Service Today (NSW) Pty Ltd (now known as Georges River Holdings Pty Ltd) & Magerovski v Commissioner for Fair Trading - [2019] NSWCATAP 113 - NSWCATAP 2018 case summary — Zoe

NSWNSWCATAP

Service Today (NSW) Pty Ltd (now known as Georges River Holdings Pty Ltd) & Magerovski v Commissioner for Fair Trading

[2019] NSWCATAP 113

NCAT Appeal Panel|2018-11-23

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At a glance

Source facts

Court

NCAT Appeal Panel

Decision date

2018-11-23

Catchwords

(1936) 55 CLR 499 Hughes and Vale Pty Ltd v New South Wales (No 2) - [1955] HCA 28
(1955) 93 CLR 127 Lowe v R [1984] HCA 46
(1984) 154 CLR 606 Postiglione v R [1997] HCA 26

Source

Original judgment source is linked above.

Catchwords

(1936) 55 CLR 499 Hughes and Vale Pty Ltd v New South Wales (No 2) - [1955] HCA 28(1955) 93 CLR 127 Lowe v R [1984] HCA 46(1984) 154 CLR 606 Postiglione v R [1997] HCA 26

Judgment (73 paragraphs)

[1]

Introduction

This decision concerns two appeals from a decision published in the Administrative and Equal Opportunity Division of the Tribunal on 23 August 2018. We will refer to the two appellants as the appellants or respectively as Mr Magerovski and Service Today (NSW). Service Today (NSW) is now known as Georges River Holdings Pty Ltd ABN 17 168 661 309. We will refer to the decision under appeal as the Decision. We will refer to the reasons for decision as Reasons.
The Tribunal made orders cancelling Mr Magerovski's contractor licence and disqualified him for two years from 23 August 2018 from being a licence holder or involved in the direction, management or conduct of a business for which a licence is required under the Home Building Act, 1989 (the HB Act).
In addition, the Tribunal ordered the cancelation of the contractor's licence of Service Today (NSW) and disqualified it for one year from the date of the Decision from being a licence holder under the HB Act.

[2]

