Magerovski v Commissioner for Fair Trading, Department of Finance, Services... [2018] NSWCATAD 192 | Case summary

NCAT Administrative and Equal Opportunity|2017-10-27

NSWADT 259 Pilipczyk & anor v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 85 Pollard v Commonwealth DPP (1992) 28 NSWLR 659 Re Brennand & Australian Casino Surveillance Authority (1995) 38 ALD 794, Re Percival and Australian Securities Commission [1993] AATA 196; (1993) 30 ALD 280 Re Pochi and Minister for Immigration and Ethnic Affairs [1979] AATA 64; (1979) 36 FLR 482 Saboune v Department of Finance and Services [2013] NSWADT 71 Saleh v Commissioner of Fair Trading [2015] NSWCATOD 68 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 Younan v Commissioner of Fair Trading, NSW Office of Fair Trading [2007] NSWADT 170 Category: Principal judgment Parties: Alan Magerovski (Applicant in 2017/230277) Service Today (NSW) Pty Ltd (Applicant in 2017/230301) Commissioner for Fair Trading, Department of Finance, Services and Innovation (Respondent) Representation: Counsel: M Kloosters (Applicants) K Jones (Respondent)

Solicitors: Zander Dre Lawyers (Applicants) NSW Fair Trading (Respondent) File Number(s): 2017/2302772017/230301 Publication restriction: none

Background

On 15 June 2011, Alan Magerovski (Magerovski) was issued a contractor licence number 237139C under the Home Building Act 1989 (the Act), which was due to expire on 14 June 2017. On or about 23 March 2014, Magerovski made an application to NSW Fair Trading (the Respondent) for a company contractor licence under the Act on behalf of Service Today (NSW) Pty Ltd (Service Today NSW).
On 21 July 2014 the Respondent issued Magerovski and Service Today NSW (the Applicants) with a Notice pursuant to section 14 of the Licensing and Registration (Uniform Procedures) Act 2002 to supply additional information relating to the involvement of Nadene Tajjour and Ziad Saboune in Service Today NSW, and the relationship and financial arrangements between Service Today NSW, Service Today Pty Ltd and Service Today (Vic) Pty Ltd (the Section 14 Notice).
The Respondent's request for information arose from the cancellation of Mr Ziad Saboune's licence and his disqualification for a period of 5 years by the Respondent in 2012, which was affirmed by the Tribunal in Saboune v Department of Finance and Services [2013] NSWADT 71, and the Respondent's investigations into the corporate structure and relationships of Service Today NSW with other entities in which Mr Saboune or Ms Tajjour, Mr Saboune's wife, held office or were otherwise involved.
On or about 31 July 2014, Magerovski responded to the Section 14 notice. Consequently, a company contractor licence number 237814C was granted to Service Today NSW on 22 August 2014, to expire on 21 August 2017.
On 22 May 2017, the Respondent issued a Notice to Show Cause pursuant to section 61 of the Act to each of Magerovski and Service Today NSW, requiring them to show cause by 23 June 2017 why disciplinary action should not be taken against them. The Applicants responded to the Notices to Show Cause on 22 June 2017.
On 19 July 2017, the Respondent issued Notices of Decision pursuant to s 64 of the Act to Magerovski (the Magerovski Decision) and Service Today NSW (the Service Today NSW Decision) (together, the Reviewable Decisions). By applications dated 28 July 2017, the Applicants sought review of the Reviewable Decisions in this Tribunal. Magerovski's application to this Tribunal is numbered 2017/00230277 and Service Today NSW's application to this Tribunal is numbered 2017/00230301.
The Magerovski Decision cancelled Magerovski's contractor's licence number 237139C and disqualified him from holding any authority under the Act or being a close associate of any holder of an authority for a period of three years, on the following two grounds: 1. That he is guilty of improper conduct under section 51(1)(a) of the Act; and 2. That he is not a fit and proper person to hold a contractor's licence pursuant to section 56(b) of the Act.
The improper conduct alleged against Magerovski was that he had provided false or misleading information to the Respondent in response to the Section 14 Notice, which amounted to commission of an offence under s 307A of the Crimes Act 1900.
The Service Today NSW Decision cancelled Service Today NSW's contractor's licence number 237814C indefinitely, on the ground that pursuant to s 56(k) of the Act, the Respondent had become aware of information that, if known at the time the application for the licence was determined (i.e. prior to 22 August 2014), would have been grounds for refusing the application.

Jurisdiction

Under s 83B of the Act, the Applicants may apply to the Tribunal for review of the Reviewable Decisions. Section 63 of the Administrative Decisions Review Act 1997 (ADR Act) requires the Tribunal, in determining an application concerning an administratively reviewable decision, to decide what is the correct and preferable decision, and authorises the Tribunal to affirm, vary or set aside the administratively reviewable decision. The Tribunal makes its own decision in place of that of the Respondent's and there is no presumption that the Respondent's decision was correct. (see McDonald v Director General of Social Security [1984] FCA 57; (1984) 1 FCR 354 at 357.)
It is well established that in considering an application for review, the Tribunal is not restricted to a consideration of the material that was before the Respondent but may have regard to any relevant material before it at the time of the review: Drake v Minister for Immigration and Ethnic Affairs [1997] AATA 179; (1979) 46 FLR 409.

