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Cases Cited: Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106; [1971] HCA 12
Kewin v AAI Ltd t/as GIO Insurance [2026] NSWCA 86
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Sleiman v Gadella Pty Ltd [2021] NSWCA 236
Ward v Williams (1955) 92 CLR 496; [1955] HCA 4

Category: Principal judgment

Parties: Joshua Diab (First Plaintiff)
TCP Projects Pty Ltd (Second Plaintiff)
Secretary, Department of Customer Service (Defendant)

Representation: Counsel:
EA Walker / MJ Long (Plaintiffs)
T Bagley (Defendant)
Solicitors:
Hallcross Legal (Plaintiffs)
Department of Customer Service (Defendant)

File Number(s): 2026/00145933

JUDGMENT

1. Mr Joshua Diab is a plumber who operates in New South Wales. He is also a director of TCP Projects Pty Ltd (TCP), which carries out building and construction work. Both Mr Diab and TCP (together, the Plaintiffs) hold contractor licences issued by the Secretary of the Department of Customer Service (the Secretary) under the Home Building Act 1989 (NSW) (the HBA).

2. On 20 March 2026, a delegate of the Secretary purported to cancel the Plaintiffs’ contractor licences under the HBA. The Plaintiffs contend that those decisions were attended by jurisdictional error. They seek orders in the nature of certiorari quashing the cancellation decisions: Supreme Court Act 1970 (NSW) s 69.

3. This Court stayed the cancellation decisions on conditions until the determination of these proceedings.

4. The Secretary has the power to issue contractor licences pursuant to s 19(1) of the HBA. A contractor licence authorises its holder to undertake residential building work and specialist work as described in the licence: HBA s 21(1).

5. Mr Diab holds contractor licence 294527C. TCP holds contractor licence 399407C.

6. Mr Diab was also a director of Arise Plumbing Group Pty Ltd (Arise) from 12 July 2023 until 19 April 2025. Arise held contractor licence 452903C. It went into liquidation on 14 October 2025 and its licence was cancelled on 3 November 2025 pursuant to s 22(1)(d) of the HBA.

7. On the same day, the Secretary issued Notices of Intent to cancel the Plaintiffs’ contractor licences pursuant to s 22(1)(h) of the HBA. That provision is as follows:

22 Cancellation of contractor licences

(1) The Secretary must, subject to the regulations, cancel a contractor licence that authorises its holder to contract to do residential building work or specialist work, or both (whether or not it also authorises the holder to contract to supply kit homes for construction by another person) if—

…

(h) the Secretary would be required to refuse an application for a contractor licence by the person.

8. The Notices of Intent stated that, as Mr Diab was, within the last 12 months, the director of a company under external administration, the Secretary “may be required to refuse” any application made by him for an individual or company contractor licence pursuant to s 33B(1)(a)(xvii) of the HBA. That provision states, relevantly, as follows:

33B General requirements for issue of certain authorities

(1) An authority (other than an owner-builder permit) must not be issued unless the Secretary is satisfied that—

(a) each relevant person in relation to the application for the authority—

…

(xvii) except in relation to an application for a tradesperson certificate—was not a director of or a person concerned in the management of a body corporate that became a Chapter 5 body corporate (other than Chapter 5 body corporate resulting from a members’ voluntary winding up of the body corporate) at any time within 12 months after the person ceased to be a director of or a person concerned in the management of the body corporate and within 10 years before the date of the application, and

…

(2) For the purposes of this section, each of the following persons is a relevant person in relation to an application for an authority—

(a) the applicant,

…

(c) if the applicant is a corporation—every director of the applicant.

9. A “Chapter 5 body corporate” has the same meaning as provided by s 9 of the Corporations Act 2001 (Cth), which relevantly includes a body corporate that is being wound up.

10. Annexed to the Notices of Intent were copies of the full text of HBA ss 22, 33B and 33C. The relevant subsection is s 33C(3) of the HBA, which provides as follows:

33C Additional requirements for obtaining contractor licences

(3) Despite section 33B(1)(a)(xiv), (xvi) and (xvii), a contractor licence may be issued if, after considering evidence supplied by the applicant, the Secretary is satisfied that—

(a) there is no evident risk to the public that the applicant will be unable to complete contracts entered into in the future to do residential building work or specialist work, and

(b) the relevant person concerned took all reasonable steps to avoid the bankruptcy, liquidation or appointment of a controller or administrator, and

(c) the relevant person concerned has put in place sufficient risk mitigation measures to avoid a future bankruptcy, liquidation or the appointment of a controller or administrator.

