Whitehouse v Commissioner for Fair Trading

NCAT Occupational|2017-04-28|Before: Dr J

Solicitors: Commissioner for Fair Trading - Legal File Number(s): 2017/00040779

reasons for decision

The applicant applied for, and was refused, a licence authorising him to do residential building work. His application was rejected because he did not meet the requirements of a document, purporting to be an instrument, on which the respondent Commissioner relies to determine the necessary qualifications for an applicant for a builder's licence.
One of the main issues in these proceedings is whether the Tribunal is bound by the terms of the purported instrument.
I have found that the document is a policy and that it is not binding on the Tribunal.
Another significant issue in the proceedings is whether the applicant meets the requirements of the policy contained in the purported instrument or, if not, whether he has attained such qualifications as the Tribunal determines to be necessary to enable the applicant to do, or to supervise, residential building work.
I have determined that he does not meet the requirements of the policy. However, I am satisfied that the applicant has qualifications enabling him to do, or to supervise, residential building work.

Background

The applicant is a certified chartered structural engineer, registered on the National Engineering Register, with the Board of Professional Engineers Queensland and with the Victorian Building Authority. He has a Bachelor of Engineering (Honours), a Masters of Engineering by Research and significant experience in the field of structural engineering.
The applicant was awarded his Bachelor of Engineering (Honours) in 2007. He majored in mechatronics, which is a combination of electrical and mechanical engineering. He was awarded the degree of Master of Engineering - Research in 2015. He obtained a Certificate IV in Building and Construction in 2016.
To be recognised as a chartered structural engineer, the applicant had to have an engineering degree, extensive experience over a period greater than 24 months demonstrating competence in the chartered discipline, employment in that field and continued engineering development.
The applicant's competency as a chartered structural engineer is recognised through the National Engineering Register (for which he is registered as a structural engineer).
Queensland is the only State or Territory in Australia where engineers must be registered to provide engineering services. The applicant is a registered member of the Board of Professional Engineers Queensland in the discipline of structural engineering. He is a registered building practitioner of the Victorian Building Authority in the discipline of civil engineering.
The applicant's Masters of Engineering by Research was completed through working on a project constructing the Illawarra Flame Solar Decathlon home. This won first place in the China 2013 Solar Decathlon, the world's largest architectural, university-led and sustainable housing competition.
On 22 November 2016, the applicant applied to the Commissioner for a contractor licence, endorsed to show that it is the equivalent of a supervisor certificate. The application was refused on 1 December 2016.
The applicant applied for internal review of the refusal decision on 12 December 2016. On 23 January 2017, an internal reviewer affirmed the original decision to refuse the applicant's application. The reason for doing so was the internal reviewer's finding that the applicant did not fulfil the current qualification requirements or practical experience requirements of a purported instrument, said to be made by the respondent under the Home Building Act 1989 (NSW).

Jurisdiction

The Tribunal has jurisdiction to review the Commissioner's refusal of applicant's application for a contractor licence under s 83B(1) of the Home Building Act, s 9 of the Administrative Decisions Review Act 1997 (NSW) and s 30 of the Civil and Administrative Tribunal Act 2013 (NSW).

