CITATION: Harb v Commissioner for Fair trading, Office of Fair Trading [2005] NSWADT 171 DIVISION: General Division APPLICANTS Peter Harb PARTIES: Steven Harb RESPONDENT Commissioner for Fair Trading, Office of Fair Trading FILE NUMBER: 043157 HEARING DATES: On the papers SUBMISSIONS CLOSED: 03/14/2005 DATE OF DECISION: 08/01/2005 BEFORE: Molony P - Judicial Member APPLICATION: Home builder - cancellation of contractor licence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Home Building Act 1989 Home Building Regulation 1997 Commissioner of Fair Trading v Harb & Anor [GD] [2004] NSWADTAP 17 CASES CITED: Harb v Commissioner of Fair Trading [2003] NSWADT 185 Makita v Sprowles [2001] NSWCA 305 APPLICANTS REPRESENTATION: T Davie, counsel RESPONDENT A Wilson, solicitor ORDERS: 1. In Mr Peter Harb's case the Tribunal:; a. affirms the decision of the Commissioner to cancel Mr Peter Harb's contractor licence; b. sets aside the determination of the Commissioner to disqualify Mr Peter Harb from obtaining a contractor licence for 5 years and to impose a penalty of $4,000.00; and,; c. substitutes that determination with a decision that Mr Peter Harb be disqualified for a period of 3 years from 1 August 2005, being any of the following:; i.the holder of any authority, ; ii. a member of a partnership, or an officer of a corporation that is a member of a partnership, that is the holder of an authority, and; iii. an officer of a corporation that is the holder of an authority; 2. In Mr Steven Harb's case, the Tribunal sets aside the determination of the Commissioner and substitutes that decision with a finding that Mr Steven Harb is guilty of improper conduct within the meaning of s.51(2)(c) of the Act, and determines that he:; a) is to be reprimanded for that improper conduct; and; b) is to pay a penalty of $1,650.00 to the Administrator. REASONS FOR DECISION Background 1 These reasons for decision concern certain aspects of the decision I made in Harb v Commissioner of Fair Trading [2003] NSWADT 185. That decision was the subject of an appeal and cross appeal to the Appeal Panel of the Tribunal. The Appeal Panel in Commissioner of Fair Trading v Harb & Anor [GD] [2004] NSWADTAP 17 allowed the appeal, set aside the orders made, and remitted the appeal to be heard and decided again, by me, without the hearing of further evidence, in accordance with the findings of the Appeal Panel. The cross-appeal by Mr Peter Harb was dismissed. 2 The background to the original application to the Tribunal is sufficiently set out in Harb v Commissioner of Fair Trading [2003] NSWADT 185, and will not be repeated here. For a complete background to, and understanding of, the totality of the issues before me, both my original decision and that of the Appeal Panel should be read. 3 For the purposes of the issues presently under consideration, it is sufficient to say that the original application to the Tribunal sought a review of disciplinary action taken by the Commissioner against Mr Steven Harb and Mr Peter Harb who were both holders of contractor licences under the Home Building Act 1989. 4 With respect to Mr Peter Harb, I found that: (a) he had failed to notify the Commissioner of a change of particulars in respect of a business name under which he carried on business in breach of clause 28 of the Home Building Regulation 1997, and was thereby guilty of improper conduct for the purposes of s.62 of the Act. (b) he had breached s.23(a) of the Act, when he knowingly represented that Harb Construction, a partnership, held a licence, when it did not do so. As such, I found he was guilty of improper conduct for the purposes of s.62 of the Act. (c) he had breached s.92(1) by proceeding to do the work for Mr and Mrs Daniels, without requiring them to provide him with a certificate of insurance. Similarly, he was in breach of s.92(2) by accepting a payment under the contract without requiring them to provide him with a certificate of insurance. As such I found he was guilty of improper conduct for the purposes of s.62 of the Act. (d) without reasonable excuse, he had failed to do work which he was obliged to do under the contract (supply and lay brushwood floors at Mr and Mrs Daniels' property). As such I found he was guilty of improper conduct for the purposes of s.62 of the Act. (e) was guilty of improper conduct for the purposes of s.62 of the Act as he breached the warranty implied into the contract by s.18B(a) of the Act that, "the work will be performed in a proper and workmanlike manner" with respect to the following items, which I regarded as minor defects, when the contract was complete: i) there was a gap at the junction of the pitched roof beside the balcony and the flat roof at the rear of the property; ii) the barge capping above the rear balcony had not been installed parallel to the barge board, and is unsightly; iii) a down pipe had been fitted to an existing gutter in an unsightly fashion which limits the flow of storm water; iv) the fascia to the first floor addition had been damaged by hammer blows; v) different timber moulding (one square, one quadrant) had been used together above the balcony, which was unsightly; and vi) the bi-fold doors to bedroom three were hung significantly out of alignment. (f) he had made a statutory declaration, filed in proceedings before the Consumer Trader and Tenancy Tribunal, in which he falsely asserted that a sample of wood was a remnant from the Daniel's site, and would match exactly the timber on the site. I found this was dishonest behaviour, and that as a result Mr Peter Harb was not fit to hold a contractor licence. 