Tyson v Director-General, Department of Finance and Services, NSW Fair Trading

Application of the relevant legislation

1. On 22 November 2013, Mr Tyson applied to vary his contractor licence to a supervisor certificate. At that time, the legislation in force was the Home Building Act 1989 and the Home Building Regulation 2004. On 15 January 2015, however, the Home Building Regulation 2004 was repealed and replaced by the Home Building Regulation 2014. Through the Home Building Amendment Act 2014, amendments were also made to the Home Building Act 1989.
2. The first question for the Tribunal is whether the Home Building Regulation 2014 or the Home Building Regulation 2004 applies in this case. See Kassem v Commissioner of Fair Trading [2015] NSWCATOD 29
3. The Tribunal is required to make the correct and preferable decision having regard to the material then before it, including any relevant factual material and any applicable written or unwritten law (Administrative Decisions Review Act 1997, s 63(1)). This generally requires the Tribunal to make a decision on the material before it at the time it makes its decision (see Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 46 FLR 409; Mattar v Roads and Maritime Services [2012] NSWADT 274 at [10]; Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286).
4. In Foley v Commissioner of Police [2005] NSWADT 12 at [5], Hennessy DP summarised the relevant principles as follows: At common law, a tribunal conducting a merits review must apply the law in force when it considers the matter, unless the decision involves a consideration of accrued rights and liabilities at an anterior date: Re Smith and Defence Force Retirement and Death Benefits Authority (1978) 1 ALD 374; Re Costello and Secretary, Dept of Transport (1979) 2 ALD 934; Commonwealth of Australia v Esber [1991] FCA 223; (1991) 101 ALR 35.
5. Item 121(2)(a) of Schedule 4 to the Home Building Act 1989 provides that an amendment made by the Home Building Amendment Act 2014 does not apply to or in respect of proceedings commenced in a court or tribunal before the commencement of the amendment. On this basis, the Tribunal is applying the provisions of the Home Building Act as they were at the time of Mr Tyson's application for review of the decision to refuse him a supervisor certificate.
6. Subsections 25(1) and 25(1A) of the Home Building Act 1989 have particular application to this case. At the time of Mr Tyson's application for review, they provided as follows: 25(1)The Director-General must refuse an application for a supervisor or tradesperson certificate if: (a) the Director-General is not satisfied that the applicant is a fit and proper person to hold such a certificate; or.. (c) the applicant is disqualified by this Act or the regulations from holding such a certificate. 25(1A) Without limiting subsection (1)(a), in determining whether an applicant is a fit and proper person to hold a certificate the Director-General is to consider whether the applicant is of good repute, having regard to character, honesty and integrity.
7. In relation to an applicant disqualified from holding such a certificate, clause 25 of the Home Building Regulation 2004 provides, relevantly, as follows: 25 General requirements for obtaining certain authorities under Act (1) Before an authority (other than an owner-builder permit) is issued, the Director-General must be satisfied that: (a) each relevant person in relation to the application for an authority: … (vii) has not had what the Director-General considers to be an unreasonable number of complaints made against him, her or it, and…. (x) has not carried out work in respect of which the Director-General considers an unreasonable number of insurance claims have been paid, and (xi) was not a director of, a partner of, or a person concerned in the management of, a body corporate or partnership that was disqualified from holding an authority within 3 years before the date of the application, unless the Director-General is satisfied that the applicant took all reasonable steps to prevent the conduct that led to the disqualification, and (xii) except in relation to an application for a tradesperson certificate-is not an undischarged bankrupt and is not a director of, or a person concerned in the management of, an externally-administered body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth) except in a case of a voluntary winding up of the body corporate, and (xiii) except in relation to an application for a tradesperson certificate-within the period of 3 years before the date of the application, was not an undischarged bankrupt and was not a director of, or a person concerned in the management of, an externally-administered body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth) except in a case of a voluntary winding up of the body corporate.
8. Clause 28(2) of the Home Building Regulation 2004 qualifies clauses 25(1)(a)(xii) and 25(1)(a)(xiii) in the following way: Despite clause 25 (1) (a) (xii) and (xiii), the Director-General may issue a qualified supervisor certificate if the Director-General is satisfied that the relevant person took all reasonable steps to avoid the bankruptcy, winding up or appointment of a controller or administrator.
9. Accordingly, the Home Building Act 1989, as it stood at the time of Mr Tyson's application for review, and the Home Building Regulation 2004 work together to clarify the legal position for a person such as Mr Tyson who, under the regulation, may be disqualified from holding a supervisor certificate.
10. On 15 January 2015, however, the Home Building Regulation 2004 was repealed and the Home Building Regulation 2014 came into operation. Unlike the Home Building Regulation 2004, the Home Building Regulation 2014 does not consider the legal position of disqualified persons. Instead, those provisions previously contained in clause 25 of the Home Building Regulation 2004 are now contained, with only minor changes, in sections 33B and 33D(2) of the Home Building Act 1989, which were inserted into the Act on 1 March 2015.
11. Item 121 of Schedule 4 to the Home Building Act 1989 does not, however, have the effect of continuing the operation of the Home Building Regulation 2004 in respect of these proceedings. That is because the making of the Home Building Regulation 2014 is not an "an amendment made by" the Home Building Amendment Act 2014.
12. Clause 75(2) of the Home Building Regulation 2014 provides, however, that any act, matter or thing that, immediately before the repeal of the Home Building Regulation 2004, had effect under that Regulation continues to have effect under the Home Building Regulation 2014.
13. Furthermore, section 143 of the Home Building Act 1989 provides as follows: An amendment made by the amending Act that imposes a requirement that was a requirement of the regulations before the amendment commenced extends to any contract or other matter to which the requirement was subject under the regulations immediately before the commencement of the amendment.
14. In light of these two provisions, the Tribunal finds that, in this case, the Home Building Regulation 2004 applies in lieu of the Home Building Regulation 2014. This is because the 2015 amendments made to the Home Building Act by inserting, inter alia, sections 33B and s33D(2) in the Act impose requirements that were previously contained in clause 25 of the Home Building Regulation 2004. This is made clear in the heading to the clause General requirements for obtaining certain authorities under Act; a heading that is modified only slightly in section 33B of the amended act, namely General requirements for issue of certain authorities.
15. For these reasons, the Tribunal finds that the now repealed Home Building Regulation 2004 continues to apply in these proceedings.