The Act

The object of the Act is to protect consumers of home building services. The Reviewable Decisions were made pursuant to the disciplinary provisions of Part 4 of the Act, the objects of which are said to include the protection of consumers, maintenance of appropriate standards and of public confidence in the home building industry, as well as the need to deter the particular licence holder and others from improper conduct: Younan v Commissioner of Fair Trading, NSW Office of Fair Trading [2007] NSWADT 170 at [26] and [32].
'Improper Conduct' under the Act relevantly encompasses the following: 51 Improper conduct: generally (1) A holder of a contractor licence who is authorised by the contractor licence to contract to do residential building work or specialist work, or a holder of a supervisor or tradesperson certificate, is guilty of improper conduct if the holder: (a) commits an offence against this Act or the regulations or section 307A or 307B of the Crimes Act 1900, whether or not an information has been laid for the offence …
Section 56 of the Act sets out the grounds upon which disciplinary proceedings may be taken against the holder of a contractor licence. Relevantly: The Secretary may take disciplinary action under section 62 against the holder of a contractor licence on any of the following grounds: (a) that the holder is not entitled to hold the contractor licence, (b) that the holder is not a fit and proper person to hold the contractor licence, (c) that the holder is guilty of improper conduct, … (e) in the case of a holder of a contractor licence that is a partnership--that any of the members of the partnership, or any of the officers of a corporation that is a member of the partnership, is not a fit and proper person to be a member of the partnership or an officer of the corporation or has been guilty of improper conduct, (f) in the case of the holder of a contractor licence that is a corporation--that any of the officers of the corporation is not a fit and proper person to be an officer of the corporation or has been guilty of improper conduct, … (k) that the Secretary has become aware of information about the licensee that, if known at the time the application for the licence was determined, would have been grounds for refusing the application, ...
Section 62 sets out the disciplinary action that may be taken against the holder of an authority: Section 62 Disciplinary action that may be taken by Secretary If, after compliance with this Division, the Secretary is satisfied that any ground on which disciplinary action may be taken against the holder of an authority has been established in relation to the holder, the Secretary may do any one or more of the following: (a) determine to take no further action against the holder, (b) caution or reprimand the holder, (c) make a determination requiring the holder to pay to the Secretary, as a penalty, an amount not exceeding $11,000 (in the case of an individual) or $50,000 (in the case of a corporation) within a specified time, (d) vary the authority held by the holder, by imposing a condition on the authority, including a condition requiring the holder to undertake a course of training relating to a particular type of work or business practice within a specified time, (e) suspend the authority for a period not exceeding its unexpired term, (f) cancel the authority, (g) disqualify the holder, either temporarily or permanently, from being any one or more of the following: (i) the holder of any authority, or any specified kind of authority, (ii) a member of a partnership, or an officer of a corporation that is a member of a partnership, that is the holder of an authority, (iii) an officer of a corporation that is the holder of an authority.
With reference to the disciplinary ground pursuant to s 56(k) of the Act, section 20 of the Act specifies grounds for refusal for a contractor licence. Relevantly: 20 ISSUE OF CONTRACTOR LICENCES (1) The Secretary must refuse an application for a contractor licence if: (a) the Secretary is not satisfied that the applicant is a fit and proper person to hold a contractor licence, or … (d) the Secretary considers that a close associate of the applicant who would not be a fit and proper person to hold an authority exercises a significant influence over the applicant or the operation and management of the applicant's business. …
"Close associate" is defined in clause 5 of Schedule 1 to the Act: (1) For the purposes of this Act, a person is a "close associate" of another person if the person: (a) is a business partner of the other person, or (b) is an employee or agent of the other person, or (c) is a corporation, or a member of a corporation, partnership, syndicate or joint venture, in which the other person or a person referred to in paragraph (a), (b) or (d) has a beneficial interest, or (d) bears a relationship to the other person that is a prescribed relationship under subclause (2), or (e) is a corporation that is a subsidiary (within the meaning of the Corporations Act 2001 of the Commonwealth) of the other person, or (f) holds or is entitled to exercise, in respect of the other person or the business of the other person, any other relevant financial interest, relevant position or relevant power. (2) For the purposes of subclause (1) (d), a person bears a "prescribed relationship" to another person if the relationship is that of: (a) a spouse or former spouse, or (b) an existing or former de facto partner, or (c) a child, grandchild, sibling, parent or grandparent, whether derived through paragraph (a) or (b) or otherwise, or (d) a kind prescribed by the regulations for the purposes of this clause. Note : "De facto partner" is defined in section 21C of the Interpretation Act 1987 . (3) For the purposes of subclause (1) (f): "relevant financial interest" means: (a) any share in the capital of the business, or (b) any entitlement to receive any income derived from the business, whether the entitlement arises at law or in equity or otherwise. "relevant position" means the position of director, manager, and other executive positions and secretary, however those positions are designated. "relevant power" means any power, whether exercisable by voting or otherwise and whether exercisable alone or in association with others: (a) to participate in any directorial, managerial or executive decision, or (b) to elect or appoint any person to any relevant position.
Section 51(1)(a) of the Act provides that improper conduct includes committing an offence under s 307A or 307B of the Crimes Act 1900, "whether or not an information has been laid". Section 307A of the Crimes Act 1900 provides: 307A FALSE OR MISLEADING APPLICATIONS (1) A person is guilty of an offence if: (a) the person makes a statement (whether orally, in a document or in any other way), and (b) the person does so knowing that, or being reckless as to whether, the statement: (i) is false or misleading, or (ii) omits any matter or thing without which the statement is misleading, and (c) the statement is made in connection with an application for an authority or benefit, and (d) any of the following subparagraphs apply: (i) the statement is made to a public authority, (ii) the statement is made to a person who is exercising or performing any power, authority, duty or function under, or in connection with, a law of the State, (iii) the statement is made in compliance or purported compliance with a law of the State. Maximum penalty: Imprisonment for 2 years, or a fine of 200 penalty units, or both. (2) Subsection (1) does not apply as a result of subsection (1) (b) (i) if the statement is not false or misleading in a material particular. (3) Subsection (1) does not apply as a result of subsection (1) (b) (ii) if the statement did not omit any matter or thing without which the statement is misleading in a material particular. (4) The burden of establishing a matter referred to in subsection (2) or (3) lies on the accused person. (5) In this section: "application" includes any claim, request or other form of application and also includes, in the case of an application for an authority, any application for the issue, grant, amendment, transfer, renewal, restoration or replacement of the authority and any other application in connection with the authority. "authority" includes any licence, permit, consent, approval, registration or other form of authority. "benefit" includes any advantage and is not limited to property.
The elements of the offence are: 1. The Applicant made a statement (whether orally, in a document or in any other way); and 2. The Applicant did so knowing that, or reckless as to whether the statement: 1. was false or misleading; or 2. omitted any matter or thing without which the statement is misleading; and 1. The statement was made in connection with an application for an authority or benefit; and 2. The statement was made to a public authority.

Fitness and Propriety

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 and Australian Broadcasting Tribunal v Bond and Ors [1990] HCA 33; (1990) 170 CLR 321 the holding of a licence under the Act attests that the holder is a person who will honestly perform his or her role as a licensee. 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].

