Bell Solar Pty Ltd v Commissioner for Fair Trading

Background

1. Bell Solar states that it is the largest solar panel retailer in Australia and, as at May 2021, has conducted over 39,000 solar panel installations since 2017. According to Bell Solar it conducts approximately 200 installations per week under its electrical contractor licence. Bell Solar sells solar panels to consumers under a contract for both the sale and installation of the solar system. Bell Solar does not conduct the installation work directly but subcontracts that work to local installers.
2. Bell Solar was issued with a contractor licence for electrical work on 2 May 2017 which was due to expire on 1 May 2020. Bell Solar lodged a renewal application for the licence with NSW Fair Trading (Fair Trading) on 15 April 2020. On 16 July 2020, Bell Solar was informed that its application to renew the license had been refused on the basis that there had been more than 120 complaints since the licence was issued in May 2017. Fair Trading considered this to be an unreasonable number of complaints and had accordingly refused the renewal under s 33B(1)(a)(vii) of the Home Building Act. Following correspondence from Bell Solar, the Commissioner advised that the renewal application would be further assessed and that Bell Solar's licence would remain current pending finalisation of that assessment.
3. Following a further period of assessment during which Bell Solar provided responses to concerns raised by Fair Trading, a decision was made on 9 April 2021 to refuse the application to renew the license.

The refusal decision

1. The decision of 9 April 2021 stated that the renewal had been refused under ss 20(1)(a), 20(3)(b) and 33B(1)(a)(vii) of the Home Building Act.

Fit and proper ground

1. Section 20(1)(a) provides that an application for a contractor licence must be refused if the Secretary is not satisfied that the applicant is a fit and proper person to hold a contractor licence. The matters taken into account by the decision maker in relation to this provision are not clearly set out. However, the reasons for decision state the following:

• When the application for the licence was made in 2017, Mayouf Boucetta was listed as the nominated supervisor. Contrary to s 33C(6) of the Home Building Act Mr Boucetta was an independent contractor and not an employee of the company.
• Mr Boucetta was overseas during several periods when specialist work was being carried out between December 2017 and July 2019.
• The nominated supervisor is responsible for carrying out relevant work on behalf of the company and upholding the codes of practice, laws and regulations. Bell Solar has engaged in work since 2 May 2017 with no adequate supervision of work carried out.
• Bell Solar and relevant individuals have demonstrated an intent to mislead Fair Trading for the purposes of obtaining an electrical contractor licence by disclosing false information in relation to the nominated supervisor.
• Bell Solar has provided inconsistent information about the number of its employees. On 22 July 2020 Bell Solar claimed to have a total of 316 employees and contractors, however, when a site visit was conducted there were no licenced contractors on site and unlicensed individuals were being contracted to carry out work on Bell Solar's behalf.
• There have been a total of 255 enquiries and complaints with Fair Trading in relation to Bell Solar.
• Bell Solar failed to notify Fair Trading of changes in directorships that took place in 2018 and 2019. At the time the licence was applied for Ajaysinh Rajput was listed as the sole director. However records of the Australian Securities and Investment Commission show that Mr Rajput ceased to be a director on 4 September 2018. Dipen Rughani was a director from 30 November 2017 to 22 May 2018 and Paul Gwilym was a director from 4 October 2018 to 31 January 2019. On 31 January 2019 Ajaysinh Rajput again became a director, ceasing on 1 July 2019. Kiran Bhavsar has been the director since then.
• On 19 October 2020 Fair Trading investigators conducted an inspection at a site in Baulkham Hills for which Bell Solar was the head contractor. Two unlicensed workers were doing electrical wiring work in breach of s 14 of the Home Building Act and the subcontractor engaged by Bell Solar was not present in breach of s16 of that Act.
• Bell Solar under the directorship of Paul Gwilym, Dipen Rughani and Ajaysinh Rajput has demonstrated a pattern of behaviour which has resulted in inappropriate conduct towards the contracting obligations a licensee should be upholding in the specialist industry.
• The decision-maker was not satisfied that Kiran Bhavsar, Paul Gwilym, Dipen Rughani and Ajaysinh Rajput satisfy the requirements of s 20(1)(a) and found that Bell Solar is not a fit and proper person to hold a contractor licence.

Supervisory arrangements

1. Section 20(3)(b) provides that the Secretary must refuse an application for a contractor license if the Secretary is not satisfied with the applicant's proposed arrangements for supervision of the work which the licence will authorise the applicant to contract to do. The matters taken into account by the decision-maker appear to be:

• Bell Solar has only ever had one nominated supervisor at any one time. Fair Trading holds the view that this constitutes a lack of supervision of specialist work given the number of installations the company claims to have completed.
• Justin Huber was nominated by Bell Solar as the nominated supervisor on 3 November 2020. Based on the number of jobs being carried out by Bell Solar, Fair Trading is not satisfied that there would be adequate supervision of work.