The Tribunal's Decision and history of dispute

In order to understand the appeals and this decision, it is necessary to set out a brief history and the reasons of the Tribunal.
On 15 June 2011, Mr Magerovski was issued a contractor licence under the HB Act, which was due to expire on 14 June 2017. On or about 23 March 2014 Mr Magerovski made an application to NSW Fair Trading for a company contractor licence under the HB Act on behalf of Service Today (NSW).
On 21 July 2014 the respondent issued Mr Magerovski and Service Today (NSW) with a notice pursuant to s 14 of the Licencing 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 arrangments between Service Today (NSW) and other companies, namely Service Today Pty Ltd and Service Today (VIC) Pty Ltd. This notice (the s 14 Notice) was issued pursuant to the authority contained in s 14 of the Licensing and Regulation (Uniform Procedures) Act 2002, the terms of which are as follows: 14 Provision of further information and supporting evidence (1) The relevant licensing authority may serve notice on an applicant requiring the applicant to provide: (a) such information further to the original information contained in the application, and (b) such documentary or other evidence (such as a photograph of the applicant) in support of the original or further information, as the authority may require to enable it to deal with the application. Note. Part 4A makes special provision for photographic identification for some licences. (2) In particular, the relevant licensing authority may require an applicant to provide: (a) details of any offence for which the applicant has been convicted or found guilty in this State or elsewhere (together with details of any penalty imposed for the offence), and (b) details of any criminal proceedings pending against the applicant in this State or elsewhere. (3) If the applicant fails to comply with the requirements of a notice referred to in subsection (1) within 14 days after the notice is served, the relevant licensing authority may refuse the application without dealing with it any further. (4) The refusal of an application under this section entitles the applicant to a refund of fees under section 22 but not to a right of review under section 23.
The respondent's request for information arose from the cancelation of Mr Ziad Saboune's licence and his disqualification, 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 Mr Magerovski responded to the s 14 Notice. A company contractor licence was subsequently granted to Service Today (NSW) on 21 August 2014, to expire on 21 August 2017.
On 22 May 2017 the respondent issued a Notice to Show Cause pursuant to s 61 of the HB Act to each of Mr Magerovski and Service Today (NSW) requiring them to show cause by 23 June 2017 why disciplinary action should not be taken against them. They responded to the Notice to Show Cause on 22 June 2017.
On 19 July 2017 the respondent issued Notices of Decision pursuant to s 64 of the HB Act to Mr Magerovski and to Service Today (NSW). They then sought review of these decisions in the Tribunal.
In the Reasons, the Tribunal referred to the two decisions dated 19 July 2017 (each referred to as the "Reviewable Decision") and stated that Mr Magerovski and Service Today (NSW) were entitled under s 63 of the Administrative Decisions Review Act 1997 (ADR Act) to require the Tribunal, in determining an application concerning an administratively reviewable decision, to decide what is the correct and preferable decision. The Tribunal has authority to affirm, vary or set aside the administratively reviewable decision.
The Reviewable Decision concerning Mr Magerovski cancelled his contractor's licence and disqualified him from holding any authority under the HB Act or being a close associate of any holder of an authority for a period of three years. It was made on the following grounds: 1. That he is guilty of improper conduct under section 51(1)(a) of the HB 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 HB Act.
The improper conduct alleged against Mr Magerovski was that he had provided false and misleading information to the respondent in response to the s 14 Notice.
The Reviewable Decision concerning Service Today (NSW) cancelling its contractors licence "indefinitely" was based on the ground that pursuant to s 56(k) of the HB 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 21 August 2014) would have been grounds for refusing the application.
As stated in [2] and [3] above, on review by the Tribunal, the Tribunal made the following substitute decisions: 1. the Tribunal cancelled Mr Magerovski's contractor's licence number 273814C and disqualified him for 2 years from the date of the Tribunal's 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 HB Act; and 2. the Tribunal cancelled Service Today (NSW) contractor's licence number 273814C and disqualified it for one year from the date of the Tribunal's decision from being a licence holder under the HB Act.
In making these orders the Tribunal 1. was not satisfied Mr Magerovski had committed an offence under s 307A of the Crimes Act 1900 (NSW); or 2. said there was insufficient evidence to show that a close associate of Mr Magerovski (namely Mr Saboune) who himself was not a fit and proper person, exercised significant influence over Mr Magerovski or the operation and management of Service Today (NSW) or Mr Magerovski: reasons at [89]. 3. Accepted that, while there had been consumer complaints about the work of Service Today (NSW), having regard to the internal processes for dealing with complaints and the receptiveness to education, the fact of these complaints was "neutral to the determination of Mr Magerovski's fitness and propriety": Reasons at [73].
However, the Tribunal found Mr Magerovski: 1. did not have sufficient knowledge of his obligations under the Corporations Act 2000 (Cwth) with respect to his role as a director of Service Today (NSW), the financial arrangements entered into by that company with other corporate entities and their corporate relationships and the financial transactions entered into by Service Today (NSW) or its employees, Reasons to be considered a fit and proper person under the HB Act at [77]; and 2. made statements in his answer to the s 14 Notice in circumstances where he had not enquired or checked the accuracy of his statements concerning the involvement of Ms Tajjour and Mr Sabourne in Service Today (NSW): Reasons at [80]. These actions demonstrated a "deficiency in his honesty associated with his contractor licence" (Reasons at [80]). Alternatively, if not a deliberate attempt to provide false and misleading information, the actions of Mr Magerovski demonstrated a lack of requisite knowledge as to what he should properly do in answering the s 14 Notice accurately: Reasons at [81]. 1. Consequently, the Tribunal determined: 1. Mr Magerovski was not a fit and proper person to hold a contractor's licence under the HB Act: Reasons at [77], [82] and [86]; and 2. in accordance with s 56(b) of the HB Act, disciplinary action should be taken and his licence should be cancelled: Reasons at [90] and [94]. 1. In respect of Service Today (NSW), the Tribunal determined disqualification action should be taken under s 56(k) of the HB Act due to its close association with Mr Saboune and Ms Tajjour: Reasons at [95].
In reaching these conclusions, the Tribunal recorded evidence given by Mr Magerovski and made findings as to the following matters: 1. Mr Magerovski presented as a truthful witness in cross-examination. However, his oral evidence "significantly diminished and contradicted his written evidence". He was unable to answer basic questions about Service Today (NSW)'s company structure or finances, including about its advertising, expenses and employees: Reasons at [38]. 2. The Tribunal only accepted Mr Magerovski's oral evidence where it was not contradicted by the respondent's evidence: Reasons at [39]. 3. The Service Today group of companies, which included Service Today (NSW), was ultimately owned by Mr Saboune and Ms Tajjour by reason of the shareholding in the various companies within the group and because of ownership in AAA to ZZZ Investments Pty Ltd, the shareholder in Service Today Pty Ltd: Reasons at [40]-[46]. 4. The Service Today group was the initiative Mr Saboune and its structure hasn't changed since inception: Reasons at [47(1)-(2)]. 5. Service Today (NSW) and Service Today (Vic), as well as other companies, would be run under the business name "Service Today" and these two companies have always shared expenses and decisions have been made by each of Mr Magerovski and Mr Saboune as directors of these companies concerning shared expenses: Reasons at [47(3)-(5)]. 6. Service Today (NSW) operates from premises owned by a company solely controlled by Mr Saboune and uses and has always used vehicles and machinery leased from a company in the sole control of Mr Saboune: Reasons at [47(6)-(7)]. 7. Mr Magerovski is a co-director with Ms Tajjour of a company that provides employment services to Service Today (NSW), Ms Tajjour's company Mr Power Electrical Pty Ltd provides the "electrical employees" to Service Today (NSW): Reasons at [47(8)-(9)]. 8. The licence of H2O Operations had been cancelled due to financial transactions from that company into accounts held by Mr Saboune and that Mr Magerovski was aware of the circumstances by which that licence had been cancelled: Reasons at [47(10)] and [91]. 9. Having regard to the corporate structure of the Service Today group including their shareholders and directors and the fact that Mr Saboune and Mr Tajjour are directors and sole shareholders AAA and ZZZ Investments Pty Ltd (the ultimate holding company of the group) each of Mr Saboune and Ms Tajjour are close associates within the meaning of the HB Act: Reasons at [45], [48]-[52]. 10. The banking records and advertising records provided by the respondent in respect of the operations of Service Today (NSW) and others within the Service Today group demonstrate that: 1. Ms Tajjour signed a form to be a signatory to the Service Today (NSW) bank account on 3 June 2014, before the s 14 Notice was answered by Mr Magerovski); and 2. since the s 14 Notice was answered, the financial transactions between the various companies within the group reflect business operations beyond sharing "marketing expenses". Inter alia, there was evidence of payments to Service Today Pty Ltd totalling $451,409.28 in the period 12 March 2015 to 24 June 2016 and payments between Service Today (NSW) and Service Today (Vic) ranging between $39 and $140,000 which did not solely relate to marketing expenses: Reasons at [54]-[55]. 3. These financial arrangements could not be explained by Mr Magerovski: Reasons at [56]. Inter-alia, he was unaware where Service Today (NSW)'s essential equipment, including 34 vehicle were leased from, was unaware who put those financial arrangements in place and could not answer questions about specific transactions in Service Today (NSW)'s accounts: Reasons at [68]. 4. Mr Saboune, as the sole shareholder of companies which leased premises and operating vehicles to Service Today (NSW, receives a financial benefit from Service Today (NSW): Reasons at [57]. 5. Mr Magerovski, by reason of his lack of knowledge, did not at the time of making the statements in response to the s 14 Notice have actual knowledge that the statements therein were false and misleading: Reasons at [71] 6. By reason of the matters disclosed in the banking records and contrary to the response to the s 14 Notice: 1. the relationship between Service Today Pty Ltd and Service Today (NSW) was not as stated in the answers Mr Magerovski gave in the s 14 Notice: Reasons at [58(1)-(2)]; 2. Ms Tajjour had a financial interest and power in Service Today (NSW) not limited or restricted to marketing, being both a signatory to the bank account of Service Today (NSW) and being the shareholder and director of two companies which provide goods or services to Service Today (NSW): [58(4)]. 3. Service Today Pty Ltd was paid significantly more than marketing expenses by Service Today (NSW): [58(5)]. 4. Companies controlled and owned by Mr Saboune, contracted with (Service Today (NSW)) and were paid under vehicle and property lease agreements, and one of those companies "made and received frequent payments to [Service Today (NSW) for operating expenses": [58(6)]. 1. Mr Magerovski accepted that he had an obligation to check the involvement of Ms Tajjour in Service Today (NSW) to ensure the answers to the s 14 Notice were correct and he accepted that he did not do this: Reasons at [72]. 2. Mr Magerovski failed to make enquiries or check the accuracy thereof when stating in the 14 Notice that: 1. Ms Tajjour had no involvement in Service Today (NSW); 2. Service Today Pty Ltd is paid for marketing expenses; 3. Mr Saboune has no involvement in Service Today (NSW) Pty Ltd 4. Reasons at [80] 1. Mr Saboune has as much, if not more involvement in Service Today (NSW) then he had in H2O operations Pty Ltd when its licence was cancelled and Mr Magerovski was aware of the circumstances of cancellation and sought to present a different reality to that of Mr Saboune's real relationship and involvement in Service Today (NSW): Reasons at [91]. 2. Mr 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 and has engaged in similar conduct to the circumstances resulting in these proceedings. In this regard the Tribunal said there was no evidence that Mr Magerovski informed himself of his obligations under the HB Act to ensure compliance with respect to his involvement in companies owned, directed or transacting with Mr Saboune: Reasons at [93].
The answers given by Mr Magerovski to the s 14 Notice were "false or misleading or omitted matters which resulted in those statements being false or misleading": Reasons at [59]. Further, whether deliberate or not, Mr Magerovski did not have the requisite knowledge to know what ought to be done in answering the s 14 Notice: Reasons at [81].
In making these findings, the Tribunal noted that the holder of a contractor licence under the HB Act, as opposed to a supervisors certificate, was required to have business management skills, as well as technical skills, to be able to comprehend and accurately complete licensing forms and to properly carry out financial management of the business to which the licence attaches: Reasons at [75].

[4]

