CITATION: Cavaliere -v- Director-General, Department of Fair Trading [2001] NSWADT 102 DIVISION: General Division APPLICANT PARTIES: Paul Cavaliere RESPONDENT Director-General, Department of Fair Trading FILE NUMBER: 003292 HEARING DATES: 28/11/2000 SUBMISSIONS CLOSED: 11/28/2000 DATE OF DECISION: 06/21/2001 BEFORE: Lees M - Judicial Member APPLICATION: Home Builder - issue of supervisor or registration certificate - Home Building Act - home builder - issue of supervisor or registration certificate MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 Building Services Corporation Act 1989 LEGISLATION CITED : Home Building Act 1989 Home Building Regulation 1997 Mutual Recognition (New South Wales) Act 1992 The Registrar, Real Estate and Business Agents Supervisory Board and Another v Barnett WA Supreme Court [Appeal Ful 151 of 1996] unreported decision CASES CITED: Australian Broadcasting Tribunal v Bond and Ors (1990) 170 CLR 321 Maurice Neville Hinchcliffe v Building Services Corporation, NSW Commercial Tribunal (24 July 1997) Hughes & Vale Pty Ltd v NSW (No 2) (1955) 93 CLR 127 APPLICANT REPRESENTATION: In person RESPONDENT P Nash, barrister ORDERS: 1 The decision of the Director-General of the Department of Fair Trading to reject Mr Cavaliere's application for a 'supervisor certificate' is affirmed. Background 1 Mr Cavaliere lodged an application with the Administrative Decisions Tribunal (the Tribunal) on 25 August 2000 for review of a decision of the Director-General of the New South Wales Department of Fair Trading (the Director-General). The earlier decision of 25 July 2000 had affirmed the refusal of Mr Cavaliere's application for a 'Supervisor Certificate' under the Home Building Act 1989 (NSW) (the Act) and had been made pursuant to a request by Mr Cavaliere for internal review of the first decision of refusal dated 19 June 2000. 2 The Tribunal's jurisdiction derives from sections 83B of the Act and 38 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act). The relevant legislation 3 Section 24 of the Act provides that (1) An individual may apply to the Director-General for a certificate that the individual is qualified to do, and to supervise: (a) residential building work, or (b) specialist work of a specified kind. (2) …. (3) An application for a certificate is to be accompanied by such particulars as are required by the Director- General concerning: (a) the fitness and ability of the applicant to do the work and any supervision for which the certificate is required, and (b) any relevant qualifications held by, relevant experience of, and appropriate training that has been or is being undertaken by, the applicant. 4 Section 25 of the Act states (1) After considering an application, the Director-General must: (a) issue a qualified supervisor certificate or a certificate of registration to the applicant, or (b) reject the application by serving on the applicant a notice setting out the reasons for rejecting the application. (2) The regulations may specify or provide for the Director-General to determine qualifications that must be held or other requirements that must be met before any supervisor or registration certificate is issued or before such a certificate of a particular kind is issued. (3) The Director-General must reject an application for a supervisor or registration certificate: (a) if the Director-General is not satisfied that any such requirement would be met were the certificate to be issued, or (b) if the applicant has not completed, at a standard acceptable to the Director-General, any relevant examination or practical test (or both) conducted or nominated by the Director-General and required by the Director-General to be completed by the applicant. 5 Section 34 of the Act states (1) An application for an authority, or for the variation, renewal or restoration of an authority, is to be: (a) made in a form approved by the Director-General, and (b) lodged personally or by post at an office of the Department of Fair Trading, accompanied by the prescribed fee. (2) A person must not, in or in connection with an application for an authority, or for the variation, renewal or restoration of an authority: (a) make any statement, or (b) supply any document, knowing it to be false or misleading in a material particular. Maximum penalty: 10 penalty units. 6 Clause 20 of the Home Building Regulation 1997 (the Regulation) provides Before a certificate is issued, the Director-General must be satisfied that the applicant: (a) is of or above the age of 18, and (b) is not an apprentice or trainee within the meaning of the Industrial and Commercial Training Act 1989, and (c) is a fit and proper person, and (d) has such qualifications or has passed such examinations or practical tests, or both, as the Director-General determines to be necessary to fit the applicant to do, or to supervise, the work for which the certificate is required, and (e) has had experience of such a kind and for such a period, as the Director-General considers would fit the applicant to do, or to supervise, the work for which the certificate is required, and (f) is capable of doing or supervising work for which the certificate is required, and (g) is not disqualified from holding a certificate or a certificate of a particular kind, and (h) is not the holder of a certificate that is suspended. The