Dziurek v Secretary of the Department of Customer Service

Material before the Tribunal

1. The application for review attaching the internal review reasons was before the Tribunal. Mr Dziurek provided two bundles of documents and written submissions. He also attended the hearing by audio visual link and gave evidence, was cross examined and made oral submissions.
2. The Respondent provided a bundle of material filed under s 58 of the Administrative Decisions Review Act 1997 (ADR Act), as well as written submissions and made oral submissions at the hearing.

Applicant's case

1. Mr Dziurek submits the s 33C(3) discretion should be exercised in his favour to grant him a licence because he has been open about the circumstances leading to his bankruptcy and he has taken positive steps since to put measures in place to prevent a recurrence, as demonstrated by the material before the Tribunal.

Respondent's case

1. The Respondent submits Mr Dziurek has not established the s 33C(3) factors exist such that Mr Dziurek should be granted a licence citing Clarke v Commissioner of Fair Trading, Office of Fair Trading [2004] NSWADT 273 (Clarke).

Jurisdiction

1. The Tribunal has jurisdiction to review an administratively reviewable decision: s 55 of the ADR Act. Section 83B of the HB Act provides that applications may be made to the Tribunal for administrative review of a decision to refuse a licence application. The Tribunal has jurisdiction to hear and determine this application for review.

Administrative Review

1. When considering an application for review the Tribunal is to decide what is the correct and preferable decision having regard to the material before it (s 63(1) of the ADR Act). In doing so the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision (s 63(2) of the ADR Act).
2. The time at which the correct and preferable decision is determined is when the Tribunal makes its decision: YG and GG v Minister for Community Services [2002] NSWCA 247 at [25]. In conducting a review the Tribunal is not restricted to consideration of the material that was before the Respondent but may have regard to any relevant material before the Tribunal at the time of the review: Shi v Migration Agents Registration Authority [2008] HCA 31.
3. The Tribunal may decide to affirm or vary the administratively reviewable decision, or set it aside and either substitute a different decision or remit the matter to the administrator for reconsideration: see s 63(3) of the ADR Act.

Proper name of the Respondent

1. This matter had been listed with Building Commission NSW identified as the Respondent. The Tribunal queried the proper name of the Respondent at the hearing on 23 August 2024. The Respondent submitted the proper name of the Respondent was "Commissioner for Fair Trading" as there was no administrative arrangements order made in respect of Building Commission NSW. Accordingly, the Tribunal made a direction to amend the proper name of the Respondent to "Commissioner for Fair Trading" on 23 August 2024.
2. However, subsequently the Tribunal became aware of an amendment to the HB Act that commenced on 20 August 2024 as a result of the Better Regulation Legislation Amendment (Miscellaneous) Act 2024 (the Amending Act) receiving assent. The Amending Act relevantly provides in Schedule 3: 3.6 Home Building Act 1989 No 147 … [3] Schedule 1, clause 1(1), definition of "Secretary" Omit the definition. Insert instead - Secretary means the Secretary of the Department
3. The Tribunal made directions on 27 August 2028 requiring the parties to address the proper name of the Respondent noting the Amending Act and the Tribunal's preliminary view the proper name of the Respondent was "Secretary, Department of Customer Service".
4. On 28 August 2024 Mr Dziurek advised he did not have any written comment to make. On 29 August 2024 the Respondent maintained in writing its view that the proper name of the Respondent was "Commissioner for Fair Trading, Department of Customer Service".
5. The parties were given the opportunity to make submissions as to whether the Tribunal should dispense with a hearing on the name issue and I am satisfied that the matter can be adequately determined in their absence and dispense with a hearing: see s 50(2) of the Civil and Administrative Tribunal Act 2013.
6. As a result of the Amending Act I am satisfied the proper name of the Respondent in this review is "Secretary of the Department of Customer Service".

Issues for determination

1. Mr Dziurek was discharged from bankruptcy on 31 January 2022. His licence application was made in September 2023 that is within the three year period to 30 January 2025 prescribed by s 33B(1)(a)(xiv) of the HB Act. To be granted a licence in those circumstances, the Tribunal needs to be satisfied on evidence provided by Mr Dziurek: 1. There is no evident risk to the public that the applicant will be unable to complete contracts entered into in the future (s 33C(3)(a) of the HB Act); 2. Mr Dziurek took all reasonable steps to avoid the bankruptcy (s 33C(3)(b) of the HB Act); and 3. Mr Dziurek has put in place sufficient risk mitigation measures to avoid a future bankruptcy, liquidation or the appointment of a controller or administrator (s 33C(3)(c) of the HB Act).
2. The Respondent's original and internal review decisions relied on other grounds that are no longer pressed and are not relevant to this review.

