Vickers v Queensland Building and Construction Commission & Ors [2019] QCA 66

SUPREME COURT OF QUEENSLAND

CITATION: Vickers v Queensland Building and Construction Commission & Ors [2019] QCA 66

PARTIES: MICHAEL ANTHONY VICKERS (appellant) v QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (first respondent) BRETT BASSETT AS THE COMMISSIONER OF THE QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION (second respondent) MARK E WILSON (third respondent) ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND (intervener)

FILE NO/S: Appeal No 10283 of 2018 / SC No 3696 of 2018

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal

ORIGINATING COURT: Supreme Court at Brisbane – [2018] QSC 199 (Crow J)

DELIVERED ON: 16 April 2019

DELIVERED AT: Brisbane

HEARING DATE: 21 February 2019

JUDGES: Holmes CJ and Gotterson and Morrison JJA

ORDERS: The appeal is dismissed.The appellant is to pay the respondents’ costs.

CATCHWORDS: STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – GENERAL APPROACHES TO INTERPRETATION – PURPOSIVE APPROACH – GENERAL PRINCIPLES – where the appellant was the director of two construction companies, one in Queensland and one in New South Wales – where the New South Wales company was placed into liquidation and the appellant was sent a Notice of Reasons for a proposed cancellation of his builder’s licence, pursuant to s 56AF and s 56AG of the Queensland Building and Construction Commission Act 1991 (Qld) – where the appellant contends that the company was not a construction company for the purposes of s 56AC(7) of 2the Queensland Building and Construction Commission Act1991 (Qld) – where it is submitted that the words of the statute confine the definition of a “construction company” to a company which actually undertakes activities with respect to “buildings” constructed on land within the State of Queensland – where it is contended that ss 9 and 35 of the Acts Interpretation Act 1954 (Qld) operate to confine the carrying out of building work and building work services to activities conducted in Queensland – where it was submitted by the Queensland Building and Construction Commission contended that the purpose of Part 3A of the Queensland Building and Construction Commission Act 1991 (Qld) was the protection of the public – where the purpose of the legislation is stated to be to prevent the failed companies re-emerging as “phoenix” companies following cancellation of a licence – whether the definition of a construction company in New South Wales is covered under the Queensland Building and Construction Commission Act 1991 (Qld) / CONSTITUTIONAL LAW – IMPERIAL, COLONIAL, STATE AND COMMONWEALTH CONSTITUTIONAL RELATIONSHIPS – GENERALLY – SOVEREIGNTY – PLENARY NATURE OF POWERS – where the appellant contends that that s 56AC of the Queensland Building and Construction Commission Act 1991 (Qld) is constitutionally invalid – where the learned primary judge concluded that s 56AC of the Queensland Building and Construction Commission Act 1991 (Qld) was constitutionally valid – where the appellant contended that the addition of the words “in this or another State” in s 56AC(7) of the Queensland Building and Construction Commission Act 1991 (Qld) was too remote from the “peace, welfare and good government” of Queensland to be within power – whether there is a sufficient connection between the subject matter of the legislation and the State of Queensland / Acts Interpretation Act 1954 (Qld), s 9, s 35, s 35(1)(b) / Australia Act 1986 (Cth), s 2 / Constitution Act 1867 (Qld), s 2 / Constitution of Queensland Act 2001 (Qld), s 8, s 51 / Queensland Building and Construction Commission Act 1991 (Qld), s 56AC, s 56AC(7), s 56AG, s 56AF / Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12, followed / Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, followed / Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1; [1988] HCA 55, cited / Williams v Stone Homes Pty Ltd [2014] QDC 64, cited

COUNSEL: B E Codd for the appellant / S E Seefeld for the respondent / P J Dunning QC SG, with K J E Blore, for the Attorney-General for the State of Queensland, intervening

SOLICITORS: Axia Litigation Lawyers Pty Ltd for the appellant / QBCC Legal Services for the respondent / Crown Law for the intervenor

1. HOLMES CJ: I have had the advantage of reading the reasons of Morrison JA and agree with his Honour’s conclusions and the orders proposed.

2. GOTTERSON JA: I agree with the orders proposed by Morrison JA and with the reasons given by his Honour.

3. MORRISON JA: The appellant is the director of two construction companies, Midson Construction (NSW) Pty Ltd and Midson Constructions (Qld) Pty Ltd.¹

4. Midson NSW was placed into liquidation on 3 January 2018. As a result the appellant was sent a Notice of Reasons for a proposed cancellation of his builder’s licence, pursuant to s 56AF and s 56AG of the Queensland Building and Construction Commission Act 1991 (Qld).²

5. The appellant and Midson Qld sought various forms of relief against the proposed cancellation of the builder’s licence, including declaratory and injunctive relief, and a judicial review. It also included proceedings in the Queensland Civil and Administrative Tribunal, seeking a merit review of the decision to give the notice.

6. The respondents³ filed a counter-application seeking to dismiss the proceedings under the Uniform Civil Procedure Rules 1999 (Qld) and the Judicial Review Act 1991 (Qld). In response, the appellant and Midson Qld alleged that some of the provisions of the QBCC Act were unconstitutional.

7. Eventually, after notices were given pursuant to s 78B of the Judiciary Act 1903 (Cth), the Attorney-General for the State of Queensland intervened.

8. When the proceedings came before the learned primary judge there were three questions in issue, only two of which were maintained on the appeal to this Court. They were:(a)was Midson NSW a “construction company” within the meaning of s 56AC(7) of the QBCC Act; and(b)is s 56AC of the QBCC Act constitutionally invalid.