11. The Plaintiffs were given the opportunity to make submissions concerning possible grounds on which the contractor licences should not be cancelled. Between 28 November 2025 and 27 February 2026, they provided to the Secretary two sets of submissions, a copy of a report on company activities and the liquidator’s report to creditors.

12. On 20 March 2026, the Secretary sent Notices of Cancellation which informed the Plaintiffs that, pursuant to s 22(1)(h) of the HBA, their contractor licences were cancelled effective from 20 April 2026. Those Notices of Cancellation recorded the following determinations:

13. Mr Diab had not adequately discharged his fiduciary duties as a director of Arise. This failure contributed to significant unresolved debts;

14. the steps taken by Mr Diab to ensure Arise operated in a solvent and compliant manner were insufficient; and

15. given the significant company debts and the impact on creditors, there was insufficient evidence to satisfy the Secretary that Mr Diab should continue to hold a contractor licence. The Secretary had serious concerns about the potential risk to the public and the ability to meet contractual and legislative obligations.

16. The Notices of Cancellation referred specifically to s 33B(1)(a)(xvii) of the HBA, but not to s 33C(3). They did, however, state:

“Building Commission NSW carefully considered all information and submissions provided in response to the [Notice of Intent] issued on 3 November 2025, including correspondence received on 28 November 2025, 1 December 2025, 27 January 2026 and 27 February 2026”.

The proceedings

14. By Further Amended Summons the Plaintiffs seek orders quashing the Secretary’s decisions to cancel the contractor licences. The first ground is that the Secretary did not, in the circumstances, have the power to cancel the contractor licences and in doing so committed jurisdictional error. The second ground, which is argued in the alternative, is that the Secretary asked the wrong question in concluding that it was required to cancel the contractor licences, thereby committing jurisdictional error. There was originally a third ground, but that was abandoned and I need not address it.

Ground one

15. The Plaintiffs submit that the Secretary’s power to cancel a contractor licence pursuant to s 22(1)(h) of the HBA cannot arise where s 33B(1)(a)(xvii) applies due to the operation of s 33C(3). They claim that s 33C(3), by use of the expression “may”, affords the Secretary a residual discretion to issue a contractor licence. If they are correct, then the Secretary’s power under s 22(1)(h) was not enlivened because the Secretary was not required to refuse to issue the contractor licence under s 33B(1)(a)(xvii).

16. The Secretary submits that ss 22(1)(h) and 33B(1)(a)(xvii) of the HBA operate so that the Secretary must cancel a contractor licence where the Secretary is not satisfied that the relevant person meets the licensing requirements prescribed by s 33B(1)(a)(xvii). The Secretary argues that s 33C(3) is only engaged if the Secretary is satisfied of the matters contained within the subsection. The Secretary, upon receiving the Plaintiffs’ evidence, was not so satisfied and was therefore required to cancel the contractor licences under s 22(1)(h).

The question before me

17. The parties devoted little attention to the construction of “may” in ss 33B and 33C. However, I regard it as central to this dispute. The question this ground raises is whether the Secretary was “required to refuse” within the meaning of s 22(1)(h) of the HBA. That will turn on the proper characterisation of s 33C(3).

18. The relationship between the relevant provisions is as follows. Section 19(1) of the HBA is the provision which confers power on the Secretary to grant contractor licences. Section 20(1) prescribes the circumstances in which the Secretary must refuse an application. Two of those circumstances are relevant here. First, under s 20(1)(a1), the Secretary must refuse an application if it is not satisfied of the matters prescribed by s 33B. Secondly, under s 20(1)(a2), the Secretary must refuse an application if, after considering evidence supplied by the applicant, it is not satisfied of the matters prescribed by s 33C(3).

19. Section 33B(1)(a)(xvii) of the HBA provides that a contractor licence must not be issued if the applicant was a director of a company that became a Chapter 5 body corporate within 12 months of the applicant ceasing to be a director. Section 33C(3) provides that, despite s 33B(1)(a)(xvii), a licence “may” be issued if the Secretary is satisfied of three cumulative matters, being public risk, reasonable steps to avoid the liquidation, and risk mitigation measures.

