The Implications of the QBCC Act on construction projects is broader than you might think
In light of the recent decision in Vickers v Queensland Building and Construction Commission & Ors , the insolvency of a related building company operating in New South Wales can also lead to the cancellation of a Queensland company’s builder’s licence by the Queensland Building and Construction Commission (QBCC). This short article will discuss how the liquidation of an interstate entity conducting building works in New South Wales was considered to be a “construction company” under section 56AC of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act). As a result, the director of the related entity has had his Queensland builders licence cancelled.
Michael Anthony Vickers (Vickers) was the director of two construction companies, Midson Construction (NSW) Pty Ltd (Midson NSW) and Midson Construction (Qld) Pty Ltd (Midson QLD). After Midson NSW was placed into liquidation on 3 January 2018, the QBCC proposed cancellation of Vickers’s building licence. Vickers appealed to the Queensland Court of Appeal, sought declaratory and injunctive relief and judicial review of the QBCC’s Notice of Reasons for cancellation of his builders licence in Queensland.
On appeal, the court considered the following issues:
1. Whether a New South Wales construction company was a “construction company” within the meaning of the QBCC Act; and
2. Whether section 56AC of the QBCC Act was constitutionally valid?
Was Midson NSW a “construction company” according to the QBCC?
Vickers attempted to argue that the definition of a “construction company” pursuant to section 56AC of the QBCC Act could not be extended to a construction company operating in New South Wales. Vickers argued that the definition of a construction company should be restricted to a company that undertakes building works or services on buildings in Queensland, being consistent with the scheme of the QBCC Act.
Construction failure outside of Queensland can result in the cancellation of your licence in Queensland
The Court of Appeal held that failure outside of Queensland can trigger the suspension or cancellation of a builder’s licence to operate in Queensland. The QBCC Act is not limited to the operation of a company conducting “building work or building work services” in Queensland. Even though events of insolvency occur outside of Queensland, the Court stated that it was self-evident that the QBCC Act aims to prevent the risk to Queensland consumers arising from building companies becoming insolvent.
A Queensland building licence holder or builder who is associated with a company which has failed to remain solvent within a different jurisdiction is considered to be no different than a licensee becoming insolvent within Queensland. To conclude, where a company has been liquidated, the Court held that section 56AC of the QBCC Act applies irrespective of which state in Australia the construction company undertakes building work and building work services.
Was section 56AC of the QBCC Act constitutionally valid?
Vickers also argued that the words “in this or another State” in section 56AC of the QBCC Act was too remote from the “peace, welfare and good government” of Queensland, and therefore the provision was constitutionally invalid – the Court disagreed. The Court considered that section 56AC of the QBCC Act does not regulate conduct in another State, but rather recognises the consequences within Queensland for actions or failed construction ventures within another State. Consequences being, a company or person who holds a building licence in Queensland may have it suspended or cancelled.
In essence, the QBCC Act aims to protect Queensland consumers by ensuring that a building licence is cancelled should a building company (or associated entity) have insufficient financial stability. The QBCC also requires licensees of building licences to be a fit and proper person, which may reflect the financial stability of a building company or associated entity.
How can we help as your construction lawyers?
If you are completing building works in both Queensland and New South Wales using different entities, or thinking of expanding your business operations into the southern State, please contact the team at Rostron Carlyle Rojas Lawyers on (07) 3009 8444 or email us at [email protected].
Please note that this article has been prepared by Jakob Mignone, Law Clerk and settled by John Christian, Associate of Rostron Carlyle Rojas Lawyers. Its contents are for general information purposes only and does not by any means constitute legal advice, nor should it be relied upon.