Relevant legislative provisions

A contractor licence authorises the holder to contract to do certain residential building work (Home Building Act, s 21) and an endorsed contractor licence authorises its holder to do (and to supervise) the same residential building work, or specialist work, as it authorises its holder to contract to do (Home Building Act, s 28(1)).
Section 20 of the Home Building Act relevantly provides: 20 Issue of contractor licences (1) The Secretary must refuse an application for a contractor licence if: … (a1) the Secretary is not satisfied as to the matters of which the Secretary is required to be satisfied by sections 33B and 33C, or … (2) The regulations may fix or provide for the Secretary to determine additional standards or other requirements that must be met before any contractor licence is issued or before a contractor licence of a particular kind is issued. … (3) The Secretary must refuse an application for a contractor licence if: (a) the Secretary is not satisfied that any such requirement would be met were the contractor licence to be issued, or (b) the Secretary is not satisfied with the applicant's proposed arrangements for supervision of the work which the contractor licence will authorise the applicant to contract to do, or (c) the Secretary is not satisfied that the applicant has complied or is able to comply with any requirements of Part 6 or any requirements of the regulations relating to insurance applicable to the doing of work of a kind proposed to be authorised by the contractor licence. (4) (Repealed) (5) A decision of the Secretary relating to determining standards or other requirements under subsection (2) cannot be reviewed by the Tribunal in an application for an administrative review made under this or any other Act.
Section 33C(1)(b)(i) of the Home Building Act provides that a contractor licence must not be issued unless the Secretary is satisfied that the applicant, if also applying for an endorsement of the contractor licence to show that it is the equivalent of a supervisor certificate, satisfies the requirements of section 33D for the issue of a supervisor certificate to the applicant. There was no dispute that s 33C(1)(b)(i) applies in the circumstances of this case and that, as a result, s 33D applies.
Section 33D(1) provides as follows: 33D Additional requirements for obtaining supervisor and tradesperson certificates (1) A supervisor or tradesperson certificate must not be issued unless the Secretary is satisfied that the applicant: (a) has such qualifications or has passed such examinations or practical tests, or both, as the Secretary determines to be necessary to enable the applicant to do, or to supervise, the work for which the certificate is required, and (b) has had experience of such a kind and for such a period as the Secretary considers would enable the applicant to do, or to supervise, the work for which the certificate is required, and (c) is capable of doing or supervising work for which the certificate is required.

The Instrument

As indicated above, a delegate of the respondent rejected the applicant's application. In doing so, the delegate applied what was said to be an instrument made under s 33D(1) of the Home Building Act. For convenience, I will refer to this as the Instrument.
The Instrument is expressed to have been made under s 33D.
By the time of the hearing, the respondent accepted that the applicant met the experience criteria set out in the Instrument. However, the respondent contended that the applicant did not meet the qualification requirements in the Instrument. Accordingly, it submitted that the decision to reject the applicant's application was the correct and preferable decision and that the Tribunal was bound by the Instrument and so not entitled to make any other decision.
The Instrument is entitled "Qualification requirements for an endorsed contractor licence or supervisor certificate for general building work" and is dated 22 April 2016. It is made by the Commissioner for Fair Trading and purports to be his determination of, relevantly, the possession of qualifications necessary for an applicant for the issue of a licence to be "the possession of qualifications or the passing of examinations specified in Column 1 of Table A to Schedule 1".
Column 1 of Table A to Schedule 1 of the Instrument lists a number of alternative qualifications or combination of qualifications, any of which the Commissioner has determined to be necessary for an applicant for the issue of a contractor licence, endorsed to show that it is the equivalent of a supervisor certificate. One of these is in item 3 of Table A, which relevantly provides as follows: 3. Completion of a Bachelor of Housing from an Australian University or a Degree in any of the following: (a) Civil Engineering; or (b) Structural Engineering; or ... from an Australian University AND Completion of a Certificate IV in Building and Construction…
Another of these is set out in item 6 of Table A: 6. Superseded qualifications Any superseded qualification, as set out in Table D: (a) which the applicant attained before 18 August 2008; or…
One of the superseded qualifications set out in Table D is, relevantly, "A Diploma from an Australian University … which is a bridging or pathway course entitling the holder to enrol in a Degree in: …. Structural Engineering; … at an Australian University, but only if the applicant has attained the Diploma before 26 March 2012…"

What is the status of the Instrument and does it bind the Tribunal?