9. The learned primary judge concluded that Midson NSW was a construction company within the meaning of s 56AC(7), and that s 56AC was constitutionally valid. Those findings are challenged on the appeal.

The statutory provisions

10. There are a series of provisions which are relevant to the resolution of the issues on the appeal, from the QBCC Act, the Acts Interpretation Act 1954 (Qld)⁴ and the Constitution of Queensland 2001 (Qld).

11. The resolution of the issues on appeal centres primarily on s 56AC of the QBCC Act, which provides:

“56AC Excluded individuals and excluded companies

(1)This section applies to an individual if—

(a)the individual takes advantage of the laws of bankruptcy or becomes bankrupt (relevant bankruptcy event); and

(b)3 years have not elapsed since the relevant bankruptcy event happened.

(2)This section also applies to an individual if—

(a)a construction company, for the benefit of a creditor—

(i)has a provisional liquidator, liquidator, administrator or controller appointed; or

(ii)is wound up, or is ordered to be wound up; and

(b)3 years have not elapsed since the event mentioned in paragraph (a)(i) or (ii) (relevant company event) happened; and

(c)the individual—

(i)was, when the relevant company event happened, a director or secretary of, or an influential person for, the construction company; or

(ii)was, within the period of 2 years immediately before the relevant company event happened, a director or secretary of, or an influential person for, the construction company.

(3)If this section applies to an individual because of subsection (1), the individual is an excluded individual for the relevant bankruptcy event.

(4)If this section applies to an individual because of subsection (2), the individual is an excluded individual for the relevant company event unless the individual can satisfy the commissioner that at the time the individual ceased to be an influential person, director or secretary for the construction company the company was solvent.

(5)An excluded individual for a relevant event does not also become an excluded individual for another relevant event if the commission is satisfied that both events are consequences flowing from what is, in substance, the one set of circumstances.

(6)A company is an excluded company if an individual who is a director or secretary of, or an influential person for, the construction company is an excluded individual for a relevant event.

(7)In this section—

construction company—

(a)means a company that directly or indirectly carries out building work or building work services in this or another State; and

(b)includes a company that, within 2 years immediately before a relevant company event for the company, directly or indirectly carries out building work or building work services in this or another State.”

12. The objects of the QBCC Act are relevant to the construction that should be placed upon its provisions. Section 3 of that Act relevantly provides:

“3 Objects of Act

The objects of this Act are—

(a)to regulate the building industry—

(i) to ensure the maintenance of proper standards in the industry; and

(ii)to achieve a reasonable balance between the interests of building contractors and consumers; and

(b)…

(c)…

(d)to regulate domestic building contracts to achieve a reasonable balance between the interests of building contractors and building owners; …”

13. Schedule 2 of the QBCC Act also contains a number of definitions which are relevant to the issues raised on appeal. Those definitions are as follows:

“building work means—

(a)the erection or construction of a building; or

(b)the renovation, alteration, extension, improvement or repair of a building; or

(c)the provision of lighting, heating, ventilation, air conditioning, water supply, sewerage or drainage in connection with a building; or

(e)any site work (including the construction of retaining structures) related to work of a kind referred to above; or

(f)the preparation of plans or specifications for the performance of building work; or

(fa)contract administration carried out by a person in relation to the construction of a building designed by the person; or

(g)fire protection work; or

(h)carrying out site testing and classification in preparation for the erection or construction of a building on the site; or

(i)carrying out a completed building inspection; or

(j)the inspection or investigation of a building, and the provision of advice or a report, for the following—

(i) termite management systems for the building;

(ii)termite infestation in the building;

but does not include work of a kind excluded by regulation from the ambit of this definition.

building—

(a)generally, includes any fixed structure; or

Examples of a fixed structure—

a fence other than a temporary fence

a water tank connected to the stormwater system for a building

an in-ground swimming pool or an above-ground pool fixed to the ground

(b)for part 6AA, see section 74AA; or

(c)for schedule 1B, see schedule 1B, section 1.

building work services means 1 or more of the following for building work—

(a)administration services;

(b)advisory services;

(c)management services;

(d)supervisory services.

carry out, for building work (other than for part 4A) means any of the following—

(a)carry out the work personally;

(b)directly or indirectly cause the work to be carried out;

(c)provide building work services for the work.”

14. The AIA contains a number of provisions which bear upon the interpretation of the QBCC Act insofar as it refers to the State of Queensland. It also contains provisions relevant to the interpretation of the statute in relation to Parliament’s legislative power.

15. Dealing first with the references to the State of Queensland, s 35 of the AIA relevantly provides:

“35 References to Queensland to be implied

(1)In an Act—

(a)a reference to an officer, office or entity is a reference to such an officer, office or entity in and for Queensland; and

(b)a reference to a locality, jurisdiction or other thing is a reference to such a locality, jurisdiction or other thing in and of Queensland.”

16. With reference to the constitutional invalidity issue, the AIA relevantly provides in s 9:

“9 Interpretation of Act in relation to Parliament’s legislative power

(1)An Act is to be interpreted as operating—

(a)to the full extent of, but not to exceed, Parliament’s legislative power; and

(b)distributively.

…

(2)Without limiting subsection (1), if a provision of an Act would, apart from this section, be interpreted as exceeding power—

(a)the provision is valid to the extent to which it does not exceed power; and

(b)the remainder of the Act is not affected.”

17. The power of the Queensland Parliament to enact statutes is contained in s 2 of the Constitution Act 1867 (Qld), which provides:

“2 Legislative Assembly constituted

Within the said Colony of Queensland Her Majesty shall have power by and with the advice and consent of the said Assembly to make laws for the peace welfare and good government of the colony in all cases whatsoever.”