Amended Grounds of Appeal

The following summarises the grounds of the appeals as contained in the Amended Grounds of Appeal filed for both appellants: 1. The Tribunal erred in finding at [9] and [95] that Service Today (NSW)'s disqualification period was indefinite in circumstances where there was no evidence, or alternatively, no logically probative evidence, to support such a finding; 2. The Tribunal did not indicate at any time that it was contemplating that the penalty imposed on Service Today (NSW) would be increased from the original penalty imposed by the respondent. By failing to provide this warning, Service Today (NSW) was not afforded procedural fairness in being provided the opportunity to withdraw its application; 3. Both Service Today (NSW) and Mr Magerovski were not afforded procedural fairness in circumstances where: 1. The Tribunal considered and applied the decision of Edward Lees Imports Pty Ltd v Commissioner for Fair Trading (No 3) [2018] NSWCATOD 116 (the Edward Lees decision) being a matter determined by the same Tribunal Member; and 2. The Edward Lees decision was not raised by either party and that decision was not available for consideration by either party until 27 July 2018 with the consequence that neither party was provided with an opportunity to make submissions with respect to that decision. 1. In reaching the conclusion at [37] to place no reliance on Mr Magerovski's written evidence, the Tribunal erred by applying the wrong principle of law or, alternatively, asking itself the wrong question. To the extent that the respondent sought to challenge the evidence put forward by Mr Magerovski, it is incumbent upon the respondent to cross examine and put those challenges to Mr Magerovski. The Tribunal failed to apply the rule in Browne v Dunn (1893) 6 R 67 (Browne v Dunn) correctly; 2. Having identified the purpose of the HB Act which is to protect consumers and matters that ought to be relevant to the assessment of a penalty, the Tribunal erred as follows: when determining whether to impose a penalty, the re-exercising of a discretion conferred on the respondent by s 62 of the HB Act miscarried in that the Tribunal failed to take into account a relevant consideration. Alternatively, the Tribunal applied the wrong principle of law or misdirected itself in failing to consider, or properly consider, the series of factors relevant to the assessment of an appropriate penalty; 3. Having found at [38] that Mr Magerovski presented truthfully as a witness, at [71] that he did not have actual knowledge that the answers he provided in response to the s 14 Notice were false or misleading and not finding Mr Magerovski was reckless, the Tribunal erred in concluding that Mr Magerovski's actions (to the extent they were made with reckless disregard as to their truth) were capable of being regarded as dishonest. In doing so, the Tribunal applied the wrong principle of law. The Tribunal failed to take a subjective approach when determining whether Mr Magerovski was reckless; 4. In light of the evidence referred to in [54] and [58] and the conclusion at [59], the Tribunal impliedly failed to make a finding that there was an ongoing obligation for Mr Magerovski to disclose on and after 31 July 2014. The Tribunal erred in failing to determine a necessary issue raised by both parties where such a finding was a necessary step for the Tribunal to reach the conclusion at [59] that Mr Magerovski provided false and misleading answers on 31 July 2014. Alternatively, if such a finding was made, there was a failure to give reasons or adequate reasons as to why such an implied finding was made; 5. The Tribunal erred in failing to provide any reason, or sufficient reasons, with respect to the veracity of the 37 complaints raised by consumers referred to at [73]. Alternatively, the Tribunal failed to determine a necessary issue raised by both parties; 6. The inference that Mr Magerovski "sought to present to the respondent a different reality of Mr Saboune's real relationship and involvement in Service Today (NSW)" was not reasonably open from the specific wording of the response provided to the s 14 Notice or other objective facts. The terms of the s 14 Notice speak for themselves, Mr Magerovski was accepted as a witness of truth and he was not asked to report accurately on the restrictions imposed on Mr Saboune and set out nothing more than his understanding on this issue; 7. In imposing the penalty against Mr Magerovski and Service Today (NSW) the Tribunal erred by failing to apply principles of proportionality and parity, or alternatively, misdirected itself and applied those principles incorrectly. Alternatively, when determining whether to impose a penalty and the nature of such penalty, the exercising of the discretion conferred on the respondent by s 62 of the HB Act miscarried in that the Tribunal acted on the wrong principle, or alternatively, relied on extraneous or irrelevant matters; 8. The Tribunal erred by making the following factual findings: 1. at [47(4)] that Service Today (NSW) and Service Today (VIC) Pty Ltd have always shared expenses (i.e. prior to 31 July 2014); 2. at [58(2)] that Service Today (NSW) paid Service Today Pty Ltd for services other than marketing as at 31 July 2014; 3. at [58(3)] that Service Today (NSW) and Service Today VIC) Pty Ltd shared regular business expenses, not restricted to marketing expenses and made frequent payments to each other as at 31 July 2014; 4. at [54(11)] that Ms Tajjour signed a form with the Commonwealth Bank to be a signatory on the bank account with Service Today (NSW); 5. that Ms Tajjour had been authorised to operate the "business account" of Service Today (NSW) from 4 June 2014; 6. at [58(4)] that Ms Tajjour was a signatory on the Service Today (NSW) bank account as at 31 July 2014; 7. at [58(5)] that Service Today Pty Ltd was paid by Service Today (NSW) for significantly more than marketing expenses as at 31 July 2014; and 8. at [58(6)] that Service Today (VIC) Pty Ltd made and received payments to Service Today (NSW) for operating expenses as at 31 July 2014. 1. in circumstances where there was no evidence and/or there was no logically probative evidence and/or there was a failure to have regard to critical evidence and/or there were adverse findings without addressing significant uncontroverted evidence to the contrary and/or the Tribunal relied on irrelevant evidence. 2. The Tribunal erred in failing to provide reasons or adequate reasons as to why the Tribunal at [55] accepted the respondent's submissions with respect to advertising records and why the Tribunal at [55] placed significant weight on the advertising records; and 3. The Tribunal erred in having identified that a contractor's licence necessarily involved "some" business management skills and that insufficient knowledge of those matters referred to at [67] and [77] gave rise to the conclusion that Mr Magerovski did not have sufficient business management skills, by applying the wrong principle or alternatively misdirecting itself in failing to consider the activities in which Mr Magerovski is or would be engaged in having regard to the significant resources and professional support he received and would continue to receive.
Both appellants submitted that the above grounds do not require leave and, in addition, they submitted the following grounds of appeal requiring leave: 1. The conclusion at [59] that Mr Magerovski gave false and misleading answers on 31 July 2014 is not just and equitable, or alternatively is against the weight of evidence; 2. The factual findings referred to in sub paragraph (ii) above are not just and equitable or alternatively are against the weight of evidence; 3. The conclusion at [94] that an appropriate period for disqualification for Mr Magerovski is 2 years is not just and equitable, or alternatively (to the extent it is a factual finding) is against the weight of evidence; 4. In the event that there is no dishonesty finding and the only basis for not being fit and proper is the lack of knowledge of corporate structures, to the extent a penalty is warranted, an appropriate penalty would be to impose a condition on Mr Magerovski to undertake a course of training of an appropriate nature within the specified time. Further, disqualification is not required, is punitive and is not required to protect consumers. Alternatively, "there is proper basis for preventing Mr Magerovski from holding an authority (such as a technicians licence) where "some" business management skills are not required". Presumably, this submission was intended to say there is "no proper basis..."; 5. There is no proper basis to impose an additional years disqualification over and above the penalty imposed on Service Today (NSW) on the basis that, given the factual finding at [95] that one year would be appropriate for the relevant changes to be made; 6. The conclusion at [95] that an appropriate period for disqualification for Service Today (NSW) is 1 year to allow Mr Magerovski sufficient time to disassociate from Mr Saboune, Ms Tajjour and their companies is not just and equitable, or alternatively (to the extent it is a factual finding) is against the weight of evidence. The Tribunal failed to consider that Mr Saboune is no longer prohibited from being involved in the company but holds an authority under the HB Act and has been free to do so since 30 April 2017. Ms Tajjour has never been prohibited from being involved in a company that holds an authority under the HB Act. There was no evidence (or findings made) of Mr Saboune and/or Ms Tajjour being involved in Service Today (NSW), other than by reason of the corporate structure; 7. To the extent there is a factual finding made that Mr Magerovski was reckless, such finding is against the weight of evidence or alternatively was not just and equitable; 8. The finding at [80] that Mr Magerovski made statements with reckless disregard as to whether they were true of false is against the weight of evidence or alternatively is not fair and equitable; and 9. The findings that Mr Magerovski had insufficient knowledge of those matters referred to at [77] was against the weight of evidence or alternatively was not fair and equitable.

[6]

Appellant's Submissions

The following paragraphs summarise the submissions put forward by counsel for the two appellants both in writing and orally at the hearing.
The appellants' say that the gravamen of their complaint with respect to the decision concerning Mr Magerovski is that the Tribunal failed to make a finding that there was a continuous obligation of disclosure on him after he provided his response to the s 14 Notice on 31 July 2014. The failure to make a finding in this regard constitutes an actual failure to exercise the jurisdiction conferred on the Tribunal.
The appellants submit: 1. The Tribunal concluded that Mr Magerovski gave false or misleading information on 31 July 2014 when he responded to a s14 Notice issued by the respondent. It also found that he did not have actual knowledge that those matters were false or misleading at the time they were provided ([59] and [71]); 2. To support the conclusion that Mr Magerovski provided false or misleading information on 31 July 2014 the Tribunal relies on evidence that relates to a period well after the response was provided; 3. An analysis of that evidence and the reasons provided by the Tribunal reveal that a continuous obligation to disclose is a necessary step to support the conclusion that Mr Magerovski provided false and misleading information on 31 July 2014; 4. The error is material in the sense that it "might" or "may" have made a difference to the outcome on the basis that the conclusion that Mr Magerovski provided false and misleading information is a primary reason why the Tribunal ultimately concluded that Mr Magerovski is not fit and proper ([86] and [90]); 5. Other errors arise including a failure to properly apply the rule in Browne v Dunn and the principles of proportionality and parity when determining penalty;
With respect to the Service Today (NSW) appeal, the appellant's say the gravamen of that appeal is that: 1. The Tribunal proceeded on the misapprehension that its licence was cancelled indefinitely when in fact, it was not; 2. The eventual penalty imposed by the Tribunal (cancellation and a twelve month disqualification) was more severe than the original penalty; and 3. Various errors of law arise including denial of procedural fairness and making factual findings where there is no evidence. Those errors are material in the sense that it "might" or "may" have made a difference to the outcome on the basis that had a warning or other form of notice been provided, Service Today (NSW) could have abandoned the review application at any time.
The appellants rely for leave on cl 12 of Sch 4 of the Civil and Administrative Tribunal Act 2013 (NCAT Act). This is misconceived in our view for reasons explained later.