5 With respect to both Mr Peter Harb and Mr Steven Harb, I found that they had failed to comply with the order of the Consumer Trader and Tenancy Tribunal made 27 May 2002 (notice of which was dated 4 June 2002), and that this was improper conduct within the meaning of s.51 (2)(c) of the Act, and grounds for disciplinary action under s.56 6 I was not satisfied that Mr Peter Harb was guilty of improper conduct for the purposes of s.62 of the Act in that the allegation that he had breached the warranty implied into the contract by s.18B (a) of the Act that, "the work will be performed in a proper and workmanlike manner" was not made out, with respect to the following claims, that: a. there were excessive gaps in the timber flooring; b. the roof sheeting which was inadequately fixed; c. there is insufficient overlap of the gutters by the roof sheeting; d. the down pipe offset at the rear of the extension, falls the wrong way, leading to pooling; e. the roof flashing on the south side provided in adequate cover. Similarly, I was not satisfied that the evidence before me demonstrated that there was a non-compliance with the Building Code of Australia by Mr Peter Harb in his work on Mr and Mrs Daniels' property. 7 Central to those findings in Mr Peter Harb's favour, was my decision that expert evidence given by Mr Tuckwell, an Investigator in the employ of the Commissioner, should receive no weight. At paragraph 56 of my reasons for decision I wrote: 'When one considers the role Mr Tuckwell has played in this matter, which, on his own evidence, includes: a) extensive discussions with Mrs Daniels; b) discussions with experts retained by Mrs Daniels; c) the conduct of a formal on site interview with Mr Peter Harb (at which Mr Peter Harb was cautioned); d) obtaining other materials relevant to the various allegation made against Mr Peter Harb; and e) the preparation of the investigator's report that included his recommendation that disciplinary action to be taken against Mr Peter Harb, it is clear that Mr Tuckwell is not a disinterested, independent expert, but an investigator who has played an active role in investigating Mr Peter Harb's conduct, and recommended that disciplinary action be taken against him. Mr Tuckwell has also demonstrated no understanding of the role and obligations of an expert witness. While I accept that Mr Tuckwell has exercised judgement in making his recommendations as to what complaints should be the subject of disciplinary action against Mr Peter Harb, that goes to show some independence in the exercise of what might be described as his 'prosecutorial discretion', but it does not, in the circumstances, demonstrate that Mr Tuckwell is an unbiased, independent expert. I am not satisfied that in his evidence Mr Tuckwell provided the Tribunal with independent, objective, unbiased opinions, and therefore give his expert evidence no weight.' 8 The Appeal Panel found I was in error in reaching that conclusion. The Panel said (Commissioner of Fair Trading v Harb & Anor [GD] [2004] NSWADTAP 17): '21 Weight to be given to expert evidence . Once expert evidence has been admitted the question arises as to the weight it should be given. The principles in relation to the weight of expert evidence, where bias is alleged, were set out by the Supreme Court of Victoria, Court of Appeal in FGT Custodians Pty Ltd (Formerly Feingold Partners Pty Ltd) v Fagenblat [2003] VSCA 33 per Ormiston JA with whom Chernov and Eames JJA agreed at [4] – [7]. (See also Kirch Communications Pty Ltd v Gene Engineering Pty Ltd , [2002] NSWSC 485 and Collins Thomson Pty Ltd (in liq) v Clayton [2002] NSWSC 366.) In relation to alleged bias or interest of an expert witness, those principles can be summarised as follows: a) once expert evidence has been admitted the weight to be given to that evidence depends, in part, on its reliability; b) reliability has two components: the qualifications and experience of the expert and bias or interest by reason of conduct or other circumstances. 22 As we have said, there was no suggestion that Mr Tuckwell did not have the requisite qualifications or experience to give an expert opinion. Consequently the decision to give no weight to Mr Tuckwell's evidence must have been based on "bias or interest by reason of conduct or other circumstances." Rather than applying this test, the Tribunal approached the question of reliability by reference to a so-called "requirement" for an expert to give "independent, objective and unbiased" evidence. (See [52] of the Tribunal's decision quoted above at [11].) The Tribunal derived that proposition from The Ikranian Reefer [1993] 2 Lloyd's Rep 68 where Cresswell J said at 81-2: An expert witness should provide independent assistance to the Court by way of objective unbiased opinion in relation to matters within his expertise... An expert ... should never assume the role of advocate. 23 Similarly, in Whitehouse v Jordan [1981] 1 WLR 246 at 256-257 Lord Wilberforce said: . . .it [is] necessary that expert evidence presented to the Court should be, and should be seen to be, the independent product of the expert, uninfluenced as to form or content by the exigencies of litigation. 