Cosbar Constructions Pty Ltd v Director General, New South Wales Fair Trading

NCAT Occupational|2015-05-11

Solicitor: Gillis Delaney Lawyers (Applicant) E Maynard, Department of Finance & Services (NSW Fair Trading) (Respondent) File Number(s): 1520010

REASONS FOR DECISION

This is a review of a decision made by the Respondent on 19th December 2014 after internal review, to affirm its decision to refuse a building contractor licence to Cosbar Constructions Pty Ltd.(Cosbar)
Cosbar's application was refused by the Respondent for reasons set out in the Respondent's determination of 19th December 2014, on the basis that the applicant was: "…..not a fit and proper person to be the holder of an authority when considering if he is a person of good repute, having regard to character, honesty and integrity in accordance with sections 20(1)(a) and 20(1A) of the Home Building Act."
The relevant legislation is the Home Building Act 1989 and the Home Building Regulations 2004 and 2014.

Applications by Mr Costello and Cosbar for building contractor licences

On 6th February 2014 Mr Costello applied to vary BOTH his personal licence and that of Cosbar Constructions Pty Ltd from bricklaying to "General Building."
On 14th May 2014 the Respondent wrote to Mr Costello and to Cosbar Constructions Pty Ltd. The Respondent refused both Mr Costello's personal building contractor application and Cosbar's company contractor licence.
Mr Costello's and Cosbar's internal review applications about both refusals were lodged on 28th May 2014.
On 8th July 2014 the Respondent affirmed the decision to refuse contractor licence status both to Mr Costello and Cosbar.

Cosbar then filed a second application dated 15th July 2014 for a variation of its existing licence from licence category "Bricklayer" to the licence category of "General Building". The application nominated Mr Jon Hansen as a qualified supervising licence holder. This application was refused by the Respondent on 1st September 2014. Cosbar's internal review request of 25th September 2014 was affirmed after internal review by the Respondent on 19th December 2014.
The Respondent based the refusal of this second application by Cosbar on the contention that the Applicant, Cosbar Constructions Pty Ltd, was not a fit and proper person, within the meaning of section 20 of the Home Building Act 1989 (NSW) (the HBA).
This is the decision which is subject of the Tribunal's hearing.

The issues before the Tribunal

The Tribunal understood that the Respondent's contention that Cosbar Constructions Pty Ltd was not a fit and proper "person" to hold a building contractor licence was based on the Respondent's conclusion that Mr Gregory Costello, the sole director of Cosbar Constructions Pty Ltd, was not a fit and proper person.
The Tribunal notes that Mr Costello has not sought review of the Respondent's decision to refuse Mr Costello a personal building licence. That decision was made on the basis that Mr Costello did not have the required experience and that he was not fit and proper to hold a building contractor licence.

Amendments to Home Building Act and Regulations

At the commencement of the hearing, there was a preliminary issue for the Tribunal as to which legislation applied in determining Cosbar's application for review. Cosbar's application for review was lodged in the NCAT on 16th January 2015. The relevant act at this time was the Home Building Act 1989. On the 15th January 2015, the day before the lodgement of the application for review in NCAT, the Home Building Regulation 2014 commenced - replacing the Home Building Regulation 2004. Provisions in the newer legislation set out that applications made before the new legislation, would be considered under the older provisions. Cosbar's original application was made before the amendments commenced on 15th January 2015. As such, it is not affected by the amendments.
In these circumstances, the Tribunal finds that the provisions of the Home Building Act 1989 and Home Building Regulation 2004 apply to the determination of this matter.
In relation to the definitions of "experience" and "lawfully engaged", Clause 28 of the Home Building Regulation 2004 applies and the Instrument dated 12 July 2013 which defines experience and lawful engagement, is the applicable Instrument.
The Tribunal also notes that section 20(6) was amended by the amendments. The Tribunal applies the pre 15th January 2015 version of section 20(6)

Relevant section of HBA 1989 - section 20(1) or Section 20(6)?