[9]

Ground 3 - Denial of procedural fairness on penalty

Ground 3 concerns a submission that there will be procedural unfairness where information is used by a decision maker in a way that could not reasonably be expected by one party and that party is not given an opportunity to respond to that use. In determining Mr Magerovski's penalty of two years, the Tribunal referred to four cases (see [94] of the Reasons). The appellant submitted that both the appellant and the respondents had made written submissions on penalty and that the respondent to the appeal provided a table of penalties to the Tribunal listing more than 170 cases. The table did not refer to any of the four cases referred to in the Reasons. Thus, the appellants were not afforded procedural fairness for the following reasons: 1. The ultimate penalty imposed by the Tribunal was done by reference to cases that were not raised by either party at any time; 2. The appellants were not afforded the opportunity to make submissions on those cases the Tribunal ultimately relied upon; 3. The cases the Tribunal relied on are distinguishable on their facts. For example, Flanagan v Commissioner of Fair Trading [2004] NSWADT 166 referred to in [94] concerned a case where there was a continuing failure to keep proper records, whereas in this case, there was no evidence of any failure to keep proper records. The decision in Aria Jap International Pty Ltd v Commissioner for Fair Trading, Office of Fair Trading [2006] NSWADT 166 is distinguishable in that that case concerned a finding that Mr Aria interfered with an authorised officer in the course of exercising his or her duties in breach of the relevant legislation. The Tribunal found that Mr Arai's conduct was contemptuous of the Office of Fair Trading and imposed a two year disqualification period. No such finding was made against Mr Magerovski. The Edward Lees decision (Edward Lees Imports Pty Ltd v Commissioner for Fair Trading (No 3) [2018] NSWCATOD 116) is distinguishable in that Mr Lees had previous criminal convictions and there were other serious findings concerning the conduct of Mr Lees. This is said to be in contrast to the facts of this case where Mr Magerovski was accepted as a witness of truth (see [38] of the Reasons). The fourth example concerns the decision in Assadourian v Roads and Traffic Authority [2013] NSWADT 6 where a ten year disqualification period was imposed. That case concerned a person who had been convicted of offences under the Tow Truck Industry Regulations 2008 and had been charged with indictable offences. The person had been found not to be fit and proper on two previous occasions. Nextly, the appellants submitted that they could not have been aware that the Tribunal intended to rely upon the Edward Lees decision and were not afforded the opportunity to make submissions with respect to its application as that case was part heard with the decision not being handed down until 23 August 2018; and 4. The appellants rely upon the English decision reported as R (on the application of Spencer) v City of Westminster Magistrates Court [2017] EWHC 3603. In that case, the High Court quashed the decision of the District Judge because the Judge had referred to unreported and unavailable first instance decisions and had not given the claimant an opportunity to address the points made in those judgments. The approach taken by the Tribunal is similar, if not identical or even worse on the basis that the decision of Edward Lees was not available until six months after submissions had closed.

[11]

Ground 5 - Error of law when determining penalty

When exercising the discretion under s 62 of the HB Act to determine penalty, the Tribunal made a House v R [1936] HCA 40; (1936) 55 CLR 499 type error. Failure to address and determine a necessary issue on the question of penalty in that no finding was made as to the veracity of the 37 complaints against Service Today (NSW) constituted an error of law and the Tribunal applied the wrong principle of law when determining the penalty to be imposed.
The Tribunal failed to conduct any active intellectual engagement with the question as to whether which of the 37 complaints had been established, the steps taken by Service Today (NSW) and Mr Magerovski personally to resolve some or all of the complaints and the scale and size of the business conducted by Service Today (NSW). These matters are relevant to the nature, width and extent of the contraventions, the loss or damages and prejudice in consequence of the contraventions and the efforts made to correct the situation. These and other matters are all germane on the question of penalty. In simple terms, having identified factors which are relevant to the assessment of penalty, the Tribunal did not give a proper, genuine and realistic consideration to those items when imposing a penalty on Service Today (NSW) and Mr Magerovski.
Whilst the Tribunal identified relevant legal principles to the assessment of appropriate penalty, it did not apply them correctly and accordingly fell into error. First, the Tribunal performed that assessment under the misapprehension that Service Today (NSW)'s authority was cancelled indefinitely. Second, there was an abject failure by the Tribunal to make any findings with respect to the veracity of the 37 complaints being a necessary issue raised by both parties. Thirdly, the period of disqualification of one year imposed upon Service Today is incongruous with a disqualification period of two years imposed upon Mr Magerovski. Fourthly, there was no need to impose a one year disqualification period on Service Today to allow "sufficient time for Mr Magerovski to restructure his business to disassociate it from the involvement by Mr Saboune, Ms Tajjour and their companies" (see [95] of the Reasons). This is because there was nothing preventing Saboune or Tajjour being presently involved in Service Today (NSW), being the only reason provided by the Tribunal. Fifthly, whilst the Tribunal stated that it had considered the principles, it could not have properly applied them in the absence of making any findings as to the veracity of the 37 complaints.

[12]

Ground 6 - Conclusion as to Mr Magerovski's dishonesty

The Tribunal did not take a subjective approach when determining whether Mr Magerovski's answers were made with reckless disregard to its truth. Had the Tribunal done so, in light of the findings made against Mr Magerovski as to his limited knowledge of the legal effect of the corporate structure (i.e. Saboune and Tajjour having relevant powers), a finding of dishonesty is not available. The error is material in the sense it might or may have made a difference to the outcome on the basis that the conclusion that Mr Magerovski was reckless ([80] of the Reasons) is a primary reason why the Tribunal ultimately concluded that Mr Magerovski was dishonest and not fit and proper (see [86] and [90] of the Reasons).
In elaborating on the above submission, Mr Magerovski says that the reasoning of the Tribunal reveals the following: 1. Mr Magerovski presented truthfully as a witness ([38] of the Reasons); 2. Mr Magerovski did not have actual knowledge that the statements he provided in response to the s 14 Notice were false or misleading ([71] of the Reasons); 3. The Tribunal identified that making a statement with reckless disregard as to whether it was true or false can be capable of being regarded as dishonest ([78] of the Reasons); 4. The Tribunal correctly identified that whether or not an act was done with reckless disregard will depend on the circumstances and requires a subjective approach ([79] of the Reasons); 5. The Tribunal found that Mr Magerovski did not check what Ms Tajjour's relationship with Service Today (NSW) was when he answered the s 14 Notice ([72] of the Reasons); and 6. Mr Magerovski's failure to check demonstrates a deficiency in his honesty ([80 of the Reasons]).
The reasoning process outlined above demonstrates that the Tribunal has not applied a principle of law correctly by failing to take a subjective approach when determining recklessness. The following demonstrates how this error arises: 1. No finding was made that Mr Magerovski provided a response to the s 14 Notice with reckless disregard as to whether it was true or false; 2. The Tribunal failed to identify what enquiries Mr Magerovski should have made prior to answering the s 14 Notice, being subjective factors relevant to the assessment of recklessness; 3. On the Tribunal's own reasoning, the only way in which Mr Saboune and Ms Tajjour were found to be involved in Service Today (NSW) was by reason of them holding a relevant power. That relevant power arose solely by the offices and shareholdings they held within the group (see [40] - [52] of the Reasons). There was no suggestion that Mr Magerovski was aware of this, nor could there been when such a finding was based, in part of the proper construction of technical provisions of the HB Act; 4. The Tribunal ignored the explanation provided by Mr Magerovski in re-examination about why he did not make enquiries regarding Ms Tajjour's involvement. That explanation (which was to the effect that she had no involvement) is not inherently improbable and should be accepted by the Tribunal particularly in circumstances where the Tribunal found that Mr Magerovski presented truthfully as a witness and that there was nothing in the written evidence that contradicts the explanation provided by him. This occurred in circumstances where Mr Magerovski was accepted as a witness of truth, the evidence that he provided about why he did or did not make certain enquiries is directly relevant when taking a subjective approach in assessing recklessness; 5. The only criticism levelled against Mr Magerovski is that he did not know Ms Tajjour was a co-director with him in Mr Power Electrical Pty Ltd which employed electrical labour for the business. The objective evidence reveals that the respondent was already aware of this fact; and 6. The question asked of Mr Magerovski was what was Ms Tajjour's involvement in Service Today (NSW), not the involvement of Mr Power Electrical Pty Ltd.
For the reasons set out above, the Tribunal has not taken a subjective approach when determining whether Mr Magerovski's answers were made with reckless disregard to its truth.