20. Section 22(1)(h) of the HBA provides that the Secretary must cancel an existing contractor licence if the Secretary “would be required to refuse” an application for such a licence by the holder under s 20(1).

21. If “may” in s 33C(3) of the HBA confers a discretion on the Secretary, then the Secretary would not be “required to refuse” and HBA s 22(1)(h) could not be enlivened. If “may” in fact means “must”, then failure to satisfy the Secretary of the matters within s 33C(3) means that the Secretary would be “required to refuse” and s 22(1)(h) is enlivened.

Applicable principles

22. Justice Leeming summarised the principles concerning jurisdictional error at [20(2)] of Sleiman v Gadella Pty Ltd [2021] NSWCA 236. There, his Honour said (citations omitted):

“(2) Jurisdictional error cannot be defined with complete precision, but a useful summary may be found in the joint judgment of Basten, Ward and McCallum JJA in Bangura v Director of Public Prosecutions (NSW) [2020] NSWCA 138 at [13]:

‘Jurisdictional error arises where the decision-maker has misunderstood the limits of his or her legal authority or has otherwise acted outside the scope of that authority, or failed to exercise the powers conferred by that authority. A failure to accord a party procedural fairness in a material respect will constitute jurisdictional error, because procedural fairness is an essential characteristic of the exercise of judicial power, being the power exercised by the District Court judge in the present case.’”

23. Jurisdictional facts were explained by Leeming JA (with whom Kirk JA and Griffiths AJA agreed) in Kewin v AAI Ltd t/as GIO Insurance [2026] NSWCA 86 at [65]–[68], where his Honour said:

65 The joint judgment in Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135; [2000] HCA 5 at [28] stated:

The term ‘jurisdictional fact’ (which may be a complex of elements) is often used to identify that criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion. Used here, it identifies a criterion, satisfaction of which mandates a particular outcome.

66 In Gedeon v Commissioner of the New South Wales Crime Commission (2008) 236 CLR 120; [2008] HCA 43 at [43] the High Court noted that the term could be used imprecisely, and gave the following description:

The expression ‘jurisdictional fact’ was used somewhat loosely in the course of submissions. Generally the expression is used to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker.

…

68 Ordinarily if the precondition to the exercise of a power is satisfied by the opinion of the donee of the power, a submission based on jurisdictional fact will fail, and a litigant challenging the validity of a decision must impugn the formation of the opinion. On the other hand, if the exercise of a power is only available if the precondition exists as a matter of fact, then the precondition will be a jurisdictional fact and a court may in judicial review proceedings determine whether the precondition existed, including on evidence not before the donee of the power: see, for example, Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; [1999] NSWCA 8 at [36], [41] and [94]; Smith v Blanch (2025) 118 NSWLR 70; [2025] NSWCA 188 at [8]. It is well settled that whether or not a precondition to the exercise of power is a jurisdictional fact is a question of statutory construction: see McMillan v Taylor (2023) 111 NSWLR 634; [2023] NSWCA 183 at [60].”

24. A provision is to be construed so that it is consistent with the language and purpose of all the provisions of the statute: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at 381 [69]. In a provision which confers power, the word “may” creates a presumption that the exercise of that power is discretionary: Interpretation Act 1987 (NSW) (Interpretation Act) s 9(1). That meaning can be displaced where a contrary intention can be discerned: Interpretation Act s 5(2). Such contrary indication may be discerned from the text or context of the statute: Ward v Williams (1955) 92 CLR 496; [1955] HCA 4 (Ward) at 505. The expression “may” in a statute conferring power on a public authority may impose a duty to exercise that power once the conditions for its exercise are satisfied. This is especially true where the purpose of the power is to confer a benefit on identifiable persons: Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106; [1971] HCA 12 (Finance Facilities) at 134 (Windeyer J, Barwick CJ agreeing). In such circumstances, the use of the power is mandatory rather than discretionary, meaning the power is coupled with a duty to use it.

Consideration

25. The Secretary’s power to grant a contractor licence pursuant to s 33C(3) of the HBA is enlivened if the Secretary is satisfied of certain matters. The word “may” in s 33C(3) creates a prima facie presumption that the provision is discretionary.