18. The Constitution of Queensland contains provisions relating to the power of the State of Queensland in terms of lawmaking, and whether it can do so beyond the State. Section 8 provides:

“8 Law-making power

The Constitution Act 1867, section 2 provides for law-making power in Queensland.”

19. Section 51 of the Constitution then relevantly provides:

“51 Powers of the State

(1)The Executive Government of the State of Queensland (the State) has all the powers, and the legal capacity, of an individual.

(2)The State may exercise its powers—

(a)inside and outside Queensland; and

(b)inside and outside Australia.”

Legal Principles

20. As to the proper approach to construction of a statutory provision, the principles are made clear by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority:⁵

“[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.

[70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court ‘to determine which is the leading provision and which the subordinate provision, and which must give way to the other’. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

[71] Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was ‘a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent.’

…

[78] However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. …”.

21. The principles in Project Blue Sky were affirmed in Lacey v Atttorney-General (Qld),⁶ where the plurality said, concerning the applicable rules of statutory construction:

“[44] The application of the rules will properly involve the identification of a statutory purpose, which may appear from an express statement in the relevant statute, by inference from its terms and by appropriate reference to extrinsic materials. The purpose of a statute is not something which exists outside the statute. It resides in its text and structure, albeit it may be identified by reference to common law and statutory rules of construction.

[45] In this context, reference should be made to s 14A(1) of the Acts Interpretation Act 1954 (Qld), which requires a purposive construction of Queensland statutes and is in the following terms:

“Interpretation best achieving Act’s purpose

(1)In the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation.”

The term ‘purpose’ is defined to include ‘policy objective’. …

[46] Section 14A requires preference to be given to that interpretation which will best achieve the purpose of the Act. ... Assuming that s 14A is not intended to displace common law rules outside its sphere of operation, the interpretations from which the selection which it mandates is to be made must be those which comply with the requirements of those rules, none of which is antagonistic to purposive construction.”

22. In Red Hill Iron Ltd v API Management Pty Ltd⁷ Beech J referred to the proposition that definition clauses do not have operative effect:

“[127] As mentioned earlier in section 2, both the Farm-in Agreement and Joint Venture Agreement make extensive use of defined terms. Definitions do not have substantive effect. They are not to be construed in isolation from the operative provision(s) in which a defined term is used. Rather, the operative provision is to be read by inserting the definition into the provision: Kelly v The Queen [2004] HCA 12; (2004) 218 CLR 216 [84], [103]; Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue [2011] WASCA 228 [62], [150], [218]. Those cases dealt with statutory interpretation; the same principle applies in interpreting contracts: Vincent Nominees Pty Ltd v Western Australian Planning Commission [25].”

23. In Watson v Scott⁸this Court referred to Red Hill and set out the established principles that apply when construing clauses affected by definition clauses:

“[50] The important part of that passage is the rule of construction that “the operative provision is to be read by inserting the definition into the provision”. That was referred to by McHugh J in Kelly v The Queen:

“[84] However, a legislative definition is not or, at all events, should not be framed as a substantive enactment. In Gibb v Federal Commissioner of Taxation, Barwick CJ, McTiernan and Taylor JJ stated:

“The function of a definition clause in a statute is merely to indicate that when particular words or expressions the subject of definition, are found in the substantive part of the statute under consideration, they are to be understood in the defined sense – or are to be taken to include certain things which, but for the definition, they would not include. ... [Definition] clauses are ... no more than an aid to the construction of the statute and do not operate in any other way.

(emphasis added).”

…

“[103] As I earlier pointed out, the function of a definition is not to enact substantive law. It is to provide aid in construing the statute. Nothing is more likely to defeat the intention of the legislature than to give a definition a narrow, literal meaning and then use that meaning to negate the evident policy or purpose of a substantive enactment. There is, of course, always a question whether the definition is expressly or impliedly excluded. But once it is clear that the definition applies, the better – I think the only proper – course is to read the words of the definition into the substantive enactment and then construe the substantive enactment – in its extended or confined sense – in its context and bearing in mind its purpose and the mischief that it was designed to overcome. To construe the definition before its text has been inserted into the fabric of the substantive enactment invites error as to the meaning of the substantive enactment.”

24. This Court has adopted the principle in Kelly v The Queen that the proper course of statutory construction is to read the words of a definition into the substantive enactment and then construe the substantive enactment.⁹

Submissions

25. What follows is a synopsis of the main contentions advanced. For the purpose of resolving the issues on appeal it is unnecessary to go further.

26. The appellant’s central contention was that Midson NSW was not a “construction company” for the purposes of s 56AC(7) of the QBCC Act. The first point made was that when the definition of “construction company” refers to “a company that directly or indirectly carries out building work or building work services in this or another State”, the words “in this or another State” can only relate to “building work” and “building work services” carried out for a “building” constructed in Queensland. Thus, it was contended that the definition of “construction company” in s 56AC(7) was “conditioned” by the defined meanings of each of those terms in schedule 2 of the QBCC Act.¹⁰

Appellant’s submissions

27. The contention was that the words in s 56AC(7) confine the definition of a “construction company” to a company which actually undertakes activities with respect to “buildings” constructed on land within the State of Queensland.¹¹

28. It was also contended that s 9 and s 35 of the AIA operate to confine the carrying out of building work and building work services to activities conducted in Queensland. It was argued that if the definition of “building” was not confined to a structure in Queensland, the QBCC Act would operate to regulate “building work” and “building work services” regardless of the location of the building being constructed. Such an outcome, it was submitted, was absurd, but obviated by the strong presumption against extra territorial regulation of another jurisdiction.¹²

29. It was contended that the inclusion of the words “in this or another State”, if limited to the carrying out of building work or building work services on buildings only constructed in Queensland, was logical and consistent with the scheme of the QBCC Act.