24 While an expert witness has a duty to the Court (and, by analogy, to the Tribunal) to give independent evidence, that duty is a statement of principle, not a rule of evidence. In FGT Custodians Pty Ltd (Formerly Feingold Partners Pty Ltd) v Fagenblat [2003] VSCA 33 the Victorian Court of Appeal dealt with a similar proposition to that put forward by the Tribunal. That proposition was that "expert witnesses should provide independent assistance to the Court by way of objective unbiased opinion in relation to matters [concerning] that person's expertise." At [15] Ormiston JA with whom Chernov and Eames JJA agreed, said that: As to the first proposition, all that has been said, particularly in recent years, about the desirability of expert witnesses providing independent evidence by way of opinion to the courts should be seen as expressions of the ideal manner in which expert witnesses should go about their tasks and the resultant opinions which those witnesses should strive to express. With but a few minor exceptions, none of them should be treated as stating principles of the law of evidence but they should be seen rather as admonitions to those who would give expert evidence, especially as to the way they should prepare and present that evidence to courts, if they and their clients wish it to be acted upon. 25 On the basis of this authority, the Tribunal's approach to the question of reliability by reference to a so-called "requirement" for an expert to give "independent, objective and unbiased" was misconceived. It should have asked itself how reliable Mr Tuckwell's evidence was in the light of any evidence of bias or interest by reason of conduct or other circumstances. Even though the Tribunal asked itself the wrong question, did it nevertheless reach a conclusion that was consistent with correct legal principle? Below we set out our reasons for concluding that it did not. 26 The evidence on which the Tribunal relied in giving no weight to Mr Tuckwell's evidence was that he was an investigator, employed by the Commissioner, who played an active role in investigating Mr Peter Harb's conduct, and recommended that disciplinary action be taken against him. In addition he concluded that Mr Tuckwell demonstrated no understanding of the role and obligations of an expert witness. Mr Tuckwell was cross-examined on several other aspects of his report but none of his answers was relied on by the Tribunal as indicating bias or lack of independence. The Tribunal's basis for that conclusion was the role he played as an investigator and his understanding of his role as an expert. 27 Firstly, in relation to Mr Tuckwell's role as an investigator, a court or tribunal must be alert to the very real possibility that such a person's evidence consciously or otherwise might be tainted or biased in favour of the party with whom they have an association. However, the authorities make it clear that an expert witness may have a close association with a party or be a party (see Brown v Baskin Rooney [2001] NSWSC 156 at [23]) and yet give reliable expert evidence. In Kirch Communications Pty Ltd v Gene Engineering Pty Ltd [2002] NSWSC 485 Campbell J followed the reasoning of Pagone J in Fagenblat v Feinbold Partners Pty Ltd [2001] VSC 479 in deciding at [4] that "even an expert opinion from someone with a connection with a party to the proceedings, is sometimes capable of assisting to resolve the issues". The Victorian Court of Appeal upheld Pagone J's reasoning in FGT Custodians Pty Ltd (Formerly Feingold Partners Pty Ltd) v Fagenblat ) [2003] VSCA 33. 28 Instead of inquiring into the question as to whether or not Mr Tuckwell's role as an investigator meant that his evidence was unreliable, the Tribunal assumed, on the basis of that role, that his evidence was totally unreliable. Like all forms of evidence, expert opinion evidence, once tested, should be given weight according to its reliability. Whether evidence lacks reliability will depend on a number of factors. These include: whether the witness is willing to make reasonable concessions in cross-examination; whether the expert's opinion is grounded in established fact; whether the expert has fully exposed the data and assumptions taken into account in reaching his or her conclusions; and whether the expert has satisfactory explained the chain of reasoning by which he or she has reached their conclusions. The Tribunal did not point to any such matters which it considered indicative of bias. That approach can be contrasted with the approach taken by the Family Court in Re W and W [2001] FamCA 216 (14 March 2001) where, in concluding that an expert was partisan, the Court set out numerous examples of partisan evidence. In our view, the Tribunal's failure to consider whether Mr Tuckwell's role as an investigator in fact meant that his evidence was unreliable, was an error of law. 29 The second basis for the Tribunal's decision that Mr Tuckwell's evidence was wholly unreliable was that he demonstrated no understanding of the role and obligations of an expert witness. Mr Tuckwell volunteered that he took an unbiased view when writing the report. When asked if he knew what the primary obligation of an expert was, he said: I always thought it was to give evidence on my report and what I've noted in my report, and being as they were allegations of defective work, residential building work, and my experience within the building industry, I'm regarded as an expert. 30 There was no evidence that Mr Tuckwell thought his role was to support the Commissioner's case, or offer anything but an even-handed, unbiased view. In saying that Mr Tuckwell's evidence is totally unreliable because he demonstrated no understanding of the role and obligations of an expert witness, the Tribunal elevated such an understanding to a "requirement". Just as there is no requirement for an expert to give "independent, objective and unbiased" evidence, there is no "requirement" that an expert witness understand his or her role and obligations. While a manifestation of any lack of understanding, such as the giving of partisan evidence, will affect the reliability of the expert's evidence, the mere lack of knowledge of an expert's role, if that is what the evidence disclosed, is not a legitimate basis for giving his or her evidence no weight. 