26. However, I consider that this would create dissonance within the statute. On that construction, once s 33C(3) of the HBA was enlivened, the application of s 22(1)(h) is negated. If that were correct, there would be no correlative ground under s 22(1)(h) supporting the Secretary’s obligation to cancel a contractor licence.

27. I consider that to be an unreasonable result. Accordingly, pursuant to s 34(1)(b)(ii) of the Interpretation Act, I have had regard to certain extrinsic material to assist me in ascertaining the meaning of the provision. Sections 20(1)(a1), 22(1)(h), 33B(1)(a)(xvii) and 33C(3) of the HBA were added by the Home Building Amendment Act 2014 (NSW). The explanatory note to that act stated that it was amending the HBA by, relevantly:

“…providing for consistent considerations for all licensing and certification decisions (that is, for their issue, renewal, restoration and cancellation), including by requiring the cancellation of a contractor licence if an application by the person would be required to be refused and making similar provisions relating to renewal.”

28. That explanatory note emphasises consistency and requirements. There is no mention of discretion. Treating the word “may” as creating a discretion would undermine the purpose of the provisions.

29. Further textual features support the provision being mandatory. First, since it creates an exception to s 33B(1)(a)(xvii) so that certain persons will not be denied a contractor licence, the provision is for a beneficial purpose: Ward at 505–506. Further, the matters within s 33C(3) are conditions precedent to the exercise of the Secretary’s power: Finance Facilities at 134.

30. I consider that the prima facie presumption that “may” in s 33C(3) of the HBA creates a discretion is displaced. The provision is mandatory. If the Secretary is satisfied of the matters within s 33C(3), it must grant a contractor licence unless there is some separate basis for the licence to be refused.

31. There is one additional problem with the Plaintiffs’ argument. It appears to confuse the nature of the Secretary’s task. If the Secretary is provided evidence and submissions, it must undertake an evaluation pursuant to s 33C(3) of the HBA. There is also no discretion concerning the nature of the evaluation. The Secretary must consider the matters within s 33C(3) and arrive at a single conclusion as to whether it is satisfied of the matters contained therein.

32. No jurisdictional error arose by the Secretary’s cancellation of the licences pursuant to s 22(1)(h) of the HBA. Accordingly, ground one fails.

Ground two

33. The Plaintiffs contend that the Secretary committed a jurisdictional error in asking the wrong question when considering whether the Plaintiffs met the requirements of s 33C(3) of the HBA. Their argument proceeds as follows:

34. in determining whether it was obliged to cancel the First Plaintiff’s contractor licence, the Secretary was required to ask whether it was satisfied of each of the matters in ss 33C(3)(a)–(c); and

35. the Secretary asked the wrong question by considering whether there was sufficient evidence by which it could be satisfied that the First Plaintiff should continue to hold a contractor licence.

36. The core of the Plaintiffs’ criticism is that the Secretary failed to focus on the composite statutory question by asking whether it was satisfied of all three matters in ss 33C(3)(a)–(c) of the HBA. The Secretary, rejecting this, contends that it asked the right question and reached its conclusion by reference to the criteria within s 33C(3). Accordingly, the Secretary submits, no jurisdictional error was committed.

37. I pause to note that there was some dispute about what document or documents disclosed the questions the decision-maker asked. The Plaintiffs submitted that the Assessment Sheet was part of the decision. The Assessment Sheet contained a “recommendation” from a person described as the “Recommending Officer”. The Plaintiffs contended that this was evidence of the decision, while the Secretary contended that it was a memorandum. I agree with the Secretary. It is clear that the Assessment Sheet was merely a recommendation and only the Notice of Cancellation disclosed what the decision-maker asked itself.

38. To quell this controversy, it is necessary to consider the notices that were provided to the Plaintiffs. As set out at [7]–[11] above, two Notices of Intent were sent by the Secretary to the Plaintiffs on 3 November 2025. The Plaintiffs’ submissions to the Secretary regarding the potential cancellation addressed a range of matters, namely:

39. the circumstances leading to the winding up of Arise;

40. information concerning TCP;

41. the financial capacity of the Plaintiffs;

42. the s 33C(3) factors; and

43. the potential impact of cancellation of the contractor licence.

