Hanna v Commissioner for Fair Trading

Background

1. Mr Hanna has held a contractor licence 112482C since 13 March 2000 in the classes of Plumber and Roof Plumber, Drainer, Gasfitter and LP Gasfitter. In 2004 he established Plumb Group Pty Ltd (Plumb Group) as a plumbing business. Mr Hanna is the Director and Secretary of Plumb Group, and shareholder with his wife. Plumb Group has held a contractor licence 169729C since 5 February 2005 in the same licence classes as Mr Hanna. Mr Hanna is the Nominated Supervisor for Plumb Group.
2. In June 2018 Mr Hanna applied to vary his contractor licence, to add the licence class General Building Work. In support of his application he provided a diploma, certificate and related documents issued by Green Skills Australia. The application was refused in September 2018. On 6 December 2019 the respondent sent a Notice to Show Cause, on the basis that there were reasonable grounds for taking disciplinary action against Mr Hanna under ss 56(c) and 56(b) of the HB Act, contending that the documents provided with the application as to his qualifications and statement of results had not been properly acquired, and that Mr Hanna had knowingly given false and misleading information in his application to vary the contractor licence.
3. Mr Hanna made submissions in relation to the Notice to Show Cause on 20 December 2019. On 11 August 2020 the respondent invited further submissions, which were provided on 20 August 2020. The decision to take disciplinary action was made on 3 September 2020. The delegate found under s 56(c) of the HB Act that Mr Hanna was guilty of improper conduct as defined in s 51(1)(a) having committed offences against s 307A(1) and 307B(1) of the Crimes Act 1900, and under s 56(b) of the HB Act is not a fit and proper person to hold the contractor licence.
4. Mr Hanna has provided an affidavit affirmed on 7 September 2020 in which he states that Plumb Group provides plumbing and drainage services for multi-storey residential and commercial developments as well as some residential homes. The business employs 43 employees and engages 16 full time subcontractors. Plum Group has 15 apprentice plumbers. On average Plumb Group undertakes plumbing work on approximately 1,000 units per year.
5. The respondent does not dispute the evidence as to the business operations of Plumb Group, or that neither Plumb Group nor Mr Hanna have any adverse licence history. The respondent did not oppose the grant of a stay, on condition that Mr Hanna not personally enter into any new contracts until the determination of the administrative review.

Legal Principles

1. The general rule is that an application for administrative review of a decision does not prevent the decision from taking effect. The Tribunal may make an order "staying or otherwise affecting the operation of the decision under review". The power to do so is set out in s 60 of the ADR Act: 60 Operation and implementation of decisions pending applications for administrative review (1) Subject to this section, an application to the Tribunal for an administrative review under this Act of an administratively reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision. (2) On the application of any party to proceedings for an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application. (3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account: (a) the interests of any persons who may be affected by the determination of the application, and (b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and (c) the public interest. (4) While an order is in force under this section (including an order that has previously been varied on one or more occasions under this subsection), the Tribunal may, on application by a party to the proceedings, vary or revoke the order by another order.
2. In QLD Protection Security Pty Ltd v Commissioner of Police, NSW Police Force [2018] NSWCATAP 113 the Appeal Panel discussed the principles concerning stays and other orders under s 60 in the following terms: 31. The Tribunal recently considered the power under s 60 of the ADR Act in Loveday v Commissioner for Fair Trading [2018] NSWCATAD 80 (Loveday). In that decision it was held at [8]: "… Section 60(2) and (3) give the Tribunal a single discretionary power to make a stay order or to refuse to make such an order taking into account all relevant considerations. Secondly, the words "to secure the effectiveness of the hearing" include a situation where the applicant will suffer irreparable loss in the sense that no recompense for it can be obtained if the application is ultimately successful: Re Pelling and Secretary, Department of Aviation [1984] AATA 179; (1984) 5 ALD 638 at 639. It is not confined to the situation where a hearing would be pointless because the applicant will go out of business if a stay is refused. …" 32. The relevant considerations in deciding whether to make an order under s 60(2) include: (1) whether the order is appropriate to secure the effectiveness of the determination of the application for review: ADR Act, s 60(2); (2) whether the order is desirable taking into account: (a) the interests of any persons who may be affected by the determination of the application for review: ADR Act, s 60(3)(a), Loveday at [10], Re Scott and Australian Securities and Investments Commission [2009] AATA 798 (Re Scott) at [4]; (b) any submission made by or on behalf of the administrator who made the decision to which the application relates: ADR Act, s 60(3)(b), Loveday at [10], Re Scott at [4]; (c) the public interest: ADR Act, s 60(3)(c), Loveday at [10], Re Scott at [4]; (3) the applicant's prospects of success on the application for review: AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 (AVS Group) at [129], Loveday at [10] and [11], Re Scott at [4]. 33. The circumstances that are relevant in any particular case to the considerations identified above may well overlap or be interrelated.

