Grewal v Commissioner of Fair Trading

Brief Background 3In support of his application the Applicant supplied relevant information in regard to his formal qualifications and Referee Statement forms completed by Mr Haitham Kamaledine. 4The Respondent concluded that the Applicant satisfied the approved qualification requirements for a building licence but determined that he did not possess the necessary industry experience required under the HBA and the Regulation. 5In support of his application the Applicant provided three addresses where he claimed residential building experience. The experience requirement for a building licence is 'at least two years relevant industry experience in a wide range of building construction work'. 6The three building sites referred to in the Referee Statements were located at Roselands, Bankstown and Monterey addresses within New South Wales. The Referee, Mr Haitham Kamaledine was nominated as the licensed builder in control of each of the three building sites. 7On the Referee Statement at page 1, under the item 'Nature of Employment' the Referee had indicated that the Applicant was a sub- contractor. 8The Respondent determined to refuse the Applicant's initial application on 22 January 2014, on the basis that he was engaged as a subcontractor and therefore could not have been lawfully engaged during the period of claimed wide ranging industry experience. The letter included the following reasons for refusal: The applicant does not hold any licence under the HBA to contract for any residential trade work. The following addresses are where the applicant has claimed residential building experience: a) 2 Rodgers St Roselands b) 43 Petunia Ave Bankstown c) 219 The Grand Parade Monterey The experience claimed at these addresses is not acceptable as: a) Haitham Kamaledine has declared the applicant was a sub-contractor and therefore could not have been lawfully engaged by Haitham Kamaledine. It is a breach of the HBA if an individual, partnership or company enters into sub-contract work to do any residential or specialist work, where they are not the holder of a contractor licence authorising its' holder to contract to do that work. The applicant has not demonstrated that: a) They have been employed or lawfully engaged by holders of a contractor licence, and, b) They have sufficient experience in supervision residential building construction work to satisfy the experiential requirement for the issuing of an individual contractor's licence for general building work under the HBA. Based on the information provided, NSW Fair Trading is not satisfied that the applicant has attained "two (2) years acceptable relevant industry experience in a wide range of building construction work" to be issued with a building licence. Accordingly, the application is refused in accordance with clause 26 (1) (b) (i) and clause 28 (1) (b) of the Home Building Regulation 2004 (refer attached extract). 9On 13 February 2014 the Applicant requested an internal review of the refusal decision. In support of the request he provided a Project Management Works sheet that provided a detailed description of the scope of works carried out at each of the sites referred to in the Referee Statement. In addition the Applicant sought clarification from the Department as to the applicable provision applying to the referee and employee at the time that the experience was gained, and offered to meet with officers of the Department to discuss and clarify any of the outstanding issues.

Outcome of Internal Review 10On 19 March 2014 the internal reviewer affirmed the previous decision to refuse Mr Grewal a contractor licence, essentially on the same basis as the decision in first instance. The internal reviewer determined that for the period of the 2 year relevant experience as submitted on the referee forms, Mr Grewal had subcontracted to the holder of the contractor licence (Mr Kamaledine the Referee) without he himself being in possession of the relevant contractor licence for the work to be carried out. The internal reviewer advised in their Statement of Reasons that: It is therefore concluded that if an individual is employed on a subcontract basis to undertake residential building work when that person is not appropriately licensed to legally contract for the work then the individual cannot be considered to have been lawfully engaged. The referee Haitham Kamaledine previously held an individual contractor licence for building licence number R86229, from 18 September 2000. The authority was cancelled on 24 August 2006. The referee stated the applicant was a full time sub-contractor in the periods January 2002 to March 2003, January 2004 to October 2004 and February 2005 to January 2006. The referee has listed the applicant's description of work carried out as site supervision and carpentry work. Lawfully engaged The applicant's referee has stated in section 5 of the completed Referee Statement form that the applicant was employed as a full time sub-contractor. The reviewer notes that the applicant in the period did not hold an authority to contract to carry out residential building work issued under the Home Building Act 1989. The reviewer has concluded that any residential building work which the applicant was undertaking for the referee was not as an employee of the referee nor was it work undertaken for the referee as the holder of a contractor licence. As the applicant was engaged as a sub-contractor it is concluded this arrangement is not in accordance with the provisions of the Home Building Act 1989 and therefore the applicant is determined by the reviewer to not have been lawfully engaged. .... The reviewer advises the applicant that his referee, as holder of a building licence, contracted with him to carry out residential building work whilst he was unlicensed to do so. 11The matter came before me for hearing on 5 August 2014. The Applicant (Mr Grewal) was assisted by Mr Khadar Roude as an industry Agent. Mr Coss Solicitor represented the Department Respondent.