Relevant provisions

1. Section 25(1) of the Home Building Act provides that an application for a supervisor certificate must be refused if the Director-General is not satisfied that the applicant is a fit and proper person to hold such a certificate or is disqualified from holding such a certificate.
2. In considering whether Mr Tyson is a fit and proper person to hold a supervisor licence, the Director-General (and on review, the Tribunal) must consider whether Mr Tyson is of good repute, having regard to character, honesty and integrity (section 25(1A) of the Home Building Act).
3. Section 25 of the Home Building Regulation 2004 sets out the general requirements for obtaining authorities, including supervisor certificates. Relevantly, the section provides as follows: (1) Before an authority (other than an owner-builder permit) is issued, the Director-General must be satisfied that: (a) each relevant person in relation to the application for an authority: (xii) except in relation to an application for a tradesperson certificate-is not an undischarged bankrupt and is not a director of, or a person concerned in the management of, an externally-administered body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth) except in a case of a voluntary winding up of the body corporate, and (xiii) except in relation to an application for a tradesperson certificate-within the period of 3 years before the date of the application, was not an undischarged bankrupt and was not a director of, or a person concerned in the management of, an externally-administered body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth) except in a case of a voluntary winding up of the body corporate
4. It is common ground that Mr Tyson was declared bankrupt as a result of lodging a Debtor's Petition and Statement of Affairs on 24 August 2013 and so is, at the time of decision and in accordance with the Bankruptcy Act 1966, an undischarged bankrupt. As an undischarged bankrupt, Mr Tyson is disqualified from holding a supervisor certificate unless the Director-General (and on review, the Tribunal) is satisfied that he took all reasonable steps to avoid the bankruptcy (clauses 25(1)(a)(xii), 25(1)(a)(xiii) and 28(2) of the Home Building Regulation 2004).
5. It is also common ground that Mr Tyson became a director of Holmwood on 4 August 2000, that the company was voluntarily wound up on 18 December 2012 and that Mr Tyson was still a director of the company at this time.
6. In its decision to refuse a supervisor certificate to Mr Tyson, Fair Trading found him to be a 'disqualified person' pursuant to section 25(1)(c) of the Home Building Act and clause 25(1)(a)(xii) and (xiii) both because he is a director of an externally-administered body corporate and because he is an undischarged bankrupt.
7. Whilst I agree that these sections apply in relation to Mr Tyson's status as an undischarged bankrupt, I disagree that they apply to Mr Tyson as the director of an externally-administered body corporate that was voluntarily wound up.
8. Clause 25 (1)(a)(xii) states that Before an authority (other than an owner-builder permit) is issued, the Director-General must be satisfied that each relevant person in relation to the application for an authority, except in relation to an application for a tradesperson certificate-is not an undischarged bankrupt and is not a director of, or a person concerned in the management of, an externally-administered body corporate (within the meaning of the Corporations Act 2001 of the Commonwealth) except in a case of a voluntary winding up of the body corporate. (my emphasis)
9. Clause 28(2) of the Regulations provides that despite clause 25(1)(a)(xii), the Director-General may issue a qualified supervisor certificate if the Director-General is satisfied that the relevant person took all reasonable steps to avoid the bankruptcy, winding up or appointment of a controller or administrator.
10. As stated above, it is not disputed that on 18 December 2012, Holmwood was voluntarily wound up. This means that although Mr Tyson is indeed the director of an externally-administered body corporate, namely Holmwood, an exception is made to the provisions of clause 25(1)(a)(xii) on the basis of the voluntarily winding up of the company. Accordingly, the Director-General (or on review, the Tribunal) does not have to consider whether Mr Tyson, as a director of an externally-administered body corporate that was voluntarily wound up, took reasonable steps to avoid the winding up.

Issues

1. In light of the above, the issues to be considered by the Tribunal are as follows:

• Did Mr Tyson take all reasonable steps to avoid bankruptcy, having regard to the steps that could have been taken by him from the time of the financial difficulties that gave rise to the outcome?
• Is Mr Tyson a fit and proper person to hold a supervisor certificate?

Evidence

1. The Tribunal has considered the wealth of evidence produced to it in this matter. In addition to the s58 documents provided by the respondent, the evidence encompassed:

• four volumes of complaints made to Fair Trading in relation to Holmwood;
• five volumes of material relevant to the insurance claims made to QBE in relation to construction by Holmwood;
• a volume of licensing material for Mr Tyson and Holmwood;
• a volume of material in relation to claims made to CGU insurance;
• a volume of documents produced by the trustee of the Bankrupt Estate of Mr Tyson;
• a volume of documents provided by the Liquidators of Holmwood;
• a report to creditors dated 15 November 2012 from the administrator;
• an email dated 18 November 2014 attaching a draft solvency analysis for Holmwood; and
• one volume of documents provided by the applicant, including a statement of Mr Tyson with accompanying documentation.

