The Queensland Building and Construction Commission Act 1991 (“the Act”) sets out four primary modes of Queensland Building and Construction Commission (“QBCC”) licence cancellation and exclusion. These are:
- As an “excluded individual” or “excluded company”, for being involved in a relevant bankruptcy or insolvency event,[1] and if excluded twice, then as a “permanently excluded individual” or a “permanently excluded company””.[2] Additionally, a company which has an excluded individual as a director, secretary, influential person or nominee is also excluded from holding a QBCC licence.[3]
- As a “convicted company officer”, for being convicted of a relevant offence under the Corporations Act 2001 relating to fraud by an officer or employee of a company.[4] Additionally, a company which has a convicted company officer as a director, secretary, influential person or nominee is also excluded from holding a QBCC licence.[5]
- As a “banned individual”, in respect of Tier 1 Defective Work being carried out.[6] Additionally, a company which has a banned individual as a director, secretary, influential person or nominee is also excluded from holding a QBCC licence.[7]
- As a “disqualified individual”, for accumulating more than 30 demerit points within 3 years.[8] Additionally, a company which has a disqualified individual as a director, secretary, influential person or nominee is also excluded from holding a QBCC licence.[9]
This article briefly outlines the banning provisions for carrying out Tier 1 Defective Work, and the limited nature of merits review of QBCC decisions made under those provisions.
What is “Tier 1 Defective Work”?
The banning provisions apply in respect of seriously defective building work described under the Act as “Tier 1 Defective Work”. Tier 1 Defective Work is defined as being grossly defective building work that falls below the standard reasonably expected of a licensed contractor for the type of building work and either:[10]
- adversely affects the structural performance of a building to the extent that a person could not reasonably be expected to use the building for the purpose for its construction;[11] or
- is likely to cause the death of, or grievous bodily harm to, a person.[12]
What work is caught by the provision?
The work caught by the provision comprises those activities that come under the definition of “building work” in the Act. However the definition of “building work” is extremely broad, and like many terms used in the Act, its scope may not be immediately apparent. It is beyond the scope of this article to set out the various inclusions and exclusions spread across different provisions of the Act.
What is meant by “carrying out” tier 1 defective work?
The term “carry out” when used in the Act is much wide in scope of meaning than the common words used. Under the Act, “carry out” in respect of Tier 1 Defective Work means:[13]
- to carry out the defective work personally; or
- to directly or indirectly, cause the defective work to be carried out; or
- to provide advisory, administrative, management or supervisory services for carrying out the defective work.
The term can be alarmingly wide in scope of application, especially when combined with provisions under the Act which allow the QBCC to issue a notice against an individual in respect of building work “carried out” by a company for which they are a director, secretary, influential person or nominee.
Banning period for Tier 1 Defective Work
The term of ban for which an individual given a notice for Tier 1 Defective Work for the first time is 3 years,[14] and if the individual (whether a licensee or not) is given a second notice regarding Tier 1 Defective Work within 10 years,[15] then the term of the ban is for the life of the individual.[16]
The notice may be in respect of Tier 1 Defective Work carried out by the individual, or by a company for which the individual was a director, secretary, influential person or nominee.[17]
Reviewable decisions in QCAT
The Act limits those decisions that are reviewable in the Queensland Civil and Administrative Tribunal (“QCAT”) by reference to a limited number of specified reviewable decisions.
QBCC process for an individual
First Notice: Tier 1 Defective work (s 67AH)
If the QBCC considers that an individual has carried out Tier 1 Defective Work, then it may give the individual a written notice stating:[18]
- details of the tier 1 defective work;
- the effect of the individual becoming a banned individual for the tier 1 defective work; and
- an invitation to the individual to make written submissions, within a stated period (of at least 28 days[19]), which need to satisfy the QBCC that:
- the individual did not carry out the work stated in the notice; or
- the work carried out by the individual was not tier 1 defective work; or
- the individual exercised reasonable diligence[20] to ensure that the work carried out was not defective.
The Act does not specify any threshold test that must be met by the QBCC before it can issue the notice, and its issue is not a decision reviewable in QCAT.[21]
Providing submissions to the QBCC
The QBCC must consider any submissions made by the individual.[22] It must then advise the individual in writing that no further action will be taken in relation to the written notice, if the QBCC is satisfied that:
- the individual did not carry out the work stated in the notice; or
- the work carried out by the individual was not tier 1 defective work; or
- the individual exercised reasonable diligence to ensure that the work carried out was not defective.[23]
Once again, the Act does not specify any threshold test that must be met by the QBCC for it to be “satisfied”, and it is not a decision reviewable in QCAT.[24]
Second Notice (to a Licensee): Cancellation and not a fit and proper person (s 67AH)
If the QBCC is not satisfied by the submissions of those matters (or if no submissions are received), then the QBCC is required to take the following steps:[25]
- notify the individual of that decision; and
- cancel their licence (if a licensee) and inform them that they are taken not to be a fit and proper person under the Act; and
- inform them regarding their right to apply to QCAT for a review and any right to have the operation of the QBCC decision stayed by QCAT.