Onus and standard of proof

In merits review cases such as these proceedings, there is no onus of proof as that term is generally understood: Nakad v Commissioner of Police, New South Wales Police Force [2014] NSWCATAP 10 at [28] - [30], [34]; Bushell v Repatriation Commission [1992] HCA 47; (1992) 175 CLR 408 at 424-425; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 at [40].
The Tribunal must decide what the correct and preferable decision is having regard to any relevant factual material: ADR Act, s 63(1). When reviewing a decision of an administrator, the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: Civil and Administrative Tribunal Act 2013 (the CAT Act), s 38(2). Although not bound by the rules of evidence, the Tribunal must base its decision on 'probative evidence': Re Pochi and Minister for Immigration and Ethnic Affairs [1979] AATA 64; (1979) 36 FLR 482 at 491-493.
The Act provides that section 61 applies "if the Secretary is of the opinion that there are reasonable grounds for believing that there are grounds for taking disciplinary action under section 62 against the holder of an authority". The standard of proof of "reasonable grounds" described at section 61 of the Act should not be confused for the standard of proof required of the Tribunal in reaching the correct and preferable decision. The "reasonable grounds" standard of proof applies only to the basis for issuing a Notice to Show Cause under section 61 of the Act. Once the Notice to Show Cause has been issued under section 61, the standard of proof changes to require the Secretary to be "satisfied" that a ground "has been established" for the purpose of disciplinary action under section 62 of the Act. As the Tribunal "walks in the shoes of the decision maker", the Tribunal is therefore required to be satisfied that each of the grounds alleged against the Applicant have been established. This is a much higher standard of proof than the "reasonable grounds for belief" required for the purpose of section 61 of the Act.
It was previously thought that the applicable standard of proof was that laid down in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. The Supreme Court has recently said in Bronze Wing Ammunition v Safe Work New South Wales (No. 2) [2016] NSWSC 988, however, that this is not the case (at [77]): "As a matter of logic, if there was no onus of proof cast upon either party, there can have been no standard of proof. If there was no standard of proof, including the civil standard of proof on the balance of possibilities, the principle in Briginshaw (it being a refinement of that standard) had no application to the proceedings before the single member.
As held in the appeal to that decision, Bronze Wing International Pty Ltd v SafeWork NSW [2017] NSWCA 41 at [127], his Honour's findings: …reflect the strictly correct proposition that neither Briginshaw nor s 140 of the Evidence Act applies directly in decision-making by NCAT where the rules of evidence do not apply. They should not be regarded as standing against the proposition that what was said in Briginshaw and Neat Holdings reflects a more general approach to fact finding, which is applicable by analogy to NCAT.
As discussed in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170 at 171: "[T]he strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove…
In determining whether the grounds for disciplinary action have been established, the Tribunal needs to balance the strength of the evidence according to the nature of the allegation. Where there is an allegation of criminal conduct, such as an offence of improper conduct pursuant to s 51(1)(a) of the Act, the strength of the evidence must therefore be high enough to establish that fact.

Disciplinary action

The Tribunal's approach in determining whether disciplinary action should be taken and, if so, what form it should take, considers that the object of sanctions under the legislation is to protect the consumers of home building services and not to punish contractors: see Lotus Constructions Pty Limited v Director -General, Department of Finance and Service, NSW Fair Trading [2013] NSWADT 260 and Pilipczyk & anor v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 85.
In Ng & anor v Commissioner for Fair Trading, NSW Office of Fair Trading & anor [2007] NSWADT 259, the Tribunal referred at [71] to [72] to the series of factors which might be relevant to the assessment of an appropriate penalty: 71 In Director-General, Department of Fair Trading v. Cohen [2000] NSWFTT 3 (cited in Younan [2007] NSWADT 170 at [26]; and Harb [2007] NSWADT 175 at [60]) the Fair Trading Tribunal outlined a series of factors which might be relevant to the assessment of an appropriate penalty. They were: • the nature, width and extent of the contraventions • the loss or damage and prejudice in consequence of the contraventions • the circumstances in which the contraventions took place • whether the licensee has been found to have engaged in any similar conduct • the presence of fraudulent or dishonest intent and deliberation on the part of the licensee • the extent of carelessness or wilfulness of the conduct • the efforts made to correct the situation and what measures have been taken by the licensee • what consciousness the licensee (a) had (b) displayed, of its obligations under the relevant statute and to the owners • the effect upon the licensee • antecedents • attitude, building history and future compliance • the penalty range. 72 To that list I would add two factors which were outlined in a list of relevant factors, which a court might take into account in determining the amount of a civil penalty, that were proposed by the Australian Law Reform Commission in Principled Regulation: Federal Civil and Administrative Penalties in Australia (2002) ALRC 95 in recommendation 29-1: see Calcaro v Chief Commissioner of State Revenue [2004] NSWADT 158. These are: • any gain made as a result of the contraventions • the degree of cooperation with the authorities

Issues for Determination

The issues for determination by the Tribunal are: 1. Whether Magerovski is guilty of improper conduct under section 51(1)(a) of the Act; 2. Whether Magerovski is not a fit and proper person to hold a contractor's licence pursuant to section 56(b) of the Act; 3. Whether there were grounds pursuant to s 56(k) of the Act for refusing Service Today NSW's application for a licence at the time the licence was determined (22 August 2014);
Following the Tribunal's determination of those issues, the Tribunal must then determine: 1. Whether any disciplinary action is warranted; and if so 2. The level of any disciplinary action.
If the Tribunal is satisfied that the Applicant committed an offence under section 307A of the Crimes Act 1900, and therefore improper conduct pursuant to section 51(1)(a) of the Act was established, it does not necessitate the taking of disciplinary action under s 62. If improper conduct is established, then the Tribunal determines whether disciplinary action pursuant to s 62 is the correct and preferable decision, and if so, the extent of that action.

Evidence

The Respondent relied on the documents filed pursuant to s 58 of the CAT Act, which numbered more than 2800 pages and included extensive banking records provided via affidavit from the relevant banks, and 36 customer complaints. The Respondent also relied on affidavits by its employees involved in the investigations, and tables created for the purpose of navigating the relevant company records and banking transactions included in the s 58 documents. The Applicants relied on two affidavits of Magerovski with more than 600 pages of exhibits, and various pages included in the s 58 documents.
The Respondent obtained advertising records from Sensis, which were provided to the Tribunal via affidavits of Robert Weng Wai Leong, and extensive banking records from the Commonwealth Bank via affidavits of Neil Pascua, Michele Bretherick, and Channpreet Kaur.
Two witnesses gave oral evidence at the hearing, Magerovski for the Applicants and Allan Carter, an investigator for the Respondent who compiled the banking and advertising records from their sources.
I rely on the Respondent's evidence as accurate and place significant weight on the ASIC and Bank records contained therein, and the tables tendered by the Respondent as a guide to those documents. For the reasons that follow, I place no reliance on Magerovski's written evidence unless it has been corroborated by other material or evidence before the Tribunal.
Magerovski presented truthfully as a witness at hearing but his oral evidence significantly diminished and contradicted his written evidence. Magerovski's written evidence was extremely detailed in relation to Service Today NSW's business processes, structure, growth, investment in technology, staffing, volume of work, accounting processes, staff training, equipment, work practices, decision making, complaints and complaint handling. When cross-examined at hearing, however, Magerovski was unable to answer basic questions about Service Today NSW's company structure or finances, including its advertising, expenses, and employees.
Magerovski was clearly unaware of or didn't know the answers to many questions asked of him in cross-examination, especially in relation to corporate offices and the corporate structure and financial transactions of Service Today NSW. On that basis, I accept only those statements made in his oral evidence which are not contradicted by the Respondent's evidence.

