the applicant. If the Appeal Tribunal was expressing its own view that he should have exercised the discretion in that way, again it has stepped beyond the confines of its jurisdiction under s 146. In the circumstances of this case, if the Appeal Tribunal wished to act under s 146 it could do so only by returning the matter to the Member for reconsideration. [16] The Appeal Tribunal s approach is puzzling, not only in light of the express statements in this Court s previous judgment, but also the written submissions made to it by the respondent. In those submissions, it was pointed out that consistently with the judgment of this Court, resolution of the legal questions could not determine the outcome of the application and that if the Appeal Tribunal were to decide the matter in the respondent s favour solely on the questions of law, it should return the matter to the Tribunal Member. The Appeal Tribunal s purported exercise of jurisdiction under s 147 [17] An appeal on a mixed question of fact and law under s 147 required leave; the Appeal Tribunal said nothing as to whether, and, if so, why, leave was granted. Nor, unfortunately, did it identify what error of mixed fact and law was the basis for its decision to re-hear the matter under s 147. The respondent s submissions raised what it said were errors of fact and of mixed fact and law, as to whether the 11 Ericson v Queensland Building Services Authority [2013] QCA 391 at [25].

9 9 suspension of the applicant s licence had caused his financial problems and whether the Tribunal Member had properly regarded it as relevant that the applicant had not fallen far below the required asset/liability ratio in the financial requirements. The Appeal Tribunal however, did not address the correctness or otherwise of those submissions and made no finding which could be regarded as one of error of fact or error of fact and law combined. Without identification of error of the kind, there was no occasion under s 147 for it to interfere with the Member s exercise of discretion. Other proposed grounds of appeal [18] The applicant also raised as an error on the part of the Appeal Tribunal its failure in exercising the discretion to take into account the facts, matters and circumstances which had led to the suspension of his licence in the first instance; that is to say, his inability to enforce the trade debt. [19] As a general proposition, it is plain that the circumstances in which a licence-holder comes to breach a condition of his licence so as to enliven a discretion to suspend or cancel under s 48 may well be relevant to how that discretion is exercised. In the present case, the trade debt issue was not irrelevant, although its significance might have been considerably diminished by the fact that there was no evidence before the Appeal Tribunal as to the debt s present status. The Appeal Tribunal s statement, We must ignore the earlier suspension of the licence was correct if it was intended to convey that there could be no review of the suspension decision absent an application in that regard; but not if it suggested that the circumstances which led to the suspension were irrelevant in any exercise of the discretion to cancel the licence. However that may be, it is unnecessary, given my conclusions as to other grounds, to reach any final view on this proposed ground. [20] The applicant proposed as a further ground of appeal that the Appeal Tribunal had erred by not considering the Member s jurisdiction in respect of the licence suspension. This ground concerned the compulsory conference which the parties were directed to attend under s 67 of the Queensland Civil and Administrative Tribunal Act. It depended on an argument that s 69 of the Act, which sets out the purposes of the compulsory conference as including to identify and clarify the issues in dispute and to identify the questions of fact and law to be decided, somehow extended the jurisdiction of the Tribunal to allow it to review any matter that a party raised at the compulsory conference. Since his submissions for the purposes of the conference had sought the lifting of the suspension, the applicant argued, it fell within the Tribunal s jurisdiction. [21] The proposed ground has no merit, and leave should not be granted in respect of it. Section 18 of the Queensland Civil and Administrative Tribunal Act confers jurisdiction on the Tribunal where an application has been made for it to exercise its review jurisdiction for a reviewable decision. Section 33 provides for the form of an application and the time within which it must be made. Section 69 merely identifies the aims of the compulsory conference; the issues and questions to be identified and clarified are those relevant to the decision under review; and that is the decision which is the subject of the application made under s 18, within the time and in the form prescribed by s 33. Conclusions [22] Counsel for the respondent very properly conceded that the Appeal Tribunal had erred in purporting to determine the matter under s 146 and in failing to make the

10 10 basis upon which it proceeded under s 146 and s 147 clear. It should be said that at no point have the errors of the Appeal Tribunal been induced by any submission of the respondent. [23] Leave to appeal must be granted in respect of those grounds in the proposed notice of appeal which assert that the Appeal Tribunal erred by failing to identify the basis on which it was dealing with the matter and failing to reconsider it in accordance with this Court s earlier decision. The appeal should be allowed for the reasons given. Given its history, the matter should be remitted to a differently constituted Appeal Tribunal for reconsideration. The respondent submitted that there would be less risk of further error if the parties were permitted to make oral, as well as written, submissions on the reconsideration. That course seems prudent. Orders [24] Leave to appeal should be granted, the appeal allowed and the matter remitted to a differently constituted Appeal Tribunal of the Queensland Civil and Administrative Tribunal for reconsideration in accordance with these reasons. [25] MULLINS J: I agree with Holmes JA. [26] HENRY J: I have read the reasons of Holmes JA. I agree with those reasons and the orders proposed.

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