Applicant's history

1. Mr Dziurek lives interstate and has applied for a licence in NSW to pursue a potential business opportunity to perform small scale carpentry work.
2. Mr Dziurek had a period of challenge in his life from approximately 2015 involving relationship and financial issues, substance dependence and a period of incarceration. In part, as a result of this period in his life, Mr Dziurek entered bankruptcy.
3. Mr Dziurek was a witness of credit, he answered questions openly and candidly and was careful to be precise as to events to the best of his recollection. I accept his evidence that he no longer had access to emails and other relevant documents because of the passing of time, his incarceration and he no longer had access to his former work email. While the documentary evidence he provided was not comprehensive, it was sufficient for the purposes of this review.
4. Mr Dziurek provided letters of reference from three clients he has performed work for in another jurisdiction. The authors detail they understand Mr Dziurek's circumstances including his bankruptcy and all speak to his good work performance, professionalism and good character. Mr Dziurek also provided evidence of the financial aspects of the work performed for those authors. The letters carry significant weight in this review because the independent authors contract with and speak for Mr Dziurek knowing his circumstances and the letters are further supported by business records.
5. The Respondent's submission was that because Mr Dziurek could not identify an exact point in time he became aware of the risk of bankruptcy the Tribunal cannot be satisfied as to the s33C(3)(b) ground, citing Clarke which considered a similar provision (at [9]-[11]): The Tribunal has already dealt with three applications for review arising under the new provisions: McDonald v Commissioner for Fair Trading [2004] NSWADT 124, Smith v Commissioner for Fair Trading [2004] NSWADT 182 and Davidson v Commissioner for Fair Trading [2004] NSWADT 200. It has expressed the following views as to the approach to be taken in examining the question of whether the licence holder took 'reasonable steps' to avoid the bankruptcy or insolvency: (i) A general inquiry into the wisdom or otherwise of the original financial dealings that ultimately ended in bankruptcy or insolvency is not contemplated by the Act. The point at which the inquiry commences is when the applicant was 'faced with the possibility' of bankruptcy or insolvency (Davidson at [20]) or was 'aware' or 'should have been aware' (McDonald at [21]) of that possibility. The focus is the steps taken to avoid the relevant event (see Smith at [17]) - in cases of the present kind, administration, and later liquidation. (ii) Subject to (i), in assessing reasonableness the Tribunal must examine all the relevant facts and circumstances. (McDonald at [25]), (iii) The steps taken by the applicant must be objectively reasonable in the sense that they would be those taken by a 'reasonable person endowed with the knowledge and experience of the [applicant]'. (McDonald at [26-27]) To these should probably be added a fourth, though it is obvious enough from the provision: (iv) The person under notice has the task of satisfying the Commissioner that he or she took all reasonable steps to avoid the insolvency.
6. Mr Dziurek provided evidence he sought help when he became financially troubled including by contacting a debt helpline he found through a government website. He also refinanced his home and business loans under financial hardship provisions. Eventually he sold his home, car and other possessions.
7. In reducing his debts, Mr Dziurek's evidence, that I accept, was that he reduced a credit card debt using the proceedings of those sales. When others provided financial assistance to Mr Dziurek, those payments were made direct to creditors so that Mr Dziurek did not have access to the relevant funds.
8. Mr Dziurek also sought help from his family, some of whom were identified as creditors in his bankruptcy. The Respondent submitted the Tribunal should be "concerned" at such an event, however I am not satisfied properly identifying creditors to whom a person owed money in a bankruptcy process should be of concern and this does not weigh against Mr Dziurek in this review.
9. I accept Mr Dziurek's evidence that he did not "run" from his financial situation and this is supported by him appointing a power of attorney over his financial affairs while he was incarcerated because he knew he would be asked to meet his obligations during that time and he intended to meet them.
10. Reasonable steps must be determined within the relevant facts and circumstances. On the material before the Tribunal I am satisfied Mr Dziurek took all the reasonable steps he could at the time, given his circumstances, to avoid bankruptcy.
11. Mr Dziurek provided evidence of many steps he has taken to address future bankruptcy risk. These include Mr Dziurek: 1. has undertaken and is currently undertaking courses of study that include business and financial management subjects; 2. uses a number of business software systems and ensures GST and tax are paid before disbursements; 3. has employed a virtual assistant to manage administrative matters for his business; 4. separates his business and personal funds; 5. has taken out a number of personal and business insurance policies; and 6. has access to advice through professional memberships he now holds.
12. Mr Dziurek has built a business since he was incarcerated when he has had no access to credit. The Respondent submitted that Mr Dziurek holding deposits of 50% in his current work in another jurisdiction should be of "concern" to the Tribunal. However I accept the evidence of Mr Dziurek that he is entitled to do so in the relevant jurisdiction, did so because he does not have access to any credit and would not in NSW where there is a deposit limit of 10%.

Consideration of s 33C(3) discretion

1. On the material before the Tribunal I am satisfied there is no evident risk to the public that the applicant will be unable to complete contracts entered into in the future because of the steps Mr Dziurek has taken since his bankruptcy including improving his business processes and taking into account the letters of reference he has provided to the Tribunal.
2. As discussed above, I am satisfied Mr Dziurek took all reasonable steps to avoid his bankruptcy in the circumstances.
3. I am also satisfied Mr Dziurek has put in place sufficient risk mitigation measures to avoid a future bankruptcy, liquidation or the appointment of a controller or administrator including because of the courses of study he has and is undertaking, the business support tools he has engaged and the professional memberships and insurance he now holds.
4. Therefore, in all the circumstances and on the material before the Tribunal, I am satisfied the s 33C(3) discretion should be exercised in favour of Mr Dziurek and the correct and preferable decision is that Mr Dziurek be granted a licence.
5. It follows the decision of the Respondent should be set aside and instead Mr Dziurek should be granted a licence in the category of carpentry work.

Order 1. The decision under review is set aside. 2. The Applicant is to be granted a contractor licence under the Home Building Act 1989 in the category of carpentry work.

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: 04 September 2024