30. The appellant’s contentions pointed to the fact that Part 3A of the QBCC Act provided for the cancellation of a licence on 28 days’ notice,¹³ and that cancellation would require the cessation of building work and prevent the continuation of existing contracts. Such adverse consequences to consumers were inconsistent with the consumer protection objects of the QBCC Act.

31. It was contended that if “building” is not confined to a structure constructed in Queensland, and the “building work” and “building work services” are contingent upon the meaning of “building”, the words “in this or another State” in s 56AC(7) would not have been necessary.¹⁴

32. In relation to the constitutional invalidity issue, the appellant contended that the addition of the words “in this or another State” in s 56AC(7) was too remote from the “peace, welfare and good government” of Queensland to be within power. The cancellation of a licence by legislation is not, at law, a punishment.¹⁵ However, the real question was whether there was a real connection between the subject matter and the “peace, welfare and good government” of Queensland. In a variety of ways it was contended that the statute overreached itself when providing for the cancellation of a person’s licence just because a company became insolvent, when that person may not have had any association with the company for up to two years prior to the event. In that two years the person may have had no say in their removal as a director and no involvement in the management of the company. Yet, it was submitted, s 56AC(7) purported to empower cancellation of such a person’s licence.

Commission’s submissions

34. The Commission contended that the learned primary judge was correct in construing s 56AC(7) as not being limited to a company carrying out building work or building work services on buildings physically located in Queensland. The plain and ordinary meaning of the words “in this or another State” make that clear. In other words, a “construction company” was a company that carried out building work or building work services in Queensland, or alternatively carried out those things in another State. None of the definitions in Schedule 2 of the QBCC Act expressly stated that they only applied to a building physically located in Queensland.

35. The Commission contended that s 35(1)(b) of the AIA did not apply because the legislation disclosed a contrary intention: s 4 and s 32A of the AIA applied. The words “in this or another State” in s 56AC(7) disclosed such a contrary intention.

36. The Commission also distinguished the authorities relied upon by the appellant, contending that none of them considered whether the definition of “building” was limited to a structure fixed to land in Queensland, and none of them considered s 56AC.

37. The Commission contended that the purpose of Part 3A of the QBCC Act was protection of the public, and reference to the second reading speech and explanatory notes concerning the introduction of the words “in this or another State” revealed that the definition of “construction company” was intended to include a company operating outside Queensland, and was designed to prevent failed companies re-emerging as a “phoenix” companies following cancellation of a licence. That met the purpose of public protection in Part 3A of the Act.

38. On the constitutional invalidity point it was contended that s 56AC does not regulate conduct in another State, but concerned the ability of a person to hold a building licence issued in Queensland by the Commission. That was within the “peace, welfare and good government” of Queensland, and a valid exercise of power. It was contended that Part 3A of the QBCC Act provided that if a company (whether in Queensland or another State) has a liquidator appointed, then the individuals who were directors or secretaries may be excluded from holding a Queensland licence. All that the QBCC Act did was to regulate one aspect of granting licences in Queensland.

Attorney-General’s submissions

39. The Attorney-General for Queensland contended that the learned primary judge was correct in construing s 56AC(7) as applying to a company operating outside Queensland. The presumption in s 35 of the AIA was displaced by the words “in this or another State”. Those words displaced the presumption for the entire concept of “building work” as expressed in s 56AC(7).

40. Further, it was contended that to construe “construction company” in s 56AC(7) as only applying to interstate companies that carry out “building work” or “building work services” for a “building” in Queensland, would be to adopt a construction that does not achieve the legislation’s evident purpose. That construction did not deal with the risk arising from Queensland builders being associated with insolvent interstate companies that do not construct buildings in Queensland.

41. It was contended that there was no constitutional invalidity to be found in s 56AC(7). The substantive provisions that engaged that definition bore a sufficient nexus to Queensland. The Queensland Parliament had power to enact legislation with extraterritorial operation provided there is a sufficient connection between the subject matter of the legislation and the State.¹⁶ The test is to be “liberally applied” and “even a remote or general connection” will suffice.¹⁷ There was no element of proportionality necessary.¹⁸

42. It was contended that this was not a case where the connection was so insufficient as to result in invalidity, because the substantive provisions of Part 3A of the QBCC Act, which engaged the definition in s 56AC(7), were concerned with the exclusion of certain individuals and corporations who are insolvent, or associated with insolvency, from holding a builder’s licence in Queensland. Those provisions do not select interstate insolvency as the hinge¹⁹ about which they turn, but rather insolvency wherever it occurs in Australia. It was contended that the extra territorial element was therefore, at most, slight and indirect.

Discussion

43. As set out above the principles applicable to statutory construction require a consideration of the text of the relevant provision, in the context of the whole statute. It is therefore necessary to examine the QBCC Act in some detail.

Statutory Context

44. The long title of the QBCC Act is “An Act to regulate the building industry”. The objects are set out in s 3, relevantly to regulate the building industry to ensure the maintenance of proper standards in the industry, and to achieve a reasonable balance between the interests of building contractors and consumers: s 3(a).

45. The Act sets up the Queensland Building and Construction Commission, providing for it to “administer this Act and further its objects”: s 7(a). For that purpose the Commission has all the powers of an individual, and “the powers given to it under an Act”: s 8.

