Mereb v Commissioner for Fair Trading

Legal principles

1. Section 33A of the Home Building Act 1989 (NSW) ('the Act') provides that a person is disqualified from holding an authority (other than a owner-builder permit) if the person has been convicted in New South Wales or elsewhere of an offence involving dishonesty within the last 10 years, unless the Chief Executive, or on review this Tribunal, has determined under subsection (2) that the offence should be ignored.
2. Section 83A of the Act stipulates that an authority includes a contractor licence.
3. Section 33A(2) of the Act allows the Chief Executive, or on review this Tribunal, to determine that such an offence committed by a person should be ignored because of the time that has passed since the offence was committed or because of the triviality of the acts of omissions giving rise to the offence.
4. Section 20 of the Act provides that the Chief Executive, or on review this Tribunal, must refuse an application for a contractor licence if the Chief Executive, or on review, this Tribunal is not satisfied that the applicant is a fit and proper person.

Issues

1. The following issues are before the Tribunal:

• whether Mr Mereb is a disqualified person for the purposes of section 33A of the Act; and
• if so, whether the offence committed by Mr Mereb should be ignored because of the time that has passed since the offence was committed or because of the triviality of the acts or omissions giving rise to the offence; and
• whether Mr Mereb is a fit and proper person to hold a contractor licence.

Mr Mereb

1. Mr Mereb filed an affidavit in support of his application. He also gave oral evidence before the Tribunal.
2. Mr Mereb is a fifty-nine year old man who was raised in Lebanon and migrated to Australia when he was 31 years old. Prior to coming to Australia, he did not speak English. He qualified as an electrician in Lebanon and has since been licensed to practise as an electrician in Australia. His licence expired in 2015.
3. In 1990, Mr Mereb and his business partner started a business, PHY Electrical Contractors ('PHY'') which has since been wound up. Over the years, the business expanded to focus only on large jobs on new buildings such as residential buildings and factories.
4. In 1993, the company began the use the services of the accountant, Owen T Daniel. In April 2000, Mr Daniel recommended a tax scheme he told Mr Mereb was legal. PHY used the scheme between 2001 and 2006. In fact, the scheme was not legal and Mr Mereb accepts that he should have recognised this.
5. Mr Mereb was convicted of an offence of conspiring to cause a loss to the Commonwealth in breach of s135.4(3) of the Criminal Code 1995 (Cth). He was sentenced to a term of imprisonment of four years with a non-parole period of 2 years. He was released from prison on 6 February 2016 and will remain on parole until 6 February 2018.
6. He agreed that the offences had occurred between 2001 and 2006, with a break in 2003 and 2004, during which time no offences took place.
7. Mr Mereb has never declared himself bankrupt and is committed to repaying all monies owing to the Australian Tax Office ('ATO'). The amount owing is approximately $600 000.
8. Mr Mereb gave evidence to the Tribunal that, since his release from prison, he has been working as a labourer for another company, of which he had previously been a director. He is now simply an employee for the company and no longer holds any positions in the company.

Remarks on sentence by Sweeney DCJ

1. In sentencing Mr Mereb and his co-offender Mr Younan, Sweeney DCJ found that he had participated in offshore round robin financial transactions, which enabled him to evade payment of company tax and personal income tax.
2. She found that the accountant, Owen T Daniel, and his staff had Mr Mereb's knowledge and agreement to participate in the illegal dishonest scheme from the 2000 meeting and for a period of almost five years, although with a break of over two years in 2003 and 2004. In her remarks on sentence, Sweeney DCJ stated that: I have no difficulty accepting that Owen T Daniel suggested the arrangement to them. Mr Mereb and Mr Younan seemed to be essentially decent hard working men who agreed to become involved in the scheme Owen T Daniel was promoting for the financial benefit of their company paying less tax that it should properly and lawfully have paid.
3. She found that in 17 international transactions, Mr Mereb and Mr Younan transferred a total of $1.7 million from PHY's bank account to New Zealand bank accounts held in the names of foreign companies set up and operated by a firm in Vanuatu and Robert Agius. False business expenses corresponding to the amounts of money transferred overseas were recorded in the company's accounts and in the company's income tax returns for the years 2001 to 2005, thus reducing the company's taxable income and the amount of tax assessed as payable by the company.
4. Sweeney DCJ described Mr Mereb in the following terms: He is a man of prior good character, having no other convictions and a history of contributing to the community through charitable work. He is unlikely to re-offend because of his character, his family support and the effect on him of these proceedings.
5. A subsequent appeal by the Commonwealth DPP against the inadequacy of the sentence imposed by Sweeney DCJ was dismissed by the Court of Criminal Appeal on 6 August 2014.