The parties raised an issue as to which section of the Home Building Act 1989 should be applied to the Tribunal's review of the refusal of the contractor licence to Cosbar Constructions Pty Ltd.
Section 20 of the HBA 1989 deals with the issue of contractor licences. Section 20 (1)(a) and 20(1A) provide for mandatory refusal of a contractor licence: Section 20(1) The Chief Executive must refuse an application for a contractor licence if: the Chief Executive is not satisfied that the applicant is a fit and proper person to hold a contractor licence, ……. Section 20 (1A) Without limiting subsection (1) (a), in determining whether an applicant is a fit and proper person to hold a licence the Chief Executive is to consider whether the applicant is of good repute, having regard to character, honesty and integrity.
The Respondent's decision on internal review was based on the provisions of section 20(1) and section 20(1A). It had been mandatory for the Respondent to refuse Cosbar a building licence.
At the same time, section 20(6) provides for discretionary refusal of a contractor licence in the public interest. Again the Tribunal notes that the provisions of section 20(6) have changed since 15th January 2015. The Tribunal applies the pre 15th January 2015 version of section 20(6).
Subsection 20(6) pre-amendment on 15 January 2015 was as follows: ... (6) Without limiting this section, the Chief Executive may refuse an application for a contractor licence if the Chief Executive is of the opinion that it is in the public interest to do so on any of the following grounds: (a) an employee or proposed employee of the applicant is disqualified from holding a contractor licence, has had an application for an authority refused on a ground relating to his or her character, honesty or integrity or has had an authority cancelled or suspended on any disciplinary ground, (b) there are reasonable grounds to believe that the application has been made with the intention of avoiding disclosure of any relevant past misconduct of the applicant or a close associate of the applicant. (c) the Director-General considers that a close associate of the applicant who would not be a fit and proper person to hold a contractor licence exercises a significant influence over the applicant or the operation and management of the applicant's business" (all underlining is the Tribunal's)
The Respondent noted that sections 20(1) and 20(6) both applied to the circumstances. The key question in considering Cosbar Constructions Pty Ltd.'s application, was the fitness and propriety of Mr Costello. Mr Costello was an employee of Cosbar Constructions Pty Ltd, who had had an application for an authority refused on a ground relating to his character, honesty or integrity. Mr Costello fell within the scope of section 20(6) (a) as an employee of Cosbar Constructions Pty Ltd who had had his own application for an authority refused.
The Respondent proffered that the matter ought to be determined by the Tribunal by application of the section which was more generous to the Applicant. Section 20(6) provided the Respondent decision maker with a discretion in relation to issuing an authority. That is, the matter to be determined was whether the decision maker ought to exercise its discretion to refuse the authority to Cosbar Constructions Pty Ltd in the public interest because, Mr Costello had had an application for an authority refused on a ground relating to his character, honesty or integrity.

Source of the Tribunal's power

The Tribunal has power to review the Respondent's decision to refuse Cosbar's contractor licence pursuant to section 83B of the Act and section 9 of the Administrative Decisions Review Act 1997 (NSW).
The review is a hearing "de novo", on the merits. The Tribunal may take into account material not previously before the decisionmaker. See Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 46 FLR 409.
The Tribunal has an unfettered discretion in making the correct and preferable decision as to the Application. Where a statute confers an administrative discretion which is unlimited in terms, the discretion is only limited by the scope and object of the statute (see Barton v R (1980) 32 ALR 449 at 458). The Tribunal notes in this regard that the object of the Home Building Act 1989 is to protect consumers.

Relevant sections of the Home Building Act (the HBA)

The Home Building Act 1989 (the "HBA") is concerned with the regulation of the New South Wales home building and specialist work (i.e. plumbing, gas fitting, electrical, air conditioning and refrigeration work) industry The HBA also sets out the Director General's powers.
Section 19(1) of the "HBA" provides that the Director General may grant contractor licences for the purposes of this Act. Section 19, when read with section 6 of the Licensing and Registration (Uniform Procedures) Act 2002 (which applies to applications for contractor licences: section 19(2) ) enables a company to apply for a contractor licence.
Section 20(1) (a) of the "HBA" specifies that the Director-General must reject an application for a contractor licence if the Director-General is not satisfied that the applicant is a fit and proper person to hold a contractor licence.
Section 20(1 A) of the "HBA" specifies that without limiting subsection (1)(a) in determining whether an applicant is a fit and proper person to hold a licence the Director-General is to consider whether the applicant is of good repute, having regard to character, honesty and integrity.
Section 20 (6) of the HBA prior to 15th January 2015, provides that: ... (6) Without limiting this section, the Chief Executive may refuse an application for a contractor licence if the Chief Executive is of the opinion that it is in the public interest to do so on any of the following grounds: (a) an employee or proposed employee of the applicant is disqualified from holding a contractor licence, has had an application for an authority refused on a ground relating to his or her character, honesty or integrity or has had an authority cancelled or suspended on any disciplinary ground, (b) there are reasonable grounds to believe that the application has been made with the intention of avoiding disclosure of any relevant past misconduct of the applicant or a close associate of the applicant. (c) the Director-General considers that a close associate of the applicant who would not be a fit and proper person to hold a contractor licence exercises a significant influence over the applicant or the operation and management of the applicant's business"