[21]

Ground 12 - Factual findings where there was no evidence

There was no evidence (or logically probative evidence) to support the factual findings made at [47(4)], [58(2)], [58(3)], [58(5)] and [58(6)] of the Reasons for the following reasons: 1. There was no direct evidence of the facts found in the above paragraphs. The only evidence was with respect to Service Today for the period of 12 March 2015 to 24 June 2016 and with respect to Service Today (VIC) for the period 8 December 2014 to 12 August 2016. There was no evidence of any transactions prior to 31 July 2014; 2. The Tribunal was not in a position to draw any inferences because no questions were put to Mr Magerovski about what expenses (if any) were shared prior to 31 July 2014; 3. Whilst the corporate structure has not changed, the letter from the accountant expressly states that the structure was established to "cater for significant growth". The Tribunal can reasonably infer that a business the size of Service Today (NSW) does not materialise overnight and takes time to grow either progressively or even exponentially, both of which militate against a finding that expenses were shared prior to 31 July 2014; and 4. Service Today (NSW) could not provide plumbing and electrical services prior to 22 August 2014 when its licence issued.
There was no evidence (or no logically probative evidence) to support the factual findings made at [54(11)], [55(5)] and [58(4)] of the Reasons for the following reasons: 1. There was no direct evidence of the facts found in the above paragraphs; 2. There was no effective cross examination of Mr Magerovski on the form signed by Ms Tajjour; 3. The form that Ms Tajjour signed on 3 June 2014 is not a complete document; 4. There is no evidence that Mr Magerovski was aware that Ms Tajjour signed the form prior to 18 August 2014 (or at any point in time on the basis that the form Ms Tajjour signed was incomplete and may not be the same form Mr Magerovski signed) and nor was there any attempt to explore this issue in cross examination; 5. The evidence from the bank creates even more confusion as to whether the form that Ms Tajjour signed was for Service Today (NSW) or Service Today; 6. After being taken to the documents in cross examination, the respondent's witness conceded that the evidence appears to show that Ms Tajjour did not have permission to authorise and in fact never had permission to authorise transactions on the two accounts the subject of the cross examination; and 7. The objective evidence from the Commonwealth Bank indicates that Tajjour never had access to transact on Service Today (NSW)'s bank account or had been given any type of authority to do so. This evidence was overlooked by the Tribunal.

[23]

Ground 14 - Conclusion that Mr Magerovski did not have sufficient business management skills

Mr Magerovski submitted that the Tribunal fell into making an error of law when considering Mr Magerovski's business management skills in assessing whether or not he was a fit and proper person. Whilst the Tribunal identified the correct legal principles that apply in an assessment of whether a person is fit or proper (see [20] - [21] of the Reasons), it did not apply those principles correctly and fell into error for the following reasons: 1. The only knowledge that is relevant to an assessment as to whether Mr Magerovski is fit and proper is the requisite knowledge of those duties and responsibilities imposed upon him by holding a licence. There is no authority involving a merits review where the absence of knowledge of obligations imposed on a director under the Corporations Act 2001 has been used when assessing an individual's business management skills; 2. The purpose of the HB Act is to protect consumers of home building services. The absence of any knowledge regarding obligations a director may owe to shareholders cannot possibly affect consumers of home building services and, accordingly, should not be considered by the Tribunal when assessing fitness and propriety; 3. The Tribunal considered and placed significant weight on Mr Magerovski's lack of knowledge regarding obligations a director may owe to shareholders (see [67] and [77] of the Reasons). Such knowledge is not required to properly discharge the obligations imposed on a nominated supervisor of a company; 4. The business management skills of Mr Magerovski should be measured against the knowledge required to properly discharge the obligations imposed on him as nominated supervisor of Service Today (NSW) and they were not. They were measured against the duties a director owes to shareholders of a company; 5. Whilst the determination of whether someone is fit and proper is one of value judgement, that judgment must be based on relevant matters having regard to the objects of the HB Act; and 6. The reasons provided by the Tribunal reveal that it was more concerned with potential breaches of the Corporations Act 2001 (Commonwealth) rather than any breaches or potential breaches of the HB Act (see [67] and [77] of the Reasons).

[24]

Ground 14A - Conclusion that Mr Magerovski gave false and misleading answers on 31 July 2014

Mr Magerovski submitted that the conclusion made by the Tribunal that he gave false and misleading answers on 31 July 2014 is not just and equitable and is against the weight of evidence. The conclusion that he gave false or misleading answers is against the weight of evidence for the following reasons: 1. The Tribunal found that Mr Magerovski did not have actual knowledge as at 31 July 2014 that the relevant statements were false or misleading (see [71] of the Reasons); 2. Mr Magerovski was accepted as a witness of truth (see [38] of the Reasons); 3. No questions were put to Mr Magerovski as to what was taking place as at 31 July 2014 save for two matters. The first concerned Mr Power Electrical Pty Ltd providing electrical personnel to Service Today (NSW). The second concerned Service Today (NSW) using vehicles and the premises provided by Service Today. Nothing turns on this given the Tribunal's conclusion that this does not give Mr Saboune a financial interest in Service Today (NSW) or enable him to have an influence over management and operation (see [57] of the Reasons); 4. All evidence relied upon by the Tribunal to find that Mr Magerovski provided a false or misleading answer on 31 July 2014 occurred well after this date (see [58] of the Reasons); 5. On the Tribunal's own reasoning the only way in which Mr Saboune and Ms Tajjour were found to be involved in Service Today (NSW) was by reason of them holding a relevant power, namely the offices and shareholdings they held within the group. There was no evidence that Mr Magerovski was aware of this; 6. The explanation provided by Mr Magerovski in re-examination about what he thought the question sought provides an innocent explanation for the answer provided. That explanation is not inherently improbable and should be accepted; 7. The findings made by the Tribunal reveal that an ongoing duty to disclose was a necessary step to support the conclusion that Mr Magerovski provided false or misleading statements on 31 July 2014; 8. Whilst the corporate structure has not changed, the letter from the accountant expressly states that the structure was established to cater for significant growth; 9. Service Today (NSW) could not provide plumbing and electrical services prior to 22 August 2014 when its licence issued; and 10. The findings appear to be based almost entirely on inference.
Leave should be granted for the following reasons: 1. All factual findings relied on evidence that relates to a period after 31 July 2014; 2. The factual findings made support the conclusion that Mr Magerovski provided false and misleading answer on 31 July 2014. That conclusion creates an injustice in light of other findings that Mr Magerovski did not have actual knowledge that they were false at the time. The injustice is compounded by the fact that the finding that he provided false and misleading answers on 31 July 2014 gave rise to the conclusion that Mr Magerovski was not fit and proper. The continuous obligation to disclose was central to the Tribunal's decision and was not merely peripheral; 3. The factual finding that Mr Magerovski provided false and misleading answers on 31 July 2014 was unreasonably arrived at; 4. The finding that Mr Magerovski was aware of Mr Saboune and Ms Tajjour's involvement in Service Today (NSW) was unreasonably arrived at and clearly mistaken in circumstances where: 1. On the Tribunal's own reasoning the only way in which Mr Saboune and Ms Tajjour were involved in Service Today (NSW) is by them holding a relevant power; 2. There was no suggestion that Mr Magerovski was aware that Mr Saboune held a relevant power. 1. Mr Magerovski was deprived of a significant possibility of a chance that was fairly open to achieve a different and more favourable outcome and accordingly, the Decision is not just and equitable.