31 Having found an error of law in the manner in which the Tribunal dealt with Mr Tuckwell's evidence, each of the orders made by the Tribunal is set aside.' 9 The Appeal Panel also found that I had confined my decision to the disqualification of the Harbs from holding an individual contractor's licence, "even though the application to the Tribunal related to the entire decision" which related to the disqualification in all the senses mentioned in s.62 (g) of the Home Building Act 1987. In addition, the Panel referred to confusion surrounding the dates in which the disqualification I had imposed was to commence. Procedure Following Remittal 10 Following the Appeal Panel's decision, which it will be recalled remitted the appeal to be heard without the hearing of further evidence, in accordance with the findings of the Appeal Panel, I determined that it was not necessary to hold a further hearing. I made directions giving the parties the opportunity to make submissions as to what determination I should make on the remittal. 11 Due to circumstances which it is not necessary to repeat here, there have been a series of delays in obtaining submissions from both parties and finally determining this matter. The Applicant's submissions were not received until 2 December 2005, and the Respondent's submissions were filed on 14 March 2005. Because of delays consequent on an injury I suffered, I have not been able to address those submissions until now. Submissions 12 The Applicant's submissions specifically address the five defects which I did not find proven, and the question of compliance with the Building Code of Australia. The Respondent's submissions do not. Those specific submissions are considered in the discussion of the defects below. 13 Both submissions address how I should approach the evaluation of Mr Tuckwell's evidence. The Applicant submits that: '8. There is no doubt that the factors enumerated by the tribunal can be relevant to the weight to be given to expert evidence. The possibility of a witness having a bias in favour or a party (directly or indirectly) is undoubtedly a matter to be taken into account by a court when deciding what weight to be given to expert evidence. It is not a ground for rejecting evidence that may be of assistance to the court when reaching the correct result. Fagenblatt v Feingold Partners Pty Limited [2001] VSC 454 per Pagone J see also Smithkline Beecham (Australia) Pty Limited v Chipman (2003) 131 FCR 500 9. The report of Mr Tuckwell was not rejected. It was admitted into evidence (which was the sense in which Pagone J was using the word 'rejected') 10. The appeal tribunal has made no criticism of any factual finding of the tribunal. Indeed, in another part of the appeal it made it clear that it does not consider itself at liberty to overturn factual findings. 11. In its criticism of the decision of the tribunal the appeal tribunal focused on two issues: first, the investigative role played by Mr Tuckwell. Secondly, his knowledge of the role and functions of an expert. 12. In relation to the first issue the criticism appears to focus on the disclosed reasoning of the tribunal. Whilst the tribunal did not say that it assumed that by reason of the investigative role the expert evidence should be given no weight, the appeal tribunal assumed that assumption had been made. 13. If, therefore, the tribunal had inquired as to the question of whether or not Mr Tuckwell's evidence should be accepted (or as to how much weight if any had should be put to it) and then had concluded that no weight should be put to it, then the decision should remain unchanged (albeit perhaps expressed differently). 14, In relation to the second issue, it is not stated that (nor would it be accurate to state) that the knowledge or otherwise of an expert of the role of an expert is of no relevance to the weight that should be attached to the report. The question is whether it would be right for that reason alone to give the report no weight. 15. It is submitted that if a document admitted as an expert report is admitted into evidence in a tribunal not bound by the rules of evidence, in circumstances where the purported expert is not disinterested or independent and is ignorant of the role of an expert witness, then all the more reason is present for applying the conventional and well known rules as to the form and content of expert evidence with full and exacting rigour. See Makita v Sprowles [2001] NSWCA 305 at para 85.' 14 For the sake of clarity, it is worth quoting what Heydon JA said in Makita v Sprowles [2001] NSWCA 305 at para 85: 'In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of "specialised knowledge"; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be "wholly or substantially based on the witness's expert knowledge"; so far as the opinion is based on facts "observed" by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on "assumed" or "accepted" facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert's evidence must explain how the field of "specialised knowledge" in which the witness is expert by reason of "training, study or experience", and on which the opinion is "wholly or substantially based", applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ's characterisation of the evidence in HG v R (1999) 197 CLR 414, on "a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise" (at [41]).' 15 The Respondent submitted that: '5. Mr Tuckwell's qualifications are not an issue. The second part of reliability is bias. The Appeal Panel found there was no evidence that Mr Tuckwell thought his role was to support the Commissioner's case, or offer anything but an even-handed, unbiased view. 6. Mr Tuckwell's evidence is reliable and there is nothing that occurred in the investigation of this matter by Mr Tuckwell or the hearing of this matter to the contrary especially Mr Tuckwell's role as an investigator. 