44. The Plaintiffs place considerable emphasis on certain parts of the 20 March 2026 Notices of Cancellation. The first relevant passage of the Notices of Cancellation stated:

“Why am I receiving this notice?

On 3 November 2025, Building Commission NSW issued you with a notice requesting additional information to assist in determining whether licence 294527C should be cancelled.”

38. The Plaintiffs contend that this sentence reflects the wrong test and that there is no reference made to s 33C(3) of the HBA. The Plaintiffs also attach significance to the following paragraph on page two of the Notices of Cancellation:

“Given the significant company debts and the impact on creditors, there is insufficient evidence to satisfy Building Commission NSW that you, Joshua James Diab should continue to hold a contractor licence. Building Commission NSW has serious concerns about the potential risk to the public and the ability to meet contractual and legislative obligations.”

39. The Plaintiffs contend that this paragraph misstates the correct question the Secretary must consider and contains confused reasoning.

40. Section 33C(3) of the HBA is a gateway provision which permits a contractor licence to be issued notwithstanding, relevantly, s 33B(1)(a)(xvii). It requires the Secretary to be satisfied of three cumulative matters.

41. It is necessary to consider whether each of the three s 33C(3) criteria must be considered and satisfied. The s 33C(3) gateway is not directed at consideration of the applicant’s character. Instead, it requires the Secretary to consider three specific matters. The first matter is forward-looking and concerns whether there is no evident risk to the public that the applicant will be unable to complete contracts entered into in the future to do residential building work or specialist work. The only specific reference to this element is in the paragraph quoted at [38] above.

42. Mr Bagley of Counsel, who appeared for the Secretary, submitted, and I accept, that this paragraph must be read in the context of the preceding paragraphs. Although the reasoning in relation to public risk is brief, I am nevertheless satisfied that the first matter was considered.

43. The second matter requires the Secretary to be satisfied that the relevant person took all reasonable steps to avoid, relevantly, the liquidation. This is a backward-looking assessment. I am satisfied that the Secretary gave considerable weight to the liquidator’s statutory report issued on 14 January 2026. That report indicated that whilst Mr Diab was a director of Arise, the company, under his directorship:

44. failed to meet its taxation obligations;

45. failed to keep adequate records;

46. likely failed to operate in a solvent manner, which carried the risk of additional financial liabilities; and

47. Arise’s accounts receivable contain significant discrepancies.

48. I am satisfied that the Secretary took the second matter into consideration.

49. The third matter is forward-looking and concerns whether the applicant had put in place sufficient risk mitigation measures to avoid a future liquidation. There is no explicit reference to risk mitigation measures in the Notices of Cancellation.

50. I have had regard to the submissions made by the Plaintiffs to the Secretary on the matter of risk mitigation measures. Those submissions address matters including engagement of financial and legal advisers, the asset base of a contingency fund, cessation of trading through TCP, refusal to take on unreliable business partners, personal completion of work without reliance on others and accountants’ projections said to demonstrate robust project management and financial controls. However, I consider that, for the purpose of the third matter in s 33C(3) of the HBA, such submissions are largely assertions rather than evidence.

51. The Secretary is required to be satisfied that sufficient measures are in place. This requires a positive state of satisfaction which, in my opinion, is attained through concrete, identifiable and verifiable steps. The absence of explicit reasons on this matter does not establish that the Secretary failed to consider it. I consider that the Secretary had sufficient regard to the third matter.

52. The Secretary, in the Notices of Cancellation, confirmed that it had carefully considered all the information and submissions provided in response to the Notices of Intention, including correspondence received on 28 November 2025, 1 December 2025, 27 January 2026 and 27 February 2026. I have no reason to doubt this. Even if I did, any remaining concerns would be allayed by the Assessment Sheet. That document, which the Plaintiffs accept was relevant and admissible, contains a detailed assessment of the submissions and material provided by the Plaintiffs.

53. I am satisfied that the Secretary asked the correct question and appropriately evaluated the three matters in s 33C(3) of the HBA. It did not fall into jurisdictional error. I reject ground two.

Orders

50. I make the following orders:

51. The Further Amended Summons is dismissed.

52. The Plaintiffs are to pay the Defendant’s costs.

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