[26]

Ground 16 - Conclusion that disqualification for Mr Magerovski of two years is not just and equitable etc.

Mr Magerovski submitted that the conclusion that an appropriate disqualification period of two years is a conclusion which is not just and equitable and is against the weight of evidence. The penalty imposed is against the weight of evidence for the following reasons: 1. There was a failure to determine the veracity of the 37 complaints; 2. The Tribunal failed to take into account that Mr Saboune's disqualification period ended on 30 April 2017 and accordingly Mr Magerovski could not have engaged in any wrong doing on and from that date; 3. The Tribunal relied on cases that were not raised by either party and that are distinguishable; 4. The evidence with respect to Service Today (NSW)'s compliance history was not considered by the Tribunal. Given the size of the business, its compliance records should be viewed as exemplary; 5. The Tribunal did not apply the proportionality or parity principle correctly for the reasons set out in earlier submissions; 6. The penalty imposed was excessive in that it was not reasonably required to protect the public, particularly where there was no finding of any defective works or substantive breaches of the HB Act; 7. The absence of any reasoning as to why the two year disqualification period was appropriate other than this was the period of time proposed in the cases cited; and 8. It is incongruous with the disqualification period of one year imposed upon Service Today (NSW), particularly in circumstances where that period of disqualification was imposed for the same reason (i.e. to enable Service Today to comply with the requirements of the HB Act).
Leave should be granted because the application of proportionality and parity principles are issues that have general application. The decision on penalty was not just and equitable on the basis that it was founded on factual findings that were against the weight of evidence. There has been a miscarriage of justice.

[29]

Ground 21 - Conclusion that Mr Magerovski had insufficient knowledge

Mr Magerovski submitted that the conclusion that he had insufficient knowledge of his obligations under the Corporations Act 2001, the financial arrangments, the transactions and its employees was against the weight of evidence for the following reasons: 1. The Tribunal did not consider or failed to properly consider the explanation provided by Mr Magerovski as to how he was able to effectively manage the business including its finances; 2. The Tribunal did not consider or failed to properly consider the evidence from Mr Magerovski that he had a finance team in place that handled the finances of Service Today (NSW); 3. There was nothing unusual in relying on a finance team in operating such a sizable business; 4. Mr Magerovski provided evidence that he monitored the financial position of Service Today (NSW) and compliance with reporting obligations with the assistance of an accountant; 5. The Tribunal did not consider, or failed to properly consider the written evidence of Mr Magerovski that went to his understanding of the requirements of the HB Act; 6. Any apprehension about breach of director's duties (even if established) is a matter for ASIC or alternatively the shareholding of a relevant entity and not regulator who should only be concerned with protecting consumers of home building services; and 7. The Tribunal did not consider or failed to properly consider Mr Magerovski's personal involvement in dealing with the 37 complaints.
Leave should be granted for the following reasons: 1. The ambit and nature of the knowledge required of the person applying on behalf of the corporate entity that seeks to obtain an authority under the HB Act raises questions of public importance and matters of administration or policy which have general application; 2. The extent to which a person is able to rely on other professional advisors when conducting a large scale business while still being compliant with the obligations imposed by the HB Act raises questions of public importance and matters of administration of policy which have general application; 3. Mr Magerovski was deprived of a significant possibility or a chance that was fairly open to achieve a different outcome by: 1. If the dishonesty findings are not upheld all of which founded on a finding that there is a continuous obligation, a simple directors or business management course could have resolved all concerns; 2. There were other more appropriate penalties available, particularly if the dishonesty findings were not upheld; and 3. If the dishonesty findings were not upheld, the penalty of two years is punitive. Accordingly, the decision is not just and equitable.
With respect to the appeal of Service Today (NSW), the primary options for disposal of the appeal are to either remit the matter back to the Tribunal differently constituted Tribunal or impose a new penalty that is not more severe than that imposed by the delegate in the reviewable decision. The appellants submitted that the most appropriate action for the Appeal Panel to take would be a complete remittal to the Tribunal differently constituted. In the event that the Appeal Panel reduced the penalty imposed on Service Today (NSW), then the proceedings concerning Mr Magerovski should be remitted in any event.

[31]

Grounds 1 - 3 Denial of Procedural Fairness

The respondent accepts that the Tribunal proceeded on an incorrect basis that the disqualification of Service Today (NSW) was for an indefinite period. However, the respondent submitted that this was not a finding of fact of the Tribunal, rather a misstatement of the Reviewable Decision.
Service Today (NSW) complains that it was not told that the penalty was going to increase and was not afforded the opportunity to comment on this aspect of the Decision. The respondent submitted that although in increase in penalty has occurred, that increase is not manifestly excessive, nor outside the range of reasonable discretion. The need for disqualification was identified because of the disqualification (in part) of Mr Magerovski which would necessitate a change in structure. Both Mr Magerovski and Service Today (NSW) were aware that both cancellation and disqualification were actions the Tribunal could impose, but chose only to make a submission that the appropriate penalty was either nothing or a fine and there is arguably no loss of opportunity as they did not take it up at first instance.
The respondent submitted that in the event that the Appeal Panel considers that there has been unfairness, the original order of cancellation is still appropriate and the Appeal Panel should simply quash the order of disqualification. Even where the Appeal Panel determines the matter should be remitted, which is not conceded by the respondent, there is no basis upon which the appeal concerning the Mr Magerovski proceedings should also be remitted and the Appeal Panel should reject the submissions from the two appellants in that regard.
In respect of Ground 3 (that the appellants were not afforded the opportunity to comment on a decision considered in the Reasons), the respondent submitted that the Tribunal was not relying on the decision of Edwards Lees as authority for the disqualification period, rather it was referring to other recent cases with similar disqualification periods.

[35]

Ground 7 - Obligation of continuous disclosure

The respondent submitted that the finding by the Tribunal at [80] is the only basis upon which the disciplinary action against Mr Magerovski was taken and therefore whether there was an ongoing obligation of disclosure did not need to be determined by the Tribunal and further, would not materially impact the findings of the Decision that the appellants challenge.
The basis upon which disciplinary action was imposed upon Mr Magerovski was upon his own evidence that he did not check the accuracy of his answers to the s14 Notice despite knowing that the accuracy of those answers was paramount. The finding does not rely on any ongoing obligation of disclosure. Rather, the Tribunal assessed Mr Magerovski's knowledge at the time he provided the response to the s 14 Notice as submitted by the appellants.
A finding of ongoing disclosure was not a required step in reaching the conclusion at [59] of the Reasons. That conclusion related to whether the answers were or were not misleading or whether they omitted matters which resulted in the statement being false or misleading. There were a number of financial arrangments in place at the time that Mr Magerovski gave the responses to the s 14 Notice (such as the ownership of the building Service Today (NSW) operated from, lack of awareness of who was the shareholder of Service Today (NSW), who Service Today (NSW) leased equipment from, that Mr Saboune and Ms Tajjour had roles within the Service Today group structure and that group structure had existed since the inception of Service Today (NSW)).
The respondent submitted that the Tribunal did not determine that because of the finding at [59] disciplinary action should be imposed. Rather, the Tribunal used this finding in respect of whether there had been any contravention of s 307A of the Crimes Act, which it ultimately determined there was not.
The respondent submitted that the Tribunal did not need to make any determination in respect of the ongoing obligation of disclosure because this was not relevant to the grounds upon which the Tribunal determined disciplinary action was appropriate. Whether there is or is not an ongoing obligation is irrelevant to Mr Magerovski's failures as set out in [80] and [81] of the Reasons. In fact, the Tribunal assessed Mr Magerovski's knowledge at the time he provided the response to the s 14 Notice.
The respondent submitted that the finding in respect of Mr Magerovski's answers being false and misleading did not relate to the findings relied on at [80] and [81]. Rather, those findings concerned whether there had been an offence against s 307A of the Crimes Act.