46. Provision is made for the appointment of the Commissioner, who is responsible for various matters, including “administration of the licensing system established by this Act” and “taking disciplinary and other proceedings under this Act”: s 20J. For the purpose of carrying out its functions, the Commission may enter into an information-sharing arrangement with a relevant agency, for the purpose of sharing or exchanging information that helps the Commission perform its functions: s 28B. For that purpose a relevant agency is not confined to an agency within Queensland, but includes “an agency of the Commonwealth, or another State…”: s 28B(4).

47. Part 3 of the QBCC Act deals with licensing, and specifically licences that can be issued authorising the holder to carry out one or more classes of building work: s 30(1). The entitlement to a licence is governed by s 31. A person is entitled to a contractor’s licence if the Commission is satisfied of various matters. They include: (i) the applicant is a fit and proper person to hold a licence; (ii) the applicant satisfies the relevant financial requirements stated in the Board’s policies; and (iii) the applicant is not an excluded individual for a relevant event: s 31(1). Similar provisions are made in respect of a company, and its entitlement to a contractor’s licence: s 31(2). Once again, the Commission has to be satisfied that the directors of the company are fit and proper persons and that the company is not an excluded company. Section 31(3) provides:

“(3) In deciding whether a particular person is a fit and proper person to hold a contractor’s licence or to exercise control or influence over a company that holds a contractor’s licence, the Commission may have regard to-

(a)commercial and other dealings in which the person has been involved and the standard of honesty and integrity demonstrated in those dealings; and

(b)any failure by that person to carry out commercial or statutory obligations and the reasons for the failure;

…”

48. There is no entitlement to a contractor’s licence if the person seeking the licence either carries on, or intends to carry on business under the licence in partnership with someone who is either an excluded individual, or an excluded company: s 31A. For each of the terms “excluded company” or “excluded individual” Schedule 2 of the QBCC Act refers back to s 56AC.

49. The pattern of the Part 3 sections reviewed so far are then repeated in relation to various categories of licence, such as a nominee supervisor’s licence or a site supervisor’s licence.

50. Division 3 of Part 3 deals with the grant of a licence. Provision is made that there must be an application for the licence, and the applicant must, at the request of the Commission, provide further information or evidence as the Commission may require. Then s 33(3) provides that in deciding whether to grant a licence the Commission may make “enquiries and investigations that are reasonable and appropriate in the circumstances”, including “carrying out checks with the Australian Securities and Investment Commission, bankruptcy registers and credit bureaus”: s 33(3)(b).

51. Division 4 of Part 3 then deals with the conditions that may be imposed upon the grant of a licence. The power to impose conditions is broad, being “such conditions as the Commission considers appropriate: s 35(1). Conditions can be imposed subsequently to the grant of a licence, for example if the Commission has reason to believe that the licensee “may have insufficient financial resources to meet possible liabilities in relation to building work”: s 36(1)(a). Here, as elsewhere, the QBCC Act requires notification to a licensee of the proposed condition, and a process by which the licensee might make representations.

52. Division 7 of Part 3 then makes it an offence to carry out building work unless the person holds a contractor’s licence: s 42(1). Similar provision is made to prevent a company carrying out building work unless that company, as licensee, has a nominee who holds a contractor’s licence or other appropriate licence: s 42B.

53. The QBCC Act includes provisions obliging a party to a building contract to avoid causing significant financial loss by reason of a failure to comply with the contract: s 42E. Where the licensed contractor is a company, both the company and the company’s nominee have a statutory obligation to ensure that the building work is carried out under personal supervision by nominated individuals: s 43(1). Similar provision is made in respect of the case where the licensed contractor is an individual: s 43(2). Like provisions are made governing the requirement for work to be adequately supervised: s 43A to s 43C.

54. Division 8 of Part 3 then makes provision for the situation where work is carried out by an owner-builder.

“(c) the licensee is convicted of an indictable offence or an offence that, if committed in Queensland, would be an indictable offence;”

56. Further, if the Commission becomes aware of the existence of facts that, having regard to provisions requiring it to be satisfied that an applicant for a licence is a fit and proper person, would allow the Commission to refuse to issue the licence, or would have allowed the Commission to refuse the licence originally, that provides a ground for suspension or cancellation: s 48(1)(j). A procedure is provided for cancellation or suspension, entailing the giving of notice and then receipt of written representations: s 49. However, power is given to the Commission to immediately suspend a licence if the Commission reasonably believes there is a real likelihood that serious financial loss will happen to consumers if the licence is not immediately suspended: s 49A(1)(c). In that situation the licensee can still make representations, but that is in respect of the lifting of the suspension, not whether it should be imposed in the first instance.

57. The importance of a licensee’s compliance with the relevant financial requirements is highlighted by Division 9A of Part 3 which provides for monitoring in that respect. Provision is made for the Commission to audit licensees, and compel the production of financial records: s 50A and s 50C.

58. Division 10 of Part 3 creates a number of offences in relation to the misuse of a licence or the carrying out of building work by an unlicensed person. Once again, the importance of satisfying financial requirements imposed by the Commission are highlighted: s 53A and s 53B. And, the importance of not carrying on business in partnership with either an excluded individual or an excluded company is recognised: s 56.

59. There are a number of provisions in the QBCC Act where provision is made for a consequence that depends upon statutes beyond the borders of the State of Queensland. One such example is in s 63, which prohibits the Commission from granting a licence to a person “if the person is … a convicted company officer …”. Schedule 2 defines “convicted company officer” to mean “a person who has been convicted of an offence under the Corporations Act 2001 (Cth), s 596(1)(b) or (c)”. There is nothing on the face of s 63 which suggests that the conviction for the offence under the Corporations Act had to be an offence committed within Queensland.