7. Therefore, it is submitted that the Tribunal in determining this matter should consider the report of Mr Tuckwell's and his oral evidence and give the report the full weight that it deserves. Having accepted the evidence of Mr Tuckwell, there is no evidence to the contrary of Mr Tuckwell's. 8. By giving Mr Tuckwell's report the appropriate weight it is respectfully submitted that the Tribunal cannot characterise the deficiencies of the Applicants' work as "not major" It should be noted that the copy of an Order made by the CTTT on 4 June 2002 for rectification of the defective work order the Applicants to pay Mrs Daniels the sum of $12 881.00. That amount is 29% of the total contract price of $44,000.00.' 16 Given the findings of the Appeal Panel, the evidence of Mr Tuckwell to which I originally gave no weight, must now be considered issue by issue. In considering that evidence in accordance with the finding of the Appeal Panel, the fact that, as pointed out by the Commissioner in submissions, there is no evidence to the contrary, has weighed significantly in my consideration of the evidence. While I continue to hold the concerns relating to Mr Tuckwell's evidence which led to my original decision to give his evidence no weight, in applying the finding of the Appeal Panel, I have accepted that the expert evidence he gave was within his expertise. There was no submission to the contrary, but a request to test that expertise rigorously. Similarly, there were no submissions going to why Mr Tuckwell's evidence in relation to specific matters should be given no weight. Rather, the issues about his evidence originally raised were again agitated in general terms, without an analysis of why his specific evidence should be given no weight, or of how his role as an investigator and his understanding of the obligations of an expert witness, should lead me to give specific evidence no weight. Bearing that in mind, I turn to consider the specific defects. The Defects 17 Excessive gaps in the timber flooring – In his report, at pages 83 – 84, Mr Tuckwell wrote: There were gaps evident in the floor at various locations ranging from ½mm to 2mm leaving an unsightly finish. … The cause of this defect would be poorly milled boards where the 'Tongue and Groove" fit together and/or boards were milled to have a different width on the face. The defect would also come about through inadequate cramping of the boards or exposure to the weather during construction. All of these causes would fall within the control of the builder. … If the flooring is adequately fixed it will not "creep" unless it is subject to variations in moisture content. If the moisture content rises the boards swell and the gaps in the boards will decrease. If the moisture content drops the boards will shrink and the gaps increase, The State Forest report … estimates that for the gaps as found to be present due to shrinkage the boards would have to have moisture content of between 12.6% and 13.6% and therefore reasons that this would have been unacceptable. Having regard for the defect where some boards are narrower than others and that areas of the boards have been filled and exhibit no signs of the filling cracking then it can be reasonably presumed the boards were fixed with the gaps as now seen. The assertion in relation to the gaps is confirmed in the report of Mr Herbert (page 275) as are the moisture content estimations. 18 The Respondent submitted that: Mr Tuckwell's evidence is no more than an assertion that there were gaps leaving an unsightly finish, an assertion as to the cause and an assertion that if flooring is adequately fixed it will not creep. The evidence does not set out the facts and matters on which the assertions are based together with reasons which proceed from those facts to the assertions. 19 The basis on which Mr Tuckwell's opinion is based is revealed in the measurements of the gaps and the moisture content, which he refers to, by Mr Herbert. There is no evidence to the contrary. Given that, and in accordance with the finding of the Appeal Panel, I accept that there were excessive gaps in the flooring. 20 Roof sheeting inadequately fixed - In his report, at pages 83 – 84, Mr Tuckwell wrote: The roof sheets to the lower roof have not been secured sufficiently and as a result are in danger of lifting from the wind and leaving the house susceptible to water entry. The sheets have been fixed at every 3rd rib along the end supports, with no fixings in the mid-supports. Standard building practice is to secure the roof sheets at every second rib along the ends and every third rib along the mid supports. This is also supported by the fact that the approved plans state that the work is to comply with the Building Code of Australia 1993, SAA Codes and relevant by-laws. The plans were drawn in 1994 and construction did not commence until December 2000, therefore the work would need to comply with the current edition of the Building Code of Australia (B.C.A) and current Australian Standards. The Building Code of Australia 1996 states that fixings are to be placed every second rib at end spans and every third rib at internal spans on corrugated profiled sheeting. The Applicant submits that Mr Tuckwell does not say why he reaches the conclusion that the roof sheeting has not been adequately fixed, or why the fixing does not comply with industry practice. This is plainly not the case: Mr Tuckwell discusses how the sheets are affixed and contrast their fixing with the requirement of the Building Code of Australia 1996. There being no evidence to the contrary and in accordance with the finding of the Appeal Panel, I accept his evidence. 