evidence 7 In addition to his application form for review by the Tribunal Mr Cavaliere provided the Tribunal with: -an undated medical certificate from Dr Behrouz Samadi of Top Ryde stating he had seen Mr Cavaliere, under his pseudonym of 'Paul Stanton' in mid-1998 for back and shoulder injury and pain; - a radiology report on Mr Cavaliere's right shoulder by Dr Phil Scamps dated 14 December 1998; - an Affidavit in the name of Paul Cavaliere dated 30 October 2000; - a copy of a letter from Graeme Earl of the Swiss Bank Corporation to Ian Watson dated 9 August 1995 advising of Swiss Bank Account details for a client of Mr Watson's; - a copy of Transcript of Brisbane Magistrate's Court Proceedings of 28 July 1998 in which Mr Cavaliere (as 'Paul Stanton') was defendant; - employment references from (1) R A Blair, Managing Director of Oakes Building Company of Penrith dated 22 February 1996, (2) Dirk Reitsma, General Manager of Reitsma Constructions Pty Ltd of Baulkham Hills dated 6 June 2000, and personal references from (1) Sister Ma. Ruth Gulane of the St Ezekial Moreno Convent, Doonside dated 12 October 2000, (2) Michelle MacGregor of Narrabeen dated 9 October 2000 and (3) Eric Bilston of Goomalling, Western Australia dated 9 October 2000; - a copy of part of a page of 'Daily Telegraph' classified advertisements with a highlighted advertisement for a 'Building Supervisor'; and - a copy of a driver's licence in Mr Cavaliere's name which expired on 20 July 1997 and a copy of Mr Cavaliere's current driver's licence under his alias of 'Paul Stanton' which is due to expire on 20 July 2003. 8 Mr Cavaliere also gave oral evidence and represented himself at the Tribunal hearing. 9 The Director-General provided the Tribunal with: a copy of the Department's entire file relating to Mr Cavaliere's certificate and licence applications; a submission dated 20 October 2000; a copy of a Certificate of Indictment Details dated 26 October 2000; transcripts of Brisbane District Court proceedings; a copy of a Western Australian Supreme Court unreported decision of 1997: The Registrar, Real Estate and Business Agents Supervisory Board and Another v Barnett [Appeal Ful 151 of 1996]; and a chronology of events. 10 Mr Cavaliere was born in 1948. He qualified in mechanical drafting and worked in engineering companies prior to entering the building industry in Queensland in the mid 1980s. Mr Cavaliere was first personally registered as a Queensland House Builder (#24217) on 27 March 1991. 11 Mr Cavaliere applied for a NSW licence in February 1992 but the application was deemed withdrawn in July 1992 after no replies to a request for further information had been received. The material suggests Mr Cavaliere would not have qualified due to lack of appropriate length of registration/experience. Mr Cavaliere was subsequently issued with a New South Wales builder's licence #49536C in September or October 1993 under the Mutual Recognition (New South Wales) Act 1992. 12 In late 1992 Mr Cavaliere contracted to do residential work and carried out such work between February and June 1993 in New South Wales while unlicenced. Mr Cavaliere used the name and licence of a NSW builder friend in the formal documentation relating to the project. On 7 November 1994 Mr Cavaliere was convicted of offences of contracting and building without a licence in the Tweed Heads Local Court. He was fined a total of $500 plus costs. 13 In his Affidavit Mr Cavaliere refers to having had three clients in 1993 who were refusing to pay him and his having a problem with the sale of a property he owned. He was in financial trouble. He commenced (and succeeded in) proceedings against one of his debtors. 14 In his Affidavit Mr Cavaliere states that in February 1995 his accountant, Ian Watson, proposed a plan to save Mr Cavaliere and his company from bankruptcy. This involved borrowing and investing monies. Mr Cavaliere obtained legal advice from a legal associate of Ian Watson's that the plan was 'ok'. Mr Cavaliere states Ian Watson and another (accountancy) associate (John Costello) suggested an additional plan, involving investing money in Switzerland. 15 In February and April 1995 Mr Cavaliere transferred monies (about $420,000) to another company directed by his wife and daughter and to two personal bank accounts. Some of these monies (about $265,000 in total (according to the trial transcript: 12/02/99 p 6 at 40-50)) were then transferred to a Swiss bank account. 16 Mr Cavaliere's construction company was declared bankrupt in June 1995 and Mr Cavaliere was declared bankrupt in August 1995. Approximately $1 million was owed to creditors. Ultimately, the trustee in bankruptcy retrieved about $400,000 and Mr Cavaliere's creditors were paid about 50c in the dollar owed. The Director-General's evidence states that two of Mr Cavaliere's creditors were placed in liquidation in part because of the failure to receive money owed from Mr Cavaliere. 17 Mr Cavaliere's Queensland building licence was cancelled in April 1995. Mr Cavaliere's NSW building licence was automatically cancelled pursuant to s 22(1)(b) of the Building Services Corporation Act 1989 (the legislation which preceded the (current) Act) due to the bankruptcy. Mr Cavaliere was contacted in September 1995 by the Department seeking the surrender of his licence. 