References

1. In a reference dated 14 March 2016, Mr Maroun Maroun, licensed builder, states that he dealt with Mr Mereb over a ten-year period and is aware of his conviction. He states that Mr Mereb has a very good reputation in the building industry and that he had always found Mr Mereb to be a professional and honest person.
2. In a reference dated 11 March 2016, Mr Rami Ibrahim, Managing Director of Coplex, states that he is aware of Mr Mereb's conviction and describes him as 'a hardworking, professional and honest person in the construction industry and the wider community. His knowledge and experience is of a high level to the industry.'

Communication with the respondent in relation to the applicant's criminal proceedings.

1. On 20 January 2014, the applicant's solicitor wrote to the Office of Fair Trading to advise that the applicant had been found guilty of an offence against section 135.4(3) of the Criminal Code 1995 (Cth) ('the Criminal Code') but had yet to be sentenced.
2. Further discussions then took place between Mr Mereb's solicitor and Fair Trading in relation to the offences. In an email dated 4 February 2014, a senior licensing officer advised Mr Mereb's solicitor as follows: I refer to our telephone conversation of this morning whereby I indicated that I would need to have further discussions with my team leader in view of the pending charge. The decision has been made to renew the licence for a 1 year period only…An Alert has been placed against Paul's licence advising the need to carry out a full criminal search at the time of next renewal…Please note it is also important for Paul to disclose these charges at the time of next renewal.
3. On 16 December 2014, the applicant's solicitor wrote to the Office of Fair Trading to advise that Mr Mereb had been found guilty of an offence against s135.4(3) of the Criminal Code and had been sentenced to a term of imprisonment.

Is Mr Mereb a disqualified person for the purposes of section 33A of the Act?

1. There is no dispute that on 13 June 2013, Mr Mereb, who had no prior convictions, was convicted of an offence of conspiring to cause a loss to the Commonwealth contrary to s135.4(3) of the Criminal Code which provides as follows: (3) A person commits an offence if: (a) the person conspires with another person with the intention of dishonestly causing a loss to a third person; and (b) the third person is a Commonwealth entity.
2. As the offence itself requires a person to 'conspire with the intention of dishonestly causing a loss to a third person' (my emphasis) I am satisfied that this is an offence that 'involves dishonesty' as required under s33A of the Home Building Act.
3. I also find that the conviction of the applicant is evidence of the offence with which he was convicted which, in this case, involves dishonesty in his intention to cause loss to the Commonwealth. The Prothonotary of the Supreme Court of New South Wales v Sukkar [2007] NSWCA 341
4. It follows then, in accordance with the provisions of s33A(1) of the Home Building Act, that Mr Mereb is disqualified from holding an authority, which includes a contractor licence, unless the Tribunal determines that the offence should be ignored because of the time that has passed since the offence was committed or because of the triviality of the acts or omissions giving rise to the offence
5. In considering whether Mr Mereb's conviction should be ignored, the applicant has submitted that the Tribunal should take into account the fact that:

• the offence did not involve dishonesty towards customers, employees or sub-contractors of Mr Mereb of his company; and
• neither Mr Mereb nor his former company have ever been the subject of any complaint by any customer, employee or sub-contractor.