60. The QBCC Act contains detailed provisions which exemplify the level of control granted to the Commission over building work and those who perform it. For example, Part 3D deals with banned individuals, that is those who are given a notice under that Part, that they are taken not to be a fit and proper person for Part 3 division 2. Part 3D prohibits the grant of a licence to a banned individual, or a company for which the banned individual is a director: s 67AE. A detailed procedure is provided for dealing with the licence of such a person, including the cancellation of the licence. Part 3E then contains detailed provisions dealing with disqualified individuals meaning an individual who was given a notice that they are taken not to be fit and proper because of convictions for a demerit offence or a judgment for an unsatisfied judgment debt.

“67AAA Meaning of building contract

(1)For this part, a building contract means a contract or other arrangement for carrying out building work in Queensland but does not include—

(a)a domestic building contract; or

(b)a contract exclusively for construction work that is not building work.

(2)In this section—

construction work see the Building Industry Fairness (Security of Payment) Act 2017, section 65.”

62. The noteworthy aspect of s 67AAA is that it confines the contract to one for carrying out building work “in Queensland”. That stands in stark contrast to the terms of s 56AC(7).

63. Part 5 of the QBCC Act then deals with the statutory insurance scheme and Part 6 with rectification of building work. Part 6AA then makes provision in respect of building products as opposed to building work. It is here that the second example of the Act providing for a consequence depends upon events occurring outside the State of Queensland. Section 74AH is one of the provisions dealing with products that are the subject of a recall order made under s 74AW. Section 74AH(2) provides that a person “must not supply, or install in a building, a building product the person knows, or ought reasonably to know, is the subject of a recall order or a corresponding recall order”. The “corresponding recall order” is defined to mean an order “under a law of another state providing for the recall of a building product from use”: s 74AH(6). Thus, the trigger for preventing the installation of the product is a recall order issued outside Queensland.

64. Part 6A of the QBCC Act deals with disciplinary proceedings. Of some significance in the current context is s 74A which gives power to the Commission to investigate grounds for taking disciplinary action:

“(1) The Commission may investigate whether proper grounds exist for taking disciplinary action against a person under this part.

(2)…

(3)Also, for an investigation under this part, the Commission may use information obtained under this Act from any entity, including, for example –

(a)a department or agency of the Commonwealth or a State;

…”

65. As can be seen, s 74A(3) enables the Commission to make use of information relevant to disciplinary action against a person, but from sources outside Queensland. That is relevant because under s 74B(1) some of the grounds which exist for taking disciplinary action include if the licensee is convicted of an indictable offence, or is bankrupt or insolvent: s 74B(1)(b) and (e). In neither case are they matters confined to or occurring in the State of Queensland.

66. A further example of extraterritorial connection appears in s 106B, dealing with the power to seize non-conforming building products. That section provides that an investigator may seize a building product if the investigator reasonably believes that the product is intended to be used but is non-conforming, and the subject of a “corresponding recall order”: s 106B(1)(b). A “corresponding recall order” is defined to mean an order “under a law of another State providing for the recall of a building product from use”: s 106B(2).

67. In that context one finds Part 3A of the QBCC Act, which makes provision in respect of excluded individuals and excluded companies. It is in that part of the Act that s 56AC is found. The seriousness with which the Act treats excluded individuals and excluded companies is shown by s 56AE, which prohibits the grant of a licence to a person if that person is an excluded individual or an excluded company. If the Commission considers that the licensee is an excluded individual or an excluded company, written notice must be given as to why the Commission has formed that view, and then the individual may make a submission in reply, but the Commission is obliged to cancel the licence if, after considering the submissions, it remains of the view that the individual is excluded or the company is excluded: s 56AF and s 56AG. Provision is also made for a review of the Commission’s opinion in that regard: s 56AH.

68. When considering the proper construction of s 56AC(7), it is appropriate to note a number of things about Part 3A of the QBCC Act.

69. Section 56AB deals with the operation of Part 3A, providing that Part 3A “has effect despite anything in part 3”. Part 3 is the section of the QBCC Act which deals, in great detail, with the matter of licensing. As noted earlier, the provisions in Part 3 deal with the various classes of licences, the entitlement to a licence, the grant and conditions of a licence, the requirements that one must meet in order to be licensed, and the cancellation, suspension or surrender of a licence. The effect of s 56AB is that the excluded individuals and excluded companies provisions in Part 3A override everything otherwise to do with licensing.

70. The second thing to note is that Part 3 of the QBCC Act deals with all of the matters concerning a person’s entitlement to a licence to carry out building work or to supervise building work. The licensing system is one which operates to regulate the building industry in Queensland and the licences which are issued are in respect of building work which is carried out in Queensland.

“(2) This section also applies to an individual if—

(a)a company that directly or indirectly carries out building work or building work services in this or another State, for the benefit of a creditor—

(i)…

(ii)is wound up, or is ordered to be wound up; and

(b)3 years have not elapsed since the event mentioned in paragraph (a)(i) or (ii) (relevant company event) happened; and

(c)the individual—

(i)was, when the relevant company event happened, a director or secretary of … [that company]; or

(ii)was, within the period of 2 years immediately before the relevant company event happened, a director or secretary of … [that company].”

77. The focus of s 56AC(2) is that a construction company has gone into liquidation,²¹ three years have not passed since that occurred, and the individual in question was a director or secretary of that company either at the time it went into liquidation or two years prior to that time. Thus it can be seen that the intended focus of s 56AC(2) is on (relevantly) a person who is or has been a director of a failed company which carried out building work or building work services.