18 Mr Cavaliere moved to Sydney in late 1995. He returned to Queensland briefly in 1996 and then returned to Sydney again. At some stage during this period he began to use the alias of 'Paul Stanton', allegedly to avoid creditors and their threats. 19 In March 1998 Mr Cavaliere was arrested in NSW and extradited back to Queensland. He was charged on three counts under 131(7) FA (1) of the Corporations Law of Queensland in that he contravened the civil penalty provision of s 232(6) in that he acted 'knowingly, dishonestly and with intent to gain a financial advantage' by transferring in February and April 1995 three separate sums of money: $61,721.99, $210,000 and $55,000 from his construction company. 20 In February 1999 Mr Cavaliere was convicted of the three counts and sentenced to three years. He served six months of the three-year sentence and was released subject to a recognisance of $6000 and a three-year good behaviour bond. 21 Mr Cavaliere's application in March 2000 for a 'Supervisor Certificate' lodged with the Department of Fair Trading was accompanied by two pro forma character reference documents signed by a husband and wife stating they had known Mr Cavaliere for 8 and 10 years respectively and had found him to be of good character and had no hesitation in recommending him to the Department of Fair Trading. Mr Cavaliere's evidence was that the husband, Mr Tarek Hilayel, was planning a building project for his company 'Madena Homes Pty Ltd' and it was Mr Hilayel who organised the application form for Mr Cavaliere as Mr Cavaliere had previously advised Mr Hilayel he did not have a current licence. 22 The application form had two questions numbered 8 and 9 asking respectively: 'Have you, or any … company of which you were a … director ever been refused or disqualified from holding a licence …… or had any such instrument cancelled or suspended?' and 'Have you in the last five years, had a conviction for a criminal offence recorded, or are now subject to a bond…?'. The negative boxes were ticked in answer to each question. Both answers were inaccurate. 23 Mr Cavaliere's evidence was that he did not tick the negative boxes when filling out the form; he had not answered the questions, he had left the boxes blank. He stated in his Affidavit that he intended to explain his omission to the Department of Fair Trading officer to whom he understood the form was going but that he forgot to do so when the opportunity arose. 24 The application form was lodged by Mr Hilayel. Mr Cavaliere's reason for not answering questions 7, 8 and 9 were that he 'did not want Mr Hilayel to know' his past. 25 On his application for review lodged with the Tribunal, Mr Cavaliere stated that his reason for seeking review of the decision was his physical condition – that due to his injury he can no longer do physical work. In his supporting Affidavit he acknowledges that some of his creditors suffered because of his conduct and that he was deeply sorry for that. He submitted that building work is all he knows and that it provides the only chance he has to earn a living. He states that there is work suitable for him but that he needs the appropriate licence. 26 Dr Samadi's abovementioned report referred to Mr Cavaliere's shoulder and back problems as at mid-1998. It stated the treatment required at that time. It reported Mr Cavaliere was advised to stay off his duties 'for one week', after which there remained some pain so Mr Cavaliere worked on 'light duties for several weeks' and again returned to Dr Samadi with shoulder pain. Dr Samadi stated Mr Cavaliere's back problem could be managed with acupuncture treatment to which Mr Cavaliere had responded fairly well. Dr Scamps' radiology report of December 1998 confirmed Mr Cavaliere had torn tendons in both shoulders and some degeneration and irregularity in the right shoulder joints. Some discomfort and clunking was noticeable in relation to the left shoulder whereas there were no signs of impingement demonstrated in relation to the right shoulder. 27 The original reason for the Director-General's decision was that s/he was not satisfied Mr Cavaliere is a fit and proper person to be the holder of the relevant certificate. This decision was primarily based on Mr Cavaliere's unlawful conduct in Queensland while he had held a builder's licence there. Decisions relied upon by the Director–General as to the interpretation of the expression 'fit and proper' were Australian Broadcasting Tribunal v Bond and Ors (1990) 170 CLR 321; the WA Supreme Court decision re Barnett noted above; and the decision of the NSW Commercial Tribunal Maurice Neville Hinchcliffe v Building Services Corporation (24 July1997). Findings and Reasoning 28 Section 25(2) of the Act provides that the Director-General may determine standards or other requirements that must be met before any certificate is issued. Clause 20 of the Regulation sets out such requirements. Section 25(3)(a) provides that an application for a supervisor or registration certificate must be rejected 'if the Director-General is not satisfied that any such requirement would be met were the certificate to be issued'. 