Corporate structure and relationships

On 20 March 2014, the following companies were registered with ASIC: 1. Service Today NSW; 2. Service Today (VIC) Pty Ltd; 3. Service Today (SA) Pty Ltd; and 4. Service Today Pty Ltd.
Service Today NSW, ACN 168 661 309 has Magerovski listed as its sole director. Its principal place of business is 91 Marigold Street, Revesby NSW 2212. Its ultimate holding company is listed as Service Today Pty Limited, ACN 168 659 247. Its sole shareholder is Service Today Pty Limited.
Service Today Pty Limited, ACN 168 659 247 is the ultimate holding company of Service Today NSW, Service Today (VIC) Pty Ltd and Service Today (SA) Pty Ltd. The sole director of Service Today Pty Ltd is Nadene Tajjour, who is Ziad Saboune's wife. Its principal place of business is 91 Marigold Street, Revesby NSW 2212. The sole shareholder of Service Today Pty Ltd is AAA to ZZZ Investments Pty Ltd.
Service Today (VIC) Pty Limited, ACN 168 661 434, has Ziad Saboune listed as its sole director. Its ultimate holding company is listed as Service Today Pty Limited, ACN 168 659 247. Its sole shareholder is Service Today Pty Limited.
Service Today (SA) Pty Ltd, ACN 168 661 452, had Magerovski appointed as its sole director on 19 May 2014. Its ultimate holding company is listed as Service Today Pty Limited, ACN 168 659 247. Its sole shareholder is Service Today Pty Limited.
AAA to ZZZ Investments Pty Ltd, ACN 158 130 324, has Ziad Saboune and Nadene Tajjour listed as its directors and joint shareholders.
On the evidence available to the Tribunal, I also find the following: 1. The Service Today Group comprises the following companies: 1. Service Today NSW; 2. Service Today (VIC) Pty Ltd; 3. Service Today (SA) Pty Ltd; 4. Mr Pipes Pty Limited; 5. Mr Power Electrical Pty Ltd; 6. Mr Pipes VIC Pty Ltd; 7. Mr Power Electrical VIC Pty Ltd; 8. Mr Pipes SA Pty Ltd; 9. Mr Power Electrical SA Pty Ltd; 10. Mr H2O Holdings Pty Ltd; 11. Mr Power Holdings Pty Ltd; 12. Mrs H2O Pty Limited; and 13. Service Today Pty Ltd. 1. The Service Today Group is owned by Mr Saboune and Ms Tajjour, by reason of their shareholding in various of those companies and AAA to ZZZ Investments Pty Ltd, which is the shareholder for Service Today Pty Ltd; 2. Mr Saboune is the sole shareholder of Service Today (VIC) Pty Ltd, Mr H2O Holdings Pty Ltd, and Mr Power Holdings Pty Ltd. Ms Tajjour is the sole shareholder Mr Pipes Pty Ltd and Mr Power Electrical Pty Ltd. Those companies provide services and resources to Service Today NSW.
In oral evidence, Magerovski accepted or stated that: 1. The Service Today Group was the initiative of Mr Saboune; 2. The structure of the Service Today Group hasn't changed since its inception; 3. It was always intended that the three companies (Service Today NSW, Victoria and South Australia) would be run under the business name of 'Service Today'; 4. The companies (specifically Service Today NSW and Service Today (Vic) Pty Ltd) in the group have always shared expenses; 5. Each of the directors of those companies - being Mr Magerovski and Mr Saboune - made decisions about the shared expenses; 6. Service Today NSW operates (and has always operated) from premises owned by a company in the sole control of Mr Saboune; 7. Service Today (NSW) uses (and has always used) vehicles and machinery leased from a company in the sole control of Mr Saboune; 8. Mr Magerovski is the co-director with Ms Tajjour of another company that provides employment services to Service Today NSW; 9. Ms Tajjour was a co-director and sole shareholder of Mr Power Electrical Pty Ltd, which is the company that provides the electrical employees to Service Today (NSW) Pty Ltd; 10. the H20 Operations licence had been cancelled due to financial transactions from the company account into accounts held by Mr Saboune;
Based on Magerovski's oral evidence and the ASIC records, the following "close associate" relationships thereby arise under the Act: 1. Service Today NSW, Service Today (VIC) Pty Ltd and Service Today (SA) Pty Ltd are subsidiaries of Service Today Pty Ltd, as Service Today Pty Ltd is listed as their ultimate holding company. Pursuant to s 5(1)(e) of Schedule 1 to the Act, Service Today NSW is therefore a close associate of Service Today Pty Ltd. 2. Ziad Saboune and Nadene Tajjour are close associates of each other, pursuant to ss 5(1)(d) and 5(2)(a) of Schedule 1 to the Act, as they are spouses; 3. Service Today Pty Ltd is a close associate of Service Today NSW pursuant to s 5(1)(f), on the basis that Service Today Pty Ltd is the sole shareholder of Service Today NSW, and therefore has a relevant financial interest and relevant power in Service Today NSW; 4. Ziad Saboune is a close associate of Service Today NSW, on the basis that he has a relevant financial interest. The relevant financial interest arises from his 50% shareholding of AAA to ZZZ Investments Pty Ltd, which is the sole shareholder of Service Today Pty Limited, which is the sole shareholder of Service Today NSW.
The Applicants submitted: Moreover, the assertion that a subsidiary company is at the mercy of its ultimate holding company is misguided and does not appreciate the status of companies as a separate legal entity and the duties and responsibilities of the directors of each company within the group to that company, its shareholders and creditors.
The Act does not require a subsidiary company such as Service Today NSW to be "at the mercy" of its ultimate holding company in order for that entity to be a close associate of the company. All that is required is that there is a relationship involving, in these circumstances, a relevant financial interest, relevant power, or relevant position. Service Today NSW's ultimate holding company is also its sole shareholder. Service Today NSW is indeed a separate legal entity from Service Today Pty Ltd, but its director has duties and responsibilities to Service Today Pty Ltd as its sole shareholder, and as its sole shareholder, Service Today Pty Ltd has a relevant financial interest in Service Today NSW and is also entitled to exercise a relevant power.
The Applicant submitted that there was no evidence that Mr Saboune has received any money or other benefit from Service Today NSW, has influence over the operating of the Service Today business, or has the ability to appoint or elect any person to a relevant position of Service Today NSW. I reject that submission on the basis of the corporate relationships discussed above. Mr Saboune is one of two shareholders (and directors) of the sole shareholder of Service Today Pty Ltd (the ultimate holding company of Service Today NSW and the Tribunal thereby infers that by reason of director responsibilities and the shareholder interest he has a relevant financial interest and relevant power in Service Today NSW.
Further, there does not need to be any evidence that Mr Saboune has received any money or benefit from Service Today NSW for him to be considered a "close associate" within the meaning of the Act. His role as a director and shareholder in associated corporate entities is sufficient as the Act does not require that the person exercise the relevant power or financial interest, just that they hold it.

