Directors banning rules softened
In Queensland, when a director holds a building license, their license is compromised when their building company enters into liquidation. The Queensland Building and Construction Commission (QBCC) has jurisdiction over this licensing and will ask for ‘show-cause’ to justify why a person should not lose their builder’s license for five years. Up until this point this all sounds fair, right?
However, in addition to this QBCC provision, where the license holder is a director of any company, in any industry and that company goes into liquidation (due to insolvency), even if their building company was trading without any financial issue; the same five-year banning provision applies.
This banning provision, when an insolvency had no relevance to a person’s builders license has long been considered unjust, and we were one party who considered it so.
We also think it is unjust, that under the QBCC rules, a building company can’t take advantage of the voluntary administration provisions of the Corporations Act 2001. If the company entered into a creditor approved Deed of Company Arrangement, the company will generally not be allowed to maintain its builder’s licence.
However, with the Queensland Building and Construction Commission Amendment Act 2014 now law, a person being the holder of a builder’s license will not be disqualified where they are the director of a non-building company that goes into liquidation. We think this is a just and long overdue amendment.
It should also be noted that the exclusion period for the holding of a builder’s licence, has been reduced from five years to three years for a first occasion where they are the director of a building company that goes into liquidation due to insolvency.