29 One of the requirements is that an applicant be 'fit and proper' (cl 20 (c)). There is no statutory definition or express guidance in the Act as to how a person may meet or fail to meet this requirement. There are several High Court decisions, however, which provide considerable guidance as to how the term and requirement is to be interpreted in the context of assessing applications for licences and such. 30 In the matter of Australian Broadcasting Tribunal v Bond and Ors, the High Court was of the view that: where there is a legislative requirement to be 'fit and proper' in relation to a licence of some kind 'the requirement takes its meaning from the activities which the person is or will be authorized to engage in by virtue of the licence and the ends to be served by those activities….'; and that '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' (see at 380). 31 The Court considered that 'the question whether a person is fit and proper is one of value judgment and in that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker' (at para 63). 32 In relation to Mr Cavaliere's physical incapacity which is what he relies upon as a basis for seeking the supervisor's certificate, apart from Dr Samadi's report and the radiology report relating to Mr Cavaliere in 1998, Mr Cavaliere provided no further or current evidence as to those injuries and their current status and effect on his capacities. At this time without such evidence, no meaningful finding can properly be made on the matter. 33 Mr Cavaliere provided two references attesting to his work performance and each were complimentary, one involved his work as a building supervisor in 1996, and the other as a general site foreman in 2000. There is no evidence to suggest Mr Cavaliere is not capable and experienced as a building supervisor. He has the relevant knowledge and ability. 34 The Director-General's submissions quoted from the Hinchcliffe decision of the NSW Commercial Tribunal as follows (at pp 26-27): 'The accreditation of a person as a building contractor (or qualified supervisor) under the Act means that a person can be held out to the public as being not only possessed of acceptable building expertise …. but is a person of integrity and honesty'. The Barnett decision provided by the Director-General refers to another High Court decision, Hughes & Vale Pty Ltd v NSW (No 2) (1955) 93 CLR 127 which sums up the three characteristics of fitness as - honesty, knowledge and ability. 35 The three referees attesting to Mr Cavaliere's character each used a pre-prepared text; they stated they understood the nature of Mr Cavaliere's 'offence', his sentence and the purpose of the reference and that they 'have always found Paul to be reliable and consistently honest in all circumstances'. Each also added personal details including how and when they came to know Mr Cavaliere (1 or 4 years). Each could be described as a friend of Mr Cavaliere. 36 Mr Cavaliere was convicted on three counts of a serious unlawful conduct involving the elements of knowledge, dishonesty and intention. Mr Cavaliere's evidence was that the conduct involved, the transfer of company funds into personal bank accounts, was taken as a result of advice he accepted from professional financial and legal advisers. Mr Cavaliere's evidence was that he therefore believed that such conduct would be lawful. The evidence suggests he pleaded guilty to the subsequent charges in order to minimise his potential period of incarceration and thereby its impact on his family. 37 The unlawful conduct related to Mr Cavaliere's position of responsibility as a Director of a building company. At worst, he abused his position in absolute self-interest at the expense of creditors, and at best, he did not sufficiently understand his responsibilities. 38 Mr Cavaliere got into trouble very early on after becoming licenced in Queensland in 1991. In 1992 and 1993 he breached the (NSW) Act by contracting for and carrying out building work in NSW without a NSW licence. As soon afterwards as 1995, both he and his company went bankrupt. It was also in 1995 that he offended the Corporations Law of Queensland as detailed above. 39 The 1995 offences involved dishonesty and deception and were very serious. They were committed not that long ago. There is no evidence establishing any subsequent significant period of exemplary behaviour on Mr Cavaliere's part. In my view, he cannot yet be held out to the wider community as an honest and trustworthy person. Even his decision in 2000 to not disclose to Mr Hilayel the reasons why he was not licensed exhibits a lack of frankness and honesty and a tendency to act out of personal interest and convenience. The references provided to the Tribunal by Mr Cavaliere seeking to establish his fitness do not outweigh these other considerations. 40 I cannot confidently form the view that Mr Cavaliere will not again put himself first and conduct himself improperly should problems arise in his work and dealings as a supervisor in the building industry. 41 I agree with the Director-General that Mr Cavaliere does not meet the fit and proper person requirement and so his application for a supervisor certificate under the Act must be rejected. 42 No findings are made in relation to Mr Cavaliere's conduct regarding s 34 and his licence application form. Decision 43 In accordance with section 63 (3)(a) of the Tribunal Act, the decision of the Director-General to reject Mr Cavaliere's application for a supervisor certificate is affirmed. 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.