Involvement of Saboune and Tajjour

The Respondent provided the Tribunal with extensive evidence of both Ziad Saboune and Nadene Tajjour's involvement in the operations of Service Today NSW. Whilst the Applicants sought to categorise this evidence as circumstantial and "relying entirely on inference", the Tribunal is entitled to determine what weight to afford the evidence available to it and make appropriate inferences for the purpose of reaching the correct and preferable decision.
In addition to the findings above, the following is evident from an examination of the banking records and advertising records provided by the Respondent: 1. Service Today NSW made 54 separate payments to Service Today Pty Ltd between 12 March 2015 and 24 June 2016, in amounts ranging from $127 to $55,000, totalling $451,409.28; 2. Service Today NSW and Service Today (VIC) Pty Ltd made 113 payments to each other between 8 December 2014 and 12 August 2016, in amounts ranging from $39 to $140,000; 3. Although limited, the banking descriptions of the payments made by Service Today NSW to Service Today Pty Ltd and between Service Today NSW and Service Today (VIC) Pty Ltd demonstrate that the payments made by Service Today NSW go beyond marketing expenses; 4. Service Today NSW paid Mr Pipes Pty Ltd between $30,000 and $53,000 per week between 23 December 2014 and 31 August 2016; 5. There is a single website 'servicetoday.com.au' which operates for all 3 states - NSW, VIC and SA; 6. The domain 'servicetoday.com.au' is owned by Mr Saboune; 7. There is a single 1300 number listed as a point of contact for all three 'Service Today' businesses on the website at 'servicetoday.com.au'; 8. The email suffix for individuals within the 'Service Today' Group is @servicetoday.com.au - it does not differentiate between the states; 9. Service Today (Vic) Pty Ltd made payments for advertising which appeared in the name of Service Today NSW; 10. Mr Saboune corresponded by email on behalf of Service Today NSW; 11. On 3 June 2014 Nadene Tajjour signed a form with the Commonwealth Bank to be a signatory on the bank account of Service Today NSW;
I place significant weight on the advertising and bank records obtained by the Respondent, and accept the Respondent's submissions in relation to the transactions contained within the bank records and the advertising records. Specifically, I accept that: 1. 'Service Today' operates as a single business across 3 states; 2. Service Today operates under a single brand name; 3. The three 'Service Today' group companies, being Service Today NSW, Service Today (VIC) Pty Ltd and Service Today (SA) Pty Ltd share expenses; 4. The bank transactions between Service Today Pty Ltd and Service Today NSW are not limited to 'marketing services'; 5. Nadene Tajjour had been authorised to operate the "business accounts" of Service Today NSW from 4 June 2014.
Magerovski could not provide the Tribunal with any explanation for the banking transactions he was taken to during the hearing. The limited descriptions provided by the Bank for some of those transactions include loans, phone and other administration expenses, and reimbursements for fees. In September 2015 alone, Service Today (VIC) Pty Ltd made transfers to Service Today NSW totalling over $221,000.
Mr Saboune is the sole shareholder of the companies which lease Service Today NSW its premises and operating vehicles. I therefore infer that Mr Saboune receives a financial benefit from Service Today NSW for the provision of its premises and vehicles, but I don't accept the Respondent's submission that this receipt of financial benefit means that Mr Saboune has a financial interest in Service Today NSW. Demonstrating influence over management and operation of a business requires more than the existence of a leasing arrangement. There is nothing in evidence before the Tribunal demonstrating any possible negative effects on the finance, management and operations of Service Today NSW if Magerovski decided to cancel and replace the current leasing arrangements.
I find on the basis of my review of the banking records that, contrary to Magerovski's response to the Section 14 Notice issued by the Respondent: 1. The relationship between Service Today Pty Ltd and Service Today NSW was significantly more than Service Today NSW paying Service Today Pty Ltd for marketing; 2. Service Today NSW paid Service Today Pty Ltd for services other than marketing; 3. Service Today NSW and Service Today (VIC) Pty Ltd were closely associated with each other. They shared regular business expenses, not restricted to marketing expenses, made frequent payments to each other and clearly had an agreement or agreements in place for that purpose; 4. Nadene Tajjour had a relevant financial interest and relevant power in Service Today NSW which was not limited or restricted to marketing. She was a signatory on the Service Today NSW bank account, was a shareholder and director of Mr Pipes Pty Ltd which received weekly payments from Service Today NSW, was a shareholder and co-director of Mr Power Electrical Pty Ltd which provided staff to Service Today NSW, and was the ultimate co-director and co-shareholder with Mr Saboune of the company which owned Service Today NSW's holding company. 5. Service Today Pty Ltd was paid by Service Today NSW for significantly more than marketing expenses; 6. Although not directly employed, contracted to or paid by Service Today NSW, Ziad Saboune was involved in Service Today NSW. He owned the companies which leased Service Today NSW with its vehicles and premises. He is the sole shareholder of Service Today (VIC) Pty Ltd which made and received frequent payments to Service Today NSW for operating expenses. Mr Saboune was the ultimate co-director and co-shareholder with his wife, Ms Tajjour, of the company which owned Service Today NSW's holding company.
The answers given by Magerovski to the Section 14 Notice are therefore false or misleading, or omitted matters which resulted in those statements being false or misleading.