An individual given a notice that they are taken not to be a fit and proper person (a banned individual) may apply have the QBCC’s decision reviewed by QCAT.[26]
Second Notice (to a Non-Licensee): Not a fit and proper person (s 67AI)
In the case that the individual is not a licensee, if the QBCC is not satisfied by the submissions of those matters (or if no submissions are received), then it is required to take the following steps:[27]
- notify the individual of that decision;
- inform them that they are taken not to be a fit and proper person under the Act; and
- inform them regarding their right to apply to QCAT for a review and any right to have the operation of the QBCC decision stayed by QCAT.
An individual who is given notice that they are taken not to be a fit and proper person may have the QBCC’s decision reviewed in in the QCAT.[28]
QBCC process for a company
First Notice: Tier 1 Defective work (s 67AJ)
If the QBCC considers that a company has carried out tier 1 defective work, then it may give any individual who was, at the time the work was carried out,[29] a director or secretary of, or an influential person or nominee for, the company, a notice in respect of the tier 1 defective work.[30]
The QBCC notice is required to set out:[31]
- details of the tier 1 defective work;
- the effect of the director, secretary, influential person or nominee becoming a banned individual for the tier 1 defective work; and
- an invitation to the director, secretary, influential person or nominee to make written submissions, within a stated period,[32] to satisfy the QBCC that:
- the company did not carry out the work stated in the notice; or
- the work carried out by the company was not tier 1 defective work; or
- the director, secretary, influential person or nominee exercised reasonable diligence to ensure that the work carried out was not defective; or
- the director, secretary, influential person or nominee was not in a position to influence the conduct of the company’s affairs in relation to the defective work.
The Act does not specify any threshold test that must be met by the QBCC before it can issue the notice, and its issue is not a decision that is reviewable in QCAT.[33]
Further, the QBCC is not restrained under the Act from giving a notice under these provisions to every person who may have been a director, secretary, influential person or nominee of an accused company at the time the work was carried out, whether or not they personally carried out the work or are still associated with that company.
Providing submissions to the QBCC
The Act states that the QBCC must consider any submissions made by the accused director, secretary, influential person or nominee,[34] and must advise them in writing that no further action will be taken in relation to the written notice[35] if after considering their submissions, the QBCC is satisfied that:[36]
- the company did not carry out the work stated in the notice;
- the work carried out by the company was not tier 1 defective work;
- the director, secretary, influential person or nominee exercised reasonable diligence to ensure that the work carried out was not defective; or
- the director, secretary, influential person or nominee was not in a position to influence the conduct of the company’s affairs in relation to the defective work.
The Act does not specify any threshold test that must be met by the QBCC for it to be “satisfied”, and it is not a decision that is reviewable in QCAT.[37]
Second Notice (to licensee): cancellation & not a fit and proper person (s 67AL)
If the QBCC is not satisfied by the submissions of those matters (or if no submissions are received), then in the case of a director, secretary, influential person or nominee was a licensee, the QBCC is required to take the following steps: [38]
- notify the individual of that decision;
- cancel their licence (if a licensee) and inform them that they are taken not to be a fit and proper person under the Act; and
- inform them regarding their right to apply to QCAT for a review and any right to have the operation of the QBCC decision stayed by QCAT.
A director, secretary, influential person or nominee who is given notice that they are taken not to be a fit and proper person may have the QBCC’s decision reviewed in in the QCAT.[39]
Second Notice (to non-licensee): not a fit and proper person (s 67AM)
In the case that the director, secretary, influential person or nominee is not a licensee, if the QBCC is not satisfied by the submissions of those matters (or if no submissions are received), then it is required to take the following steps, namely it must:[40]
- notify the individual of that decision;
- inform them that they are taken not to be a fit and proper person under the Act; and
- inform them regarding their right to apply to QCAT for a review and any right to have the operation of the QBCC decision stayed by QCAT.
A director, secretary, influential person or nominee who is given notice that they are taken not to be a fit and proper person may have the QBCC’s decision reviewed in in the QCAT.[41]
Notice to company regarding a banned individual (s 67AN)
If the QBCC considers that a company that is a licensee has a banned individual as a director, secretary, influential person or nominee,[42] then it must give the company a written notice:[43]
- identifying the relevant individual said to be a director, secretary, influential person or nominee; and
- Stating that the relevant individual must stop being a director, secretary, influential person or nominee of the company within 28 days after the QBCC gives the notice, or else the QBCC must cancel the company’s licence.
If the QBCC must then cancel the company’s licence if the relevant individual does not stop being a director, secretary, influential person or nominee within the 28 days,[44] and is not required to give the usual notice of its reasons in the case of cancellation of the licence.[45]
The QBCC’s decision that a company that is a licensee has a banned individual as a director or secretary, influential person or nominee can be reviewed in in the QCAT.[46] However, likewise as discussed above, the actual decision reviewable by QCAT is very limited.