Respondent's initial and internal review decisions

At hearing the Respondent referred to the reasons set out in its initial and internal review decisions relating to Cosbar Constructions Pty Ltd dated 19th December 2014. These reasons had dealt with a refusal based on section 20(1) which made it mandatory for the Respondent to refuse the application if the Director-General is not satisfied that the Applicant is a fit and proper person to hold a contractor licence. The Tribunal summarises those reasons in relation to section 20(1) (a) as follows.
The Respondent had initially refused Cosbar's second application to vary its licence lodged on 15th July 2014, as the Respondent concluded that Mr Costello had made false and misleading statements to Fair Trading in regards to his personal application (made on 6th February 2014) to vary his existing qualified supervisor certificate from bricklaying to general building.
As a result of the Respondent's conclusion that Mr Costello had made false and misleading statements in his personal application, the Respondent did not consider Mr Costello to be a fit and proper person to be the holder of a building licence, having regard to character, honesty and integrity. It refused Mr Costello's personal application for a contractor licence on the basis that he was not fit and proper AND that he did not meet experience requirements.

Respondent's Reasons on internal review

Cosbar requested an Internal Review on 25th September 2014. In that application for internal review, Mr Costello for the Applicant, Cosbar, denied knowing about the infringement notice against the Company until after he had lodged the Company's application. As a result he had answered "no" to a probity question at point 9. He had not done so dishonestly. Mr Costello also provided further information about issues relating to his fitness and propriety and his experience. Despite the provision of this information, the Respondent affirmed the initial decision on internal review on 19th December 2014.
The Respondent determined that Mr Costello was not a fit and proper person to hold an authority having regard to his character, honesty and integrity. Hence the Director General was obliged to refuse Cosbar's application.
The detail of the reasons for this are largely set out at paragraphs 15, 19 and 20 of the Respondent's determination in relation to Cosbar of 19th December 2014.
This was because Mr Costello:

he had made a false declaration in his company variation application in section 9 in relation to the financial and criminal history probity questions;
had been found not to be fit and proper in his personal qualified supervisor variation application, as he had made false and misleading statements in regards to his building experience.; and
had breached the HBA by entering into a sub-contractor agreement to do residential specialist work when he was not the holder of a contractor licence authorising him to do that work.

The reviewer found that the applicant had shown a pattern of behaviour with both applications which indicates he is not a fit and proper person in regards to character, honesty and integrity, as he was working as a sub-contractor without a licence, was advertising for building work when only the holder of a bricklaying licence and at the very least exaggerated the extent of his building experience -in regards to dates worked on site and possibly the type of experience gained. This is in addition to not declaring he has had complaints lodged or compliance action commenced and stating he held a building licence when in fact the application had not been finalised, therefore he was the holder of a bricklaying licence only.
The probity issue arose because Mr Costello had answered 'No' to a question on the application form: Have you or any partnership or company of which you were/are a member or director, had any complaints lodged or compliance action commenced arising from your activities in relation to the conduct of residential work?
The Respondent considered that this was a false statement by Mr Costello as he had been contacted by a Fair Trading compliance officer on 8th and 9th May 2014, and advised that there had been a complaint lodged. The complaint was that Cosbar Constructions Pty Ltd was contracting for the construction of peoples' homes, (without a building licence) and that the company was recommending to consumers that they will do the residential building work while requiring the consumer to get an owner builder permit.
In that conversation, Mr Costello had also advised the compliance officer that he had a builders licence and the work he was doing was on behalf of his mother, who was constructing her house under an owner builder permit. This was not a truthful statement as no building licence had been issued to Mr Costello. The application was, at that stage, still pending a decision. The officer advised Mr Costello that he had examined the website for Cosbar Constructions Pty Ltd and that it was a breach of section 5 of the HBA to seek work until a licence was issued. It was also a breach of the Australian Consumer Law to place misleading testimonials.
The Respondent's breach notice dated 8th of July 2014 was sent to the Company's registered street address. Mr Costello had then lodged the applications a week later on 15th July 2014. The Respondent considered that Mr Costello should have known about the breach, first when spoken to by the departmental officer, and then on receipt of the breach notice - prior to lodging the application on 15th July 2014.
The Respondent stated that the applicant is a businessman running a company and neglecting to or avoiding mail collection is not an acceptable reason for not knowing about the complaints made or the infringement issued.