21 Insufficient overlap of gutters by upper roof sheeting - In his report, at pages 83 – 84, Mr Tuckwell wrote: The roof sheets to the upper roof only protrude into the gutter 25mm, which is an insufficient amount … The contractor has installed an alcor flashing under the roof sheets and down into the gutter to stop water entering into the roof space as a means of overcoming the defect. Because of the inadequate overlap to the gutter water flows over the end of the roof sheet and then by wind and capillary action runs back up the underside of the sheet and into the eaves. … Standard building practice is to have the roof protrude into the gutter by 50mm to prevent wind blown rain from entering the roof space. This is also supported by the manufacturer's installation instructions, which states that roof sheets should overhang at least 50mm into gutters. In support of his opinion that Mr Tuckwell notes that the Martin report refers to the overlap as being "just adequate", while the BCM report refers to the sheets being "too short". The BCM report goes on to refer to a hole where the sheet meets the gutter, which might allow water to enter. It is unclear to me whether the hole is in the sheet, or created by the overlap. In my view, both these reports are equivocal and do not necessarily support Mr Tuckwell's opinion. There is, however, at page 297, an extract from the manufacture's instructions, "Using Lysaght Roofing and Waiting - installation of pierce fixed sheeting manual", which says that, "Roof sheets should overhang at least 50mm into gutters". 22 The Applicant submits that Mr Tuckwell's conclusion of insufficient overlap is no more than an assertion. Given that the overhang has been measured at 25mm and the manufacturer recommends a 50mm overhang, I do not accept that submission. I do, however, accept that, in the absence of any evidence of actual water penetration, I cannot be satisfied on the basis of Mr Tuckwell's evidence, especially in the light of the equivocal nature of the other reports, that water is actually penetrating. 23 Roof flashing on the south side provides inadequate cover - In his report, at page 87-88, Mr Tuckwell wrote: 'The purpose made colourbond flashing installed to the upper roof does not provide sufficient cover in that it does not turn down over the ribs of the roof sheet. This is a standard feature on all flashings as can be seen in the Lysaght detail or Trimdek Hi-ten accessories. … The Martin report prepared on behalf of the builder also identifies this defect … It says: The ridge capping has the south side of it not turned down over the klip lok roofing. i.e. it appears too short a cover over the roofing . The turn down is to stop water entering from wind driven rain and capillary attraction (when two surfaces are close together water can be drawn between the surfaces.) As there is no turn down, this now leaves the roof susceptible to water entry …' The details of the capping and flashing provided by Lysaght (at 298) all show turn downs, but the detail does not show the size of the turn downs. The photographs show no turn downs. The Applicant made no submissions with respect to this issue. In the absence of contrary evidence and in accordance with the finding of the Appeal Panel, I accept Mr Tuckwell's opinion evidence in this regard. 24 Down pipe offset at the rear of the extension, falls the wrong way - In his report, at page 89, Mr Tuckwell wrote: 'The offset to the downpipe at the rear of the extension has a fall in the wrong direction … My inspection revealed that the offset is falling 3mm in the wrong direction. Standard building practice is to have a fall in the offset towards the downpipe. This fall should also be sufficient so water does not pond in the offset and eventually rust it. It should also drain the roof water freely and thereby preventing water entering the building due to the gutter overflowing.' In submissions that Applicant classified this as an "aesthetic judgment" on the part of Mr Tuckwell, and did not address Mr Tuckwell's substantial conclusion that the downpipe is falling in the wrong direction, thereby reducing the downpipes capacity to drain. In the absence of evidence to the contrary and in accordance with the finding of the Appeal Panel, I accept Mr Tuckwell's evidence in this regard. 25 Work Contrary to the Building Code of Australia - In his report, at page 89, Mr Tuckwell wrote: 'On the 5 February 2002 I carried out a preliminary inspection. While on site I observed water leaking through a light fitting in the kitchen. An inspection of the junction of the roof and wall adjacent to the gutter above this area, revealed that it had been constructed in such a manner that allowed water entry … The Environmental Planning and Assessment Regulation 2000 requires: 98 Compliance with Building Code of Australia and insurance requirements under Home Building Act 1989 (cf clauses 78 and 78A of EP&A Regulation 1994) (1) For the purposes of section 80A (11) of the Act, the following conditions are prescribed in relation to a development consent for development that involves any building work. (a) that the work must be carried out in accordance with the requirements of the Building Code of Australia ...... The BCA has the following requirement: PERFORMANCE REQUIREMENT P2.2.2 Weatherproofing A roof and external wall (including openings around windows and doors) must prevent the penetration of water that could cause (a) unhealthy or dangerous conditions, or loss of amenity for occupants; and (b) undue dampness or deterioration of building elements. As water penetrates the dwelling the work does not comply with the requirements of the BCA … The flashing as installed had been installed incorrectly as it had run past the gutter. The flashing should have been finished in line with the end of the roofing sheet. The wall area that is now allowing water entry (the hole) should have been fully covered with wall cladding (refer photographs Nos.27 & 28).' 