78. I pause to note a contention advanced by the Attorney-General. It was that s 56AC was a definitional section²² and that the definition of “construction company” in s 56AC(7) “feeds into the definition of ‘excluded individual’ in s 56AC(2) and (4)”. In my respectful view, that approach is an error. True it is that Schedule 2 contains definitions of “excluded individual” and “excluded company” that refer back to s 56AC(3), (4) and (6). However, s 56AC(1) and (2) are, in my view, substantive provisions that specify the circumstances in which s 56AC applies to an individual, and if they apply s 56AC(3) and (4) are substantive provisions that declare the status of the person as an excluded individual. Similarly s 56AC(6) declares the status of a company as an excluded company. That this is the effect of those provisions, and that they are not merely definitional, is seen from s 56AE which prohibits the grant of a licence to a person or company with that status. And reference to what was said in Kelly v The Queen²³ adopting a passage from Gibb v Federal Commissioner of Taxation (see paragraph [23] above) serves to remind one of the nature of a definition clause:

“The function of a definition clause in a statute is merely to indicate that when particular words or expressions the subject of definition, are found in the substantive part of the statute under consideration, they are to be understood in the defined sense – or are to be taken to include certain things which, but for the definition, they would not include.”

79. The definition of “construction company” in s 56AC(7) uses the express words “in this or another State” to qualify what building work or building work services are being referred to. The literal meaning of those words is that it covers building work or building work services both in Queensland and any other State. Once the definition is read into s 56AC(2), the plain words of that subsection are that it applies to a person if the company of which that person was a director or secretary, has gone into liquidation or been wound up, wherever that occurred, and three years have not gone by.

80. When considering the use of the phrase “in this or in other State” in s 56AC(7), all the words in the provision must be given work to do.²⁴ The appellant’s contentions would ignore that phrase, when there is no reason to do so. Further, the contrary intention under s 4 of the AIA may be evinced by express terms, necessary implication or from the general character of the legislation.²⁵ Here the plain words of s 56AC(7) displace the presumption in s 35(1)(b) of the AIA. Even if that were not the case, the displacement of the presumption can be seen by the context and purpose of the QBCC Act, and in particular Part 3A. As noted above, that Part is directed to excluding certain persons and companies who are insolvent, or associated with insolvency, and preventing them from holding a builder’s licence in Queensland. It is self-evident that Part 3A addresses the risk to Queensland consumers arising from builders in Queensland becoming insolvent, even if that is triggered by an insolvency outside Queensland. A Queensland licence holder or builder who is associated with a company failure in some other jurisdiction, is no less a risk to consumers in Queensland than if that licensee or builder was associated with a company failure in Queensland.

81. The appellant’s approach involves reading into the definition in s 56AC(7) the definitions of “building work” and “building work services” from Schedule 2. That approach is misconceived. Kelly v The Queen makes it clear that definitions should be read into substantive provisions prior to commencing process of construction of those provisions, but that definition sections are not substantive provisions for that purpose. Put simply, there is no warrant to read the definitions of “building work” or “building work services” into the definition in s 56AC(7).

82. However, even if that was done it does not aid the appellant’s contentions. They turn on using the presumption in s 35(1)(b) of the AIA to construe “building work” or “building work services” as being confined to something which occurs in the State of Queensland. That presumption, however, can be displaced if a contrary intention appears in the relevant statute: s 4 of the . In my view, the words “in this or another State” provide a clear statement of a contrary intention.

“A major deficiency with the existing regulatory structure has been the ability of defaulting contractors to restructure their corporate structure to re-emerge as a ‘phoenix’ company following cancellation of a licence. This new part is designed to remove individuals who have demonstrated their incapacity to manage finances from the building industry for a 5-year period.”

92. When the Bill was introduced into Parliament, the second reading speech relevantly noted:³⁴

“The Bill introduces a range of enhancements to the existing licensing system for the benefit of consumers and industry participants. Ultimately, they will improve public confidence in the integrity of the system. First, the Bill contains provisions to prevent bankrupts and persons associated with bankruptcy from holding or being associated with a building contractor’s licence for a period of five years. This will prevent the re-emergence of shonks through the device of ‘phoenix’ companies. The scheme introduced by the Bill provides for ‘excluded individuals’ who may not hold a licence. These are bankrupts or individuals who take advantage of the laws of bankruptcy, such as through entering into a ‘Part 10 arrangement’ with creditors, or who are associated with a failed company. They will be ‘excluded individuals’ for five years from the relevant event.”

93. There have been substantial amendments to Part 3A since its introduction. The words “in this or another State” were introduced into the definition in 2017.³⁵ The Explanatory Notes concerning that amendment stated:³⁶

“The Bill also increases the rigour around the ‘excluded individual’ provisions, so that a person who was involved in a company failure in other jurisdictions, or who was the director of a company up to two years prior to a failure, will be excluded from obtaining a QBCC licence. Amendments in the Bill are aimed at preventing illegal phoenixing activity, when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts. The Bill will allow the QBCC to more effectively target defaulting contractors who restructure their corporate affairs in order to keep operating after their licence has been cancelled.

…

The amendment ensures that a construction company, as defined, includes a company operating outside of Queensland but within Australia.”

94. Those references are sufficient to demonstrate, were it in doubt otherwise, that the legislature’s intention was that a company failure outside Queensland could trigger the withholding of a licence or the cancellation of a licence in Queensland.