Mr Costello's evidence

Mr Costello provided an affidavit to the Tribunal. He also gave oral evidence to the Tribunal and was cross examined.
Company probity question
Mr Costello said that he was unaware of the infringement notice at the time of lodging the application for the licence on the 15th July 2014. The Breach Notice was dated 8th July 2014. He did not know when it was posted. The Breach Notice was posted to the Cosbar registered address which was his parents-in law's home. He said all other mail from the Respondent had been sent to Cosbar's postal box - this was the only letter which had gone to its registered street address. He was seeing his parents-in-law 3-4 times a week. He did not however receive the letter until 25th July 2014. He had paid the fine the same day. At the time of lodging the application on 15th July 2014 he had not received a complaint in writing. He had understood from the compliance officer that the matter may not progress.

false and misleading statements in regards to his building experience

Mr Costello told the Tribunal he had corrected the clerical error made about his work on the 31 Cylinders Drive Kingscliff job by Mr Johnston in his referee's statement, both in a telephone conversation with an officer of the Respondent in May 2014 and by letter dated 28th May 2014. breaching the HBA by entering into a sub-contractor agreement to do residential specialist work when he was not the holder of a contractor licence authorising him to do that work.
Mr Costello denied doing this. He said he had done bricklaying work on his mother in law's home at Kingscliff. He had not acted as a builder.

The Respondent's case in relation to section 20(6)

The relevant parts of subsection 20(6) pre-amendment on 15 January 2015 were as follows: ... (6) Without limiting this section, the Chief Executive may refuse an application for a contractor licence if the Chief Executive is of the opinion that it is in the public interest to do so on any of the following grounds: (a) an employee or proposed employee of the applicant is disqualified from holding a contractor licence, has had an application for an authority refused on a ground relating to his or her character, honesty or integrity or has had an authority cancelled or suspended on any disciplinary ground, (b)….. (c) the Director-General considers that a close associate of the applicant who would not be a fit and proper person to hold a contractor licence exercises a significant influence over the applicant or the operation and management of the applicant's business
The Respondent submitted that the provisions of section 20 (6) (a) and (c) operated to provide a basis on which the Tribunal should exercise its discretion not to grant an authority to Cosbar Constructions Pty Ltd as a building contractor in the public interest.
In relation to section 20(6) (a), it was a statement of fact that Mr Costello has had an application for an authority refused on a ground relating to his character, honesty or integrity. This was the personal application made by Mr Costello on 6th February 2014, refused by the Respondent on 14th May 2014, and affirmed after internal review on 8th July 2014.
In relation to section 20(6) (c), the Respondent submitted that the Tribunal should continue to be satisfied that Mr Costello was not a fit and proper person in the context. His explanations given at hearing of the matters set out in the Respondent's Internal Review decision concerning Mr Costello's personal application, had not established that he was a fit and proper person. The Tribunal should find that Mr Costello was not a fit and proper person. Once the Tribunal had found this, it was not necessary for the Respondent to prove that Mr Costello as the sole director of the company exercised the kind of influence set out in section 20(6) - "a significant influence over the applicant or the operation and management of the applicant's business". That should be inferred as he was the sole director of Cosbar.
Mr Costello's behaviour in ticking the probity question box wrongly in the Cosbar application was inappropriate. He had been told that there was a complaint. He should have ticked "yes" and put in an explanation as to what had occurred in his conversation with Stuart Evans from the Department.
Knowledge is part of the test of fitness and propriety. This included knowledge of the responsibilities of a director of a company. In the circumstances, at best, Mr Hansen could only be responsible for those things that occurred on site. Mr Costello must be aware as a director of the company of his responsibility to fill in forms properly. It was not just a clerical error that Mr Johnston's referee's statement had inserted eight extra months of experience. Mr Costello should have provided an explanation as to what had occurred. A higher standard is needed of persons who are licensed contractors.
The Respondent referred to the reference provided by Mr Sherriff concerning Mr Costello's work in Victoria. The Respondent conceded that, in fairness to Mr Costello, he may not have known that Mr Sherriff's reference in relation to his work in Victoria was not acceptable in New South Wales.
The Respondent considered that Mr Costello had properly conceded that he had been working on a site without a licence in New South Wales.
Mr Costello could have corrected these problems by undertaking a course in relation to the obligations of a director. There had been no proper acknowledgement of his errors or any attempt to re-educate himself. It was not in the public interest that Cosbar Constructions Pty Ltd be granted a building contractor licence given Mr Costello's behaviour as its director. A