1. Relevant aspects of this evidence are set out below.

Statement and oral evidence of Mr Tyson

1. Mr Tyson has provided a statement in support of his application. He also gave evidence during the Tribunal hearing.
2. He stated that having received his building contracting licence in 1992, he sustained injuries to his neck and back after falling from the roof of a house he was building in 1993. After this, using the company name Tyson Constructions, Mr Tyson began working for Mr Barry Dickinson, supervising and project managing houses for his company Kentucky Cottages, of which Mr Michael Everard, a real estate agent, was a silent partner.
3. In 2000, Mr Tyson and Mr Dickinson set up a new company, Holmwood Builders Pty Ltd (Holmwood), of which they were both directors. Mr Dickinson resigned as a director in 2003. From this point until 2008, Mr Tyson was the sole director of the company with Mr Dickinson, as shareholder, managing the business including its finances. Mr Tyson was in charge of project management for the company which involved being on site and co-ordinating the tradespeople. In 2009, Mr Brendan Dale and Mr Everard became directors of the company. Mr Dale managed the company's residential constructions while Mr Everard managed the company's finances. Although Mr Everard would verbally report to Mr Tyson, Mr Tyson did not have access to the financial databases or online banking for the company.
4. On the suggestion of Mr Everard, Mr Tyson invested $1 300 000.00 into the company by borrowing against his family home. Mr Tyson's parents also invested in the business.
5. From 2009 to 2013, Mr Tyson was involved in the commercial arm of the company, which had won a tender for Landcom and Aged Care and Disability Housing. Mr Tyson was the project manager for all the ensuing projects.
6. During this time, he was not involved in any of the company's residential building projects. For commercial projects, Mr Tyson would instruct the accounts department to issue monthly invoices for work completed.
7. In July or August 2012, one of the company's two accountants resigned. In September or October 2012, tradespeople and suppliers were telling Mr Tyson that they hadn't been paid.
8. When Mr Tyson questioned the company's remaining accountant, Mr Anthony McTaggart, about the overstanding payments, he told Mr Tyson that the tradespeople would be paid during the next pay cycle.
9. In October 2012, Mr Tyson requested a copy of the company records from the accountant and showed them to a local liquidator who advised him that 'cash flow looks tight, but it is workable based on the business plan the accountants had put together.' The liquidator, Mr Peter Amos, also recommended a second (replacement) accountant for the company, Mr Wayne Marshall. The company's original accountant, Mr Anthony McTaggart, resigned the day before the new accountant commenced work.
10. On his second day in the position, Mr Marshall advised Mr Tyson that the company was in financial crisis unless they refinanced. According to Mr Marshall, the creditors' list greatly outweighed the debtors.
11. Mr Everard did not support Mr Tyson's decision to place the company into administration. According to Mr Tyson: I hoped an administrator might be able to fix the company's issues as there were contracts to complete, just no money to pay suppliers. I thought an administrator could get the company back on track. I was concerned that Holmwood may be close to insolvency and was concerned if we continued to trade without an administrator there would be serious trouble.
12. In November 2012, Mr Tyson spent time with the liquidators assisting them to find documents and provide information. At this time he discovered that monthly invoices for $1600 from the massage business owned by Mr Everard's wife had been paid for 'staff massages.' Mr Tyson was unaware of any staff members who had received massages. Mr Everard and Mr Dickinson were unable to be located after the liquidation: their phones were disconnected and their places of residence vacated.
13. The day after the liquidation, Mr Tyson rang to apologise to each of the tradespeople to whom the company owed money. He also rang to try to ensure the minimisation of delays to an elderly couple's house due to the company's liquidation.
14. Mr Tyson was declared bankrupt in August 2013. This was because he had become liable for a number of personal guarantees made as a director of Holmwood. The amount of money he personally owes his debtors is $4.6 million. He and his wife are repaying the $1.3 million mortgage against their family residence, as a result of the money loaned to Holmwood.
15. According to Mr Tyson In early August 2013 I lodged a Debtor's Petition and a Statement of Affairs and on 24 August 2013 I was declared bankrupt. I became liable for a number of personal guarantees I made as a director of Holmwood Builders (and associated entities) when Holmwood and its related entities were liquidated. At the time I did this, 9 different creditors had commenced proceedings against me and lodging caveats against my house. I did not take bankruptcy as the easy option. I waited for 9 months after the administration of Holmwood to see if I could avoid bankruptcy but I could see that because of the personal guarantees that I had given on behalf of the company that had gone into liquidation that I could not avoid it. Around this time, I had debtors harassing me, my wife and my mother-in-law attempting to serve court notices and other claims. Many of the creditors were large companies (for example Bunnings, Stegbar Windows) and I assumed they would be prepared to chase me. The mortgaging bank (NAB) to our family home was trying to foreclose on the house. NAB had provided a commercial facility against [the] house for $1 300 000.00 against the house for my Wife and I to invest in Holmwood. I also had a total of 11 caveats removed by a lapsed notice. We were successful in getting each removed, allowing my Wife to switch the commercial facility to a loan for $1 300 000.00 at a home loan rate that we could actually service. After getting refinance approval but before settlement, 2 more caveats were lodged by creditors of Holmwood against my family home. We then went back to the Supreme Court (representing ourselves as we could not afford legal frees) we succeeded in having those caveats removed too as the court found there was no equitable charge for the property. This mean the title could be cleared and my wife could re-finance at a lower rate and the Bank did not foreclose on our home. I continue to live at our family home with my wife and four children (my children are under 18 years old). My mother-in-law lives in a granny flat she financed [and] built on our property and she has a life estate registered against the property. The amount I personally owe debtors is $4.6 mil[lion].
16. Mr Tyson's future intention is to put forward a proposal to satisfy his creditors. At this stage, however, he does not have the financial resources to either fund such a proposal or run the required creditors meeting.
17. If Mr Tyson were to be granted a supervisor certificate, he would be able to earn an annual salary of between $80 000 and $110 000. According to Mr Tyson, this would allow him to present an arrangement to his creditors that may be acceptable to them, allowing him to discharge his debts and to have his bankruptcy annulled.
18. In his affidavit, Mr Tyson states that he has never had a complaint made against him personally or against Tyson Constructions in relation to his capacity as a builder.
19. Mr Tyson acknowledges that 63 complaints have been made against Holmwood. Attached to his statement is a spreadsheet with Mr Tyson's comments as to the nature of these complaints. Of the 63, he sets out 18 complaints he believe were incorrectly attributed to Holmwood, seven that were due to the company being place in administration, ten that were due to incomplete work, five that were due to project delay, six that were due to miscellaneous complaints, one that was for a complaint of overcharging and several that were due to minor defects.
20. Mr Tyson writes: I estimate that Holmwood built on average 150 houses per year between 2000 and 2012, equating to approximately 1800 houses in total. If 45 of these homes had a complaint registered against the builder that equates to just under 3% of all homes built by Holmwood attracted a complaint…It is also worth noting before December 2009 - the time that Michael Everard and Brendan Scott became directors - the total number of complaints against Holmwood made between 2003 and 2009 was 11. After December 2009 complaints increased.
21. In oral evidence before the Tribunal, Mr Tyson agreed that as a director of Holmwood, he had a responsibility to be aware of the financial standing of the company. He told the Tribunal that there were two chartered accountants employed by the company and that the company's financial records were being shown to the insurers QBE on a quarterly basis who continued to issue the company with Home Warranty Certificates up until 3 October 2012 when the company went into liquidation. Mr Tyson told the Tribunal that QBE would have examined the financial books 'a couple of months after June 2012.'
22. He told the Tribunal that he did not have access to the database or the MYOB package or the bank accounts and that whenever he asked for information, he would be given a copy of the relevant financial record. He did not have concerns about the financial state of the company given that QBE was continuing to issue Home Warranty Insurance and the bank was continuing to issue loans for the display homes being constructed by Holmwood Construction. Furthermore, he was relying on the information given to him by the other directors. He was continuing to be paid his salary, the staff were getting paid and superannuation was being paid. It was only when the tradespeople were not getting paid that Mr Tyson started to 'follow it up.' This was late September, early October 2012.
23. He told the Tribunal that the financial records he was being shown bore no resemblance to the records he later became aware of once the company was in administration. He told the Tribunal that he has now come to the view, confirmed by 'what he was told by an accountant who had worked for Holmwood' that there must have been two sets of financial records being kept.
24. In his application for an internal review of the decision to refuse to grant him a qualified supervisor certificate, Mr Tyson set out the circumstances of the liquidation of the company: There is no dispute that I was a director of Holmwood Builders Pty Ltd and that the company has been under external administration since 12 November 2012. However I believe I need to provide some clarification. Holmwood Builders had two internal accountants (who) took directives from the CEO Michael Everard (also a director). Brendan Dale was also a director however removed himself just prior to the administration. My primary role in the business was out on site, this by no means diminishes…my responsibilities as a director of the company, however I just wish to present the background information. In October I became aware of trades not being paid or paid sporadically. I took the accounts to my personal accountant, where I was informed that cash flow was tight but workable. I took action as soon as I became aware of trades not being paid. Around the same time [the accountant] Anthony McTaggart put in his notice, I sourced another accountant recommended by an accountant that I knew. It was at this time that I was informed by the new account how Anthony and Adam had been accounting loads into the company as preferential shares which are seen as assets not liabilities as they in fact were. I contacted Hall Chadwick as soon as I became aware of this as I did not wish to trade insolvent. I was the only director present when the administrators came in. I continued to go into the office for three weeks after to aid the administrators and find out what had gone wrong.
25. In relation to his personal bankruptcy, Mr Tyson wrote: It is not in dispute that I am [an] undischarged bankrupt and that it was a result of personal guarantees signed in relation to the company, but I do dispute that I didn't take all reasonable steps to avoid bankruptcy. I was the only director who attended court in relation to these guarantees, although both Michael Everard and Brendan Dale also signed the documents. I was informed by the creditor's counsel that as the guarantees are worded 'jointly and severally' and that the other directors were 'difficult to locate' that they were pursuing me for the entire amount and that I would have to sue the other directors personally. I was not in a position to do this. I had already taken a loan against my family home and placed these funds in the company ($1.3 million which I lost). I had nothing further that I could sell to extinguish the debt. I couldn't afford counsel for these court proceedings I represented myself.