Improper conduct

The Respondent alleged that the Applicant had committed an offence against section 307A of the Crimes Act 1900 (NSW). The first, third and fourth elements of the offence were not disputed - that the Applicant's response of 31 July 2014 to the section 14 notice issued by the Respondent on 21 July 2014 was a statement made in connection with an application for an authority, being the application for a licence under the Act, to the Respondent as a public authority. The second element of the offence, regarding the Applicant's knowledge or recklessness in making the statements, was disputed.
The Respondent submitted that the standard of proof applicable to the Tribunal in determining whether the elements of s307A of the Crimes Act 1900 had been met was "reasonable grounds for belief", but I reject that submission. The allegation is a criminal offence and the relevant standard of proof is, at a minimum, for the Tribunal to be "satisfied" that the "grounds are established" pursuant to s 62 of the Act. I agree with the Applicant's submission that, given the serious nature of the allegations made against Magerovski and Service Today NSW and the consequences for both if established, the principles discussed in the High Court in Briginshaw and Neat Holdings are enlivened, as referred to above at [25] to [28].
A basic requirement of establishing an offence is sufficient particularisation of the allegations of fact for the purpose of allowing the accused to defend him or herself. The definition of "improper conduct" as included at s 51(1)(a) of the Act specifically does not require that an "information has been laid", but this does not otherwise diminish the seriousness of the allegation with respect to an offence under s307A of the Crimes Act 1900, or the requirements of proving it. The Tribunal must be satisfied that, as at 31 July 2014, Magerovski had actual knowledge that the statements he made in the response to the section 14 Notice were false or misleading, or omitted a matter or thing which made the statement misleading, or that he was reckless to and regarding the same effect.
For that purpose, the Respondent is required to satisfy the Tribunal that the offence is established on the evidence, with sufficient particularisation and identification of which statements of the Applicant were false, or which were misleading, or which omitted a matter resulting in a false or misleading statement; the existence of each fact or matter in issue for each statement; the basis upon which each subject statement was false, or misleading, or omitted a matter. The Respondent is also required to satisfy the Tribunal that the evidence establishes the state of knowledge of the Applicant at the time in relation to each fact or matter; the Applicant's knowledge that the statement was false, or misleading, or omitted a matter which resulted in the statement being false or misleading. Alternatively, the Respondent is required to satisfy the Tribunal that the evidence establishes that the Applicant was reckless as to whether his statements were false, or misleading, or omitted a matter which resulted in a false or misleading statement, including identification to the Tribunal of what would constitute recklessness in the circumstances of the offence.
The Respondent's section 14 Notice sought the following information from Magerovski for the purpose of processing his contractor licence under the Act: You have marked 'NO' to the following question - Question 9(viii) of 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 building work?" However, Fair Trading records indicate that there have been numerous complaints lodged against the contractor licence 246172C held by MR H2O Operations Pty Ltd that you are currently a director of. You have marked 'NO' to the following question - Question 9(ii) of the application form: "Have you or any partnership or company of which you were/are a member or director, ever been refused or disqualified from holding a licence, authority certificate or resignation or had any such instrument cancelled or suspended?" However Fair Trading records indicate that the contractor licence 246172C held by your company MR H2O Operations Pty Ltd was cancelled on 29/11/2013. 1. Please explain the reasons for non-disclosure of the above two items with the application. A search of the records of Australian Securities & Investment Commission (ASIC) has revealed the following: Mr Alan Magerovski is director for Service Today (NSW) Pty Ltd and Service Today (SA) Pty Ltd and Ziad Saboune is director for service Today VIC Pty Ltd. Service Today Pty Ltd is the ultimate holding company for all three companies i.e. Service (NSW) Pty Ltd, Service Today (SA Pty) Ltd and Service Today (VIC) Pty Ltd. Ms Nadene Tajjour (Saboune) is sole director of the ultimate holding company Service Today Pty Ltd. 2. What is the relationship between Service Today Pty Ltd and your company Service Today (NSW) Pty Ltd? 3. What is the relationship between Service Today (VIC) Pty Ltd and your company Service Today (NSW) Pty Ltd? 4. What is Ms Nadene Tajjour's (Saboune) involvement in Service (NSW) Pty Ltd? 5. Explain any involvement Ms Nadene Tajjour (Saboune) has in Service (NSW) Pty Ltd. 6. What are the financial arrangements between Service Today (NSW) Pty Ltd and Service Today Pty Ltd? 7. What is Mr Ziad Saboune's involvement in Service (NSW) Pty Ltd? 8. Explain any involvement Mr Ziad Sabboune has in Service (NSW) Pty Ltd.
Magerovski's response of 31 July 2014 stated the following: 1. In relation to filling out questions 9viii, my understanding was if there was any outstanding cases with the company, we didn't know we had to list every complaint against my company. This was error of understanding we weren't trying to hide the facts. In relation to filling out question 9vii, I read through the questions and didn't read it completely correctly, I understand the question to say whether or not our license has been suspended or revoked, in relation to the Mr H2O Operations Pty Ltd my understanding was that we ceased trading because we had involvement with ZIAD SABOUNE and we ceased trading. 2. The relationship to Service Today Pty Ltd and Service Today (NSW) Pty Ltd is that we pay Service Today Pty Ltd a marketing fee they have secured very cheap advertising with google and newspapers and we pay them for this services only. 3. There is no relationship with Service Today (Vic) Pty Ltd we don't pay them for any services nor do we have any agreements with them. 4. Nadene Tajjour has no involvement in Service Today (NSW) Pty Ltd. We understand that she is director of Service Today Pty Ltd and we will be making payments in relation to marketing. 5. Nadene has no involvement in Service Today (NSW) Pty Ltd. 6. Service Today Pty Ltd is paid for marketing expenses. 7&8. Zaid Saboune has no involvement in Service Today (NSW) Pty Ltd. We understand he is not to be involved in any plumbing operation in NSW as he has been suspended. He will not be employed or contracted or paid by the company.
The Respondent submitted that Magerovski's knowledge as at 31 July 2014 included the matters described above at [47], and the following: 1. 'any' involvement of Mr Saboune was of interest to the Respondent; 2. 'any' involvement of Ms Tajjour was of interest to the Respondent; 3. Ms Tajjour was a director of Service Today Pty Ltd; 4. Service Today NSW shared a Finance Manager with the other Service Today companies; 5. Mr Saboune and Ms Tajjour had roles within the Service Today Group and ultimately were the owners of the Service Today Group; 6. The National Accounts Manager, who worked for Service Today NSW on a full-time basis, had access to the bank accounts of other companies within the group structure.
However in cross-examination, Magerovski frequently answered that he didn't know whether propositions put to him by the Respondent regarding the corporate structure and relationships of Service Today NSW and its financial arrangements were correct. In response to the proposition that it was his "statutory duty to act in shareholder's best interest", he answered, "What is that? I guess?" demonstrating that he did not understand his statutory duties and obligations. His evidence was that he did not know and did not inquire into the finances and financial decisions of Service Today NSW, relying entirely on the accountant and finance team, and that he signed what was put in front of him.
Magerovski was unaware of his responsibilities as a director of Service Today NSW and other corporate entities, and claimed to be unaware of the involvement of Ms Tajjour as his co-director and shareholder of another company, Mr Power Electrical Pty Ltd. He was unaware that the premises from which Service Today NSW had always operated was owned by "Mr H20 Holdings" and was unaware whether a lease had been signed or rent was paid to that entity. He was unaware from where Service Today NSW's essential equipment, including 34 vehicles, were leased from, or who had put those arrangements in place. He could not answer questions about any specific transactions in Service Today NSW's accounts when taken to them.
Magerovski stated that he was "the face" of Service Today NSW, that his authority was not required for Service Today NSW's financial transactions, that he was "not really" ever involved in financial decisions. He could not recall whether Service Today NSW had entered into any loans, but agreed that as its Director he would have to authorise any loans. He interviewed tradespersons for employment with Service Today NSW, but they then "get sent off to the HR Department". When asked "who came up with the Service Today concept", he replied "Mr Saboune".
I accept Magerovski's evidence regarding his knowledge of the aforementioned matters. Although the ASIC and financial records provide a strong foundation for the Tribunal finding the "close associate" relationships expressed at [48] and [49] above, to support a finding that Magerovski had knowledge of those matters assumes that Magerovski understood and was aware of his duties and responsibilities as a director of Service Today NSW, fulfilled that role appropriately, and had oversight and knowledge of the day to day management of business including its financial arrangements and transactions. Those assumptions are not supported by Magerovski's evidence.
The extent and effect of Magerovski's evidence of his knowledge, or lack thereof, of the corporate structure, financial arrangements, and financial management of Service Today NSW leads to the conclusion that he did not, at the time of making the statements in the response to the Section 14 Notice, have actual knowledge that those statements were false or misleading. In the absence of any cogent evidence from the Respondent to the contrary, the Tribunal accepts Magerovski's evidence of his knowledge.
Magerovski accepted that he had an obligation to check the involvement of Ms Tajjour in Service Today NSW to ensure that the answers he was giving to the section 14 Notice were correct, and accepted he did not do so. He knew that "any involvement" was of concern to the Respondent but didn't check what Ms Tajjour's relationship with Service Today NSW was when he answered the Section 14 Notice. On the basis of that evidence, taken at its highest, the Tribunal finds that "there are reasonable grounds for the belief that the elements of s307A of the Crimes Act 1900 have been satisfied", in relation to recklessness. This is a finding on a generalised, unparticularised basis, to the standard of "reasonable grounds for belief". The standard, however, is whether the Tribunal is satisfied that the elements of s307A of the Crimes At 1900 have been established. On the evidence available to the Tribunal, an offence pursuant to s307A is not established to the relevant standard. Accordingly, the allegation of Magerovski's improper conduct pursuant to s 51(1)(a) of the Act is not found as a ground for disciplinary action pursuant to s 62 of the Act.