The Tribunal raised with the parties the status of the Instrument and asked the parties to consider whether the status of the Instrument was that of a policy. The respondent denied that it was a policy and said that the Tribunal was bound by it.
Ms Jenkins, a solicitor for the respondent, submitted that, by operation of s 20(5) of the Home Building Act, cited above, the Tribunal was precluded from reviewing the Instrument. Section 20(5) provides that a decision of the Secretary relating to determining standards or other requirements under s 20(2) cannot be reviewed by the Tribunal. Section 20(2) provides that the regulations may provide for the Secretary to determine additional standards or other requirements that must be met for a contractor licence to be issued. The respondent accepted that the regulations do not, in fact, make any such provision but says that s 20(2) should be read as if it referred to s 33D of the Home Building Act.
Ms Jenkins submitted that, on the authority of Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586; [2000] 2 All ER 109 ("Inco"), the Tribunal could "correct" the legislation, if it was sure of: 1. the intended purpose of the statute; 2. the failure of the draftsman and parliament by inadvertence to give effect to that purpose; and 3. the substance of the provision parliament would have made.
As Ms Jenkins informed the Tribunal, Inco has been referred to with approval by French CJ and Bell J in Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642 ("SZJGV") at 652. Ms Jenkins submitted that parliament had inadvertently failed to give effect to the intended purpose of the Home Building Act and that, if it had had regard to the purpose of the statute, it would have amended s 20(2) by changing the opening words of that provision from "The regulations" to "Section 33D." On this basis, Ms Jenkins said, s 20(5) applied and the Tribunal was not entitled to review the Instrument.
In SZJGV, French CJ and Bell J referred to Inco as reflecting the approach set out in Maxwell's On the Interpretation of Statutes, 12th ed (1969), p 228, being an approach "which can be taken in dealing with statutory language whose ordinary meaning is plainly at odds with the statutory purpose" (at 651). The passage their Honours quoted from On the Interpretation of Statutes (at 651), begins with the sentence: "Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity which can hardly have been intended, a construction may be put upon it which modifies the meaning of the words and even the structure of the sentence."
It is relevant to observe as a matter of context that, prior to the commencement of the Home Building Regulation 2014 ("the 2014 Regulation"), cl 26(1) of the Home Building Regulation 2004 (NSW) ("the 2004 Regulation") relevantly provided that, before a contractor licence is issued, the Director-General must be satisfied that the applicant, if also applying for an endorsement of the contractor licence to show that it is the equivalent of a supervisor certificate, complies with the requirements prescribed by clause 28(1). Clause 28(1) of the 2004 Regulation relevantly provided that, before a certificate is issued, the Director-General must be satisfied that the applicant has such qualifications or has passed such examinations or practical tests, or both, as the Director-General determines to be necessary to enable the applicant to do, or to supervise, the work for which the certificate is required.
The Director-General (an earlier name for the current respondent) has previously relied upon this clause, in conjunction with s 20(2) of the Home Building Act, as authority for the making of an instrument in similar terms to the current Instrument (see, for example, Ivanovski v Commissioner for NSW Fair Trading, Department of Finance and Services [2013] NSWADT 274 at [3]-[7]).