Applicant's Submissions

The Applicant made detailed written submissions. The Tribunal summarises the Applicant's submissions as follows.
The Respondent's refusals were solely based, in essence, on a finding by the Respondent that Cosbar is not a fit and proper entity to hold a general contractor licence in class "building" because Mr Costello is not a fit and proper person. However the Applicant submitted that Cosbar's application was made on the basis that any work to be undertaken by Cosbar would be undertaken under a nominated supervisor, Mr Jon Robert Hansen, proposed employee of Cosbar, who holds a contractor licence and about whom there is no question regarding fitness and propriety.
The Respondent's findings and ultimate conclusion appear to be based on the implied, but unexpressed, assertion that because Mr Costello (in the Respondent's eyes) is not a fit and proper person, he would exert some form of undue influence on Mr Hansen's activities as an employee of Cosbar. There is no evidence in any of Mr Costello's dealings with the Respondent (or indeed, the public in general) that supports that contention.
If Mr Costello acted improperly with regards to Mr Hansen's supervision, it is likely that Mr Hansen would leave Cosbar's employment (and Cosbar would be unable to continue general building activities).
That view is supported by the evidence of Mr Hansen's conversations with the officers of the Respondent, which was to the effect that he would still undertake work separate to Cosbar's work (see Respondent's "Phone Note" dated 15 December 2014).
Secondly, the only ground for refusal of Cosbar's Application is that it should be 'disqualified' (despite apparently meeting the requirements otherwise) on the grounds in section 20(6) of the Act. The Respondent had not however relied on section 20(6) in reaching its earlier decisions. Further, there was no basis for asserting that it is in the public interest for Cosbar not to be granted the extended licence (particularly in light of Mr Hansen's supervision of any works).
Thirdly, to the extent that Mr Costello's fitness and propriety is relevant to the Application, at its highest, the Respondent's objections to Mr Costello thus far is that he provided partially inaccurate information as to his experience. Mr Costello's belief in that information was reasonably held.
Further, there is nothing in what has transpired that impacts negatively on Mr Costello's character or reputation.
The Respondent had not shown that the particular facts relied upon are proven, or that those facts suffice to prove that Mr Costello (his involvement in the operations of Cosbar) are so serious as to render him unfit.
Finally, to the extent that there is any question as to Mr Costello's fitness and propriety relating to a website operated by Cosbar, Mr Costello immediately took the website offline when made aware of the possibility that it breached the Act.
Also, Cosbar did not undertake any work of a general building nature whilst the website was online (or at any time).
At the time he lodged the application, Mr Costello was not aware the Respondent intended to take any further action in relation to the website. He was not aware there was a matter he needed to declare in relation to question 9, the probity section.
Mr Costello had not been dishonest about his work experience. The details of Mr Costello's work experience were contained in the referee's work experience statement dated 13 February 2014 made by Mr Johnston, not Mr Costello. Due to Mr Johnson's clerical error, his Referee Statement referred to work on the Cylinders Drive development from 25 May 2012. However, that clerical error was clarified by letter from Cosbar dated 28 May 2014 (counter signed by Mr Johnston). Specifically, the work at the Cylinders Drive development commenced in June 2013. That clarification was accepted by the Respondent in its letter dated 8 July 2014.
As a matter of procedural fairness, if the Respondent was going to rely upon concerns about Mr Costello's stated experience, in order to arrive at a finding of fitness and propriety, the Respondent should have been in contact with either or both of Mr Costello and Mr Johnston to give them an opportunity to respond.
Mr Costello had set out his total work experience himself in his application, as being from "5/5/2002 to 6/2/2014". This included his Victorian work experience. He did not know that Victorian work experience would not be counted. The Respondent made no investigation of what non-New South Wales experience was sought to be relied upon.
The Respondent had not given Mr Costello procedural fairness before asserting that Mr Costello "has possibly breached Section 307A of the Crimes Act 1900 by supplying false information/documentation". The Respondent had not given consideration to what the legal tests were in relation to Section 307A of the Crimes Act 1900. Accordingly the Respondent should not have relied on this assertion in concluding that Mr Costello was not "fit and proper".