Fitness and propriety

Included in the material before the Tribunal were 37 complaints made by consumers of Service Today NSW's services. The Applicants submitted that these complaints should be viewed in their context of the volume of work in which they were engaged, being 32,889 jobs during the period 1 March 2015 to March 2017; their technology, training, compliance and complaint handling procedures; and their receptiveness to education. I accept the Applicant's submissions with respect to these complaints, and therefore consider their existence neutral to the determination of Magerovski's fitness and propriety.
The Tribunal's findings above regarding Magerovski's knowledge and recklessness in answering the Section 14 Notice are additionally relevant to his fitness and propriety pursuant to s 56(b) of the Act.
The characteristics of fitness and propriety are knowledge, honesty and ability. It is necessary to view these characteristics within the scope of the licence in question, which is Magerovski's contractor licence. The nature of a contractor licence is different to that of, for instance, a tradesperson's certificate which involves the knowledge of certain technical requirements and ability to do those specific technical skills for which the certificate is granted. A contractor licence necessarily involves some business management skills. Business management skills include the comprehension and accurate completion of licensing forms and business records, responsibility for accounting and financial management of the business, or the ability to effectively oversee those functions when outsourced.
In contrast to Saleh v Commissioner of Fair Trading [2015] NSWCATOD 68, which involved a motor vehicle tradesperson's authority, Magerovski's role requires business management skills. At [78]: Mr Saleh's negligence in submitting a form he had not checked for its veracity is not directly related to the technical skills required of a motor mechanic. The Tribunal's view of the outcome of this matter might have been different as suggested by Judicial Member Molony in the matter of Grenfell (Grenfell v Director General of the Department of Finance and Services [2013] NSWADT 57 at 10-11) had the role for which Mr Saleh was seeking certification been one that involved business management skills. The Tribunal understands that Mr Saleh is now aware of the need to take personal responsibility for such matters.
On the evidence available to the Tribunal, and specifically relying on the oral evidence of Magerovski, I find that Magerovski does not have sufficient knowledge of his obligations under the Corporations Act with respect to his role as director of Service Today NSW, the financial arrangements entered into by Service Today NSW with other corporate entities and their corporate relationships, and the financial transactions entered into by Service Today NSW or its employees, to be considered a fit and proper person under the Act.
As to honesty, recklessness has been considered in a number of Tribunal decisions to amount to dishonesty for the purpose of determining the fitness and propriety of an applicant. In Pollard v Commonwealth DPP (1992) 28 NSWLR 659 at paragraph 669A and B, 'reckless disregard' was considered 'capable of equally being regarded as dishonest': "If a person knows he is making a false statement, that is a form of dishonesty. To do so with reckless disregard as to whether it is true or false appears to me capable of equally being regarded as dishonest. Indeed, someone who is prepared or willing to seek a financial advantage by making this statement without regard to whether such is true or false, without regard to what the true position might be, could well be thought to be acting dishonestly."
Although "there is a line between recklessness and dishonesty" (Hart v Federal Commissioner of Taxation [2003] FCAFC 105; (2003) 131 FCR 203), whether or not an act was done with 'reckless disregard' will depend on the particular circumstances and requires a subjective approach. The issue is whether there can be found to be dishonesty for the purposes of the Act in the conduct of the Applicant (Farah v Director General Department of Finance and Services [2013] NSWADT 198). Where in considering "recklessness" within the meaning of an offence under s307A of the Crimes Act 1900 I have determined that the offence is not made out, I can still include the conduct which was subject to the offence in considering the Applicant's honesty, for the purpose of determining his fitness and propriety under the Act.
The evidence demonstrates that the Applicant was aware of his obligations to answer the questions posed in the Section 14 Notice accurately, and agreed that he had not checked the accuracy of his statements. In these circumstances, the Applicant's failure to make inquiries or to check the accuracy of his statements in responding to the Respondent's Section 14 Notice, specifically in the statements "Nadene has no involvement in Service Today (NSW) Pty Ltd", "Service Today Pty Ltd is paid for marketing expenses" and "Zaid Saboune has no involvement in Service Today (NSW) Pty Ltd" demonstrates a deficiency in his honesty associated with his contractor licence.
In Campbell v Director General, Department of Services Technology and Administration [2011] NSWADT 236, Judicial Member Montgomery found that the Applicant had deliberately withheld relevant information about her bankruptcy from the Respondent, and that she was aware of the effect that information would have on her licence application. He stated that "honesty is one of the key elements of fitness" and that, in the circumstances if he were wrong and the applicant did not deliberately withhold the information from the Respondent, it was apparent that she did not have the requisite "knowledge to know what she ought duly to do." Similarly, in these proceedings, if Magerovski did not deliberately withhold the involvement of Saboune and Tajjour from the Respondent and did not deliberately answer the Section 14 Notice in a false or misleading way, it is apparent that Magerovski does not have the requisite knowledge to know what he ought duly to do in answering the Section 14 Notice accurately.
Accordingly I find that Magerovski is not a fit and proper person within the meaning of the Act to hold a contractor licence.