Appellant's submissions

1. In his affidavit Mr Hanna states that if the decision is not stayed, he will no longer be able to act as Nominated Supervisor for Plumb Group, and Plumb Group would no longer be able to provide plumbing and drainage services, and as a consequence would be unlikely to be able to continue to employ and engage its current staff, or perform its current contracts. The process of arranging an alternative Nominated Supervisor would take at very best a month and any alternative individual would have to be approved by the respondent.
2. Mr Hanna submits that the merits of the application for administrative review are strong, challenging the evidence on which the findings were made, and submits that there would be no material risk to employees, sub contractors or customers of Plumb Group or other interested persons or the general public if he continues to be licensed and Plumb Group continues to operate its business until determination of the review application. Plumb Group could be permanently and irreversibly damaged as a business, which aside from the consequences for its employees and contractors would place his family in acute financial distress.
3. Mr Hanna submits that the lack of urgency in making the decision, being 8 months after the Notice to Show Cause was issued, tells against any real concern of risk associated with his continuing to operate under the licence.
4. Mr Hanna opposed the condition proposed by the respondent. While Mr Hanna personally does not contract for plumbing work undertaken by Plumb Group, notice of the condition on the public register would cause reputational harm and adversely affect Plumb Group's ability to tender for and obtain new work. The allegations that the documents are fraudulent has been denied since September 2018 in correspondence between his solicitors and the respondent.

Respondent's submissions

1. The respondent submits that the use of fraudulent qualifications in support of the application to vary the contractor licence raises concerns as to whether Mr Hanna is a fit and proper person to be dealing with clients for plumbing work. Prohibiting Mr Hanna from contracting would provide a safeguard for the public. The proposed condition would not affect Mr Hanna's ability to sign off and certify work, and any effect on reputation would be for Mr Hanna, and not Plumb Group. Plumb Group would have 30 days in which to have an alternative Nominated Supervisor approved.

Discussion and findings

1. The evidence as to the operations of Plumb Group, and Mr Hanna's role in those operations as sole Director and joint shareholder, and Nominated Supervisor, was not disputed. The business employs 43 employees, including 15 apprentices, and engages 16 full time subcontractors, and its current projects include work on projects for approximately 2,000 units. The Tribunal is satisfied that unless a stay is granted Mr Hanna would not be able to continue as Nominated Supervisor, which would disrupt business operations until an alternative Nominated Supervisor could be appointed and approved. That would affect Plumb Group's ability to continue to perform its contractual obligations to existing customers, tender for and obtain new work, and as a consequence continue the employment and engagement of its staff and contractors.
2. The respondent does not oppose a stay, and the issue is whether any order granted to secure the effectiveness of the determination of the review application should be subject to the condition sought by the respondent.
3. The applicant concedes that since Mr Hanna does not currently contract in his own name, Plumb Group could continue to perform work under its current contracts and obtain new work, however submits that the proposed condition would affect Plumb Group's ability to continue to obtain new work, because of the reputational harm. It was not in dispute that if the condition were imposed Mr Hanna could continue to sign off on work undertaken by Plumb Group.
4. The evidence does not suggest that Plumb Group's viability would be threatened, however as noted in Loveday it is not necessary for the Tribunal to be satisfied that the applicant would go out of business if a stay is refused.
5. The respondent submits that any reputational effect would be for Mr Hanna personally, and not Plumb Group. The Tribunal accepts that Plumb Group could continue to operate, however is of the view that having regard to the company history and structure it is difficult to separate the company from Mr Hanna. Mr Hanna's evidence, which was not disputed, was that he established Plumb Group in 2005 and that since the business began trading he has been its Nominated Supervisor; based on the ASIC records, he has been sole Director and Secretary since January 2004.
6. The Tribunal accepts that the interests of Plumb Group, and its employees and subcontractors, and customers, could be affected by a conditional stay: while the viability of the business would not appear to be threatened, any impact on obtaining new work would affect the business' ongoing ability to continue employment for its not insignificant workforce.
7. The respondent submits that the allegations underlying the disciplinary action are serious, involving allegations of criminal breaches, and raise concerns as to whether Mr Hanna is a fit and proper person to be engaged in the industry. To that extent, the proposed condition is a safeguard for the public. The Tribunal agrees that the protection of the public is an important factor in the licensing and regulatory regime; however, the length of time between the initiation of the show cause process and the determination to take disciplinary action, would indicate that there could not have been any real concern of risk associated with Mr Hanna continuing to operate under the contractor licence.
8. The applicant submits that there are strong prospects of success in the application for administrative review, and the evidence in support of the allegations is not strong. The applicant has provided extensive evidence in support, which in the context of the hearing of the stay application has not been considered in detail, or tested. It cannot be said at this stage that there is either a likelihood that the decision will be affirmed, or that there are no prospects of success.
9. A significant factor in favour of making an order in terms that would enable Mr Hanna personally and Plumb Group to continue operating the business until determination of the administrative review application is that both Mr Hanna and his company have been operating in the plumbing industry for many years, without complaint or adverse compliance issues. While not diminishing the public interest in the proper regulation of the industry, and in particular where there are concerns as to whether participants are fit and proper persons, the Tribunal is satisfied that having considered the matters specified in s 60(3) of the ADR Act it is desirable to make an unconditional order to stay the operation of the decision under review until the determination of the administrative review application.

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: 15 September 2020