The Evidence at Hearing 12In his evidence Mr Grewal was taken to page 1 of the Referee Statement. He was specifically asked whether he worked for Mr Grewal as an employee or sub- contractor. His evidence was that he was a sub-contractor not an employee. However when questioned further on this he answered that he was really an employee, and was only a subcontractor for the purpose of his ABN and that was based upon advice from his Accountant concerning taxation matters. 13When he was asked to expand on the information provided on page 10 of the section 58 documents (concerning page 3 of his Referee Statement - Building Site 1) Mr Grewal's evidence was that he mainly did carpentry work and performed the role of site supervisor when watching the concreters complete their work on the site. 14When questioned about the job referred to as Building Site 3 (on page 11 of the section 58 documents) Mr Coss advised that the Department was unable to locate a DA for that particular address at the relevant time. 15Mr Grewal gave evidence that his main profession was carpentry. In respect of whether he was paid sick leave by Mr Kamaledine, he answered, 'maybe'. He worked 5 days a week with him for the nominated periods. He gave evidence that to his recollection he was paid wages without Tax being deducted. He was paid under his ABN. 16Whenever asked to describe the nature of the work performed, including in cross examination, Mr Grewal consistently provided a general answered that he performed the whole range of work required. 17Following Mr Grewal's evidence Mr Kamaledine gave evidence. Mr Kamaledine attested that Mr Grewal possess the relevant experience to meet the condition for the granting of a contractor licence, and that he personally witnessed Mr Grewal working on and completing residential construction. 18His evidence was that Mr Grewal knows the process back to front. He had Mr Grewal commence with him as a labourer but he progressed in the types of jobs that he completed for him, and could perform great (and often complex) work. 19When questioned specifically about the period under supervision (2002-2006) initially Mr Kamaledine could not recall whether Mr Grewal was employed or engaged as a sub-contractor. 20Later in his evidence Mr Kamaledine stated that he now recalled that he (Mr Grewal) was employed. However he was unable to recall whether Mr Grewal was ever paid sick leave. 21Mr Coss took Mr Kamaledine to a letter dated 14 July 2014 addressed to him from the Department. The letter sought clarification of matters raised in Mr Kamaledine's Referee Statement dated 6 December 2013. It also referred to a Statutory Declaration dated 23 June 2014 filed in support of Mr Grewal's individual contractor licence application for the work category of general building work. 22Mr Kamaledine confirmed in his evidence that he had not responded to the letter. However, later in his evidence he claimed that he had not seen the letter. 23Mr Coss questioned Mr Kamaledine about a number of technical aspects relating to the nominated Building Sites referred to in the Referee Statement. When questioned about matters relating to whether as the Principal Contractor Mr Kamaledine held the necessary home warranty insurance he answered that he could not recall. There was also some dispute between the Department and the witness as to the DA status for some of the nominated sites, and the scope of the approved work. 24Whilst these matters do not relate directly to Mr Grewal's application, they impact on whether the work being performed at the site constitutes lawful engagement under the HBA. 25The Respondent submitted during the hearing and by way of written submissions filed and served prior to the hearing date that the Applicant was not 'lawfully engaged' during the relevant period. 26The Respondent further submitted that that the fact that the Applicant was financially remunerated for the work carried our as a subcontractor does not mean that he was lawfully engaged. The instrument states that any financial remuneration can only be as a consequence of being "lawfully engaged".