[38]

Ground 11 - Breach of principles of proportionality and parity

This ground concerns the issue of proportionality and parity in imposing an appropriate penalty. The respondent submitted that there was no error in the Tribunal's approach. The purpose of the penalty table was to record all penalties imposed over a period of time, not penalties relating to any specific group. The respondent submitted that there was no error shown in the Tribunal's consideration of the distinction between natural persons and companies. Parity is not simply a matter of the same sentence being imposed, it is a matter to be determined having regard to the different circumstances of the offenders involved (see Postiglione v R [1997] HCA 26; (1997) 189 CLR 295 at [301]).
The different roles of the different appellants justifies the difference in treatment of the individuals and that the treatment of the company in the present circumstances was appropriate. The reason for the penalty being imposed was not the same, Mr Magerovski's period of disqualification was said to be necessary (see [94] of the Reasons) to allow him to obtain and demonstrate the knowledge necessary for the holder of a contractor licence in relation to business management, financial and accounting obligations, corporate responsibilities and other obligations under the HB Act. The purpose of the disqualification period of Service Today (NSW) was set out in [95] of the Reasons. Mr Magerovski is in a different position to Service Today (NSW).
The respondent submitted that the Tribunal was not required to consider that Mr Saboune was able to be involved in Service Today (NSW) from 30 April 2017. Firstly, Mr Saboune has not applied for any licence in New South Wales, secondly, that the disqualified person may now apply for a licence does not alter the fitness and propriety assessment of Mr Magerovski at the time he responded to the s 14 Notice, nor at the time he demonstrated that he does not have basic and fundamental knowledge relevant to his holding a contractor's licence.
The respondent submitted that in [30] of the Reasons, the Tribunal set out the factors which might be relevant to the assessment of an appropriate penalty. The Tribunal has clearly determined the majority of factors set out (noting that the Tribunal does not have to address each one) including the nature, width and extent of the contraventions, the circumstances, the presence of dishonest intent, the extent of carelessness or wilfulness, the efforts made to correct the situation and measures taken by the licensee, the consciousness of the licensee of his obligations and previous behaviour warrant a finding that Mr Magerovski is not a fit and proper person within the meaning of the HB Act.
Finally, the respondent submitted that in the event that the Appeal Panel finds that the Tribunal was in error in relation to the conclusion at [95] of the Reasons in respect of the penalty imposed on Service Today (NSW), the Appeal Panel should impose the original penalty of cancellation on the grounds that the conduct warranted the findings pursuant to s 56k of the HB Act.

[39]

Ground 12 - Factual findings where there was no evidence

This ground concerned alleged incorrect findings of fact and the respondent submitted that each finding of fact was available on the evidence and further was not material to the decision of the Tribunal concerning the reasons for disciplinary action being necessary. In particular: 1. [47(4)] - Mr Magerovski accepted that the Service Today Group shared expenses and agreed that the structure of the group had not changed since its inception. In any event, the respondent submitted this finding is not relevant to the Tribunal's decision; 2. [54(11)] - the appellants accepted that Ms Tajjour signed a form with the Commonwealth Bank. That form is to be a signatory. The finding is not that Ms Tajjour was a signatory. In any event, the finding is not relevant to the Tribunal's decision; 3. [55(5)] - there was evidence of this state of affairs before the Tribunal in the affidavit of Ms Beretherick which included various authority and disclosure forms signed by Ms Tajjour as the authorised signatory. Contrary to the appellants submission the objective evidence from the Commonwealth Bank was not compelling, comprising of an unsigned document from a bank employee and simply stated that "Nadene" had no authority given to her to transact on the Service Today Pty bank account and had not transacted on the account. There was no time frame given, nor was the maker of the statement available for cross examination. In any event, it is not the case contrary to the submissions made by the appellants that the finding is that Mr Magerovski knew of this state of affairs. Simply, it is that Ms Tajjour had been authorised to operate the business accounts of Service Today (NSW) from June 2014, which is consistent with the documentary evidence; 4. [58(2)], [58(3)] and [58(5)] - there are a number of transactions which go beyond that of marketing services and for which there was no explanation forthcoming from the appellants. The reasons for the transactions can be inferred from the descriptions contained in the bank account records. It is irrelevant the period for which the transactions relate to, the Tribunal Member was making a finding concerning the actual state of affairs between the relevant players and as such whether information existed that would impact the issuing of a licence. It was not a material finding relied upon in determining disciplinary action was appropriate against Mr Magerovski; and 5. [58(6)] - there was evidence of each of the matters referred to in this finding. Again the Tribunal was making a finding as to the actual state of affairs between the parties. It was not a finding relied upon in determining disciplinary action was appropriate against Mr Magerovski.

[50]

Decision

This is an appeal regulated by s 80 of the NCAT Act. Accordingly, an appeal lies as of right on any question of law, or with leave on any other ground (s 80(2)).
Contrary to the submissions, Sch 4 cl 12 does not apply in determining whether leave should be granted from a decision of the Administrative and Equal Opportunity Division. This is because the clause only operates to regulate leave to appeal a decision of the Consumer and Commercial Division: see Sch 4 cl 12(1) and definition of "Division decision" Sch 4 cl 1. However, the principles in Collins at [80] and following concerning the general discretion apply to the appeal.
The gravamen of the appeal brought by Mr Magerovski is that in the absence of the Tribunal finding that he (Mr Magerovski) or Service Today (NSW) had a "continuous obligation of disclosure" arising after the response to the s 14 Notice was provided to the respondent, the Tribunal erred in its determination that false or misleading information was provided. The error is said to arise because the conclusion that the information provided was false or misleading relies upon evidence relating to a period after the response was provided.
In our view, the analysis put forward by Mr Magerovski concerning the Decision is misconceived and we agree with the respondent that there was no need to consider or find that there was an obligation of continuous disclosure.
The reason we have come to this conclusion can be explained by restating in summarised form what the Tribunal decided. The substance of the Decision was as follows: 1. Mr Magerovski did not have sufficient knowledge of his obligations under the Corporations Act with respect to his role as a director of Service Today (NSW) or of the financial arrangments and transactions entered into by Service Today (NSW); 2. Mr Magerovski made statements in response to the s 14 Notice, which he had not enquired into or checked as to accuracy concerning the involvement of Ms Tajjour or Mr Saboune. He demonstrated a lack of knowledge as to what he should properly do in answering the s 14 Notice; 3. Mr Magerovski was unable to answer basic questions about Service Today (NSW)'s corporate structure or finances including about its advertising expenses and employees. His oral evidence could only be accepted when not contradicted by the respondent's evidence; 4. Mr Magerovski stated or accepted the various findings set out in paragraph 47 of the Reasons. These findings relate to the corporate structure of the Service Today group of companies which operated under the name "Service Today". The findings include that Service Today (NSW) and Service Today (VIC) have always shared expenses and decisions have been made by each of Mr Magerovski and Mr Saboune concerning shared expenses. There were additional findings recorded in paragraph 47 of the Reasons concerning the relationship between Service Today (NSW), the other companies in the group, Mr Saboune and Ms Tajjour; and 5. Mr Magerovski was not a fit and proper person to hold a contractor's licence.
We do not accept that the Tribunal's conclusions were based upon matters which occurred only after the response to the s 14 Notice and we therefore agree with the respondent that there was no need to consider or decide whether there was an obligation of continuous disclosure.
Further, the findings concerning matters occurring after the response to the s 14 Notice provide evidence which demonstrates the business structure put in place with the involvement of the close associate was, at all times, intended to operate with the relevant involvement of Mr Saboune and Ms Tajjour as found by the Tribunal. These matters were known to or should have been known to Mr Magerovski and should have been included in the response to the s 14 Notice.
We will now turn to each ground of appeal.