Complaints

1. Section 33B(1)(a)(vii) states that a licence must not be issued unless the Secretary is satisfied that each relevant person in relation to the application for the licence has not had what the Secretary considers to be an unreasonable number of complaints made against him, her or it. The decision-maker states the following:

• There have been 255 enquiries and complaints with Fair Trading in relation to Bell Solar. The number of enquiries and complaints demonstrates a continued pattern of behaviour which has resulted in continuing consumer detriment and disregard for legislative obligations and requirements. The number of complaints has not reduced and this demonstrates a lack of commitment by Bell Solar to adhere to legislative requirements.
• The decision-maker was satisfied that Bell Solar has had an unreasonable number of complaints made against it.

Legal principles in relation to a stay

1. The general rule is that an application for administrative review of a decision does not prevent the decision from taking effect. The Tribunal has power, however, to make an order "staying or otherwise affecting the operation of the decision under review" (s 60 of the ADR Act).
2. In QLD Protection Security Pty Ltd v Commissioner of Police, NSW Police Force [2018] NSWCATAP 113, an Appeal Panel of this Tribunal led by Wright J, summarised the considerations which should be applied when considering a stay in matters such as this as including: 1. whether the order is appropriate to secure the effectiveness of the determination of the application for review: s 60(2), ADR Act; 2. whether the order is desirable taking into account: 1. the interests of any persons who may be affected by the determination of the application for review: s 60(3)(a), ADR Act, Loveday v Commissioner for Fair Trading [2018] NSWCATAD 80 (Loveday) at [10], Re Scott and Australian Securities and Investments Commission [2009] AATA 798 (Re Scott) at [4]; 2. any submission made by or on behalf of the administrator who made the decision to which the application relates: s 60(3)(b), ADR Act, Loveday at [10], Re Scott at [4]; 3. the public interest: s 60(3)(c), ADR Act, Loveday at [10], Re Scott at [4]; 1. the applicant's prospects of success on the application for review: AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 (AVS Group) at [129], Loveday at [10] and [11], Re Scott at [4].
3. The circumstances that are relevant in any particular case to the considerations identified above may well overlap or be interrelated.
4. In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 at [129] the Court of Appeal held that securing the effectiveness of the determination of the application involves matters such as ensuring that the lapse of time before the determination is actually made does not deprive the review of practical point. The Court went on to say that it also involves considering the possibility that the result of the review might be that the decision is affirmed, with the consequence that, if stay is granted, the decision has not been implemented during the period of the stay.
5. In Loveday v Commissioner for Fair Trading [2018] NSWCATAD 80 at [14] the Tribunal referred with approval to the following passage from Re Pelling and Secretary, Department of Aviation [1984] AATA 179; (1984) 5 ALD 638 at 639: 6 If, after the facts have been ascertained at the hearing, the Tribunal considers that the applicant did deliberately flout the law and that his conduct warrants suspension of his licences in spite of the hardship which it will cause him and the company, the right or preferable decision may well be to affirm the decision under review. But, if its implementation before the facts have been established is likely to cause him or the company serious irreparable harm (irreparable in the sense that no recompense for it can be obtained if the application for review is successful) and so to affect adversely the effectiveness of the hearing and determination of the application under review, it may be appropriate to stay the implementation of the decision pending the hearing and decision of the application. However, in considering whether that is so, it is necessary that their interests be weighed against the interest of the public in the safe operation of aircraft. Only thus can the right or preferable decision regarding the stay be given.