26 The Applicant's submissions do not address this issue. There is no evidence contradicting Mr Tuckwell's opinion. His observation of water leaking through a light fitting speaks of a dangerous condition. I accept this evidence and his opinion. Minor or Major Defects 27 The Respondent submits that the defects for which Mr Peter Harb is responsible should not be classified as minor, but are major defects. In doing so, the Respondent relies on the cost of rectification relative to the total cost of the renovation, as indicative of the seriousness of the defects. 28 The defects in issue for the purposes of this discussion, are those found by me in my original decision (set out in paragraph 4(e) above), and those which, in accordance with the findings of the Appeal Panel, I have accepted today. In my original decision I classified the defects I then found as minor. I adopted that classification because I did not consider that the defects I then found resulted in the work done by Mr Peter Harb being structurally unsound or unable to fulfill the purpose of protecting occupiers from the elements. I did not have regard to the cost of repairs, but to the consequences of the defects on the integrity of the structure. It is ultimately a matter of definition. In the light of the findings I have now made about the other defects, however, I am of the view that the insufficient overlap of gutters by the upper roof sheeting is a major defects in the sense discussed. This is so as it allows water to penetrate the structure. In any case, I do accept that the cost of rectification of all the defects represents a significant cost. Disciplinary Action – Peter Harb 29 In my original decision I wrote: '76 In Mr Peter Harb's case I have concluded that as the holder of a contractor licence he has: a) failed to notify the administrator of a change of particulars relating to a business name; b) misrepresented that Harb Construction was the holder of a contractor licence; c) carried out residential building work without a contract of insurance being in place; d) installed flooring other than as agreed; e) did not carry out the works in a proper and workman-like fashion, albeit the defects are not major; f) failed to comply with money order made by the Consumer Trader and Tenancy Tribunal on 27 May 2002; and g) that he is not fit to hold a contractor licence because of his lack of honesty in submitting a false statutory declaration to the Consumer Trader and Tenancy Tribunal. 77 I do not accept the submissions that I should regard Mr Peter Harb as having no fraudulent or dishonest intent when he submitted the statutory declaration. As noted above I find the explanation proffered of that conduct to be highly improbable and can only conclude that he was seeking to obtain an advantage in the Consumer Trader and Tenancy Tribunal proceedings, when he submitted it. That in my view is clear evidence of dishonesty. 78 With respect to the issue of the absence of insurance I regard this is a most serious matter. Mr Peter Harb accepted payment and proceeded to undertake the works without a certificate of insurance, and thereby placed his clients in serious peril. His actions undermined, and deprived them of, the essential protection which the legislative scheme regulating the home building industry, provided by the Act, seeks to put in place. The fact that he has suffered the civil consequences that the Act stipulates may befall him in such circumstances does not detract from the seriousness of his conduct. 79 With respect to the failure to comply with the Tribunal order, I accept that his failure to comply with that order was made against the background of significant confusion relating to the Tribunal's original work orders. It did, however, occur in circumstances where Mr Peter Harb had rights of appeal and rehearing, which were not exercised. At the same time, compliance by licenced contractors with orders made by the Consumer Trader and Tenancy Tribunal in its home building jurisdiction is an essential part of the legislative scheme for the regulation of the home building industry, and the protection of consumers engaging contractors to perform residential building work. Non-compliance with orders of the Consumer Trader and Tenancy Tribunal is improper conduct and merits disciplinary action. Similarly, misrepresenting who is the holder of a contractor licence serves to undermine the legislative scheme, and detracts form the protection it seeks to offer consumers. Likewise, I regard non-compliance with an agreed specification for a matter such as the type of timber to be used on the floors of residential premises to be serious improper conduct, as the cost of rectifying such matters is generally prohibitive. With respect to the other matters alleged against Mr Peter Harb I accept that when compared to the matters discussed above they are relatively minor, but it must be remembered that they too flout the requirements of the scheme. 