Detailed data of the insurance claims lodged with QBE in relation to Holmwood

1. In a document detailing the insurance claims lodged with QBE in relation to Holmwood, the dates the claimed losses were sustained range between 15 February 2012 and 14 January 2014. For each of the claims, the principal cause is listed as insolvency with the claim codes being either for structural or non-structural defects or a failure to complete. As at June 2014, the total amount paid by QBE to the claimants was $7 822 837.25.

Complaints made against Holmwood

1. In a letter dated 8 August 2014 to the liquidators of Holmwood, the NSW Self Insurance Corporation - Home Warranty Insurance Fund claims $8 170 167.00 being for indemnities paid by QBE Insurance for claims made by owners for defects in the residential building work undertaken by the company.
2. A table summarised the complaints was prepared by Fair Trading. At hearing, Mr Tyson highlighted those complaints where no substance was found to the complaints, where the complaints were simply inquiries made following the liquidation of Holmwood, where the complaints were not builder related but instead were an issue for the supplier and where the complaints were with the processes of the insurer rather than a building issue.

Tax debt

1. On 18 October 2011, a warning of intended recovery action was sent to Holmwood by the Deputy Commissioner of Taxation in relation to an amount of $107 348.03 owed by the company. A subsequent letter from the Deputy Commissioner of Taxation dated 27 October 2011 confirms an agreement with the company to pay its tax debt by monthly instalments. According to subsequent correspondence, this arrangement was continuing in September 2012.

Report to creditors of Holmwood

1. According to the s439A report to creditors prepared by the liquidators appointed to Holmwood on 10 December 2012 ('the report'), the amount of money claimed by unsecured creditors was $9 252 282. The amount of money owed to the Australian Tax Office was $70 708.12. Loans made to the company amounted to $730 286 with other creditors claiming an amount of $114 791.
2. The report confirms Mr Tyson's evidence that he was available to answer queries in relation to the company whereas Mr Dale was unable to be contacted.
3. The report sets out the following explanations for the company's difficulties as provided by Mr Everard:

• lengthy wet weather conditions that slowed down production;
• lack of work being received by government agencies;
• fee requirements from the home warranty insurer becoming more stringent;
• expected bank funding and extended credit terms not being forthcoming;
• failure to sell rent rolls;
• effect of cost cutting not immediately able to be realised;
• inability to sell a percentage of the business;
• construction revenue unrealised due to delays in commencing a large construction contract.

1. The report also cites the following reasons given by Mr Tyson for the company's problems: the company's overheads were too high, the company had too many employees and was unable to get tradesmen and suppliers to go to construction sites to work on projects which led to the company suffering significant losses from non-payment on a number of building contracts.
2. On the evidence before him, the liquidator concluded that 'whilst I have no reason to oppose the Directors' reasons for failure, my preliminary investigations into the affairs of the Company also indicate that the failure may be attributed to:

• poor financial control, including lack of records - the company has kept a significant amount of books and records, however, certain records are either not complete, incorrect or are not sufficiently details. Therefore, the accuracy of these books and records kept by the company cannot be verified;
• inadequate cash flow or high case use - 'The Directors of the Company wound down the trading operations of the Company progressively some four (4) weeks prior to the appointment of the Administrators, being 13 November 2012, as it had no funds to continue its operations. As a result of insufficient income being generated through the business operations of the company, the company heavily relied upon its..overdraft account to meet such costs/losses. Furthermore, as trading terms with customers were unfavourable and the level of unsecured debt was being increased, the company was unable to pay its debts as and when they fell due and failed as a result of inadequate cash flow;
• poor strategic management of business;
• poor economic conditions - I am of the opinion that the downturn in the construction industry may have had a dual effect of reducing the level of work and margins on the company's construction projects. As a consequence of margins potentially being reduced, the company may have sustained losses on projects.'