There had been some differences in the information provided to the Respondent by Mr Costello's referees and Mr Costello in relation to the timing of and Mr Costello's roles on the Kingscliff and Punt Road jobs. However, Cosbar submits that the details of experience preferred by Mr Costello's referees, broadly corresponds with the details provided to the Respondent, such that the Tribunal should not have any concerns as to Mr Costello's fitness and propriety on that issue.
Mr Costello submitted that the proper view of the confusion regarding his involvement in the Punt Road development was that the experience should not count towards his experience component, rather than form the basis of an adverse finding as to fitness and propriety.
The Respondent rejected Mr Costello's explanation regarding non-receipt of the Penalty Notice because of assertions by a compliance officer employed by the Respondent, Mr Stuart Evans. The Respondent had not made available to Cosbar a copy of any statement by Mr Evans. The Respondent had not accorded the Applicant procedural fairness, before relying on Mr Evans' assertions.
There is no evidence that Cosbar ever undertook work as a subcontractor without a licence. Cosbar (and Mr Costello himself) had their respective licences on and from 10 September 2012. On the available evidence provided for the purposes of the Referee's Statement, neither Cosbar nor Mr Costello undertook any bricklaying work in New South Wales before 10 September 2012.
The Respondent has never issued a penalty notice based on the assertion that Cosbar advertised for building work when only the holder of a bricklaying licence.
There appears to be an assertion on the part of the Respondent that Cosbar was recommending to consumers that it could do residential building work pursuant to Owner Builder arrangements. This assertion appears to revolve around work allegedly undertaken by Cosbar at the premises of Mr Costello's mother in law. However, no complaint has ever been lodged nor taken further.
If the assertion were based on material on Cosbar's website, the Applicant submitted that any website operated by Cosbar was taken offline immediately upon being informed by Mr Evans that it might have contravened the Act.
The Respondent had stated that Mr Costello had "engaged in a pattern of behaviour." Cosbar submitted that when properly analysed and deconstructed, there is nothing in its (or Mr Costello's) conduct that was improper. The Respondent's assertion that Cosbar or Mr Costello had followed a "pattern of behaviour" that was improper, is unwarranted and unjustified.
Cosbar submits that the Tribunal should make the following findings, based on the legal principles outlined above.
Firstly, there is no proper factual basis for asserting that Cosbar would not be a fit and proper entity to hold a contractor licence by reason of Mr Costello's position within the company.
There is nothing in the evidence to support any assertion that Mr Costello is otherwise than honest, knowledgeable and able.
Similarly, there is nothing in the evidence to support the proposition that Mr Costello held out to the public as being not only possessed of acceptable expertise, but as a person of integrity and honesty.
Indeed, at its highest, the Respondent's findings as to Mr Costello's conduct fall well short of proving the negative test, that is, that Mr Costello is not a fit and proper person.
Taking each of the considerations outlined by the High Court in Bond (Australian Broadcasting Tribunal -v- Bond and Ors [1990] HCA 33; (1990) 170 CLR 321) into account: 1. The activities to be undertaken by Cosbar are building activities in which its work will be supervised by Mr Hansen, not Mr Costello. 2. There is nothing in the conduct of the Mr Costello that would indicate the latter could or would suborn Mr Hansen's supervision of Cosbar's works. 3. There is no evidence of improper conduct. At its highest, Mr Costello's conduct has been wanting for detail, a product of insufficient information about the process of certification. 4. Similarly, there is no evidence before the Tribunal to show that Mr Costello's conduct would be repeated in the future. 5. The Respondent's requirements having been clarified, it is unlikely that any of these issues would likely happen to Cosbar in the future. 6. Mr Costello's character honesty or integrity have not been impeached in any way by what has transpired in the registration process.
Secondly, it follows then that subsection 20(6) of the Act has no application. That is particularly the case as there is no evidence of any public interest in denying Cosbar's licence application.
Thirdly, there is no proper foundation to support any contention that Cosbar or Mr Costello have knowingly or recklessly committed a breach of section 307A of the Crimes Act 1900.
The Applicant submitted that the correct and preferable decision in relation to the Application is that the Application be approved because Mr Hansen is sufficiently qualified to be the holder of a contractor licence.