Legislative Scheme 27Section 20(2) of the Home Building Act 1989 provides that the regulations may fix or provide for the respondent to determine standards or other requirements that must be met before any contractor licence is issued or before a contractor licence of a particular kind is issued. 28Section 20(5) of the Act provides that a decision of the respondent relating to the determining of qualifications or other requirements under sub-section (2) cannot be reviewed by the Tribunal in an application for review made under this or any other Act. 29Clause 26(1)(b)(i) of the Home Building Regulation 2004 reads: Page 2. Before a contractor licence is issued, the Director-General must be satisfied that the applicant, if also applying for an endorsement of the contractor licence to show that it is equivalent of a supervisor certificate complies with the requirements prescribed by clause 28(1). 30Clause 28(1) provides: (1) Before a certificate is issued, the Director-General must be satisfied that the applicant: (a) has such qualifications or has passed such examinations or practical tests, or both, as the Director-General determines to be necessary to enable the applicant to do, or to supervise, the work for which the certificate is required, and (b) has had experience of such a kind and for such a period, as the Director-General considers would enable the applicant to do, or to supervise, the work for which the certificate is required, and (c) is capable of doing or supervising work for which the certificate is required. 31The current standards and other requirements determined by the Director- General in relation to the qualifications, examinations and experience required for an endorsed licence or supervisor certificate to do or to supervise building work are set out in an Instrument effective 3 July 2013 (see: NSW Government Gazette No. 90, 12 July 2013). 32I am satisfied that Mr Grewal has the relevant qualifications. I note that this aspect is not contested between the parties. The issue to be determined is whether Mr Grewal has the requisite experience as specifically defined and proscribed in the Instrument. 33The definition of experience in the gazette is set out below: "Experience" means experience gained by the applicant as: (a) an employee of; or (b) a person otherwise lawfully engaged by, The holder of a contractor licence authorising the holder to do the class of residential building work in which the experience was gained ("the Work"), where during the relevant period, the applicant was: (c ) supervised and directed in the doing of the Work by the holder of an endorsed contractor licence or supervisor certificate authorising its holder to supervise the Work; and (d) financially remunerated for the Work 34Mr Grewal provided a large amount of information to the Tribunal in respect of the extent of his building work and general experience. The scope and nature of his residential construction work over the last 14 years is not in dispute. Mr Grewal provided information by way of testimonials, building plans, drawings, contract specification and a large number of photographs showing work that he says that he has performed (predominantly) in the years following the period claimed in his application. 35I note that some of this work was carried out either on his own sites or on behalf of an owner builder. Mr Grewal is not able to claim those periods as part of the '2 years experience whilst lawfully engaged' requirement. This is because under the provisions an applicant cannot self- verify their experience, nor is the time performing work for an owner builder able to count, as an owner builder permit is not the equivalent of a contractor licence authorising the older to do the class of residential building work in which the experience was gained. 36Additionally he is not able to claim the periods where he worked directly under the direction and guidance of an architect.