1. The report makes the following comments in relation to the frontend loading of construction: My investigations into the Company's construction projects indicate that the Company was 'frontend loading/overbilling numerous construction projects. As creditors may be aware, 'frontend loading/overbilling occurs when a Company places a value on a work activity that is in excess of its cost plus reasonable overhead and profit. I am of the opinion that the Company's 'frontend loading'/overbilling procedure may have had the following detrimental effects on the trading performance of the company: Insufficient funds remained in the unpaid portion of the building contract to complete the remaining works on the respective projects: The Company may have failed to adequately estimate the cost of completion of projects. The company has used the funds from the positive cash flow that the frontend loading/overbilling created which has resulted in insufficient funds remaining to complete the work. It seems funds have been utilised in the business operations of the Company. Frontend loading/overbilling of projects provides additional cash flow that covers financial losses on other projects. Therefore the Company was using the frontend loading/overbilling from one contract to fund the completion of previous projects. Frontend loading/overbilling eventually had an impact on the cash flow of the Company as the commencement of new projects was delayed.
2. According to the report, investigations had disclosed numerous payments to Mr Everard, Mr Dale and Ms Everard (Mr Everard's ex-wife) that the 'management accounts suggest..are loan repayments to..Mr Everard and Mr Dale however there is no indication that such amounts were advanced to the company. The payments that were made to Ms Everard have no description and/or details in respect of the nature of these payments.'
3. According to the report: investigations of the books and records received indicate that the Company received increased demands for payment from its creditors from 1 May 2012. The demands from creditors increased significantly in a short period of time and the Company received its first statutory demand on 23 October 2012 and continued to receive further demands until the appointment of the Administrators, being 13 November 2012.

Letter to ASIC from Hall Chadwick 25 June 2014

1. In this letter, the liquidator wrote that from his investigations into the books and records of the company, he had established that the company had been trading whilst insolvent and that Mr Dale traded the company whilst insolvent up until the date he resigned as director on 1 November 2012.

Draft Solvency Analysis of Holmwood by Hall Chadwick

1. An email dated 12 November 2014 from Fair Trading attaches an undated draft solvency analysis for Holmwood.
2. The draft analysis, which is unsigned and undated, is apparently written by the liquidators of the company. The unnamed author of the draft analysis concludes that from my review of the Company's records made available to me and my understanding of the company and its affairs, it is my opinion that the Company has traded whilst insolvent since November 2011.
3. This opinion is based upon:

• the company's liquidity ratios being below 1 (namely 0.71 from 1 July 2010 to 30 June 2011; 0.46 from 1 July 2011 to 30 June 2012; and 0/42 from 1 July 2012 to 13 November 2012);
• the company owing Commonwealth and state taxes to the amount of $276 050.32;
• the company having no access to further funding or credit from its financier, the Commonwealth Bank;
• the company's records disclosing that available assets were insufficient in value and security to enable any form of external funding from a financier;
• a significant increase in demands from creditors between 1 May 2012 and the appointment of the administrators on 13 November 2012;
• $2 800 269 being due to creditors at the time of the company being placed in administration;
• payments to creditors of rounded sums which are not reconcilable to specific invoices. The author writes that 'my investigations of the books and records received indicate ninety three (93) payments from the period of 1 May 2010 to 13 November 2012 in the amount of $1 551 225 that are large rounded payments that are not reconcilable to specific tax invoices.'

1. The draft solvency analysis concludes: Based on the above, the Company may have traded whilst insolvent, from as early as November 2011. The above major insolvency indictors demonstrated that the Company was insolvent as at November 2011 and continued to trade whilst insolvent from this date to the date of my appointment as Administrator being 13 November 2012. Directors have a duty to prevent insolvent trading by a company. Mr Ian Matthew Tyson has failed to prevent the Company from incurring debt, whilst it was objectively insolvent. I am of the view that the Company was likely to have become insolvent since November 2011 and Mr Tyson continued to trade the Company whilst insolvent (i.e. incurring debt) until the date the Administrators were appointed to the Company, being 13 November 2012.

Report to Creditors dated 20 September 2013 re: The Bankrupt Estate of Ian Matthew Tyson

1. The report confirms that Mr Tyson was declared bankrupt on 24 August 2013 as a result of lodging a Debtor's Petition and Statement of Affairs. The Statement of Affairs discloses 'a deficiency of assets over liabilities of $4 826 914.39.' The report does not dispute Mr Tyson's reason for entering into bankruptcy as being 'liabilities due to guarantees.'

References for Mr Tyson

1. A series of references have been provided in support of Mr Tyson's application, excerpts from two of which are set out below.
2. In a letter dated 10 April 2014, the Federal Member for Macarthur, Mr Russell Matheson MP, writes as follows: I have known Ian for the past 16 years.,.Ian is a loving husband and devoted father of 4 children 12, 10. 8 and 5 years of age. He also has a passion of always being involved with community charities…One of his most outstanding contributions being the construction of the Macarthur Lifeline Counselling Centre. Ian coordinated the construction, donating his time and building expertise…I understand that Ian has made some misjudgements on who he should do business with, placing his trust in people who were not deserving of it. As a result he has paid the ultimate price of the business failing. What has shone through all of this is Ian's courage, determination and strength to face creditors, staff and the criticism that comes which a business fails.
3. Mr Tyson's family accountant and tax agent writes; In my professional capacity I have always known Ian to be honest and compliant with his responsibilities…Ian is a man of integrity who has faced enormous personal challenge in past business dealings. To date, I believe he was the only one who stood to face the many people who criticised, threatened and blamed him when others who were accountable, shamefully planned their escape from this responsibility. Ian knows he had responsibilities and I believe he acted to the best of his ability to satisfy those responsibilities.

Applicant

1. Ms Cuddy, for Mr Tyson, told the Tribunal that as soon as Mr Tyson became aware that the tradesmen were not getting paid, he had acted quickly to place the company into administration. This was done, not to defeat creditors, but because Mr Tyson believed an administrator could help the company recover.
2. Ms Cuddy submitted that because Mr Tyson lacked the experience in managing the finance of a company - especially one with the complex structure of Holmwood - he had relied on his fellow director, Mr Michael Everard, and the company's own accountants to undertake the financial management of the company while he undertook the role of managing the commercial building arm of the company.
3. Ms Cuddy further stated that: even though Fair Trading have stated that Mr Tyson as a director should have been aware of the financial circumstances of the company, under the Corporations Act, s127, only two directors are required to sign documents. As a result Everard and Dale signed the majority if not all documents and were able to keep Mr Tyson out of the loop. They also did not give him access to the online bank accounts and the debtors and creditors register.
4. Ms Cuddy submitted it was appropriate for Mr Tyson to only be informed of the company's financial circumstances 'to a bare minimum':

• because of the size of the company,
• because the company had a managing director, two internal accountants and other accounting staff;
• because the company had a management structure which did not include him; and
• because his role meant that he was primarily on construction sites.