Section 20(6), Tribunal's findings of fact and law

The Tribunal directs its findings of fact and law at the elements set out in section 20(6). The Chief Executive, and hence the Tribunal on review, may refuse an application for a contractor licence if the Chief Executive/Tribunal is of the opinion that it is in the public interest to do so on any of the following grounds (a) to (c).
Paragraph (a) of Subsection 20(6) is satisfied in that an employee of the applicant - Mr Costello - has had an application for an authority refused on a ground relating to his or her character, honesty or integrity.
Paragraph (c) of Subsection 20(6) (c) provides for refusal of an authority where the Director-General considers that a close associate of the applicant who would not be a fit and proper person to hold a contractor licence exercises a significant influence over the applicant or the operation and management of the applicant's business"

"close associate"

This subsection presents mixed findings of fact and law. Close associate is defined in clause 5 of Schedule 1 of HBA as: "(b) an employee or agent of the other person".
It was not contested, and the Tribunal finds, both as a matter of fact and law, that Mr Costello is a close associate of Cosbar.

"exercises a significant influence over the applicant or the operation and management of the applicant's business"

It was not substantially contested before the Tribunal that as the sole director of Cosbar, Mr Costello would exercise a significant influence over the operation and management of the Applicant's business. The Tribunal finds that Mr Costello would, and in fact as a result of his corporate responsibilities, should, exercise such influence.
Mr Costello did however contest that he would exercise a negative influence over Cosbar's work quality or that he would do so in relation to Mr Hansen's work as the qualified supervisor.
The Tribunal finds that there is no basis for the Tribunal to conclude that Mr Costello would exert influence to undermine the quality of Mr Hansen's work as a qualified supervisor.

"who would not be a fit and proper person to hold a contractor licence"

Fit and proper person

In Hughes & Vale Pty Ltd v The State of New South Wales (No 2) [1955] HCA 28; (1955) 93 CLR 127 at 156 Dixon CJ, McTiernan and Webb JJ said, in relation to the "fit and proper person" test that its purpose: "... is to give the widest scope for judgment and indeed for rejection. "Fit" (or "idoneus") with respect to an office is said to involve three things, honesty knowledge and ability. ."
Consistently with the decisions of the High Court in Hughes & Vale Pty Ltd v The State of New South Wales (No 2) and Australian Broadcasting Tribunal -v- Bond and Ors [1990] HCA 33; (1990) 170 CLR 321 the holding of a contractor licence under the Act attests that the holder is a person who will honestly perform his or her role as a contractor: see also Kioussis -v- Director General, Department of Fair Trading [2002] NSWADT 2 at paragraph 69, per Henessy DP. What fit and proper means must be viewed in the light of, "... the activities in which the person is or will be engaged": Re Percival and Australian Securities Commission [1993] AATA 196; (1993) 30 ALD 280, at 290. What is fit and proper will depend on the legislative context and the nature of the particular profession, trade or occupation in question: Re Brennand & Australian Casino Surveillance Authority (1995) 38 ALD 794, at 796 para [41].
Mr Costello's evidence focussed on contesting the conclusion that he was not a fit and proper person to hold a building contractor licence. His evidence addressed the specific findings of the Respondent in relation to the:

