In J & MD Milligan Pty Ltd v Queensland Building Services Authority [2012] QSC 213, Justice Wilson considered whether the elements of a claim for estoppel had been properly pleaded.

In this case, the plaintiff, J & MD Milligan Pty Ltd (Milligan), sought leave to amend its Statement of Claim to add a cause of action in estoppel.

By way of background, Milligan carried on business fabricating and installing steel structures. This case concerned its contractor’s licence under the Queensland Building Services Authority Act 1991 (Qld) (Act), and in particular, s 53A. This section provides that a contractor’s licence can not be renewed unless the contractor satisfied the relevant financial requirements.

On 30 September 2010, the defendant, Queensland Building Services Authority (QBSA) sent Milligan a “licence renewal notice”. On 29 September 2011, QBSA notified Milligan that it was suspending Milligan’s licence due to an alleged failure to provide certain information pursuant to s 53A of the Act. Milligan was prohibited from carrying out any building work during the suspension period.

Milligan alleged that it had in fact satisfied the requirements in s 53A of the Act when it gave QBSA certain “Financial Documents” in January 2012, thereby obliging QBSA to lift the suspension on the licence.

On 20 April 2012, QBSA advised Milligan that it had lifted the suspension, but that it would not renew the licence on the grounds that Milligan had not yet complied with the financial requirements for licensing.

Before Justice Wilson, Milligan alleged that QBSA was estopped from denying that the financial documents were “information” for the purposes of s 53A of the Act.

Milligan also alleged that QBSA’s assertion that Milligan did not comply with the financial requirements for licensing was a wrongful exercise of QBSA’s powers and functions.

Justice Wilson held that Milligan had not pleaded the elements necessary for estoppel. Her Honour held that Milligan had not pleaded a clear and unequivocal representation by QBSA, or that it had changed its position in reliance on a representation by QBSA. Relevantly, her Honour stated (at [20]-[21]):

“That a particular construction of a statute would produce a result that would be oppressive, capricious or arbitrary may be a powerful reason to reject that construction in favour of another. But if, despite the potentially oppressive, capricious or arbitrary result, that construction is the correct one, the doctrine of estoppel cannot be invoked to avoid that result.

Further, there must be a clear and unequivocal representation before there can be an estoppel by representation.”

[Footnotes omitted]

Her Honour went on to say, relevantly, that QBSA did not represent that Milligan satisfied the relevant financial requirements stated in its policies. It acknowledged technical compliance with the renewal process, but it continued to assert that Milligan did not comply with the financial requirements for licensing, and foreshadowed further action about the status of the licence. In other words, the information supplied failed to show that Milligan satisfied those requirements.

According to Justice Wilson, if, contrary to this, the “withdrawal” of the suspension involved QBSA making a decision to renew the licence, in making that decision, QBSA was not acting as an administrative tribunal deciding between competing claims. Accordingly, the decision was not one upon which an issue estoppel could be based.

Estoppel was therefore not available to prevent the exercise of a statutory duty or a statutory discretion of a public character.

Accordingly, Justice Wilson refused leave to amend the claim to insert a claim based on estoppel.

In considering whether to bring a claim for estoppel, it is important to be mindful of two important points which come out of this case:

  • estoppel cannot be invoked to avoid a potentially oppressive, capricious or arbitrary result in the construction of a statute (and presumably a contract) if that construction is the correct one, and
  • there must be a clear and unequivocal representation before there can be an estoppel by representation.