The Home Building Amendment Act 2014 (NSW) inserted the current ss 33C and 33D into the Home Building Act. Those provisions, broadly, replicate the substance of cl 26(1) and 28(1) of the 2004 Regulation, referred to above. The 2014 Regulation commenced on 15 January 2015, repealing the 2004 Regulation, the same day ss 33C and 33D of the Home Building Act commenced. However, s 20(2) of the Home Building Act, which refers to the Regulations providing for the Secretary to determine standards, was not amended. This means that s 20(5), which precludes the Tribunal from reviewing the Secretary's determination of standards under s 20(2), does not on its face apply to any instrument the making of which is not specifically authorised by the regulations. It is this circumstance which lends some support to the proposition that, if a consequence of the amendments were that the Secretary now has no power to make a binding instrument, that consequence was unintended.
Notwithstanding this, the terms of s 20(2) do not lead to any "manifest contradiction of the apparent purpose of the enactment" or to any "inconvenience or absurdity which can hardly have been intended." There is no reason why the 2014 Regulation could not be amended, or a new regulation made, to fix or provide for the Secretary to determine additional standards or other requirements that must be met before any contractor licence is issued or before a contractor licence of a particular kind is issued. The fact that it does not currently do so does not make it legitimate for the Tribunal to read s 20(2) as referring to s 33D rather than the regulations. There is no manifest contradiction between the terms of s 20(2) and those of s 33D of the Home Building Act. As French CJ and Bell J pointed out in SZJGV, the courts should be careful to abstain from any course which might have the appearance of judicial legislation. The same is true of this Tribunal. I am not satisfied that the legislature or the draftsman has failed to give effect to the purpose of the Home Building Act when amending it in 2014. I note also that, when s 33D was inserted, s 20 was not amended. That is a further reason why I am not entitled to read s 20(2) in the way proposed by the respondent.
I do not accept the respondent's contention that the Tribunal is entitled to treat s 20(5) as if it referred to standards or other requirements made under s 33D of the Act.
Ms Jenkins further submitted that I should follow O'Connell v Commissioner for Fair Trading [2017] NSWCATOD 32 where, she said, the Tribunal had held that it was bound by the Instrument. However, O'Connell was concerned with an instrument in force before the Instrument was made. The instrument the subject of that case was made on 20 December 2013 pursuant to the 2004 Regulation. The transitional provisions in cl 75(2) of the 2014 Regulation therefore applied to give it continued effect (see O'Connell at [5]). The Instrument was made after the 2014 Regulation took effect, so that cl 75 has no application to it. For these reasons, the decision in O'Connell is of no relevance to the present situation.
I am not satisfied that there is any power in the Home Building Act to make an instrument such as the Instrument purports to be. Section 33D(1), read with s 33C(1)(b), prohibits the Secretary from issuing a contractor licence endorsed to show that it is the equivalent of a supervisor certificate unless satisfied that the applicant "has such qualifications or has passed such examinations or practical tests, or both, as the Secretary determines to be necessary to enable the applicant to do, or to supervise, the work for which the [endorsed licence] is required". This does not authorise the making of an instrument having the status of delegated legislation.
On balance, I find that the proper characterisation of the Instrument is that it is a policy. The Tribunal is required to give effect to "Government policy", except in certain circumstances, the term "Government policy" being defined to mean a policy adopted by the Cabinet, a Minister or the Premier (Administrative Decisions Review Act, s 64(1) and (5)). There is no evidence that the Instrument has been adopted by the Cabinet, a Minister or the Premier. It purports to have been made by the respondent and I accept that that is the case. The Tribunal "may have regard to any other policy applied by the administrator in relation to the matter concerned except to the extent that the policy is contrary to Government policy or to law or the policy produces an unjust decision in the circumstances of the case" (Administrative Decisions Review Act, s 64(4)). I consider that this provision applies to me in my application of the policy expressed in the Instrument.