Evidence and submissions

1. In support of the application for a stay, Bell Solar notes that it is no longer licensed to provide installation services under the consumer contracts that it has entered into, even though those installation services are being provided by licensed subcontractors. While no new contracts have been entered into, Bell Solar is currently contracted to install approximately 1,735 solar panel systems in homes in NSW. Of those, 300 installations are booked to occur within the next two weeks. These bookings have been rescheduled to allow for the application for a stay to be determined. Bell Solar states that those customers will be adversely affected if a stay is not granted as they will be caused significant inconvenience.
2. Furthermore, Bell Solar states that there are some 21,000 customers who have had systems supplied by it who may now be disadvantaged to the extent that any warranty services and preventative maintenance cannot now be performed under the supply contracts with Bell Solar.
3. Bell Solar also states that it has 36 full-time employees and 280 subcontractors who have the potential to lose their ability to continue to work in the manner that they have operated since 2017. Bell Solar provided a copy of emails and letters from a number of installers who state that the sudden stoppage of work from Bell Solar is having a significant effect upon their business and loss of income for themselves and their employees.
4. Bell Solar submits that a stay is required to ensure that the company can continue to operate and serve its existing customers. The company notes that its application for renewal was under consideration for a year during which time it continued to operate with the approval of Fair Trading. Bell Solar states that licensed subcontractors are required to perform the installation work and that that work will continue in a safe and supervised manner.
5. Bell Solar submits that there is a real risk of irreparable reputational damage to its business if a stay is not granted given the highly competitive nature of the NSW residential solar market. Any concerns about the business will cause existing customers to cancel their contracts and prospective customers to contract with one of Bell Solar's competitors. This reputational damage would be difficult if not impossible to reverse.
6. The Commissioner is opposed to the stay and states that the company can continue to operate in relation to its sales function as no licence is required to sell solar panels. In those circumstances customers can contract with licensed installers.
7. Bell Solar states that there is no risk of harm to the interests of customers if the company continues to operate. Licensed electrical contractors will continue to undertake the required electrical work and issues of safety therefore do not arise. Furthermore, the installations will be monitored and effectively tracked or reviewed through Bell Solar's compliance systems, which include new electronic and auditing systems.
8. Bell Solar states that there have been no safety incidents since the company commenced operations in 2017 - there have been no fires and no injuries. The Commissioner acknowledged that there have been no historical safety issues in relation to the company. The Commissioner states, however, that the inadequate level of supervision identified in the decision raises safety issues as does the use of unlicensed workers as was discovered in the October 2020 site inspection in Baulkham Hills.
9. The Commissioner states that Bell Solar has been operating since 2017 without a nominated supervisor as Mr Bourcetti was not an employee and could therefore not perform the role. Bell Solar states that, although Mr Bourcetti was erroneously nominated, it is not true to say that there was no supervision as Mr Bourcetti actually performed the role he was engaged to undertake.
10. At the hearing the Commissioner's representative reiterated that having one nominated supervisor for the work was inadequate given the number of installations performed by the company. It was submitted that it is against the public interest to have only one nominated supervisor for the company. Bell Solar submitted that this proposition is not based on any consideration of the systems that the company has put in place to ensure adequate supervision and, in particular, recent changes which have included electronic and other methods of supervision.
11. The Commissioner stated that the nomination of Mr Huber as supervisor has not been accepted by Fair Trading because the licence has been under review. It was stated at the hearing by the Commissioner's representative that this means that the company is working without a nominated supervisor. This was not the understanding of Bell Solar which advised that they have not been informed that their nomination has been refused and assumed, in accordance with normal practice, that the nomination was valid as submitted.
12. Bell Solar submits that the decision under review is fundamentally flawed and contains errors of fact and law. In relation to the issue of the nomination of Mr Boucetta as nominated supervisor when he was not an employee, Bell Solar states that the position of Fair Trading that there was an intention to mislead is not based on any evidence. Bell Solar states that the alleged failure to meet a fit and proper person test relates to the conduct of past directors who have not been afforded an opportunity to respond to any allegations and impugn the fitness and propriety of the current director, Mr Bhavsar, in relation to matters that occurred prior to his involvement with the company. Furthermore, Bell Solar submits that the decision relies on technical issues and does not identify any breaches of safety.
13. Bell Solar submits that there is an ongoing public interest in customers and suppliers being able to conduct their business in circumstances where there is no risk to public safety and that existing contractual and employment arrangements can be preserved.
14. Bell Solar states that it is wrong and unfair to presume that one nominated supervisor is insufficient to meet the company's supervision needs. It states that the decision fails to take into account any of the mechanisms employed by the company to ensure appropriate supervision. Bell Solar notes that the October 2020 incident at the site in Baulkham Hills occurred because the licensed subcontractor briefly left the site while electrical work was being undertaken by labourers. The contractor was in fact fined by Fair Trading. Bell Solar states that it was wrong for it to now be held liable for the criminal conduct of others.
15. Bell Solar states that the decision refers to the number of enquiries and complaints made to Fair Trading but notes that the relevant provision in s 33B(1)(a)(vii) refers only to complaints. In any event, Bell Solar submits that the number of complaints is not unreasonable and represents less than 1% of its customers.