Consideration 37In the case of Zada v Director General Department of Finance and Services NSW Fair Trading [2014] NSWCATOD 16, Senior Member Frost made the following observations on the issue of whether a person was lawfully engaged for the purposes of the HBA. At paragraph 36: In the absence of a statutory definition of "employee" in the HB Act, the word must take its ordinary meaning - "a person working for another person or a business firm for pay" (Macquarie Online Dictionary). A simplistic distinction between an employee and an independent contractor (or subcontractor) is that the former works for another while the latter works for himself. In earlier times the main indicator of an employment (master/servant) relationship was the control exercised by one person over another, but nowadays it is "the totality of the relationship between the parties which must be considered": Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 at 29, cited with approval in Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at 41. Supervision and direction are often very relevant to the enquiry. Those concepts are also relevant to the "experience" question, as is evident from their use in paragraph (c) of the definition in the Instrument. That is why it may be more instructive to start the enquiry by considering the level of supervision and direction provided by the licence holder rather than to focus on either the label used or the tax arrangements in place. The greater the level of supervision and direction, the more likely it is that an employment relationship exists. And if the worker is not closely supervised and directed, then he or she is not likely to reach the requisite level of "experience" in any event, no matter what label has been applied to the relationship. The proper task is to examine "the totality of the relationship between the parties". Having said that, there is still room for debate about the reach of the expression "otherwise lawfully engaged", given provisions in the HB Act such as s 12 which prohibit certain categories of work except as an "employee". The respondent suggested, by way of example, that the expression may allow a licensed carpenter (not being an employee) to carry out, under supervision, some incremental activities as a way of progressing towards a builder's licence. That suggestion seemed to be driven more by pragmatism than by a close analysis of the words of the Instrument and the broader regulatory regime. And of course there is an inconsistency between that suggestion and the respondent's primary position, which is that a person who is not an employee will necessarily be in breach of s 12, and is therefore not "otherwise lawfully engaged". 38Very little evidence was adduced about the nature of the work performed under the supervision of the Referee during the period that the Applicant claims that he was lawfully engaged. Most of the evidence of that nature related to the high quality of work that the Applicant had undertaken in more recent projects, outside of the period nominated in the Referee Statement. The pertinent evidence was general in nature in accordance with the matters outlined at paragraph 16 (above). 39An analysis of the evidence in this case against the matters referred to in Zada creates a situation whereby it could be argued that irrespective of the working relationship between the Applicant and the Referee's company, ie: the Applicant was lawfully engaged, there remains an issue as to the nature and scope of the work performed under the period of supervision. There is very little detail of the work performed other than carpentry, site supervision and various compliance matters relating to safety and building standards. These are important areas of expertise but in my view do not constitute a "wide range of building construction work" as specified in the Instrument. 40The case of Locking v Department of Finance and Services [2013] NSWADT 239 also provides some guidance on the live issues in this application. At paragraph 18 Deputy President Hennessy made the following observations: 18 A building contractor has the overall responsibility for a site and must be able to supervise all of the trades required to complete any type of dwelling. Additionally a builder must be able to determine that all trades have complied with all standards and requirements. There are many gaps in Mr Locking's trade supervisory experience and therefore his understanding of certain trades. Those trades include flooring, bricklaying, stonemasonry, wet plastering, painting, decorating, general concreting, tiling, demolishing, fencing, glazing and waterproofing. 19 A building contractor is also able to contract with the public, and must therefore be able to negotiate a contract, quote for a project and co-ordinate the trades to be able to complete the project on time and within budget. He or she must also be able to negotiate and discuss the jobs with council and private certifiers to ensure that the work is passed fit when appropriate.

Conclusion 41At present, on the evidence before me I am not satisfied that the Applicant was an employee of the Referee Company, nor am I satisfied that he meets the "Experience" requirement. It appears from the evidence before me that the Applicant was in effect engaged as a subcontractor for the period claimed in his application. The wide ranging experience that he appears to have gained in part during the period 2002-2005 but predominantly in the years following that, is experience that he gained whilst self- employed, or working for owner builders or in some other capacity not referred to either in his application or on the material before the Tribunal. It may well be that the Applicant is able to satisfy the Department's requirements in respect of other industry experience gained in more recent years, when lawfully engaged in another capacity. 42Therefore, based on all of the evidence before me, I am not satisfied that the Applicant has demonstrated a minimum of two years relevant industry experience, whilst lawfully engaged, in a wide range of building construction work. 43It follows that the correct and preferable decision is to affirm the Department's decision. 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: 18 September 2014