[52]

Ground 3

This ground concerns the Tribunal's apparent reliance on cases not referenced by the parties in their consideration of the appropriate penalties to be imposed. In paragraph 94 of the Reasons the Tribunal determined that a period of disqualification for Mr Magerovski was necessary and that the appropriate period would be two years. The period of disqualification was described as necessary to allow Mr Magerovski to obtain and demonstrate the knowledge necessary for the holder of a contractor's licence under the HB Act in relation to business management, financial and accounting obligations, corporate responsibilities and other obligations under the HB Act. The period of two years was said to follow the Tribunal's previous determinations in such matters and the respondent's submissions on penalties imposed under the HB Act between 2012 and 2017. Four cases were cited apparently in support of the period of two years. One case was not published until after the hearing and all four are said by Mr Magerovski to be distinguishable on their facts. However, in our view, the Tribunal did not rely on the four cited cases, except for the limited purpose of noting that the penalty followed (which we take to mean was guided) the cited cases. The Reasons makes it clear that the period was decided on the basis of what was necessary to allow Mr Magerovski to obtain and demonstrate the necessary knowledge for the holder of a contractor licence. The Tribunal "followed" previous determinations. Those determinations could not have been anything more than guidelines as each case would have been decided on its own facts.
In Champion Homes Sales Pty Ltd v Commissioner for Fair Trading [2018] NSWCATAP 18, the Appeal Panel referred to the "parity principle" and comments of Justices of the High Court in Lowe v R [1984] HCA 46; (1984) 154 CLR 606. In that case, Dawson J (with whom Wilson J agreed) stated that there is no rule of law which requires co-offenders to be given the same sentences for the same offence, even if no distinction can be drawn between them. However, his Honour said that justice should be even handed and this has led to sentences being varied by Courts of Appeal in order to reduce the disparity between sentences separately imposed on co-offenders. His Honour said: "On any view the interference of a Court of Appeal is not warranted unless the disparity is such that the sentence under appeal cannot be allowed to stand without it appearing that justice has not been done. The difference between the sentences must be manifestly excessive and call for the intervention of an appellant court in the interests of justice. [8]."
In our view, the Tribunal was entitled to seek guidance from other cases which may have had some similar characteristics and also to make a decision on penalty based upon the particular requirements of this case. In our view, this is what has occurred and there is no manifest injustice.
Mr Magerovski relied upon the English case reported as The Queen on the application of Elizabeth Spencer v City of Westminster Magistrates Court v Crown Prosecution Service [2017] EWHC 3603 in support of the proposition that procedural fairness had been denied because the Tribunal relied upon (and expressly cited) the Edward Lees decision, which decision was not available for consideration by the parties until after the Decision had been delivered.
In our view, the English decision is distinguishable. It is clear that that case concerned a question as to whether the approach to be taken with respect to whether a security should be forfeited (where an accused had absconded contrary to bail conditions) and whether the question should be treated on the same footing as a case concerning the forfeiture of sureties. The case involved an argument that there was no difference in the law as to the forfeiture of sureties and securities and the case proceeded on the basis that relied upon a case involving surety forfeiture. However, the reserved decision was decided upon a consideration of cases concerning forfeiture of securities being a basis which was different to the way the hearing proceeded.
In our view, having regard to the reasoning recorded in the Reasons for the imposition of the penalty, Mr Magerovski has not been denied procedural fairness and Ground 3 is rejected.

[53]

Ground 4

This ground concerned the submission that the Tribunal erred in not applying the rule in Browne v Dunn. Putting aside the question of whether the Tribunal is obliged to apply such rule, in our view, the crucial findings made by the Tribunal were fairly foreshadowed by the cross examination of Mr Magerovski. The finding in paragraph 80 of the Reasons that Mr Magerovski failed to make enquiries or check the accuracy of his statements in response to the section 14 Notice were justified having regard to questions put and answers given during the cross examination of Mr Magerovski: see the transcript, page 99 in appeal book 1. The finding in paragraph 81 of the Reasons that Mr Magerovski did not have requisite knowledge to know what he ought duly to do in answering the s 14 Notice was a conclusion reasonably available having regard to the evidence given in cross examination: see Transcript pages 99, 100 and 104. In our view, it is incorrect to say that Mr Magerovski was not asked whether companies in the group have always shared expenses. Questions of that kind can be found on Transcript pages 96, 97, 100 and 110. For example, on page 110, Mr Magerovski agrees with the question to the effect that it had been established earlier in the cross examination that Service Today (VIC) shared expenses with Service Today (NSW). Mr Magerovski also agreed with the proposition that the structure of the group had not changed since inception.
In our view, it is incorrect to say that key propositions were not put to Mr Magerovski or that the respondent was not permitted to make submissions to support factual findings that were subsequently made by the Tribunal. As stated above, the key finding in paragraph 80 of the Reasons that Mr Magerovski failed to make enquiries, or check the accuracy of his response to the s 14 Notice, and that he does not have requisite knowledge to know what to do in answering a s 14 Notice (paragraphs 80 and 81 of the Reasons) were conclusions fairly available on the evidence.
Accordingly, we reject Ground 4.

[55]

Ground 6

This ground concerned the submission that the Tribunal did not take a subjective approach when determining whether Mr Magerovski's answers were made with reckless disregard to their truth. The premise for Mr Magerovski's submission is that he presented as a witness of truth. This submission takes out of context what the Tribunal in fact found. What the Tribunal found is contained at paragraph 38 of the Reasons where the Tribunal said: "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."
In our view, the Tribunal noted a discrepancy between Mr Magerovski's apparent knowledge contained in his written evidence compared with his more limited knowledge as evidenced in his oral testimony. In any event, the basis for the Tribunal's finding that Mr Magerovski was not a fit and proper person is found in paragraphs 80 and 81 of the Reasons. In paragraph 80 the Tribunal found that Mr Magerovski had not checked the accuracy of his statements or made enquiries in responding to the s 14 Notice, demonstrating a deficiency in his honesty associated with his contractor licence. In paragraph 81 the Tribunal stated that it is apparent that Mr Magerovski does not have the requisite knowledge to know what he ought duly to do in answering the s 14 Notice accurately.
Consequently, ground 6 is rejected because the decision as to penalty did not turn upon a finding that Mr Magerovski was reckless with the truth.

[63]

Grounds 14A and 15

These grounds concern the finding that Mr Magerovski gave false and misleading answers on 31 July 2014 and, in particular, that that finding is not just and equitable and is against the weight of evidence. This ground requires leave (s 80(2)(b) of the NCAT Act). Leave is required in accordance with the provisions of cl 12 of Sch 4 of the NCAT Act.
We agree with the respondents submissions that this ground mischaracterises what the Tribunal actually decided. The Tribunal did not find that Mr Magerovski gave false and misleading answers. Rather, it found that false and misleading answers were given by Mr Magerovski. The reasons do not contain the finding or connote that Mr Magerovski knowingly gave false or misleading answers.
These grounds also concern the submission that Mr Magerovski was found to be a witness of truth. We disagree and have earlier, in these reasons, explained our view of the Tribunal's findings in this respect.
This ground contains the submission that no questions were put as to the state of affairs at 31 July 2014 save for two matters. We disagree and have already elaborated on this aspect: see Ground 4. Similarly, our response to Ground 4 identifies questions put and answers given during Mr Magerovski's cross examination not limited to the period after 31 July 2014. Additionally, our response to Ground 10 deals with the balance of the matters raised under this ground.
Further, it is necessary for these grounds to be established to satisfy the criteria set out in the decision of Collins v Urban [2014] NSWCATAP 17. The relevant principles are described in paragraph 84 of that decision in the following words: 84 The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (3) In relation to an application for leave to appeal relating to a question of practice and procedure, the application is to be approached with the restraint applied by an appellate court when reviewing such decisions, especially if the application is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21] and the authorities cited there.
In our view, none of the criteria mentioned above have been satisfied so as to justify consideration to granting leave to appeal. Mr Magerovski specifically submits that the findings concerning the response to the s 14 Notice create an injustice. As has been said before, Mr Magerovski lacked requisite knowledge and lacked an understanding of his duty with respect to the response to the s 14 Notice. There is in our view, no basis for the submission that the Decision was unreasonably arrived at or is clearly mistaken, nor that he was deprived of a significant possibility of a chance that was fairly open to achieve a different and more favourable outcome. Accordingly, to the extent it is required, leave to appeal is refused.

Service Today (NSW) Pty Ltd (now known as Georges River Holdings Pty Ltd) & Magerovski v Commissioner for Fair Trading

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