Consideration

1. Bell Solar submits that its prospects of success in the review application are good and points to what it states are errors of fact and law in the decision. It is not open to me in considering the application for a stay to conduct a preliminary hearing on the merits of the substantive proceedings. When the matter comes before the Tribunal for hearing, it may receive fresh evidence in addition to that which was initially before the Commissioner. In that context, it is difficult to determine the company's prospects of success on review. That being said, Bell Solar raises significant matters which may weigh in its favour.
2. I accept that the business and financial position of Bell Solar will be adversely affected if a stay is not granted. I also accept that, in a competitive market, there would be an effect on the reputation of the company if it cannot fulfil its contractual arrangements. The Commissioner is correct in saying that the sales side of the business could continue if a stay is not granted. While that may ameliorate some effects of the cancellation of the licence, however, there would still be a significant impact on the business as it would not be able to offer the "package deal" of sales and installation.
3. Whether that would mean that the effectiveness of the review could not be secured is not clear. This is particularly the case as the applicant could seek to expedite the review and may be able to later trade out of any difficulties if successful, although I do accept that it would have suffered some reputational damage from which it would be difficult to fully recover.
4. Fair Trading has sought to cast doubt on Bell Solar's claims about the number of employees it has and on the number of subcontractors engaged in installation work. The basis upon which this is done is unclear. It is, however, clear from the emails and letters from subcontractors who rely on the company for business that they are losing income because of the sudden lack of work. I accept that the interests of employees and subcontractors would be affected if a stay is not granted. Any loss of income they may experience will not be able to be recovered even if Bell Solar is ultimately successful in its review application. I also accept that the interests of customers who have current contracts or who wish to rely on warranties in relation to past installations would also be affected if a stay is not granted. The number of customers is substantial.
5. As was noted in AVS, if a stay is granted and the decision to cancel the licence is ultimately affirmed, the decision will not have been implemented for the period of the stay. In that regard it is relevant that the allegations made against Bell Solar have not involved any incidents of harm to public safety or to employees or contractors. While the Commissioner argues that the supervisory arrangements raise safety risks, the company was allowed to continue to operate with those arrangements for over a year while its application to renew the licence was considered. There is also some force in Bell Solar's argument that the decision maker did not take into account the actual supervisory arrangements now in place in determining that one nominated supervisor is insufficient.
6. In relation to the incident at the Baulkham Hills site where labourers were left unsupervised, while clearly contrary to the law, no person was harmed. I note that the subcontractor was fined by Fair Trading but no action was taken against Bell Solar which would seem to indicate that Fair Trading was of the view that responsibility for the breach lay primarily with the subcontractor in that instance.
7. At the hearing the Commissioner's representative stated that Bell Solar has been operating without a nominated supervisor since November 2020. It is not clear whether this is so. Mr Huber was nominated by Bell Solar and Fair Trading was accordingly notified as required. Bell Solar states that it has never been advised that Mr Huber is unsuitable to be a nominated supervisor. In addition, the decision to refuse the licence makes no reference to the company currently not having a nominated supervisor as required by the Home Building Act (rather, it is made in part on the adequacy of that supervision). In addition, as noted above, Bell Solar was permitted to continue to operate while the application to renew the licence was being assessed. It does not seem likely that Fair Trading would overlook whether there was in fact a nominated supervisor in permitting the company to continue to operate.
8. In any event, even though the issue remains unclear, I do not consider that it affects my decision about whether a stay should be granted. It is clearly, however, a matter which needs to be clarified between the company and Fair Trading before the company could resume business if a stay is granted.
9. Having taken into account the matters specified in 60(3) of the ADR Act, and in particular the effects upon employees, subcontractors and customers if a stay is not granted, and the steps taken to increase supervision of subcontractors by electronic and other means, I am satisfied that a stay should be granted pending the outcome of the review.
10. Bell Solar has asked that I make various orders in relation to the stay contingent upon the outcome of its internal review application and any subsequent further review application to the Tribunal. In my view, it is sufficient to make an order in the terms set out below. Either party is at liberty to approach the Tribunal for further orders if necessary.
11. Another matter raised by Bell Solar is that, upon making the decision to refuse to renew the licence, in the register on its website Fair Trading altered the status of the licence from "current" to "expired 1 May 2020" leading customers to conclude that the company has been engaging in unlicensed work since that time when it has not. Bell Solar asks that I order the Commissioner to correct the register to reflect the true position. I am not inclined to make such an order (even if I have the power to do so) but it is my expectation that the register will reflect that the licence remains current while a stay is in place.

Orders 1. The operation of the decision by the Commissioner for Fair Trading not to renew the electrical contractor licence 309865C of Bell Solar Pty Ltd is stayed until determination of the application for review or further order of the Tribunal. 2. The matter is listed for directions on 29 June 2021 at 11:30 am.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 May 2021