Don’t become a BSA excluded individual

Don’t become a BSA excluded individual

BSA licence holders may become excluded individuals if:

  1. they become bankrupt or take advantage of the laws of bankruptcy; or
  2. a company in which they are a director, secretary or influential person has an administrator, controller, liquidator or provisional liquidator appointed.

If one of these “relevant events” occurs you may get a letter from the BSA:

  1. identifying the relevant event and stating you are an excluded individual;
  2. advising you that you can apply to be a “Permitted Individual (“PI”), which you must do within 28 days of receiving the BSA letter;
  3. stating the circumstances when the BSA must cancel your licence.

IF YOU GET SUCH A LETTER YOU MUST APPLY TO BECOME A PI, if you want to remain licensed, otherwise your licence is automatically cancelled.

If that happens and you want to have a licence, you would have to REVIEW THE BSA CANCELLATION DECISION IN QCAT which is:

  1. expensive and uncertain that QCAT allow you to be a PI; and
  2. YOU WON’T HAVE A LICENCE IN THE MEANWHILE

Therefore make a PI APPLICATION within time and explain to the BSA:

  1. all the causes of the relevant event;
  2. that you took all reasonable steps to avoid the coming into existence of the circumstances that resulted in the happening of the relevant event.

If the BSA rejects your PI application or does not decide it within 28 days, then you will lose your licence UNLESS YOU REVIEW THE BSA REJECTION DECISION IN QCAT within time.

Whilst the outcome of your review is not certain, if you can demonstrate that you took all reasonable steps, you may convince QCAT that you should be a PI. This is what happened in the recent case of Jensen v Queensland Building Services Authority [2013] QCAT 121 where the member applied the principles in Younan v Queensland Building Services Authority [2011] QCA 1 which had approved the earlier decision of McGill DCJ in Younan v Queensland Building Services Authority [2010] QDC 158.

Importantly Younan, states that you are not expected as a director to put in extra money into an insolvent business. The key is taking reasonable steps in prevention rather than in dealing with the problems that subsequently arise.

Contact Lenz Moreton on telephone (07) 3220 0299 to discuss making a PI application, or reviewing either a BSA Licence Cancellation decision, or a BSA PI application refusal.