Limitation on granting a licence to a company
Additionally, the QBCC must not grant a licence to a company for which a banned individual is a director, secretary, influential person or nominee.[47]
Recent Case: Bloomer Constructions (Qld) Pty Ltd v Queensland Building and Construction Commission
The recent case in QCAT of Bloomer Constructions (Qld) Pty Ltd v Queensland Building and Construction Commission demonstrates how technical and tricky these provisions can be.
In July 2016, the QBCC sent a notice to the directors of a building company advising that the QBCC considered that Tier 1 defective work had been carried out.
The company sought to challenge the QBCC decision that Tier 1 defective work had been carried out. As the notice it received was issued to the directors of the company and did not specify which section of the Act it was issued under, the company obtained legal representation and sought review of the decision thought to made under section 67AL of the Act – a reviewable decision which related to notification of the decision to cancel the licence of the director, secretary, influential person and/or nominee of the company and that the person is taken to not be a fit and proper person under the Act.
However the QBCC’s position was that its notice was issued under section 67AJ of the Act, which was merely a step in process leading up to section 67AL,[49] but was not itself a reviewable decision under the Act. QCAT accepted the QBCC’s argument and found that because section 67AJ was not identified under the Act as being reviewable, it did not have any jurisdiction to review QBCC’s decision and had to dismiss the building company’s application for review.
In our view, the case is an example of the confusion caused by these provisions of the Act, and demonstrate just how easy it is to get it wrong.
How Boss Lawyers can help you
This can be a complex area of law which can have a devastating effect on your ability to operate in the Queensland building industry.
Given the serious consequences involved, you should always obtain competent independent legal advice regarding your particular circumstances, the validity of any adverse decision made against you, and the options that may be available to you.
For practical legal advice, support and assistance regarding your particular circumstances, call Boss Lawyers. We are ready to step in and assist you to assert your rights and protect your interests.
David Grant, Lawyer
Citations:
[1] See Part 3A of the QBCC Act 1991.
[2] See Part 3B of the QBCC Act 1991.
[3] QBCC Act s 56AC(6).
[4] See Part 3C of the QBCC Act 1991.
[5] QBCC Act s 63(b).
[6] See Part 3D of the QBCC Act 1991.
[7] QBCC Act s 67AE(2).
[8] See Part 3E of the QBCC Act 1991.
[9] QBCC Act s 67AZC(b).
[10] QBCC Act s 67AB(1)
[11] For example: A building is constructed and due to substandard building work all or a significant part of the building requires demolition or substantial reconstruction.
[12] For example: A fire protection contractor installs a fire protection system that does not meet the requirements of the Building Code of Australia for the system. In the event of fire, the noncompliance is likely to result in the death of, or grievous bodily harm to, a person.
[13] QBCC Act s 67AB(1).
[14] QBCC Act s 67AO(3).
[15] QBCC Act s 67AO(7)(a).
[16] QBCC Act s 67AO(4).
[17] QBCC Act s 67AO(8).
[18] QBCC Act s 67AF(1) and (2).
[19] QBCC Act s 67AF(3).
[20] The following example of “reasonable diligence” is given in the Act: An individual carried out tier 1 defective work in relation to the footings of a house. However, the individual had reasonably relied on plans for the footings drawn by an engineer and carried out the work in accordance with the plans. It was the reliance on the plans that caused the tier 1 defective work.
[21] This is because it is not listed in the QBCC Act as a reviewable decision.
[22] QBCC Act s 67AF(4).
[23] QBCC Act s 67AG.
[24] This is because it is not listed in the QBCC Act as a reviewable decision.
[25] QBCC Actr s 67AH(3).
[26] See QBCC Act s 86(1)(n) identifies s 67AH as being reviewable in QCAT.
[27] QBCC Act s 67AI(1) to (3).
[28] See QBCC Act s 86(1)(n) identifies s 67AMI as being reviewable in QCAT.
[29] Note: a person who is no longer involved with the company when issued with the notice will still be caught by the provision.
[30] QBCC Act s 67AJ(1) and (2).
[31] QBCC Act s 67AJ
[32] At least 28 days: QBCC Act s 67AJ (3).
[33] This is because it is not listed in the QBCC Act as a reviewable decision.
[34] QBCC Act 67AJ(4).
[35] QBCC Act s 67AK(2).
[36] QBCC Act s 67AK(1). This decision is not listed as being reviewable in QCAT.
[37] This is because it is not listed in the QBCC Act as a reviewable decision.
[38] QBCC Act s 67AL(3).
[39] See QBCC Act s 86(1)(n) identifies s 67AL as being reviewable in QCAT.
[40] QBCC Act s 67AM(3)
[41] See QBCC Act s 86(1)(n) identifies s 67AM as being reviewable in QCAT.
[42] QBCC Act s 67AN(1).
[43] QBCC Act s 67AN(2).
[44] QBCC Act 67AN(3).
[45] See QBCC Act s 49.
[46] QBCC Act s 86(1)(o).
[47] QBCC Act s 67AE(b).
[48] Bloomer Constructions (Qld) Pty Ltd v Queensland Building and Construction Commission [2016] QCAT 374.
[49] I.e., The step related to seeking of submissions prior to the QBCC making a decision whether or not the individual is a banned individual under section 67AL of the Act.