95. This ground of appeal fails.

Ground 2 - invalidity

96. The review of Part 3A of the QBCC Act, in the context of the Act overall, demonstrates that Part 3A is directed at the ability of a person to be granted a licence, or to continue to hold a licence, in each case issued in Queensland. The appellant only seeks to challenge the constitutional validity of s 56AC. However, that section merely defines who is an “excluded individual” or an “excluded company”. Section 56AC has no substantive effect otherwise. What flows from a conclusion that someone is an “excluded individual” or “excluded company” is that which is imposed under s 56AE-s 56AG. As noted above those sections are directed to whether a person might obtain a Queensland licence, or continue to hold one. There is no challenge to the constitutional validity of s 56AE-s 56AG.

97. The Queensland Parliament may enact legislation with extra territorial operation, provided there is a sufficient connection between the subject matter of the legislation and the State.³⁷ The relevant test is that referred to by the High Court in Union Steamship Co of Australia Pty Ltd v King:³⁸

“These decisions and statements of high authority demonstrate that, within the limits of the grant, a power to make laws for the peace, order and good government of a territory is as ample and plenary as the power possessed by the Imperial Parliament itself.³⁹

…

It is now accepted beyond any question that colonial legislatures had power to make laws which operate extraterritorially … same comment applies with equal force to the Parliaments of the Australian States.⁴⁰

…

That being so, the new dispensation may do no more than recognize what has already been achieved in the course of judicial decisions. Be this as it may, it is sufficient for present purposes to express our agreement with the comments of Gibbs J in Pearce where his Honour stated that the requirement for a relevant connexion between the circumstances on which the legislation operates and the State should be liberally applied and that even a remote and general connexion between the subject-matter of the legislation and the State will suffice.⁴¹”

98. The Parliament of each State has power to make laws for the peace, order and good government of that State, and has extraterritorial operation, as appears from s 2(1) of the Australia Act 1986 (Cth), which provides:

“2 Legislative powers of Parliaments of States

(1)It is hereby declared and enacted that the legislative powers of the Parliament of each State include full power to make laws for the peace, order and good government of that State that have extra-territorial operation.”

99. Part 3A of the QBCC Act does not regulate conduct in another State, but rather identifies simply that an individual or company’s conduct in another State will have a consequence in the State of Queensland. The consequence is that the company or person might not be able to be granted a licence, or a licence which they hold might be subject to cancellation depending on the circumstances. As the review of the legislation above demonstrates, Part 3A does nothing more than regulate one aspect of granting licences by the Commission. So much is recognised, at least, by the fact that Part 3A applies notwithstanding any other provision in Part 3 which sets out the licensing scheme relating to the building industry in Queensland.

100. When s 56AC is examined, the identification of the construction company, whose liquidation or winding up triggers the identification of an excluded individual or excluded company, is a company that carries out building work or building work services in Queensland or in any other State of Australia. Relevantly to this case, it is that company’s insolvency which triggers the operation of s 56AC(4) or (6). Therefore, the substantive provisions of Part 3A are engaged by insolvency, wherever that occurs in Australia. That necessarily includes Queensland. Thus, it is not interstate insolvency which is at the heart of the provisions, but rather the simple fact of insolvency. To the extent that there is any extraterritorial element, therefore, it is slight or indirect, but nonetheless well within the concept of “a remote and general connection between the subject matter of the legislation and the State”.

101. However, in my view, the proper focus of Part 3A is that the substantive provisions in s 56AE–s 56AG visit consequences upon persons or companies in Queensland, in respect of a Queensland matter (the grant or continued or continued holding of a Queensland licence) by the Commission, which is a Queensland entity. The connection between Queensland and the substantive provisions, which are brought into effect by the definitions in s 56AC and therefore should be read with that section, is correctly characterised as “direct and substantial”.⁴²

102. For these reasons it is clear, in my view, that there is no constitutional invalidity in respect of s 56AC.

103. This ground fails.

Conclusion

104. As all grounds of appeal have failed, I would propose the following orders:The appeal is dismissed.The appellant is to pay the respondents’ costs.

Footnotes

1. I will refer to each of these companies as Midson NSW and Midson Qld. ↩

2. To which I will refer as the QBCC Act. ↩

3. The Queensland Building and Construction Commission (“the Commission”), the Commissioner, and a Licence Entitlement Officer. As their interests are aligned I shall refer only to the Commission. ↩

4. To which I will refer as the AIA. ↩

5. (1998) 194 CLR 355; [1998] HCA 28, at [69]-[71]. Internal citations omitted. ↩

6. [2011] HCA 10; (2011) 242 CLR 573 at [44]-[46]. Internal citations omitted. ↩

7. [2012] WASC 323 at [127]. ↩

8. [2015] QCA 267 at [50]-[51]; internal citations omitted; emphasis in original text. See also Farnham v Pruden [2016] QCA 18 at [23]. ↩

9. For example, Bond v Chief Executive, Department of Environment and Heritage Protection [2017] QCA 180 at [9]-[11]; Multiplex Bluewater Marina Village Pty Ltd v Harbour Tropics Pty Ltd [2017] QCA 202. ↩

10. Appellant’s outline, para 20. ↩

11. In this respect reliance was placed on Ooralea Developments Pty Ltd v Civil Contractors (Aust) Pty Ltd [2015] 1 Qd R 311 at [21] to [49]; Williams v Stone Homes Pty Ltd [2014] QDC 64 at [30] to [47], [52] and [53]; [2015] QSC 160 at [30]; [2014] QCA 330 at [12], [13] and [16]; and [2017] QSC 287 at [10]-[20].