1. The applicant concedes, however, that the acts or omissions giving rise to the offence were not trivial. I agree that the acts giving rise to the offence were not trivial. Mr Mereb was found guilty of an offence under s135.4(3) of the Criminal Code which carried a maximum penalty of 10 years. The amount of money involved in the offence was approximately $500 000, which is substantial. The sentence imposed on Mr Mereb, namely a head sentence of four years with a non-parole of two years, reflects the severity with which the sentencing judge viewed Mr Mereb's conduct.
2. On the evidence before me, I find that the acts giving rise to the offence were not trivial and that the offence should not be ignored on that basis.
3. The applicant has also submitted that in determining whether the offence should be ignored the Tribunal should consider:

• the hardship already experienced by Mr Mereb in terms of his imprisonment and his payment of penalties and interest;
• the fact that without a contractor licence, Mr Mereb will be denied his livelihood and the opportunity to rebuild his life and family.

1. I accept that Mr Mereb has been deeply affected by the court proceedings and his subsequent imprisonment. I also accept that he and his family have experienced hardship as a result of it. Hardship is, however, not a factor which the Tribunal can take into account in determining whether or not the Director General has made the correct and preferable decision. Lal -v- Director-General, Department of Transport [2001] NSWADT 74
2. I also accept that the references submitted to the Tribunal attest to Mr Mereb's good reputation within the industry. I similarly accept that the nature of Mr Mereb's previous work as an electrician involved dealings with other members of the building industry rather than with the general public.
3. The applicant has submitted that the Tribunal should determine that the offence should be ignored because of the time that has passed since the offence was committed. On the evidence before me, I accept that the acts leading to the offence took place between 2001 and 2006, with a break between 2003 and 2004.
4. Such a lapse of time, the applicant submits, is sufficient for the Tribunal to ignore the offence. The respondent does not agree.
5. The applicant was sentenced to a head sentence of four years, which reflects the seriousness of the offence. Mr Mereb continues to serve his sentence, although he is now released to parole. In my view, this is a relevant consideration in considering whether to determine that the offence should be ignored on the basis of the time that has passed since the offence was committed. Had the applicant already completed his sentence, I would be more minded to exercise such a discretion.
6. The applicant submits that I should take into account the delays in Mr Mereb's court proceedings in deciding whether to ignore the offence because of the time that has passed since the offence was committed. I accept that the Mr Mereb's court proceedings were drawn out, and I accept that Mr Mereb was not to blame for this. Indeed, this was taken into account by the sentencing judge, in determining the appropriate sentence for Mr Mereb: I take into account the delay of more than seven years between the end date of the offences and the sentencing of the offences. [T]here have been delays during the court processing not attributable to the offenders…I accept on the material before me that the offenders and their families have been in suspense and experienced high levels of anxiety in that period.. I take all those matters into account. R v Mereb; R v Younan (unreported 7 February 2014, per Sweeney DCJ)
7. I am satisfied that the delays in the court proceedings were taken to account on sentence by Sweeney DCJ in reaching her sentence, and that these findings were favourable to the applicant. In considering whether to ignore the offence on the basis of time elapsed, I give less weight to the delays in the court proceedings and more weight to the fact that Mr Mereb continues to serve his sentence for a serious offence. On the evidence before me, I am not satisfied the offence should be ignored because of the time that has passed since the offence was committed.

Is Mr Mereb a fit and proper person to hold a contractor licence?

1. As I have determined that Mr Mereb is disqualified from holding a contractor licence on the basis of s33A of the Home Building Act, it is not necessary for me to determine whether he is a fit and proper person to hold such a licence.

conclusion

1. For the reasons set out above, I find that Mr Mereb is disqualified from holding an authority in accordance with s33A(1) of the Act. Accordingly, the decision of the Commissioner of Fair Trading to refuse Mr Mereb a contractor licence is refused.

order 1. The decision of the Commissioner of Fair Trading dated 16 November 2015 to refuse a contractor licence to the applicant is affirmed. 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: 31 October 2016