1. Ms Cuddy criticised Fair Trading's use of the liquidator's preliminary findings that the company had poor financial control and that the directors were at fault in the management of the company's financial affairs. According to Mr Cubby: these are by no means…final views of the liquidator and it is prejudicial to the applicant for the report to be given so much weight as though it is a final, determinative report. The liquidator also notes that poor economic conditions may have contributed to the company's failure, which the reviewer failed to acknowledge entirely.
2. Ms Cuddy also noted Mr Tyson's statement that he was unaware of any practice by the company of 'frontend loading'. Mr Tyson was in charge not of the residential building arm of the company but rather the commercial building arm of the company which did not require funds upfront as the clients, mainly government entities, were billed on a monthly basis.
3. Mr Cuddy also submitted that in light of the personal guarantees Mr Tyson had made to Holmwood suppliers and given her own lack of assets, he had no option but to enter into bankruptcy.
4. There was, Ms Cuddy submitted, no evidence that Mr Tyson had acted dishonestly. He had simply relied on the information provided by the company's accountants while 'the other directors were treating the company as a personal ATM.' On the evidence, Ms Cuddy submitted, there was nothing that Mr Tyson could have done to avoid bankruptcy.
5. Ms Cuddy submitted that Mr Tyson is a fit and proper person to hold a supervisor's certificate. According to Ms Cuddy, Mr Tyson is a 'person of good repute as evidenced by his conduct surrounding the immediate circumstances of the liquidation of Holmwood. This conduct, in addition to the references of notable people, shows he is a person of honesty and integrity.'

Respondent

1. Ms Robosa, for Fair Trading, conceded that Mr Tyson, as an individual, has not been the subject of complaint.
2. She submitted that Mr Tyson did not take all reasonable steps to avoid the liquidation of the company or to avoid entering into bankruptcy himself. He had the opportunity to check the company accounts but did it only belatedly. Had he carried out his duties as a director diligently, he should have picked up the problems with the company. As it was, he had no ability to run a financial business.
3. Ms Robosa submitted that despite Mr Tyson's statement that he only became aware of the company's financial difficulties in September or October 2012 when his tradesmen complained of not being paid, the evidence in the liquidation materials (see Report by Director or Officer as to the Affairs of Holmwood Builders dated 3 December 2012) shows that Mr Tyson was having problems getting tradesmen and suppliers to go on site before this. On this basis, Mr Robosa submits that, at the latest, Mr Tyson should have been aware that external administration was a possibility by November 2011.
4. She also submitted that, as a director of the company, Mr Tyson should have been aware:

• of the company's outstanding tax liabilities of $217 354.11 as at November 2011;
• of the balance of monies owed to creditors outside trading terms;
• of payments to creditors of rounded sums which were not reconcilable to specific invoices, namely 93 payments from the period of 1 May 2010 to 13 November 2012 in the amount of $1 551 225;
• from the balance sheets and profit and loss accounts showed him at directors meetings, that there was a 2011 loss which indicated that the company was in financial difficulty;
• that the company had liquidity ratios below 1 for the financial years ended 30 June 2011 and 30 June 2012 and for the period 1 July 2012 to 13 November 2012;
• that the company had no access to alternative finance; and
• that the company was receiving increased demands for payment from its creditors from 1 May 2012.

1. On this basis, Ms Robosa submitted that Mr Tyson should have taken steps to avoid the company's administration from, at the latest, November 2011. According to Ms Robosa, Mr Tyson has not provided any material to satisfy the Tribunal that he had taken any steps in 2011 to avoid the liquidation of Holmwood.
2. According to Ms Robosa, Mr Tyson had acknowledged that he had failed to take steps to ensure that the books and records were properly kept and..satisfy himself that the balance sheets and profit and loss accounts were correct…He indicated that he was 'unsure' of various matters which are incumbent on him as a director to check, e.g. books and records kept by Holmwood, whether company policy was adhered to, auditing of accounts and company's insurance policies.
3. According to Ms Robosa, as a holder of a contractor licence since May 1992 and a businessman who has carried on business in the building industry on his own or in partnership with others, Mr Tyson should have known that Mr Holmwood's financial standing was problematic in 2011. Had he diligently exercised his duty as a director to check the books and records of Holmwood, he would have been alarmed by the indicators of insolvency facing Holmwood in 2011. Ms Robosa submitted that in view of his failure to diligently carry out his functions as a director, Mr Tyson allowed Holmwood to trade while insolvent as early as November 2011.
4. In relation to Mr Tyson's bankruptcy, Ms Robosa submitted that: Mr Tyson has attributed his bankruptcy to a number of personal guarantees he made as a director of Holmwood which had gone into liquidation…In his Report to Creditors dated 20 September 2013, Mr Bruce Gleeson, Trustee, agreed that 'liabilities due to guarantees' is Mr Tyson's 'non business related cause of insolvency…As Mr Tyson's bankruptcy is directly linked to Holmwood's liquidation, the assessment of steps which he had taken to avoid the liquidation is relevant [to] whether he has taken reasonable steps to avoid his own bankruptcy.
5. Ms Robosa submitted that the following cast doubt on Mr Tyson's fitness and propriety to hold a supervisor certificate:

• Mr Tyson's bankruptcy and the liquidation of Holmwood which show a lack of financial ability by Mr Tyson to conduct a business;
• the unreasonable number of complaints lodged against Holmwood;
• the unreasonable number of insurance claims lodged against Holmwood; and
• Mr Tyson's lack of insight into his responsibility for the difficulties Holmwood had caused its customers.