Question 9 probity issue;
Website infringement;
Statements in relation to Mr Costello's experience; and
Doing work as a builder, unlawfully

Tribunal's findings of Fact

Question 9 probity issue
The Tribunal accepts that when Mr Costello lodged the Company's 2nd application, on 15th July 2014, he had not received a written notification about the complaints in relation to the matters he had discussed with Mr Evans. The Tribunal accepts Mr Costello's evidence that it was not until 25th July 2014 that he was clear that there was a complaint. Thus his probity declaration on 15th July 2014 in lodging the Company's application was not dishonest.

Website infringement

The Tribunal accepts that Mr Costello's website infringed requirements, that he was fined by the Respondent and that he paid the penalty of $500 for this at the time or shortly after he received it on 25th July 2014.

Statements in relation to Mr Costello's experience

Mr Costello told Tribunal that the statement in his personal application that the job at 31 Cylinders Drive commenced on 25th May 2012, when it did not commence until June 2013, was a clerical error which was made by Mr Johnston. He did not elaborate. He later corrected the error with the Respondent. The Tribunal finds that Mr Costello was careless about how he filled in and submitted the forms.

Doing work as a builder, unlawfully

There was insufficient evidence before the Tribunal including from third parties, that Mr Costello had done work unlawfully as a builder in NSW when he was licensed as a bricklayer. The Tribunal was not satisfied on the evidence before it that this had occurred.
The Tribunal has considered whether the above findings mean that Mr Costello, would not be not a fit and proper person to hold a contractor licence.
The conclusions of fact I have reached in respect of Mr Costello's applications for contractor licences for himself and Cosbar, are that he was careless in his completion and submission of the forms in relation to experience. I am also satisfied that he breached requirements in relation to his website and paid a penalty of $500. I am not satisfied that these matters continue to demonstrate a lack of honesty or integrity on his part. The Respondent's conclusion about Mr Costello' lack of fitness and propriety did not relate to his technical expertise. There was no allegation or finding before the Tribunal that Mr Costello's work as a bricklayer had been of poor quality. Mr Costello gave evidence that he now understands the necessity not only to apply proper technical skills, but also to take his corporate responsibilities seriously. These matters reflect on his past lack of care in his business management, but that is not a reason for finding him not fit and proper now.

In the Public Interest to refuse

Public interest is not defined in the HBA. The Tribunal looks to other areas of administrative discretion reliant upon meeting "public interest". Public interest can go beyond the character of the Applicant. It can include concerns in relation to public protection, public safety and public confidence in the administration of the licensing system - see Constantin v Commissioner of Police New South Wales Police Force [2013] NSW ADT AP 16 at 33. The decision maker must exercise the discretion promoting the objects and principles of the Home Building Act. Mr Costello's individual interest in Cosbar having a licence is subordinate to that of the public interest in ensuring public safety - see Comalco Aluminium (Bell Bay) Ltd v O'Connor and Others (1995) 131 ALR 657.
Public interest should be interpreted in the context of the objects of the HBA. The object of the HBA is to protect consumers in relation to the quality of residential building. This is an important consideration for the Tribunal in determining the impact of Mr Costello's employment on the operations of Cosbar. Cosbar proposes to employ Mr Hansen as a qualified supervisor. The Tribunal understands the designation of qualified supervisor to make the supervisor responsible for the technical quality of work. The Tribunal does not consider there is evidence that Mr Costello would intimidate Mr Hansen into allowing poor technical work. The Tribunal is not satisfied that the public interest in Cosbar undertaking proper building work while ever Mr Costello is an employee of Cosbar is compromised. The Tribunal is not satisfied that public interest is a ground on which Cosbar constructions Pty Ltd should be refused a building contractor licence.

Decision

The Respondent's decision to refuse Cosbar Constructions Pty Ltd a building contractor licence is set aside. 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: 09 July 2015

At a glance

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Judgment (26 paragraphs)

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Legislation Cited (2)

Cases Cited (9)

Cited By (1)