80 In considering what disciplinary action to take I am cognizant of the fact that the purpose of disciplinary action is not to punish Mr Peter Harb but to protect the public: Clyne v NSW Bar Association (1960) 104 CLR 186 at 201. In reviewing the matters I have found against Mr Peter Harb I have sought to highlight the dangers conduct such as his exposes members of the public to. I have also borne in mind that no prior misconduct is alleged against him. 81 In my opinion the Administrator was correct to cancel his contractor licence. I am of the view, however, that the period of disqualification, given the matters I have found against Mr Peter Harb, was greater than his offences call for. It is my view that a disqualification period of three years would be preferable. Given that decision, I do not consider it appropriate to impose a monetary penalty as a consequence of the cancellation and disqualification is that Mr Peter Harb is likely to be financially strained. In those circumstances the imposition of a financial penalty would not, in my view serve to protect the public, but rather would have a punitive effect on Mr Peter Harb. 82 In Mr Peter Harb's case, therefore, the decision of the Tribunal is to: a) affirm the decision of the Administrator to cancel Mr Peter Harb's contractor licence; b) sets aside the determination of the Administrator to disqualify Mr Peter Harb from obtaining a contractor licence for 5 years and to impose a penalty of $4,000.00; and, c) substitutes that determination with a decision that Mr Peter Harb be disqualified from holding a contractor licence for a period of 3 years.' 30 On the remittal of the matter, I have found that Mr Peter Harb did not carry out additional works in a proper and workman-like fashion and that this included a major defect. He has also not adequately weather proofed the site in breach of the Building Code of Australia. As a result, Mr Peter Harb is guilty of additional improper conduct contrary to s.51(c) of the Home Building Act 1987, because he has breached the statutory warranties implied by s.18B(a) and (c) of the Act. Moreover, I remain satisfied that he engaged in all the conduct specified in paragraph 76 of my original reasons. 31 I remain of the view that the protection of the public requires that his contractor licence be cancelled and that he be disqualified in all the senses mentioned in s.62 (g) for a substantial period. In submissions the Commissioner argued that the original decision of the Commissioner to disqualify Mr Peter Harb for five years should be affirmed. No reasons were advanced as to why five years is appropriate. 32 I am not of the view that the extra matters I have found against Mr Peter Harb in the course of this remittal are such that the protection of the public calls for the imposition of a greater period of disqualification than that already imposed by me. I am unable to see what benefit flows to the public from the imposition of a five year disqualification, rather than one of three years. In my view, a disqualification period of three years offers sufficient protection, is proportionate to the public risk in this case, and is the correct and preferable decision. 33 In Mr Peter Harb's case, therefore, the decision of the Tribunal is to: a. affirm the decision of the Commissioner to cancel Mr Peter Harb's contractor licence; b. sets aside the determination of the Commissioner to disqualify Mr Peter Harb from obtaining a contractor licence for 5 years and to impose a penalty of $4,000.00; and, c. substitutes that determination with a decision that Mr Peter Harb be disqualified for a period of 3 years from 1 August 2005, being any of the following: i. the holder of any authority, ii. a member of a partnership, or an officer of a corporation that is a member of a partnership, that is the holder of an authority, and iii. an officer of a corporation that is the holder of an authority. Disciplinary Action – Steven Harb 34 In my original decision I wrote: 83 It will be seen that I have concluded that Mr Steven Harb as the holder of a contractor licence failed to comply with the monetary order of the Consumer Trader and Tenancy Tribunal made on 27 May 2002. His involvement in the issues giving rise to that order was peripheral, although the order was very clearly directed to both Mr Peter Harb and him. It required action on his behalf. As with Mr Peter Harb, I accept that his failure to comply with that order was made against the background of significant confusion relating to the Tribunal's original work orders. It did, however, occur in circumstances where Mr Steven Harb had rights of appeal and rehearing, which were not exercised. Those factors, together with Mr Steven Harb's hitherto unblemished record, persuade me that Mr Steven Harb's actions in this case do not warrant the cancellation of his licence. 84 Non-compliance with orders of the Consumer Trader and Tenancy Tribunal is improper conduct and, in my view, merits disciplinary action. While not persuaded that Mr Steven Harb's conduct in the circumstances of this case merits cancellation or disqualification, I am of the view that the protection of the public requires the taking of disciplinary action against him, which reflects the seriousness of Mr Steven Harb's failure to comply with the order. In all the circumstances, I am of the opinion that the appropriate disciplinary action is to reprimand Mr Steven Harb for his improper conduct, and to direct that he pay a penalty of $1,650.00 to the Administrator. 35 I remain of that view. In Mr Steven Harb's case, therefore, the decision of the Tribunal is to set aside the determination of the Commissioner and substitute that decision with a finding that Mr Steven Harb is guilty of improper conduct within the meaning of s.51 (2)(c) of the Act, and determines that he: a) is to be reprimanded for that improper conduct; and b) is to pay a penalty of $1,650.00 to the Administrator. 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.