All reasonable steps

1. Ms Robosa, for Fair Trading, has submitted that Mr Tyson is a 'disqualified person' pursuant to section 25(1)(c) of the Home Building Act and clause 25(1)(a)(xii) and (xiii) both because he is a director of an externally-administered body corporate and because he is an undischarged bankrupt.
2. Whilst I agree that these sections apply in relation to Mr Tyson's status as an undischarged bankrupt, I disagree that they apply to Mr Tyson as the director of an externally-administered body corporate that was voluntarily wound up.
3. As I have set out above, this is because although Mr Tyson is indeed the director of an externally-administered body corporate, namely Holmwood, an exception is made to the provisions of clause 25(1)(a)(xii) of the Home Building Regulation 2004 on the basis of the voluntarily winding up of the company. Accordingly, the Director-General (or on review, the Tribunal) does not have to consider whether Mr Tyson, as a director of an externally-administered body corporate that was voluntarily wound up, took reasonable steps to avoid the winding up (clause 28(2) of the Home Building Regulation 2004).
4. There is no dispute that Mr Tyson was declared bankrupt on 24 August 2013 as a result of lodging a Debtor's Petition and Statement of Affairs.
5. On this basis, I agree that clause 25(1)(xii) of the Home Building Regulation applies in this case. This means that a supervisor certificate cannot be issued to Mr Tyson unless the Tribunal is satisfied that he took all reasonable steps to avoid the bankruptcy.
6. Mr Tyson explained that he had been forced in bankruptcy when he became liable for a number of personal guarantees he made as a director of Holmwood (and associated entities) when the company was liquidated.
7. He stated: I did not take bankruptcy as the easy option. I waited for 9 months after the administration of Holmwood to see if I could avoid bankruptcy but I could see that because of the personal guarantees that I had given on behalf of the company that had gone into liquidation that I could not avoid it.
8. In his report to creditors dated 20 September 2013, the trustee, Mr Bruce Gleeson, agreed that liabilities due to guarantees were Mr Tyson's 'non business related cause of insolvency.'
9. It is clear, then, that Mr Tyson's bankruptcy is directly linked to the liquidation of Holmwood. For this reason, an assessment of the steps he had taken to avoid the liquidation is relevant to a finding of whether he had taken reasonable steps to avoid his own bankruptcy.
10. The tests for establishing whether a person took all reasonable steps to avoid bankruptcy or insolvency is summarised in Clarke v Commissioner for Fair Trading [2004] NSWADT 27. In that case President O'Connor DCJ set out the approach to be taken in examining the question of whether the licence holder took 'reasonable steps' to avoid the bankruptcy or insolvency: (i) A general inquiry into the wisdom or otherwise of the original financial dealings that ultimately ended in bankruptcy or insolvency is not contemplated by the Act. The point at which the inquiry commences is when the applicant was 'faced with the possibility' of bankruptcy or insolvency (Davidson at [20]) or was 'aware' or 'should have been aware' (McDonald at [21]) of that possibility. The focus is the steps taken to avoid the relevant event (see Smith at [17]) - in cases of the present kind, administration, and later liquidation. (ii) Subject to (i), in assessing reasonableness the Tribunal must examine all the relevant facts and circumstances. (McDonald at [25]), (iii) The steps taken by the applicant must be objectively reasonable in the sense that they would be those taken by a 'reasonable person endowed with the knowledge and experience of the [applicant]'. (McDonald at [26-27])….. (iv) The person under notice has the task of satisfying the Commissioner that he or she took all reasonable steps to avoid the insolvency.
11. The authorities to which the President referred are Davidson v Commissioner for Fair Trading [2004] NSWADT 200; McDonald v Commissioner for Fair Trading [2004] NSWADT 124 and Smith v Commissioner for Fair Trading [2004] NSWADT 182.
12. Accordingly, the point at which the assessment commences is when Mr Tyson was faced with the possibility of bankruptcy or was aware or should have been aware of that possibility.
13. The test of "reasonable steps" is that of what a reasonable person endowed with Mr Tyson's the knowledge and experience would do. In applying this test I must consider two issues: (i) when did Mr Tyson know, or ought he to have known, that the bankruptcy in question was a possibility? and (ii) what steps did he take to avoid his bankruptcy?

(i) when did Mr Tyson know, or ought he to have known, that the bankruptcy in question was a possibility?

1. It is common ground that Mr Tyson's bankruptcy occurred as a result of personal guarantees he had provided to Holmwood. Accordingly, it was clear that once Mr Tyson became aware of the financial difficulties facing Holmwood, he should have been aware of the possibility of his own financial difficulties, in light of the personal guarantees he had given the company and in light of the loan his wife had given to the company of $1 300 000, which had been secured over the couple's family home.
2. Mr Tyson's evidence is that he only realised that the company might have to go into liquidation in September or October 2012, when he became aware of his tradesmen not being paid or being paid sporadically.
3. As a director of a company, however, Mr Tyson has a duty of care and diligence in accordance with section 180 of the Corporations Act 2001. This includes being informed of the actual financial affairs of their company, including its solvency. It is a duty that is not diminished by delegating responsibility, and directors are unable to hide behind ignorance of the company's affairs, where that ignorance is of their own making. Statewide Tobacco Services Ltd v Morley (1990) 2 ACSR 405.
4. If Mr Tyson had showed the due diligence required of him as a director of the company, he would have ensured that he was aware of the company's financial records. Had he checked the financial records he would have discovered, as the liquidator later did, that the company was already in financial difficulties in November 2011. Had he checked the records, Mr Tyson would have found that the company's liquidity rates were below 1 for the financial years ending 30 June 2011, 30 June 2012, and for the period 1 July 2012 to 13 November 2012. He would also have discovered the high balance of monies owed to creditors in excess of ninety days. Similarly, he would have been aware of the company's overdue Commonwealth and State taxes to an amount of $217 354.11.
5. His explanation to the Tribunal that he simply 'did not have access to the database or the MYOB package or the bank accounts' is not sufficient.
6. Furthermore, Mr Tyson's acknowledgement in the Report by Director or Officer as to the Affairs of Holmwood Builders Pty Ltd dated 3 December 2012 that he had failed to take steps to ensure that the books and records were properly kept and to satisfy himself that the balance sheets and profit and loss accounts were correct is further proof that he had not shown the due diligence required of a director of a company.
7. Mr Tyson has stated that he now believes that there were two sets of financial records being kept for the company. As no evidence of this has been placed before me, I can give only limited weight to Mr Tyson's assertion in this regard.
8. Because of his failure to show due diligence as a director, Mr Tyson remained unaware of the financial difficulties of the company as a time when he should have been aware of them.
9. On this basis, I find that had Mr Tyson performed his duties with due diligence as required by a director, he would have been aware of the financial difficulties faced by the company, and the consequential possibility of his own bankruptcy, well before October 2012.