Does the applicant meet the requirements of the Instrument?

The first question I need to address is whether the applicant satisfies the terms of the policy expressed in the Instrument, such that the grant of a contractor licence to the applicant would be consistent with those terms.
The applicant submitted that he meets the requirements of the Instrument in three ways.
First, he says he meets item 3 of Table A of Sch 1 to the Instrument which requires completion of a Certificate IV in Building and Construction and, relevantly, a degree in either civil or structural engineering.
There is no dispute that the applicant has been awarded a Certificate IV in Building and Construction. However, the respondent says that he does not have a degree in civil or structural engineering.
The applicant submits that there is no such thing as a degree in civil engineering or structural engineering. Rather, he says, there are degrees in engineering with majors in various disciplines such as civil engineering or structural engineering.
I accept the applicant's evidence on this point. However, the instrument has to be given some meaning. I find that, by a "degree in civil engineering" or a "degree in structural engineering," the Instrument requires a degree in engineering with a relevant major.
The applicant submits that, whilst his degree is not a major in civil engineering or structural engineering (it is a major in mechatronics), nevertheless, he has the equivalent or higher qualifications to a degree in structural engineering. He says that, to become a chartered engineer, he had to do research for a Masters degree determined by Engineers Australia as having the qualification requirements for structural engineering. He then had to complete three years of practical experience, and five years in the industry to gain the knowledge and experience required.
Whilst I accept that the applicant has qualifications in the field of structural engineering which are the equivalent of or higher than a degree in engineering majoring in structural engineering, he does not have a degree in engineering, majoring in structural engineering, as required by item 3 of Table A. He therefore does not meet the requirements for a structural engineering degree specified in item 3 of Table A.
The second way in which the applicant says that he meets the requirements of the Instrument is that he has completed a Masters degree which was topically associated with a structural engineering degree. He says that his research was directly associated with a project encompassing aspects of design, structural engineering and construction management. He points out that the term "degree" is defined in the Instrument to include a Masters degree. Thus, he says, his Masters degree should be regarded as a degree in Structural Engineering.
I accept that the project the applicant undertook as part of his Masters degree involved aspects of structural engineering. However, the Masters degree is termed a "Master of Engineering - Research." It is not a Masters degree in structural engineering (my emphasis). Accordingly, I find that he does not meet the requirements of the Instrument in the second way he proposes.
The applicant submits, thirdly, that he meets the requirements of the Instrument in that he attained the equivalent of a superseded qualification before 2008. This is "A Diploma from an Australian University … which is a bridging or pathway course entitling the holder to enrol in a Degree in: …. Structural Engineering; … at an Australian University". Although the applicant did not attain a diploma, he completed the first year of an engineering degree at an Australian University before 2008. He says that, if he had left university after the first year of his engineering degree, he would have been awarded a diploma of engineering which met the requirements of the Instrument under the rules applicable at the time.
I accept the applicant's evidence that, at the time he did the first year of an engineering degree, he could have graduated with a diploma of engineering after first year. I also accept his evidence that this diploma would have met the description of a bridging or pathway course entitling the holder to enrol in a degree in Structural Engineering at an Australian University. However, as indicated above, the Instrument does not require a diploma or equivalent; it requires a diploma. The equivalent qualification (or part qualification), therefore, does not meet the requirements of the Instrument.
For these reasons, I find that the applicant does not meet the qualification requirements specified in the Instrument.

Does the applicant have the necessary qualifications?