Grounds for refusal

Section 56(k) of the Act provides as a basis for disciplinary action "that the Secretary has become aware of information about the licensee that, if known at the time the application for the licence was determined, would have been grounds for refusing the application". The "information" alleged in the Service Today NSW Decision referred back to the Notice to Show Cause, which included the Respondent's investigations into the advertising, financial transactions and corporate relationships of Service Today NSW demonstrating its relationships with Nadene Tajjour, Ziad Saboune and corporate entities which they controlled or were involved.
It is difficult for the Tribunal to identify what specific information the Respondent relied on in making the determination that, had it known as at 22 August 2014, would have been grounds for cancellation. In the Service Today NSW Decision, the Respondent stated: …the information the Commissioner has become aware of that would have been grounds for refusing the application has been emphasised in the Notice paragraphs 3.2 - 3.20. Further information also relates to the attachments to the Notice, in particular the answers to the questions in the Section 14 Notice.
The Tribunal infers that the grounds for cancellation alluded to by the Respondent are pursuant to s 20(1)(a) and 20(1)(d) of the Act, on the basis that none of the other grounds listed in s 20 of the Act are relevant to the issues in these proceedings.
Section 20(1)(a) refers to the fitness and propriety of the licence applicant. The fitness and propriety of Magerovski is discussed above and I agree that, had the Secretary been aware as at 22 August 2014 of Magerovski's lack of knowledge or that his responses to the Section 14 Notice were less than honest, and were in fact false and misleading, these would have provided grounds for refusal of Service Today NSW's application.
An additional ground for refusal of the application is found at s 20(1)(d) of the Act. This ground for refusal requires a close associate of the applicant, who is or would not be a fit and proper person, exercises a "significant influence over the applicant or the operation and management of the applicant's business".
"Significant influence" is not defined in the Act. The application of s 20(1)(d) of the Act was considered in Designbuild NSW Pty Ltd v Commissioner for Fair Trading [2016] NSWCATOD 69 where, in contrast to these proceedings, the extent of the close associate's influence on the Applicant was directly dealt with in evidence and submissions. There, the Tribunal determined that despite the close associate's relevant financial interest as a 50% shareholder, his potential position as an employee and his history as the father of the applicant's director, it was not satisfied that he would have significant influence over the applicant, or the operation and management of the applicant's business.
In these proceedings, while an inference can be made by the Tribunal that someone other than Magerovski has significant influence over the operation and management of Service Today NSW on the basis of Magerovski's evidence, and that Mr Saboune, being 'not a fit and proper person', has some involvement in Service Today NSW, there is insufficient evidence on which the Tribunal could find that Mr Saboune exerts a "significant influence" over Magerovski, or the operation and management of Service Today NSW.

Penalty

Grounds are established for disciplinary action against Magerovski pursuant to s 56(b) of the Act, and Service Today NSW pursuant to s 56(k) via s 20(1)(a) of the Act. The determination that Magerovski is not a fit and proper person to hold a contractor licence is serious and warrants the imposition of disciplinary action.
Section 62 of the Act sets out a range of disciplinary actions, including fines, imposing conditions on the licence, suspension and cancellation, and disqualification periods. In considering the principles expressed above at [29] and [30], I accept the Respondent's submissions that Mr Saboune has as much, if not more, involvement in Service Today NSW than he had in H2O Operations Pty Ltd when that licence was cancelled, that Magerovski was aware of the circumstances of that licence cancellation and has therefore "sought to present to the Respondent a different reality of Mr Saboune's real relationship and involvement in Service Today NSW". This is inferred from the specific wording of the statements given by Magerovski in the response to the Respondent's Section 14 Notice, where he makes specific, though limited and erroneous, reference to the restrictions placed on Mr Saboune's involvement in the industry: Zaid Saboune has no involvement in Service Today (NSW) Pty Ltd. We understand he is not to be involved in any plumbing operation in NSW as he has been suspended. He will not be employed or contracted or paid by the company.
Service Today NSW and many of the Service Today Group companies were registered or restructured following Ms Saboune's disqualification. On the evidence available to the Tribunal, I infer that one of the reasons for registering, structuring and managing the companies in the manner conducted was to allow Mr Saboune's continued involvement in the industry on a national or, at least, interstate basis when he had been disqualified in NSW. Magerovski's actions and inactions in providing the Respondent with relevant information when requested, and his lack of knowledge and input into the financial management, accounts and corporate relationships of Service Today NSW allowed Mr Saboune's continued involvement.
Magerovski was a director of H2O Operations Pty Ltd, which had its licence cancelled on 13 November 2013 because of its close association with Mr Saboune. He has therefore engaged in similar conduct to the circumstances resulting in these proceedings. There is no subsequent evidence of effort by Magerovski to inform himself of his obligations under the Act to ensure compliance with respect to his involvement in companies owned, directed or transacting with Mr Saboune.
Magerovski's conduct undermines confidence in the Respondent's licensing regime and the Tribunal's findings regarding Magerovski's fitness and propriety warrant the cancellation of his licence and the licence of Service Today NSW. A period of disqualification is necessary to allow Magerovski to obtain and demonstrate the knowledge necessary for the holder of a contractor licence under the Act in relation to business management, financial and accounting obligations, corporate responsibilities, and other obligations under the Act. An appropriate period, following the Tribunal's previous determinations in such matters and the Respondent's submissions on penalties imposed under the Act between 2012 and 2017, would be two years: Edward Lees Imports Pty Ltd v Commissioner for Fair Trading (No 3) [2018] NSWCATOD 116; Aria Jap International Pty Ltd v Commissioner for Fair Trading, Office of Fair Trading [2006] NSWADT 166, Flanagan v Commissioner of Fair Trading [2004] NSWADT 166, Assadourian v Roads and Traffic Authority [2013] NSWADT 6.
Disqualification of Service Today NSW is also necessary to protect the public, by allowing sufficient time for Magerovski to restructure his business to dissociate it from involvement by Saboune, Tajjour, and their companies, as appropriate to comply with the requirements of the Act. There is no submitted basis for the disqualification period to be indefinite. In the circumstances, a period of 1 year would be appropriate to allow the relevant changes to be made and registered.
I have not agreed with all decisions made by the Respondent or the penalty they imposed on Magerovski and Service Today NSW. In the circumstances, the correct and preferable decision is to set aside the Respondent's Reviewable Decisions and substitute a different decision.

Orders: 1. The Respondent's Reviewable Decisions of 19 July 2017 are set aside. 2. In substitution for those decisions, the Tribunal: 1. cancels Magerovski's contractor's licence number 237139C and disqualifies him for 2 years from the date of this decision, from being a licence holder or involved in the direction, management or conduct of a business for which a licence is required under the Act; and 2. cancels Service Today NSW's contractor's licence number 237814C and disqualifies it for 1 year from the date of this decision from being a licence holder under the Act.

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

Amendments 23 August 2018 - No amendments made 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: 23 August 2018

Magerovski v Commissioner for Fair Trading, Department of Finance, Services and Innovation; Service Today NSW v Commissioner for Fair Trading, Department of Finance, Services and Innovation

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