(ii) what steps did Mr Tyson take to avoid his bankruptcy

1. I accept Mr Tyson's evidence that he became concerned about the company's financial position in September or October 2012 when he realised that his tradesman and suppliers were not being paid. I accept that he acted on his concern by seeking the advice of a liquidator who was a personal friend and by taking the advice of the new accountant he had employed. By this stage, however, there was no option by to voluntarily wind the company up.
2. I accept that, as a result of personal guarantees made by Mr Tyson as a director of the company, he found himself owing $4 826 914.39 once the company went into liquidation. I accept Mr Tyson's evidence that he did not have the assets to either pay the money owing or to reach an agreement with his creditors and so his only option was to declare bankruptcy.
3. In light of the evidence before me and because of the causal connection between the company's liquidation and Mr Tyson's subsequent bankruptcy, I cannot satisfied that Mr Tyson took all reasonable steps to avoid his bankruptcy. In failing to show the diligence required of a director to inform himself of the financial situation of the company, Mr Tyson allowed the financial problems of the company to go unnoticed, including a substantial tax debt, liquidity rates below 1 and payments to creditors that were not reconcilable to specific tax invoices. Had he acted to ensure he was aware of the financial records of the company, he should have been aware of the possibility of the company's insolvency and his own subsequent bankruptcy much earlier than October 2012 and so would have been able to take earlier action to try to avoid both the insolvency and the bankruptcy.
4. By the time Mr Tyson took action in relation to the financial difficulties of Holmwood, insolvency, and his own bankruptcy, was the only option.
5. For these reasons, I find that in failing to ensure he was aware of the financial situation of the company, I cannot be satisfied that Mr Tyson took all reasonable steps to avoid his consequential bankruptcy.

Fit and Proper

1. In Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, Chief Justice Mason described the phrase 'fit and proper', at 380, as follows: The question whether a person is fit and proper is one of value judgment. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness and propriety are under consideration.
2. At 380, Toohey and Gaudron JJ described the phrase to mean: The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question."
3. In Hughes and Vale Pty Ltd v New South Wales (No.2) [1955] HCA 28; (1955) 93 CLR 127 the High Court said (at 156-7): The expression 'fit and proper' is of course familiar enough as traditional words when used with reference to offices and perhaps vocation. But their very purpose is to give the widest scope for judgment and indeed for rejection. 'Fit' (or 'idoneus') with respect to an office is said to involve three things, honesty, knowledge and ability ... When the question was whether a man was a fit and proper person to hold a licence for the sale of liquor it was considered that it ought not to be confined to an inquiry into his character and that it would be unwise to attempt any definition of the matters which may legitimately be inquired into; each case must depend upon its own circumstances.
4. In Sobey v Commercial and Private Agents Board 20 SASR 70 Walters J said: In my opinion what is meant by that expression is that the applicant must show not only that he is possessed of a requisite knowledge of the duties and responsibilities evolving upon him as the holder of a particular licence ... but also that he is possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public ... as a person to be entrusted with the sort of work which the licence entails. That is, what is fit and proper will depend on the legislative context and the nature of the particular profession, trade or occupation in question: Re Brennan & Australian Casino Surveillance Authority (1995) 38 ALD 794, at 796 paragraph [41]; Re Percival and Australian Securities Commission [1993] AATA 196; (1993) 30 ALD 280, at 290.
5. In Obradovic v Commissioner for Fair Trading, Office of Fair Trading (GD) [2006] NSWADTAP 18 the Appeal Panel took into account the manner in which the former building licence holder had conducted his licensed activity in determining his fitness and propriety to be issued with a new licence.
6. It is clear that, having been the holder of a builder contractor licence from 1992 to 2014, Mr Tyson has the necessary qualifications to be issued with such a licence. On this basis, I am satisfied that he has the requisite knowledge for being issued with a contractor licence.
7. In regard to the issue of integrity and honesty, there is no evidence of any dishonesty or misconduct by Mr Tyson. Similarly, there is no evidence of him personally being held in disrepute. Indeed, the evidence is that when Holmwood went into administration, Mr Tyson assisted the liquidator with the company's details, attended the creditors meeting and tried to assist in the minimisation of delays to the completion of an elderly couple's property. I accept that, at all times, Mr Tyson did what he could to assist the liquidator in the hope that the company would be able to resolve its financial difficulties.
8. Mr Tyson alleges that his fellow directors were taking money out of the company and that this contributed to the demise of the company. The report by the liquidator that 'ninety three (93) payments from the period of 1 May 2010 to 13 November 2012 in the amount of $1551225 that are large rounded payments…are not reconcilable to specific tax invoices' seems to support such a view.
9. Ms Robosa for Fair Trading has submitted that the amounts of complaints made against Holmwood should be taken into account when considering whether Mr Tyson is a fit and proper person to hold a supervisor certificate.
10. In considering these complaints, Mr Tyson has clarified aspects of the complaints themselves. On the basis of this evidence, I accept that of the 63 complaints, eighteen were incorrectly attributed to Holmwood. In my consideration of whether Mr Tyson is a fit and proper person to hold a supervisor's certificate, I also accept that the majority of the complaints and claims brought were for residential premises built by Holmwood, an arm of the company managed not by Mr Tyson, who was in charge of commercial construction, but rather by Mr Dale.
11. Of the insurance clams made, I accept that the majority were made for failure to complete and only twelve for defective work.
12. I also accept that Mr Tyson held a builder contractor licence for a 22 year period and that it is not disputed that, during that time, there were no insurance claims made against Mr Tyson personally or against his former company, Tyson Constructions.
13. I have raised my concerns about Mr Tyson's failure to inform himself in relation to the financial records of the company. My concerns do not, however, mean that he is not a fit and proper person to be the holder of a supervisor certificate. Mr Tyson presented as an honest man who has been devastated by the collapse of the business and the subsequent financial loss experienced by his creditors. Of the three directors, he was the one who stayed to assist the liquidator and try to work through the problems of the company. There is no allegation that Mr Tyson has been anything but honest in his business dealings and capable as a builder and supervisor. In my view, on the basis of the material before me, Mr Tyson is a fit and proper person to be issued with a supervisor certificate.

Conclusions and orders

1. For the reasons set out above, I find that the decision of Fair Trading to refuse Mr Tyson's application for a supervisor certificate is the correct and preferred decision. I have not based my finding on Mr Tyson not being a fit and proper person to hold a supervisor certificate. I have made my finding on the basis that I am not satisfied that Mr Tyson took all reasonable steps to avoid bankruptcy. As a consequence, pursuant to cl 25(a)(xii) of the Home Building Regulation 2004 his application for a supervisor certificate must be refused.
2. Accordingly I order that the decision of the respondent to refuse the applicant's application for a supervisor's certificate 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: 14 May 2015