As the applicant has not met the requirements of the Instrument, I have to consider whether I may determine that he should be issued with a contractor licence, having regard to s 33D(1). Read with s 33C(1), this provides that the Secretary must not issue the endorsed contractor licence unless satisfied that the applicant (relevantly) has such qualifications as the Secretary determines to be necessary to enable the applicant to do, or to supervise, the work for which the endorsed contractor licence is required. The Tribunal stands in the shoes of the Secretary when conducting a review, so the provision is to be read as if the word "Tribunal" were substituted for the word "Secretary." As indicated above, the Tribunal may have regard to the Instrument except, relevantly, to the extent that it is contrary to law or to the extent that it produces an unjust decision in the circumstances of the case.
As is evident from the discussion above, I have had regard to the Instrument. Ms Jenkins, for the respondent, stated from the bar table that the Instrument was developed through a process of consulting relevant stakeholders and that I should not depart from it. She said that it would be inappropriate for the Tribunal to take on the role of determining what qualifications were equivalent to those in the Instrument, particularly as there was no evidence as to what constituted equivalent qualifications. Ms Jenkins also submitted that the determination of equivalency between components of a course can only be determined by someone with expertise in the area. She said that all that the Tribunal had before it as to equivalency was the lay opinion of the applicant which was not independent.
It should be added, for completeness, that Ms Jenkins applied for an adjournment when I raised the issue of whether the Instrument was binding or merely a policy. However, when questioned about the purposes for which she needed an adjournment, Ms Jenkins withdrew the application, saying that, instead of adducing more evidence "about equivalency," she would "go into issue of equivalency in a broader sense".
The respondent is effectively submitting that the Tribunal may or should not depart from the Instrument because it was formed after a process of consultation with relevant stakeholders and because the Tribunal does not have independent expert evidence before it. That submission is not accepted.
First, there is no evidence about the process by which the terms of the Instrument were determined. Even if I were to accept Ms Jenkins' statements from the bar table as evidence (which I do not), the Tribunal is not entitled to apply the Instrument inflexibly (that is, as a fixed, determinative rule). This would be an error of law (see NEAT Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277; 77 ALJR 1263; [2003] HCA 35, Gleeson CJ at [24]; Adultshop.Com Ltd v Members of the Classification Review Board [2007] FCA 1871 at [110] and authorities there cited; King v Minister for Immigration and Border Protection [2014] FCA 766 at [22]). Further, the legislature has provided for the way in which the Tribunal is to deal with policy in s 64 of the Administrative Decisions Review Act, and the Tribunal is bound by those provisions. Finally, the circumstance that there is no independent expert evidence is a result, in part, of the respondent's initial decision not to adduce any and its subsequent decision not to apply for an adjournment for the purposes of obtaining such evidence.
The Tribunal's task is to determine the application on the material before it (Administrative Decisions Review Act, s 63). I consider I have ample material before me to determine the application.
The evidence establishes that the applicant has attained a very high level of qualifications in the field of structural engineering. Having regard to the Instrument, the qualifications he has attained in that field are higher than a degree of structural engineering, one of the accepted qualifications in item 3 of Table A. As already indicated, he has completed a Certificate IV in Building and Construction. Thus, he has equivalent (or in fact higher) qualifications than those determined by the respondent, in item 3 of Table A, as being necessary to enable the applicant to do, or to supervise, the work for which the endorsed contractor licence is required. Were I to apply the policy contained in the Instrument strictly, this would produce an unjust decision in the circumstances of this case (see Administrative Decisions Review Act, s 64(4)).
I am also satisfied that the applicant's qualifications are such as enable him to do, or to supervise, the work for which the endorsed contractor licence is required.
In these circumstances, I am satisfied that the applicant has the qualifications required by s 33D(1)(a), when read with s 33C(1)(b).
It has not been necessary for me to consider whether the policy embedded in the Instrument is contrary to law. However, I note that it appears to provide for fixed, determinative rules, and is applied by the respondent as if it contained fixed, determinative rules. I also note the Tribunal's comment in Wall v Commissioner for Fair Trading [2017] NSWCATOD 76 at [33] that the Instrument "may provide some guidance to those applicants wishing to apply to the Commissioner for a licence, but cannot be considered reflective of the eligibility requirements under the Act."

Other matters of which the Tribunal must be satisfied

The Tribunal must also be satisfied of the matters in s 33D(1)(b) and (c) before deciding that an endorsed contractor licence should be issued to the applicant.
The respondent accepts that the applicant has the experience required by s 33D(1)(b). The Tribunal finds that the evidence establishes that the applicant has had experience of such a kind and for such a period as it considers would enable the applicant to do, or to supervise, the work for which the endorsed contractor licence is required, within s 33D(1)(b).
I am also satisfied, from the evidence, that the applicant is capable of doing or supervising work for which the certificate is required within s 33D(1)(c). The respondent did not make any submissions to the contrary.

Orders

For the reasons given above, I find that the correct and preferable decision is for the applicant to be issued with a contractor licence, endorsed to show that it is the equivalent of a supervisor certificate.
I make the following orders: 1. The respondent's decision to refuse the applicant's application for a contractor licence, endorsed to show that it is the equivalent of a supervisor certificate, is set aside. 2. In substitution for that decision, the Tribunal decides that the respondent is to issue the applicant with a contractor licence, endorsed to show that it is the equivalent of a supervisor certificate, within 28 days of the date of this decision.

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: 06 July 2017

Home Building Amendment Act 2014(NSW)

Home Building Regulation 2004(NSW)

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